Okay. Great. Thanks everyone for being here. My name is Yanan Zhu, and I'm one of the biotech analysts here at Wells Fargo. It is my great pleasure to be joined by the management team of Iovance Biotherapeutics. With me here are Corleen Roche, CFO, and Brian Gastman, EVP Translational Medicine and Research. Thanks, Corleen and Brian, for joining us.
Thanks for having us.
Our pleasure.
Great. I was wondering if the team can kick off with a brief overview of the company before we dive into questions.
Sure. Our company is based on a therapy called TIL therapy, which is essentially taking immune cells that the body deems the most important to fight against the tumor, but there is just not enough of them out of the patient. We manufacture those to the billions, and then we prep the patient ahead of time, give those same cells that came from the patient, that are actually unmodified, right back to the patient. This therapy style has been around for decades. There are patients who are alive with refractory melanoma over 30 years since their treatment. We are building on the shoulder of giants. We are also based on a registrational trial that completed its five-year study. It has been published and really unprecedented long-term outcomes for these patients.
Great, thank you. Let us talk about the commercial performance of AMTAGVI. Congrats on a very strong second quarter, where you had $91 million in sales compared to $60 million in the first quarter. That is a big jump. Can you remind us what drove the increase in sales?
Absolutely. So I will probably boil it down to a few things. I would say, just to remind everyone, we have a growing body of real-world evidence, which is showing response rates over 50% in true second line. I think having that communication with the physicians, them having that data, is giving them even more confidence to treat and to treat earlier. We have done some surveys, and our physician awareness over the past year has grown threefold. We have also grown our network of authorized treatment centers, so we have breadth as well as depth, and we are continuing to do so. We have mentioned before we will have at least 110 authorized treatment centers by the end of the year.
Got it. I think at the earnings call, you did mention you have good visibility into the third quarter back then at the earnings call. Can you give us any update on the observation back then that demand continues to grow, the trends were still very positive? Any update to that statement, and how would you project sales for the third quarter?
Yep. I won't guide for the third quarter, but let me tell you this. We're continuing to see those positive demand trends. And they're happening as we sit here, which is actually really, really good news as they continue to grow. As far as our forecast, we have mentioned that we will update our full year guidance. That'll give you a view into the full second half, Q3 and Q4, and we'll do that within this quarter. We mentioned that at the call.
Before the next earnings call, you would update the guidance?
Yes.
Okay, great. Any comment on the fourth quarter sales? I don't know how much visibility you have, but when you make the guidance, how much confidence do you have for the fourth quarter?
I'll go back to an earlier comment. It's early days on the fourth quarter. We do have visibility because of the process. We are continuing to see positive demand trends. That's what I can tell you about the fourth quarter. And when we give that guidance, we'll have even a little bit more visibility, right? Not full, but we'll have a good sense of what's going on. But the positive demand trends are a good indicator.
Okay. I was wondering, in terms of quarter-over-quarter change, could we expect continued quarter-over-quarter growth for the rest of the year?
Yes, that's the goal. I believe you will see quarter-over-quarter growth. Now, I do have to give one caveat. The first quarter and second quarter had a little bit of timing offset, so that growth percentage might be a little bit inflated because of the timing of some maintenance we did in the first quarter, but you will definitely be seeing growth.
That's great to hear. Thank you. Let's talk about the ATC network. Could you provide an update on the number of centers currently offering AMTAGVI and your expectation for the network's expansion through the end of the year?
Sure. Right now we're using the number of 95, but I would say it's close to 100 centers in the United States. We expect by the end of the year to be around 110. There's a very good mix there of now community to academic. About a third of our authorized treatment centers are in the community, which is allowing us to bring the drug to the patient, which we've heard loud and clear is very important to both the treating physicians as well as the patients themselves. We are seeing growth that Corleen has just described in both types of centers, including our older existing centers as well as our newer centers are both making up the demand that we've described.
Got it. Any additional color in terms of academic versus community centers? Give us a sense about the growth opportunity within each setting.
Sure. So, in the community, we really recognize that most of the frontline melanoma patients that we are talking about becoming refractory exist there. We know that to be able to bring the therapy to the patient there is a lot of incentivization to do so. We do think there is a lot of growth opportunity there, but in the existing ATCs, there is a long-standing tradition of referrals to them. What we have done now is help them educate the physicians who are sending the patients to them that number one, these patients are not going to be trapped at the new ATC. They are going to be done in a partnership that will come back to them. We are making it look less like a referral and more as a resource that they may not have at their hospital, akin to not having open heart surgery, for example.
Finally, we are using the real world evidence data that we have done on our own, but also other centers have done independently and validated to show that when you get to these patients earlier in their cancer journey, we can see response rates above 50%, easier to administer the drug, and overall, the experience is just much more positive, which is a positive feedback for everybody. That message is getting out there. So it is not just that AMTAGVI exists to the local doctor, but that AMTAGVI, when given at the right time, can be a powerful tool and allow you to continue to follow and treat your patients for years to come.
Okay. I was wondering with your high performing group or the group of the high performing ATCs, has any of them reached any capacity constraint for their site, for example?
I would actually say the opposite is happening. What we're seeing now is huge investment into increasing their resources, bed capacity, not just because of the success they're seeing with AMTAGVI, but success begets success, and they are seeing other cell therapy companies, other options coming down the road, and they're preparing for it. If anything, someone said to me today, maybe 50% of our ATCs are investing in expanding their footprint in this area, and I think the rest will follow as well. I would say that it's literally spurring them to want to have more of what we are offering.
Great to hear. I think you mentioned the benefit of real world data in driving demand, which is great to see in the last quarter's numbers. But I think you also mentioned previously that you look to expand your sales presence and increase awareness among the centers. Can you discuss the progress on that front, and what other strategies are you pursuing to drive demand?
Well, I think there are two parts, and Corleen may want to talk about the footprint of our sales force. But from my perspective, getting that information to physicians who are actually controlling the journey of those patients has been key. Both getting them to want to have their own centers to be authorized treatment centers, as well as encouraging them to refer out. What we've seen, though, in the community, though, is a conglomeration of a lot of hospitals coming together and a lot of physicians coming together. In many ways, we are able to take the learnings from our best authorized treatment centers in academia and work within the framework within the network of these community hospitals to get something very similar out of them. And that's key because what you might have seen two years ago was a lot of early growth pain.
We don't want anyone to have to experience that ever again. We want to take the learning so that they can start on a higher level than any of our even best centers today had to go through in the past. You'll see more and more of that happening with the company. Related to that is a lot of work and expansion of the sales force and the sales team, and I don't know if you want to comment on that.
Yeah, I can comment on that.
Yeah.
I think we've recently talked about strategic targeted investment to make sure that our footprint is where we want it to be. And we're surrounding these treatment centers, right? We have the sales force. We have reimbursement specialists. We have the ATC operations group, which works with them on a daily basis. We have medical affairs, and we have a very strong payer coverage, which is helpful as well. We're providing whatever we need to get the latest information to them and to help them in their operations.
If I could just expand on that. Currently, from an access perspective, almost 95% of all Americans are within two-hour drive of any of our ATCs. That's huge, and that is getting better as we expand strategically. Secondly, most of our patients are being reimbursed through commercial payers. And we now know through policies, actually, that are published, that already over 250 million lives in the United States are being actively covered by AMTAGVI. And the rest, we really don't have any denials. It's very rare that we have them or they get overturned. So the coverage has been excellent, and that's allowing the drug to get to the patients faster.
Great. Thanks. That's a lot of progress into the U.S. market. Let's also touch on international markets. So the therapy has been approved in Australia and under review in Switzerland and the U.K. So could you discuss your commercialization and market access strategy outside the U.S., including priorities of the launch and timelines?
Yeah, absolutely. As you mentioned, we are already approved in Australia and Canada, in addition to the U.S. What I will tell you is we have a long-term vision of being able to reach as many patients as we possibly can globally that can benefit from AMTAGVI, and there is about 30,000 previously treated melanoma patients globally that we are aware of, that we are trying to reach. Now, of course, we are making it a priority. There is pricing negotiations ongoing in the countries where we have approval, and that takes a little bit, as you can imagine, and we are establishing ATCs there so that if any private pay patients come through, we can grab them first. We are continuing, as you mentioned, to expand into other countries. I think that AMTAGVI is valuable to all patients.
If you have talked to a patient who has no evidence of disease following AMTAGVI, it really tugs at your heartstrings. It really makes you want to get this to as many people as possible.
Got it. Any sense of the ultimate contribution of ex-U.S. revenue versus U.S. revenue?
Yeah, I think we have not guided on that, but obviously, I think we can, in the longer term, as we get up and running in those countries, it can be a really nice growth area.
Got it. Let's also talk about Proleukin. Proleukin's second quarter sales was $9 million, compared with $11 million in the first quarter. You did talk about demand remaining strong on the quarterly call and that all three wholesalers have sold through their previous stocks and will be ordering more next. Can you talk about the momentum of Proleukin and-
Yeah, absolutely. For Proleukin, there's really good momentum. The demand remains strong. What you're seeing in Q1 and Q2 is a little bit of inventory build before the price increase, and we're seeing all three wholesalers continue to order, and I think it'll be a little smoother. It's not on the same revenue cycle because we sell it through wholesalers, and then they're distributing. It's not exactly matched up, but it is driven by the strong AMTAGVI demand that you're seeing. You should see, and we're expecting growth in Q3 and Q4 for that.
Got it. I think in the past, you talk about, at steady state, Proleukin should account for 16% of total revenue. Is that still the case?
Yeah, I think that's still a good number. We based it on last year, so it's based on the actuals of last year, and we think it's right around the ballpark. Give or take some inventory build here or there. I think that that's what we're expecting.
Okay. Got it. Do you think the 16% can? It's a number that could mature even in the second half of this year, right?
Yes.
Is that it's not a long-term number?
Yes, for sure. Yep.
Right. Okay. Got it. Let's talk about margin.
Yeah.
You had a very good second quarter margin, 56%, especially given that your manufacturing facility is not fully utilized at this point yet, right? That number improved from 41% in first quarter. Can you remind us what drove the improvement first?
Absolutely. There is a number of reasons. First of all, if you recall, we brought all of our manufacturing in-house, so we are not using any contract manufacturers anymore, so that gives us economies of scale. We are very focused on doing more with the resources we have. So we are expanding capacity through targeted efforts to optimize efficiency within the plant. We are seeing that. The volume growth is helping, and we know that we have more capacity in that plant to grow further with the same resources. When you think about the operating efficiencies, I will not go into detail of what they are. There is a very strong focus on those projects, but think process improvement, think automation, closed system, things like that will help us even grow capacity more because we have the ability to in our plant without significant capital or people cost.
Got it. Did Proleukin also contributed to the margin improvement last quarter?
Not significantly. I think what's happening is Proleukin actually had a smaller share, as we just talked about in Q2.
So really that margin growth was driven by AMTAGVI.
Right. Yeah. Got it. That makes sense. In terms of all these improvements, first of all, can we see further? Can you be even more efficient from the last quarter, already a very good number? And I forgot if you have guided for a long-term ideal rate of growth margin.
First answer is absolutely, we're going to see more improvement in the margin. We haven't guided, but what we've talked about, and I haven't given a time frame, is a goal of around 70%. So I think that's a reasonable goal. Again, not a guide, but just to let you know how we're thinking about it.
Got it. Very helpful. Great. Let's talk about the pipeline. I think a huge investor focus is on the lung cancer data coming. Can you talk about where you are and when we might see the data, and what's the expectation for the data?
Sure. You are referring to our IOV-LUN-202 phase II registrational trial, which is akin to the same successful phase II trial that we did for melanoma called C-144-01. That trial is studying second-line refractory to chemo-IO non-small cell lung cancer that are EGFR, ROS1, ALK wild type. We have further focused on non-squamous cell subtype, which actually is the majority of all lung cancer, believe it or not. Despite all those distinctions, it is actually the majority. The three big things to note is one, is that we have line of sight this year, hopefully soon, to the end of the trial, which is huge. It is a Herculean experience for us to have been able to do a second one and to complete it this year. Related to that, we expect to have updated data this year, sometime in the fourth quarter.
It will not be the final data that will be given to the BLA, but it will be a large enough amount of data that it will be extremely unlikely that it would change left or right by the time we actually submit to the FDA. Thirdly, that puts us in line that we will be able to submit a sBLA to the FDA in 2027. All that remains on track. So far what we have done is given two major updates in data. Both have been relatively stable, both in response as well as durability. Those are the type of numbers we expect that we would need to have for an FDA approval.
I see. Sorry, I might have missed this. You mentioned a sBLA, right? Is there an initial BLA based on
The way our regulatory team was working is that because AMTAGVI is based off of lifileucel, which is actually a different [ID], but it is the same lifileucel, the sBLA is based off the BLA that we already submitted.
Oh, okay. Interesting. Interesting. It will be the same product.
Correct. It is made exactly the same way. We call it the Gen 2 process. It is tumor resections, goes through the same 22-day manufacturing process. Now, the release criteria may be different, and that is a discussion with the FDA. But ultimately, what we start with and what we end with should be essentially identical.
I see. I.e. AMTAGVI. This is AMTAGVI.
Yeah, I can't say what we're going to name it. Maybe Corleen may know. I don't know if we're going to call it AMTAGVI for lung, but I can tell you it'll be lifileucel.
Okay. Got it. Yeah. Yeah. You did report interim data last year. Can you remind us of that data? Yeah, let's talk about what we expect in the context of that data.
Sure. In that data set, we had a waterfall of 39 patients, and we showed the response rate of nearly 26%. That was very stable from the previous one we had done well over a year earlier than that. The duration of response was still not reached, which is incredible given the amount of follow-up that we had at that point. We don't know what the duration of response ultimately will be. But if it's a similar story as melanoma, it took over five years to see the DOR in melanoma. It ended up being slightly over three years. So it's akin to the kind of duration of response you would see in a drug that has curative intention. So far it's been stable and we will hopefully be able to update later this year.
Got it. Got it. So give us a sense of how many people's data we saw last time, and at this fourth quarter update, how many patients' data are we expecting?
Well, we're expecting for the whole trial to submit around 80 patients, which is about double what we reported before. I can tell you the data was so inspiring to our PIs that that's why we were able to finish off the trial actually relatively quickly. We were able to take the data, show it to them, and they're like, "Wow, there's something really there there." They just started accruing really quickly, and that's why we're able to give you line of sight that we're close to the end of the trial. Let's assume for argument's sake, the 80th patient shows up whenever it does. If that patient is a responder, there's a certain amount agreed upon follow-up that we have to do on every responder, and that would be why we wouldn't be able to have the final data.
If somebody has not been confirmed a responder or still in stable disease, we really wouldn't be able to report a response on them yet. There will be some patients in the around 80 patients that won't be there. Plus, the durability, it's a continual monitoring. That may get longer, or it may just remain unreached. All that would potentially change as we give it to the FDA. But we expect that the data we give in this fourth quarter will be very similar.
Interesting. Let's talk about the bar for success, the bar for approval. Because some things that we hear from investors might be, well, a response rate of mid 20% is not that different from a lot of the therapies or those that are in development. But you are targeting an accelerated approval pathway, right? What is the justification that this therapy could pursue that pathway?
Well, let me first talk about the end, because that's key. We've seen multiple lung cancer approvals, even in this administration, with that size of a trial in a single-arm study. We feel that the design, plus we have strong relationships with the FDA, we have multiple ex-FDA people in the company, is very appropriate for an approval. Secondly, the response rate. What is the benchmark? The main benchmark is docetaxel. The docetaxel, let's call it in the teens, depending on which phase III trial used it as a control arm. Mid-20s, certainly 20s is better than that. But what's key is its Duration of response is less than six months. It's a complete palliative therapy. There are many chemotherapies that can give you a few weeks of outcome, but it's meaningless because ultimately you're going to fail and almost essentially 100% of patients fail with docetaxel.
Giving, let's say, for argument's sake, one in four patients a response with a duration of response that's unreached and may be years in the making is a completely different level, and there's no other therapy out there, even in the treatment landscape, that can provide even the potential of that kind of durability. We have seen multiple failures of trial after trial in this space. This is a huge level up from what's out there and what we see that is even potentially out there. Again, we have very good alignment with the FDA.
Got it. That's great to hear. Can I ask about the safety? What is the bar for safety in your mind for this therapy?
We, as you may recall, this trial had a pause because of a safety event. We made a change mainly in the use of lymphodepletion that has completely improved the safety profile that caused that delay. I will mention parenthetically that as soon as we gave the FDA our response, within 24 hours, it was, I think, even less than 24 hours, they opened us back up, which was maybe record time. I think the FDA recognized not only our fix was a good one, but that there's a major unmet need that we are fitting, that we are taking care of. That being said, I think that we expect to see similar safety profile that we do with melanoma, which continues to get better as we get better at it in the real world.
I don't know exactly the numbers you want from me, but I can tell you that our latest addendum to that protocol has made a huge difference in the ability to give this drug to patients.
Got it. Okay. Is it fair to say if the safety profile is comparable to the melanoma study, which we already know very well, that should be considered acceptable?
I would think so, given the fact that the unmet need in lung is so much greater than it is in melanoma. In melanoma, you have multiple other treatment options, even if they're not approved, that people use. There really is nothing in lung. If you look in the frontline of lung cancer trials, they pretty much, as great as they are initially, they almost all fail it. Every physician is just waiting for the failure to happen when they treat their frontline patients. There's a huge unmet need for this, and I think the acceptance of a profile similar to melanoma will be even more so accepted in the lung milieu.
Very helpful. Can I ask you, when you report the data, is this going to be a medical meeting situation or this is going to be a company announcement situation? Perhaps also on the timeline, once we get there, what are the timeline for next steps and next catalysts?
We don't want to give away where we're going to give it, and the reason really is it's external to us what the data looks like at any particular data cut and when the deadlines are for international congresses. We also want to look at the quality of the congress. If we want to throw it in a congress, we could. We want really high impactful congresses, and only so many a year, and their deadlines are fixed. There's nothing we can do about it. If the stars don't align, we have the option of always do it as a press release. It's not because the data is not good enough. It's specifically because a lot of things have to align in order for it to happen.
But of course, if we did it as a press release, you will see a more fleshed out data discussion at a congress subsequent to that.
Right.
Does that answer your question?
Yeah, that totally answered it. The timeline to next steps?
Oh, yeah. Obviously, we see the end of the trial. We have to wait six months from the last responder. That data then becomes the packet we give to the FDA, and we immediately go for an sBLA.
Okay. Got it. Very helpful. Thank you. Let's talk about the TILVANCE-301 study that's in the first line, melanoma. Can you give us a sense of where it is at?
Sure. To remind the audience, that is a frontline therapy. It's a phase III multi-center international trial. It's the largest trial of Iovance's history. It's comparing TIL plus or lifileucel plus pembrolizumab versus pembrolizumab. It is randomized trial. It serves dual purposes. One is to confirm or accelerate approval in our current AMTAGVI, and the second is to bring AMTAGVI for the first time, or lifileucel for the first time, as an approved drug in frontline melanoma. Because of its endpoint readout, we can do a confirmation and an accelerated approval in the frontline, and then later confirmation in the frontline, all with this one trial.
Where it is right now is it's well underway. The accrual is going faster than it ever has. We have prescribed times that we will do data cuts, but we as a company have less insight. We're more blinded to the which is a good thing, to the results, in part because it's bigger studied, but also because of the nature of a phase III trial. When we have our prescribed data cuts, which we haven't said publicly, that's probably when we will do something public with that information.
Okay. Fair to say the enrollment is on track to your own expectation?
Look, we always want better than our. As soon as you get there, they want more and we want more. We always want to do more for the patients, for the company, for our mission. I'll never say we're satisfied, but I think we are happy with the kind of accrual we're getting. And we're seeing new PIs coming out of the woodwork wanting to be part of this and putting patients on it.
Got it. What about additional indications? You talked about the soft tissue sarcoma, and also I think in the past you talked about endometrial cancer as well. Can we touch on development in those areas?
I'll be brief. We did an IST looking at UPS and DDLPS, two of the most morbid forms of soft tissue sarcoma, very deadly cancer. Benchmark is horrible, worse than docetaxel in lung. Long story short, our first six evaluable patients, half of them have ongoing, thus very durable, deep responses and have really improved the quality of life of those patients. That has moved into a trial we call SARATOGA, which is going to be a phase II registrational trial along the same lines as our lung trial, as well as our successful melanoma trial. It will include both indications, and you should see that starting to accrue quite soon. I just checked clinicaltrials.gov and it's there. And we will have data being presented at ESMO. By the way, I should also mention, the data that led to TILVANCE-301's design came from a trial called our 1a trial.
That's also going to be presented orally at ESMO as well, by the way. But the bottom line is that we're very excited about that and we have patients ready to go, and we expect a relatively rapid accrual. The other one you mentioned was endometrial, and it's a really good example of using biomarker-based evaluation to do precision medicine. What we found there was within a cohort of refractory endometrial cancer, that the serous subtype had a 100% disease control rate and a 40% overall response rate. We are in active discussions with the FDA how to reevaluate these data and what we do with other types of endometrial cancer. But that's the main status, and there will be data in the near future on that as well.
Got it. I do not know if you want to touch on any next generation innovation for the TIL platform.
Sure. Iovance developed and launched the first ever genetically modified TIL. That is IOV-4001. That is PD-1 inactivated TIL. Its main function is to block a major resistance mechanism that makes TIL therapy not work as well as it should, specifically at the TIL, without having to dilute the whole patient with anti-PD-1. We have evaluated in melanoma as a benchmark. We are exploring in lung cancer, and we are likely to move into other indications in the near future, and there will be more to come on that as well. IOV-5001 is near and dear to my heart. I run early phase development as part of my many hats at Iovance. What it does is it expresses a tethered IL-12 that does not get secreted. The goal is to have many TIL be each cell much more potent than the even TIL we give now.
This allows us to move into indications that previously TIL never worked in. The basis for that was an actual clinical trial, which was extremely exciting from the NCI. The problem was that IL-12 was secreted, so along with these incredible results they had was a high level toxicity, and our IOV-5001 overcomes that problem by keeping it stuck to the T cell and only when the T cell actually recognizes the tumor. Finally, we have a number of ISTs. Again, my team is running. They are looking at other cancer types. We have some excitement about more to come on non-melanoma skin cancer. That is one of my backgrounds. Both Merkel cell and cutaneous squamous cell carcinoma, the two most common cancers in human, by the way. We are looking at other indications, and there will be much more.
There is a lot to talk about, and we will do it in different parts over time. You can imagine our IR team, which is here right now, will have a lot to work with in the near future.
Great to hear and looking forward to that. I do not know, Corleen, if you can give us a sense of the cash runway.
Absolutely. Recall at our second quarter earnings call, we said at the end of second quarter, we have over $300 million in cash equivalents, and investments, and we now expect that runway to be into the second half of 2028. I will just add, that extension is related to all the things we talked about as far as efficiencies. Be on the lookout for the guidance and expect it to be positive.
Great. With that, I think we are out of time. Thank you so much for all you guys.
Yeah, thank you.
Thanks, Yanan.