All right. Good morning, everyone. Tyler Van Buren here, Senior Biotech Analyst at TD Cowen. Thank you very much for joining us for TD Cowen's 45th Annual Healthcare Conference. Excited to kick off the morning here with the first day for our first session with Iovance. We are going to be having a fireside chat with management. It's my pleasure to introduce Jean-Marc Bellemin, the Chief Financial Officer; Howard Johnson, the Chief Business Officer; and Peter Prieto, the Senior Vice President of Medical Affairs. It's a privilege to have you guys here. Thank you very much for joining me.
Thank you for having us here.
Before I get started, for those in the audience, if you guys have questions, feel free to raise your hand. We'll do our best to get them asked. Let's go ahead and get straight into it with the AMTAGVI launch. You guys just, at the end of last week, reported fourth quarter earnings. You met the high end of the guidance with total 2024 revenue of $164 million, which is impressive in the first year of launch by anyone's standards. AMTAGVI came in at $49 million for the quarter with PROLEUKIN, an impressive $25 million that we'll get to in a second. Maybe you guys could start off with just discussing the results and whether there were any seasonal impacts that you guys saw with respect to infusions or resections, since that was a topic post Q3 earnings.
Yeah, thank you. I will take this one. Thank you, Tyler. I mean, first of all, I want to really emphasize the performance of 2024. I think, as you just mentioned, we did $164.1 million for the full year. It's the high end of our guidance we gave already in August last year. We beat the street expectation. It's just less than a year off launch of AMTAGVI. I think $164 million is quite an outstanding performance. Regarding your seasonality question, I mean, I will be direct to say it's a little bit early to assess if there is any seasonality we should expect on AMTAGVI or not. Why so is because we only have three quarters of revenue. Generally, for seasonality, you need really almost a few years to be able to assess that. We didn't see any of them, any seasonality yet. I think it's too early to call on it.
Okay. On the call, you noted that the iCTC facility was closed for maintenance. Did it impact infusions and what happened to the patients and product that was unable to be manufactured during that maintenance period?
Yeah, so indeed, we commented on the fact that there was a planned closure of short closure of iCTC in Q4. It was for maintenance, annual maintenance reason. Since then, iCTC has been back, and the operation has successfully resumed. We are planning to have another maintenance for contract manufacturing in the first quarter of 2025. Now, to answer your question, there was very minimal impact, and there will be minimal impact in Q1 infusion. Everything is back in the forecast because, again, the shutdown was planned and scheduled, so everything was included in our forecast.
Okay. It is essentially short enough that you're able to just schedule around that closure.
Yeah.
Yeah.
Do you want to comment?
Yeah, Tyler. Sites had full optics to the available slots, and there was really no impact to patients or ATCs other than a smaller amount of slots during that time. They were able to plan around it.
Okay.
I'll also say that one of the reasons you have a second facility is exactly for these annual maintenance pauses in manufacturing. We have the CDMO as our second facility, and that really helps mitigate these pauses in manufacturing.
Okay. Is the CDMO, does it simply serve as like a backup, or are you kind of splitting manufacturing between the two?
I mean, so we actually split between the two, but our main focus is really to use iCTC because this is our main manufacturing for many different reasons, including gross margin. You want to have a maximization of the utilization. But our CDMO is clearly there as a backup when there is those kind of maintenance.
Okay. That's helpful. As I mentioned, PROLEUKIN sales were $25 million for the quarter, significantly exceeding expectations. I think some investors have asked if the PROLEUKIN patient number is kind of exceeding the AMTAGVI number, looking at PROLEUKIN revenue as a sole source of revenue based upon the AMTAGVI utilization. Curious to just have you maybe walk through those dynamics. Maybe if there's anything you could say regarding the split of PROLEUKIN for AMTAGVI versus other purposes and how you expect PROLEUKIN sales to progress over the course of the year.
Sure. What you should know about PROLEUKIN is that there are basically three different sources of revenue from PROLEUKIN, right? The main source is that each AMTAGVI patient also gets PROLEUKIN, so we get revenues from that. There are also other usages, right? There are usages for manufacturing and for clinical trials by other cell therapy companies. There is still usage as a monotherapy for PROLEUKIN, right? The bulk of the revenue is going to come from AMTAGVI now and going forward, right? There are these other opportunities for us to sell into these other markets. Right now, we say that PROLEUKIN is a great prognosticator of AMTAGVI revenue. What we see and what we've seen in the first couple of quarters of launch is exactly that effect. In 2024, what we did is we established two specialty distributors early on in the year.
In the fourth quarter, we added a third specialty distributor. Now we have the three main distributors in the United States set up. There was restocking throughout the year at the initially established SDs. In the fourth quarter, obviously, there was the initial stocking. All of this is driven by PROLEUKIN demand, I'm sorry, by AMTAGVI demand because obviously the two products are joined at the hip.
Yeah. Let's not forget also the PROLEUKIN revenue is recognized at the time of the shipment delivery versus AMTAGVI and the infusion. So that's why we know it's a good indicator of AMTAGVI sales.
The shelf life of PROLEUKIN is quite long.
It is. It is.
Okay. Before you acquired it, was it doing about $20 million a year?
$26 million, yeah, was the year just before we acquired it.
Okay. So obviously, that's a component of the business that's adding to the quarterly revenues. Do you expect to expand that kind of non-MTAG be use with PROLEUKIN over time?
There are opportunities. I still think it's right to stay focused on the fact that most of PROLEUKIN is going to be associated with AMTAGVI. But there are these other markets, and we have a commercial team that's focused on selling into these other markets.
Okay. I guess as we think about the percent of total revenue of PROLEUKIN versus AMTAGVI and when PROLEUKIN kind of reaches steady state, I guess it's tied to AMTAGVI, right? So you can't really it's going to continue growing kind of incrementally quarter over quarter with AMTAGVI, right? You're not going to reach steady state.
Yeah, but you need to reach the steady state. As Orazio was mentioning about the three different lines of business, we do not know yet exactly how this is going to shape in the future. Nevertheless, we always say that we do expect PROLEUKIN to represent 15% of revenue potentially for the organization. I mean, when we acquired the drug, it was clearly for AMTAGVI, but now we see this as an opportunity in terms of global sales of PROLEUKIN, clearly.
Okay. You all reiterated guidance for the full year 2025 of $450 million -$475 million, monster number for a cell therapy launch in the second year and first full year. Maybe you could just provide some comments on that and why you reiterated it, what's driving your confidence in achieving that number.
Yeah, sure. Several factors, but clearly, we have the visibility on the demand. We know the demand. We have clear visibility around that. We are ramping up our ATCs. We now have 70 ATCs. When we launched, there were only 30. We moved from 30 to 70. All of them are ramping up. Some ATC just came on board, and some are already doing multiple patients. There is a ramp-up that will happen. We are also engaging a lot with the community and reaching out and driving the demand from the community. Very confident about our guidance for next year. Do simple math, it is one patient per month per ATC on the 70. For us, it is something we know we will achieve in 2025.
Sounds great. When you refer to visibility of demand and you schedule these patients, how far out are you guys currently scheduling patients, I guess, for resections?
Yeah. At the current time, I mean, it's just really a matter of weeks. It's a matter of weeks. Patients can be enrolled and can be set up for surgery a week later if need be. It's just typically we shoot for about two weeks from time of enrollment to time for surgical resection.
Okay. That is about the amount of time that also takes to kind of secure up reimbursement?
Typically.
Okay. You have got manufacturing, which is 34-ish days. After that, you are essentially doing the conditioning, lymphodepletion, and getting the patient ready for infusion.
Correct.
Okay. Do you expect that overall, call it one to two-month timeframe to shorten significantly in the near future, or is that more of a long-term endeavor?
Yeah, I think we have some plans that could potentially shorten this by a day or two, but that will happen over time in the next year. That is something that will happen more gradually.
Okay. As you mentioned, Jean-Marc, one patient per month per 70 ATCs would get you to the annual guidance number.
With PROLEUKIN also.
Yeah, including PROLEUKIN.
Let's not forget.
Of course. I mean, obviously, you guys just need to continue working on pull-through in these centers, educating physicians, increasing utilization. Can you guys elaborate on what you're doing on that front to make sure that that happens?
Yeah. You know, I think it's really three prongs as Jean-Marc mentioned. In full honesty, we really feel like we're scratching the surface of this launch. The launch has been successful, we feel, through the first three quarters. We are adding more ATCs. We are seeing that ATCs are committing to more infusions in 2025. We are bringing new ATCs on in really high-volume markets such as Los Angeles, intermountain regions with high incidences of melanoma. We are collaborating with really KOLs and large community oncology practices to bring these patients into select ATCs or even have discussions about making these kind of regional centers ATCs. Again, we feel like we're just scratching the surface. This is the tip of the iceberg for the launch.
Okay. On the earnings call, one of the more interesting metrics you gave was the percent of ATCs that have infused 10 or more or one or more. Obviously, getting those, what was it, about over half of patients or over half of ATCs that have infused one or more patients to 10. For the 13% of ATCs that have reached the expertise level of 10 or more patients, what are learnings from those ATCs? What are they doing well? Why have they gotten to 10 or more? Is it just simply that they were the first ATCs, or are there some that are just coming online very quickly?
Yeah, there's a learning curve there, Tyler. I think what we've been able to do is to have kind of exchange of learnings from those initial ATCs that have been so successful. We're able to package those. Like our product, which is first-in-class, we have a first-in-class team, a peer-to-peer team that comprises four nurse practitioners, a PA, as well as a few MDs that go out and essentially work with these sites to exchange best practices, patient identification, at times that you would mention AMTAGVI in the patient journey at the time of first-line treatment so that by the time the patient does recur, you're available for that treatment. We would also work with the centers with our ATC ops operational team that's now boots on the ground. We have these teams deployed, and we're able to kind of transfer that knowledge.
The return on these engagements has already been shown through launch. We are bringing these ATCs kind of up to speed, and I think they are very much appreciating that information, and it is getting them out of the gate strong.
Okay. Seventy ATCs is a solid number, but how many ATCs is too many, or what's the optimum number of ATCs that you guys would like to get to over time? When you think about CAR-T, I think Gilead in the U.S. with their Kite franchise is at 100 and change globally. It's like over 400, right? Maybe approaching 500. At least in the U.S., it's 100 and change. Would it be a similar amount for you guys?
Yeah. We've not disclosed an absolute number, but we do plan to increase steadily the number of ATCs within the United States to meet demand. This would include kind of untapped markets and relationships with large community practices. That number, we do plan to increase through the year.
Okay. There is a great slide that you guys put together showing the launches of CAR-Ts versus AMTAGVI be. You guys are clearly on track with those launches, if not a little better. Those lines are not straight up and to the right, right? There is some lumpiness. As we think about Q1 results and going into the end of the year, Q2, Q3, Q4, how do you expect kind of overall sales and utilization for AMTAGVI be to increase? Do you think that maybe it will be a little flattish in Q1 and then a bigger ramp going into the last three quarters or second half of the year, or should we expect a significant rebound in Q1?
Yeah, I think it's fair to say, and that's why we put this slide, Tyler, is to just give a comparison that, yeah, we are beating the CAR-T for the time being, but it's a little bit sometimes flattening and then accelerating again. I mean, to be fair, we mentioned about the closing of iCTC, even short, and of CDMO. We say there will be a little impact in the Q1 infusion. We do expect the ramp-up of the new ATCs and the acceleration of community referral and all that. We do expect actually more an acceleration of revenue in the second half of this year. Again, want to reiterate the guidance and confidence around that.
Okay. Great. You mentioned the price increase being factored into guidance for the year. April 1st, maybe you could just briefly discuss the price increase and instituting that if there's any considerations around that.
Yeah. I mean, we will do a 9% price increase as of April 1 for both PROLEUKIN and AMTAGVI. Again, this was built in our forecast, so no surprise there. I mean, we look at other cell therapy and what price increases have been done. We have not done any increase on prices, for example, for PROLEUKIN since we acquired the asset. I mean, I will say a standard in terms of price increase, and we will assess that every year, of course.
Okay. True adjusted gross margins have improved from, I think it was 26% in Q2 to 44% in Q3 and now 46% in Q4. You talk about 70% over the next few years. Can you talk about why you've observed those improvements so far to date and what you need to do to get it to 70% in the next few years?
Yeah. I mean, of course, several factors will influence on the gross margin. The big step between 26% to 44%, so Q2 to Q3, was mainly due to actually manufacturing utilization. The demand was coming through, and iCTC was, of course, then utilized more than in Q2. After that, you have to think that we will have a steady improvement on the gross margin coming from better patient, better tumor selection, manufacturing automation, optimization. I mean, we talk about operational efficiency. As Peter mentioned, we may reduce even the production of frame by one or two days shave there. Everything will go into the improvement that we should see in the gross margin. Again, being confident of reaching 70% in the coming years.
Since you mentioned the, again, reference earlier in the conversation where Peter was talking about maybe shaving off a couple of days, some of the ATCs beginning the preconditioning prior to the AMTAGVI manufacturing completion. Can you talk about how widespread that is now versus what it could be in the future and how much time that's saving?
Yeah, it depends on the ATC. It's a bit heterogeneous now, but as sites become more comfortable with the regimen and seeing the outcomes and with their internal workflows, I think there's an opportunity to begin this kind of preconditioning lymphodepletion at the time that shipment is confirmed by Iovance. They're becoming more comfortable with this. I would say throughout the next year, you probably see that become more common.
Okay. To ship it, once manufacturing is completed, to ship it has got to be a matter of a day or two or three.
Exactly. Yeah, a day or two.
Okay. I guess looking at ex-U.S., you guys have guided to three significant ex-U.S. approvals this year, including U.K. in the first half, Canada mid-year, and the rest of Europe in the second half. Can you talk about your launch readiness in Europe and Canada and whether you expect those regions to start contributing to sales this year?
Yeah, we have MAAs submitted to all the regulatory bodies within the regions that you mentioned. We have boots on the ground already. In Europe, we have an ETC operations team there now beginning to authorize centers. We also have our field medical team there that is engaging not only with our clinical trials that we're continuing to increase enrollment, but prepare for launch of AMTAGVI in Europe. We are on point for that goal of ours.
Just to comment on the revenue, there is nothing in our guidance for 2025 related to ex-U.S. It will be incremental if something's coming. We do expect that, of course, those countries will help in 2026. I mean, there will be significant, yeah.
Okay. The CAR-T companies have built plants abroad, but I think you all initially plan to use iCTC or maybe even the CDMO. You're able to do that just because, I guess, shipping to Europe, you can do that in a day or two as well, or do you plan on adding manufacturing abroad? What's the strategy in terms of manufacturing the product and shipping?
Yeah. I mean, even our clinical trials, some of them are in Australia. So we're shipping to Australia from iCTC. Internally, as built to date, iCTC can accommodate 1,200 patients, but we have capacity to build that to 2,000 and plans to increase that to 5,000 in the next few years. We have no doubt that we have capacity within our manufacturing ability to meet all our clinical and commercial goals. One of the decisions to place the plant in Philadelphia was really consideration about serving the U.S. from Maine to California, but also being able to serve Europe. As Peter said, we've been serving clinical trials out of our CDMO and iCTC in Philly for years, and the commercial product will just be an extension of that.
Okay. If you have demand for 2,000, you could manufacture that, and you could expand the plant to manufacture that in the coming months or by year-end, or what's the timeframe on 2,000 and 5,000?
The expansion is already underway, and it's a matter of years to get to 5,000. I would say probably two to three years. The plant is built now, Tyler, in terms of capacity, physical capacity, and we just have to staff it up to 2,000, right? We've actually made the decision to invest in building out the plant to 5,000, a capacity of 5,000, so we can staff all the way up to 5,000. Right now, we're staffing up to 2,000, but we're building for 5,000, if that's clear.
Okay. That's clear. What are you building to get to 5,000? Is it just the suites that you have to build out?
Additional clean rooms.
Okay. All right.
Obviously, quality testing labs.
Yeah.
Yeah.
Each of those suites and clean rooms, obviously, I guess you've got a product that's taking those up at least for like a week or two during the manufacturing process?
As you know, the process is a certain amount of time, and the product sits in incubators for much of that time, but there are certain days in the process where the product does get handled. Each product, obviously, is tracked all the way through, and different clean rooms are employed, but the product sits in an incubator a lot of the time.
Got it. Okay. With respect to the launch XUS, have you guys said anything regarding price, what we should expect there?
Yeah. No, we did not comment anything yet around price. Let's go to the registration, then reimbursement approval. A good surrogate, though, will be looking at other cell therapy company and the discount they got versus their U.S. price.
Okay. Maybe we'll spend a few minutes on the pipeline. MTAG be expansion into frontline melanoma, confirmatory phase three Tilvance 301 trial is progressing. Maybe you could give a latest update there in terms of how that trial is going and when we should expect top-line data.
Yeah. The TILVANCE trial continues to accrue. We have 60 sites currently. We have a lot of forward momentum with enrollment and a lot of enthusiasm among our PIs, many of whom were at either ATCs that have commercial AMTAGVI and now have the ability to provide in the clinical trial setting first-line availability to cells with the ability to crossover. As you know, this is a global randomized trial, and those typically take several years to read out. With the intent and the design of the study with dual primary endpoints of response and PFS, we know that PFS will take some time to mature. We are hopeful that we'll have some interim analysis for ORR that would likely support that, looking further into that in the first line, but we've not disclosed when we will evaluate that.
How does this increase the overall AMTAGVI opportunity versus the current indication, and what would be the ideal patients in the front line to be treated with AMTAGVI?
Yeah, I think it only increases awareness in the community among PIs, again, who will see we always typically say, as a former surgical oncologist, you have to treat one patient. You see how durable this, how meaningful this therapy can be. I think that is only leading to further interest, awareness, and getting patients to what accounts for 90% of cancer deaths in this country, and that's solid tumors. As we look moving forward, I think there's only forward momentum with using these trials for increased awareness.
Okay. Let's move to lung here for a little bit. You have noted that you'll be reporting data from IOV-LUN-202 in the second half. What should we expect from this top-line data release?
Yeah, I think with the data, we're going to hope to have a number of patients to any meaningful duration of response to support approvability of a full data set. We've not shared or provided guidance on when that full data set will be available, but to say that we have plans for supplemental BLA in 2027.
What's a meaningful duration of response in these patients?
We know that over 70% have greater than six months. So I think greater than six months is something that we would shoot for.
Okay. Just cohort 3A of IovCom 202 at SITC of last year, lifileucel plus pembro in frontline lung cancer patients that progressed on chemo. I guess based upon this data, you plan to open cohort 3D in EGFR wild-type lung cancer patients post-chemo. When do you expect to start enrolling this cohort, and will it be confirmatory for 202, or what's the purpose of that cohort?
We hope to enroll soon, but it's actually a frontline population. It's not after chemo. It's actually adding lifileucel to the pembro chemo regimen in the true first line. We hope to target EGFR wild-type patients in non-small cell lung cancer who really represent a majority of the unmet need in the second line. Yes, the hope is that this would lead to a confirmatory trial for the second-line setting in non-small cell lung cancer, which is supported by LUN-202.
Okay. Like TILVANCE, I imagine that's going to take several years, right?
Remains to be seen, but typically, our strategy is in parallel with what we've done with melanoma.
Okay. Endometrial, that's a more recent indication that you all have added in the past year or so. How's that phase two progressing, and what should we expect for the data release in the second half?
Yeah, that trial, again, continues to accrue with a lot of investigator interest, and we are excited about that potential new indication. There's really a significant unmet need there for patients who fail first-line therapy. The response rates are really abysmal, somewhere in the order of 10%. We would expect to release an initial data set in line with initial data sets we've released from other signal-finding studies.
Okay. That's helpful. In the last couple of minutes, just you guys have several other pipeline programs ongoing. You've got 3001 and 5001. Maybe you could just give brief highlights regarding those programs and when you expect kind of the next update to be from those.
Sure. I'll take a stab at that. 3001 is our second-generation IL-2. Obviously, we own PROLEUKIN and sell a lot of PROLEUKIN, but we're always interested in improving the IL-2 side of the equation. We acquired by license the rights to this IL-2. We put it into the clinic just recently, and it's a fusion protein. The whole idea of it is that it has a longer half-life than PROLEUKIN. We think it's going to be not only safer, but easier to administer than PROLEUKIN. You won't need several doses of Iov-3001. You'll likely just need one or maybe two. Iov-3001 is an exciting product that's in the clinic. Iov-5001 is also part of our strategy, Tyler, to improve the TIL product, right? We have several ways of doing that.
One is we genetically engineer the TIL, and we already have a product in the clinic called Iov-4001, which is a genetically engineered PD-1 knockout TIL cell. That's in the clinic, both in melanoma and in lung cancer, and we expect to see results of that at some point in the near future. We also work on improving the TIL process itself. One of the things we're working on in our new creative with Steve Rosenberg is the development of a product and process to really focus on neoantigen experience, neoantigen-selected cells. The real killers, if you will, not the bystander cells in a cell product. We want to focus a product on the assassins, the most potent TIL cells, and we're focused on the next-generation product and process around that effort. Finally, we've announced Iov-5001, which is going to be filed as an IND this year.
5001 is a product where we're tethering a very strong IL-2 cytokine stimulant and enhancer called IL-12. IL-12 will be inducible and tethered on a TIL cell, leading to it being released right at the site of activity, right in the tumor microenvironment, and then not leaking into the systemic, the rest of the patient, if you will, to cause toxicity. We are super excited about 5001. We are also excited about 4001 and 3001. These are multiple shots on goal that not only work the PROLEUKIN side of the equation, but work the cell side of the equation too.
That's great. Thanks for that, Howard. Jean-Marc, maybe to wrap things up, you could end with the latest on cash runway and financing options that you guys are exploring moving forward.
Yeah, let's close the loop. As of February 26, we disclosed we have $422 million of cash. The $422 million will be sufficient for the second half of 2026. We also gave guidance around the cash burn being below $300 million, including iCTC expansion investments. No need to finance. I mean, for the time being, really, it's managing expenses more.
Okay. Wonderful. We're up on time, so we'll go and wrap things up. Jean-Marc, Howard, Peter, thank you very much.
Thank you, Dallas.