Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) Q1 2024 Earnings Call Transcript May 9, 2024
Iovance Biotherapeutics, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Welcome to the Iovance Biotherapeutics Conference Call to discuss the First Quarter 2024 Results and recent Corporate Updates. My name is Livia, and I’ll be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now hand the conference call over to Sara Pellegrino, Senior Vice President, Investor Relations and Corporate Communications at Iovance. Sarah, you may begin.
Sara Pellegrino: Thank you, operator. Good afternoon and thank you for joining this conference call and webcast to discuss our first quarter 2024 results and recent corporate update. Dr. Fred Vogt, our Interim President and Chief Executive Officer will provide an introduction and summarize key updates on our U.S. Commercial launch of Amtagvi and our pipeline program. Jim Ziegler, EVP Commercial, will highlight our initial insights for the U.S. commercial launch of Amtagvi, in advanced melanoma. Dr. Igor Bilinsky, COO, will highlight commercial manufacturing and capacity expansion plans. Jean-Marc Bellemin, CFO will review our financial results. And Dr. Friedrich Finckenstein, Chief Medical Officer, will review key pipeline update including upcoming clinical data presentations at ASCO and new next generation approaches.
Dr. Brian Gastman, Executive Vice President, Medical Affairs; and Dr. Raj Puri, Executive Vice President, Regulatory Strategy are also on the call and available for the Q&A session. Earlier this afternoon, we issued a press release that can be found on our corporate website at iovance.com. Before we start, I would like to remind everyone that statements made during this conference call will include forward-looking statements regarding Iovance’s goals, business focus, business plans and transactions, revenue, commercial activities, clinical trials and results, regulatory approvals and interactions, plans and strategies, research and preclinical activities, potential future applications of our technologies, manufacturing capabilities, regulatory feedback and guidance, payer interactions, licenses and collaboration, cash position and expense guidance, and future updates.
Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time-to-time in our SEC filings. Our results may differ materially from those projected during today’s call. We undertake no obligation to publicly update any forward-looking statements. With that, I will turn the call over to Fred.
Dr. Fred Vogt: Thank you, Sarah and good afternoon everyone. I’m pleased to host our first quarter 2024 results conference call. This has been a decisive year for Iovance following our first FDA approval and strong start to the U.S. launch of Amtagvi for patients with advanced melanoma. We expect the positive momentum at Iovance will continue to build throughout 2024 as we ramp up the U.S. launch and execute across our broad clinical pipeline. To begin, we are very pleased that the high initial demand for Amtagvi continues to accelerate. Demand has increased month over month since approval and expected to grow further throughout the year. As of today, more than 100 patients are already enrolled for Amtagvi therapy and most are expected to be ready for infusion across the second and early third quarters of 2024.
In addition, more than 60 additional patients have been identified at ATCs and are expected to enroll soon. As existing and new ATCs continue to build experience, we expect patient enrollments to steadily increase throughout the year, supporting our expectations for sustained growth. As we anticipated, interest is very high on ATCs and they are demonstrating that they have the training, infrastructure and capabilities to treat patients with the Amtagvi, which Jim will further highlight. We remain on track to have 50 total ATCs by the end of this month. We also set a new goal of at least 70 ATCs by the end of this year, representing the largest ever number of ATCs for a cell therapy launch. We are pleased to see positive reimbursement trends, which is a key indicator for success and adoption.
Positive reimbursement decisions are supported by our clinical data and the recent addition of Amtagvi as the preferred second line or subsequent therapy in the National Comprehensive Cancer Network or NCCN guidelines. The time to treatment will accelerate as ATC has established a solid foundation for broad market access and reimbursement which will add to momentum. Jim will describe this in more detail. In terms of commercial manufacturing, we have two FDA approved manufacturing sites and sufficient capacity to meet near-term demand at launch setting a new bar for cell therapy launches. Our commercial manufacturing experience is very positive and is consistent with our prior clinical experience. We have successfully manufactured and delivered Amtagvi within our target turnaround time of 34 days.
ATC has observed sufficient availability of manufacturing slots and reported positive experience in the scheduling process, which is critical for broader utilization. We expect to have ample capacity to meet the anticipated ramp up in demand this year. Finally, long-term expansions are underway to more than double our currently built capacity for future growth. In addition to the U.S. launch, we are working to enter new markets that can more than double the total addressable advanced melanoma patient population for Amtagvi. Regulatory submissions remain on track this year in the EU, UK and Canada where we have the potential to begin driving significant additional revenue by the end of 2025. We also continue to advance and expand our robust and exciting pipeline including two registrational programs as well as new next generation approaches that Frederick will highlight on this call.
As a fully integrated company is executing the U.S. launch and developing a broad pipeline, Iovance is well positioned to remain a global leader in innovating, developing and delivering TIL Cell Therapy for patients with cancer. I’ll now hand over to Jim, our Executive Vice President of Commercial who will speak in more detail about our launch metrics.
Jim Ziegler: Thank you, Fred. We are excited about the potential for Amtagvi to transform the treatment paradigm in advanced melanoma. My objectives today are to highlight initial U.S. launch metrics, which are supported by robust demand among ATCs and patients as well as progress with payers. ATCs are the key driver of demand and patient enrollments for Amtagvi. Launching with 30 ATCs was a testament to the significant unmet need in advanced melanoma and each center’s high level of commitment to offer Amtagvi for their patients. Today, there are more than 40 ATCs and we remain on track to meet our goal of 50 total ATCs by the end of May. Due to increasing interest by hospitals that offer Amtagvi, we are now targeting at least 70 total ATCs by the end of the year.
As Fred mentioned earlier, ATCs have enrolled more than 100 patients for Amtagvi treatment. A patient enrollment is defined as an Amtagvi treatment decision by the provider and patient. The patient enrollment is followed by commercial payer, prior authorization and a scheduled tumor procurement for manufacturing. Based on the patient journey timeline Amtagvi infusion for currently enrolled patients would likely occur across the second quarter and early third quarter. In addition, existing ATCs are screening an increasing number of patients for treatment eligibility. With more than 60 patients currently in screening today, we expect a high conversion of additional patients to Amtagvi patient enrollment in the near-term for potential infusion in the third quarter.
We are observing month over month growth and we anticipate sustained growth throughout the year as the number of ATCs expand and there is broader utilization of Amtagvi. In the short time since approval, favorable reimbursement trends and medical coverage policies have set us up for success and broad access for patients. Early launch data indicates that more than 75% of patients enrolled for Amtagvi are commercially insured which aligns with our expectations. Thus far payers responsible for more than 200 million lives have approved at least one patient for Amtagvi treatment and notably 13 payers responsible for approximately 90 million covered lives have already published medical coverage policies that are consistent with label, clinical trials and the recently updated NCCN guidelines.
We expect the remaining payers to issue similar favorable medical coverage policies and that timelines for financial clearance will accelerate as more payers, issue coverage policies. In summary, we are extremely pleased with the early launch progress and we expect steady growth as ATCs gain treatment experience, our ATC network expands and community referrals increase over time. I look forward to providing future updates on these important ATC reimbursement and performance metrics. I would like to acknowledge the very talented cross functional teamwork at Iovance. I’m even more pleased in the deep partnerships our team has established with ATCs. Collectively, our goal is to broaden and accelerate patient access to Amtagvi. I will now pass the call to Igor Bilinsky, our Chief Operating Officer to highlight our manufacturing progress.
Dr. Igor Bilinsky: Thank you, Jim. Today, I’d like to highlight our current manufacturing capabilities, experience with the Amtagvi U.S. launch, as well as our capacity expansion plans to support significant further growth in demand that we anticipate in the U.S. from geographic expansion and from our exciting clinical pipeline. Manufacturing is a core competency for us at Iovance and we built our own manufacturing facility, Iovance Cell Therapy Center or ICTC in Philadelphia. ICTC is one of the largest cell therapy manufacturing facilities in the world and the only one specifically designed for TIL manufacturing. ICTC is now FDA approved for commercial manufacturing of Amtagvi for the U.S. market and continues to serve patients in our clinical trials in melanoma, lung cancer and other indications in the U.S., Europe, Australia and other geographies.
ICTC has been responsible for most of the commercial and tagging manufacturing volume to date. In addition to ICTC, the FDA approved our contract manufacturer site for commercial manufacturing of Amtagvi. Having two approved facilities provides us with additional flexibility and capacity for both commercial and clinical patients. Overall, we believe that our manufacturing capabilities and capacity are setting a new bar for cell therapy launches and we’re strategically planning ahead for anticipated demand in future. Turning to our early experience with commercial launch, we’re executing as planned. The commercial manufacturing experience to date is consistent with prior clinical experience. Turnaround time has been on target with initial launch expectations of approximately 34 days from receipt of tumor tissue to return shipment of Amtagvi to the ATC, which is then followed by lymphodepletion and infusion.
We are confident in our capacity to meet the current and projected demands of the U.S. launch in our clinical trials, as well as to support Iovance’s planned future growth. ICTC as built today has the capacity to provide TIL therapies for more than 2,000 patients per year. A competent manufacturing team is important in biotech and cell therapy in particular. Right now we are staffed appropriately for launch and we are continuing to add headcounts to meet the demand for commercial Amtagvi as well as for our clinical trials. To fulfill our staffing needs, the ICTC Philadelphia location provides access to talent with cell therapy and gene therapy experience at other companies in the region, as well as the next generation of talent through the local schools and resources.
In preparation for increasing commercial demand in the U.S. and additional geographies and in support of our advancing clinical pipeline, further capacity expansion is now underway at ICTC and is expected to be completed in a few years. Building out the existing shelf space of the facility is expected to enable ICTC to supply TIL therapies for more than 5,000 patients annually. Longer term, our vision is to supply TIL for over 10,000 patients annually from the ICTC accounts. We’ve an option to construct another building of the ICTC campus and plan to drive additional efficiencies by incorporating increased automation in our manufacturing process. In summary, our team is excited to provide Amtagvi and our investigational TIL therapies for patients with cancer.
We are laser focused on the quality of the manufacturing process in the spirit of doing everything right first time at every step from incoming receipt of tumor sample through manufacturing and product release to outbound shipment of Amtagvi to the commercial ATCs and investigational tools to clinical trial sites. I’m available to answer additional questions during the Q&A. And I will now hand the call over to Jean-Marc, our Chief Financial Officer.
Jean-Marc Bellemin: Thanks Igor. Today, I will review our current cash position as well as our results for the quarter ended on March 31, 2024. I will also highlight our 2024 outlook. As of March 31, 2024, Iovance had cash, cash equivalents, investments and restricted cash of approximately $362.6 million. The current cash position and anticipated revenue from Amtagvi and Proleukin are expected to be sufficient to fund current and planned operation well into the second half of 2025. Shifting to our first quarter financial results. Net loss for the first quarter ended March 31, 2024, was $113 million or $0.42 per share, compared to a net loss of $107.4 million or $0.50 per share for the first quarter ended March 31, 2023. The net loss for the first quarter of 2024 includes amortization of intangible assets acquired as part of the Proleukin transaction.
Revenue for the first quarter ended March 31, 2024 was $715,000 and comprised of sales of Proleukin in licensed market outside of the U.S. Cost of sales for the first quarter ended March 31, 2024 was $7.3 million primarily related to inventoriable cost associated with sales of Proleukin and non-cash amortization expense for the acquired intangible asset for developed technology. There was no revenue or cost of sales in the first quarter ended March 31, 2023. Research and development expenses were $79.8 million for the first quarter ended March 31, 2024, a decrease of $2.9 million compared to $82.7 million for the same period ended March 31, 2023. The decrease was primarily attributable to the transition to commercial Amtagvi remanufacturing in the most recent quarter, partially offset by increased cost associated with the purchase of raw materials, clinical trials driven primarily by the Phase 3 TILVANCE-301 clinical trial and the planned EU regulatory submissions for lifileucel.
Selling, general and administrative expenses were $31.4 million for the first quarter ended March 31, 2024, an increase of $3.3 million compared to $28.1 million for the same period ended March 31, 2023. The increase was primarily attributable to increases in headcount and related costs, including stock-based compensation to support the growth in their whole business and related corporate infrastructure as well as cost incurred to support the commercialization of Amtagvi and Proleukin, partially offset by a decrease in legal costs. Regarding our outlook for this year, we continue to guide towards full year 2024 cash burn in the range of $320 million to $340 million excluding onetime expenses, and we’ll continue to leverage opportunities to optimize spending.
The U.S. launch of Amtagvi as well as the sales of Proleukin used in conjunction with the Amtagvi treatment regimen are expected to drive significant revenue in the second half of 2024 and into 2025 and beyond. As a reminder, revenue recognition for Amtagvi occurs upon infusion like other cell therapies, so we expect to begin recognizing and reporting significant revenue in the second quarter of this year. For additional information, please see this afternoon’s press release and our Form 10-Q to be filed later today. I will now hand the call to Frederick, our Chief Medical Officer to discuss our clinical pipeline.
Dr. Friedrich Finckenstein: Thank you, Jean-Marc. I am pleased to speak today about our key clinical pipeline highlights in solid tumors, which as you all know, represent more than 90% of all diagnosed cancers in the U.S. One of our key priorities is expanding the label for Amtagvi to address the need of patients with advanced melanoma in the frontline treatment setting. Our registrational Phase 3 TILVANCE-301 is well underway and on track to support accelerated and full approvals of Amtagvi in combination with pembrolizumab in frontline advanced melanoma as well as regular approval of Amtagvi in post anti-PD-1 melanoma. Global site activation and patient enrollment continue with strong momentum in the U.S., Europe, Australia, Canada and additional countries.
Our frontline advanced melanoma strategy is supported by Cohort 1A in our IOV-COM-202 trial in solid tumors and previously published data on TIL therapy in the pre immune checkpoint inhibitor era. We look forward to an oral presentation of updated clinical data from Cohort 1A, which continue to strongly support our frontline development plans at the American Society of Clinical Oncology or ASCO Annual Meeting on May 31, 2024. Shifting to our program in non-small cell lung cancer, we reported positive updates for our single arm registrational Phase 2 trial, IOV-LUN-202 in post anti-PD-1 non-small cell lung cancer. We resumed enrollment for new patients within a very short time after the U.S. FDA lifted our partial clinical trial hold in the first quarter.
IOV-LUN-202 includes clinical sites in the U.S., Canada and Europe with plans to include additional regions with strong track record for enrollment in lung cancer studies over the next few months. Enrollment has restarted with high demand, which is driven by encouraging data and further augmented by excitement from the approval of Amtagvi. We expect the registrational cohorts to be fully enrolled in 2025. Current data from IOV-LUN-202 and the FDA interactions regarding our regulatory pathway continue to be positive and support our confidence in the opportunity for TIL cell therapy in lung cancer. The FDA has provided positive regulatory feedback on the proposed potency matrix for lifileucel in non-small cell lung cancer during a recent Type D meeting and as previously announced that the design of the single arm IOV-LUN-202 trial may be acceptable for approval of lifileucel in post-anti-PD-1 non-small cell lung cancer.
In other tumor types, we are starting a Phase 2 trial of lifileucel in post-anti-PD-1 endometrial cancer, which is a significant opportunity for TIL cell therapy. Our Phase 2 trial will include patients with advanced endometrial cancer, who progress after platinum based chemotherapy and anti-PD-1 therapy regardless of mismatch repair status of the tumor. Our rationale is supported by the TIL mechanism of action, which may benefit both patient populations as well as preclinical and manufacturing success data that we plan to report later this year. There is a significant unmet medical need and no currently approved treatment options for the vast majority of patients with endometrial cancer in the post-anti-PD-1 treatment setting. Given this unmet medical need and the enthusiasm we’ve received from gynecological oncologists, we expect to enroll quickly and we look forward to seeing first data soon.
As the leader in TIL cell therapy, Iovance is at the forefront of next generation approaches that have the potential to address unmet need for patients and solidify our long-term leadership in the space. We reached an important milestone for our genetically modified TIL cell therapy, IOV-4001, in the first in human GM1-201 trial in previously treated advanced melanoma or non-small cell lung cancer patients. The Phase 1 safety portion concluded successfully and we are progressing into the multicenter Phase 2 efficacy stage of the trial. IOV-4001 utilizes the TALEN technology license from Cellectis to inactivate PD-1 during the TIL manufacturing process. We also have options to continue to develop other investigational gene edited TIL cell therapies with multiple knockout targets to potentially improve efficacy.
We are also making great strides to advance additional next generation programs towards the clinic. In the third quarter of 2024, we plan to submit an investigational new drug application or IND for a Phase 1/2 clinical trial of IOV-3001, a modified interleukin-2 or IL-2 fusion protein. At ASCO 2024, a poster will highlight preclinical data that supports the potential for improved safety with robust defector T cell expansion with IOV-3001. Lastly, on today’s call, we are introducing IOV-5001, a new next generation program. IOV-5001 is a genetically engineered TIL cell therapy with inducible and tethered IL-12. The addition of IL-12 has augmented TIL antitumor activity in vitro. IOV-5001 also builds on the improved efficacy of a prior generation IL-12 TIL therapy that was observed in a clinical trial at the National Cancer Institute or NCI.
IOV-5001 is currently in IND enabling studies. We plan to discuss IOV-5001 with the FDA at an INTERACT meeting in the third quarter of 2024 and anticipate an IND submission in early 2025. I’m happy to address questions about these programs and additional trials during the Q&A session. I’ll now turn the call over to the operator to begin the question-and-answer session.
Operator: [Operator Instructions] And our first question coming from the line of Michael Yee with Jefferies. Your line is open.
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