| Item 1.01. | Entry into a Material Definitive Agreement. |
On March 18, 2021, UroGen Pharma Ltd. (the “Company”) and RTW Investments ICAV, for and on behalf of RTW Fund 2 (“RTW”), entered into a Pre-Paid Forward Contract (the “Agreement”) pursuant to which the Company granted to RTW the right to receive certain future cash payments from the Company in exchange for $75 million in cash. The Agreement and the transactions contemplated thereby (the “RTW Funding Transaction”) were unanimously approved by the Board of Directors of the Company on March 17, 2021.
Under the Agreement, RTW is entitled to receive tiered, future cash payments based on aggregate worldwide annual net product sales of Jelmyto® (mitomycin) for pyelocalyceal solution in an amount equal to: (i) 9.5% of annual net sales up to $200 million, (ii) 3.0% of annual net sales for annual net sales between $200 million and $300 million, and (iii) 1.0% of annual net sales for annual net sales above $300 million. If certain revenue thresholds for Jelmyto aggregate worldwide annual net sales are not met, the future cash payments to RTW with respect to Jelmyto annual net sales up to $200 million will increase by 3.5%, and may decrease back to 9.5% dependent on the Company meeting certain subsequent Jelmyto aggregate worldwide annual net sales thresholds.
In addition, subject to U.S. Food and Drug Administration (“FDA”) approval of UGN-102 (mitomycin) for intravesical solution, RTW is entitled to receive tiered, future cash payments based on aggregate worldwide annual net product sales of UGN-102 in an amount equal to: (i) 2.5% of annual net sales up to $200 million, (ii) 1.0% of annual net sales for annual net sales between $200 million and $300 million, and (iii) 0.5% of annual net sales for annual net sales above $300 million. If the Company does not receive FDA approval for UGN-102 by a specified date, the future cash payments to RTW with respect to aggregate worldwide annual net sales of Jelmyto across all Jelmyto annual net sales tiers will increase by 1.5%.
The Company will be required to make payments of amounts owed to RTW each calendar quarter, and the future cash payments based on both Jelmyto and UGN-102 (together, the “Products”) aggregate worldwide annual net sales will terminate following the quarter during which the aggregate cash payments received by RTW are equal to or greater than $300 million.
The Agreement is subject to customary closing conditions and contains customary representations and warranties of the Company and RTW, including with respect to organization, authorization and tax matters, indemnification obligations, and certain covenants with respect to payment, reports, intellectual property, in-licenses, out-licenses, and certain other actions with respect to the Products. Until the earlier of such time that (i) the Company’s aggregate worldwide annual net product sales of the Products reach a certain threshold or (ii) the Company’s market capitalization reaches a certain threshold, (a) RTW will be granted a security interest in the Products and the regulatory approvals, intellectual property, material agreements, proceeds and accounts receivable related to the Products (the “Product Collateral”) and (b) the Company will be subject to a negative pledge in respect of the Product Collateral.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Agreement, which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ending March 31, 2021.
| Item 7.01. | Regulation FD Disclosure. |
On March 18, 2021, the Company issued a press release announcing the RTW Funding Transaction. A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.
The information in this Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements, including statements regarding the closing of the RTW Funding Transaction; the investment of the proceeds from the RTW Funding Transaction; and the potential of the Company’s proprietary RTGel technology platform to improve therapeutic profiles of existing drugs. These statements are subject to a number of risks, uncertainties and assumptions, including, but not limited to the timing and success of clinical trials and potential safety and other complications thereof; the ability to obtain regulatory approval within the timeframe expected, or at all; the ability to maintain regulatory approval; complications associated with commercialization activities,
