Earnings Call: Q4 2020

Feb 25, 2021

Good afternoon, and welcome to the Iovance 4th Quarter and Full Year 2020 Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. I would like to turn the call over to your speaker, Sara Pellegrino, Vice President, Investor and Public Relations at Iovance. Please go ahead. Thank you, operator. Good afternoon and thank you for joining us. Speaking on today's call, we have Maria Fardis, our President and Chief Executive Officer Frederick Finkenstein, our Chief Medical Officer and Jean Marc Bellamine, our Chief Financial Officer. We are also joined by Jim Ziegler, Senior Vice President, Commercial. This afternoon, we issued a press release that could be found on our website at iovance.com, which includes the financial results for the 3 12 months ended on December 31, 2020, as well as corporate updates. 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, pre commercial activities, clinical trials and regulatory plans and results, potential future applications of our technologies, manufacturing capabilities, regulatory feedback and guidance, payer interactions, collaborations, 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 introduction, I will hand the call over to Maria. Thank you, Sarah, and good afternoon, everyone. I am pleased to highlight our 2020 progress as well as our 2021 priorities at Iovance during today's conference call. During 2020, we continue to advance and broaden our tumor infiltrating lymphocytes or Till platform across multiple indications, including metastatic melanoma, cervical, head and neck and non small cell lung cancers. For our lead Till product candidate, lifileucel and metastatic melanoma, we reported new and updated data from our ongoing C14401 clinical study demonstrating durable responses in our Cohort 2 for one time treatment with lifileucel. We initiated a dialogue with FDA and learned that we need to continue refining the information from our potency assays. We continue our work to refine existing assays as well as develop new assays in pursuit of our Biologics License Application or BLA, which is our top priority for 2021. In additional indications, we completed enrollment in 2 cohorts for lifileucel and advanced cervical cancer. We reported the initial clinical data for Till in combination with pembrolizumab in head and neck cancer and the activated sites for our registration directed study of LN-one hundred and forty five in non small cell lung cancer. We believe that the growing body of Till clinical data across multiple late stage cancers, coupled with combination of Till and checkpoint inhibitors in earlier stages of disease, validate the significance and broad potential for Till. We also continue to execute toward all manufacturing and pre commercial activities in furthering our commitment to address the critical needs of cancer patients. I am very confident in the strength of our employees to deliver on this mission. We have an impressive 76% of our nearly 2 50 employees who have at least a year of cell therapy experience. On the call today, I would like to spend a few minutes highlighting the lead indications. Then I would let Fredrick highlight our recent clinical study updates. I will begin with our 1st pivotal program lifileucel in advanced melanoma. Metastatic melanoma is a common skin cancer accounting for approximately 96,000 patients diagnosed and 7,000 deaths each year in the United States alone. We are focused on metastatic melanoma patients that have exhausted their most commonly used available care options and need alternative therapies. In early January of 2021, we provided a corporate update that median duration of response still has not been reached at 28.1 months of median study follow-up for Cohort 2 from our C1440 1 clinical study. We as well as KOLs continue to be very enthusiastic about the durability of response following one time treatment with lifileucel. For the post anti PD-one patient population similar to Cohort 2, chemotherapy is only currently available option and offering a 4% to 10% response rate and overall survival of only 7 to 8 months. We intend to present a long term follow-up data from Cohort 2 at an upcoming medical conference. As previously mentioned, reaching agreement with FDA on the potency assay is a top priority for Iovance. Following a Type B meeting with the U. S. FDA during Q4 of last year, we reached agreement on the duration of clinical data follow-up for our pivotal Cohort 4 to support the BLA. We did not reach an agreement with the agency on the potency assays to define Till and continue our work to define existing potency assays while developing new assays. While the length of time until BLA submission depends on future dialogue with the agency, we continue staying prepared for a BLA submission in 2021. We plan to provide updates when available. Our second pivotal program is investigating LN-one hundred and forty five, now also known as lifileucel in this C14504 study support a BLA submission in metastatic cervical cancer. Enrollment in both Cohorts 12 of this study have been completed. Patients in our pivotal cohort 1 are post chemotherapy, whereas cohort 2 includes post anti PD-one patients. We believe that inclusion of both cohorts in the BLA may strengthen the potential label and reflect the expected upcoming treatment landscape in cervical cancer. The resolution of the potency assay for lifileucel and melanoma is a key step toward our BLA submission plan in the cervical cancer indication. As a reminder, the FDA has previously granted both breakthrough therapy and fast track designation for lifileucel in cervical cancer. Turning to our manufacturing facility, Iovance Cell Therapy Center or ICTC, the construction of clean rooms was completed in late 2020. Process equipment are now in place in the available clean rooms and activities in support of clinical manufacturing are expected to initiate in the coming months. Commercial manufacturing remains on track for 2022 with capacity to meet the demand for up to thousands of patients. Iovance has transformed pill manufacturing from a lengthy academic process to a shorter, scalable, centralized GMP process yielding a cryopreserved product. Our GEN-two process is 22 days. To date, more than 400 patients have received Iovance Till with a continuing success rate above 90%. We have also built and continued to augment our intellectual property, which is covered by more than 20 granted or allowed U. S. And international patents for compositions and methods of treatment in a broad range of cancers relating to the GEN-two manufacturing process. Our Iovance IP portfolio includes patent applications and granted patents directed towards Gen 3 manufacturing, selected Till products, stable and transient genetic Till modifications, cryopreservation and combination of Till with checkpoint inhibitors. Turning to our commercial launch preparation, the Iovance team is currently focused on KOL engagement, site activation and training, Till education and awareness, patient access and other readiness activities. Our priority is to ensure launch success while taking a gated approach to commercial readiness expenses and headcount prior to DNA submission. Our medical affairs team works with a network of treating healthcare professionals or HCPs and patient advocacy groups to ensure that the information about Till is available to interested organizations. A core commercial team continues to partner with the leading U. S. Cancer centers to build their Till service line capabilities and the intent to scale up training and onboarding upon BLA submission. Our market access team continues to meet with the private payers and the Centers for Medicare and Medicaid Services or CMS to ensure patients have appropriate and timely access to lifileucel. We believe that CMS and payers recognize the unmet need and clinical value of lifileucel as well as the potential benefits for patients with metastatic melanoma. We are also pleased with the development and progress of our Iovance Cares program. Our goal is to deliver a best in class cell ordering and patient support system that assists the patients at every step of the process. I will now pass the call to Frederick to outline our clinical study updates, including the enrollment status as well as introduction of new cohorts and treatment regimens into our existing studies. Frederic? Thank you, Maria. I am pleased to highlight today that we are currently recruiting patients for 4 clinical studies. Our drug development strategy focuses on cancer populations with high unmet need with substantial opportunity for Till to make a meaningful impact. Our C14504 clinical study in advanced cervical cancer has completed and closed enrollment in the first two cohorts, while we continue to recruit a 3rd cohort of anti PD-one naive patients to receive Till plus pembrolizumab. Recruitment also remains underway in our IOV COM202 study in solid tumors. The IOV LUN-two zero two study in second line non small cell lung cancer and the IOV CLL01 study in CLLSLL. As we move ahead with TIL alone and in combination with approved treatments in different indications in various stages of cancer, the COVID-nineteen pandemic may impact the pace of enrollment, particularly across cohorts with early aligned patients, which may improve as COVID-nineteen abates. On last quarter's call, I focused on the activation of our IOV LUN-two zero two clinical study. Today, I will highlight our current data and strategy in head and neck cancer as well as the recent updates and inclusion of new cohorts in the IOVCOM202 basket study. Head and neck cancer remains an important indication for Iovance and we are particularly encouraged by the initial clinical data for our Till therapy, LN-one hundred and forty five, in combination with pembrolizumab that was presented at the Society For the Immunotherapy of Cancer, or SITC, Annual Meeting in November of 2020. We are also excited about the potential for Till in combination with pembrolizumab and other solid tumors. The SITC poster highlighted 9 patients with head and neck squamous cell carcinoma or HNSCC from Cohort 2A in the IOV COM202 basket study. These patients had not previously received treatment with checkpoint inhibitors, but may have received prior chemotherapy. Following LN-one hundred and forty five in combination with pembrolizumab, overall response rate or ORR was 44% and median duration of response had not been reached at 8.6 months of median study follow-up. While these are small patient numbers, we find the results to be very promising. ORR with checkpoint inhibitor monotherapy and checkpoint naive head cancer patients ranges from 15% to 18% in the literature. We look forward to gathering additional data to present at an upcoming conference in the future. CORE IIa has now been expanded to include up to 19 patients. Regarding our C-one hundred and forty five O3 clinical study of LLM-one hundred and forty five alone in head and neck cancer, we achieved target enrollment and closed the study to enrollment. Before I hand the call to Jean Marc, I would like to highlight additional updates in our IOV COM2, 2 basket study, which now includes 7 total cohorts across melanoma, head and neck and non small cell lung cancers. As Maria mentioned, we are very excited about the potential for Till to offer an option for many different patient populations in multiple indications. In this basket study, early line patients in each indication received Till plus pembrolizumab, second line non small cell lung cancer patients received Till plus epilimumab nivolumab and later line cancer patients with melanoma in non small cell lung cancer received Till alone. Recent updates include the addition of a new melanoma cohort, a new lung cancer cohort and as mentioned previously, the expansion of the head and neck cancer cohort. Our newly added cohort 1C will investigate LN-one hundred and forty four manufactured with our 16 day 3rd generation or Gen 3 process in metastatic melanoma patients who have received 1 or more prior systemic therapies. Cohort 2a in head and neck cancer, which is evaluating LN-one hundred and forty five in combination with pembrolizumab, was expanded to include up to 19 head and neck cancer patients who are naive to immune checkpoint inhibitors. And our new Cohort 3C will provide an alternative option to standard chemotherapy in non small cell lung cancer, offering Till plus ipilimumab, nivolumab in non small cell lung cancer patients who have received one prior systemic therapy. The 3 non small cell lung cancer cohorts in this basket study together with the second line patient population in our IOV LUN202 registration supporting study allow us to cast a broad net to address the unmet needs in non small cell lung cancer. I will now hand the call over to Jean Marc to discuss our Q4 and full year 2020 financial results. Thank you, Frederic. My comments will reflect the high level financial results from the Q4 and full year 2020. Additional details can be found in this afternoon's press release as well as in our annual report on Form 10 ks filed with SEC. I will begin with our cash position. As of December 31, 2020, Iovance held $635,000,000 in cash, cash equivalents, short term investment and restricted cash compared to $312,500,000 on December 31, 1, 2019. This current cash position delivered on our commitment to end last year with at least $630,000,000 in cash. Our current cash positions include net proceeds of $567,000,000 from our June 2020 common stock public offering. Our financial strength is expected to be sufficient into 2023 to deliver on our pipeline programs. Moving to the income statement. Our net loss for the Q4 ended December 31, 2020, was $68,400,000 or $0.47 per share compared to a net loss of $63,600,000 or $0.50 per share for the Q4 ended December 31, 2019. Net loss for the 12 months ended December 31, 2020, was $259,600,000 or $1.88 per share compared to a net loss of $197,600,000 or $1.59 per share for the 12 months ended December 31, 2019. Research and development expenses were $52,400,000 for the Q4 ended December 31, 2020, a decrease of $1,800,000 compared to $54,200,000 for the Q4 ended December 31, 2019. Research and development expenses were $201,700,000 for the full year ended December 31, 2020, an increase of $35,700,000 compared to $166,000,000 for the full year ended December 31, 2019. The decrease in research and development expenses in the Q4 2020 over the prior year period was primarily attributable to a decrease in manufacturing and clinical cost following the completion of enrollment in the pivotal cohorts for melanoma and cervical cancer. The increase in research and development expenses in the full year of 2020 over the prior full year period was primarily attributable to higher clinical cost, licensing fees and growth of the internal research and development team. General and administrative expenses were $16,100,000 for the Q4 2020, an increase of $5,200,000 compared to $10,900,000 for the Q4 2019. General and administrative expenses were $60,200,000 for the 12 months ended December 31, 2020, an increase of $19,300,000 compared to $40,900,000 for the 12 months ended December 31, 2019. The increases in general and administrative expenses in the Q4 and full year 2020 compared to the prior year periods were primarily attributable to growth of the internal general and administrative team and higher stock based compensation expenses. As of December 31, 2020, there were approximately 146 point 9,000,000 common shares outstanding. Looking ahead, we are open to opportunities to top off our cash balance while being mindful of dilution. As such, we have put an at the market or ATM facility in place to raise up to $350,000,000 The ATM, much like a shelf, is a good housekeeping measure that may allow us to be opportunistic in adding to our already strong balance sheet. I will now hand the call back to the operator to kick off the Q and Our first question is from Mark Breidenbach with Oppenheimer. Your question please. Hey, thanks for taking the question and congrats on the progress this quarter. Maria, I was hoping you could clarify whether or not the first patient has been treated in the IOV LUN-two zero two study? And can you offer any thoughts as to when we might see lung cohort data from the Basket trial? Hi, Mark. Good afternoon. Thank you for the questions. We have not started patient dosing in LUN-two zero two, although we do have a few sites that are activated. We have not committed to a data flow timeframe for our lung data. If you recall, there's only 2 cohorts in our program that actually have patients in them. 1 is Cohort 3A and 1 is Cohort 3B in the COM202 study. We have highlighted in Cohort 3A, we have had challenges in patient enrollment. And in Core 3b, we are hoping to have additional patients with longer enough follow-up to be able to present the data. But we have not committed to a timeframe for data flow. Okay. Thanks. That's helpful. And just turning to the cervical program, obviously there might be more focus on Cohort 2 given the evolving standard of care in frontline cervical cancer. Can you give us a sense for what you see as a meaningful efficacy experience patients in cervical? And if we can expect to see data from the second cohort of this trial? Sure. So currently, the way we have designed the protocol for Cohort 2, II, we have these patients as post PD-one and expectedly they would have received chemotherapy as a prior line because that's just available care for them. So if you think about is 3rd line therapy, the best we are aware of and there is no data that I'm aware of and I'll refer to Fredrick in just a minute, that is for post PD-one patients. But I believe for chemo and third line, the bar is around 3% response rate mark. In terms of Cohort 2 data itself, we have blinded ourselves the same way as we have with our pivotal cohorts such as cohort 1 in cervical and we have not read out that cohort since we have talked to FDA. Frederic, I don't know if you want to add anything on the expected response rate for Cohort 2 patients or similar patients? Thanks, Maria. No, that's correct. There is numbers for 3rd line treatment. The 3% is about right and that is interestingly true across a number of different therapies, all of them being chemotherapy. So it's all ranging in the about 3% range. Our next question comes from Peter Lawson with Barclays. Your question please. Hey, thanks for taking my questions. Maria, just on the FDA and the potency assay, what are the next steps? And are they in any way kind of asking for a more defined product? Hi, Peter. Thank you for your question. We have from the time we met with the agency, which was back in early October of 2020, we have submitted a couple of packages to the agency. We have not received additional comments or questions from FDA. So we haven't received specific requests in any way. We continue with our validation work with additional assays and we expect to be providing that information to the agency in the coming weeks or months. So we don't have anything new from the agency and no additional questions have arrived. Okay. Thank you. And then just with the Gen 3 manufacturing, does that in any way kind of generate a more defined product? And just kind of a question around that as well is, how many T cell clones are there in most of your products? Really good topic. Our Gen III is expected to be released under the same type of criteria as Gen II. So from a chronotype diversity perspective, we don't expect it to be different than our Gen II. In terms of how many approximate chronotypes there are, we have released a repertoire data from our melanoma program, as an average, what we see is around somewhere between 10,000 to 17,000 chronotypes per patient product. Our next question is from Biren Amin with Jefferies. On the cervical study, across both Cohort 1 and 2, Maria, can you just talk about the lower bound of the 95% confidence interval that you need to exceed for regulatory purposes? Thank you for the question, Biren. Good afternoon. We haven't changed our statistical plans in any way. So we are still going with the existing plans that we had before. So we haven't changed anything. The only thing that we are basically communicating to investors is, there is a possibility of using Cohort 2 in addition Cohort 1. We stand ready, should that be a need from the agency. And we are wondering whether that might be an ask because the landscape is expected to change with the potential chemoimmunotherapy becoming frontline therapy. So we haven't changed our statistical plan in any way. So the statistical plan was based on cohort 1. So is cohort 2 then then, I'm sure you've made some assumptions that you need to exceed a certain level of efficacy for Cohort 2 as well. And given the patient population's PD-one I can't speak to the data. As I noted, we are blinded to both Cohort 1 and Cohort 2 data. So it's hard for me to tell you what we are seeing. I can tell you and I've commented on this before, when we read out the 27 patients before we had met the agency and blinded ourselves, we did have patients that had prior checkpoint therapy and we had responders in that group. And that was on the slide that we presented at ASCO. But aside from that, we are not planning on changing our statistical approach in any way. We just are making sure that we are ready should the agency request Cohort 2 to be added into the BLA. That's all we are saying. Okay. And then maybe just one question on Cohort 3C in the Basket study where you're combining with ipinivo, what's the rationale with this combination? And this is a time in 2 stage design. So is there a thought that you could develop this into a pivotal cohort if you're seeing encouraging data? Just to make sure we are on the same page, Biren, are you asking about the COM202 program or still the cervical program? The COM202, sorry, COM202, the basket study, the combination with ipinivo in lung? Sure. Why don't I ask Rudra to comment on this? Sure. I think one thing to mention here is the population in this cohort is non overlapping with the IOV Lung two zero two. So I think that is one rationale here is that we are broadening and covering additional populations across the non small cell lung cancer patient population. The further rationale for ipinivo is that with this regimen, we're exploring priming of the tumor and T cell infiltration by administering ipinivo prior to resection. So this is different from how we are doing this in ILV LUNG-two zero two, for example. So here the dosing is a single dose of ipi and nivo prior to resection and then after resection we are continuing nivo as comparable to how we are doing this in the pembro combination studies. So this is exploring a priming approach that's additional rationale for this. Great. Thank you. Our next question comes from Ren Benjamin with JMP Securities. Your question please. Hey, good afternoon guys. Thanks for taking the questions and congrats on the progress. Maria, I'd like to maybe get a sense of the timing of the potential filings. I think before, at least I had, I was thinking about both melanoma and cervical going in very, very close to each other. It seems to me just kind of based on how things could unfold that melanoma could be a 2021 type of filing and cervical kind of based on the work that needs to be done might be more 2022. Am I thinking about that correctly or is there another way to think about it? Hi, Rene. Good afternoon. I don't know if I can necessarily deduct that. I think it really depends on resolution of the potency assay matter with FDA. Given that we have completed enrollment into the cervical program, both cohorts 1 and 2, and cohort 1 was completed, if you recall, around Q3 2020. We think we have sufficient amount of follow-up possibly just for cohort 1. If they ask for cohort 2, then of course we need additional follow-up. But I don't think I can rule out submission of potential BLAs for both indications in 2021. Got it. Okay. And then I noticed, of course, the and it makes sense, the combination studies with checkpoints. But is there are there any other work that's being done to evaluate other combinations outside of checkpoints in these points in these indications? Yes, that's a great question. We've actually thought about a number of different alternative combinations in different settings and lines. Typically, we are looking to see where we can take the Till product into earlier lines. Looking at Steve Rosenberg's data in PD-one naive patients, this is highly encouraging. It showed us that if Till is an earlier line of therapy, there may be additional responders and additional CRs that one can have. And so the initial thinking wasn't necessarily going into combination, but going into an earlier line. Now once we decide we are going to earlier line, typically a regulatory path is offered the patient available care in addition to Till. And so since in most of the diseases we are in, available care in frontline happens to be checkpoint inhibitors, we are in combination with checkpoint inhibitors. But I do want to remind there has been data published in combining Till plus other agents, TKI has come to mind, BRAF combinations have been published. And that data appears to have been possibly additive. Although many of these studies are not statistically significant in terms of their number of patients, but there appears to be additivity there. Got it. I guess one final one for me. In the melanoma study, you continue to not reach the median duration. Do you have any sort of sense as to what the patients who are progressing, kind of what they're moving on to? And have any of them ever been retreated with Till's? Yes, we do collect that information as part of our database, certainly in certain cohorts. We also do have a retreatment cohort. You might recall it's called cohort 3 in our melanoma program. So they do have the opportunity to get retreated should they choose to do that. So yes. Okay. And we haven't seen any I totally forgot about cohort 30. We haven't seen any data from those patients or is there any sort of an update that we have from that cohort? Yes. We haven't presented data from that cohort. Typically, we want to have sufficient number of patients before we can present data and long enough follow-up. But yes, that Cohort 3 allows for retreatment of patients that may be coming from Cohorts 1, 2 and 4. Excellent. Thank you very much. Thanks for taking question. Of course. Thank you, Rainy. Our next question comes from Mara Goldsby with Mizuho. Please go ahead. Hey, great. Thanks for taking my question. I mean, I think this kind of dovetails on the last question about earlier lines of therapy. But in the non small cell lung cancer study, the inclusion criteria really just specify that patients have a single line of systemic therapy that includes checkpoint and chemo. And so I'm just curious as to is that your anticipation that you will essentially be a second line or are you taking patients who've had more than one prior line of therapy? So, Mauro, in the COM202 study where chemoimmunotherapy is defined as prior line, we are asking patients to be second line. Does that answer your question? Yes. No, I appreciate that. Thank you. Sure. Thank you. All right. And our last question comes from Nick Abbott with Wells Fargo. Your question please. Good afternoon. Thank you for taking my questions. First one, Marie, can I just confirm that the next sort of submission to FDA on the potency assay would occur in this quarter? You said the next few weeks, so I'm not sure if that you mean this quarter. Hi, Nick. Good afternoon. Yes, we have said that we are on track with completion of the validation work to provide the data to agency, I have always said in the upcoming weeks to months. So that's not an incorrect statement. So we are still on target with our own internal activities. Okay. And then in terms of the you mentioned that you've been validating the assay. So by that, does that can we conclude that you've tested all of the melanoma cohort for products with that assay? And I guess where I'm going in with this is, what would be the timeline between an agreement with FDA on the potency assay and the filing? So just to kind of clarify, the validation that you're talking about does not apply to our FRONT RUNNER assay. That assay had been validated fairly a few years ago and that data was provided to the agency and the clinical samples were in fact released based on that assay. So that work was completed. When we are talking about validation of additional assays, these are subsequent assays that we are talking to the agency. But to answer the second question, if that's what your question is, yes, one would have to run the clinical samples with the validated assay and provide that to the agency. Depending on how many samples are asked, this is something that takes a few months to do. It shouldn't be a rate limiting step or submission from the way we are thinking about it. So just to be clear then, you have run those clinical samples or you would wait until you get agreement with FDA that the assay is sufficient? I don't know if I can disclose the details. There are ways of doing both at the same time. So not every single sample needs to be run in advance of getting some degree of agreement, but some samples can be run and we do run them just to test the range of an assay. Okay. Okay. So it is I'm sorry to belabor the point. So if we go ahead and we file in the next few weeks, then FDA agrees some weeks after that, it's still possible you could file a BLA before the middle of the year? Without going into too much detail, because you're right, it depends on what exactly they request or how clear they provide a feedback on, I do want to remind, we still need to read our data by IRC. The clinical data still need to be read out by IRC. We have been waiting to make sure that the agency is comfortable with our approach and then read the clinical data by IRC. Okay. And then just it's intriguing that you might be able to combine the cervical data cohort 1 with not just cohort 2, but melanoma potentially. But am I right in assuming the only cohort 1, the breakthrough therapy designation for LN-one hundred and forty five in cervical applies only to cohort 1. So how do you combine submission that has part of it is has breakthrough therapy and part of it doesn't? Really great question. Breakthrough therapy generally is a designation. It doesn't dictate your label. So there's not a direct correlation of whatever it is you receive breakthrough therapy has to be exactly your label. All it says is that the agency recognizes that this particular therapy for this patient population is unmet need and they are willing to work with the sponsor to expedite the development program. Okay. Is this okay, fair enough. I'll leave it at that. Sure. Thank you. And there's no further questions. I would like to turn the call back to Maria Fargis for her final remarks. Thank you again for joining the Iovance 4th quarter and full year 2020 results conference call. Please feel free to reach out to our IR team if you wish to follow-up. Have a great rest of the day. And ladies and gentlemen, thank you for participating in today's program. You may now disconnect.