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spk03: Welcome to the Iovance Biotherapeutics conference call to discuss second quarter 2024 results and recent corporate updates. My name is Daniel and I will 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'll now turn the call over to Sarah Pellegrino, Senior Vice President, Investor Relations and Corporate Communications at Iovance. Sarah, you may begin.
spk12: Thank you, operator. Good afternoon and welcome to Iovance conference call and webcast to discuss our second quarter and first half 2024 results and corporate updates. Dr. Fred Vose, our Interim President and Chief Executive Officer, will provide an introduction and summarize key updates for our U.S. commercial launch of AMTAGV, including revenue guidance and our pipeline program. Jim Ziegler, EVP Commercial, will highlight additional details of the U.S. commercial launch of AMTAGV in advanced melanoma. Dr. Igor Belinsky, Chief Operating Officer, will comment on our commercial manufacturing experience and capacity expansion plan. John Mark Bellamine, CFO, will review our financial results including revenue and financial outlook, and Dr. Frederick Finkenstein, Chief Medical Officer, will review key clinical pipeline updates. Dr. Brian Gassman, EVP Medical Affairs, and Dr. Raj Puri, EVP Regulatory Affairs, are also on the call and available for the Q&A session. Earlier this afternoon, we issued a press release that could be found on our corporate website at iovance.com. Before we start, I would like to remind everyone that statements made during this conference call will include forward-looking statements regarding IOVANS' 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 FDC 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.
spk08: Thank you, Sarah. I am pleased to host this afternoon's conference call to discuss our 2024 second quarter and first half results. We've had a productive year so far at I-Advance following our first FDA approval and a successful start in the U.S. commercial launch of Antagni for patients with advanced melanoma. First, we were very pleased with the exceptional demand for Ampagni. Our second quarter product revenue was $31.1 million, inclusive of recognized revenue for Ampagni and Prolucan. Ampagni revenue is recognized upon infusion, while Prolucan revenue is recognized upon delivery, typically a few months prior to Ampagni infusion, providing a strong leading indicator of demand of future Ampagni revenue. The initial quarter of product revenue from our U.S. launch demonstrates early success from our team's execution, as well as the unmet need, high awareness, broad patient access, and motivated, authorized treatment centers, or ATCs. With the antagonist already showing a meaningful benefit for patients treated in the commercial setting, we expect continued launch momentum, which I'll return to in a moment. As Jim will discuss, we have a very engaged network of more than 50 current ATCs. These ATCs are proving that they have the training, infrastructure, and capabilities to treat patients with antagony. We also remain on track to have at least 70 ATCs by the end of the year, representing the largest ever initial ATC network for a cell therapy launch. We've also started our community referral activities to drive additional demand for these ATCs. Through early success with reimbursement and a strong logistics and scheduling collaboration between IVAN and the ATCs, Time of treatment is also becoming faster for patients. In addition, our commercial manufacturing capabilities are successfully delivering AMTAG-B at an increasing pace. The key takeaways, as Igor will summarize, are that we are staffed to provide manufacturing slots to meet current and expected demand. We are scaling up manufacturing according to our growth projections. We have increased capacity and headcount each month since launch and continue ramping up to match ongoing demand growth. Turning back to launch momentum, this afternoon's press release, we also introduced revenue guidance for the third quarter of full year 2024 and for 2025. This guidance is based upon our ongoing experience and confidence in the strong uptake and significant quarter-over-quarter growth that Antagni demand in corresponding pro-leukin sales for the foreseeable future. We used our visibility into the growth rate of infusions adoption act across our ATC network, manufacturing capacity, and additional launch dynamics to prepare this guidance. In the third quarter, we expect total product revenue within the range of $53 to $55 million. Notably, more than 55 patients have been infused with Ampagni since the first commercial infusion in April of 2024, including 25 patients infused in the second quarter. More than 30 patients have already been infused, and distributors are restocking Prolucan since the start of the third quarter. Many more infusions are scheduled or anticipated before quarter end in support of our guidance. For full year 2024, we anticipate total product revenue for Amtagby and Perlucan of $160 to $165 million. We expect the full year 2024 will reflect continued demand growth for Amtagby and corresponding sales for Perlucan. For full year 2025, the first calendar year of our U.S. launch, first full calendar year of our U.S. launch, We expect significant year-over-year growth driven by scale-up in existing and new ATCs and robust community referral networks contributing to additional demand. As a result, we anticipate total product revenue will increase to $450 to $475 million in the full year of 2025. In 2026 and beyond, Antagni and Prolucan are expected to continue to drive significant additional revenue growth. These products represent more than a billion-dollar peak opportunity in the U.S. market in the currently approved indication alone. Future revenue growth drivers also include a wider geographic footprint for Antagni and previously treated advanced melanoma, as well as U.S. and global label expansions to frontline advanced melanoma, non-small cell lung cancer, and other indications, as we'll discuss later on the call. Growth margins are also expected to increase to greater than 70% over the next several years. This reflects the long-term commercial strength for EmpagV and Prolucan and highlights the strong future for Iovance. Globally, EmpagV represents a multi-billion dollar opportunity to address more than 20,000 previously treated advanced melanoma patients annually across the U.S. in our initial planned geographic program. Following our recent regulatory submission in the European Union, we remain on track for additional submissions in the U.K. and Canada this year and Australia and Switzerland in 2025, with commercial launches to follow. IVANCE is well-positioned to build upon our existing commercial success and continue growing globally. In addition to AMTAG-B, our robust and exciting pipeline may help even more patients with solid tumors obtain potentially curative medicines. Our programs include two registrational trials and other indications, and we are continuously innovating with next-generation TIL therapies. Frederick will discuss our pipeline in further detail on this call. The first approval, launch, and large-scale manufacturing of TIL cell therapy together with our intellectual property position in DeepPipeline, provide us with distinct competitive advantages. As a fully integrated company, Iovance is well-positioned to maintain the global leader in innovating, developing, and delivering pill cell therapies for patients with cancer. I'll now hand over to Jim, our Executive Vice President of Commercial, who will summarize our U.S. commercial activities. Jim?
spk14: Thank you, Fred. We are excited about the potential for our U.S. launch of mTAGB, to improve the lives of patients with advanced melanoma. As more and more patients are treated with commercial mTAGV, an increasing number of our ATCs are sharing positive feedback and posting stories about their patients who have benefited from mTAGV in the early months since approval. My objectives today are to highlight our U.S. launch priorities and progress, including adoption and utilization within our expanding ATC network, community referrals, reimbursement and patient access, and streamlining and expediting the patient journey. First, our ATC network is scaling and expanding as planned, which is a key driver of demand, and we expect robust demand to continue. Today, onboarding is complete at more than 50 US ATCs. The centers who were active at approval are scaling up, and many have treated multiple patients. Newer ATCs that have recently completed onboarding, including major US cancer centers, are beginning or preparing to treat patients. As we look to bring treatment closer to patients, our goal is to have approximately 70 ATCs in total by year end. Beyond this number, many additional centers have expressed interest in joining our network. Currently, more than 90% of treated patients are located within 200 miles of an ATC. With 70 ATCs, nearly all melanoma patients will be within a two-hour drive to the closest center. Community referrals are also driving growth in patient volume and demand within the ATCs. An increasing number of ATCs are proactively building awareness about mTAGV across their community referral networks. IOVANS is rolling out initiatives to further support awareness and referrals by deploying direct outreach and resources into the community. The size and scope of our ATCs and these community referral networks are a testament to the significant unmet need in advanced melanoma, each center's dedication to offer mTAGV and interest among community oncologists. In addition to ATC demand, patient access is critical for adoption and uptake. Our launch data indicates that approximately 75% of mTAGV patients are covered by private payers as expected. Favorable medical coverage policies and reimbursement are facilitating broad access to mTAGV. First, MTAGV's inclusion in the National Comprehensive Cancer Network or NCCN guidelines reinforce clinical data and support broad payer coverage. We have also achieved significant accomplishments with positive payer coverage in only five months since approval. As of today, payers responsible for more than 225 million lives or more than 85% of U.S. covered lives have already implemented positive medical coverage policies that are consistent with label, clinical trials, and the NCCN guidelines. Successful reimbursement is also driving faster time to treatment. The current average time to financial clearance is approximately three weeks, which is a significant reduction from the four to six weeks at initial launch. Improved efficiencies at ATCs, including scheduling in parallel with financial clearance, are also speeding up time to treatment. We expect the trends towards shorter time to treatment to continue as more ATCs gain experience. In summary, we are extremely pleased with the early launch performance. There is strong demand at our ATCs. Payer coverage policies are in place and favorable. and time to treatment is becoming faster. These dynamics support the strong growth projections in our product revenue guidance for MTagV and ProLucan. I would also like to acknowledge our very talented cross-functional team who works tirelessly to ensure broad and timely access to MTagV. I will now pass the call to Igor Balinski, our Chief Operating Officer, to highlight our manufacturing progress.
spk04: Thank you, Jim. Today I'd like to highlight our commercial and clinical manufacturing capabilities, the progress of our commercial launch, as well as our ongoing capacity expansion efforts. Manufacturing is a core competency of IVAMS. We are laser focused on quality from incoming receipt of tumor sample through manufacturing and product release to outbound shipment of the final product. Our established internal manufacturing facility, the Eye of End Cell Therapy Center, or ICTC, is the core of our manufacturing network. Located in Philadelphia, ICTC is one of the world's largest cell therapy manufacturing facilities and the only one specifically designed for till manufacturing. The ICTC has a fully integrated and committed team with deep cell therapy experience. This facility is approved by the FDA for MTAGV commercial manufacturing and has been supplying MTAGV to patients since approval while continuing to serve patients in our global clinical trials. We're actively hiring at ICDC to support the continued ramp in the US commercial demand and our clinical pipeline. The ICDC location in Philadelphia provides access to an experienced workforce with cell and gene therapy experience as well as to innovative partnerships with local colleges and trade groups. Within our manufacturing network, a contract manufacturer site is also approved by the FDA for commercial manufacturing of Ontagli and provides additional capacity and flexibility to closely match supply and demand. Turning to commercial manufacturing updates, our experience to date has been consistent with our expectations and with prior clinical experience. We are executing and scaling up as planned. Since the FDA approval in February, we have been continuously increasing our staff manufacturing capacity month over month to closely align it with the growing commercial demand. We have sufficient capacity and staffing available in our manufacturing network to meet the increasing MTAG-B demand. We are now running our manufacturing network at high capacity utilization while ensuring slot availability for our ATCs. In addition, the turnaround time for mTAGB has been on target with our launch plans of approximately 34 days from receipt of patient cells at our manufacturing facility to return shipment of the product to the ATC. As we scale up, we're also focused on improving cost of goods over time through economies of scale and operational efficiencies, and by leveraging our competitive advantage and unique position as the leader in the TIL cell therapy. Turning to our facility expansion efforts, they are closely aligned with our demand growth projections. ICTC, as built today, has the capacity to provide TIL therapies for more than 2,000 patients per year. Following the recent EU regulatory submission and additional planned ex-US filings, we expect ICDC to provide commercial and targeted patients in Europe and beyond upon potential approvals in those geographies. We're in the process of building out the existing shell space at ICDC, so this facility can supply TIL therapies for more than 5,000 patients annually in the next few years. Longer term, our vision is to supply TIL cell therapies for over 10,000 patients annually from the ICTC campus. We have an option to construct another building on the adjacent lot and plan to drive additional efficiencies by incorporating increased automation in our manufacturing process. Importantly, our manufacturing capabilities are protected by a robust intellectual property portfolio. IVANZ currently owns more than 210 granted or allowed U.S. and international patents and patent rights for mTagV and other TIL-related technologies that are expected to provide exclusivity through at least 2042. In summary, the IVANZ team is excited and firmly committed to manufacturing and delivering mTagV in our investigational TIL cell therapies for patients with cancer. I'm available to answer additional questions during the Q&A, and I will now hand the call over to Jean-Marc, our Chief Financial Officer.
spk11: Thank you, Igor. Today, I will review our current cash position as well as our results for the second quarter and first half ended on June 30, 2024. I will also highlight our financial outlook, including revenue and expanded guidance. As of July 24, 2024, I advanced at an unaudited cash position of approximately $449.6 million, which includes net proceeds of approximately $200 million raised from an at-the-market equity financing facility during the second and third quarter of 2024. The current cash position and anticipated product revenue are expected to be sufficient to fund current and planned operation into 2026. I advance at $346.3 million in cash, cash equivalents, investment, and restricted cash at the end of December 31, 2023. I will now transition to our second quarter and year-to-date financial results. Net loss for the second quarter of 2024 was $97.1 million, or $0.34 per share, compared to a net loss of $106.5 million, or $0.47 per share, for the second quarter under June 30, 2023. Net loss for the first half of 2024 was $210.1 million, or $0.76 per share, compared to a net loss of $213.9 million, or 98 cents per share, for the six-month period under June 30, 2023. Revenue was $31.1 million for the second quarter of 2024, and consisted of product revenue from the initial quarter of MTAG-V sales, as well as recurring revenue from production. We recognized revenue of $12.8 million from completed MTAG-V infusion. We also recognized $18.3 million in global revenue from polluting during our initial quarter in supplying US specialty distributors. Revenue for the first half of 2024 was $31.8 million and consisted of product revenue from both polluting and MTAG-V. Revenue for the first half of 2023 was $0.2 million for global sales of Proloquing, which we began to recognize during the three-month period under June 30, 2023. Revenue increases in the second quarter and first half of 2024 over the prior year periods were primarily attributable to the U.S. launch for MTAG-V, as well as significant growth in U.S. Proloquing revenue for use in the MTAG-V treatment regimen. As Fred mentioned, Proloquing is a strong leading indicator for near-term MTAG-V growth. Revenue recognition for Proloquing is a few months earlier than MTAG-V when specialty distributors and ATCs purchased Proloquing in advance of MTAG-V infusions. Notably, Proloquing second quarter revenues surpassed annual global revenue for Proloquing in 2023, reflecting strong demand for use with MTAG-V. In addition, specialty distributors who purchased polluting in the second quarter have already started restocking and is another positive signal of the strong MTAG relaunch and increasing demand for polluting used with MTAG. Cost of sales for the three and six months under June 30, 2024, was $31.4 million and $38.6 million, respectively, primarily related to costs associated with sales of antagonistic polluting, certain costs associated with patient drop-off and manufacturing success rates, non-cash amortization expense for intangible assets, and royalties payable on product sales. Cost of sales for both the three and six months and the June 30, 2023 was $2.1 million, primarily related to non-cash amortization for intangible assets. The increase in cost of sales in the second quarter and first half of 2024 over the prior year periods were primarily attributable to the initiation of commercial manufacturing and related costs for the U.S. launch of Antagly during the first half of 2024. Cost of sales is a function of volume and capacity utilization, which is already improving as we scale up our available capacity. In addition, education and training to optimize patient selection and tumor sample resections, as well as our continued focus on operational efficiencies, are expected to optimize cost of sales over time as we aim to reach our target gross margin of more than 70% over the next several years. Research and development expenses were $62.1 million for the second quarter of 2024, a decrease of $24.2 million compared to $86.3 million for the same period under June 30, 2023. research and development expenses were 141.9 million dollars for the six months and the june 30 2023 a decrease of 27.2 million dollars compared to 169.1 million dollars for the same period and the june 30 2023 the decreases in research and development expenses in the second quarter and first half of 24 over the period the prior year periods were primarily attributable to the transition of MTAG-V to commercial manufacturing, decreased the cost associated with certain clinical activities in the first half of 2024, and the completion of pre-commercial qualification activities in 2023. This decrease in research and development were partially offset by increase in stock-based compensation resulting from growth in net count. Selling general and administrative expenses were $39.6 million for the second quarter of June 2024, an increase of $17.7 million compared to $21.9 million for the same period under June 2023. Selling general and administrative expenses were $71 million for the first half of 2024 and an increase of $21 million compared to $50 million for the same six-month period in the June 30, 2023. The increase in selling general and administrative expenses in the second quarter and first half of 2024 compared to the prior year periods was primarily attributable to the increase in net count and related costs, including stock-based compensation, to support the growth in the overall business and related corporate infrastructure, as well as legal costs and costs incurred to support the commercialization of MTAG-V and Proloquy. Next, I would like to cover a financial outlook for the MTAG-V launch and future expenses. As Fred highlighted earlier in his introduction around revenue guidance, we expect quarter-over-quarter and annual growth in product revenue to continue for the next several years with the steepening U.S. adoption curve for MTAG-B. Geographic and label expansion as well as new product approvals may also add to our growth trajectory in 2026 and beyond. I will highlight our guidance numbers again as a reminder. In the third quarter of 2024, we expect total product revenue within the range of $53 to $55 million. We anticipate total product revenue for the full year 2024 within the range of $160 to $165 million. In the full year 2025, We expect a significant year-over-year increase in annual product revenue to $450 to $475 million. In addition, as Fred mentioned, gross margins are expected to increase to greater than 70% over the next several years. Regarding our expense outlook, we continue to reiterate full-year 2024 cash burn guidance in the range of $320 million $340 million, excluding one-time expenses. We will also continue to leverage opportunities to optimize spending. For additional information, please see the company's selected condensed consolidated balance sheet and statement of operation in this afternoon's press release and our form 10-Q to be filed later today. I will now hand the call to Frederic, our chief medical officer, to discuss our clinical pipeline.
spk10: Thank you, Jean-Marc. As my colleagues have conveyed, MTAGV is only the tip of the iceberg for the potential of tilt cell therapy in solid tumors, which represent more than 90% of all diagnosed cancers in the U.S. I would like to acknowledge my own personal excitement and the rewarding experience for our Iovans clinical development team as we hear frequent ATC feedback about patients benefiting from MTAGV in the commercial setting. This is great news that also motivates our clinical teams to develop and deliver tilt-cell therapy to cancer patients in additional therapeutic settings and with additional tumor types. Today, I will focus on key clinical pipeline highlights, including two ongoing registrational trials from this afternoon's press release. I'll begin with the frontline advanced melanoma settings. a key priority with the potential for life elucidation to address thousands of additional patients. Our global registration of phase 3 trials, TILVAMS 301, remains on track to support accelerated and full approvals of MTAG-B in combination with pembrolizumab in frontline advanced melanoma, as well as regular approval of MTAG-B in post-anti-PD-1 melanoma. Enrollment is strong across geographies with high enthusiasm for site participation. More than 40 sites are currently active across 10 countries, including the US, Canada, Europe, and Australia, with 60 additional sites selected across 18 countries total. IVAN does careful feasibility assessments for each site selection, at which time the sites also commit to participate. Site activation includes institutional ethics board approvals and scientific review of the TIL-VANS trial design, including the Pembrolizumab monotherapy control arm and its fit with local standards of care for the enrolled patient population. We also believe the option to cross over to TIL therapy from the control arm is attractive to patients. As a reminder, TIL-VANS 301 is supported by previously published data on TIL monotherapy in the pre-immune checkpoint embeda era And importantly, life elusive data in advanced melanoma patients who were naive to immune checkpoint inhibitors in cohort 1A of our IOV COM-202 trials in solid tumors. In our ASCO oral presentation in May, updated cohort 1A data demonstrated an unprecedented rate, depth, and durability of responses, including a more than 60% OR, a 30% confirmed complete response rate, and a differentiated safety profile. A new proof-of-concept cohort, 1D, is also beginning in the IIRvCom2 trial to investigate Lifilucel in combination with Nivolumab and Riladlimab in patients with frontline advanced melanoma. This novel combination represents another potential best-in-class frontline alternative for physicians and patients. Shifting to non-small-cell lung cancer, Enrollment continues to accelerate with strong demand in our Single-Arm Registrational Phase II Trial, IOV LUN202, in post-anti-PD-1 non-small cell lung cancer. We expect to complete enrollment and report top-line data for the IOV LUN202 registrational cohorts in 2025 and submit a potential supplemental biologics license application to the FDA in 2026. We are confident in the IOV-LUN202 trial based on the positive preliminary data. Also, the FDA provided positive regulatory feedback on our proposed potency matrix, as well as the single-arm trial design to support accelerated approval of lifelucidin post anti-PD-1 on small cell lung cancer. We have also initiated the multicenter IOV-END201 phase 2 trial to investigate life elusal in post-anti-PD-1 endometrial cancer patients, regardless of mismatch repair or MMR status. There is an unmet medical need and no currently approved treatment options for the vast majority of patients with endometrial cancer in the post-anti-PD-1 treatment setting. This unmet need will become more relevant as immune checkpoint emitters move into the frontline setting in combination with chemotherapies. Combined with the enthusiasm from gynecological oncologists, we expect IOV-END201 to enroll quickly, and we look forward to presenting initial data soon. As the leader in TIL cell therapy, IOVANCE is at the forefront of next-generation approaches to optimize TIL and TIL treatment regimens. We are investigating a next-generation PD-1 inactivated TIL cell therapy, IOV-4001, in a clinical trial in previously treated advanced melanoma or non-small cell lung cancer patients. Two additional next-generation programs are in IND-enabling studies and are approaching clinical trials in the near term. IOV3001 is a next-generation interleukin-2 or IL-2 analog for use with the TIL treatment regimen. Preclinical data support the potential for improved safety with robust effector T cell expansion driven by IOV3001. IOV5001 is a genetically engineered TIL cell therapy with inducible and tethered interleukin-12, or IL-12. IOV5001 has augmented TIL antitumor activity in preclinical studies and may improve safety via the tethering of IL-2 to the TIL. As noted in this afternoon's press release, we've renewed our cooperative research and development agreement, or CRADA, to collaborate with the U.S. National Cancer Institute, or NCI, on preclinical and clinical development of enhanced tumor-reactive TIL products. Additional details about our development programs are included in today's press release, as well as the corporate slide deck and scientific presentations on our website. I'm happy to address questions about these programs and additional trials during the Q&A session. I now turn the call over to the operator to begin the question and answer session.
spk03: To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from Michael Yee with Jefferies. Your line is open.
spk16: Hey, guys. Thanks. Congrats on a good execution of the launch and good guidance. We just wanted to ask two questions on the guidance. Does the guidance number include proleukin revenues built into that? I know it's not a huge amount, but just want to make it square and accurate. And then can you talk to the $18 million of proleukin as a lead-in indicator Does that imply a certain amount of patience or a certain amount of time, or is it just distributors buying it up? We try to back into that as maybe a queue of demand. And so I just want to think about your numbers on Prolucan, and perhaps related to that, if I may just ask differently, do you have any numbers on the patient enrollment forms to think about the queue? Thanks so much.
spk08: Yeah, Mike, the guidance does include Prolucan. So all the guidance numbers that we put out include Prolucan revenues as well as Antagni revenues. Now, on the Prolucan revenue number for this quarter, that represents sort of the leading indicator for what we think will be Antagni demand over the next couple quarters. You can model it any way you see fit. It's a large number of infusions. We've given you the number of infusions through – Very recently, it's more than 55 now. And you can use that to kind of estimate where we're going. But the whole point of it is to give a guidance so that you can rely on our internal understanding of infusions and proleukin demand and see what the upswing is going to look like here. It's a very positive uptake of both proleukin and especially antacid.
spk16: Yeah, so to clarify, it's a buying up of a certain amount from distributors, but not like a one-for-one or a certain amount of time. It's just an indicator.
spk08: It's just an indicator, and they've already started restocking. I can't stress that more. They've already started reloading because they've sold a lot of that product already. Got it. Thank you.
spk03: Thank you. Our next question comes from Peter Lawson with Barclays. Your line is open.
spk02: Thanks for the guidance, Fred, and congrats on the progress. For the Q3 guidance, what's the breakout of IL-2 versus TIL? Same question for the full year as well. And then for the IL-2 revenues this quarter, what was the proportion of that IL-2 that was used for TIL therapy?
spk08: Yeah, we don't have, we're not going to provide guidance on the individual products. We're just going to provide the aggregate guidance. You can probably model it by understanding the amount of Prolucan that's used per Antagni patient because, and I'm going to answer your second question ahead of time here, we don't know exactly how much of our Prolucan gets used in the Antagni regimen, but you can hear from Jean-Marc's comments earlier and from the experience of Prolucan in the industry for many years. it's got to be the vast majority of it getting used for Antagni. We have no way of tracking that from an accounting perspective, but it's being, obviously the massive upswing in ProLucan sales is driven by Antagni.
spk02: Okay, thanks so much.
spk03: Thank you. Our next question comes from Andrea Tan with Goldman Sachs. Your line is open.
spk01: Good afternoon. Thanks for taking the question. Fred, I'm curious here, just given where you stand in the launch in your six months in What is driving your confidence for a full year 25 guidance, given where you are now? And then just curious if you plan on providing metrics around demand, such as the patient enrollments or screening, as you have in the in-pass quarters. Thanks so much.
spk08: Andrew, we may provide some additional guidance on – you won't hear us talking about enrollments anymore. It's really not relevant anymore. All that matters now is infusions, which is a revenue-generating event. So we may talk a bit about that as we go over the next – whatever, four or five quarters here. But really what we're trying to do with the guidance is give you the big numbers so you don't have to worry about enrollments and that sort of thing. You can figure out exactly what we're seeing in terms of infusions. What's giving us guidance on that fiscal year 25 guidance, the full year 25 guidance, we can see the launch. We see how we're doing. We know all the dynamics. We know how many ATCs are coming on board. We know what we think they're going to do. We know our manufacturing capacity and all the details around that stuff that would be very difficult, I think, for the street to model in some cases. So we're going to provide it for you so you have clarity on what we're seeing. We are very, very confident in that guidance based on what we're seeing so far in the initial part of the launch because we've got such a good picture of launch dynamics right now.
spk06: Okay, thanks so much. Thank you.
spk03: Our next question comes from Yanan Zhu with Wells Fargo Securities. Your line is open.
spk09: Great. Thanks for taking our questions, and congrats on the progress here. So I guess I have a couple of questions on patient numbers. You know, you gave the patient infusion number of infusions since the start of this quarter, which is 30 patients. Given that there will be, you know, you have talked about month-to-month increase and quarter, over a quarter increase, can we assume that over the next two months, within the current quarter, you will have, you know, patient numbers that will exceed the 30 patient number there? And also on patient number, you know, just wanted to understand, have there been, patients that have been resected around the same time as the 30 patients and who did not receive the product, i.e., trying to get a sense of the ongoing attrition rate, whether that's due to manufacturing issues or patient progression. If you can give some color there, that would be super helpful. Thank you.
spk08: Yeah, to answer your second question first, the patient dropout rate and manufacturing success rate remain consistent with what we saw in the clinical trial experience. So we're seeing that today. We can obviously further optimize that, and we're working on that. Part of the reason we're giving guidance is so that you don't have to necessarily factor that all in. We can see that pretty clearly and understand that. And as we go, we may provide more details on that once we have a larger end in our data set here. But right now, we feel very good about those numbers. And then you answered the question, I couldn't fully understand what you were getting at with the patient numbers. We've already done more than 30 patients this quarter, meaning third quarter, the quarter we currently sit in, than we did in the quarter or second quarter that we're reporting for. We expect that to obviously accelerate considerably, such that by the end of third quarter, the numbers are going to be much higher. I'm not sure if that answers your question, or if you want to phrase it differently, I can try it again.
spk09: Right. So given that you infused more than 30 patients, this quarter, but this quarter is, you know, still have a couple of months to go, right? So I'm just trying to understand what's your assumption for this quarter, the patient number for this quarter, given that you only gave the revenue guidance, which includes prolupin. And at this current stage, I think it's a little hard for us to understand the prolupin revenue, you know, contribution because there's a lot of stocking. So it's hard for us to see the patient number. If you can help us understand the patient number for this quarter, that would be helpful. Thank you.
spk08: We have an estimated number for this quarter that's a lot higher than 30. I can't give you that number today. I can tell you that it will be significantly higher, and we'll track out the way we think it will track out to give you 53 to 55 million in revenue, with a good portion of that being proleukin, especially restocking of proleukin. That's the most color I can give you right now.
spk09: Got it, got it. Thanks, and congrats again.
spk03: Thank you. Our next question comes from Tyler Van Buren with TD Cowan. Your line is open.
spk07: Hey, guys. Thanks for taking the question. Just a couple. So you gave basically some metrics on time to manufacturing, which is consistent and reimbursement. But what's the average time from the beginning, from opt-in to infusion? And then the second one is around kind of how much you're netting per infusion and gross margins. You know, I suppose if you guide to target gross margin of 70% over the next few years, that would assume roughly 360 on the 515 list. So it has to be lower currently. And we're getting some inbounds with cost of sales being the same as product revenue for this quarter. So more color on that and how much is fixed versus variable and how it might evolve over time would be super helpful.
spk08: Sure. We currently right now, Tyler, see the entire enrollment process, the reimbursement, approval, financial single case agreement, all the stuff we talked about endlessly on a lot of these calls, as well as scheduling and getting in line for resection. The whole thing takes about three or four weeks right now. I hope that answers the first part of your question there. That's where it is today, and that's getting quite close to where we want it to be long term. On the netting, I think with respect to gross margin, we've obviously given you the number. Are you asking about gross to net on the product on AMTAGB? Because you mentioned discounting, and I'm not sure exactly what you were talking about from a financial perspective. Gross to net on the product is very low.
spk07: Yeah, currently how much you're netting with each infusion and how you expect that to evolve in the coming quarters.
spk08: All right, so gross to net right now is less than half a percent, and we expect it to stay around there. Less than 0.5.
spk07: But I guess the question is cost of sales are the same as product revenue. So there's a lot, I mean, there's a lot of that fixed. I mean, and obviously if it's a 70% gross margin, it's not half currently, right?
spk06: Half a percent currently.
spk08: I think, so I'm going to probably need John Mark's help here, but maybe some of this is lost in the definition of cost of sales. Mark, do you want to come in?
spk11: Yeah, just chiming in and trying to answer Tyler's question. So what you will see in the 10Q and all the details is obviously our cost of sales in total, which is $38 million if you look at the year to date, June 2024. We don't have any specific gross margin to give for product or product by product because it's a total. Just know that on the cost of sales, you will have, of course, other things than only cost of product, you know, cost of goods sold itself, because you have intangible assets that you need to take into account. You have royalty to take into account. So you cannot, you know, draw exactly what's the conclusion on the gross margin. But we are committed, again, in the next several years to reach this 70 percent, because we We believe that where we stand today in terms of cost of sales for our product make us confident for reaching the 70% in the next, you know, few years.
spk06: Thanks.
spk03: Thank you. Our next question comes from Ben Vernet with Stifel. Your line is open.
spk05: Hey, thank you very much. And again, appreciate or congrats on all the progress on a great quarter. Question just on the cash guidance that, Jean-Marc, you were talking about. To what extent do you consider product revenue when calculating the cash runaway?
spk11: Yeah, we do take into account the product revenue. But to be honest with you, Ben, we are very conservative. So that's why we're confident in saying with the recent, you know, $200 million we just raised to be able to go into 2026. And that includes, you know, all the spending in terms of investment. in terms of increasing manufacturing capability and capacity and all our operational spend. So we are very conservative and very confident about that.
spk05: Okay. Thank you. So just to clarify, so when thinking about kind of the spending going forward, we shouldn't just assume that that cash guidance is assuming the product guidance exactly? The product guidance guidance?
spk11: We do take into account what we are telling you around the 450 to 475 million in 2025. Obviously, this is our baseline to look into a cash burn for the cash overall situation for next year. But that's the top line after you have to take into account also, you know, some one-time expenses we may have into increasing capability and capacity at ICTC, for example. But again, very confident into giving the guidance into 2026 as a cash in hand.
spk05: Excellent. Okay. And maybe just one follow-up. What is kind of the timeframe for expanding the manufacturing capacity to 5,000?
spk08: Igor, do you want to handle that one?
spk04: Happy to. So right now, the network is built to a couple of thousand patients per year capacity. And within the existing ICDC facility, as you recall, we have shell space that we're now building out. And that build-out will bring ICDC to over 5,000 patients per year capacity. And that build-out should be completed in a couple of years.
spk05: Okay. Great. Thank you very much. Of course.
spk03: Thank you. Our next question comes from Colleen Cousy with Bayer. Your line is open.
spk13: Great. Thanks for taking our questions, and congrats on the progress. Can you comment on the manufacturing success rate and just what happens when there is an unsuccessful manufacturing run? Does that just get filtered into COGS? And then for the fiscal year 2025 guidance, how much is the contribution expected to be from Europe?
spk08: Yeah, Jean-Marc, do you want to talk a little bit about how it works with the manufacturing, like an out-of-spec, and how that goes in the COGS?
spk11: Yeah, so, Colin, thanks for the question. I appreciate that. The out-of-spec and all the scrap will go, and you will see that in the queue, as part of our cost of sales, because when the project is not being infused by the patient because of patient health or other situation like that, and, you know, out-of-spec, of course, we have to take it into account what stage of, you know, production it was so it will be taken into account as part of cost of sales if it is going into potentially some kind of you know in this case by case situation clinical use then we will switch into OPEX we will switch it back to OPEX as part of our clinical spend in that case Colleen I can answer no the European European revenue is not factored in anything right now that will come online as I said in my remarks a little bit later
spk08: we expect, and will give us even more tailwinds in 2026 and beyond.
spk13: Great. Thanks for taking our questions, and congrats on the progress.
spk03: Thank you. Our next question comes from Astika Gumurdin with Truce. Your line is open.
spk15: Hey, guys. Thanks for the question, and appreciate all the color and the patience. with all our questions today on this. I'm going to ask one more on the guidance here. Maybe you can give a little color. If the proportion of the product revenue guidance that is attributable to Prolucan, is that right to assume that the contribution slides down with each progressing period, or is it a fixed component each period, and then each period provided? And then of the 25 patients that were treated in 2Q, What proportion of these patients was reimbursement sought on a single-case basis, and how is that shifting into the 30 patients already treated today in 3Q? Thanks.
spk08: Yeah, so, Steve, the way to think about it is, if Ampag-B has a price, Prolucan has a price, you multiply the Prolucan price by the number of vials you expect, you're going to get to what I think you referred to as a fixed combination, which is a fixed percentage. So ultimately, Antagni patients that get Prolucan, there's going to be a percentage between the total cost of those two drugs, what percentage Prolucan contributes and what percentage Antagni contributes. You can calculate it pretty easily. It's roughly in the ballpark of about 15%. We can calculate that out in more detail for you, but I'm sure you can do the math. For the 25 patients in the single case agreement, we do single case agreements for every patient. They just go faster and faster. Maybe, Jim, could you add a little bit of color on how that helps improve for those 25 patients?
spk14: Yep. Thanks, Fred. So the payer mix that we're seeing currently in the early days of launch mirrors what we had previously shared prior to launch. So prior authorizations and single case agreements primarily apply to the private payers, which you will recall was about three quarters of the patients. That's what we're seeing right now. in the early months of launch, a payer mix that's very consistent, so about 75%. Thanks, guys.
spk03: Thank you. Our next question comes from Rennie Benjamin with Citizens JMP. Your line is open.
spk17: Hey, guys. Thanks for taking the questions, and congratulations on a great quarter and great guidance. A couple for us, maybe just starting off. Can you talk a little bit about how you're managing and working with ATCs, especially as it comes to, you know, maybe constraints and how they're dealing with prioritizing, you know, CAR-Ts versus TIL infusions and how that's looking, you know, kind of going forward. And I guess, you know, also we heard a lot of arguments this quarter, you know, patients were dying before they get the infusion. Maybe you can talk a little bit about how, you know, what the patients, are kind of looking at now as they're being enrolled? Has it changed any? Are they healthier, less lines of therapy? And then the other argument we heard was that, you know, you guys didn't have enough slots and that there was just a backlog and then people were waiting for cells to get processed. Can you talk maybe a little bit about that, whether or not there was a backlog? Thank you.
spk06: Yeah, do you want to take the first part of that? Maybe Brian can take the second part.
spk14: Yeah, sure. So, thanks, Rennie. As we work with the ATCs, we work with them almost on a daily basis, especially the top ATCs. How they decide and allocate beds between CAR Ts and Tils, I'm not exactly sure of, but I do know that in terms of demand and scheduling patients for mTAGV, that doesn't seem to be a concern. Just as prior to launch, there was a lot of concern around the lack of hospital beds, it does not appear to be any type of a restraint at all. In terms of patients dying before infusions, I guess what I would say is similar to other CAR-Ts where there's a high unmet need and the lack of available treatments. Yes, you do have some patients that may progress or may die before therapy, but as we are well into launch now into our fifth and sixth months, I think patient selection is getting much better, and we're not seeing those same trends. I would just reiterate that the demand that we're seeing at the ATCs, the operational readiness looks really, really good, and it reinforces the confidence behind our guidance. Brian?
spk18: Yeah, I would second everything you said, Jim. One thing that we've done at Iovance, I think it's not the only one of its kind. It's certainly rather unique. It's developed this, we call it peer-to-peer, which is really former healthcare providers speaking to current healthcare providers and assessing patients as a partnership. We've all learned about the current commercial patient population out there And I think what's really made the biggest improvement is patient selection, people understanding who are the most appropriate, and even more so that these authorized treatment centers are speaking to the referring doctors to try to get them to understand earlier when it's best to send the patients to them so that we can move this process up and make patients who right now may not be the best candidates. There is a point earlier in their journey when they were better candidates. I think this relationship that we have with all the authorized treatment centers is starting to bear fruit, and that's why I think you're seeing less and less of what you were describing.
spk17: Excellent. Thanks, guys. Congrats.
spk03: Thank you. I'm showing no further questions at this time. I would now like to turn it back to Fred Vogt for closing remarks.
spk08: Thank you again for joining the Iovance Biotherapeutics second quarter and first half 2024 financial results and corporate updates conference call. We're honored to disclose the first revenues for the first commercial TIL cell therapy and look forward to providing further updates on the progress of our Antagni launch, as well as continued developments in our pipeline and future updates. It's already been a monumental year for Iovance, and we continue to be motivated as we hear media and social media how Antagni is providing hope to patients with metastatic melanoma. As always, we're thankful for the patients, healthcare and advocacy communities, our partners, and our exceptional I-Advanced team. 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.
spk03: This concludes today's conference call. Thank you for participating. You may now disconnect.
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