Iovance Biotherapeutics, Inc. is a commercial-stage biopharmaceutical company that has pioneered a transformational approach to treating cancer by harnessing the human immune system's ability to recognize and destroy diverse cancer cells. The company's mission is to be the global leader in innovating, developing, and delivering tumor infiltrating lymphocyte (TIL) cell therapies for patients with solid tumor cancers.

Company History and Business Overview

Iovance was founded in 2011 with the goal of building upon the promise of TIL cell therapy that had been previously demonstrated in single-center clinical trials at academic research centers, including the National Cancer Institute (NCI). The company's multi-center trials, novel TIL products, manufacturing processes, facilities, and bioanalytical platforms have transformed TIL cell therapy into a commercially viable treatment that can now be accessed by thousands of patients with cancer.

Prior to 2024, Iovance did not have any products approved for commercial sale and had not generated significant revenue from operations. The company faced several challenges in the development and clinical testing of its product candidates, including limited experience in completing pivotal clinical trials for cell therapy products and developing preclinical immunotherapy products. Iovance also had to overcome manufacturing challenges associated with the complex process of producing a personalized cell therapy product for each patient. Despite these obstacles, the company successfully navigated the regulatory approval process and brought its first product to market.

In February 2024, Iovance received FDA approval for its lead product, Amtagvi (lifileucel), the first and only one-time, individualized T cell therapy approved for the treatment of adult patients with unresectable or metastatic melanoma previously treated with a PD-1 blocking antibody, and if BRAF V600 mutation positive, a BRAF inhibitor with or without a MEK inhibitor. This approval was based on the safety and efficacy results from the C-144-1 clinical trial, a global, multicenter trial investigating Amtagvi in patients with advanced melanoma previously treated with anti-PD-1 therapy and targeted therapy, where applicable.

Amtagvi is manufactured using a proprietary process to collect and multiply a patient's unique T cells from a portion of their tumor. The final product is then returned to the patient to fight their cancer. Amtagvi is part of a treatment regimen that includes lymphodepletion and a short course of high-dose Proleukin (aldesleukin), an IL-2 product that Iovance acquired the worldwide rights to in May 2023.

In addition to the U.S. launch of Amtagvi, Iovance is pursuing regulatory approvals for the product in additional markets with a high prevalence of advanced melanoma, including the European Union, United Kingdom, Canada, Switzerland, and Australia. The company submitted a centralized marketing authorization application (MAA) to the European Medicines Agency (EMA) for lifileucel in June 2024, which was validated and accepted for review in August 2024. Iovance also submitted an MAA to the Medicines and Healthcare products Regulatory Agency in the United Kingdom in October 2024 and a new drug submission (NDS) was deemed eligible for Notice of Compliance with Conditions (NOCc) by Health Canada.

Iovance's development pipeline includes multicenter trials of TIL cell therapies in additional treatment settings for solid tumor cancers, such as non-small cell lung cancer (NSCLC) and endometrial cancer. The company is investigating TIL monotherapies for patients with later stage disease who were previously treated with standard of care therapies, as well as TIL combinations with standard of care therapies to potentially improve outcomes in patients who are earlier in their disease.

The company manufactures Amtagvi and its investigational TIL cell therapies using centralized, scalable, and proprietary manufacturing processes. The company's internal manufacturing facility, the Iovance Cell Therapy Center, and a contract manufacturing organization currently have capacity to supply over 1,200 patients annually and the company expects to expand this capacity further.

Iovance is also developing next generation therapies, such as genetically modified and gene edited TIL cell therapy and next generation cytokines.

Financial Performance and Key Metrics

Financials

Iovance's financial performance has shown significant improvement since the launch of Amtagvi and the acquisition of Proleukin. In the company's latest quarterly report for the period ended September 30, 2024, it reported the following key financial metrics:

• Total revenue of $73.69 million for the third quarter of 2024.

• Net loss of $78.56 million for the third quarter of 2024.
• Operating cash flow of -$73.30 million for the third quarter of 2024.
• Free cash flow of -$77.46 million for the third quarter of 2024.

For the first nine months of 2024, Iovance reported:

• Total product revenue of $90.38 million, consisting of $54.86 million from Amtagvi and $35.52 million from Proleukin sales.

• Net loss of $293.62 million.

The company achieved the higher end of their 2024 product revenue guidance range of $160 million to $165 million, reporting total product revenue of $164.1 million for the full year 2024, which was above the full year Street consensus.

Iovance is reiterating its full-year 2025 guidance for total product revenue in the range of $450 million to $475 million, driven by continued growth in Amtagvi and Proleukin sales. The company expects a significant increase in year-over-year growth in both Amtagvi and Proleukin sales as authorized treatment centers (ATCs) broaden utilization and new ATCs as well as community referral networks contribute increasing demand.

The company also expects its annual cash burn, excluding one-time items, to be less than $300 million in 2025, including investment in their ICTC facility expansion, as it continues to grow revenue and improve gross margins. Iovance's cash burn is expected to continue to decrease as they execute the Amtagvi launch and drive towards breakeven and profitability.

In terms of profitability, Iovance reported a gross margin of 46% for the fourth quarter of 2024, an improvement from previous quarters as the company focuses on profitability.

The strong revenue growth in 2024 was primarily driven by the successful commercial launch of Amtagvi and the acquisition of Proleukin, which have begun to generate meaningful sales for the company. The biotechnology industry is seeing significant growth in the development and commercialization of novel cell and gene therapies, with a CAGR of approximately 15-20% expected over the next 5 years, which bodes well for Iovance's future growth prospects.

Liquidity

As of September 30, 2024, Iovance reported the following liquidity metrics:

• Cash, cash equivalents, short-term investments, and restricted cash totaled $403.80 million.

• Debt-to-equity ratio of 0.082.
• Current ratio of 3.74.
• Quick ratio of 3.31.

These metrics indicate that Iovance has a strong liquidity position to support its ongoing operations and future growth initiatives.

Product Segments

Iovance's product portfolio consists of two main segments:

1. Amtagvi (lifileucel): This is Iovance's lead product and first internally developed FDA-approved therapy. Amtagvi is a tumor-derived autologous T cell immunotherapy indicated for the treatment of adult patients with unresectable or metastatic melanoma previously treated with a PD-1 blocking antibody, and if BRAF V600 mutation positive, a BRAF inhibitor with or without a MEK inhibitor. Amtagvi received accelerated approval from the FDA in February 2024 based on an endpoint of overall response rate. It is manufactured using Iovance's proprietary Gen 2 manufacturing process, which allows for the production of a cryopreserved, individualized therapy.

Revenue from Amtagvi product sales totaled $42.04 million in the third quarter of 2024 and $54.86 million for the first nine months of 2024. The strong Amtagvi revenue was driven by the commercial launch of the product in the U.S., where Iovance is executing the launch strategy focused on onboarding authorized treatment centers, educating healthcare providers, ensuring operational excellence in manufacturing and delivery, and securing reimbursement.

2. Proleukin: This is an interleukin-2 (IL-2) product that is used in the Amtagvi treatment regimen. Iovance acquired the worldwide rights to Proleukin in May 2023. Proleukin product revenue was $16.52 million in the third quarter of 2024 and $35.52 million for the first nine months of 2024, primarily from sales in markets outside the U.S. to support the Amtagvi launch. The company noted that as the Proleukin inventory that was with distributors at the time of acquisition has been substantially sold, Iovance experienced significant re-stocking demand from specialty distributors in the U.S. in the second and third quarters of 2024 to support Amtagvi infusions.

Overall, Iovance's total product revenue for the third quarter of 2024 was $58.55 million, a significant increase from the $469,000 in product revenue reported in the same period of the prior year. For the first nine months of 2024, total product revenue was $90.38 million, up from $707,000 in the first nine months of 2023.

Competitive Landscape and Risks

Iovance faces competition from other biotechnology and pharmaceutical companies developing therapies for the treatment of solid tumor cancers, including Amgen, AstraZeneca, Bristol-Myers Squibb, Merck, and Regeneron Pharmaceuticals. The company believes it has a competitive advantage as the first company to obtain FDA approval for a TIL cell therapy product and its proprietary manufacturing capabilities.

However, Iovance is subject to various risks, including the ability to successfully manufacture and commercialize its products, obtain regulatory approvals, manage its growth, and protect its intellectual property. The company also faces the challenge of educating healthcare providers and patients on the benefits of its personalized cell therapy approach.

Furthermore, Iovance's financial performance is dependent on the successful commercialization of Amtagvi and Proleukin, as well as the company's ability to advance its pipeline of TIL cell therapy candidates. Any delays or setbacks in these efforts could have a material adverse impact on the company's business and financial results.

Conclusion

Iovance Biotherapeutics has transformed TIL cell therapy from a promising academic concept into a commercially viable treatment option for patients with solid tumor cancers. The company's approval and launch of Amtagvi, as well as its acquisition of Proleukin, have positioned it as a leader in the field of personalized cancer immunotherapies.

While Iovance faces competition and risks inherent to the biopharmaceutical industry, its innovative approach, robust manufacturing capabilities, and expanding pipeline of TIL-based therapies suggest that the company is well-positioned to continue its trajectory as a pioneer in the fight against cancer. The strong financial performance in 2024 and positive outlook for 2025 demonstrate the company's potential for continued growth and eventual profitability as it expands its commercial presence and advances its pipeline of novel cancer therapies.