Executive Summary / Key Takeaways

• CG Oncology is a late-stage clinical biopharmaceutical company focused on developing cretostimogene grenadenorepvec as a potential bladder-sparing therapy for bladder cancer, addressing significant unmet needs in BCG-unresponsive and intermediate-risk NMIBC.
• The company's lead asset, cretostimogene, demonstrated compelling efficacy and durability in the pivotal BOND-003 Cohort C trial, with a 75.5% complete response rate at any time and a 42.3% K-M estimated 24-month complete response rate, supporting an anticipated BLA submission in the second half of 2025.
• Cretostimogene exhibits a favorable safety profile with no Grade 3+ treatment-related adverse events reported in BOND-003 Cohort C, and translational data suggests no need for post-treatment close contact precautions, offering potential advantages over existing therapies.
• CG Oncology maintains a strong liquidity position with $688.4 million in cash, cash equivalents, and marketable securities as of March 31, 2025, providing an estimated cash runway into the first half of 2028 to fund operations through potential approval and initial commercialization.
• While the company faces typical biotech risks including regulatory uncertainty, reliance on third-party manufacturing, and ongoing litigation, its differentiated technology, robust clinical data, and solid financial footing position it for a potential market entry into a high-need therapeutic area.

A New Chapter in Bladder Cancer Treatment

CG Oncology, Inc. is charting a course to redefine the treatment landscape for bladder cancer, a disease marked by high recurrence rates and significant patient burden. As a late-stage clinical biopharmaceutical company, CGON's focus is squarely on developing cretostimogene grenadenorepvec, an investigational oncolytic immunotherapy designed as a potential backbone bladder-sparing therapeutic. The company's journey, which began in 2010 under the name Cold Genesys, Inc., has been dedicated to advancing this single, promising candidate through rigorous clinical development. This strategic focus aims to address critical unmet needs, particularly for patients with high-risk Non-Muscle Invasive Bladder Cancer (NMIBC) who no longer respond to the current standard-of-care, Bacillus Calmette-Guérin (BCG) therapy.

The current treatment paradigm for BCG-unresponsive NMIBC often culminates in radical cystectomy, the complete removal of the bladder, a procedure associated with profound social, functional, and emotional impact. Furthermore, a persistent shortage of BCG has exacerbated the challenge, creating a pressing need for effective alternatives, even in earlier disease stages like intermediate-risk NMIBC. CG Oncology's strategy is built upon the potential of cretostimogene to offer a highly effective, well-tolerated, and bladder-sparing option, positioning it as a potential alternative or complement to BCG and potentially alleviating the strain on BCG supply if approved for broader indications.

Cretostimogene represents a differentiated technological approach. It is an intravesically delivered oncolytic immunotherapy, meaning it is administered directly into the bladder. This targeted delivery mechanism is designed to selectively infect and replicate within cancer cells, leading to cell lysis and the release of tumor-associated antigens, thereby stimulating an anti-tumor immune response. Translational data presented at the European Association of Urology (EAU) Congress showed that cretostimogene levels peaked locally in the bladder immediately after instillation and were sustained for 4-5 days, with no systemic exposure detected. This lack of systemic exposure is a key differentiator, suggesting that post-treatment close contact precautions, often required with other therapies, may be unnecessary, enhancing patient convenience and potentially compliance.

The company's competitive positioning is primarily defined by its lead asset's clinical performance against existing and emerging therapies for NMIBC. While large pharmaceutical companies like Merck (MRK) and AstraZeneca (AZN) offer systemic immune checkpoint inhibitors (e.g., KEYTRUDA, Imfinzi) used in BCG-unresponsive settings, and companies like UroGen Pharma (URGN) offer other intravesical agents (e.g., JELMYTO), CGON's cretostimogene has demonstrated compelling efficacy and durability data that appears competitive, if not superior, in key metrics within its target population. For instance, reported complete response rates for cretostimogene in BOND-003 Cohort C appear higher than typical response rates seen with systemic checkpoint inhibitors in similar patient populations. This quantifiable performance edge in efficacy and durability, coupled with a favorable local safety profile and the potential for reduced post-treatment restrictions, forms the core of CGON's competitive moat against both large-cap diversified players and smaller, niche competitors like URGN.

Early strategic collaborations, such as the 2019 agreement with Lepu Biotech for the China territory and the 2020 agreement with Kissei Pharmaceutical for various Asian countries, provided initial funding and expanded the potential geographic reach of cretostimogene. While license and collaboration revenue has been modest ($52 thousand in Q1 2025 vs. $529 thousand in Q1 2024, reflecting the timing of milestone recognition), these partnerships represent early steps in leveraging the asset's potential globally. The Kissei agreement, in particular, is structured as a collaborative arrangement involving cost-sharing for global development activities and reciprocal royalty obligations, highlighting the strategic importance of this partnership beyond just licensing revenue.

Advancing the Pipeline and Building for Commercialization

CG Oncology's development strategy is centered around expanding the potential utility of cretostimogene across the NMIBC spectrum. The most advanced program is the Phase 3 BOND-003 trial in high-risk BCG-unresponsive NMIBC. Enrollment for Cohort C, evaluating cretostimogene monotherapy in patients with carcinoma in situ (CIS) with or without Ta/T1 disease, is complete. Updated data presented through April 2025 from Cohort C showed a 75.5% complete response (CR) rate at any time and a Kaplan-Meier estimated 24-month CR rate of 42.3%. The median duration of response (DoR) exceeds 28 months and is ongoing, indicating potentially best-in-disease durability. Notably, 97.3% of patients in Cohort C remained free from progression to muscle-invasive disease at 24 months, and 91.6% of responders remained cystectomy-free. These robust results, coupled with Fast Track and Breakthrough Therapy designations from the FDA, underpin the company's expectation to initiate a Biologics License Application (BLA) submission to the U.S. FDA in the second half of 2025.

Beyond the core BCG-unresponsive CIS population, CGON is exploring cretostimogene in other high-risk NMIBC settings. The exploratory BOND-003 Cohort P, initiated in April 2024, is evaluating monotherapy in patients with only Ta/T1 disease. Initial data from Cohort P presented in April 2025 showed a promising estimated 90.5% high-grade recurrence-free survival at 3 and 9 months in treated patients, with updated data expected in the second half of 2025. The Phase 2 CORE-008 trial, initiated in October 2024, is evaluating cretostimogene in BCG-naïve (Cohort A) and BCG-exposed (Cohort B, expanded March 2025) high-risk NMIBC patients. A third cohort (Cohort CX) was initiated in April 2025 to evaluate cretostimogene in combination with gemcitabine in the high-risk BCG-exposed population, exploring combination strategies.

The company is also targeting the intermediate-risk NMIBC population with the Phase 3 PIVOT-006 trial, evaluating adjuvant cretostimogene monotherapy following TURBT. The enrollment completion date for PIVOT-006 is expected in the second half of 2025. CGON believes that approval in this setting could position cretostimogene as a backbone therapy, potentially alleviating the current need to ration BCG due to shortages. This multi-pronged clinical strategy aims to maximize the market opportunity for cretostimogene across different NMIBC patient segments.

Operationally, CG Oncology relies on third parties for the manufacture of cretostimogene for clinical supply and intends to do so for potential commercial supply. This asset-light approach allows the company to focus resources on clinical development and commercialization. Steps have been taken to secure the supply chain, including a $25 million note receivable established in February 2025 to facilitate a third party's acquisition of a contract manufacturing organization critical for cretostimogene supply. In anticipation of potential FDA approval, the company is actively building its commercial infrastructure, including marketing, market access, patient access, and field force capabilities, with pre-launch activities already underway.

Financial Health and Future Funding

As a clinical-stage biopharmaceutical company, CG Oncology has incurred significant operating losses and negative cash flows since inception. For the three months ended March 31, 2025, the company reported a net loss of $34.5 million, an increase from $16.9 million for the same period in 2024. This increase in net loss was primarily driven by a substantial rise in operating expenses, which totaled $42.3 million in Q1 2025 compared to $23.0 million in Q1 2024. Research and development expenses increased by $10.3 million to $27.5 million, mainly due to higher external clinical trial costs associated with increased patient enrollment and increased personnel costs. General and administrative expenses increased by $9.0 million to $14.8 million, reflecting higher personnel costs, professional fees, and marketing-related costs as the company expands its operations and prepares for potential commercialization.

Despite these increasing expenses, CG Oncology maintains a strong liquidity position, largely thanks to successful capital raises. As of March 31, 2025, the company held approximately $688.4 million in cash, cash equivalents, and marketable securities, with working capital of approximately $678.6 million. This robust cash balance was bolstered by net proceeds of $399.6 million from its IPO in January 2024 and $223.1 million from a follow-on offering in December 2024. Based on its current operating plan, the company estimates that its existing cash resources will be sufficient to fund operations into the first half of 2028. This provides a significant runway to support ongoing clinical trials, the planned BLA submission, and initial commercialization activities if approved.

However, the company explicitly states that this estimate is based on assumptions that may prove incorrect, and available capital could be utilized sooner than expected. Generating significant product revenue is contingent upon successful clinical development, regulatory approval, and commercialization, which are years away and not guaranteed. Therefore, substantial additional funding will be required to support continued operations and growth beyond the current cash runway. The company expects to finance future needs through equity offerings, debt financings, or collaborations. An At-the-Market (ATM) offering agreement was established in March 2025, providing the flexibility to sell up to $250 million of common stock, although no sales had been made under this agreement as of the filing date. Failure to secure additional funding when needed could necessitate delaying, limiting, or terminating development and commercialization efforts.

Risks and Challenges Ahead

Investing in a clinical-stage biopharmaceutical company like CG Oncology inherently involves significant risks. The successful development and regulatory approval of cretostimogene are highly uncertain and depend on numerous factors, many of which are outside the company's control, including the outcome of clinical trials and regulatory reviews. While BOND-003 Cohort C data is promising, there is no guarantee the FDA will approve the BLA submission.

The company's reliance on third parties for manufacturing cretostimogene introduces supply chain risks. Any disruption or failure by these third parties could delay clinical trials or potential commercial launch. Furthermore, the ongoing legal proceeding initiated by ANI Pharmaceuticals, Inc. (ANI), seeking a royalty on cretostimogene sales, poses a potential financial risk. The company is vigorously defending this matter, with a trial date set for July 21, 2025, but litigation outcomes are inherently uncertain and can be costly regardless of the result.

Competitive pressures in the bladder cancer market are significant. While cretostimogene's data appears compelling, other companies are also developing therapies for NMIBC, including alternative intravesical agents and systemic immunotherapies. The commercial success of cretostimogene, if approved, will depend on its ability to gain market acceptance, secure favorable pricing and reimbursement, and compete effectively against established and emerging treatments.

Conclusion

CG Oncology stands at a critical juncture, poised to potentially bring a differentiated, bladder-sparing oncolytic immunotherapy to market for patients with high-risk NMIBC. The strength of the BOND-003 Cohort C data, particularly the compelling complete response rates and duration of response, provides a solid foundation for the anticipated BLA submission in the second half of 2025. Cretostimogene's unique mechanism of action, favorable safety profile, and potential for reduced post-treatment restrictions offer tangible benefits that could address significant unmet needs and differentiate it within a competitive landscape.

While the company is currently pre-revenue and incurring substantial losses as it invests heavily in R&D and commercial readiness, its strong cash position provides a significant runway to navigate the crucial period leading up to potential regulatory approval and initial launch. The strategic expansion of the clinical program into other NMIBC populations and combinations underscores the long-term vision for cretostimogene as a potential backbone therapy. Investors should closely monitor the outcome of the BLA submission, progress in ongoing clinical trials, the resolution of the ANI legal proceeding, and the company's ability to effectively execute its commercialization strategy and secure future funding as needed. The potential for cretostimogene to become a standard-of-care in NMIBC represents a significant opportunity, balanced by the inherent risks of clinical development and market entry in the biotechnology sector.