Yahoo Finance Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) Q4 2023 Earnings Call Transcript
Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) Q4 2023 Earnings Call Transcript February 28, 2024
Iovance Biotherapeutics, Inc. misses on earnings expectations. Reported EPS is $-0.45 EPS, expectations were $-0.44. Iovance Biotherapeutics, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Welcome to the Iovance Biotherapeutics Conference Call to discuss the Full Year 2023 Results and recent Corporate Updates. My name is Kevin, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Sara Pellegrino, Senior Vice President, Investor Relations and Corporate Communications at Iovance. Sarah, you may begin.
Sara Pellegrino: Thank you, operator. Good afternoon and thank you for joining our conference call and webcast to discuss full year 2023 results and recent corporate update. Dr. Fred Vogt, our Interim President and Chief Executive Officer; will provide a brief introduction. Jim Ziegler, EVP Commercial, will highlight our initial insights for the U.S. commercial launch of AMTAGVI, following the recent U.S. Food and Drug Administration or FDA approval in advanced melanoma. Igor Bilinsky, Chief Operating Officer, will highlight commercial manufacturing and capacity expansion plans. Friedrich Finckenstein, our Chief Medical Officer, will summarize key clinical pipeline highlights; and Jean-Marc Bellemin, Chief Financial Officer will review our financial results.
Dr. Brian Gastman, EVP, Medical Affairs; and Raj Puri, EVP, Regulatory Strategy and Translational Medicine are also on the call and available for the Q&A session. 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, commercial activities, clinical trials and results, regulatory approvals and interactions, plans and strategies, research and preclinical activities, potential future applications of our technologies, manufacturing capabilities, regulatory feedback and guidance, payer interactions, licenses and collaboration, cash position and expense guidance, and future updates.
Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time-to-time in our SEC filings. Our results may differ materially from those projected during today's call. We undertake no obligation to publicly update any forward-looking statements. With that, I will turn the call over to Fred.
Fred Vogt: Thank you, Sarah and good afternoon everyone. I'm pleased to host our 2023 full year results conference call. Throughout last year, we executed toward our first approval of commercial launch, while advancing our pipeline. On today's call, we have a variety of exciting topics to cover on the heels of the U.S. FDA's recent approval of AMTAGVI, the first one-time T cell therapy for solid tumor. AMTAGVI label allows us to become the first treatment option for advanced melanoma patients after anti-PD-1 and targeted therapy. The strength of this label also reflects a best case scenario with strong efficacy data from pivotal Cohort 4 as well as pull Cohorts 2 and 4. In the first few days of U.S. launch, we are seeing strong demand and momentum for AMTAGVI.
Consequently, we also expect increased demand for Proleukin. 32 [ph] authorized treatment centers or ATCs were ready for approval and nearly all identified a patient. Jim will provide more detail later in the call. The first tumor resection occurred in the first business day after approval and commercial manufacturing began the following data at our Iovance Cell Therapy Center, or ICTC. This is a testament to the high unmet medical need and the great segment around this new therapy as well as our commercial manufacturing readiness. Igor will talk today about our capacity to serve our near-term commercial launch of clinical trials and ongoing expansion plans. In addition to the U.S. launch, our near-term expansion plans for AMTAGVI are focused on addressing many thousands of additional patients by entering new geographies and broaden the label to include frontline advanced melanoma, as well as other indications.
For example, our planned global expansion has a potential to report the double the total number of addressable patients for Amtagv posed the anti-PD-1 melanoma. We remain on track to submit regulatory dossiers this year at the European Union in the first half of the year, followed by the United Kingdom and Canada in the second half. In addition, our Phase 3 TILVANCE-301 trial continues with a strong momentum in several countries to support regulatory submissions in frontline advanced melanoma. We are also pleased with the progress with our robust development pipeline across solid tumor cancers. Frederic will speak later about some key highlights on our ongoing clinical trial programs. Today, Iovance is the fully integrated company and is now the first company to commercialize the T cell therapy for solid tumor indication.
We are well positioned to execute on our regulatory pipeline, manufacturing commercial launch activities to remain the global leader in TIL cell therapy. Jim will now describe the ongoing activities related to our US launch.
Jim Ziegler: Thank you, Fred. Each year, approximately 8,000 people in the US die from melanoma. Until now, there have been no FDA-approved treatment options for patients with advanced melanoma, whose disease progressed following an immune checkpoint inhibitor and if appropriate, a targeted therapy. For these patients, Amtagv ushers in a new era for the melanoma treatment landscape as a one-time cell therapy that is manufactured specifically for each patient to address a significant unmet need. Today, I will highlight our launch activities, ATC onboarding as well as access and reimbursement. There is a strong level of ATC commitment with 30 onboard today. These onboarded ATCs are engaged in various stages of the process, including patient identification, reimbursement authorization, scheduling and tumor tissue procurement and manufacturing.
In the less than two weeks following approval, the majority of our activated ATCs have at least one identified patient and are in the process of establishing financial clearance for reimbursement, including prior authorizations and single-case agreements. There are at least 20 patients in the process, which includes 10 patients with scheduled or pending manufacturing slots. The number of ATCs engaged in this process reflects the high unmet need and a sense of urgency to offer Amtagv for their advanced melanoma patients. In addition, we continue to onboard and remain on track to have approximately 50 active ATCs in total by the end of May. We are also pleased with the initial market access and inpatient reimbursement trends for Amtagv. These are consistent with approved CAR T product with the benefit of increased speed resulting from both our preparation and the ATC's experience.
We continue to anticipate prior authorizations to include coverage consistent with label, medical coverage policies within about 90 to 180 days and single-case agreements for commercially insured patients. I want to acknowledge our strong cross-functional teams who have worked tirelessly to ensure our launch, readiness and execution. We are confident in our ability to deliver a successful commercial launch. I will now turn the call over to Igor, who will highlight our manufacturing readiness and capabilities.
Igor Bilinsky: Thank you, Jim. Amtagv, as well as our investigational TIL cell therapies are manufactured using our proprietary process to collect the patient TIL cells from a portion of their tumor, multiply them into billions and return them back to the patient to fight cancer. The US FDA has approved commercial manufacturing at our internal facility, the Iovance Cell Therapy Center, or iCTC, as well as at a nearby contract manufacturer. These facilities are built to support up to several thousand patients annually. As Fred mentioned, the first tumor resection occurred on the first business day of the approval and commercial manufacturing of Amtagvi is officially underway. We are currently staffed to meet the anticipated needs of our US launch, as well as our ongoing and planned clinical trials.
In the BLA submission form Amtagvi, we have included the capacity demonstration study higher than our immediate needs. This means that we can increase near-term capacity through increased staffing without requiring additional capacity authorizations. In addition, we are building further capacity to align with our near-term and long-term manufacturing needs. As we prepare to expand Amtagvi into new markets and indications and advance our solid tumor pipeline, extension within the iCTC facility is already starting. Build-out of additional clean rooms within the existing shelf space at iCDC can significantly increase capacity to over 5,000 patients annually over the next few years. Longer term, our future expansion plans may bring our manufacturing capacity above 10,000 patients annually.
In summary, our team is excited to provide Amtagvi to patients in need, we're laser focused on the quality of the manufacturing process in the period of doing everything right first time at every step from incoming receipt of the tumor sample through the manufacturing and product release process, to outbound shipment of the final Amtagvi product to the ATCs and to patients. I'm available to answer additional questions during the Q&A, and I will now hand the call over to Fredrik.
Friedrich Finckenstein: Thank you, Igor. I'm pleased to speak today about the key highlights within our clinical pipeline in solid tumors, which, as you know, represent more than 90% of all diagnosed cancers in the US. I'll begin with TILVANCE-301, our registrational Phase 3 trial in frontline advanced melanoma. TILVANCE-301is well-underway, it’s both accelerated and full approval of Amtagvi in combination with pembrolizumab in the frontline advanced melanoma. Global site activation and patient enrollment continue its strong momentum in the US, Europe, Australia, Canada and additional countries. TILVANCE-301 is also the confirmatory trial to support full approval of Amtagvi post anti-PD-1 advanced melanoma. Shifting to our program in non-small cell lung cancer and our single-arm registrational Phase 2 trial IOV-COM-202 in post anti-PD-1 non-small cell lung cancer, enrollment in the registrational cohort is estimated to complete in 2025.
Following the partial clinical hold for new patients, we are working collaboratively with the US FDA and believe we have provided all the necessary information to resume new patient enrollment in the near future. We are also preparing to start up a new Phase 2 trial in post anti-PD-1 endometrial cancer, which is expected to include patient populations who are efficient and proficient in mismatch repair. T cell therapy based on its mechanism of action may benefit both of these patient populations. We look forward to providing more details in advancing this trial this year. Iovance is the leader in T cell therapy, including next-generation approaches that have the potential to optimize outcomes for patients. We continue to investigate our genetically modified PD-1 inactivated TIL therapy IOV-4001in the GM1-201 trial.
This is the first-in-human trial in previously treated advanced melanoma or non-small cell lung cancer patients. This was just a snapshot of the many activities and progress across our followed tumor pipeline, and I'm happy to address questions about these programs and additional trials during the Q&A session. I will now hand the call to Jean-Marc. Jean-Marc?
Jean-Marc Bellemin: Thank you, Fred. Today, I will review our current cash position as well as our full year results for the year ended on December 31, 2023. I will also highlight our 2024 outlook. As of February 22, 2024 our unaudited cash position is approximately $485.2 million, which includes net proceeds of approximately $197.1 million net of underwriting and other offering expenses from the follow-on equity financing in February of 2024. The current cash position and anticipated revenue from both Amtagvi and Proleukin are expected to be sufficient to fund current and planned operations well into the second half of 2025. Shifting to our full year financial results. Net loss for the fourth quarter ended December 31, 2023, was $116.4 million or $0.45 per share compared to a net loss of $105.3 million or $0.64 per share for the fourth quarter ended December 31, 2022.
Net loss for the year ended December 31, 2023, was $444 million or $1.89 per share compared to a net loss of $395.9 million or $2.49 per share for the year ended December 31, 2022. The net loss for the year ended December 31, 2023, includes amortization of intangible assets acquired as part of the Proleukin transaction. Revenue from the fourth quarter and year ended December 31, 2023, was $482,000 and $1 million, respectively, and comprised of product sales of Proleukin following the acquisition in May 202. There was no revenue for the fourth quarter and year ended December 31, 2022. Cost of sales for the fourth quarter and year-end December 31, 2023, was $4.4 million and $10.8 million, respectively, and comprised of cost of inventory associated with sales of Proleukin as well as $3.9 million and $9.7 million, respectively, of non-cash amortization expenses for the acquired intangible assets for developed technology.
There was no cost of revenue for the fourth quarter and year ended December 31, 2022. Research and development expenses were $87.5 million for the fourth quarter ended December 31, 2023, an increase of $6.9 million compared to $80.6 million for the same period ended December 31, 2022. Research and development expenses were $344.1 million for the year ended December 31, 2023, an increase of $49.3 million compared to $294.8 million for the same period ended December 31, 2022. The increases in research and development expenses in the fourth quarter and the year ended December 31, 2023, over the prior year periods were primarily attributable to increases in headcount and related costs to support increased production capacity and commercial manufacturing readiness, and clinical trial costs driven primarily by the initiation of our Phase 3 TILVANCE-301 clinical trial.
Selling, general and administrative expenses were $29.9 million for the fourth quarter ended December 31, 2023, an increase of $3.4 million compared to $26.5 million for the same period ended December 31, 2022. Selling, general and administrative expenses were $106.9 million for the year ended December 31, 2023, an increase of $2.8 million compared to $104.1 million for the same period ended December 31, 2022. The increase in selling, general and administrative expenses in the fourth quarter and the year ended December 31, 2023, compared to prior year periods was primarily attributable to increase in headcount and related costs to support the growth in the overall business and related corporate infrastructure, professional fees and travel costs, as well as costs associated with Proleukin integration activities.
This increase was partially offset by a decrease in stock-based compensation expenses, legal and other costs. For additional information, please see this in afternoon press release and our annual report on Form 10-K to be filed later today. Regarding our outlook for this year, we continue to guide towards full year 2024 cash burn in the range of $320 million to $340 million, excluding one-time expenses, and we will continue to leverage opportunities to optimize spending. The U.S. launch of Amtagvi as well as the sales of Proleukin used in conjunction with the Amtagvi treatment regimen are expected to drive significant revenue in the second half of 2024 and into 2025 and beyond. Revenue recognition for Amtagvi occurs upon infusion like other cell therapies.
So we expect to begin recognizing and reporting significant revenue in the second quarter of this year. I will now turn the call over to the operator to begin the question-and-answer session.
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