may 30, 2017 price $18.48^ urogen initiate at buy and $27 ...(~2x the rate for turbt surgery plus...

USD Prev. 2016A Prev. 2017E Prev. 2018E Prev. 2019E

Rev. (MM) -- 17.5 -- 7.5 -- 0.0 -- 12.5

EPS

Mar -- -- -- (1.81) -- -- -- --

Jun -- -- -- (0.74) -- -- -- --

Sep -- -- -- 0.19 -- -- -- --

Dec -- -- -- (0.49) -- -- -- --

FY Dec -- (1.91) -- (1.58) -- (2.14) -- (1.92)

FY P/E NM NM NM NM

Price Performance

MAY-17

20

19

18

17

16

^Prior trading day's closing price unlessotherwise noted.

COMPANY NOTE

Initiating Coverage

USA | Healthcare | Biotechnology May 30, 2017

UroGen (URGN)Chemo-Obliterating Urothelial Cancers;Initiate at Buy and $27 PT

EQU

ITY R

ESEARC

H A

MERIC

AS

BUYPrice target $27.00

Price $18.48^

Financial SummaryNet Debt (MM): ($73.0)Long-Term Debt (MM): $0.0Cash & ST Invest. (MM): $73.0Cash/Share: $5.00Cash (MM): $73.0

Market Data52 Week Range: $20.02 - $13.01Total Entprs. Value (MM): $150.6Market Cap. (MM): $223.6Shares Out. (MM): 12.1Float (MM): 11.5Avg. Daily Vol.: NA*General: Due to rounding, use of diluted vs.basic share count in 1/4's of profit, and URGN'sIPO in Q2 2017, the sum of 2017 1/4's does notequal the full year EPS estimate.

Matthew J. Andrews *Equity Analyst

(617) 342-7866 [email protected]

* Jefferies LLC

Key TakeawayURGN leverages its novel RTGel platform technology to treat urothelial cancers(UC) and seeks to change the treatment paradigm from surgery to chemo-ablation with MitoGel (UTUC) and VesiGel (NMIBC). MitoGel CUP data arecompelling (62% CR) and Ph. III data are expected mid-2018. VesiGel Ph. II dataare equally promising and it offers a 2nd high-quality shot on goal in the largebladder cancer market. We model $433M in 2031 peak-adjusted sales.

Jefferies, LLC was joint bookrunner on URGN’s 5/3/17 IPO.

MitoGel in Low-Grade Upper Tract Urothelial Carcinoma: Looking to ConquerMount OLYMPUS. The single-arm, Ph. III OLYMPUS study (n=74) started in April. Whilethe Compassionate Use Program data set is small (n=13 assessable), 8 patients achievedComplete Remissions (62% per protocol; 44% per ITT) and safety was unremarkable. FDAencouraged URGN to move directly into a Ph. III and to file based on CR (and submit CRdurability data as they mature). While URGN is seeking to replicate the compelling CUP data,our analysis of PD-1/PD-L1 BTD approvals in metastatic UC suggest the bar for efficacy couldbe 20%+, readily achievable in our view. See pages 22-24 for more details.

VesiGel in Low-Grade Non-Muscle Invasive Bladder: Taking On TURBT. Equallypromising are Ph. II(a) data demonstrating 86% CR and 80% remain in remission at one year(~2x the rate for TURBT surgery plus adjuvant chemo). Ph. II(b) is to start in H1 2018. If Ph.II(a) data are replicated, this may enable a single-arm Ph. III pivotal study in late 2019+.

LT strategy: seeking to become a leader in UC. MitoGel, VesiGel and Vesimune targetmarkets which have a U.S. prevalence of 525,000+. URGN’s goal is to replace surgery (thestandard of care) in LG UTUC/NMIBC with its non-surgery, chemo-ablation approach. Our2031 $433M peak sales estimate assumes ~9% of prevalent patients are treated (~29,000).We model 75%/55% probabilities of success for MitoGel/VesiGel.

BotuGel could offer LT upside. Allergan licensed RTGel rights for use with Botox inoveractive bladder disease. Ph. II start expected in Q4 2017. We believe AGN's deep diligenceprovides solid validation of URGN's IP estate and manufacturing scalability.

MitoGel updates in 2017-2018. We expect OLYMPUS updates/data in late 2017 and H12018 (Society of Urologic Cancer, ASCO GU, AUA, ASCO). URGN to report final top-line CRdata in mid-2018 and to file the NDA during H2 2018.

Valuation/RisksOur $27 PT is a blend of DCF and P/S. Risks: regulatory, clinical, and financing.

Please see analyst certifications, important disclosure information, and information regarding the status of non-US analysts on pages 38 to 42 of this report.

Deirdre Abbotts

RI-Restricted

2022 Enterprise Value (EV/Sales)

Source: Company reports, Jefferies estimates

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

2019E 2020E 2021E 2022E

Other Considerations

While CEO Bentsur has commercial

experience from Keryx and launching

Auryxia, URGN has not received approval

for any pharmaceutical product. In order

to establish an independent commercial

organization URGN may need to raise

funds to do so through equity financings,

which could lead to shareholder dilution

in 2018+.

Revenue (Millions)

Source: Company reports, Jefferies estimates

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

2019E 2020E 2021E 2022E

UroGen Pharma Ltd. is a clinical stage biotechnology company focused on development of

medicines for the treatment of urological diseases (e.g., cancer, overactive bladder). Its

three lead oncology therapies are MitoGel (in Phase III for low-grade Upper Tract Urothelial

Cancer), VesiGel (in Ph. II(a) for low-grade Non-Muscle Invasive Bladder Cancer), and

Vesimune (an immunotherapy in Ph. II for high-grade Non-Muscle Invasive Bladder

Cancer). MitoGel and VesiGel leverage UroGen’s RTGel platform technology. UroGen’s

goal is for MitoGel and VesiGel to replace 1st line surgery for LG UTUC and LG NMIBC.

Top-line MitoGel results are expected by mid-2018. UroGen licensed rights to BotuGel to

Allergan in 2016 for the treatment of overactive bladder disease. UroGen’s headquarters

are located in Ra’anana, Israel and NY, NY.

June 2017: present MitoGel Ph. II CUP data

at the ASCO Meeting.

Late 2017/Q1 2018: present interim Ph. III

MitoGel data from the OLYMPUS study.

H1 2018: start the Ph. II(b) VesiGel study.

Mid-2018: top-line final CR and safety

results for the OLYMPUS study.

Catalysts

Target Investment Thesis

Probabilities of success for MitoGel in LG

UTUC and VesiGel in LG NMIBC of 75%

and of 55%.

U.S. approvals of MitoGel and VesiGel in

2019 and 2023.

Peak-adjusted MitoGel sales of $229M.

Peak-adjusted VesiGel sales of $204M.

No credit for Vesimune in HG NMIBC.

Target Price: $27.00 (based on a blended

DCF and P/S).

Upside Scenario

Positive Ph. III data for MitoGel in LG UTUC

(100% probability) and no change to

probability of success for VesiGel in LG

NMIBC (55%).

U.S. approvals of MitoGel and VesiGel in

2019 and 2023.

Peak unadjusted MitoGel sales of $305M.

Peak adjusted VesiGel sales of $204M.


Target Price: $36.00 (based on a blended

DCF and P/S).

Downside Scenario

Probabilities of success for MitoGel in LG

UTUC and VesiGel in LG NMIBC of 75%

and of 0%. Increase discount rate to 15%

from 13% due to higher clinical risk.

VesiGel is not positive in Ph. II(b).

U.S. approval of MitoGel in 2019 and

peak adjusted sales of $229M.


Target Price: $7.00 (based on a DCF);

includes ~$5.00/cash per share as of end

of 2017.

Long Term Analysis

Scenarios

Group EV

Source: FactSet and Jefferies estimates

$150

$339

$493 $432

$114

$0

$100

$200

$300

$400

$500

$600

URGN KPTI IMGN CALA STML

EV/2022 Sales

Source: FactSet and Jefferies estimates

1.9

0.4

2.1

0.6 0.9

0.0

0.5

1.0

1.5

2.0

2.5

Recommendation / Price Target

Ticker Rec. PT

URGN Buy $27.00

KPTI Buy $16.00

IMGN Buy $6.00

CALA NC NC

STML Buy $16.00

Company Description

THE LO

NG

VIE

W

Peer Group

UroGen Pharma Ltd.

Buy: $27.00 Price Target

URGN

Initiating Coverage

May 30, 2017

page 2 of 42 , Equity Analyst, (617) 342-7866, [email protected] J. Andrews

Please see important disclosure information on pages 38 - 42 of this report.

UroGen Pharma Ltd. (URGN) – Buy Rating - $27 Price Target

Our take: Until the recent approvals of the PD-1/PD-L1monoclonal antibodies (mAbs) in metastatic urothelial cancer, this cancer has historically seen very little change in the treatment landscape. In 1st line upper tract urothelial cancer (UTUC) and bladder cancers, the standard of care (SOC) remains surgery followed by adjuvant chemotherapy. Surgery has associated risks, co-morbidities, high costs, and a large proportion of patients will invariably have disease recurrence. URGN’s strategy is to change the treatment paradigm from surgery to chemotherapy-ablation with MitoGel (low-grade UTUC) and VesiGel (low-grade non-muscle invasive bladder cancer [NMIBC]). Beyond LG UTUC and LG NMIBC, URGN is developing Vesimune (an immunotherapy) in combination with PD-1/PD-L1 antibodies (mAb) for high-grade (HG) NMIBC. URGN leverages its novel RTGel platform technology which uses generic mitomycin (MMC) as the chemotherapeutic. RTGel allows for longer dwell time of MMC (up to eight hours) in the kidney or bladder and is able to overcome the anatomic challenges of the kidney and bladder. Early data from Phase II studies of MitoGel and VesiGel demonstrate very promising Complete Remission (CR) rates -- 62% for MitoGel and 86% for VesiGel -- along with an unremarkable safety profile (very similar to MMC, though we await Ph. III data for their true risk/benefit profiles). The Ph. III, single-arm, MitoGel OLYMPUS study is ongoing with top-line results expected in mid-2018, while a Ph. II(b) study of VesiGel is to commence in H1 2018. Following an over-subscribed IPO, URGN is well-funded through 2018. Lastly URGN has a solid management team with regulatory and commercial experience and a high-quality Board of Directors. We model $229M and $204M in adjusted peak MitoGel and VesiGel sales. With the potential for positive clinical progress and data updates for MitoGel in the OLYMPUS study through 2018, a growing appreciation for URGN’s broad urothelial cancer portfolio strategy, and meaningful market opportunities, and high-quality clinical shots on goal, we see upside from current levels over the long-term.

Looking to become a leader in the treatment of urological cancers with three novel therapies. Urothelial cancers (UC) represent the kidney, ureters, and bladder, and a U.S. prevalence of ~625,000 and an annual incidence of ~80,000. Beyond the recent approvals of five PD-1/PD-L1 mAbs for the treatment of metastatic UC, LG and HG UC are treated with surgery (over multiple years) and adjuvant chemotherapy. There are currently no drugs approved for 1L UTUC or NMIBC. URGN’s strategy is to develop MitoGel and VesiGel as chemo-ablative therapies for 1L use and replace (and delay) surgery and potentially improve outcomes and delay recurrence of tumors. Beyond LG UTUC and NMIBC, URGN is developing Vesimune in combination with PD-1/PD-L1 mAbs for the treatment of HG NMIBC. If URGN’s strategy is successful, its portfolio will target ~80% of the UC market.

Executive Summary (1/3)

URGN

Initiating Coverage

May 30, 2017



MitoGel: looking to become the 1st drug ever approved for LG UTUC. MitoGel targets LG UTUC, which has a U.S. prevalence and annual incidence of ~14,500 and ~3,000, and tumor resection of visible tumors is the SOC. If LG disease progresses to HG disease, the patient can undergo a nephroureterectomy (complete removal of kidney and ureter). Data in 13 assessable patients in a Compassionate Use Program (CUP) study demonstrated a very promising CR rate of 62%, with only three of eight CR patients having disease recurrence. Due to the promising safety and efficacy profile from the CUP, FDA encouraged URGN to move directly into a single-arm Ph. III study (OLYMPUS), which enrolled its 1st patient in April 2017. This 74-patient study is expected to report final top-line results by mid-2018, followed by a 505(b)2 rolling NDA submission later in 2018, if the data are positive. We believe the FDA has been very accommodative in its dealings with URGN and realizes the unmet need in LG UTUC and preventing/delaying nephroureteroectomies. FDA is comfortable with a single-arm study with CR rate as the primary endpoint (and durability of response data can be submitted at a later date). While FDA has not indicated what the CR rate for OLYMPUS needs to be to support approval, we believe there is ample regulatory precedent for FDA to approve MitoGel if the CR rate is even in the low to mid-20% (a readily achievable CR). We model $229M in peak-adjusted sales in 2031 (75% probability).

VesiGel: targeting the larger NMIBC market. VesiGel targets LG NMIBC, which has a U.S. prevalence and annual incidence of ~465,000 and ~63,000, and transurethral resection of bladder tumor (TURBT) surgery followed by intravesically delivered adjuvant chemotherapy is the SOC (usually water-based MMC, although the chemotherapy used varies). It is estimated that 100,000+ TURBTs are performed annually. A 2016 meta-analysis of seven EORTC studies in 2,596 Ta/T1 (lower-risk) bladder cancer patients (78% of whom previously used intravesical therapy) indicates recurrence rates at one year are between 15% and 61%, suggesting new therapies are needed. URGN has done thorough dose-ranging work in Ph. II and has identified 80mg VesiGel as the appropriate dose to study in a Ph. II(b) study, expected to start in H1 2018. In a Ph. II(a) dose-ranging study vs. 40mg VesiGel and water-based MMC, 86% of patients dosed with 80mg achieved a CR compared to 70% for water-based MMC. VesiGel’s safety profile is unremarkable at this time with 60+ assessable patients from Ph. II, and AEs generally similar to MMC. For patients who achieved a CR in Ph. II, only 20% had recurrence of disease at one year, a numerically lower rate than historical SOC data. Unlike MitoGel’s more rapid path to market, we conservatively assume VesiGel has to complete a Ph. III study and reaches the U.S. market in 2023. We model $204M in peak-adjusted sales in 2031 (55% probability).



URGN

Initiating Coverage

May 30, 2017



Vesimune, an immunotherapy approach to HG NMIBC. HG NMIBC represents a U.S. market opportunity of ~50,000 (up to 20% of bladder cancer prevalence). The current SOC is TURBT followed by up to three years of adjuvant Bacillus Calmette-Guerin (an immunotherapy which is very toxic), thus limiting its broad usage. Vesimune is a re-formulation of FDA-approved imiquimod, a toll-like 7 receptor (TLR7) agonist. Bladder cancers are believed to over-express TLR7, offering a novel target to treat HG NMIBC. In monotherapy Ph. II studies, Vesimune has generated CR rate of 40%. URGN’s strategy is to develop Vesimune in combination with PD-1/PD-L1 mAbs (e.g., Keytruda, Opdivo, etc.) in order to harness a patient’s own immune system to combat NMIBC.

No radio silence for URGN through 2018. Due to the open-label nature of the OLYMPUS study URGN will be able to begin providing interim efficacy and safety updates after a sufficient number of patients have been enrolled, possibly by late 2017 at the Society for Urologic Oncology Meeting (November/December) or February 2018 at the ASCO GU Meeting. Top-line CR results are expected by mid-2018 (with durability of response data later in 2018 through mid-2019). In addition to MitoGel, there will be VesiGel and Vesimune clinical updates and potential BotuGel data from an Allergan Ph. II study in over-active bladder disease in 2019, which will help contribute to a solid amount of news flow through 2018.

Well-funded through key MitoGel data in mid-2018. Net proceeds for the IPO are expected to be up to ~$62M, which should fund corporate activities through early 2019. Use of net proceeds include: $17M to complete the Ph. III MitoGel OLYMPUS study, ~$14M to file the INDA and start the Ph. II(b) VesiGel study (in H1 2018), and the remainder for clinical development work, including studying Vesimune in combination with PD-1/PD-L1 mAbs.

Experienced management team and Board of Directors. CEO Ron Bentsur’s previous experience includes being CEO at Keryx and overseeing FDA approval (via a 505(b)2 NDA) and the U.S. launch of Auryxia. President Gil Hakim has led clinical development and dialog with FDA on MitoGel and VesiGel and was instrumental in negotiations with Allergan on the global BotuGel license. Medical Director Dr. Schoenberg is a leading clinician in the fields of urology and bladder cancer. The BOD is highlighted by Dr. Arie Beldegrun, a urologist by training, and Ms. Kathryn Falberg, most recently CFO at Jazz.



URGN

Initiating Coverage

May 30, 2017



UroGen’s Development Pipeline

Program Indication(s) Status

MitoGel Low-grade upper tract urothelial

carcinoma (LG UTUC)

MitoGel represents UroGen's 1st-line chemo-ablative, non-surgical approach to LG UTUC. Phase III

commenced in April 2017 after filing the INDA in December 2016. The Phase III OLYMPUS study will

enroll ~70 patients. The standard of care (SOC) is radical nephroureterectomy. After removal of visible

tumors, instillation of neoadjuvant or adjuvant chemotherapy (if kidneys remain) has not been

proven to be very effective. In a Compassionate Use study the Complete Remission rate is 62% (per

PDE response criteria) with primarily Grade 2 side effects. The MitoGel formulation includes mitomycin

as the active drug. UroGen plans on submitting a rolling 505(b)2 NDA filing with mitomycin as the

reference drug and based on CR rate.

VesiGel Low-grade non-muscle invasive

bladder cancer (LG NMIBC)

VesiGel represents UroGen's 1st-line chemo-ablative, non-surgical approach to replace TURBT. The

SOC is Trans Urethral Resection of Bladder Tumor (TURBT), followed by a series of intravesical

instillations of prophylactic chemotherapeutic drugs, such as mitomycin or BCG. A Ph. II(a) study in

Europe is ongoing with final data expected in Q2 2017. A Ph. II(b) is expected to commence in H1 2018

with a goal to replicate Ph. II(a) data. In Ph. II(a), the high-dose (0.12%, 80mg) demonstrated a CR rate

of 86%. Of the 28 patients who achieved a CR, 79% had a durable CR at twelve months compared to

TURBT with adjuvant water-based mitomycin's 40-60% recurrent rate.

Vesimune (TMX-

101)

High-grade non-muscle invasive

bladder cancer (carcinoma in

situ) (HG NMIBC)

30% of all NMIBC is high-grade disease. Vesimune is a reformulation of Zyclara (imiquimod), a Toll-like

receptor 7 agonist, approved in two indications. UroGen licensed rights in 2015 from Telormedix SA.

The SOC is TURBT followed by BCG, an immunotherapy-based drug. In a Ph. I pilot study, a 40% CR

rate was observed in 10 patients. The initial study was a dose-escalation study in 23 patients.

BotuGel Overactive bladder Partner Allergan plans on commencing a Ph. II study in the fall 2017. BotuGel is UroGen's RTGel re-

formulated with Botox as the active drug. UroGen received $17.5M in up front cash with a deal total of

$225M, including clinical, regulatory, and commercial milestones and a low single-digit royalty rate.

Source: Company reports and Jefferies

URGN

Initiating Coverage

May 30, 2017



UroGen’s Upcoming Milestones Chart

Program Timing Event

Q2 - Q4 2017 Present CUP data at medical meetings (e.g., AUA, ASCO, and Society of Urologic Oncology).

Late 2017 Meet with CHMP to determine registration path in Europe.

Late H1/Mid-2018 Complete enrollment in OLYMPUS Study.

H2 2018 Top-line results from the OLYMPUS Study.

End 2018 Submit 505(b)2 NDA on a rolling submission basis.

Mid 2019 FDA's decision on MitoGel NDA.

Q2 - Q4 2017 Present data at medical meetings (e.g., AUA, ASCO, and Society of Urologic Oncology).

Early Q2 2017 Complete the EU-based Ph. (a) dose-ranging study (n=80) with one year of follow-up.

H2 2017+ File INDA for LG NMIBC.

H2 2017+ Publish Ph. II(a) data.

H1 2018 Initiate a U.S./EU-focused Ph. II(b) study in order to replicate EU Ph. II(a) data.

H2 2018 Close enrollment for Ph. II(b) study.

Q3 2019 Top-line Ph. II(b) results.

End 2019 Meet FDA to determine if it will need to run a randomized, controlled Ph. III or a single-arm

study (and add more patients as part of a Ph. II/III).

Q2 - Q4 2017 Present pre-clinical data in combination with PD-1/PD-L1 mAbs at medical meetings.

2018 Initiate Ph. I(b) study in combination with PD-1/PDL-1 mAbs.

Q3 2017 Allergan to file INDA in overactive bladder

Q4 2017 Allergan to initiate Ph. II(b) study in overactive bladder

MitoGel

VesiGel

Vesimune

BotuGel

Source: Company reports and Jefferies estimates

URGN

Initiating Coverage

May 30, 2017



Valuation (1/2)

We are establishing a $27 price target for URGN based on blended DCF and price-to-sales analyses. Our DCF is based on future cash flows from MitoGel in LG UTUC and VesiGel in LG NMIBC. Our revenue estimates are probability weighted by indication (75% for MitoGel and 55% for VesiGel). Our DCF extends to 2031. We utilize a 13% discount rate, which we believe is appropriate for a company of URGN’s size and stage of development (beginning of Ph. III for MitoGel and Ph. II(a) for VesiGel), and probability-weighted revenues. We assume URGN independently advances MitoGel and VesiGel to the market in the U.S. and will need to establish a U.S. sales force. We model secondary stock offerings in 2019 and 2021 to help URGN establish its commercial organization and to continue to advance its pipeline. We do not currently include ex-U.S. revenues in our estimates at this time as the EU regulatory pathway has not been determined by URGN. This methodology yields a probability-weighted DCF valuation of $22.66/share.

$ M, except per share 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E

Revenue $7.5 $0.0 $13 $18 $37 $77 $148 $197 $250 $286 $324 $358 $393 $412 $432

Net Cash and Equivalents $73 $45 $116 $81 $156 $149 $186 $256 $359 $483 $635 $811 $1,012 $1,237 $1,481

Unlevered Free Cash Flow ($13) ($27) ($35) ($35) ($30) ($7) $37 $69 $103 $125 $152 $176 $200 $225 $245

PV of Cash Flow ($13) ($24) ($27) ($24) ($18) ($4) $18 $30 $39 $42 $45 $46 $46 $46 $44

Disc. Rate

NPV of Cash Flows 2017E - 2034E $250 13.0%

Plus: Cash/equivalents (End 2017, pro forma ) $73

Equity Value $323

# Of Shares in M Outstanding at the End of 201714.3

DCF Value per Share $23

UroGen Pharma, Ltd. DCF Analysis ($M)


URGN

Initiating Coverage

May 30, 2017



Valuation (2/2)

We are establishing a $27 price target for URGN based on blended DCF and price-to-sales analyses. As with our DCF analysis, we utilize a 13% discount rate and apply a 5.0x to 5.5x P/S multiple to 2024 revenue of $197M. Depending on the ramp in revenues for URGN’s approvals, these multiples may prove to be conservative. We selected 2024 as our valuation year as this represents five full years post-initial estimated U.S. launch of MitoGel and two years post-launch of VesiGel. Our price-to-sales method derives an estimated share price of $29.05 to $33.87. Blending our DCF and P/S methods yields a $27/share price target.

Revenues

Estimated 2024 Revenues $197 $197

Total Revenues $197 $197 Valuation Year 2024

Multiple 5.0 5.5 Valuation Date 12/31/2024

Multiple*Revenues $984 $1,083 Today's Date 5/26/2017

Discount Rate 14.0% 13.0% 6.6 Years

Periods 6.6 6.6

PV of Future Revenues $414 $483

Estimated Diluted Shares

Outstanding at end of 2017 (M)14 14

Estimated Share Value $29.05 $33.87

Note: Shares in millions and revenues in $ millions.

URGN Price-to-Sales Valuation

Source: Jefferies estimates

DCF $22.7

P to S $31.5

Blended $27.1


URGN

Initiating Coverage

May 30, 2017



UroGen’s Key Risks

Clinical Risks: As with all companies in biotechnology that are investing in the development of clinical programs, trial failures and regulators requesting additional and unexpected studies prior to approving marketing applications can lead to delays in time to market entry and could also possibly result in the discontinuation of programs. URGN initiated a Ph. III study in LG UTUC based on promising data in 13 assessable UTUC patients. These data may not be replicated in the Ph. III OLYMPUS study.

Regulatory Risks: The FDA/EMA could determine that the marketing application(s) for any of URGN’s clinical candidate(s) is/are inadequate and could delay/deny approval(s). Any delays in approval timelines could impact our earnings estimates, price target, and/or rating. The FDA may determine that MitoGel and VesiGel are not approvable through its 505(b)2 pathway, and, as a result, URGN may have to conduct additional clinical studies.

Commercial and Competitive Risks: Our estimates rely on future sales of MitoGel in LG UTUC and VesiGel in LG NMIBC, and there is no guarantee URGN or a potential future pharmaceutical/biotechnology partner will be successful marketing either product candidate, even in the absence of any competitors, in the EU or the U.S. Our estimates rely on the success of the company to receive drug reimbursement from both private and public payers. These payers may not opt to adequately reimburse for either product candidate based on future study results and how both medicines are priced.

Financing Risks: Even after URGN’s May 2017 IPO, in order to advance its development candidates and to establish a U.S. sales force, URGN may need to raise additional capital. As a result, there is the potential for shares holders to have their investments experience dilution.

URGN

Initiating Coverage

May 30, 2017



Introduction/Background to UroGen

UroGen Pharma Ltd. is a clinical stage biotechnology company focused on development of medicines for the treatment of urological diseases (e.g., cancer, overactive bladder).

URGN’s goal is to become a leader in the treatment of UC affecting the kidneys, ureters, and bladder.

MitoGel, VesiGel, and Vesimune target the LG UTUC and LG/HG NMIBC patient populations (~625,000 U.S. prevalence).

URGN’s strategy is to replace 1L surgery for LG UTUC and NMIBC with URGN’s tumor ablating/non-surgical approaches.

MitoGel is URGN’s lead asset and could be the 1st drug ever approved to treat LG UTUC. In very advanced patients in a CUP study it demonstrated impressive efficacy with a CR rate of 62%. If the ongoing Ph. III OLYMPUS study is positive, MitoGel could reach the U.S. market by mid-2019.

VesiGel is being studied in LG NMIBC and has demonstrated equally impressive CR rates with low recurrence rates in a Ph. II(a) study. VesiGel’s efficacy is comparable to TURBT (and adjuvant MMC). A Ph. II(b) study is to commence in H1 2018.

MitoGel and VesiGel are based on URGN’s proprietary formulations which includes MMC, a generic chemotherapy drug used off-label in a water-based formulation as an adjuvant or supplemental post-surgery therapy. URGN plans to pursue a 505(b)2 regulatory strategy (referencing MMC data), which could save time and financial resources needed to reach the U.S. market.

The secret behind MitoGel and VesiGel is URGN’s RTGel, a platform technology leveragable across oncology and other urologic conditions. After instillation by the oncologist, the gel enables longer dwelling time (up to eight hours) in the kidney/ureter and/or bladder, which could lead to higher efficacy. To date, there are no suggestions this gel interferes with the natural flow of fluids in the urinary tract. URGN currently has IP coverage through 2031, including composition of matter patents.

URGN has a solid executive team and BOD (including Dr. Arie Beldegrun, CEO of Kite, who is a urologist by training).

Use of proceeds from the IPO will enable URGN to complete the Ph. III MitoGel OLYMPUS study, file the VesiGel INDA, start a Ph. II(b) VesiGel study in H1 2018, and fund other research and development work.

URGN licensed use of RTGel to Allergan for use in development of BotuGel for over-active bladder disease. This license provides some measure of validation of URGN’s IP, the science behind the RTGel platform, the scalability of manufacturing, etc. as Allergan conducted thorough diligence on RTGel.

MitoGel OLYMPUS Clinical Progress and Start of VesiGel Ph. II studies are key clinical milestones in 2017/2018.

URGN

Initiating Coverage

May 30, 2017



Top-level overview of UroGen’s Portfolio

URGN’s current strategy is to target LG UTUC and LG and HG NMIBC.

As the SOC for LG UTUC and LG NMIBC is surgery, URGN’s goal is to replace 1L surgeries with use of their chemo-ablating drugs, MitoGel and VesiGel.

In HG NMIBC, the SOC is TURBT + adjuvant Bacillus Calmette-Guerin (an immunotherapy which is very toxic).

─ URGN plans on studying Vesimune in combination with PD-1/PD-L1 mAbs as an alterative less toxic regimen.

The prevalence and incidence of UC in the U.S. is ~625,000 and ~80,000, respectively.

As the median age at diagnosis is ~73 years of age, a significant portion of the costs of care fall on the federal government. In 2010 Medicare costs were estimated at $4B and are expected to grow to $5B+ by 2020 (due to an aging population).

In 2012 the estimated prevalences of LG NMIBC (VesiGel) and LG UTUC (MitoGel) were 325,000 and 14,500, respectively.

There are no FDA-approved drugs in 1L LG UTUC or LG NMIBC, but there are three drugs approved for use in LG NMIBC as post-TURBT treatment options.

─ The most widely used adjuvant drug, post-TURBT is water-based MMC.

While URGN’s datasets are relatively small, all three investigational therapies have promising early profiles.

CR rates for all three agents are 62%, 86%, and 40% in their respective indications.

MitoGel and VesiGel are relatively clean drugs, with adverse events (AEs) that are primarily related to MMC, and there have been limited cases of Serious Adverse Events (SAEs).

The MitoGel Ph. III OLYMPUS study enrolled its 1st patient in early April, the VesiGel Ph. II(a) is nearing completion with a Ph. II(b) planned for H1 2018, and preclinical studies are underway for Vesimune + PD-1/PD-L1 mAb combinations.

Drug MitoGel VesiGel Vesimune

Indication LG UTUC LG NMIBC HG NMIBC and CIS

Development stage Ph. III underway Ph. II(b) start H1 2018 Ph. II

Prevalence 14,500 325,500 139,500

Incidence 3,000 42,000 18,000

Standard of Care No SOC; tumor

resection;

nephroureterectomy

TURBT + adjuvant water-

based mitomycin (six

weekly instillations)

TURBT + adjuvant BCG

(up to 2-3 years)

"N" assessable 13 69 10

Efficacy (CR) 62% 86%; 79% 1-year

recurrence free

40%

Time to Market 2019 2023 TBD

JEF estimates $305M in 2031 $370M in 2031 N/A


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Urothelial Cancers (1/4)

UC includes the kidneys, urinary bladder, and accessory organs (e.g. urethra, ureter).

~ 90-95% of UC are bladder cancers and the prevalence is ~580,000 in the U.S. and the prevalence of UTUC is ~45,000.

Of these bladder cancers, ~80-85% are non-muscle invasive and ~15-20% are muscle invasive.

─ Prevalence of NMIBC is 465,000 and MIBC is 115,000.

For NMIBC 70-80% are low-grade and 20-30% are high-grade, while for UTUC ~40% are LG and ~60% are HG.

─ The grade of the cancer relates to the invasiveness of the tumors into the muscle wall of the bladder and kidney/ureter.

─ The two grading scales for bladder cancers are the WHO (1973) and WHO/ISUP (2004).

UC is diagnosed through use of an endoscopic evaluation -- a non-surgical viewing instrument that is used to examine the entire urinary tract.

The SOC is generally surgery in LG UTUC and LG/HG NMIBC.

In LG NMIBC the SOC is transurethral resection of bladder tumor (TURBT) followed by intravesically delivered adjuvant chemotherapy.

─ TURBT is conducted at a hospital and under general anesthesia and requires an overnight stay.

─ Surgery is not optimal for these patients due to their advanced age and co-morbidities.

─ In patients with low or intermediate-risk NMIBC, multiple medical societies (NCCN, AUA, EAU, ESMO) recommend a single intravesical instillation of a chemotherapy immediately following resection.

In HG NMIBC the SOC is TURBT + adjuvant BCG.

In MIBC the SOC is radical cystectomy (removal of the bladder).

There is no SOC in LG UTUC, although the clinician can attempt to remove visible tumors.

─ In LG UTUC the goal is to remove tumors if the clinician can see them, and in HG disease it is complete removal of the kidney.

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Urothelial Cancers – Staging of Bladder Cancers (2/4)

As noted in the exhibit on the right, bladder cancer is categorized by the invasiveness of tumor(s) into the bladder tissue (non-muscle or muscle).

Invasiveness refers to how far into the wall of the bladder the cancer has invaded.

─ NMIBC: not into the muscle

─ MIBC: into the muscle

Staging refers to the depth of invasion and the magnitude and rate of spreading of the cancer.

─ NMIBC includes: Ta (mucosal layer; noninvasive papillary disease; confined to the epithelial layer), T1 (submucosal layer; tumor invades the subepithelial connective tissue), and Tis (high-grade lesions; noninvasive flat carcinoma and also known as carcinoma in situ = CIS).

─ Ta (70%), T1 (20%), and Tis (10%).

─ MIBC: T2 to T4.

A key prognostic factor for survival is whether the tumor is muscle invasive or not.

The five-year survival rate is 15-63% if MIBC and 90% if NMIBC.

NMIBC tumor types are circled Source: UroGen F-1 page 79

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Urothelial Cancers – UTUC (3/4)

Upper Tract Urothelial Carcinoma represents an orphan disease cancer with an aggressive disease course.

In 2012, the prevalence of UTUC was ~45,000 and an incidence of ~7,500 (with 4,500 with HG and ~3,000 with LG disease).

Mean/median OS is five to seven years, which is lower than LG NMIBC.

Patients can have significant co-morbidities due to the potential for having one or both kidneys removed.

There is no SOC in 1L patients. In LG UTUC clinicians may attempt to remove visible tumors, while the SOC in patients with HG disease is radical nephroureterectomy (complete removal of the kidney and ureter).

─ In LG disease, this procedure can occur every 12 to 18 months.

─ In LG, the clinician may opt to administer a single course of adjuvant water-based MMC to help prevent recurrence.

─ Nephroureterectomy costs ~$80,000/year if there are no complications, while costs can exceed $200,000+ if both kidneys have to be removed (and the patient requires kidney dialysis).

There is a high rate of disease recurrence and the disease can transition from LG to HG disease (decreasing survival).

─ A 2009 article in Journal of Endourology found a 90% rate of recurrence in LG UTUC, and 20% had their disease progress to HG UTUC and subsequently had to undergo kidney and upper tract removal.

Key challenges facing oncologists in effectively removing the tumors are anatomical and physiologic.

Due to the kidney’s anatomy, oncologists can only resect what tumors they can see as some tumors are hidden and others can’t be removed due to their location within the kidney(s).

URGN strategy is to replace surgical removal of tumors and prevent the need for nephroureterectomy (and having the patient go onto dialysis) with a non-surgical option and chemo-ablate tumors.

Based on MitoGel’s formulation, it is able to overcome the anatomic and physiologic challenges of the kidney and also allow for longer dwell time in the kidney and ureter (increasing the likelihood the MMC is able to kill the tumor(s)).

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Urothelial Cancers – Bladder Cancer (4/4)

Bladder cancers represent a larger market opportunity with a less aggressive disease course than UTUC.

The prevalences of NMIBC and MIBC are 465,000 and 115,000.

Mean/median OS is 10-15 years.

The SOC in 1L NMIBC is TURBT +/- adjuvant chemotherapy, and in MIBC it is TURBT + BCG.

─ Only three drugs have been approved for use following surgery (Thiotepa, BCG, and Valstar), but are sparingly used.

─ Other drugs used as adjuvant chemotherapy include MMC, doxi/epi/valrubicin, and gemcitabine.

Off-label water-based MMC is generally the preferred chemotherapy drug used in the adjuvant setting.

─ Depending on the extent of bleeding following surgery, MMC will be administered in a single instillation within 12 hours of surgery (peri-operative) or over six weekly instillations two to three weeks after surgery (adjuvant).

─ In the adjuvant setting, additional courses are administered for up to one year.

URGN estimates that ~100,000 TURBT procedures are performed annually and the cost per procedure is $10,000 to $15,000.

The goal of adjuvant chemo is to prevent re-seeding of cancerous cells, delay recurrence, and prevent disease progression.

BCG is approved for use in CIS and HG NMIBC.

While TURBT is usually successful in removing the tumors, disease recurrence rates at one year are high and range from 15% to 61% and the probability of disease progression at five years is 7% to 40%.

The number, size, and prior recurrence rates are the most important variables in determining the likelihood of recurrence.

Concerns about toxicities, administering chemotherapy in the operating or recovery room, and reimbursement (for off-label drugs) has limited the broad use of chemotherapy post-TURBT.

Rates are high because the oncologist may not remove all of the tumor, he/she may miss visible tumors, and adjuvant chemotherapy (if used) does not sufficiently kill any remaining tumor(s).

─ In addition, the adjuvant chemotherapy has limited dwell time in the bladder (< 15 minutes).

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May 30, 2017



RTGel: Reverse Thermalization Gel

RTGel is a novel polymeric biocompatible reverse thermal (sensitive) gelation hydrogel, which is a liquid at low temperatures and converts into gel/solid form within 10-15 minutes when heated (or inside the human body).

The components are polymer-based and are all FDA approved as inactive ingredients. These include:

─ Oraqix (a periodontal gel), Namenda, and Xeloda .

MitoGel and VesiGel are formulated with MMC chemotherapy as the active drug.

Mitomycin C (MMC) is a generic drug used off-label but only in a water-based formulation as an adjuvant post-surgery.

It is administered intravesically through a catheter, but washes out of the kidney/bladder after 5-10 minutes, when the body generates urine/voids itself.

─ This limited dwell time decreases the efficacy of MMC (or any chemotherapy used to treat LG UTUC or LG NMIBC).

Upon instillation into the bladder, ureter, and/or kidney, the RTGel converts to into gel/solid form.

─ The MMC is slowly released by the gel as urine interacts with the RTGel.

─ The RTGel resides in the bladder or kidney for ~5 to 8 hours and the longer dwell time is believed to improve MMC’s efficacy.

─ URGN believes there is a greater chance the tumor cells will go through their S-phase while the instilled MMC is present and still in contact with tumors, thus leading to higher efficacy.

MitoGel has received a CE mark as a device in Europe.

The Ph. III MitoGel dose is 40mg MMC while the VesiGel dose is 80mg MMC.

─ VesiGel requires a higher dose and a larger volume because of a larger surface area compared to the kidney and ureter.

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It has been a busy six years for URGN.

In the exhibit on the right we highlight key financing, clinical, and regulatory milestones.

VesiGel clinical development commenced in January 2013 with the 1st dose administered.

The MitoGel CUP commenced in November 2014.

BotuGel development commenced in March 2013 and culminated with the Allergan license in October 2016.

URGN inlicensed rights to Vesimune in October 2015.

The executive team was expanded in August 2015 with Ron Bentsur joining as CEO.

The pivotal Ph. III OLYMPUS study for MitoGel started in April 2017, five years after testing of the RTGel formulation started in late 2011.

URGN has completed four private/VC rounds of financings culminating with its May 4, 2017, IPO.

A Brief History of UroGen

Date Event

July 2011 $1.5M private round of financing.

November 2011 Hydrogel tested in humans.

November 2012 CE mark received for hydrogel.

January 2013 VesiGel 1st dosed in humans.

March 2013 BotuGel development in Overactive Bladder initiated.

May 2013 $7M VC round of financing.

December 2013 BotuGel development in other indications initiated.

August 2014 Orphan Drug designation from FDA for MitoGel.

October 2014 $8.5M VC round of financing.

November 2014 MitoGel CUP started.

January 2015 Ph. II(a) VesiGel study initiated.

August 2015 Expanded management team.

October 2015 Acquired Vesimune from Telormedix SA.

November 2015 $18M round with new VC and insider financing.

October 2016 BotuGel licensing agreement with Allergan and $17.5M upfront.

December 2016 INDA accepted for MitoGel.

April 2017 Enrolled 1st patient into the Ph. III OLYMPUS MitoGel study.

May 2017 Initial Public Offering of common stock.


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Thirteen patients had confirmed LG UTUC and were evaluable for response, and eight of the 13 had a CR, and five achieved a PR.

─ The sole patient who completed six instillations but was not assessable was a 93-year old who refused to go back to the clinic for a confirmatory CR assessment.

─ The 62% CR (per protocol; 44% per ITT) is impressive considering the advanced stage of the patients

─ Three of the eight CR’s had recurrences, which occurred at four, eight, and nine months.

MitoGel was well-tolerated with AEs typically seen with MMC: fatigue, allergic reaction, burning sensation, nausea, fever, and dysuria (and there were limited Gr2+ events).

Four patients were unable to complete therapy due to AEs: pyelonephritis, acute renal failure, pancytyopenia, and cardiac condition.

SAEs appear un-related to MitoGel and include: acute pyelonephritis (kidney infection), hydronephrosis (swelling of upper urinary tract due to build up of urine due to obstruction), severe arrhythmia, cardiac asthma, aggravation of renal function, hyperkalemia, pancytopenia, scarring/narrowing of the calyceal infundibulum, and asymptomatic extravasation of the upper tract.

MitoGel Compassionate Use Program (CUP) Data

Impressive CR rate in a very advanced patient population.

URGN initiated a Ph. II CUP study in the U.S., Europe, and Israel in late 2014.

─ Patients were very advanced with unilateral or bilateral, LG or HG UTUC, and solitary or both kidneys.

─ A number of patients were scheduled for nephroureteroectomy surgery.

Patients received six weekly instillations of 40mg, while two received maintenance dosing.

Since the study was conducted under a CUP, the investigators had broad latitude in who was allowed into the study and how they were cared for, and there was no uniform protocol with respect to dosing or the primary endpoint.

─ The data has not undergone independent monitoring or quality assurance.

Treated N= 22

LG UTUC N= 18

Completed six

instillations

N= 14

Assessed

endoscopically

N= 13

CR N= 8; 62%

PR N= 5; 38%

Recurrences N-3; 4, 8, 9 months

Maintenance N= 2


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Pivotal OLYMPUS study is underway with top-line data by mid-2018.

The OLYMPUS study dosed its 1st patient in April 2017.

─ Recruitment is expected to take 12 to 15 months and be completed by mid-2018.

─ The study includes 17 U.S. centers, and URGN may add EU centers after meeting with EMA/CHMP later in 2017.

OLYMPUS is not being conducted under an SPA.

The study will enroll ~74 patients who are naïve or recurrent LG, non-invasive UTUC.

─ Patients previously treated with BCG or who have Tis/CIS will be excluded.

─ Patients will be treated once weekly for six total instillations of MitoGel (4mg MMC per mL and a maximum dose of 15 mL).

─ Patients who achieve a CR will be treated once monthly as a maintenance dose for a total of 11 additional instillations.

The primary endpoints are safety and CR rate -- which will be assessed 4 to 6 weeks following the last instillation (the PDE visit).

Key secondary endpoints include: CR at month three after the PDE, MMC levels (in a sub-set of patients), PK, durable CR, and CR at month 12 after the PDE.

A key difference vs. the CUP, is CR patients will be able to receive maintenance dosing every month.

This was introduced into the protocol in order to help prevent recurrence of tumors and to maintain the CR.

Assuming a positive OLYMPUS study, URGN plans to file for approval based on CR.

In pre-Ph. III meetings, the FDA indicated a single-arm study was sufficient to file for approval.

URGN does not need to await durability data and can begin the rolling 505(b)2 NDA submission after the CR data are available.

─ URGN plans to submit the durable CR data later in 2018/2019 and as a supplement to the clinical data package.

While MitoGel’s CR rate is the primary endpoint, consistent with other single-arm studies with response rate as the primary endpoint, we expect FDA to also focus on durability of response as a key secondary endpoint (and supportive of the CR rate).

MitoGel: Looking to Climb Mount OLYMPUS

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Accommodative FDA in development of the MitoGel clinical program

Aware of the unmet need in the LG non-invasive UTUC population, the FDA has been accommodative with URGN in developing the regulatory pathway for MitoGel and potentially accelerating the time to market.

1) FDA did not ask for a control arm in OLYMPUS and indicated URGN could move directly into a pivotal study.

─ FDA did not ask for a randomized study because there are a limited number of patients, there is no drug used as SOC, there were ethical considerations for a control arm, and a randomized study would have been a challenging study to enroll in a relatively short time.

─ When URGN met with the FDA to review the CUP data, URGN thought the agency would suggest a Ph. II study prior to starting a pivotal study.

─ The FDA had wanted to review safety data in ~20 patients, but appeared to have changed its views after reviewing the results for the 14 enrolled/13 assessable CUP patients.

─ The level of clinical activity in the CUP was unexpected and the safety profile was encouraging.

2) FDA agreed to CR rate as the primary endpoint.

─ CR is viewed as a surrogate endpoint as opposed to a longer-term endpoint, such as prevention of recurrence, PFS, or OS.

3) FDA indicated that URGN could file for approval based on CR rate and there was no need to wait for durability of response data.

─ URGN believes waiting for durability data would have added a year+ (if FDA requested 12-month CR rate).

4) To prevent recurrences, patients who achieve CR in OLYMPUS are eligible to receive maintenance MitoGel.

─ This could also help support the longer-term risk/benefit profile for MitoGel as part of the NDA review (and separately with payers).

5) Study size for OLYMPUS is n=74, which is consistent with several solid tumor cancers approved by FDA based on single-arm studies with ORR/DOR as the primary endpoints.

─ These include Alecensa (n=87) and Bavencio (n=88).

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What is the bar for approval for MitoGel in UTUC? (1/3)

The response criteria for the Ph. III MitoGel OLYMPUS study are based on Primary Disease Evaluation (PDE) and not RECIST criteria, so a different set of response criteria.

The MitoGel OLYMPUS study is a single-arm study with Complete Remission (CR) as the primary endpoint.

─ Durability of CR response -- which assesses whether a tumor recurs -- is a secondary endpoint of the study.

In OLYMPUS, CR is assessed four to six weeks after the sixth weekly instillation of MitoGel.

PDE criteria define CR and PR as the following:

─ CR: no tumor(s) initially detected by the oncologist are present at the time of evaluation. This follows six weekly instillations of MitoGel.

─ PR: the size or # has decreased or if following an initial CR, there is tumor recurrence within three months after evaluation.

─ FDA is focused on whether or not a tumor is completely ablated and whether it returns (recurs).

─ Under PDE criteria, a PR is not relevant to assessing MitoGel’s efficacy.

As part of its four pre-INDA meetings with the FDA, the agency did not indicate what the CR rate has to be in order to support approval.

FDA did indicate that it is less likely to believe 15% is clinically meaningful.

URGN (and its advisors) believes that 20%+ is likely to be viewed as clinically meaningful.

The OLYMPUS study IRB/Ethics Committee required URGN to include a null hypothesis in the protocol.

─ OLYMPUS is powered at 74 patients with the lower bound of the 95% CI for CR of 15% with a median CR of 30%.

As we discuss on the following slide, our research suggests that a 20% CR is probably sufficient to support approval of MitoGel (provided it is coupled with a reasonable safety profile and no major decline in durability of CR).

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May 30, 2017



While MitoGel has not been granted Breakthrough Therapy Designation (BTD), the OLYMPUS study is not being conducted under an SPA, and URGN does not plan on pursuing accelerated approval (using Objective Response Rate (ORR) as a surrogate endpoint), we identified approvals for solid tumor cancer therapies from 2013-2017 which we think provide substantial evidence that FDA could approve MitoGel based on a CR rate in the lower 20% range.

Note that we are not suggesting that this is the CR rate that will be generated in OLYMPUS. Interviews with key advisors to URGN suggest they believe the 62% CR in the CUP can be improved upon based on a “healthier” patient population in the Ph. III study. Rather, our goal is to try to identify what is the minimal CR rate that FDA would use to consider approving MitoGel in LG UTUC.

Over this four-year period FDA has approved 11 therapies under BTD based on single-arm studies which used ORR or ORR/DOR as the primary endpoint. See chart on the following slide.

─ While these approvals are not based on PDE criteria, we believe they provide directional evidence on how the FDA may assess MitoGel, and what is clinically meaningful in terms of CR.

ORR for the 11 single arm studies ranged from 15% (Tecentriq) to 61% (Tagrisso).

Five PD-1/PD-L1 mAbs (Bavencio, Imfinzi, Keytruda, Opdivo, and Tecentriq) have been approved for the treatment of metastatic UC.

─ Note: these are end-stage UC patients with metastatic disease (a different population than LG UTUC).

─ Bavencio 16%, Imfinzi 17%, Keytruda 29%, Opdivo 20% and Tecentriq with 15% ORR.

─ CR by RECIST criteria have been less impressive: Bavencio 6%, Imfinzi 3%, Keytruda 7%, Opdivo 3%, and Tecentriq 6%.

Duration of response data for the PD-1/PD-L1’s are limited with Opdivo reaching a median of 10.3 months, while the median has not been met for Bavencio, Imfinzi, Keytruda, or Tecentriq.

FDA has approved two drugs in non-urothelial cancer indications (Alecensa and Bavencio) based on single-arm studies with ORR as the primary endpoint, and both studies had <100 patients in both studies.

─ These sizes are consistent with the size of OLYMPUS (n=74), suggesting OLYMPUS is appropriately sized and powered.


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Drug Indication Endpoint

for AA

N ORR 95% CI DOR (months) Study Design

1.4 to 8.5+ (in 18 responders)

8 patients @ 6+ months

2nd Line urothelial cancer ORR, DOR 370 29% 24, 34 Not reached (1.4+, 17.8+) Single arm

2.6+ to 10+ (in 33 responders);

13 patients @ 6+ months

2nd Line urothelial cancer ORR, DOR 270 19.6% 15.1, 24.9 10.3 (1.9+, 12+) Single arm

Tecentriq 2nd Line urothelial cancer ORR, DOR 310 14.8% 11.1, 19.3 Not reached (2.1+, 13.8+) Single arm

Imfinzi 2nd Line urothelial cancer ORR, DOR 182 17.0% 11.9, 23.3 Not reached (0.9+, 19.9+) Single arm

2nd Line urothelial cancer ORR, DOR 242 16.1% 10.8, 22.8 Not estimable (1.4+, 17.4+) Single arm

Metastatic Merkel cell carcinomaORR/DOR 88 33.0% 23.3, 43.8

2.8 to 23.3+; n=88; DOR > 6 and 12

months reportedSingle-arm

Alecensa ALK+ NSCLC, progressed on or intolerant to crizotinib (2 studies)ORR,DOR 87; 138 38%; 44%

28, 49; 36,

537.5 Study 1; 11.2 Study 2 Single arm

Rubraca 3rd Line Deleterious BRCA mutation in advanced ovarian cancer (2

studies)ORR, DOR 106 54% 44, 64 9.2 Single arm

Tagrisso EGFR T790+ NSCLC, progressed on or after an EGFR TKI (2 studies)ORR,DOR 201; 210 57%: 61%

50, 64; 54,

681.1 to 5.6 Single arm

Zykadia ALK+ NSCLC, progressed on or intolerant to crizotinib (2 studies)ORR, DOR 163 55.0% 47, 62 7.4 Single arm

Ibrance In combo with letrozole in ER+, HER2- Breast Cancer as initial

endocrine-based therapy for metastatic disease PFS 84 55.4%

Not

reportedNot reported Randomized +/- letrozole

Lartruvo Soft-tissue sarcoma with doxorubicin, not amenable to

radiotherapy or surgery

ORR, PFS,

OS66 18.2% 9.8, 29.6 Not reported

Open-label, randomized

combo with doxo vs. doxo

Solid Tumors

Metastatic Melanoma, disease progression post-ipilimumab or

BRAF inhibitorORR,DOR 173 24% 15, 34

Source: FDA.gov, package inserts, company reports, and Jefferies

Bavencio

Keytruda Open label, randomized two

doses

Opdivo Metastatic Melanoma, disease progression post-ipilimumab or

BRAF inhibitorORR,DOR 120 32% 23, 41

Open label, randomized vs.

dacarbazine or carbo/pac

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Ongoing Ph. II(a) will conclude in Q2 2017.

The study is a randomized, active control study which compares VesiGel 40mg, VesiGel 80mg, vs. water-based MMC 40mg.

─ These patients did not undergo TURBT, but instead were treated with chemo-ablative therapy.

─ If a patient did not achieve a CR after the six planned weekly instillations, they were then scheduled for TUBRT procedure.

─ The study started September 2013 and is being conducted in EU and Israel.

─ Eighty-one patients were randomized and 65 are assessable to date.

─ The primary endpoint is CR rate four weeks after the sixth instillation and durability of CR at one year.

Impressive efficacy, numerically higher than water-based MMC.

Nineteen of 22 (86%) treated with VesiGel 80mg have achieved a CR and did not need surgical intervention

─ 79% remained in remission 12 months after completion of dosing (and not getting additional treatment).

Safety: incidence of AEs is low in both VesiGel arms and were not significantly different, and include: dysuria (46% vs. 23%), allergy (12% vs. 12%), lower urinary tract symptoms (15% vs. 4%), and hematuria (12% vs. 0%).

SAEs have been limited with allergy, weakness, hematuria, difficult or labored breathing, and lower urinary tract symptoms.

─ None were deemed to be related to VesiGel except two cases of allergy cases, which resolved.

VesiGel in LG NMIBC (1/4)

Clinical development of VesiGel began in early 2013, URGN has completed one Ph. I and two Ph. II studies, and URGN’s goal is to develop it in 1L LG NMIBC as an alterative to TURBT.

N

assessable

CR

rate

Tumors

< 1 cm

Tumors

> 1 cm

< 3

tumors

> 3

tumors

VesiGel 0.06%40mg MMC in

64ml gel20 45% 50% 40% 50% 0%

VesiGel 0.12%80mg MMC in

64ml gel22 86%

88%

(n=16)

83%

(n=6)

81%

(n=16)

100%

(n=6)

MMC 0.1%40mg MMC in

water 23 70%

78%

(n=18)

40%

(n=5)

80%

(n=15)

50%

(n=8)

Source: Company reports, Lenis et al. ASCO 2017, and Jefferies

Ph. II randomized study 81

enrolled and 65 assessable

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CR analyses based on # of tumors and tumor size suggest VesiGel performs differently than water-based MMC.

As noted on the prior slide, VesiGel 80mg generated numerically better CR rates than water-based MMC in patients with tumors > 1 cm and if they had > 3 tumors.

─ This is an important study result as this is the TURBT population and target market that URGN is pursuing.

Based on treatment guidelines, oncologists can use fulguration (using electrical current delivered by a needlelike electrode) to remove tumors that are 0.5 to 1cm.

─ The fulguration procedure can be conducted in the oncologist’s office, while tumors > 1cm require the TURBT procedure.

─ While rates of recurrence are low (~10%), use of fulguration is variable and is based on the doctor’s experience, expertise, the patient’s profile, and reimbursement from payers.

VesiGel 80mg appears to be the dose with the best blend of efficacy and safety.

As noted on the prior slide, VesiGel 80mg is numerically better than VesiGel 40mg for CR (86% vs. 45%).

URGN conducted a separate Ph. II(a) in H1 2015 in the EU and Israel where it assessed doses up to 120mg.

─ Fourteen patients were enrolled and 12 were assessed:

─ There was an impressive 83% CR, however there was a higher rate of MMC-related AEs and five of the 12 could not complete all six instillations.

─ Interestingly, CRs were observed in three of the five who could not complete all six doses.

A Ph. I study in India assessing 40 or 80mg MMC (in 40ml gel) established proof-of-concept for VesiGel.

The study enrolled 19 patients with 15 assessable for response.

─ A 40% CR rate was observed at the 40mg dose and a 50% CR rate at the 80mg dose.


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VesiGel 80mg compares favorably to TURBT’s recurrence-free survival (RFS) at one-year.

As noted in the following exhibit, URGN has Ph. I and II(a) data in 69 assessable patients and data in 41 patients who completed 12 months of follow-up.

Of these 41 patients, 28 achieved a CR and did not receive follow-up treatment.

These 28 patients were followed for recurrence data, and 79% of patients were still free of tumors through 12 months.

In the randomized Ph. II, recurrence free survival (RFS) at one year for TURBT was 75% (n=20), while it was similar for VesiGel 40mg (n=8; 88%), VesiGel 80mg (n= 16; 78%), and water-based MMC (n= 14; 86%). There were no significant differences across the four groups (p=0.91).

URGN plans to start a Ph. II(b) in H1 2018 in order to develop additional data on the 80mg dose.

This U.S.-based study will assess ~100-150 patients and will focus on developing more safety and efficacy data for 80mg dose.

─ URGN is waiting to start this study because it wants the MitoGel OLYMPUS study to be well-enrolled and underway before shifting internal resources to the Ph. II(b).

Data are expected sometime in H2 2019.

If the Ph. II(b) data replicate Ph. II(a) data, URGN believes it may be able to negotiate a single-arm Ph. II/III study to support FDA approval.


69

41 Month 3 Month 6 Month 9 Month 12

28 100% 89% 86% 79%


Ph. I/II assessable patients

Completed 12-month follow-up

Patients that achieved CR

% of 28 CRs that remained recurrence-free @

URGN

Initiating Coverage

May 30, 2017



Paced by completion of the Ph. II(b) study, the Ph. III program could start in late 2019/early 2020.

Depending on the design of the Ph. III clinical program, it could take two to three years to complete the Ph. III study.

─ We conservatively assume top-line Ph. III data by 2022 and onto the U.S. market by 2023 (if URGN has to conduct a separate Ph. III study).

Possible Ph. III study designs could include:

1) URGN may pursue a orphan disease approach (< 200,000 patients) where the patient is at high-risk and is frail and it is not advisable for the patient to under-go anesthesia (and TURBT).

─ The key advantage is this could be addressed in a single-arm study.

─ The disadvantage is that the market opportunity is smaller compared to the broad NMIBC market.

2) A non-inferiority study vs. TURBT.

3) A single-arm study where the Ph. II(b) study is further enlarged after the 100-150 patients’ data are analyzed.

─ This assumes the Ph. II(b) data are compelling and at least similar to the current Ph. II(a) data for 80mg VesiGel.

4) In patients who achieve a CR, compare maintenance VesiGel vs. maintenance water-based MMC on tumor recurrence.

The totality of the Ph. II data will help determine what the Ph. III study design will be. As noted in the Spectrum Pharmaceuticals apaziquone ODAC Briefing Book in 2016 (page 36)…”Despite the obvious need for new, and better studied therapies, the Bladder Cancer Task Force and the NCI recently acknowledged the lack of trials in the NMIBC space within the National Clinical Trials Network. The reason for this is many fold, including lack of consensus on trial endpoints and appropriate control arms. There is a lack of recommendations on appropriate clinical trial designs founded on evidence-based literature, current practice guidelines, and expert consensus…”


URGN

Initiating Coverage

May 30, 2017



Vesimune may offer a novel immunotherapy approach to treating HG NMIBC and Carcinoma in Situ (CIS).

The current SOC in HG NMIBC is TURBT followed by adjuvant BCG; however, BCG’s use is limited due to significant toxicities.

Vesimune is a liquid, re-formulation of imiquimod and is a toll-like 7 receptor (TLR7) agonist.

─ Imiquimod is FDA-approved for genital warts, actinic keratosis, and superficial basal cell carcinoma (as a topical formulation).

─ TLRs initiate the innate immune response system, and Vesimune may be able to elicit an adaptive immune response in the presence of released bladder cancer antigens, which may translate into a lasting acquired immune response.

─ Bladder cancer cells are believed to over-express TLR7.

Vesimune has received orphan drug designation for CIS.

Early Ph. I data in 35 patients support further investment in Vesimune.

Vesimune has successfully completed a dose-escalation Ph. I study in 23 NMIBC patients, and was well-tolerated.

A 2nd Ph. I (b) study has been completed in 12 CIS patients with 10 assessable patients

─ Vesimune was instilled for six weeks as single agent and generated 40% CR (with CR being assessed ~6 weeks after the last dose).

─ Patients were followed for up to six months with two of the four CR’s remaining in remission with no therapy and the two other CRs remaining in remission after using adjuvant BCG.

─ Key reported side effects include: urination urgency, dysuria, fatigue, urinary tract infections (with one SAE), and hematuria.

URGN’s strategy is to combine Vesimune with a checkpoint inhibitor in order to augment the body’s immune response and preliminary pre-clinical data demonstrate proof-of-concept.

Data at the AUA 2017 Meeting indicate the combination significantly reduced bladder weight in mice compared to either therapy alone. Bladder weight is considered a marker of tumor burden.

Further analyses suggest a trend towards reduced regulatory T-cell and an increase in activated CD4 and CD8 T-cells.

Vesimune (TMX-101) in HG NMIBC

URGN

Initiating Coverage

May 30, 2017



URGN plans to pursue a 505(b)2 regulatory pathway for MitoGel and VesiGel.

FDA has agreed that both drug candidates qualify for review through the 505(b)2 pathway, where it can reference (some) publically available data on MMC.

─ URGN is working with a regulatory consultant who has filed 200+ 505(b)2 NDAs.

Background on MMC.

MMC is a cytotoxic antibiotic that inhibits DNA synthesis.

Typical side effects include: dysuria, urinary urgency and frequency, malaise, arthralgia/flu-like symptoms, rash, anorexia, nausea/vomiting, urinary incontinence, bladder spasms, and hematuria.

MMC is used to treat different types of cancers:

─ In bladder it is used off-label in the adjuvant setting (post-surgery) to reduce recurrence of tumors.

─ In stomach, pancreas, esophagus, lower bowel, biliary tract and lung cancers it is used in combination with other drugs.

─ In anus cancer it can be used in combination with other drugs or radiotherapy.

─ In certain breast cancers it is used as a single agent or in combination with other drugs.

MMC has never been studied as a chemo-ablative therapy in LG UTUC or LG NMIBC.

In bladder cancer the usual dose is 20-40mg weekly or three times a week for a total of 20 doses (per the mitomycin-C Kyowa label).

─ Forty mg is reconstituted in 20 mL sterile water.

─ It is administered for up to six weekly instillations in a water formulation in the adjuvant setting for LG NMIBC, and to a lesser extent in LG UTUC.

URGN believes its VesiGel Ph. II study (which included water-based MMC as a control arm), is the only clinical data assessing MMC as a chemo-ablative drug in a randomized study in LG NMIBC.

505(b)2 Strategy Leveraging MMC

URGN

Initiating Coverage

May 30, 2017



U.S. revenue Summaries for MitoGel and VesiGel

We believe at peak MitoGel and VesiGel represent an adjusted $433M commercial opportunity in the U.S.

We probability weight our U.S. revenue estimates for MitoGel and VesiGel at 75% and 55%, respectively.

We do not include Vesimune, BotuGel royalties (from Allergan), or ex-U.S. sales/royalties for MitoGel and VesiGel in our estimates.

We assume peak penetration of 20% in 2025 for MitoGel and 50% in 2029 for VesiGel.

─ This equates to 3,600 and 25,350 patients on MitoGel and VesiGel.

Our MitoGel estimates are based on LG UTUC prevalence (~14,500) and VesiGel estimates are based on LG NMIBC incidence (~44,000).

─ By 2025 MitoGel will have fully penetrated the LG UTUC annual incidence (currently estimated at 3,000).

We assume FDA approvals of MitoGel and VesiGel in 2019 and 2023.

Our adjusted 2031 U.S. MitoGel and VesiGel revenue estimates are $229M and $204M, respectively.

Our un-adjusted 2031 U.S. MitoGel and VesiGel revenue estimates are $305M and $370M, respectively.

Peak

Adjusted

Sales ($M)

Peak

Unadjusted

Sales ($M)

Probability

of Success

# of Patients

on Therapy at

peak

Peak

penetration

MitoGel $229 $305 75% 3,600 20%

VesiGel $204 $370 55% 25,350 50%


URGN

Initiating Coverage

May 30, 2017



Financials and Licensing Agreement with Allergan

Well-capitalized to advance its programs through early 2019.

URGN ended 2016 with $21.4M, and along with an expected $7.5M cash milestone from Allergan in Q3 2017, would be expected to fund activities into mid-2018.

URGN has 1.43M options (exercisable at stock prices up to $6.73/share) and 728,312 warrants (exercisable at weighted average stock price of $7.81/share).

In order to establish a U.S. commercial infrastructure, advance its pipeline, and launch MitoGel and VesiGel in the U.S., we model $100M secondary stock offerings (3.7M share offerings at $27/share) in 2019 and 2021, respectively.

Licensing agreement with Allergan for BotuGel.

October 2016 Allergan licensed worldwide rights for use of RTGel for the use of neurotoxins.

The deal structure includes $225M in aggregate cash milestones:

─ $17.5M upfront, $7.5M for filing of the INDA, $20M for initiation of a Ph. III study, $15M for initiation of a 2nd Ph. III study in a 2nd indication, $50M and $25M for 1st commercial sales in the U.S. and Europe, $25M and $15M for 1st commercial sales in the U.S. and Europe in a 2nd indication, and $50M for sales exceeding $500M.

─ Tiered low single-digit royalty rate on net global sales.

─ Allergan is responsible for expenses related to clinical, regulatory, and commercial.

The agreement is positive in many regards, as Allergan conducted extensive due diligence (which validates RTGel, URGN’s IP, etc.), provided up front cash, and ties into URGN’s strategy to focus on uro-oncology indications.

URGN

Initiating Coverage

May 30, 2017



Management and Key Board Member Bios

Ron Bentsur – Chief Executive Officer. Ron became CEO in August 2015 and spent the previous five years as CEO of Keryx Biopharmaceuticals, where he oversaw FDA approval of Auryxia and its subsequent launch. Prior to Keryx Mr. Bentsur was CEO of XTL Biopharmaceuticals from 2006 through April 2009. Prior to XTL he served a CFO at Keryx (2.5 years) and in technology and biotechnology investment banking (6.5 years). Ron serves on the boards of Stemline Therapeutics and Advance Inhalation Technologies, Ltd.

Gil Hakim – President, Israel Operations. In August 2015 Gil transitioned from CEO of URGN (since August 2010) to President. Prior to URGN he served as Director of New Product Development at Medispec (six years) and was focused on cardiology, urology, and dermatology. Prior to Medispec he worked at MTRE Advanced Technologies, Omrix Biopharmaceuticals, and Biosense-Webster (the last two companies being acquired by Johnson & Johnson). Gil has worked closely with FDA on the MitoGel and VesiGel clinical programs and played a key role in negotiating the Allergan BotuGel license.

Gary Titus – Chief Financial Officer. Gary joined URGN in July 2015. He has 12 years experience as a CFO with BioCardia, SciClone Pharmaceuticals, Kosan Biosciences, and Nuvelo, Inc.

Dr. Mark Schoenberg – Medical Director. Dr. Schoenberg joined URGN in February 2016 and has 20+ years experience in clinical research across all forms of bladder cancer. He is considered a leading clinician in the fields of urology and bladder cancer. Dr. Schoenberg received his M.D. license from the University of Texas Health Services Center.

Dr. Arie Beldegrun – Chairman of the Board. Dr. Beldegrun has been chairman since December 2012 and is Professor of Urology at the Geffen School of Medicine at UCLA. Dr. Beldegrun is a urologist by training who still cares for patients one or two days a month. Dr. Beldegrun is CEO of Kite Pharma, Inc. and also serves on the board of Teva Pharmaceutical Industries Ltd.

Kathryn Falberg – Director. Kate joined the board in April 2017 and has served as CFO at Jazz Pharmaceuticals, Inc. and SVP Finance and Strategy and CFO at Amgen. Ms. Falberg also serves on the boards of Aimmune Therapeutics, aTyr Pharma, Axovant Sciences, BioMarin Pharmaceutical, and Medivation (until its acquisition by Pfizer).

Additional members of the BOD include: Dr. Stuart Holden, Chaim Hurvitz, Ran Nussbaum, and Dr. Pini Orbach.

URGN

Initiating Coverage

May 30, 2017



Intellectual Property

MitoGel, VesiGel, and RTGel issued patents provide coverage through 2031.

URGN’s IP estate covers five inter-related disciplines:

─ Pharmaceutical composition of matter, manufacturing processes, combination therapy, methods of treatment, and delivery system for bladder and upper urinary tract cancers.

─ URGN has composition of matter patents on MitoGel, VesiGel, and Vesimune.

URGN has four issued patents which expire between 2024 to 2031 in the U.S. and are related to methods, systems, new compounds, and compositions for treating urinary tract cancers.

60+ applications have been filed.

Twelve issued worldwide patents relate to other product candidates and expire between 2030 and 2031.

FDA has granted Orphan drug designation to MitoGel, which will provide seven years of regulatory exclusivity upon approval (tentatively through 2026 if approved in 2019).

URGN

Initiating Coverage

May 30, 2017



UroGen Model: Income Statement

FY 2016A Q1 2017E Q2 2017E Q3 2017E Q4 2017E FY 2017E FY 2018E FY 2019E FY 2020E FY 2021E FY 2022E FY 2023E FY 2024E

Revenues

BotuGel collaboration revenue $17.5 $0.0 $0.0 $7.5 $0.0 $7.5 $0.0 $10.0 $0.0 $0.0 $0.0 $0.0 $0.0

MitoGel U.S. sales (1) $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $2.5 $17.6 $36.9 $77.0 $120.7 $147.2

VesiGel U.S. sales (1) $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $26.9 $49.6

Total Revenues $17.5 $0.0 $0.0 $7.5 $0.0 $7.5 $0.0 $12.5 $17.6 $36.9 $77.0 $147.7 $196.8

Expenses

Cost of Goods Sold $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.1 $0.9 $1.8 $3.9 $7.4 $9.8

Total research and development $10.3 $2.5 $3.6 $4.0 $4.3 $14.5 $19.6 $25.2 $27.0 $32.4 $36.0 $36.1 $36.3

Total general and administrative $6.4 $1.7 $2.2 $1.2 $1.7 $6.8 $9.0 $22.2 $28.0 $34.7 $45.4 $49.7 $55.0

Total Expenses $16.7 $4.2 $5.8 $5.2 $6.1 $21.2 $28.6 $47.4 $55.9 $68.9 $85.3 $93.2 $101.1

Income (Loss) from Operations $0.8 ($4.2) ($5.8) $2.3 ($6.1) ($13.7) ($28.6) ($34.9) ($38.2) ($32.1) ($8.2) $54.5 $95.7

Finance expenses, net $2.7 $0.0 $0.0 $0.1 $0.1 $0.2 $0.6 $0.8 $1.0 $1.2 $1.6 $1.8 $2.4

Other Income (expense), net $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

Income (Loss) before income tax expense ($1.9) ($4.2) ($5.7) $2.4 ($6.0) ($13.5) ($28.0) ($34.1) ($37.3) ($30.9) ($6.7) $56.3 $98.1

Income tax expense (benefit) $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $16.9 $29.4

Net Income (GAAP) ($1.9) ($4.2) ($5.7) $2.4 ($6.0) ($13.5) ($28.0) ($34.1) ($37.3) ($30.9) ($6.7) $39.4 $68.7

EPS Basic (GAAP) ($1.91) ($1.81) ($0.74) $0.19 ($0.49) ($1.58) ($2.14) ($1.92) ($1.98) ($1.31) ($0.27) $1.55 $2.59

EPS Diluted (GAAP) ($1.91) ($1.81) ($0.58) $0.17 ($0.42) ($1.26) ($1.84) ($1.71) ($1.78) ($1.20) ($0.25) $1.42 $2.40

Net Income (Non-GAAP) $0.0 ($3.8) ($5.2) $2.8 ($5.4) ($11.6) ($25.4) ($29.8) ($32.3) ($24.8) $0.7 $47.2 $77.0

EPS Basic (Non-GAAP) $0.01 ($1.64) ($0.68) $0.23 ($0.45) ($1.35) ($1.94) ($1.67) ($1.72) ($1.05) $0.03 $1.85 $2.90

EPS Diluted (Non-GAAP) $0.01 ($1.64) ($0.53) $0.20 ($0.38) ($1.08) ($1.67) ($1.49) ($1.54) ($0.97) $0.03 $1.71 $2.69

Shares Outstanding (Basic) 2.31 2.31 7.7 12.1 12.1 8.6 13.1 17.8 18.8 23.5 24.5 25.5 26.5

Shares Outstanding (Diluted) 2.31 2.31 9.9 14.3 14.3 10.7 15.3 20.0 21.0 25.7 26.7 27.7 28.7

UroGen Pharma Ltd. (URGN)Statement of Operations

FY Ends December 31

(In 000's except per share amounts)


Note: (1) = probability-adjusted

URGN

Initiating Coverage

May 30, 2017



UroGen Model: Balance Sheet

Fiscal year ends December 31 2015A 2016A 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E

ASSETS

Current Assets:

Cash and cash equivalents $18.0 $21.4 $72.7 $45.4 $115.7 $80.8 $156.1 $149.1 $186.4 $255.9

Accounts receivable $0.0 $0.1 $0.0 $0.0 $0.9 $1.3 $2.8 $5.8 $11.1 $14.8

Inventory $0.0 $0.1 $0.0 $0.0 $0.4 $0.6 $1.3 $2.7 $5.2 $6.9

Prepaid expenses and other current assets $1.1 $0.4 $0.4 $0.4 $0.4 $0.4 $0.4 $0.4 $0.5 $0.5

Total Current Assets $19.1 $22.0 $73.2 $46.0 $117.6 $83.3 $160.7 $158.1 $203.2 $278.1

Property and equipment, net $0.3 $0.7 $1.5 $2.2 $3.0 $3.9 $4.8 $5.7 $6.7 $7.7

Restricted deposit $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

Other non-current assets $0.0 $0.3 $0.3 $0.3 $0.3 $0.3 $0.3 $0.3 $0.3 $0.3

TOTAL ASSETS $19.4 $23.1 $74.9 $48.4 $120.9 $87.4 $165.7 $164.1 $210.2 $286.0

LIABILITIES & STOCKHOLDERS EQUITY

Current Liabilities

Accounts payable and accrued expenses $1.7 $1.9 $3.2 $4.3 $7.1 $8.4 $10.3 $12.8 $14.0 $15.2

Total current liabilities $2.2 $3.1 $3.9 $5.0 $7.8 $9.1 $11.0 $13.5 $14.7 $15.9

Long-term Liabilities

Warrants for preferred shares $0.9 $3.6 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

Total Liabilities $3.1 $6.7 $3.9 $5.0 $7.8 $9.1 $11.0 $13.5 $14.7 $15.9

Stockholders' Equity

Common stock $0.01 $0.01 $0.02 $0.02 $0.03 $0.03 $0.03 $0.04 $0.04 $0.04

Additional paid-in capital $41.5 $43.5 $47.9 $52.6 $57.9 $63.7 $70.1 $77.1 $84.8 $93.3

Accumulated deficit ($25.3) ($27.2) ($38.8) ($64.2) ($94.0) ($126.3) ($151.1) ($150.4) ($103.2) ($26.2)

Total stockholders' equity $16.281 $16.3 $71.0 $43.5 $113.1 $78.3 $154.7 $150.6 $195.5 $270.2

TOTAL LIABILITIES AND EQUITY $19.4 $23.1 $74.9 $48.4 $120.9 $87.4 $165.7 $164.1 $210.2 $286.0


UroGen Pharma Ltd. (URGN)

Balance Sheet

(In 000's $)

URGN

Initiating Coverage

May 30, 2017



UroGen Model: Cash Flow Statement

Fiscal year ends December 31 2015A 2016A 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss) ($12.7) ($1.9) ($13.5) ($28.0) ($34.1) ($37.3) ($30.9) ($6.7) $39.4 $68.7

Depreciation $0.1 $0.2 $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 $0.1

Stock-based compensation expense $0.4 $2.0 $1.9 $2.6 $4.3 $5.0 $6.1 $7.4 $7.8 $8.3

Change in operating assets & liabilities

Accounts receivable $0.0 ($0.1) $0.1 $0.0 ($0.9) ($0.4) ($1.4) ($3.0) ($5.3) ($3.7)

Inventory $0.0 ($0.1) $0.1 $0.0 ($0.4) ($0.2) ($0.7) ($1.4) ($2.5) ($1.7)

Increase in accounts payable, accrued expenses, and advances $1.2 $0.5 ($1.3) ($1.1) ($2.8) ($1.3) ($2.0) ($2.4) ($1.2) ($1.2)

Net cash provided by (used in) operating activities $0.6 $1.2 ($1.1) ($1.1) ($4.2) ($1.8) ($4.1) ($6.9) ($9.0) ($6.6)

Net Cash from Operations ($7.2) $4.2 ($12.6) ($26.5) ($34.0) ($34.0) ($28.8) ($6.1) $38.3 $70.4

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and equipment, net ($0.3) ($0.7) ($0.7) ($0.8) ($0.8) ($0.8) ($0.9) ($0.9) ($1.0) ($1.0)

Net Cash from Investing ($0.3) ($0.8) ($0.7) ($0.8) ($0.8) ($0.8) ($0.9) ($0.9) ($1.0) ($1.0)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from sale of common stock $0.0 $0.0 $62.2 $0.0 $100.0 $0.0 $100.0 $0.0 $0.0 $0.0

Issuance cost $0.0 ($0.6) $2.5 $0.0 $5.0 $0.0 $5.0 $0.0 $0.0 $0.0

Net Cash from Financing $21.6 ($0.0) $64.7 $0.0 $105.0 $0.0 $105.0 $0.0 $0.0 $0.0

Net Increase in Net Cash $14.1 $3.4 $51.3 ($27.3) $70.2 ($34.9) $75.3 ($7.0) $37.3 $69.4

Net Cash at beginning of period $3.9 $18.0 $21.4 $72.7 $45.4 $115.7 $80.8 $156.1 $149.1 $186.4

Net Cash/Securities, End of Period $18 $21 $73 $45 $116 $81 $156 $149 $186 $256


UroGen Pharma Ltd. (URGN)

Cash Flow Statement

(In 000's $)

URGN

Initiating Coverage

May 30, 2017



Company DescriptionUroGen Pharma Ltd. is a clinical stage biotechnology company focused on development of medicines for the treatment of urological diseases(e.g., cancer, overactive bladder). Its three lead oncology therapies are MitoGel (in Phase III for low-grade Upper Tract Urothelial Cancer),VesiGel (in Ph. II(a) for low-grade Non-Muscle Invasive Bladder Cancer), and Vesimune (an immunotherapy in Ph. II for high-grade Non-MuscleInvasive Bladder Cancer). MitoGel and VesiGel leverage UroGen’s RTGel platform technology. UroGen’s goal is for MitoGel and VesiGel toreplace 1st line surgery for LG UTUC and LG NMIBC. Top-line MitoGel results are expected by mid-2018. UroGen licensed rights to BotuGelto Allergan in 2016 for the treatment of overactive bladder disease. UroGen’s headquarters are located in Ra’anana, Israel and NY, NY.

Analyst Certification:I, Matthew J. Andrews, certify that all of the views expressed in this research report accurately reflect my personal views about the subjectsecurity(ies) and subject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specificrecommendations or views expressed in this research report.As is the case with all Jefferies employees, the analyst(s) responsible for the coverage of the financial instruments discussed in this report receivescompensation based in part on the overall performance of the firm, including investment banking income. We seek to update our research asappropriate, but various regulations may prevent us from doing so. Aside from certain industry reports published on a periodic basis, the large majorityof reports are published at irregular intervals as appropriate in the analyst's judgement.

Investment Recommendation Record(Article 3(1)e and Article 7 of MAR)

Recommendation Published , 00:17 ET. May 30, 2017Recommendation Distributed , 00:20 ET. May 30, 2017Recommendation Recalled , 06:47 ET. May 30, 2017Recalled Recommendation Distributed , 06:47 ET. May 30, 2017

Company Specific DisclosuresFor Important Disclosure information on companies recommended in this report, please visit our website at https://javatar.bluematrix.com/sellside/Disclosures.action or call 212.284.2300.

Explanation of Jefferies RatingsBuy - Describes securities that we expect to provide a total return (price appreciation plus yield) of 15% or more within a 12-month period.Hold - Describes securities that we expect to provide a total return (price appreciation plus yield) of plus 15% or minus 10% within a 12-month period.Underperform - Describes securities that we expect to provide a total return (price appreciation plus yield) of minus 10% or less within a 12-monthperiod.The expected total return (price appreciation plus yield) for Buy rated securities with an average security price consistently below $10 is 20% or morewithin a 12-month period as these companies are typically more volatile than the overall stock market. For Hold rated securities with an averagesecurity price consistently below $10, the expected total return (price appreciation plus yield) is plus or minus 20% within a 12-month period. ForUnderperform rated securities with an average security price consistently below $10, the expected total return (price appreciation plus yield) is minus20% or less within a 12-month period.NR - The investment rating and price target have been temporarily suspended. Such suspensions are in compliance with applicable regulations and/or Jefferies policies.CS - Coverage Suspended. Jefferies has suspended coverage of this company.NC - Not covered. Jefferies does not cover this company.Restricted - Describes issuers where, in conjunction with Jefferies engagement in certain transactions, company policy or applicable securitiesregulations prohibit certain types of communications, including investment recommendations.Monitor - Describes securities whose company fundamentals and financials are being monitored, and for which no financial projections or opinionson the investment merits of the company are provided.

Valuation MethodologyJefferies' methodology for assigning ratings may include the following: market capitalization, maturity, growth/value, volatility and expected totalreturn over the next 12 months. The price targets are based on several methodologies, which may include, but are not restricted to, analyses of marketrisk, growth rate, revenue stream, discounted cash flow (DCF), EBITDA, EPS, cash flow (CF), free cash flow (FCF), EV/EBITDA, P/E, PE/growth, P/CF,P/FCF, premium (discount)/average group EV/EBITDA, premium (discount)/average group P/E, sum of the parts, net asset value, dividend returns,and return on equity (ROE) over the next 12 months.

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URGN

Initiating Coverage

May 30, 2017



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can vary depending on analyst recommendations for inclusion. Stocks will be added as new opportunities arise and removed when the reason forinclusion changes, the stock has met its desired return, if it is no longer rated Buy and/or if it triggers a stop loss. Stocks having 120 day volatility inthe bottom quartile of S&P stocks will continue to have a 15% stop loss, and the remainder will have a 20% stop. Franchise Picks are not intendedto represent a recommended portfolio of stocks and is not sector based, but we may note where we believe a Pick falls within an investment stylesuch as growth or value.

Risks which may impede the achievement of our Price TargetThis report was prepared for general circulation and does not provide investment recommendations specific to individual investors. As such, thefinancial instruments discussed in this report may not be suitable for all investors and investors must make their own investment decisions basedupon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Past performance ofthe financial instruments recommended in this report should not be taken as an indication or guarantee of future results. The price, value of, andincome from, any of the financial instruments mentioned in this report can rise as well as fall and may be affected by changes in economic, financialand political factors. If a financial instrument is denominated in a currency other than the investor's home currency, a change in exchange rates mayadversely affect the price of, value of, or income derived from the financial instrument described in this report. In addition, investors in securities suchas ADRs, whose values are affected by the currency of the underlying security, effectively assume currency risk.

Other Companies Mentioned in This Report• Amgen, Inc. (AMGN: $155.01, HOLD)• ImmunoGen Inc. (IMGN: $4.72, BUY)• Johnson & Johnson (JNJ: $126.92, HOLD)• Karyopharm Therapeutics, Inc. (KPTI: $8.95, BUY)• Kite Pharma (KITE: $73.11, BUY)• Pfizer, Inc. (PFE: $32.14, HOLD)• Stemline Therapeutics, Inc. (STML: $8.45, BUY)• Teva Pharmaceutical Industries Ltd (TEVA: $28.50, HOLD)

Notes: Each box in the Rating and Price Target History chart above represents actions over the past three years in which an analyst initiated on acompany, made a change to a rating or price target of a company or discontinued coverage of a company.Legend:

I: Initiating Coverage

D: Dropped Coverage

B: Buy

H: Hold

UP: Underperform

For Important Disclosure information on companies recommended in this report, please visit our website at https://javatar.bluematrix.com/sellside/Disclosures.action or call 212.284.2300.

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Initiating Coverage

May 30, 2017





Distribution of RatingsIB Serv./Past 12 Mos.

Rating Count Percent Count Percent

BUY 1088 50.09% 339 31.16%HOLD 917 42.22% 175 19.08%UNDERPERFORM 167 7.69% 13 7.78%

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This report is not an offer or solicitation of an offer to buy or sell any security or derivative instrument, or to make any investment. Any opinion orestimate constitutes the preparer's best judgment as of the date of preparation, and is subject to change without notice. Jefferies assumes no obligationto maintain or update this report based on subsequent information and events. Jefferies, its associates or affiliates, and its respective officers, directors,and employees may have long or short positions in, or may buy or sell any of the securities, derivative instruments or other investments mentioned ordescribed herein, either as agent or as principal for their own account. Upon request Jefferies may provide specialized research products or servicesto certain customers focusing on the prospects for individual covered stocks as compared to other covered stocks over varying time horizons orunder differing market conditions. While the views expressed in these situations may not always be directionally consistent with the long-term views

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expressed in the analyst's published research, the analyst has a reasonable basis and any inconsistencies can be reasonably explained. This materialdoes not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individualclients. Clients should consider whether any advice or recommendation in this report is suitable for their particular circumstances and, if appropriate,seek professional advice, including tax advice. The price and value of the investments referred to herein and the income from them may fluctuate. Pastperformance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchangerates could have adverse effects on the value or price of, or income derived from, certain investments. This report has been prepared independently ofany issuer of securities mentioned herein and not in connection with any proposed offering of securities or as agent of any issuer of securities. Noneof Jefferies, any of its affiliates or its research analysts has any authority whatsoever to make any representations or warranty on behalf of the issuer(s).Jefferies policy prohibits research personnel from disclosing a recommendation, investment rating, or investment thesis for review by an issuer priorto the publication of a research report containing such rating, recommendation or investment thesis. Any comments or statements made herein arethose of the author(s) and may differ from the views of Jefferies.

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For Important Disclosure information, please visit our website at https://javatar.bluematrix.com/sellside/Disclosures.action or call 1.888.JEFFERIES

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URGN

Initiating Coverage

May 30, 2017



may 30, 2017 price $18.48^ urogen initiate at buy and $27 ...(~2x the rate for turbt surgery plus...

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