Iovance Biotherapeutics Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 8, 2024

There are 15 speakers on the call.

Operator

Welcome to the Iovance Biotherapeutics Conference Call to discuss Second Quarter 2024 Results and Recent Corporate Updates. My name is Daniel, and I will 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.

Operator

I will now turn the call over to Sarah Pellegrino, Senior Vice President, Investor Relations and Corporate Communications at Iovance. Sarah, you may begin.

Speaker 1

Thank you, operator. Good afternoon, and welcome to Iovance conference call and webcast to discuss our second quarter and first half twenty twenty four results and corporate update. Doctor. Fred Boat, our Interim President and Chief Executive Officer, will provide an introduction and summarize key updates for our U. S.

Speaker 1

Commercial launch of AMTAGMI, including revenue guidance and our pipeline program. Jim Zeigler, EVP Commercial will highlight additional details of the U. S. Commercial launch of Amtavvi in advanced melanoma. Doctor.

Speaker 1

Igor Belinsky, Chief Operating Officer will comment on our commercial manufacturing experience and capacity expansion plan Jean Marc Bellomine, CFO, will review our financial results, including revenue and financial outlook and Doctor. Frederick Finkenstein, Chief Medical Officer, will review key clinical pipeline updates. Doctor. Brian Gasman, EVP, Medical Affairs and Doctor. Raj Puri, EVP, Regulatory Affairs are also on the call and available for the Q and A session.

Speaker 1

Earlier this afternoon, we issued a press release that could 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 and revenue guidance, 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.

Speaker 1

With that, I will turn the call over to Fred.

Speaker 2

Thank you, Sarah. I am pleased to host this afternoon's conference call to discuss our 2024 second quarter and first half results. We've had a productive year so far at iAdvance following our first FDA approval and a successful start in the U. S. Commercial launch of ANTAGMI for patients with advanced melanoma.

Speaker 2

First, we are very pleased with the exceptional demand for ANTAGMI. Our Q2 product revenue was $31,100,000 inclusive of recognized revenue for AMTAGMI and PROLUQUIN. AMTEGVI revenue is recognized upon infusion, while PROLUCAN revenue is recognized upon delivery, typically a few months prior to AMTEGVI infusion, providing a strong leading indicator of demand of future antagny revenue. The initial quarter of product revenue from our U. S.

Speaker 2

Launch demonstrates early success from our team's execution as well as the unmet need, high awareness, broad patient access, motivated authorized treatment centers or ATCs. With AMTEGI already showing a meaningful benefit for patients treated in the commercial setting, We expect continued launch momentum which I'll return to in a moment. As Jim will discuss, we have a very engaged network of more than 50 current ATCs. These ATCs are proving that they have the training, infrastructure and capabilities to treat patients with emtagb. We also remain on track have at least 70 ATCs by the end of the year, representing the largest ever initial ATC network for a cell therapy launch.

Speaker 2

We've also started our community referral activities to drive additional demand for these ATCs. Through early success with reimbursement and a strong logistics and scheduling collaboration between Iovance and the ATCs, time to treatment is also becoming faster for patients. In addition, our commercial manufacturing capabilities are successfully delivering AMTEGBI at an increasing pace. The key takeaways, Zico will summarize, but that we are staffed to provide manufacturing slots to meet current and expected demand. We are scaling up manufacturing according to our growth projections.

Speaker 2

We have increased capacity and headcount each month since launch and continue ramping up the match ongoing demand growth. Turning back to launch momentum, this afternoon's press release, we also introduced revenue guidance for the Q3 and full year 2024 and for 2025. This guidance is based upon our ongoing experience and confidence in the strong uptake and significant quarter over quarter growth in AMTAPI demand and corresponding Proluton sales for the foreseeable future. We used our visibility into the growth rate of infusions, adoption across our ATC network, manufacturing capacity and additional launch dynamics to prepare this guidance. In the Q3, we expect total product revenue within the range of 53 $1,000,000 to $55,000,000 Notably, more than 55 patients have been infused with Emtekne since the first commercial infusion in April of 2024, including 25 patients infused in the Q2.

Speaker 2

More than 30 patients have already been infused and distributors are restocking prolukin since the start of Q3. Many more infusions are scheduled or anticipated before quarter end in support of our guidance. For full year 2024, we anticipate total product revenue for AMTEGI and Proleukin of $160,000,000 to $165,000,000 We expect the full year 2024 will reflect continued demand growth for AMTEGVI and corresponding sales for Perleukin. For full year 2025, the first calendar year of our U. S.

Speaker 2

Launch, first full calendar year of our U. S. Launch, we expect significant year over year growth driven by scale up in existing and new ATCs and robust community referral networks contributing to additional demand. As a result, we anticipate total product revenue will increase to $450,000,000 to $475,000,000 in the full year of 2025. In 2026 and beyond, the emtagvian and proleukin are expected to continue to drive significant additional revenue growth.

Speaker 2

These products represent more than $1,000,000,000 peak opportunity in the U. S. Market in the currently approved indication alone. Future revenue growth drivers also include a wider geographic footprint for AMTEGVI in previously treated advanced melanoma as as well as U. S.

Speaker 2

And global label expansions to frontline advanced melanoma, non small cell lung cancer and other indications as we'll discuss later on the call. Gross margins are also expected to increase to greater than 70% over the next several years. This reflects the long term commercial strength for EmtekVI and Proleukin and highlights the strong future for Iovance. Globally, IMTAGI represents a multi $1,000,000,000 opportunity to address more than 20,000 previously treated advanced melanoma patients annually across the U. S.

Speaker 2

In our initial planned geographic footprint. Following our recent regulatory submission in the European Union, we remain on track for additional submissions in the UK and Canada this year and Australia and Switzerland in 2025 with commercial launches to follow. Iovance is well positioned to build upon our existing commercial success and continue growing globally. In addition to IMTAGBI, our robust and exciting pipeline may help even more patients with solid tumors obtain potentially curative medicines. Our programs include 2 registrational trials and other indications and we are continuously innovating with next generation Till Therapies.

Speaker 2

Frederic will discuss our pipeline in further detail on this call. The first approval launch in large scale manufacturing with Till cell therapy together with our intellectual property position in deep pipeline provide us with distinct competitive advantages. As a fully integrated company, Ivant is well positioned to maintain the global leader in innovating, developing, delivering tel cell therapies for patients with cancer. I'll now hand over to Jim, our Executive Vice President of Commercial, who will summarize our U. S.

Speaker 2

Commercial activities. Jim?

Speaker 3

Thank you, Fred. We are excited about the potential for our U. S. Launch of mTagV to improve the lives of patients with advanced melanoma. As more and more patients are treated with commercial mTagV, an increasing number of our ATCs are sharing positive feedback and posting stories about their patients who have benefited from MCGV in the early months since approval.

Speaker 3

My objectives today are to highlight our U. S. Launch priorities and progress, including adoption and utilization within our expanding ATC network, community referrals, reimbursement and patient access and streamlining and expediting the patient journey. First, our ATC network is scaling and expanding as planned, which is a key driver of demand and we expect robust demand to continue. Today, on boarding is complete at more than 50 U.

Speaker 3

S. ATCs. The centers who were active at approval are scaling up and many have treated multiple patients. Newer ATCs that have recently completed onboarding, including major U. S.

Speaker 3

Cancer centers are beginning or preparing to treat patients. As we look to bring treatment closer to patients, our goal is to have approximately 70 ATCs in total by year end. Beyond this number, many additional centers have expressed interest in joining our network. Currently, more than 90% of treated patients are located within 200 miles of an ATC. With 70 ATCs, nearly all melanoma patients will be within a 2 hour drive to the closest center.

Speaker 3

Community referrals are also driving growth in patient volume and demand within the ATCs. An increasing number of ATCs are proactively building awareness about mTAGV across their community referral networks. Iovance is rolling out initiatives to further support awareness and referrals by deploying direct outreach and resources into the community. The size and scope of our ATCs and these community referral networks are a testament to the significant unmet need in advanced melanoma, each center's dedication to offer AMTAGV and interest among community oncologists. In addition to ACC demand, patient access is critical for adoption and uptake.

Speaker 3

Our launch data indicates that approximately 75% of AMTOGV patients are covered by private payers as expected. Favorable medical coverage policies and reimbursement are facilitating broad access to MTAGV. 1st, MTAGV's inclusion in the National Comprehensive Cancer Network or NCCN guidelines reinforce clinical data and support broad payer coverage. We have also achieved significant accomplishments with positive payer coverage in only 5 months since approval. As of today, payers responsible for more than 225,000,000 lives or more than 85% of U.

Speaker 3

S. Covered lives have already implemented positive medical coverage policies that are consistent with label, clinical trials and NCCN guidelines. Successful reimbursement is also driving faster time to treatment. The current average time to financial clearance is approximately 3 weeks, which is a significant reduction from the 4 to 6 weeks at initial launch. Improved efficiencies at ATCs including scheduling in parallel with financial clearance are also speeding up time to treatment.

Speaker 3

We expect the trends towards shorter time to treatment to continue as more ATCs gain experience. In summary, we are extremely pleased with the early launch performance. There is strong demand at our ATCs, payer coverage policies are in place and favorable and time to treatment is becoming faster. These dynamics support the strong growth projections in our product revenue guidance for and timely access to MTAGB. I will now pass the call to Igor Balinski, our Chief Operating Officer to highlight our manufacturing progress.

Speaker 4

Thank you, Jim. Today, I'd like to highlight our commercial and clinical Manufacturing is a core competency of IVANS. We are laser focused on quality from incoming receipt of tumor sample through manufacturing and product release to outbound shipment of the final product. Our established internal manufacturing facility, the Iovance Cell Therapy Center or ICTC is the core of our manufacturing network. Located in Philadelphia, ICTC is one of the world's largest cell therapy manufacturing facilities and the only one specifically designed for Till manufacturing.

Speaker 4

The ICTC has a fully integrated and committed team with deep cell therapy experience. This facility is approved by the FDA for emtagli commercial manufacturing and has been supplying emtagli to patients since approval, while continuing to serve patients in our global clinical trials. We are actively hiring at ICDC to support the continued ramp in the U. S. Commercial demand and our clinical pipeline.

Speaker 4

The ICDC location in Philadelphia provides access to an experienced workforce with cell and gene therapy experience as well as to innovative partnerships with local colleges and trade groups. Within our manufacturing network, a contract manufacturer site is also approved by the FDA for commercial manufacturing of untagweed and provides additional capacity and flexibility to closely match supply and demand. Turning to commercial manufacturing updates. Our experience to date has been consistent with our expectations and with prior clinical experience. We are executing and scaling up as planned.

Speaker 4

Since the FDA approval in February, we have been continuously increasing our staff manufacturing capacity month over month to closely align it with the growing commercial demand. We have sufficient capacity and staffing available in our manufacturing network to meet the increasing MTAG B demand. We are now running our manufacturing network at high capacity utilization, while ensuring slot availability for our ATCs. In addition, the turnaround time for Emtekbee has been on target with our launch plans of approximately 34 days from receipt of patient cells at our manufacturing facility to return shipment of the product to the ATC. As we scale up, we're also focused on improving cost of goods over time through economies of scale and operational efficiencies and by leveraging our competitive advantage and unique position as the leader in the Till cell therapy.

Speaker 4

Turning to our facility expansion efforts. They are closely aligned with our demand growth projections. ICTC as built today has the capacity to provide Till therapies for more than 2,000 patients per year. Following the recent EU regulatory submission and additional Plant ex U. S.

Speaker 4

Filings, we expect ICDC to provide commercial untagb to patients in Europe and beyond upon potential approvals in those geographies. We're in the process of building out the existing shelf space at ICDC, so this facility can supply Till therapies for more than 5,000 patients annually in the next few years. Longer term, our vision is to supply Till therapies for over 10,000 patients annually from the ICTC campus. We have an option to construct another building on the adjacent lot and plan to drive additional efficiencies by incorporating increased automation in our manufacturing process. Importantly, our manufacturing capabilities are protected by a robust intellectual property portfolio.

Speaker 4

Ivant currently owns more than 210 granted or allowed U. S. And international patents and patent rights for Amtagvi and other Till related technologies that are expected to provide exclusivity through at least 2,042. In summary, the Ibrance team is excited and firmly committed to manufacturing and delivering emTagV in our investigational Till cell therapies for patients with cancer. I'm available to answer additional questions during the Q and A, and I will now hand the call over to Jean Marc, our Chief Financial Officer.

Speaker 5

Thank you, Igor. Today, I will review our current cash position as well as our results for the Q2 and first half ended on June 30, 2024. I will also highlight our financial outlook, including revenue and expanded guidance. As of July 24, 2024, iovance had an unaudited cash position of approximately $449,600,000 which includes net proceeds of approximately $200,000,000 raised from an at the market equity financing facility during the second and Q3 of 2024. The current cash position and anticipated product revenue are expected to be sufficient to fund current and planned operation into 2026.

Speaker 5

Iovance had $346,300,000 in cash, cash equivalents, investment and restricted cash at the end of December 31, 2023. I will now transition to our Q2 year to date financial results. Net loss for the Q2 of 2024 was $97,100,000 or $0.34 per share compared to a net loss of $106,500,000 or $0.47 per share for the Q2 ended June 30, 2023. Net loss for the first half of twenty twenty four was $210,100,000 or $0.76 per share compared to a net loss of $213,900,000 or $0.98 per share for the 6 months period ended June 30, 2023. Revenue was $31,100,000 for the Q2 of 2024 and consisted of product revenue from the initial quarter of antacb sales as well as recurring revenue from ProLukin.

Speaker 5

We recognized revenue of $12,800,000 from completed MTAC B infusion. We also recognized $18,300,000 in global revenue from Pro LUKIN during our initial quarter in supplying U. S. Specialty distributors. Revenue for the first half of twenty twenty four was $31,800,000 and consisted of product revenue from both Polokine and Emtekbee.

Speaker 5

Revenue for the first half of twenty twenty three was $200,000 for global sales of ProLukin, which we began to recognize during the 3 months period ended June 30, 2023. Revenue increases in the second quarter and first half of twenty twenty four over the prior year periods were primarily attributable to the U. S. Launch for Entagvi as well as significant growth in U. S.

Speaker 5

Proleking revenue for use in the AMTAGV treatment regimen. As Fred mentioned, ProLukin is a strong leading indicator for near term AMTAGV growth. Revenue recognition for ProLukin is a few months earlier than AMTAGV when specialty distributors and ATCs purchased Pro Looking in advance of AMTACV infusions. Notably, ProLukin's 2nd quarter revenue surpassed annual global revenue for ProLukin in 2023, reflecting strong demand for use with M tags. In addition, specialty distributors will purchase Pro Locking in the 2nd quarter have already started restocking and is another positive signal of the strong mtype relaunch and increasing demand for for looking used with mtype.

Speaker 5

Cost of sales for the 3 6 months ended June 30, 2024 was $31,400,000 and $38,600,000 respectively, primarily related to costs associated with sales of anthaglia and pro looking, certain costs associated with patient drop off and manufacturing success rates, non cash amortization expense for intangible assets and royalties payable on product sales. Cost of sales for both the 3 6 months ended June 30, 2023 was $2,100,000 primarily related to non cash amortization for intangible assets. The increase in cost of sales in the second quarter and first half of twenty twenty four over the prior year periods were primarily attributable to the initiation of commercial manufacturing and related costs for the U. S. Launch of Entagvi during the first half of twenty twenty four.

Speaker 5

Cost of sales is a function of volume and capacity utilization, which is already improving as we scale up our available capacity. In addition, education and training to optimize patient selection and tumor sample resections, as well as our continued focus on operational efficiencies are expected to optimize cost of sales over time as we aim to reach our target gross margin of more than 70% over the next several years. Research and development expenses were $62,100,000 for the Q2 of 2024, a decrease of $24,200,000 compared to $86,300,000 for the same period ended June 30, 2023. Research and development expenses were $141,900,000 for the 6 months ended June 30, 2023, a decrease of $27,200,000 compared to $169,100,000 for the same period ended June 30, 2023. The decreases in research and development expenses in the second quarter and first half of twenty twenty four over the period the prior year periods were primarily attributable to the transition of MTAG B to commercial manufacturing, decreased the cost associated with certain clinical activities in the first half of twenty twenty four and the completion of pre commercial qualification activities in 2023.

Speaker 5

The decrease in research and development were partially offset by increase in stock based compensation resulting from growth in headcount. Selling, general and administrative expenses were $39,600,000 for the Q2 of June 2024, an increase of $17,700,000 compared to $21,900,000 for the same period ended June 3, 2023. Selling, general and administrative expenses were $71,000,000 for the first half of twenty twenty four and an increase of $21,000,000 compared to $50,000,000 for the same 6 months period ended June 30, 2023. The increase in selling, general and administrative expenses in the second quarter and first half of twenty twenty four compared to the prior year periods was primarily attributable to the increase in headcount and related costs, including stock based compensation to support the growth in the overall business and related corporate infrastructure as well as legal costs and cost incurred to support the commercialization of MTAG V and co looking. Next, I would like to cover our financial outlook for the MTAG V launch and future expenses.

Speaker 5

As Fred highlighted earlier in his introduction around revenue guidance, we expect quarter over quarter and annual growth in product revenue to continue for the next several years with the steepening U. S. Adoption curve for IMTACB. Geographic and label expansion as well as new product approvals may also add to our growth trajectory in 2026 and beyond. I will highlight our guidance numbers again as a reminder.

Speaker 5

In the Q3 of 2024, we expect total product revenue within the range of $53,000,000 to $55,000,000 We anticipate total product revenue for the full year of 2024 within the range of $160,000,000 to $165,000,000 In the full year 2025, we expect a significant year over year increase in annual product revenue to $450,000,000 to $475,000,000 In addition, as Fred mentioned, gross margin are expected to increase to greater than 70% over the next several years. Regarding our expense outlook, we continue to reiterate full year 2024 cash burn guidance in the range of $320,000,000 to $340,000,000 excluding onetime expenses. We will also continue to leverage opportunities to optimize spending. For additional information, please see the company's selected condensed consolidated balance sheet and statement of operation in this afternoon's press release and our Form 10 Q to be filed later today. I will now hand the call to Frederic, our Chief Medical Officer to discuss our clinical pipeline.

Speaker 6

Thank you, Jean Marc. As my colleagues have conveyed, ENTAGVY is only the tip of the iceberg for the potential of Till cell therapy in solid tumors, which represent more than 90% of all diagnosed cancers in the U. S. I would like to acknowledge my own personal excitement and the rewarding experience for our Iovance clinical development teams as we hear frequent ATC feedback about patients benefiting from IMPAGBI in the commercial setting. This is great news that also motivates our clinical teams to develop and deliver TillTale therapy to cancer patients in additional therapeutic settings and with additional tumor types.

Speaker 6

Today, I will focus on key clinical pipeline highlights, including 2 ongoing The key priority with the potential for lifileucel to address thousands of additional patients. Our global registrational Phase III trial, TILDANCE-three zero one, remains on track to support accelerated and full approvals of AMTOG B in combination with pembrolizumab in frontline advanced melanoma as well as regular approval of AMTOG B in post anti PD-one melanoma. Enrollment is strong across geographies with high enthusiasm for site participation. More than 40 sites are currently active across 10 countries, including the U. S, Canada, Europe and Australia, with 60 additional sites selected across 18 countries total.

Speaker 6

Iovance does careful feasibility assessments for each site selection, at which time the sites also commit to participate. Site activation includes institutional ethics, board approvals and scientific review of the Tillman's trial design, including the pembrolizumab monotherapy control arm and its fit with local standards of care for the enrolled patient population. We also believe the option to cross over to Till therapy from the control arm is attractive to patients. As a reminder, TILBAN-three zero one is supported by previously published data on Till monotherapy in the pre immune checkpoint EBITDA era and importantly lifileucel data in advanced melanoma patients who were naive to immune checkpoint inhibitors in cohort 1a of our IOV COM202 trial in solid tumors. In our ASCO oral presentation in May, updated Cohort 1a data demonstrated an unprecedented rate depth and durability of responses, including a more than 60% overall, a 30% confirmed complete response rate and a differentiated safety profile.

Speaker 6

A new proof of concept cohort 1D is also beginning in the IRV COM202 trial to investigate lifileucel in combination with nivolumab and rilatumab in patients with frontline advanced melanoma. This novel combination represents another potential best in class frontline alternative for physicians and patients. Shifting to non small cell lung cancer, enrollment continues to accelerate with strong demand in our single arm registrational Phase II trial, IOV LUN202 in post anti PD-one non small cell lung cancer. We expect to complete enrollment and report top line data for the IOV LUN202 registrational cohorts in 2025 and submit a potential supplemental biologics license application to the FDA in 2026. We are confident in the IOV LUN-two zero two trial based on the positive preliminary data.

Speaker 6

Also the FDA provided positive regulatory feedback on our proposed potency matrix as well as the single arm trial design to support accelerated approval of lifileucelin post anti TD-one on small cell lung cancer. We have also initiated the multicenter IOV END201 Phase 2 trial to investigate lifileucel in post anti PD-one endometrial cancer patients regardless of mismatch repair or MMR status. There is an unmet medical need and no currently approved treatment options for the vast majority of patients with endometrial cancer in the post anti PD-one treatment setting. This unmet need will become more relevant as immune checkpoint inhibitors move into the frontline setting in combination with chemotherapy. Combined with the enthusiasm from gynecological oncologists, we expect IOV END-two zero one to enroll quickly and we look forward to presenting initial data soon.

Speaker 6

As the leader in Till cell therapy, Iovance is at the forefront of next generation approaches to optimize Till and Till treatment regimens. We are investigating a next generation PD-one inactivated Till cell therapy, IOV-four thousand and one in the clinical trial and previously treated advanced melanoma or non small cell lung cancer patients. 2 additional next generation programs are in IND enabling studies and are approaching clinical trials in the near term. IOV-three thousand and one is a next generation interleukin-two or IL-two analog for use with the Till treatment regimen. Preclinical data support the potential for improved safety with robust effector T cell expansion driven by IOV-three thousand and one.

Speaker 6

IOV-five thousand and one is a genetically engineered Till cell therapy with inducible and tethered interleukin 12 or IL-twelve. IOB-five thousand and one has augmented Till anti tumor activity in preclinical studies and may improve safety via the tethering of IL-two to the Till. As noted in this afternoon's press release, we've renewed our Cooperative Research and Development Agreement or CRADA to collaborate with the U. S. National Cancer Institute or NCI on preclinical and clinical development of enhanced tumor reactive tilt products.

Speaker 6

Additional details about our development programs are included in today's press release as well as the corporate slide deck and scientific presentations on our website. I'm happy to address questions about these programs and additional trials during the Q and A session. I'll now turn the call over to the operator to begin the question and

Operator

Our first question comes from Michael Yee with Jefferies. Your line is open.

Speaker 7

Hey, guys. Thanks. Congrats on a good execution of the launch and good guidance. We just wanted to ask 2 questions on the guidance. Does the guidance number include ProLukin revenues built into that?

Speaker 7

I know it's not a huge amount, but just want to make it square and accurate. And then can you talk to the $18,000,000 of proleukin as a lead in indicator? Does that imply a certain amount of patients or a certain amount of time? Or is it just distributors buying it up? We try to back into that as maybe a queue of demand.

Speaker 7

And so I just want to think about your numbers on proleukin and maybe perhaps related to that if I may just ask differently, do you have any numbers on the patient enrollment forms to think the queue? Thanks so much.

Speaker 2

Yes, Mike, the guidance does include Perleukin. So all the guidance numbers we put out include Prolukin revenues as well as Ampangiabetes revenues. Now on the Prolukin revenue number for this quarter, that represents sort of the leading indicator for what we think will be MTAGI demand over the next couple of quarters. You can model it anyway you see fit. It's a large number of infusions.

Speaker 2

We've given you the number of infusions through recently is more than 55 now. And you can use that to kind of estimate where we're going. But the whole point of it was giving guidance so that you can rely on our internal understanding of infusions and Proleukin demand and see what the upswing is going to look like here. It's a very positive uptake of Perleukin and especially Antagmi.

Speaker 7

Yes. So to clarify, it's a buying up of a certain amount from distributors, but not like a one for 1 or a certain amount of time. It's just an indicator.

Speaker 2

It's just an indicator and they've already started restocking. I can't stress that more. They've already started reloading because they've sold a lot of that product already.

Speaker 7

Got it. Thank you.

Operator

Thank you. Our next question comes from Peter Lawson with Barclays. Your line is open.

Speaker 8

Thanks for the guidance Fred and congrats on the progress. The Q3 guidance, what's the breakout of IL2 versus Hill? Same question for the full year as well. And then for the IL-two revenues this quarter, what was the proportion of that IL-two that was used for Till therapy?

Speaker 2

Yes. We don't have we're not going to provide guidance on the individual products. We're just going to provide the aggregate guidance. You can probably model it by understanding the amount of proleukin that you use for ANTAG mutation because I'm going to answer your second question ahead of time here. We don't know exactly how much of our ProLukin gets used in the antagonist regimen, but you can hear from Jean Marc's comments earlier and from the experience of ProLukin in the industry for many years, it's got to be the vast majority that getting used for Entagny.

Speaker 2

We have no way of tracking that from an accounting perspective, but it's being obviously the massive upswing in Proluton sales is driven by MTAG.

Speaker 8

Got you. Okay. Thanks so much.

Operator

Thank you. Our next question comes from Andrea Tan with Goldman Sachs. Your line is open.

Speaker 9

Good afternoon. Thanks for taking the question. Fred, I'm curious here just given where you stand in the launch in your 6 months and what is driving your confidence for a full year 2025 guidance given where you are now? And then just curious if you plan on providing metrics around demand such as the patient enrollments or screening as you have in the past quarters? Thanks so much.

Speaker 2

Andrew, we may provide some additional guidance on we're not you won't hear us talking about enrollments anymore. It's really not relevant anymore. All that matters now is infusions, which is a revenue generating event. So we may talk a bit about that as we go over the next, whatever 4, 5 quarters here. But really what we're trying to do with the guidance is give you the big numbers, so you don't have to worry about enrollments and that sort of thing you can figure out exactly what we're seeing in terms of infusions.

Speaker 2

What's giving us guidance on that fiscal year 'twenty five guidance, the full year 'twenty five guidance, we can see the launch. We see how we're doing. We know all the dynamics. We know how many ATCs are coming on board. We know what we think they're going to do.

Speaker 2

We know our manufacturing capacity and all the details around that stuff that would be very difficult, I think for the Street to model in some cases. So we're going to provide it for you. So you have clarity on what we're seeing. We are very, very confident in that guidance based on what we're seeing so far in the initial part of the launch because we've got such a good picture of launch dynamics right now.

Speaker 9

Okay. Thanks so much.

Operator

Thank you. Our next question comes from Ynon Zhu with Wells Fargo Securities. Your line is open.

Speaker 6

Great. Thanks for taking our questions and congrats on the progress here. So I guess I asked a couple of questions on patient numbers. You gave the patient infused the infusion number of infusions for since the start of this quarter, which is 30 patients. Given that there will be you have talked about month to month increase and quarter over quarter increase, can we assume that over the next 2 months within the current quarter, you will have patient numbers that will exceed the 30 patient number there.

Speaker 6

And also on patient number, just wanted to understand, has there been patients that have been resected around the same time as the 30 patients and who did not receive the product, I. E, trying to get a sense of the ongoing attrition rate, whether that's due to manufacturing issues or patient progression. If you can give some color there that would be super helpful. Thank you.

Speaker 2

Yes. To answer your second question first, the patient dropout rate and manufacturing success rate remain consistent with what we saw in the clinical trial experience. So we're seeing that today. We can obviously further optimize that and we're working on that. Part of the reason we're giving guidance is so that you don't have to necessarily factor that all in.

Speaker 2

We can see that pretty clearly and understand that. And as we go, we may provide more details on that once we have a larger end in our data set here. But right now, we feel very good about those numbers. And then you answer the question I couldn't fully understand what you're getting at with the patient numbers. We've already done more than 30 patients this quarter, meaning 3rd quarter, quarter we currently sit in than we did in the quarter, second quarter that we're reporting for.

Speaker 2

We expect that to obviously accelerate considerably such that by the end of Q3 the numbers are going to be much higher. I'm not sure if that answers your question or if you want to phrase it differently, I can try it again.

Speaker 6

Right. So given that you infused more than 30 patients this quarter, but this quarter is still have a couple of months to go, right? So I'm just trying to understand what's your assumption for this quarter, the patient number for this quarter, given that you only gave the revenue guidance, which includes prolukin. And at this current stage, I think it's a little hard for us to understand the Proluton revenue contribution because there's a lot of stocking going on. So it's hard for us to see the patient number.

Speaker 6

If you can help us understand the patient number for this quarter, that will be helpful. Thank you.

Speaker 2

We have an estimated number for this quarter that's a lot higher than $30,000,000 I can't give you that number today. I can tell you that it will be significantly higher and it will track out the we think it will track out to give you $53,000,000 to $55,000,000 in revenue with a good portion of that being Proleukin, especially restocking of Proleukin. That's the most color I can give you right now.

Speaker 6

Got it. Thanks and congrats again.

Operator

Thank you. Our next question comes from Tyler Van Buren with TD Cowen. Your line is open.

Speaker 10

Hey, guys. Thanks for taking the question. Just a couple. So you gave basically some metrics on time to manufacturing, which is consistent and reimbursement. But what's the average time from the beginning from opt in to infusion?

Speaker 10

And then the second one is around kind of how much you're netting per infusion and gross margins. I suppose if you guide to target gross margin of 70% over the next few years, that would assume roughly 360 on the 5.15 list. So it has to be lower currently and we're getting some inbounds with cost of sales being the same as product revenue for this quarter. So more color on that and how much is fixed versus variable and how it might evolve over time would be super helpful.

Speaker 2

Sure. We currently right now Tyler see the entire enrollment process the reimbursement, approval, financial single case agreement, all the stuff we talked about endlessly on one of these calls, as well as scheduling getting in line for resectioning. The whole thing takes about 3 or 4 weeks right now. All right. So I hope that answers the first part of your respect to gross margin, we've obviously given you the number.

Speaker 2

Are you asking respect to gross margin, we've obviously given you the number. Are you asking about gross to net on the product on AMTAGBI? You mentioned discounting and I'm not sure exactly what we were talking about from a financial perspective. Gross to net on the product is very low.

Speaker 10

Yes. Currently how much you're netting with each infusion and how you expect that to evolve in the coming quarters?

Speaker 2

All right. So gross to net right now is less than 0.5 percent and we expect it to stay around there, less than 0.5%.

Speaker 10

But I guess question is cost of sales are the same as product revenue. So there's a lot I mean, there's a lot of that fixed. I mean, and obviously, if it's a 70% gross margin, it's not half currently, right, half a percent currently?

Speaker 2

I think so I'm going to probably need Jean Marc's help here, but maybe this is some of this is lost in the definition of cost of sales that we use. Jean Marc, you want to come in?

Speaker 5

Yes, yes, yes. Just chiming in and trying to answer Tyler's question. So what you will see in the 10 Q and all the detail is obviously our cost of sales in total, which is €38,000,000 if you look at the year to date June 2024. We don't have any specific gross margin to give for product or product by product because it's a total. But just know that on the cost of sales, you will have, of course, other things than only cost of product, cost of goods sold itself, because you have intangible assets that you need to take into account, you have royalty to take into account.

Speaker 5

So you cannot draw exactly what's the conclusion on the gross margin, but we are committed again in the next several years to reach this 70% because we believe that where we stand today in terms of cost of sales for our product make us confident for reaching this 70% in the next few years.

Speaker 11

Thanks.

Operator

Thank you. Our next question comes from Ben Burnett with Stifel. Your line is open.

Speaker 11

Hey, thank you very much. And again, appreciate or congrats on all the progress on a great quarter. Question just on the cash guidance that Jean Marc you were talking about. To what extent do you consider product revenue when calculating the cash runway?

Speaker 5

Yes. We do take into account the product revenue, but to be honest, with you Ben, we are very conservative. So that's why we're confident into saying with the recent €200,000,000 we just raised to be able to go into 2026. And that includes all the spending in term of investments, in term of increasing manufacturing capability and capacity and all our operational spend. So we are very conservative and very confident about that.

Speaker 11

Okay. Thank you. And just to clarify, so when thinking about kind of the spending going forward, we shouldn't just assume that that cash guidance is assuming the product guidance exactly, the product strategy guidance?

Speaker 5

We do take into account what we are telling you around the €450,000,000 to €475,000,000 in 2025, obviously. This is our baseline to look into a cash burn for the cash overall situation for next year. But that's the top line after you have to take into account also some one time expenses we may have into increasing capability and capacity at ICTC for example. But again very confident into giving the guidance into 2026 as a cash in

Speaker 11

Excellent. Okay. And maybe just one follow-up. What is kind of the timeframe for expanding the manufacturing capacity to 5,000?

Speaker 2

Igor, do you want to handle that one?

Speaker 4

I'm happy to. So right now the network is built to a couple of 1,000 patient per year capacity. And within the existing ICDC facility, Tal, as you recall, we have shelf space that we're now building out and that build out will bring ICTC to over 5,000 patient per year capacity. And that build out should be completed in a couple of years.

Speaker 11

Okay, great. Thank you very much.

Speaker 12

Of course.

Operator

Thank you. Our next question comes from Colleen Cusi with Baird. Your line is open.

Speaker 1

Great. Thanks for taking our questions and congrats on the progress. Can you comment on the manufacturing success rate and just kind of what happens when there is an unsuccessful manufacturing run? Does that just get filtered into COGS? And then for the fiscal year 2025 guidance, how much of is the contribution expected to be from Europe?

Speaker 2

Yes. Jean Marc, do you want to talk a little bit about how it works with the manufacturing like an out of spec and how that goes in the COGS?

Speaker 5

Yes. So, Collin, thanks for the question. I appreciate that. The out of spec and all the scrap will go and you will see that in the queue as part of our cost of sales because when the project is not being infused by the patient because of patient health or the situation like that and out of spec of course, we have to take it into account what stage of production it was. So it will be taken into account as part of cost of sales.

Speaker 5

If it is going into potentially some kind of in this case by case situation, clinical use then we will switch into OpEx. We will switch it back to OpEx as part of our clinical spend in that case.

Speaker 2

And Colleen, I can answer. No, the European revenue is not factored in anything right now. That will come online, as I said in my remarks, a little bit later. We expect and will give us even more tailwinds in 2026 and

Speaker 1

beyond. Great. Thanks for taking our questions and congrats on the progress.

Operator

Thank you. Our next question comes from Asthika Goonewardene with Truss. Your line is open.

Speaker 13

Hey, guys. Thanks for the question and appreciate all the color and the patience with all our questions today on this. I'm going to ask one more on the guidance here. Maybe you can give a little color. If the proportion of the product revenue guidance that is attributable to Proxucan, Is that right to assume that the contribution slides down with each progressing period or is it a fixed component each period and then each period provided?

Speaker 13

And then of the 25 patients that were treated in 2Q, what proportion of these patients were reimbursement sought on a single case basis? And how is that shifting into 30 patients already treated today in 3Q? Thanks.

Speaker 2

Yes. So, Steve, the way to think about it is, if Emtekbee has a price, Perleukin has a price, you multiply the Perleukin price by the number of biology you expect, you're going to get to what I think you referred to as a fixed combination, which is a fixed percentage. So ultimately, IMTAGNEY patients that get Proleukin, there's going to is going to be a percentage between the total cost of those two drugs, what percentage Proleukin contributes and what percentage AMTAGMI contributes. You can calculate it pretty easily. It's roughly in the ballpark of about 15%.

Speaker 2

We can calculate that out more detail for you, but I'm sure you can do the math. For the 25 patients in the civil case agreement, we do civil case agreements for every patient. They just go faster and faster. Maybe Jim, could you add a little bit color on how that's improved to those 25 patients?

Speaker 3

Yes. Thanks, Fred. So the payer mix that we're seeing currently in the early days of launch mirrors what we had previously shared prior to launch. So prior authorizations in single case agreements primarily apply to the private payers, which you will recall was about 3 quarters of the patients. That's what we're seeing right now in the early months of launch, a payer mix that's very consistent, so about 75%.

Speaker 13

Thanks guys.

Operator

Thank you. Our next question comes from Reni Benjamin with Citizens JMP. Your line is open.

Speaker 12

Hey guys, thanks for taking the questions and congratulations on

Speaker 6

a great quarter and great guidance.

Speaker 12

A couple for us, maybe just starting off. Can you talk a little bit about how you're managing and working with ATCs, especially as it comes to maybe constraints and how they're dealing with prioritizing CAR Ts versus Till infusions and how that's looking kind of going forward. And I guess also we heard a lot of arguments this quarter, patients were dying before they get the infusion. Maybe you can talk a little bit about how what the patients are kind of looking at now as they're being enrolled? Has it changed any?

Speaker 12

Are they healthier, less lunges therapy? And then the other argument where it was that you guys didn't have enough slots and that there was just a backlog and people were waiting for cells to get processed. Can you talk maybe a little bit about that whether or not there was a backlog? Thank you.

Speaker 2

Dan, do you want to take the first part of that? Maybe Brian can take the second part.

Speaker 3

Yes, sure. So thanks, Randy. As we work with the ATCs, we work with them almost on a daily basis, especially the top ATCs. How they decide and allocate beds between CAR Ts and TILs, I'm not exactly sure of, but I do know that in terms of demand and scheduling patients for mTAGV that doesn't seem to be a concern. Just as prior to launch, there was a lot of concern around the lack of hospital beds.

Speaker 3

It does not appear to be any type of a restraint at all. In terms of patients dying before infusions, I guess what I would say is similar to other CAR Ts where there's a high unmet need and the lack of available treatments. Yes, you do have some patients that may progress or may die before therapy. But as we are well into launch now into our 5th 6 months, I think patient selection is getting much better and we're not seeing those same trends. I would just reiterate that the demand that we're seeing at the ATCs, the operational readiness looks really, really good and it reinforces the confidence behind our guidance.

Speaker 3

Brian?

Speaker 14

Yes. I would second everything you said, Jim. One thing that we've done at Iovance, I think it's not the only one of its kind. It's certainly rather unique is developed as we call it peer to peer, which is really former healthcare providers speaking to current healthcare providers and assessing patients as a partnership. We've all learned about the current commercial patient population out there.

Speaker 14

And I think what's really made the biggest improvement is patient selection, people understanding who are the most appropriate and even more so that these authorized treatment centers are speaking to the referring doctors to try to get them to understand earlier when it's best to send the patients to them so that we can move this process up and make patients who right now may not be the best candidate. There is a point in their earlier in their journey when they were better candidates. And I think this relationship that we have with all the authorized treatment centers is starting to bear fruit. And that's why I think you're seeing less and less of what you were describing.

Speaker 12

Excellent. Thanks guys and congrats.

Operator

Thank you. I'm showing no further questions at this time. I I'd now like to turn it back to Fred Vogt for closing remarks.

Speaker 2

Thank you again for joining the IVANS Biotherapeutics 2nd quarter and first half twenty twenty four financial results and corporate updates conference call. We're honored to disclose the first revenues for the first commercial Till cell therapy and look forward to providing further updates on the progress of our ANTAPI launch as well as continued developments in our pipeline and future updates. It's already been a monumental year for Iovance. We continue to be motivated as we hear media and social media, our AMPEGGY is providing hope to patients with metastatic melanoma. As always, we are thankful for the patients, healthcare and advocacy communities, our partners and our exceptional IVANCE team.

Speaker 2

I would also like to thank our shareholders and covering analysts for their support. Please feel free to reach out to our Investor Relations team for follow-up. Thank you.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

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Key Takeaways

  • Iovance reported $31.1 million in Q2 product revenues—including AMTAGMI recognized on infusion and Proleukin recognized on delivery—driven by more than 55 AMTAGMI infusions since April across a network of over 50 authorized treatment centers (ATCs) and growing to 70 by year-end.
  • The company provided revenue guidance of $53–55 million for Q3 2024, $160–165 million for FY 2024, and $450–475 million for FY 2025, with gross margins expected to exceed 70% over the next several years and a >$1 billion US peak opportunity in the current indication.
  • Iovance’s commercial manufacturing at its Philadelphia Cell Therapy Center (ICTC) is now operating at high utilization with a ~34-day turnaround from cell receipt to shipment, and is being expanded to support >2,000 patients/year today and >5,000 within the next few years.
  • The clinical pipeline remains robust, with the Phase III TILCADENCE-301 registrational trial in frontline and post–PD-1 advanced melanoma, Phase II IOVLUN202 in post–PD-1 non–small cell lung cancer, an endometrial cancer study, and next-gen TIL programs including PD-1 inactivation, IL-2 analogs, and inducible IL-12.
  • Iovance is pursuing global expansion following an EU regulatory submission, with UK and Canada filings planned this year and Australia and Switzerland in 2025, positioning the company for multi-billion dollar markets beyond the US launch.
A.I. generated. May contain errors.
Earnings Conference Call
Iovance Biotherapeutics Q2 2024
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