Lots of info on the web. Here is a possible explanation among others:
"Most of what has been said here will be valid from a strictly mechanistic point of view. The transmutation theory, though, needs a new, holistic paradigm which is based more on the dynamics of energies. In recent scientific research, a shift is visible from reductionism to holism. It is beyond the scope of this paper to go into this matter. I nevertheless want to take the new paradigm fully into account here in trying to find explanations for the effectiveness of urine therapy. Urine can be considered to contain an exact holographic picture of the body fluids and tissues. The biofeedback of this holographic information by re-ingesting the urine may well inform the energy system in a way which helps restoring a disturbed balance. The medical doctor and urine therapist Abele cautiously discusses the possible effect of urine as holographic feedback: "The question rises as to whether urine could possibly be considered to be a sort of liquid-hologram. Once the body has been made conscious of urine in an unconventional way (such as it being reintroduced into the body by intramuscular injection) the whole organism evaluates it and subsequently updates its own regulating mechanisms (at least in specific cases)." The theory of transmutation implies that the body is capable, through energetic exchange within the body itself, to transmute certain substances or molecules into other ones." Taken from: http://www.urinetherapeutics.com/transmutation_theory.htm