Iovance Biotherapeutics, Inc. (NASDAQ: NASDAQ:IOVA) reported a successful third quarter in 2024, surpassing revenue expectations following the FDA approval and U.S. commercial launch of its advanced melanoma treatment, Amtagvi. The interim CEO, Dr. Fred Vogt, announced a third-quarter product revenue of $58.6 million, outperforming the forecasted $53 million to $55 million.
Amtagvi alone contributed $41 million in the quarter, with 146 patients receiving treatment since April, paving the way for an anticipated $75 million in revenue from the drug in 2024.
The company's global expansion efforts include regulatory submissions in various countries, with potential approvals in the EU and UK by late 2025. Manufacturing capacity is scaling up to meet demand, with a goal to serve over 10,000 patients annually in the future. Iovance closed Q3 with a solid cash position of $403.8 million and a reduced net loss compared to the previous year.
Key Takeaways
- Iovance's Q3 product revenue exceeded expectations, reaching $58.6 million, with Amtagvi contributing $41 million.
- The company projects $75 million in 2024 revenue from Amtagvi and anticipates total product revenue of $160 million to $165 million for the year.
- Global expansion plans are in motion, with regulatory submissions in multiple countries and expected approvals in the EU and UK in mid to late 2025.
- Manufacturing operations are ramping up, with a current capacity for over 2,000 patients and plans to expand to over 10,000 patients.
- Iovance reported a healthy cash position and a reduced net loss for the quarter.
- Clinical advancements include promising results in TIL cell therapy trials for solid tumors, with expectations for accelerated approval for Lifileucel in non-small cell lung cancer by 2025.
Company Outlook
- Anticipates total product revenue for 2024 between $160 million and $165 million.
- Expects cash burn of $320 million to $340 million for the year.
- Aims to increase Authorized Treatment Centers from 56 to around 70 by the end of 2024.
- Projects revenue of $450 million to $475 million for 2025.
Bearish Highlights
- Reported a net loss of $83.5 million for Q3 2024, though this was an improvement from Q3 2023's $113.8 million loss.
Bullish Highlights
- Strong product revenue driven by the successful launch of Amtagvi.
- Global expansion and regulatory submissions underway for broader market access.
- Increased manufacturing capacity to meet growing demand for Amtagvi.
Misses
- There were no specific misses reported in the earnings call.
Q&A Highlights
- Discussion on the optimization of treatment processes at Authorized Treatment Centers.
- Confirmation of improvements in manufacturing success rates and operational efficiency.
- Anticipation for continued growth in patient infusions and revenue in Q4.
Iovance Biotherapeutics continues to make strides in the treatment of advanced melanoma with its TIL cell therapy, Amtagvi. The company's financial and operational progress, as reported in their third-quarter earnings call, indicates a strong trajectory for growth and expansion into global markets. With a focus on enhancing manufacturing capabilities and advancing clinical trials, Iovance is poised to address significant unmet medical needs in cancer treatment. Investors and stakeholders are watching closely as the company moves towards achieving key milestones in the coming years.
InvestingPro Insights
Iovance Biotherapeutics' strong Q3 performance is reflected in recent market data and analyst insights from InvestingPro. The company's market capitalization stands at $3.08 billion, underscoring its significant presence in the biotechnology sector.
One of the most striking InvestingPro Tips is that Iovance has seen a remarkable 194.48% price total return over the past year, aligning with the company's successful launch of Amtagvi and its robust revenue growth. This exceptional performance is further supported by strong returns of 26.34% and 54.66% over the last month and three months, respectively, indicating sustained investor confidence in Iovance's commercial prospects.
The company's revenue growth is particularly noteworthy, with InvestingPro data showing a staggering 12,751.2% increase in the last twelve months as of Q3 2024. This aligns perfectly with the reported Q3 product revenue of $58.6 million, which exceeded expectations. However, it's important to note that despite this impressive top-line growth, Iovance is not yet profitable, with an operating income margin of -473.22% for the same period.
Analysts remain optimistic about Iovance's future, with an InvestingPro Tip indicating that they anticipate sales growth in the current year. This expectation is consistent with the company's own projections of $160 million to $165 million in total product revenue for 2024.
For investors seeking a deeper understanding of Iovance's financial health and market position, InvestingPro offers 11 additional tips, providing a comprehensive analysis to inform investment decisions.
Full transcript - Iovance Biotherapeutics Inc (IOVA) Q3 2024:
Operator: Thank you for standing by. My name is Mandeep and I'll be your operator today. I'd like to welcome everyone to the Iovance Third Quarter 2024 Financial Results Call. I would now like to turn the call over to Sara.
Sara Pellegrino: Thank you, operator. Good afternoon, and thank you for joining this conference call and webcast to discuss our third quarter and year-to-date 2024 financial results, as well as recent corporate and development program updates. Dr. Fred Vogt, our Interim Chief Executive Officer and President will provide an introduction and summarize the latest progress with our U.S. Commercial launch of Amtagvi, including revenue and revenue guidance, patient demand and market access, an update on our global regulatory submissions and a high level summary of our key pipeline. Dr. Brian Gastman, our Executive Vice President, Medical (TASE:PMCN) affairs, will highlight adoption and demand at authorized treatment centers or ATCs as well as our community outreach initiatives to drive additional growth for the U.S. commercial launch of Amtagvi in advanced melanoma. Dr. Igor Bilinsky, our Chief Operating Officer, will cover our commercial manufacturing experience and the status of our ongoing capacity expansion. Jean-Marc Bellemin, our Chief Financial Officer, will review our financial results including revenue and revenue guidance, gross margin and the strength of our balance sheet. And Dr. Friedrich Graf Finckenstein, our Chief Medical Officer, will review key pipeline highlights, including recent updates related to our clinical program in frontline non-small cell lung cancer. Dr. Raj Puri, our EVP of Regulatory Affairs, and Ann Brooks, Senior Vice President, Commercial, are also on the call and available for the Q&A session. Earlier this afternoon we issued a press release that can be found on our corporate website @iovance.com. 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 and revenue guidance, 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 collaborations, cash position and expense guidance and future updates. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time to time in our SEC filings. Our results may differ materially from those projected during today's call. We undertake no obligation to publicly update any forward-looking statements. With that introduction, I will hand the call to Fred.
Fred Vogt: Thank you, Sara. I am pleased to host this afternoon's conference call to discuss our financial results for the third quarter and year-to-date of 2024 as well as our recent corporate highlights. Iovance is nearing the end of a successful year following our first FDA approval and a strong start to U.S. commercial launch of Amtagvi for patients with advanced melanoma. We are rapidly advancing our robust pipeline of current future generation TIL cell therapies across all stages of development to expand our commercial opportunities. I would like to begin by highlighting the exceptional continued demand for Amtagvi. Our third quarter total product revenue was $58.6 million, surpassing the top end of our third quarter total product revenue guidance of $53 million to $55 million. Total (EPA:TTEF) product revenue in the third quarter included $41 million for Amtagvi and $16.5 million for Proleukin. As a reminder, Amtagvi revenue is recognized upon infusion to the patient. Proleukin revenue is recognized upon delivery to distributors or hospitals, typically a few months prior to Amtagvi infusion. Year-to-date, total product revenue was $90.4 million through September 30, including $54.9 million for Amtagvi and $35.5 million for Proleukin. Third quarter and year-to-date revenue reflects robust initial uptake and increasing strong demand and adoption of Amtagvi, as well as sales of Proleukin used with Amtagvi. Since the first infusion in April through today, 146 patients have been infused with Amtagvi, keeping us on track towards our 2024 guidance and representing about $75 million 2024 revenue from Amtagvi alone, with more to come. Infusions over time also reflect an increasing rate of adoption, with 25 in the second quarter, 82 in the third quarter and 39 in the fourth quarter to-date. Our team's successful execution, as well as the unmet medical need in advanced melanoma, high awareness, broad patient access, and a motivated and expanding network of authorized treatment centers or ATCs continue to drive strong adoption and uptake of Amtagvi and Proleukin. With 56 current ATCs, we remain focused on our goal of onboarding approximately 70 total ATCs by year end. Our community referral initiatives are also driving additional demand as our ATCs continue to scale up to treat more patients. In addition to robust demand, favorable medical coverage policies and reimbursement are facilitating broad access to Amtagvi. Approximately 75% of Amtagvi patients are covered by private payers. More than 250 million lives, or more than 95% of U.S. covered lives, currently have access to reimbursement through positive medical coverage policies or pharmacy benefit plans. And positive payer coverage has been consistent with the label, Clinical trials and National Comprehensive Cancer Network (LON:NETW), or NCCN guidelines. As Igor will further summarize, we are manufacturing and delivering Amtagvi to patients at an increasing pace. We can meet current demand while increasing capacity and headcount each month to match ongoing growth. As the launch continues the treatment journey is also speeding up for patients. Financial clearance currently averages approximately three weeks, representing a significant reduction from four to six weeks at initial launch. ATCs are saving additional time by scheduling in parallel with financial clearance and/or initiating the preconditioning regimen in conjunction with or several days prior to product arrival. We are consistently delivering on our turnaround time of 34 days for manufacturing and release testing and expect this turnaround time to decrease as the launch continues. Looking ahead, we are reaffirming our full year 2024 total product revenue guidance of $160 million to $165 million. We also reiterate our full year 2025 guidance of $450 million to $475 million in total product revenue. We expect a significant increase in year-over-year growth as ATCs broaden utilization and new ATCs as well as community referral networks contribute to additional demand. We anticipate significant additional revenue growth in 2026 and beyond. In the currently approved advanced melanoma indication alone, Amtagvi and Proleukin represent more than a $1 billion peak opportunity in the U.S. market. Globally, Amtagvi represents a multibillion dollar opportunity to address more than 20,000 previously treated advanced melanoma patients annually in the U.S. and in our initial ex- U.S. markets. Gross margin, which Jean-Marc will highlight in a few minutes, is also expected to increase to greater than 70% over the next several years, and our third quarter gross margin is more than halfway toward that target. With a fully integrated infrastructure and growing interest in Amtagvi outside the U.S., Iovance is well positioned to continue scaling globally. Our ex- U.S. teams are being built and regulatory dossiers are under review, submitted or planned across multiple international markets with the potential for our first ex- U.S. approval in the first half of 2025. The European Medicines Agency validated and accepted our Marketing Authorization Application or MAA for review for all EU member states with potential approval in the second half of 2025. The Medicines and Healthcare Products Regulatory Agency in the United Kingdom (TADAWUL:4280) is reviewing a separate MAA submission for potential approval in the first half of 2025. Our new drug submission is also underway for near term submission in Canada and will include a prioritized review process for potential approval in mid-2025. Additional regulatory dossiers remain on track for submission in Australia and Switzerland in 2025 and we will target additional markets with highly concentrated populations of advanced melanoma patients in the future. Iovance is poised to remain the global leader in innovating, developing and delivering current and future generations of TIL cell therapies for patients with cancer. The first approval, launch and large scale manufacturing with TIL cell therapy, together with our intellectual property position and deep pipeline, provide us with distinct competitive advantages. Future growth drivers include global label expansions in the frontline, advanced melanoma, other tumor types and next generation programs that we'll discuss in more detail today. I'll hand over now to Brian, our Executive Vice President of Medical Affairs, who will summarize our ATC network and U.S. field activities. Brian?
Brian Gastman: Thank you, Fred. We're excited about the potential for Amtagvi to improve the lives of thousands of patients with advanced melanoma. Our ATCs continue to share positive feedback and stories about their patients who have benefited from Amtagvi since approval. My objectives today are to highlight one, demand and adoption and utilization across our expanding ATC network. And two, our field support for ATCs as well as targeted community oncologists. First, our ATC network is scaling and expanding as planned and we expect robust demand growth to continue. Amtagvi's early inclusion in the NCCN guidelines combined with strong clinical data has supported broad and successful market access. Today, Amtagvi is available at 56 United States ATCs and our goal is to reach approximately 70 total ATCs by the end of 2024, with more to come in 2025. Our field medical team is composed of highly experienced medical science liaisons and former healthcare providers including oncologists and surgeons. They understand the unique needs of each ATC and proactively provide support, training and peer-to-peer conversations around patient selection and surgical resection to maximize successful outcomes with the Amtagvi treatment regimen. As we expand our ATC network to bring treatment closer to patients more than 90% of treated patients are located within 200 miles of an ATC today. Nearly all melanoma patients will be within a two hour drive to the closest center by year end. Community referrals are also driving patient volume and demand growth across our networks of ATCs. Iovance field teams are currently targeting top community practices and large community-focused professional organizations. The primary objective is to drive early referrals by identifying patients with advanced melanoma who are currently receiving frontline treatment and may be eligible for Amtagvi upon disease progression. In summary, we are extremely pleased with the early launch performance as our ATCs successfully adopt and broaden utilization of Amtagvi. I will now pass the call to Igor Bilinsky, our Chief Operating officer to highlight our manufacturing progress.
Igor Bilinsky: Thank you Brian. Today I'd like to highlight our commercial and clinical manufacturing capabilities, the progress of our commercial launch and the status of our ongoing capacity and facility expansion. Our manufacturing capacity continues its steady ramp up month over month to support the growing Amtagvi commercial demand. We continue to actively hire manufacturing and quality control staff as well as supporting functions and have significantly increased our staff capacity at Iovance Cell Therapy Center or ICTC since launch in February. We have two manufacturing facilities approved by the FDA for commercial manufacturing of Amtagvi. One is our internal manufacturing facility, Iovance Cell Therapy center, located in the Navy Yard in Philadelphia. It is one of the largest cell therapy manufacturing facilities in the world. In addition, our contract manufacturer's facility provides us with further capacity and scheduling flexibility to serve Amtagvi patients. We are pleased with our commercial manufacturing experience to-date which remains consistent with prior clinical experience. The Medical affairs team is doing a tremendous job sharing best practices among ATCs such as optimal tumor selection and sample procurement for manufacturing which contribute to improving manufacturing success rates. The turnaround time has been consistent at 34 days from receiving cells at the manufacturing facility to Amtagvi being ready for return shipment to the ATC. As Fred mentioned, we are working on optimizing our processes to further shorten the turnaround time. As we scale up. We also expect to improve the cost of goods over time through economies of scale and operational efficiencies as well as by leveraging our competitive advantage and unique position as the leader in the TIL cell therapy space. Our manufacturing network is currently running at high capacity utilization while ensuring slot availability for our ATCs. In anticipation of potential regulatory approvals of Amtagvi outside the us we are establishing logistics and distribution to support a successful commercial launch in new markets such as the EU, U.K. and Canada. The ICTC already serves patients in our clinical trials in Europe, Australia and other geographies and we intend to manufacture global commercial product from our Philadelphia sites as well. In anticipation of the longer term growth of global commercial demand in melanoma and other indications, we are expanding our manufacturing network. ICTC as built today has the capacity to provide TIL products for more than 2,000 patients annually. Building out the existing shelf space at ICTC is expected to bring that capacity to over 5,000 patients annually upon completion, which we expect within a couple of years. Further expansion of our manufacturing campus in Philadelphia along with process optimization and automation is expected to bring the capacity to over 10,000 patients annually. The Iovance Manufacturing Supply Chain and Quality Team is committed to operational excellence in providing Amtagvi to patients in the spirit of doing everything right first time every time. I'd like to thank them for their continued dedication 24/7, 365 in serving our patients who need this paradigm changing and potentially lifesaving therapy. Importantly, our expertise in TIL cell therapy as well as manufacturing capabilities are protected by a robust intellectual property portfolio. Iovance currently owns more than 230 granted or allowed U.S. and international patents and patent rights for Amtagvi and other TIL-related technologies that are expected to provide exclusivity through at least 2042. I'm available to answer additional questions during the Q&A, and I will now hand the call to Jean-Marc, our Chief Financial Officer.
Jean-Marc Bellemin: Thank you, Igor. Today I will review our current cash position as well as our results for the third quarter and nine months ended September 30, 2024. I will also highlight our financial outlook including revenue and expand guidance, as well as our gross margin. As of September 30, 2024, our unaudited cash position was approximately $403.8 million, including approximately $200 million in net proceeds from the at-the market equity financing facility during the second and early third quarters of 2024. We expect the current cash position and anticipated product revenue to be sufficient to fund current and planned operation into 2026. I will now transition to our financial results. Net loss for the third quarter of 2024 was $83.5 million, or $0.28 per share, compared to a net loss of $113.8 million, or $0.46 per share for the third quarter ended September 30, 2023. Net loss for the first nine months of 2024 was $293.6 million, or $1.03 per share, compared to a net loss of $327.7 million, or $1.44 per share, for the nine month period ended September 30, 2023. Transitioning to revenue, which Fred previously summarized, our total product revenue includes Amtagvi infusion in the U.S. and global sales of Proleukin, primarily used in the Amtagvi treatment regimen and other commercial and clinical settings. As previously discussed, Proleukin revenue is recognized upon delivery to distributors and hospitals and generally purchased several months in advance of anticipated infusions and Amtagvi revenue recognition. Total product revenue was $58.6 million for the third quarter of 2024, including $42.1 million for Amtagvi and $16.5 million for Proleukin. Total product revenue for the first nine months of 2024 was $90.4 million and consisted of $54.9 million for Amtagvi and $35.5 million for Proleukin. Revenue for the first three and nine months of 2023 was $0.5 million and $0.7 million respectively for global sales of Proleukin. Revenue increases in both periods of 2024 over the prior year periods were primarily attributable to the U.S. Commercial launch of Amtagvi and the related strong demand for Proleukin for use with Amtagvi beginning in the second quarter of 2024. I will now highlight our cost of sales which includes cost of inventory, overhead and related cash and non-cash expenses that are directly associated with sales of Amtagvi and Proleukin as well as manufacturing cost of Amtagvi. Cost of sales for the three months ended September 30, 2024 was $39.8 million, primarily attributed to $8.3 million in period costs associated with patient drop off and manufacturing success rates, $6.9 million for non-cash expenses including fair market value, step up and intangible asset amortization and $3.9 million in royalties payable on product sales. Notably, our third quarter costs associated with patient drop off and manufacturing success rate have decreased over our previous quarter's report of $8.7 million, even though volume and activity greatly increased. In the prior year three months period cost of sales was $4.3 million, primarily related to non-cash amortization for intangible assets. Cost of sales for the nine months ended September30, 2024 was $78.5 million, primarily related to $17.2 million in certain costs associated with patient drop off and manufacturing success rates, $20.3 million in non-cash expenses, including fair market value step up and intangible assets amortization, and $8.2 million in royalty payable on product sales. In the prior year nine month period, cost of sales was $6.4 million primarily related to non-cash amortization for intangible assets. The increase in cost of sales in the third quarter and year-to-date 2024 over the prior year periods were primarily attributable to the U.S. commercialization of Amtagvi beginning in the first quarter of 2024 as well as related increased sales of Proleukin including the initiation of product sales, commercial manufacturing and related cash and non-cash expenses tied to Amtagvi and Proleukin. Since the initial launch of Amtagvi cost of sales is improving as we increase volume and capacity utilization due to continued strong demand and launch ramp up. In addition, as Brian and Igor mentioned, the ongoing support, education and training with our ATCs as well as our continued focus on operational efficiencies in manufacturing and release testing can further optimize our cost of sales and translate to a higher gross margin over time. I will briefly comment on third quarter gross margin. Our cost of sales in the third quarter includes $6.9 million of non-cash expenses such as fair market value and amortization related to the Proleukin accusation resulting in the third quarter gross margin of $25.6 million against a revenue of $58.6 million. The improvement in gross margin over the second quarter reflects our ongoing focus on profitability and positions us more than halfway towards our target of a gross margin above 70% in the coming years. I will now shift to our operating expenses. Research and development expenses were $68.2 million for the third quarter of 2024, a decrease of $19.3 million compared to $87.5 million for the same period ended September 30, 2023. Research and development expense were $210.1 million for the nine months ended September 30, 2024, a decrease of $46.5 million compared to $256.6 million for the same period ended September 30, 2023. The decrease in research and development expenses in the third quarter and first nine months of 2024 over the prior year periods were primarily attributable to the transition of Amtagvi to commercial manufacturing and lower clinical cost and lower costs resulting from the completion of pre-commercial qualification activities in 2023. This decrease in research and development were partially offset by increase in headcount and related costs including stock based compensation. Selling general and administrative expenses were $39.6 million for the third quarter of 2024, an increase of $12.6 million compared to $27 million for the same period ended September 30, 2023. Selling general and administrative expenses were $110.5 million for the first nine months of 2024, an increase of $33.5 million compared to $77 million for the same nine month period ended September 30, 2023. The increase in selling general and administrative expenses in the third quarter and first nine months of 2024 compared to the prior year periods was primarily attributable to increasing head count and related costs including stock-based compensation to support our overall business and related infrastructure growth as well as legal cost and commercial-related costs. Looking ahead, I would like to briefly summarize our financial outlook. As Fred mentioned, we reiterate our guidance for total product revenue within the range of $160 million to $165 million dollars for the full year 2024 and $450 million to $475 million for the full year 2025. Regarding our operating expenses, we reiterate full year 2024 cash burn guidance in the range of $320 million to $340 million excluding onetime expense. We will also keep leveraging opportunities to optimize spending in the coming quarters. For additional information, please see the companies with selected consolidated balance sheets and statement of operation in this afternoon's press release and Form 10-Q to be filed later today. I will now hand the call to Friedrich, our Chief Medical Officer, to discuss our clinical pipeline.
Friedrich Graf: Thank you, Jean-Marc. As my colleagues have conveyed, Amtagvi is only the tip of the iceberg for the potential of TIL cell therapy in solid tumors, which represents more than 90% of all diagnosed cancers in the U.S. Today I will focus on our clinical programs in lung, frontline melanoma and endometrial cancers, as well as our exciting next generation pipeline. This week we are attending the Society for Immunotherapy and Cancer Conference or SITC annual meeting in Houston. Here we have a number of invited presentations focused on Amtagvi and our pipeline. In a late breaking poster we are presenting updated preliminary results from Cohort 3A in the IOV-COM-202 trial including additional patients and longer term follow-up. Cohort 3A is investigating Lifileucel plus pembrolizumab in patients with advanced non-small cell lung cancer who are naive to checkpoint inhibitor therapy. Our review and analysis of cohort 3A patients with EGFR wild-type disease regardless of PDL1 status who represent the majority of patients in the frontline non-small cell lung cancer setting. The confirmed objective response rate or ORR was 64.3% among these patients, including 54.5% ORR in patients who had difficult to treat PDL1 negative disease, which is higher than reported responses in these patients to currently approved therapy. Remarkably, five of the six responses in EGFR wild-type tumors were ongoing as of the last follow up visit with four ongoing for more than 20 months from TIL infusion. In addition, median duration of response was not reached at a median study follow up of 26.5 months. The robust response rates and meaningful durability for Cohort 3A demonstrate the potential for the Lifileucel regimen to drive meaningful benefit when added to standard of care frontline non-small cell lung cancer treatment. The results are available in the late breaking poster as well as in our corporate deck at iovance.com. Based on Cohort 3A data we plan to open a new Cohort 3D in the IOV-COM-202 clinical trial. Cohort 3D will investigate a regime that adds lifileucel to the frontline standard of care of chemotherapy and pembrolizumab for patients with EGFR wild-type non-small cell lung cancer. Cohort 3D results will inform the design of a planned confirmatory trial in frontline non-small cell lung cancer. We expect that the integration of the Lifileucel regimen into current frontline standard of care with chemo and pembrolizumab will further augment the strong efficacy seen in Cohort 3A and has the potential to establish a new frontline regimen in non-small cell lung cancer. To address unmet medical need among patients with advanced non-small cell lung cancer in the post anti PD1 setting. We are investigating lifileucel monotherapy in the single arm registrational Phase 2 IOV-LUN-202 clinical trial. Single agent chemotherapy, the current standard of care in this setting provides limited rate and duration of responses. Investigators are excited about the opportunity to advance the first cell therapy for patients with non-small cell lung cancer in the IOV-LUN-202 trial. Site activations and enrollment continue to accelerate. We are also confident in our approval strategy based on the positive preliminary data and prior FDA feedback for IOV-LUN-202. We expect to report additional data for the registrational cohorts in 2025 and achieve a potential accelerated U.S. approval for Lifileucel in non-small cell lung cancer in 2027. Expanding the commercial opportunity for Amtagvi into frontline advanced melanoma is also a top priority at Iovance. Our global registrational Phase 3 trial, TILVANCE-301 remains on track to support accelerated and full approvals of Amtagvi in combination with pembrolizumab in frontline advanced melanoma as well as regular approval of Amtagvi in post anti PD1 melanoma. We continue to see strong momentum with enrollment and high enthusiasm among clinical sites. Nearly 50 sites are currently active across 11 countries in North America, Europe and Australia and more than 50 new sites across 15 additional countries are lined up to join TILVANCE-301. As a reminder, TILVANCE-301 is supported by results from IOV-COM-202 Cohort 1A in patients with advanced melanoma naive to immune checkpoint inhibitors. In the most recent Cohort 1Ata presentation at ASCO, Lifileucel plus pembrolizumab demonstrated an unprecedented rate, depth and durability of responses, including a 30% confirmed complete response rate as well as a safety profile that is differentiated from combination checkpoint inhibitor therapies. In addition, we are exploring a potential best-in-class frontline alternative for physicians and patients in the U.S. Cohort 1D in the IOV-COM-202 trial will investigate Lifileucel in combination with nivolumab and relatimab in patients with frontline advanced melanoma. Moving along the pipeline we are excited about our first clinical trial in advanced endometrial cancer. Recent approvals of immune checkpoint inhibitors in combination with chemotherapy for frontline endometrial cancer have created an unmet need for patients who progress. There are no currently approved therapies after anti-PD1, which represents a significant new opportunity for TIL cell therapy. Patient enrollment has commenced in our IOV-END-201 Phase 2 trial to investigate Lifileucel after a frontline standard of care of chemotherapy and anti PD1 therapy in patients with both mismatch repair or MMR deficient and proficient tumors. This trial is supported by published preclinical and manufacturing success data as well as positive feedback from gynecological oncology experts. As the leader in TIL cell therapy, Iovance is also at the forefront of next generation approaches to optimize TIL and TIL treatment regimen. We are investigating a next generation PD1 inactivated TIL cell therapy IOV-4001 in the IOV-GM1-201clinical trial. Genetic modification using the TALEN technology to inactivate PD1 may enhance the efficacy of IOV-4001 in place of systemic anti PD1 therapy which is associated with short and long term systemic adverse events or AEs. IOV-GM1-201 has cleared the Phase 1 safety reading and is currently enrolling two Phase 2 courts of patients with previously treated advanced melanoma or non-small cell lung cancer, with high interest by investigators to contribute to this trial. The pace of enrollment is increasing and this trend is expected to continue through 2025. Building on our successful Proleukin franchise, IOV-3001 is a second generation modified IL2 analog designed to enhance TIL survival and cellular proliferation. IOV-3001's favorable pharmacodynamic and pharmacokinetic characteristics may result in a better safety profile and may support less frequent dosing compared to Proleukin. An investigation on new drug or IND application was allowed to proceed for a Phase 1/2 clinical trial of IOV-3001 for use in the tilt therapy treatment regimen and clinical enrollment is expected to begin soon. Lastly, IND-enabling studies are proceeding for IOV-5001, a genetically engineered inducible and tethered IL-12 TIL cell therapy. The prior generation IL-12 TIL product demonstrated an impressive ORR of 63% in advanced melanoma patients at doses 10 to 100 fold lower than conventional TIL products. However, the product secreted IL-12 which resulted in adverse events. IOV-5001's design includes inducible IL-12 expression restricted to the tumor and tethering of IL-12 to the cell surface which prevents IL-12 secretion. We expect IOV-5001 to allow higher cell doses over the prior generation product and improve TIL efficacy while ensuring safety, potentially allowing for expansion into a wide range of common solid tumor cancers beyond our current pipeline with significant market opportunity. Preclinical results supporting IOV-5001 will be featured in a poster at SITC on Saturday, November 9. We plan to submit a pre IND meeting request to FDA this year to support clinical development of IOV-5001 in many common solid tumor cancers with large populations and unmet need in 2025. Preclinical results for IOV-5001 will be featured in a poster at SITC on Saturday, November 9. Additional details about our development programs are included in today's press release, as well as the corporate slide deck and the data presentations I mentioned are currently available to view on the Scientific Presentations and Publications page on our website. I'm happy to address questions about these programs and additional trials during the Q&A session. I would like to acknowledge the significant progress we have made in advancing our clinical and preclinical pipelines this year and thank our talented, multidisciplinary team and research partners. I'm excited to see what's next as we continue to develop and deliver TIL cell therapy to cancer patients in additional therapeutic settings and with additional tumor types. I now turn the call over to the operator to begin the question-and-answer session.
Finckenstein: Thank you, Jean-Marc. As my colleagues have conveyed, Amtagvi is only the tip of the iceberg for the potential of TIL cell therapy in solid tumors, which represents more than 90% of all diagnosed cancers in the U.S. Today I will focus on our clinical programs in lung, frontline melanoma and endometrial cancers, as well as our exciting next generation pipeline. This week we are attending the Society for Immunotherapy and Cancer Conference or SITC annual meeting in Houston. Here we have a number of invited presentations focused on Amtagvi and our pipeline. In a late breaking poster we are presenting updated preliminary results from Cohort 3A in the IOV-COM-202 trial including additional patients and longer term follow-up. Cohort 3A is investigating Lifileucel plus pembrolizumab in patients with advanced non-small cell lung cancer who are naive to checkpoint inhibitor therapy. Our review and analysis of cohort 3A patients with EGFR wild-type disease regardless of PDL1 status who represent the majority of patients in the frontline non-small cell lung cancer setting. The confirmed objective response rate or ORR was 64.3% among these patients, including 54.5% ORR in patients who had difficult to treat PDL1 negative disease, which is higher than reported responses in these patients to currently approved therapy. Remarkably, five of the six responses in EGFR wild-type tumors were ongoing as of the last follow up visit with four ongoing for more than 20 months from TIL infusion. In addition, median duration of response was not reached at a median study follow up of 26.5 months. The robust response rates and meaningful durability for Cohort 3A demonstrate the potential for the Lifileucel regimen to drive meaningful benefit when added to standard of care frontline non-small cell lung cancer treatment. The results are available in the late breaking poster as well as in our corporate deck at iovance.com. Based on Cohort 3A data we plan to open a new Cohort 3D in the IOV-COM-202 clinical trial. Cohort 3D will investigate a regime that adds lifileucel to the frontline standard of care of chemotherapy and pembrolizumab for patients with EGFR wild-type non-small cell lung cancer. Cohort 3D results will inform the design of a planned confirmatory trial in frontline non-small cell lung cancer. We expect that the integration of the Lifileucel regimen into current frontline standard of care with chemo and pembrolizumab will further augment the strong efficacy seen in Cohort 3A and has the potential to establish a new frontline regimen in non-small cell lung cancer. To address unmet medical need among patients with advanced non-small cell lung cancer in the post anti PD1 setting. We are investigating lifileucel monotherapy in the single arm registrational Phase 2 IOV-LUN-202 clinical trial. Single agent chemotherapy, the current standard of care in this setting provides limited rate and duration of responses. Investigators are excited about the opportunity to advance the first cell therapy for patients with non-small cell lung cancer in the IOV-LUN-202 trial. Site activations and enrollment continue to accelerate. We are also confident in our approval strategy based on the positive preliminary data and prior FDA feedback for IOV-LUN-202. We expect to report additional data for the registrational cohorts in 2025 and achieve a potential accelerated U.S. approval for Lifileucel in non-small cell lung cancer in 2027. Expanding the commercial opportunity for Amtagvi into frontline advanced melanoma is also a top priority at Iovance. Our global registrational Phase 3 trial, TILVANCE-301 remains on track to support accelerated and full approvals of Amtagvi in combination with pembrolizumab in frontline advanced melanoma as well as regular approval of Amtagvi in post anti PD1 melanoma. We continue to see strong momentum with enrollment and high enthusiasm among clinical sites. Nearly 50 sites are currently active across 11 countries in North America, Europe and Australia and more than 50 new sites across 15 additional countries are lined up to join TILVANCE-301. As a reminder, TILVANCE-301 is supported by results from IOV-COM-202 Cohort 1A in patients with advanced melanoma naive to immune checkpoint inhibitors. In the most recent Cohort 1Ata presentation at ASCO, Lifileucel plus pembrolizumab demonstrated an unprecedented rate, depth and durability of responses, including a 30% confirmed complete response rate as well as a safety profile that is differentiated from combination checkpoint inhibitor therapies. In addition, we are exploring a potential best-in-class frontline alternative for physicians and patients in the U.S. Cohort 1D in the IOV-COM-202 trial will investigate Lifileucel in combination with nivolumab and relatimab in patients with frontline advanced melanoma. Moving along the pipeline we are excited about our first clinical trial in advanced endometrial cancer. Recent approvals of immune checkpoint inhibitors in combination with chemotherapy for frontline endometrial cancer have created an unmet need for patients who progress. There are no currently approved therapies after anti-PD1, which represents a significant new opportunity for TIL cell therapy. Patient enrollment has commenced in our IOV-END-201 Phase 2 trial to investigate Lifileucel after a frontline standard of care of chemotherapy and anti PD1 therapy in patients with both mismatch repair or MMR deficient and proficient tumors. This trial is supported by published preclinical and manufacturing success data as well as positive feedback from gynecological oncology experts. As the leader in TIL cell therapy, Iovance is also at the forefront of next generation approaches to optimize TIL and TIL treatment regimen. We are investigating a next generation PD1 inactivated TIL cell therapy IOV-4001 in the IOV-GM1-201clinical trial. Genetic modification using the TALEN technology to inactivate PD1 may enhance the efficacy of IOV-4001 in place of systemic anti PD1 therapy which is associated with short and long term systemic adverse events or AEs. IOV-GM1-201 has cleared the Phase 1 safety reading and is currently enrolling two Phase 2 courts of patients with previously treated advanced melanoma or non-small cell lung cancer, with high interest by investigators to contribute to this trial. The pace of enrollment is increasing and this trend is expected to continue through 2025. Building on our successful Proleukin franchise, IOV-3001 is a second generation modified IL2 analog designed to enhance TIL survival and cellular proliferation. IOV-3001's favorable pharmacodynamic and pharmacokinetic characteristics may result in a better safety profile and may support less frequent dosing compared to Proleukin. An investigation on new drug or IND application was allowed to proceed for a Phase 1/2 clinical trial of IOV-3001 for use in the tilt therapy treatment regimen and clinical enrollment is expected to begin soon. Lastly, IND-enabling studies are proceeding for IOV-5001, a genetically engineered inducible and tethered IL-12 TIL cell therapy. The prior generation IL-12 TIL product demonstrated an impressive ORR of 63% in advanced melanoma patients at doses 10 to 100 fold lower than conventional TIL products. However, the product secreted IL-12 which resulted in adverse events. IOV-5001's design includes inducible IL-12 expression restricted to the tumor and tethering of IL-12 to the cell surface which prevents IL-12 secretion. We expect IOV-5001 to allow higher cell doses over the prior generation product and improve TIL efficacy while ensuring safety, potentially allowing for expansion into a wide range of common solid tumor cancers beyond our current pipeline with significant market opportunity. Preclinical results supporting IOV-5001 will be featured in a poster at SITC on Saturday, November 9. We plan to submit a pre IND meeting request to FDA this year to support clinical development of IOV-5001 in many common solid tumor cancers with large populations and unmet need in 2025. Preclinical results for IOV-5001 will be featured in a poster at SITC on Saturday, November 9. Additional details about our development programs are included in today's press release, as well as the corporate slide deck and the data presentations I mentioned are currently available to view on the Scientific Presentations and Publications page on our website. I'm happy to address questions about these programs and additional trials during the Q&A session. I would like to acknowledge the significant progress we have made in advancing our clinical and preclinical pipelines this year and thank our talented, multidisciplinary team and research partners. I'm excited to see what's next as we continue to develop and deliver TIL cell therapy to cancer patients in additional therapeutic settings and with additional tumor types. I now turn the call over to the operator to begin the question-and-answer session.
Operator: [Operator Instructions] Our first question comes from the line of Tyler Van Buren with TD Cowen. Please go ahead.
Tyler Van Buren: Hi guys. Thanks very much. Congratulations on the quarter and all the progress. So the 39 patients treated to date are 30% above the 30 infusions reported at the same time point last quarter. And so if you just simply apply that to Q3 sales to Q4 and Proleukin sales are stable, you should obviously meet your annual guidance. However, there are significant holidays coming up next quarter, so can you talk about the potential impact of the holidays and have you seen any infusions scheduled around those holidays yet?
Friedrich Graf Finckenstein: Yes, Tyler, we can talk about that a bit. We actually project infusions out over through the entire quarter and we can see them far in advance. And yes of course during the holidays there is going to be some patients that either try to get their infusion or caregivers to try to get the infusion ahead of the holidays or after the holidays for family reasons as well as the physicians wanting to take time off. So there is a bit of a lull during that period. But I think what you've calculated there is a fair estimate regardless of any lull. I think we'll still perform quite well in the quarter. We've accounted for that when we do our projections.
Operator: Our next question comes from the line of Peter Lawson with Barclays (LON:BARC). Please go ahead.
Peter Lawson: Got you. Thank you so much. I guess just a question around the IL-2 stocking level, how does that change over time? I assume there's going to be less stocking each quarter, but just if you kind of walk through the dynamics of what you think that IL-2 number would look like for both use and then the stocking level. Thank you.
FredVogt: Thanks, Peter. The level -- we're currently stocking up three specialty distributors which represent the three large distributors in the United States, the big three. We primarily focused on one in Q2, another one in Q3, and there'll be another one we expect in Q4. I think as I said before, the numbers will be steady. They could go down or up 10% or so. You see we did more last quarter. We did less this quarter. I would strongly advising anyone thinking we can't do more. We can do more Proleukin in the fourth quarter and that may be the case. We'll see. But after that we'll have all the main distributors stocked up. And as I said on the last earnings call, we expect after that growth to then start in 2025 and go up more traditionally quarter over quarter.
Peter Lawson: Great. Thank you so much.
Operator: Our next question comes from Andrea Newkirk with Goldman Sachs (NYSE:GS). Please go ahead.
Andrea Newkirk: Thanks so much for taking my question. Fred, I was wondering if you could provide more color on your comment that preconditioning is happening sometimes in parallel or before Amtagvi actually arrives at the ATC. Just curious how common this is. And does this suggest that your manufacturing at a spec rates are improving sufficiently such that ATCs are willing to do this at risk? Thanks so much.
FredVogt: Yes, that's right, Andrea. The ATCs that have a lot of experience with both our manufacturing process and our out of specs as well as with their patients are getting more and more comfortable doing this. So yes, I think you're correct. That does reflect that kind of confidence. I can't tell you exactly how common it is. What I can tell you is it's more common at the larger ATCs that are more sophisticated, that have more experience. I think many quarters in the launch we'll probably see that for a good number of patients. I don't know. I can't really guess, but either a majority or significant minority as we go out in time. Because what we know is that everybody's getting the message that the sooner you get this product into the patient, the better. So I think there's a lot of them, they have confidence. They'll want to do this more generally.
Andrea Newkirk: Great. Thank you.
Operator: Our next question comes from the line of Yanan Zhu with Wells Fargo (NYSE:WFC). Please go ahead.
Yanan Zhu: Great. Thanks for taking our questions. Congrats on the quarter. I was wondering about the 82 infusions in the last quarter. How are they -- how were they distributed across the months and is there a clear trajectory of growth? And going into fourth quarter, how do you feel about the month to month prospects? And if I may, also wondering, like the month to month growth, is that mainly from demand growth and ATC center number increase or are there any elements of improved manufacturing and logistics that makes you comfortable about forecasting growth? Thank you.
FredVogt: So yes, Yanan, across 82 infusions in the third quarter, there was month over month growth. They basically plotted on a chart. You would see it go up month over month. And we expect that to continue through Q4 with the 39 that we've already reported. With respect to your question about whether that's driven by ATC growth, meaning growth and demand at the ATCs or adding new ATCs, yes, that's a big factor in driving that. And the availability of slots above all is what drives that. So the fact that we're scaling up manufacturing is really what's driving that growth. It links up with the manufacturing capacity. Now I can add, since you asked, yes, I think we're getting better and better with our out of spec rate. I can't say that's month over month, but quarter over quarter, I think that's what's happening and I expect that to continue into 2025 and beyond. So yes, month over month you see growth and we expect it to continue. It's largely driven by capacity, but I'm sure there's an element of -- I'm sure there's an element of improved out of spec rate and stuff like that also adding some wind to those sales.
Yanan Zhu: Great, thanks for the color.
Operator: Our next question comes from the line of Ben Burnett with Stifel. Please go ahead.
Ben Burnett: Just a question on just the profitability and kind of the gross margin goals, where you think you mentioned getting to 70%, sounds like you're halfway there. How are you realizing that? And I guess what are the operational levers that will get you to that 70% goal?
FredVogt: Maybe I can start, Ben and then Jean-Marc can jump in and help here a little bit. So as we scale up a launch, especially using our ICTC facility, COGS goes down very quickly just on the capacity utilization. So that's a big factor in improving gross margin at the end of the day because that's a major component of COGS, a major component of cost of sales. That'll drive margins up from where they are right now, which is in the mid-40s, to somewhere up closer to 70%. We've got all sorts of other initiatives, including operational excellence type work that we use to conduct projects to also improve margins. This includes some things that are quite confidential, obviously, but things that we do to improve our manufacturing process, things that we do to scale things up. A lot of those things have to be filed with the FDA and take some time to go through, but they're all in progress right now. And then I think we have pretty good management of our expenses too. We try to bring those down and keep those steady at least. As we expand our clinical portfolio, Jean-Marc may be able to add a little bit more on the accounting side of that as well.
Jean-Marc Bellemin: Yes, thank you, Fred. I think you said it all. And then if you think about the margin, I mean, we do expect the cost of sales -- I mean the cost of goods sold in general to improve over time. We are only in the second quarter of launch, so obviously there is a lot of optimization which is currently happening. And as you have seen in terms of the significant jump of improved gross margin between Q3 and Q2, we know that in the future, as mentioned by Fred, with automation, optimization also working on some of the costs even related to raw material, the cost of goods sold, particularly from Amtagvi will help. That's the beauty of having your own ICTC and being in charge and control of the cost. So that's why we are confident and expect the gross margin to grow to the 70%, above 70% in the future years
Ben Burnett: Okay, thank you very much.
Operator: Our next question comes from the line of David Dai with UBS. Please go ahead.
David Dai: …some of the things you did to improve the dropout rate.
FredVogt: We got -- we only caught part of that. David, could you please repeat that question?
David Dai: My apologies. So just curious about the dropout rate. What are some of the activities you did to improve the dropout rate that you saw this quarter compared to last quarter?
FredVogt: I don't think we really did anything in particular. We are optimizing the launch as we go. We're teaching ATCs how to get patients through better. We're teaching them how to do better quality surgical resections. You heard a lot of that in the script from all of us, including Brian's part of the script. But we are, I think, just seeing the benefits of a launch that's ongoing. You're only really only two quarters in the launch. So I think you can expect to see this improve quarter over quarter and eventually get up to what we think will be the manufacturing success rate that we had, or at least manufacturing experience that we had during the clinical studies. So there's nothing I can really point to that we did specifically. We're just optimizing across the board.
David Dai: Got it. Thank you very much.
Operator: Our next question comes from the line of Michael Yee with Jefferies. Please go ahead.
Michael Yee: Great, thanks. Fred, can you remind us about reimbursement? I know that since launch it's been sort of coverage by patient in single case deals. Can you remind how does it work for commercial? If you wanted a more broad based contract where you can get approval very quickly, days or weeks rather than a month, I just wondering how that's going and if that could be a significant accelerator of the business. The second question relates to the lung cancer. Can you just remind us of your ongoing pivotal study in second line, is that something that could possibly read out next year? Maybe just right size by expectations. Thanks.
FredVogt: Yes. So on the point of reimbursement, Mike, we did -- we noted during the prepared remarks there that we have cut the average reimbursement time from four to six weeks down to three weeks. That's the financial clearance time. That includes prior authorization as well as single case agreements. That's probably we think the sweet spot going forward. That's really realistically what the ATCs can do. The good news is they can select the manufacturing slot in parallel, schedule the operating room time and bring the patient pack back in, which takes typically about three weeks even at high speed given their operating room capacity and stuff like that. So really I don't think it's a drag at all. We don't anticipate really needing to further optimize that. If you take a look at our corporate deck that we posted today you'll see a new slide that summarizes this. I think that really helps highlight where we're going and where other areas we can optimize. But that's not really one of them. We're already there, I think on that one. On non-small cell lung, yes. Our press release today talked about us having data out next year 2025 and us getting approval in 2027. That's what we think. That's what we think can happen based on the data and based on the study as it's running right now.
Michael Yee: Perfect, thank you.
Operator: Our next question comes from the line of Asthika Goonewardene with Truist Securities. Please go ahead.
Asthika Goonewardene: Hi guys, Asthika Goonewardene, Truist here. Thanks for taking my question. I want to double click onto the improvement to the outer spec rate. And now that you've had several centers treating a good number of patients, are you seeing that any trends or factors that influence the OS? I'm particularly wondering, is it just a factor of centers having more experience or are you now getting new centers coming online that are just getting better and are just much better at performing the receptions and producing the product right out the gate?
FredVogt: Well, it's both. We're trying. In the beginning we had centers come on that were good and some that struggled to do resections and select patients. We helped them out, they got better and now we learn from that as well in our teaching. The new ATCs as they come on, the benefits of all that early learning so that they don't make the same mistakes. We plot out actual run charts for each ATC to see what they did, look patient by patient for each ATC, give them a scorecard as to how they're performing and help them with our peer to peer team that Brian's team. Brian oversees the team, Peter Prieto's team that does that. And others, they go out and they talk to the surgeons and they make sure the patient selection is correct and they work with them on resection quality. And now I think I would just say that we're just gaining momentum and building momentum here. It's been a big rush and it's stepping up and up and going faster and faster. There's nothing really magical to it. It's hard work, but once it's done, they can get the experience. And I think what we're seeing is that any ATC can really get these skills to do Amtagvi therapy.
Operator: Thank you. That does conclude today's Q&A session. I would now like to turn the call over to Fred Vogt, Interim CEO for closing remarks.
Fred Vogt: Thank you again for joining Iovance Biotherapeutics third quarter and year-to-date 2024 financial results and corporate updates conference call. We're pleased to provide an update on our launch of the first commercial TIL cell therapy and look forward to providing further Amtagvi updates, as well as continued developments on our pipeline in the near future. It's already been a transformative year for Iovance and we continue to be motivated as we hear frequent feedback from ATCs about advanced melanoma patients benefiting and finding hope with Amtagvi in the commercial setting. As always, we're thankful to the patients, healthcare and advocacy communities, our partners and our exceptional Iovance team. I would also like to thank our shareholders and covering analysts for their support. Thank you.
Operator: This does conclude today's call. You may now disconnect.
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