Iovance Biotherapeutics - Q3 2023

Transcript

Operator (participant)

Welcome to the Iovance Biotherapeutics Third Quarter and Year-to-Date 2023 Financial Results and Corporate Updates Conference Call. My name is Abigail, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session. To ask a question, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. Please note that this conference is being recorded. I will now turn the call over to Sara Pellegrino, Senior Vice President, Investor Relations and Corporate Communications at Iovance. Sara, you may begin.

Sara Pellegrino (SVP of Investor Relations and Corporate Communications)

Thank you, operator. Good afternoon, and thank you for joining us. Speaking on today's call, we have Dr. Fred Vogt, our Interim President and Chief Executive Officer, Dr. Igor Bilinsky, our Chief Operating Officer, Jim Ziegler, Executive Vice President, Commercial, Dr. Friedrich Finckenstein, our Chief Medical Officer, and Jean-Marc Bellemin, our Chief Financial Officer. Dr. Brian Gastman, Executive Vice President, Medical Affairs, and Dr. Raj Puri, our Executive Vice President, Regulatory Strategy and Translational Medicine, are available for the Q&A session. This afternoon, we issued a press release that can be found on our corporate website at iovance.com, which includes the financial results for the three and nine months ended on September 30th, 2023, as well as recent 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 and transactions, revenue, pre-commercial activities, clinical trials and results, regulatory interactions, plans and strategies, research and preclinical activities, potential future applications of our technologies, manufacturing capabilities, regulatory feedback and guidance, payer interactions, licenses and 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 filing. Our results may differ materially from those projected during today's call. We undertake no obligation to publicly update any forward-looking statements. With that, I will turn the call over to Fred.

Fred Vogt (Interim President and CEO)

Thank you, Sara, and good afternoon, everyone. I'm pleased to highlight several recent important milestones for Iovance. We continue to make significant progress towards U.S. commercialization while pursuing opportunities for our cell therapies in additional geographies and solid tumor cancers. Our top priority is to secure FDA approval and launch lifileucel in the U.S., a new class of treatment for advanced melanoma patients with limited options. Overall, the BLA process continues on the priority review with several positive status updates. We remain engaged with the FDA to complete the review as efficiently as possible. As a reminder, the FDA reiterated in September that there are no major review issues and no plans to hold an advisory committee meeting. In addition, all pre-approval inspections of all clinical sites and internal and external manufacturing and testing facilities have been successfully completed.

The FDA is also engaged and has no concerns with the status of the TILVANCE-301 confirmatory trial, which remains on track to be well underway by the PDUFA date. We appreciate the FDA review team's efforts to expedite the remaining review. We are confident in the potential for lifileucel to redefine the treatment paradigm for these patients who have no approved options after current standard of care. For the strength of our clinical data, manufacturing capabilities, and commercial readiness efforts, Iovance is ready to rapidly serve the U.S. melanoma community immediately following an approval, including the potential scenario for approval earlier than the February 24th, 2024 PDUFA date. Beyond the U.S., we plan to submit additional marketing applications for lifileucel in Europe and other geographies.

Based on positive feedback for the European Medicines Agency on cohorts two and four of the C-144-01 clinical trial, we plan to submit a marketing authorization application in the first half of 2024, with a potential European launch in 2025. We are also engaged with regulatory authorities in the United Kingdom and Canada. We plan to submit marketing applications in both countries in the second half of next year, again, with potential launches in 2025. Key markets such as Germany, France, and the U.K. have mechanisms for early access and reimbursement that can begin to drive significant additional near-term revenue by the end of 2025. Next year, we expect to have additional regulatory updates about our expansion plans for lifileucel in Australia and other countries with a significant number of advanced melanoma patients.

Collectively, the advanced melanoma population in Germany, France, the UK, and Canada is slightly larger than the US patient population, with the same unmet medical need. Our geographic expansion, when complete, can more than double the total addressable patient population for lifileucel in advanced melanoma. We plan to leverage existing resources to serve the melanoma community in these new geographies without incurring significant additional expenses. For example, our Iovance Cell Therapy Center, or iCTC, has sufficient capacity for these new countries, and we already have an existing office in Amsterdam and field medical support in the region. As we prepare to launch lifileucel, we are also integrating Proleukin, a currently marketed IL-2 product used as part of the cell therapy regimen. By owning Proleukin, we can offer it alongside lifileucel and have full control of the IL-2 supply chain.

We also expect to lower clinical trial expenses and future costs of goods for lifileucel. Beyond our regulatory and commercial readiness activities, our robust cell therapy pipeline continues to advance with seven active clinical trials. These include two registrational trials, TILVANCE-301 in frontline melanoma and IOV-LUN-202 in previously treated advanced lung cancer, which Friedrich will highlight in a moment. Completing enrollment in IOV-LUN-202 in 2024 is a top priority towards a potential supplemental BLA filing.... Additional clinical trials include the IOV-COM-202 trial in solid tumors and our first-in-human trial of our genetically modified cell therapy, IOV-4001. Lastly, we are excited to introduce a new Iovance cell therapy program in endometrial cancer.

Checkpoint inhibitors are moving into earlier lines of therapy, leaving an unmet medical need for patients who progress on or after immunotherapy and chemotherapy. Friedrich will provide more details on this, on this new program later in this call. Turning to our organization, we have more than 500 people with experience in developing and commercializing oncology and cell and gene therapy products. They are ready for our initial U.S. launch, ex-U.S. expansion, and ongoing pipeline developments. We have recently completed headcount growth and significant one-time investments in commercial and manufacturing readiness activities to prepare for launch and expand our pipeline. Following these one-time investments in strategic portfolio prioritization, we can reduce quarterly and annual operating expenses in the remainder of 2023 and full year 2024, while continuing all key clinical programs and internal manufacturing capabilities.

In addition, our September 30th cash position of roughly $428 million is expected to fund our operating plan into 2025. Jean-Marc Bellemin will provide additional color on the expense guidance and cash runway assumptions on today's call. We're excited about the near-term future at Iovance as we advance and broaden our mission to be the global leader in innovating, developing, and delivering cell therapies for people with cancer across multiple solid tumors. I look forward to addressing your questions later in this call, and will now ask Igor to present our manufacturing updates.

Igor Bilinsky (COO)

Thank you, Fred. We are committed to operational excellence, and to date have provided TIL therapy to more than 600 patients with a consistent manufacturing success rate of more than 90%. As part of the BLA review process, the FDA completed successful pre-license inspections of our Iovance Cell Therapy Center facility, or iCTC, and our contract manufacturer's facility. Both sites are prepared with sufficient capacity and staffing to supply our commercial launch and clinical trials. Our manufacturing network strategy supports our vision to establish TIL therapy as the next paradigm-shifting class of cancer therapy in the U.S. and beyond. The iCTC is currently built to supply TIL products for more than 2,000 patients annually in the U.S. and our planned geographic expansion. By building out additional existing shell space, iCTC may ultimately supply two products for more than 5,000 patients annually.

Longer term, our vision is to build capacity for more than 10,000 patients annually by adding new facilities, as well as streamlining and automating manufacturing processes. Intellectual property, or IP, is also a critical component at Iovance. We currently own at least 60 granted or allowed U.S. and international patents, including Gen 2 patent rights that we expect to provide exclusivity into 2038. Extensive detail on Iovance's owned IP is available on our corporate website and within our annual report on Form 10-K. I would now like to hand the call to Jim Ziegler to highlight our commercial launch preparations. Jim?

Jim Ziegler (EVP of Commercial)

Thank you, Igor. At Iovance, we have the potential to transform the practice of medicine in advanced melanoma and additional solid tumors. In the U.S., approximately 8,000 people die of melanoma annually, and the World Health Organization reports higher mortality in Europe. Lifileucel has the potential to be standard of care for patients who have no currently approved treatment options after standard of care frontline therapy. We have a sense of urgency to deliver Lifileucel to these advanced melanoma patients upon approval. Our commercial and cross-functional teams are on track as we approach our PDUFA date. Today, I will highlight onboarding for our authorized treatment centers, or ATCs, payer engagement, and commercial operational readiness activities. First, onboarding is a strong indication of ATC commitment and Lifileucel demand. Today's press release provided our first status update on ATC onboarding.

Approximately 30 centers have completed pre-approval onboarding steps to establish their TIL service line capabilities. These centers are educated in all aspects of the lifileucel treatment regimen, with staff and processes to begin treating patients pending the approval. Previously, we shared our goal to onboard 40 ATCs within 90 days of the PDUFA date. Based on our onboarding progress, we now expect to onboard approximately 50 centers within 90 days of the PDUFA date. We are also planning a disciplined approach to organize and schedule each ATC for their first treatments with full Iovance support. We believe a positive initial experience will drive long-term success and peak revenues. Reimbursement is also essential for patient access and provider adoption. Our market access team continues to engage the key national and regional payers to accelerate timely access and appropriate reimbursement for lifileucel upon approval.

We believe payers appreciate the high unmet need, lack of treatment options, and clinical value of lifileucel in advanced melanoma. We expect strong reimbursement for lifileucel, with a payer mix that includes a favorable, commercially insured population. More than three-quarters of advanced melanoma patients are currently insured through commercial, Medicare Advantage, and Medicare IPPS-exempt segments. Based on our payer interactions, we expect coverage similar to CAR Ts, requiring prior authorization with coverage consistent with label, medical coverage policies issued within about 90-180 days, and single case agreements for commercially insured patients. Although pricing will be disclosed after approval, we believe the lifileucel value proposition supports pricing in the higher range of CAR T cell therapies.

The CAR T prices range from $424,000-$508,000, based on current and reported price increases, with additional price increases expected in early 2024. In addition to lifileucel, we will receive incremental revenue from the sales of Proleukin for each patient. As a reminder, revenue recognition for lifileucel occurs upon infusion, like other cell therapies. As we approach the U.S. launch, I would like to highlight the extensive cross-functional launch preparations underway. Our commercial and cross-functional teams are on track as we approach our PDUFA date, and we remain confident in our ability to deliver a successful launch. I will now pass the call to Friedrich Graf Finckenstein, our Chief Medical Officer, to highlight our clinical progress.

Friedrich Graf Finckenstein (CMO)

Thank you, Jim. This afternoon's press release highlighted several pipeline updates. On the call today, I would like to focus on our recent data presentations, which are available on our corporate website, as well as selected registrational programs in frontline advanced melanoma and non-small cell lung cancer. I will also discuss our new TIL program in endometrial cancer. We are pleased that several recent posters and presentations from our C-144-01 trial continue to support the potential benefit of lifileucel as a one-time treatment that is differentiated from other immunotherapies for advanced melanoma. In October, during the European Society for Medical Oncology, or ESMO Congress, and at this week's Society for Melanoma Research or SMR, we highlight clinically meaningful and durable activity for lifileucel from a subgroup analysis of patients with a rare and difficult to treat mucosal melanoma subtype.

During the Society for Immunotherapy of Cancer, or SITC annual meeting last week, we highlighted the durable efficacy shown in a now four-year analysis of pooled cohorts two and four of the C-144-01 trial. Our poster reported the longest follow-up data on lifileucel treatment outcomes in the largest population of patients with anti-PD-1 refractory advanced melanoma treated with TIL therapy. Our registrational trials continue to advance an additional indication. TILVANCE-301 is designed to support accelerated and full approvals of lifileucel in combination with pembrolizumab in frontline advanced melanoma. This randomized trial remains on track to be well underway at the time of potential approval and is designed as the confirmatory trial to support full approval for lifileucel in post anti-PD-1 advanced melanoma.

We continue to randomize patients and activate global sites in the TILVANCE-301 in key geographies with a large presence of melanoma patients and the potential for strong enrollment. We recently activated new sites in the U.S. and the first site in Australia. We also have regulatory clearances to open sites in the United Kingdom and Canada. In non-small cell lung cancer, we have also made significant progress with our registrational strategy. IOV-LUN-202 is our registrational single-arm phase II trial in post anti-PD-1 lung cancer. Following the positive preliminary data analysis from LUN-202, physician interest and momentum for center participation is strong and remain actively activated with the sites. We also have FDA regulatory feedback that the trial design may be acceptable for an accelerated approval of TIL therapy in post anti-PD-1 non-small cell lung cancer.

The preliminary analysis included data from the registrational population in cohorts one and two, which enroll EGFR, ROS or ALK mutation-negative patients who have progressed on or after chemotherapy and anti-PD-1 therapy. Six patients had a confirmed objective response, representing an ORR of 26.1%. All six responses, including one complete response and five partial responses, remained ongoing at the time of the data analysis and ranged from 1.4+ to 9.7+ months. We remain on track to complete enrollment in LUN-202 in the second half of 2024. Based on this trial, we intend to submit a supplemental BLA for a U.S. accelerated approval in post anti-PD-1 non-small cell lung cancer.

We are proposing a phase III registrational trial in frontline lung cancer, which is intended to serve as the confirmatory trial for full approval in the post anti-PD-1 setting and to support an approval in frontline treatment setting. We plan to meet with FDA early next year to discuss the phase III registrational trial, where our goal is to improve frontline non-small cell lung cancer therapy by adding TIL therapy to standard of care pembrolizumab maintenance therapy administered after completion of the initial chemoimmunotherapy. Our confidence in this frontline trial design is supported by the encouraging responses and response durations that we have observed with the TIL pembrolizumab combination compared to standard of care benchmarks, even without chemotherapy.... Turning toward our new program in endometrial cancer. As Fred mentioned, we are starting an Iovance TIL therapy program in endometrial cancer.

The standard of care frontline treatment is shifting, and there is a lack of approved treatment options for patients who progress on or after immune checkpoint inhibitor-containing treatment regimens. Analogous to other tumor types, our one-time TIL therapy may offer benefit in this setting. Based on the TIL mechanism of action, the benefit of TIL therapy is likely to extend across patients with tumors that are mismatch repair mechanism deficient and proficient, and our clinical program will include patients from both subgroups. We look forward to providing more details as we work towards initiating the study in the first half of 2024. I am available during the question and answer session. For now, I will hand the call over to Jean-Marc to discuss our year-to-date 2023 financial results.

Jean-Marc Bellemin (CFO)

Thank you, Friedrich. I will summarize the high-level financial results for the three and nine months ended on September 30, 2023. More details can be found in this afternoon's press release, as well as in our SEC filings. Beginning with the balance sheet, Iovance had $427.8 million in cash, cash equivalents, investment, and restricted cash as of September 30, 2023, compared to $478.3 million as of December 31, 2022. The current cash position includes approximately $203.2 million in combined net proceeds from our public offering in July 2023, and the at-the-market equity financing facility. We expect our cash position and anticipated 2024 revenue from lifileucel and Proleukin to be sufficient to fund current and planned operation into 2025.

As Fred described it earlier, we continue to internally prioritize and optimize our operation and completed many one-time investments. As we carefully manage our operating expenses, we are guiding towards 2024 cash burn in the range of $320 million-$340 million, excluding one-time expenses, and we'll continue to look for opportunities to further streamline spending and drive revenue. Transitioning to financial results, net loss for the third quarter ended September 30, 2023, was $113.8 million, or $0.46 per share, compared to a net loss of $99.6 million, or $0.63 per share, for the third quarter ended September 30, 2022.

Net loss for the nine months ended September 30, 2023, was $327.7 million, or $1.44 per share, compared to a net loss of $290.6 million, or $1.80 per share, from the same period ended September 30, 2022. We began recording revenue from product sales following the Proleukin acquisition in May 2023 and anticipate significant revenue after the launch of lifileucel. Revenue for the third quarter and nine months ended September 30, 2023, was $469,000 and $707,000, respectively. There were no revenue for the third quarter and nine months ended September 30, 2022.

Cost of sales for the third quarter and nine months ended September 30, 2022, 2023, sorry, was $4.3 million and $6.4 million, respectively. The cost of sales includes cost of inventory associated with sales of Proleukin, as well as $4 million and $5.9 million, respectively, of non-cash amortization expenses of the acquired intangible assets for developed technology in the three and nine months period ended September 30, 2023. There was no cost of revenues for the third quarter and nine months ended September 30, 2022. Research and development expenses were $87.5 million for the third quarter ended September 30, 2023, an increase of $15 million compared to $72.5 million for the same period ended September 30, 2022.

Research and development expenses were $256.6 million for the nine months ended September 30, 2023, an increase of $42.4 million compared to $214.2 million for the same period ended September 30, 2022. The increases in research and development expenses in the third quarter and the nine months ended September 30, 2023, over the prior year periods, were primarily attributable to growth of the internal research and development team, as well as higher costs related to facilities and the initiation of new clinical trials, including the phase III TILVANCE trial, which were partially offset by a decrease in stock-based compensation expenses. Selling general and administrative expenses were $27.0 million for the third quarter ended September 30, 2023....

A decrease of $0.9 million compared to $27.9 million for the same period ended September 30, 2023. Selling, general, and administrative expenses were $77.0 million for the nine months ended September 30, 2023, a decrease of $0.6 million compared to $77.6 million for the same period ended September 30, 2023. The decrease in selling, general, and administrative expenses in the third quarter and the nine months ended September 30, 2023, compared to prior year periods was primarily attributable to the decrease in stock-based compensation expenses and other costs related to the timing of spend compared to the prior year period, including marketing, advertising, and legal costs, partially offset by costs associated with the growth in the overall business.

As of September 30, 2023, there were approximately 255.8 million common shares outstanding. Before handing the call back to the operator to kick off the Q&A session, I want to reiterate our 2024 cash burn guidance in the range of $320 million-$340 million, excluding one-time expenses, as we will carefully manage our operating expenses in the coming months and quarters. Operator, we can now start the Q&A session.

Operator (participant)

Thank you. At this time, we'll conduct the question-and-answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. One moment while we compile the Q&A roster. Our first question comes from Peter Lawson with Barclays. Your line is open.

Peter Lawson (Managing Director and US Biotech Equity Analyst of Healthcare and Life Science)

Great. Thank you so much. Thanks for taking my questions. Just as we think about a potential EU filing, if you can talk about the impact of a single-arm study on a EU approval and if that kind of changes the way you think about reimbursement as well in the EU. And then I've got a follow-up. Thank you.

Fred Vogt (Interim President and CEO)

Sure, Peter. Yeah. You're thinking of the CAR T products and what they did to get approval there. And obviously, we have the TILVANCE-301 study already running, which could provide us that randomized controlled trial that we could use to, and we'll read out right around the time, potentially, where we could use it to drive reimbursement in Europe. So yes, that's correct. We think, you know, as you know, there's early access programs in all the major countries. The single-arm data should be good enough for that. The EMA seems fine with the single-arm data, and then you get through the early access program, and then TILVANCE is reading out, and potentially, you're on to more longer-term public reimbursement programs in Europe.

Peter Lawson (Managing Director and US Biotech Equity Analyst of Healthcare and Life Science)

Great. Thank you. And then—Sorry. And I had a follow-up just for around the number of authorized treatment centers that seem to increase. I'm just curious about what drove that increase, whether it was kind of demand-driven essentially, or if it was the benefit of, of the FDA delay.

Fred Vogt (Interim President and CEO)

Jim, do you want to take this?

Jim Ziegler (EVP of Commercial)

Hi, Peter, it's Jim. Yes, it's a combination of both. There's a high sense of urgency and demand from our treatment centers, so we've had a few extra weeks, months to prepare, and we're just increasing the number. We're very confident to share that number publicly because the demand is so high right now for these centers to be able to offer lifileucel.

Peter Lawson (Managing Director and US Biotech Equity Analyst of Healthcare and Life Science)

Great. Thank you. I'll get back into the queue.

Operator (participant)

One moment for our next question. Our next question comes from Colleen Kusy with Baird. Your line is open.

Colleen Kusy (Senior Research Analyst of Biotechnology)

Hi, good afternoon. Can you hear me okay? Hello? Can you hear me okay?

Fred Vogt (Interim President and CEO)

Colleen, we can hear you.

Colleen Kusy (Senior Research Analyst of Biotechnology)

Okay, great. So thanks for taking the question. Congrats on all the progress and on the launch prep. So clarifying question, on the 30 centers who have completed the ATC preparation, theoretically, if lifileucel were approved today, could those centers start preparing to dose a patient today? Or kind of what else needs to be done for those patients to start using lifileucel once it's approved, once they're through the training?

Fred Vogt (Interim President and CEO)

Yeah, Jim can answer this in more detail, Colleen, but yes, basically, these guys are ready to go. Jim, do you want to give a little bit more detail here?

Jim Ziegler (EVP of Commercial)

Sure. Thanks, Colleen. Just real quickly, what we've done to date on the pre-approval onboarding is, you know, we've worked this with the centers to develop their TIL service line, which includes the clinical end-to-end education and training with med onc surgeons, cell therapy. We've operationalized the tumor journey in terms of building out workflows, SOPs, coordination and procedures on all of the logistics from OR, chain of identity, chain of custody, to product handling and logistics. And we've worked extensively on the reimbursement front. So when we say that these centers are ready to go, they're ready to go.

The last step in all of this will be for us to use the final label, make sure that all of our training and initiatives are consistent with label, and then we'll roll out a very abbreviated update based upon the label, and centers will be ready to enroll their first patients.

Colleen Kusy (Senior Research Analyst of Biotechnology)

Great. That's really helpful. Thank you. You had some commentary around the size and the mortality rate in some of the ex-US territories. Can you just talk a little bit more about the differences in the cell therapy market as you see it in Europe versus the US, and talk about what the manufacturing plans would be in those regions?

Fred Vogt (Interim President and CEO)

... Sure. The manufacturing plan we mentioned earlier, we're going to use our iCTC facility there. So, I want to make it absolutely clear we're not talking about building a new facility there right now. We're focused on using our existing facility that's already built out to make efficient use of our capital. The CAR T launches in Europe provide a pretty good yardstick for what's available there and what can be done in Europe. You can see from there, there's six CAR T products that have been approved in Europe at this point in different jurisdictions, and you've seen sales figures. You've seen from the European sales of these things that range anywhere from $tens of millions up into the low $hundreds of millions at this point. So we see this as a pretty good upside opportunity here.

Again, it increases the market significantly. We've got more than 3,000 patients a year in Germany dying from melanoma right now, and equally bad numbers in France and the UK and elsewhere. And then we've also got Canada in play here, and we're going to look at Australia as well, as we've mentioned, too, where you have more, well over 1,000 patients a year dying in Australia of melanoma. The demand for cell therapy in these jurisdictions is very high. We have clinical sites there. We know the physicians very well, and we're very comfortable with launching the product there. We think it can be successful, just like the CAR Ts are.

Colleen Kusy (Senior Research Analyst of Biotechnology)

Great. Thanks for taking our questions.

Operator (participant)

One moment for our next question. Our next question comes from Yanan Zhu with Wells Fargo. Your line is open.

Yanan Zhu (Senior Analyst of Biotechnology Equity Research)

Great. Thanks for taking our questions. Could you give us a sense of how the review is going? Have you had the late-cycle meeting? Have you had any labeling discussion? And also, could you talk about your perception of the agency's resources allocated to the review and whether the previous constraint has improved? And then I have a follow-up. Thanks.

Fred Vogt (Interim President and CEO)

Raj, would you like to take Yanan's question? I think Raj is on the line.

Raj Puri (EVP of Regulatory Strategy and Translational Medicine)

Yeah, no, I'll take that question. Thank you, Yanan, thank you for the question. The review is coming along very well. We have been getting IRs and providing all the responses to the agency. Our late-cycle meeting is planned. We will announce when that has happened. There are no other additional issues currently. The resource issues seem to be under control, and we are expecting that our BLA would be approved, perhaps, before the PDUFA date in January, sometime in January. The PDUFA date is February 2024.

Yanan Zhu (Senior Analyst of Biotechnology Equity Research)

Great. Great. And could you elaborate on the estimate of January? Is there anything for us to further understand here?

Raj Puri (EVP of Regulatory Strategy and Translational Medicine)

Yeah. So the FDA likes to approve products with the unmet medical need, at least four to six weeks prior to PDUFA date, as they have done with all CAR T-cell products, and other products as well. So with that keeping that in mind, FDA would like to... They like to approve the product sooner before the PDUFA date. So we are expecting the same for the lifileucel.

Yanan Zhu (Senior Analyst of Biotechnology Equity Research)

Got it. That's very, very helpful. And then my follow-up is about the center, number of centers and manufacturing capacity. So great to hear that you have 30 centers virtually ready to go. And by the time of approval, I assume you might have additional centers ready to go. And the question is, would you have any capacity limit that you might, you know, place a cap on the number of manufacturing slots at each of these early centers? And my other question is whether you can foresee that you might onboard more than 50 by the time, by 90 days after the approval, and would your capacity allow that? Thank you.

Fred Vogt (Interim President and CEO)

Yeah, Yanan, let me start, and maybe Igor can help out here. Yes, we obviously, you're aware of our facility. It's a very large facility. It's got capacity. It's built today for up to 2,000+ patients. FDA is the final decider of capacity with cell therapy, with all kinds of cell therapies, so we can't really say what's going on until we've got the feedback from FDA as part of the approval process. At the very end, we'll find out more about that. We did announce, as you saw, that we anticipate 50 ATCs within 90 days of the PDUFA date. It's possible we can go beyond that. We have to see. Right now, that's a pretty large launch. It'd be the largest launch ever for cell therapy, so it's pretty, pretty aggressive.

Let me turn it over to you for just some comments on the capacity and our ability to scale up between our own facility as well as our contract manufacturer.

Igor Bilinsky (COO)

Yeah. Thanks, Fred. Yanan, thanks for the question. So first of all, as I mentioned earlier, the FDA completed pre-license inspections at both sites, at our iCTC facility and contract manufacturing facility. Both went very, very well, and so both were successful. So both sites, our, our iCTC site and the contract manufacturer site, are preparing for the launch and also producing clinical material. The exact capacity, as Fred mentioned, will be determined by what capacity the FDA allows. We've been hiring and training the personnel. Well, we have been, and our contract manufacturing partner have been as well, in preparation for launch. But again, the exact capacity at launch, we'll know-... hopefully in the next several weeks as we get to approval.

Yanan Zhu (Senior Analyst of Biotechnology Equity Research)

Great. Super helpful. Thank you, for all the color.

Operator (participant)

One moment for our next question. Our next question comes from Michael Yee with Jefferies. Your line is open.

Dina Elmonshed (Equity Research Associate)

Hi, thanks for the question. This is Dina on for Mike. Congrats on all the progress. I just wanted to ask about lung. I know that there was a previous disclosure about potentially seeing some second-line updated lung data, maybe at a medical conference, that's coming up by year-end. Is that still on track, or, or what are you guys thinking about the lung strategy? Thank you.

Fred Vogt (Interim President and CEO)

Yes, Dina, we're looking to put data out on lung when we think we have meaningful additional numbers available, so we would really like to see more patients, I think, in the study, and then we will get that to a medical meeting. I don't know if we're gonna get it by the end of the year at this point or it could be next year, but it's important to us to have that data be more significant once we have more patients in the study. Remember, we put out data with 23 patients who had a 26.1% ORR with good signs of durability, so it could use a dose of additional patients here to help bolster the case.

Meanwhile, we're just executing on the study right now and running hard to make sure we can complete enrollment in 2024.

Dina Elmonshed (Equity Research Associate)

Perfect. Thank you so much.

Operator (participant)

One moment for our next question. Our next question comes from Ren Benjamin with JMP Securities. Your line is open.

Reni Benjamin (Managing Director and Senior Biotechnology Analyst of Oncology and Cell Therapy)

Hey, good afternoon, guys. Thanks for taking the questions, and congratulations on all the progress and a very informative call. A couple of quick ones. You know, you mentioned following a strategic portfolio prioritization. I typically think, you know, anytime that's mentioned, there have been programs that have been backburnered. Are there any programs that have been backburnered? Because you mentioned that there are seven clinical studies that are still ongoing. And as part of that, can you just give us an update as to what's happening with the ovarian study, or do you think the endometrial one that you're gonna start will kind of take that one over?

Friedrich Graf Finckenstein (CMO)

Yeah, Reny, I think you're referring to cervical, I think, instead of ovarian, right? I said we don't have an ovarian program at Iovance.

Reni Benjamin (Managing Director and Senior Biotechnology Analyst of Oncology and Cell Therapy)

Oh, sorry. Yeah, cervical. Thanks.

Friedrich Graf Finckenstein (CMO)

Yeah. So all those studies continue to run, and we actually think we can continue to run these studies in the budget we're on. We say prioritization, we may focus more on enrolling one particular study or putting our efforts on, for example, the IOV-LUN-202 study, where we need to enroll fast. That doesn't mean we're closing the cervical study. The endometrial study, when it does hit, will hit later, and so we don't foresee a near-term impact on cash. We could always reevaluate the programs at that point. What we're basically saying, though, is we're focusing on particular studies that are of high importance, like IOV-LUN-202 and TILVANCE-301, as well as the BLA approvals and the ex-US filings at this point, so we can drive revenues.

Reni Benjamin (Managing Director and Senior Biotechnology Analyst of Oncology and Cell Therapy)

Got it. Okay. Then just switching gears to the ESMO data that Friedrich mentioned. You know, as of the latest long-term follow-up, can you talk a little bit, I guess, about the PFS for the pooled cohorts of, you know, two and four? Can you just remind us what kind of subsequent therapies these patients got? And if I'm remembering right, correct me if I'm wrong, the 26% of patients that are surviving four years, right, their overall survival is 26% of patients are out four years. Does that, you know, suggest that patients who have been treated with lifileucel are not in any way detrimentally impacted by any post therapies, or is there another way to look at that data?

Friedrich Graf Finckenstein (CMO)

Reny, I can take this one. So as you know, collecting data, collecting subsequent data is always something that you have to take with a grain of salt. We haven't put out a comprehensive summary of what we are seeing in the study. But again, I think what you're seeing in this, in these long-term follow-up data is really the promise that TIL cell therapy has for patients treated with TIL in a setting where there's really no available care, right? So I don't actually think there's going to be a pattern here in regards to what these patients would be seeing after. We certainly don't see any signals for detriment.

What we think is really fascinating in this data is the long-term durability, the fact that we now have patients who have completed the study in complete response, meaning a five-year follow-up, which equals to cure, and that we see late deepening of responses and conversions to complete response, which is speaking to the mechanism of action of a living drug. That I think is the importance of this data.

Reni Benjamin (Managing Director and Senior Biotechnology Analyst of Oncology and Cell Therapy)

Yep. Yep, fair enough. I guess just one final question regarding the label. Is there any possibility of like a blue sky sort of scenario for a labeling discussion where you get, you know, more than what you want? Or, you know, really when we're looking at this data, accelerated approval and the like, you think the base case scenario, kind of based on the trial results from cohort two and cohort four, is the best that we can hope for?

Fred Vogt (Interim President and CEO)

No, I think... Well, actually, let me say something, Raj, and that you can add in, because we didn't answer Yanan on this fully either. But, on the label front, if we get cohort four, followed by pool cohort two plus four, which is what we think FDA is leaning towards right now, based on our conversations, we think that's the home run, the best option, because that allows promotion on the back of both the cohort four data, the pivotal data, as well as the 153 patient data set with mDOR not reached. It's a large data set. It just gives you a lot of different promotional opportunities for the product.

Raj can tell you more about sort of the nitty-gritty of the details of when the timing for label and that kind of discussion comes up, if you want.

Raj Puri (EVP of Regulatory Strategy and Translational Medicine)

Yeah, I think some of Fred covered it pretty well. Some of the labeling discussion actually has begun. We have received a few IRs, and we have responded to them. So I suppose I reconfirm that the labeling has started, and we're gonna have more discussions regarding that in next couple of weeks or so.

Peter Lawson (Managing Director and US Biotech Equity Analyst of Healthcare and Life Science)

Thanks, guys. Thanks for taking the questions, and good luck.

Operator (participant)

One moment for our next question. Our next question comes from Mara Goldstein with Mizuho. Your line is open.

Mara Goldstein (Managing Director and Biotechnology Analyst)

Great. Thank you so much for taking my question. If I could just return to the strategic portfolio prioritization as well as the completion of a number of activities. You mentioned that that is likely to reduce the quarterly and annual operating expenses. So I'm wondering if you can provide us with some guidance, at least directionally, as to what that is. And then on the ATM program, how much capacity is left there?

Fred Vogt (Interim President and CEO)

Jean-Marc, do you want to take that?

Jean-Marc Bellemin (CFO)

Yeah, definitely. Thank you, Mara, for the question. So I'm not going to be really specific, but you can imagine that this year, as we were preparing for launch, there was a lot of one-time expenses related to manufacturing readiness, even on the CapEx and OpEx front. Also ramping up on the commercial, all the activities and medical. So there is a lot of spend that occurred in 2023 that will be considered again one time and not happen the next year. So prioritization means also managing investment over time, and that's why we're confident about our ability to reduce our spend, both quarterly and annually, as we announced during the call.

Mara Goldstein (Managing Director and Biotechnology Analyst)

Okay, and then-

Jean-Marc Bellemin (CFO)

On the area of the ATM. Yeah, so on the ATM, we still have a, you know, large amount available because we have a $500 million ATM on which we only-

Mara Goldstein (Managing Director and Biotechnology Analyst)

Okay.

Jean-Marc Bellemin (CFO)

drew a, you know, partial amount in the Q3. Very similar.

Mara Goldstein (Managing Director and Biotechnology Analyst)

All right. Thank you very much.

Jean-Marc Bellemin (CFO)

You're welcome.

Operator (participant)

One moment for our next question. Our next question comes from Asthika Goonewardene with Truist. Your line is open.

Karina Rabayeva (Equity Research Associate)

Hi, this is Karina for Asthika. I had a question, if you could share some color on the manufacturing success rate, whether you had any discussions with the FDA on this and the potential prospects to be tighter in the commercial setting, as has been previously seen with other CAR-Ts. Thank you.

Fred Vogt (Interim President and CEO)

Igor, do you want to get that?

Igor Bilinsky (COO)

I'm sorry, could you repeat the question, please? My audio broken up.

Karina Rabayeva (Equity Research Associate)

On the manufacturing success rate, whether you had any discussions with the FDA and for the potential for the specs to be tighter in the commercial setting?

Igor Bilinsky (COO)

Yes. So, as you know, in case of CAR-Ts, we've seen that happen in some cases to an extreme extent. In our case, we've had the manufacturing success rate maintained in the clinic at more than 90% consistently, and in the pivotal cohorts, it was 94.7%. The final specs will be set very late, at approval, so we cannot comment on the final specs right now, but that's certainly been part of the discussions with the agency and part of the information requests that have been ongoing. But we don't expect, I mean, right now, we don't expect anything as anywhere close as draconian as you've seen in some cases of CAR-T in terms of tightening the specs. Does that answer the question?

Operator (participant)

One moment for our next question. Our next question comes from Ben Burnett with Stifel. Your line is open.

Ben Burnett (Director and Equity Research Analyst of Biotechnology)

Hey, great. Thanks so much. I wanted to go back and ask another question about just the capacity. I understand that the FDA will sort of help define the capacity at launch, just in terms of the number of slots that are available for commercial use. But I guess, can you frame for us just maybe, like, an upper limit of the capacity that you feel like you can handle now?

Fred Vogt (Interim President and CEO)

Yeah, Ben, the facility right now is actually constructed to go even beyond 2,000 patients a year at our facility. And then on top of that, we have our CDMO, WuXi, that has considerable capacity too. We haven't disclosed exactly what that is, but it's quite large, and could represent a good portion of our capacity at launch. So that's really the max that we've got constructed today without the need for additional capital.

Ben Burnett (Director and Equity Research Analyst of Biotechnology)

Okay, that's helpful. Does that include, like, the personnel required to sort of run that type of capacity at that level?

Fred Vogt (Interim President and CEO)

Yeah. The majority of that personnel is in place, and the rest of it can be put in place very quickly.

Ben Burnett (Director and Equity Research Analyst of Biotechnology)

Okay.

Igor Bilinsky (COO)

Obviously, we don't just, we don't just sit the personnel there, well, as a fixed cost if we don't need to. But we, we are very well skilled in bringing on manufacturing and QC personnel quickly and know how to do that in both in-house or CDMO.

Ben Burnett (Director and Equity Research Analyst of Biotechnology)

Okay, that's great. And then maybe just one other question. Just, I guess, can you frame for us when one would expect the labeling discussions to start? Would this be something at the late cycle meeting, as being the first ever sort of TIL approval? Just, any color you can provide on that?

Raj Puri (EVP of Regulatory Strategy and Translational Medicine)

... Yeah, as I mentioned earlier, thanks for asking this question, that labeling discussion has actually begun. We have received a couple IRs clarifying things in the label. So and it's gonna continue until they perhaps earlier approval date. So it's a good news for us that we have already engaged with the agency, the labeling discussion.

Ben Burnett (Director and Equity Research Analyst of Biotechnology)

Okay, that's great. Thanks so much.

Operator (participant)

One moment for our next question. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. Our next question comes from Kelsey Goodwin with Guggenheim. Your line is open.

Kelsey Goodwin (VP and Senior Research Analyst of Oncology and Cell Therapy)

Oh, hey, thanks for taking my question. Just a couple quick ones from me. I guess, maybe just on ex-U.S., is this still something that you're looking to pursue on your own? And I guess, is there any appetite to maybe partner or in specific regions or just more broadly, ex-U.S.? And then, moving on to the endometrial cancer trial, I guess maybe could you just remind us what kind of the efficacy benchmark is in the post PD-1 setting here? Thank you.

Fred Vogt (Interim President and CEO)

Yeah, I can answer the first one, Kelsey, and then Friedrich can jump in on the second part on the endometrial benchmarks. So we're always looking for opportunities, and yes, we would consider things like partnerships, strategic alliances, and things like that. But right now, we do have the ability to go into these jurisdictions ourselves as needed, and we can do that with minimal capital investments right now. As we discussed on the earlier part of the call, we don't need to build a facility there. We don't need to really do a whole lot of hiring there. We can get in there and generate revenues relatively quickly.

Now, if it turns out there's a partnership that would be of value to our shareholders, certainly we would consider that in those jurisdictions, but right now we're looking to do it ourselves as well. And then, Friedrich, can you answer the endometrial benchmark question?

Friedrich Graf Finckenstein (CMO)

Yeah, really good question, and I love getting a question on the endometrial program. Thank you. So as you know, what we are seeing happening right now with the checkpoint inhibitors moving from a second-line treatment setting into frontline, the data on what's being used and efficacy after use of checkpoint inhibitors is really not available. So I think probably the best benchmark, the best starting point of what you can look at as a potential benchmark, would be data that have been used when pembrolizumab was brought into the second line setting. There, the control arm of study KEYNOTE-775 was investigator's choice docetaxel monotherapy.

And those showed an ORR of about 15%, median duration of response of 5.7 months in patients with MMR-proficient tumors. The results in dMMR patients were a little lower, with ORR of 12% and median DOR of 4.1 months. So I think that's probably where you can start, given that we would be exploring populations that have seen both chemo, frontline chemo, which was the prior therapy for patients in this study, in KEYNOTE-775, but also either concomitant or sequential checkpoint inhibitor therapy. I think it's fair to say that we would choose to beat an ORR of about 10%-15%.

Kelsey Goodwin (VP and Senior Research Analyst of Oncology and Cell Therapy)

Okay, great. Thank you so much.

Friedrich Graf Finckenstein (CMO)

Mm-hmm.

Operator (participant)

That concludes the question and answer session. At this time, I would like to turn the call back to Fred Vogt for closing remarks.

Fred Vogt (Interim President and CEO)

Thank you again for joining the Iovance Biotherapeutics third quarter 2023 financial results and corporate, corporate updates conference call. We've had a productive year to date with the priority review of the BLA, the close of the Proleukin transaction, important milestones in lung cancer, and delivering on our key regulatory, commercial, manufacturing, and pipeline activities. I'm grateful for the patients, physicians, and regulators, as well as for our employees and cross-functional teams who have collaborated on our BLA submission while advancing our mission to be the global leader in cell therapy. I'd 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 (participant)

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.