Good afternoon and welcome to the Iovance Biotherapeutics Third Quarter 2017 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Following the formal remarks, we will open the call for your questions. Please be advised that this call is being recorded at the company's request. At this time, I would like to turn the conference over to Tim Morris, Chief Financial Officer at Iovance. Sir, please go ahead.

Thank you, Amanda. Good afternoon, everyone, and thank you for joining us today. As many of you know, I joined Iovance as CFO in August of this year. With me on the call are Dr. Maria Fardis, our President and Chief Executive Officer; and Dr. Igor Gorbatchevsky, our Vice President of Clinical Science. This afternoon, we issued a press release that you could find on our website at iovance.com which includes the financial results, highlights for the quarter, and other topics we plan to discuss on today's call. Before I turn the call over to Maria, I would like to remind everyone that statements made during this conference call will include forward-looking statements regarding Iovance's goals, business focus and business plans, clinical trials plan and results, potential future applications of our technology, manufacturing capabilities, licensing and collaboration transactions, future updates, and cash usage forecasts. 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, let me pass the call over to Maria.

Thank you, Tim. Good afternoon everyone. As Tim mentioned, he joined Iovance team in August as CFO. Tim comes to Iovance at over two decades of experience in public biotech companies in executive finance and business development roles. He was instrumental and helping us complete the $50 million around financing that we closed in September. I will let Tim expand on the details of that offering in a few moments then to review the financial results for the quarter. During the third quarter, we continued our progress in the clinical development of our TIL therapy. For the metastatic melanoma study, as you may recall, we presented encouraging data from the first cohort of the Phase 2 study of LN-144 in patients with metastatic melanoma at ASCO earlier this year. Patients in this first cohort received a non-cryopreserved TIL product, using a first generation manufacturing process known as gen 1 that requires that requires approximately five to six weeks to prepare the TIL product. A second cohort was added to the study to investigate a new manufacturing process developed entirely at Iovance. This new manufacturing process takes 22 days in duration excluding shipment and needs the production of the cryopreserved cell product. We refer to this process as Generation 2 or gen 2 for sure. The cryopreserved product provides flexibility of patient dosing, while the shorter duration of manufacturing minimizes the time a patient has to wait to receive their TIL product. The decreased manufacturing timeline often results in a reduction of cost of goods. We started enrolling patients in this new cohort in the second quarter this year. Early results from the second cohort of this study will be presented as a late-breaker at the Annual Society for Immunotherapy of Cancer or SITC Meeting on November 9. The second Phase…

Thank you, Maria. The GAAP net loss attributable to common stockholders for the third quarter 2017 was $22.1 million or $0.35 per share. This compares to $68.2 million or $1.15 per share reported in the third quarter of 2016. Last year, in the third quarter, the company reported a non-cash charge of $49.5 million for deemed dividend related to the beneficial conversion feature of the preferred stock issued in 2016. Non-GAAP net loss attributable to common stockholders for the quarter ended September 30, 2017, was $19.5 million or $0.31 per share. This compares to non-GAAP net loss of $10.1 million or $0.17 per share for the quarter ended September 30, 2016. For the nine months ended September 30, 2017, GAAP net loss was $66.2 million or $1.06 per share. This compares to $86.7 million or $1.64 per share for the same period in 2016. Non-GAAP net loss for the same period in 2017 was $57 million or $0.91 per share. This compares to non-GAAP net loss of $21.4 million or $0.40 per share for 2016. In September, the company completed a public offering of approximately 8.8 million shares of its common stock. The shares of common stock issued and sold at the offering include 1.2 million shares issued upon the exercise in full by the underwriters of their option to purchase additional shares. The net proceeds from the offering after deducting underwriter discounts, commissions, and other estimated offering expenses payable to Iovance are approximately $54 million. For the third quarter of 2017, we had net cash usage of approximately $19.7 million. This cash usage was in line with our guidance of approximately $20 million to $22 million per quarter. We ended the quarter with cash, cash equivalents, and short-term investments for approximately $163.4 million including the proceeds from the financing. For the fourth quarter 2017, we are projecting cash usage of approximately $20 million to $22 million. For the full-year 2017, we expect cash usage to be approximately $78 million to $80 million. We anticipate the year-end cash balance to be in excess of $140 million. Our Investor Relation activities in the fourth quarter include a tour of our manufacturing suite to Wuxi Aptech facility in Philadelphia. Last week a group of analysts and investors attended the event and were able to view one of our TIL manufacturing suites during production. Iovance management and Wuxi representatives were also on hand to answer any questions. The slides from this event were filed along with an 8-K last week. We are scheduled to attend and present at the Jefferies Global Healthcare Conference in London, November 16. And lastly I would like to announce that we will be holding our inaugural Analyst Day on December 13 in New York City. Additional details will follow but please save the date. We'll now turn the call over to the operator for your questions-and-answers.

Thank you. [Operator Instructions]. And our first question comes from the line of Boris Peaker of Cowen & Company. Your line is open.

Great. So my first question is you mentioned you wanted to compare the first and second gen 2 TIL therapies to decide which one to advance forward and I'm just curious what specific parameters would you compare between the two different cohorts?

Thank you, Boris. So we would we have a couple of options, one is that the TIL product that we manufactured completely ineffective when it enters human body, you would see progressive disease at the initial response for your patients. The second outcome would be that that's not the case and in fact the response -- there is responses for this second generation product. This is the data we will present at ASCO and we certainly have an internal bar for minimum response that we would like to see in this cohort before we are sure that we're proceeding with this cohort. This is part of the reason we are waiting for that decision by December of this year.

So specifically response is there are any other immunologic parameters or anything else that you will be comparing or it’s just driven by the response?

We certainly evaluate a study based on endpoints, so safety and efficacy so we will certainly be looking at safety and to the degree we have an update we certainly will be comparing them. But in terms of efficacy that's the second parameter that we'll be looking at and those numbers are a little bit easier to compare just because we know what the response for cohort 1 is.

Got it. And my last question outside of the studies that you guys are doing, there is a number of TIL trials ongoing by NIH in the Morphet Cancer Center, I'm just curious how does their approach is different from what you’re doing from just the actual TIL cell process and then also do you have a sense of when we may see some of their data?

Yes, definitely. So the NIH process is what we licensed and it’s clearly similar to what we call gen 1 to add generation one approximately five to six big launch, there's other parameters in there that are fairly similar to our process. We did modify gen 1 is not identical to NCI process we modified it some in order to tech transferred into our CMO. The process at Morphet is clearly similar to the NCI process but you're correct that some of the sites have their own individual changes that they have implemented. I think that's exactly what why you want to have a central procedure where a sponsor provides harmonious process through all the CMOs and that's a product you provide to the patients. So each site can have their own different processes and the responses may or may not be comparable.

And the last part of my question, go ahead sorry.

Yes and then the second part of your question is when do we expect to see some results maybe from some of the other studies? We know that Morphet was putting a manuscript together for their TIL plus AP studies. I'm not aware whether they proceeded to submission we will be seeing a version of it, it is certainly their data, so they have a liberty of putting it out or not, the data from NCI particularly the Keytruda combination study is fairly early and we know Professor Rosenberg loves to provide sophisticated data. So I don't expect to see that in the remaining part of the year but the TIL combination plus AP is a possibility. You can check with Morphet and see if they’re ready to submit it.

Okay, all right, great. Thank you very much for taking my questions.

Well thank you, Boris.

Thank you. Our next question comes from the line of Jim Birchenough of Wells Fargo Securities. Your line is open.

Hi guys, thanks for taking the question and congratulations on all the progress. Just following up on Boris’s question, if it turns out that you need to advance into a pivotal study with gen 1 manufacturing, is that a commercially viable manufacturing process or would you foresee starting a pivotal with that gen 1 and then working on something like a gen 3, just trying to understand how to think about scenarios that you have to go forward with gen 1?

Hi Jim, thank you for your question. We certainly have the capability of scaling up gen 1 as well. I think one of the key messages we try to convey as part of the Wuxi tour was that the process is reproducible, scalable, and from a scaling perspective it requires additional modules and we have them. We have additional three so we can add them, so it is a process that could be scaled up, it's not that difficult. Having said that we continue working on process development, we certainly have a gen 3 in our research pipeline that we are looking at and we would absolutely be able to optimize should that be necessary.

And then just a follow-up on some of the ongoing studies Maria. Any detail on how many patients in cohort 3 where you're rebiopsing and re-dosing any indication of how many patients have been treated there and when we might see that re-dosing data relative to cohort.

Sure. So we haven’t -- yes thank you for the question. We certainly haven’t disclosed how many patients we have for cohort. But my guess would be sometimes around 2018 we can get clear guidance as to when we can put that data out.

And then just one final one, just on LN-144 in the Fast track designation, just wondering is breakthrough therapy designation on the table here is that something you’re looking into and when might we here about that?

Really good question, thank you. Absolutely something we should certainly think about and follow-up. I think the order of events for us has been we should think about that type of a designation when we have our manufacturing method nail down. That type of a designation typically helps in taking your product through review process and approval and in an ideal world you want to have that for a product that is manufactured with a method you’re proceeding to BLA for. So that’s been our next decision to decide on which generation of manufacturing and then we can think about what are the regulatory designations we can request for it.

Thank you. Our next question is from the line of Joe Pantginis of H.C. Wainwright. Your line is open.

Good afternoon. Thanks for taking the question. First Maria with regard to the potential path in Melanoma you obviously changed the protocol to include only the relapsed refractory patients with regard to the checkpoint. Can you just remind us whether there really is any benchmark for this population or you really breaking new ground here?

Hi Joe, thanks for this question. You’re correct, we changed the protocol to go post checkpoints once the patients have progressed on anti-PD-1 checkpoints. There is nothing that is approved for this patient population, so it’s definitely the unmet medical need.

Perfect, thank you. And quick well not necessarily quick I apologize but since the CAR-T are really what’s driving news flow right now in the industry and their welcome advance. Beyond your differentiated safety I guess can you discuss one of the questions that seems to come up a bit is the number of cells that's dosed to patients for TILs versus the CAR-Ts and why you think that’s basically an apples to oranges comparison.

Great. Thanks for the questions. I won't go into a lot of detail in terms of CAR-T therapy, obviously that’s not a product we work on at Iovance. But in terms of the number of cells where TILs are administered we definitely dose into billions typically Professor Rosenberg has dosed somewhere as low as around $1 billion sometimes sub 1 billion and as high as 200 billion. We were within that range in terms of number of cells. Just briefly to touch on the question you’re asking my understanding of CAR-T therapy is that it's dosed in million. So there is definitely orders of magnitude in terms of the number of cells different.

And in fact that the lower number of cells really have to do with the fact that these are more liquid tumors for the CAR-Ts obviously and you need substantially more cells presumably to be able to attack the solid tumor environment especially with all that’s going on with this trauma and what have you, I assume.

That’s a pretty good assumption but I have to tell you that I don’t know if I’ve seen any data that would support why there is a difference between them. I think Professor Rosenberg sort of tested into billions that was low number he started with, he found that there is responses he tried to find a high dose, he is trying to find a massive tolerated dose. So wasn’t any dose limiting toxicity seen and he said in those numbers, I’m not sure if he ever tries to bring the dose down to multiple million. And if you think about replacing the T-cells in human body, the one might be able to do the math that it requires to be into billion, there is slightly different processes compared to CAR-T.

Thank you. And our next question is from the line of Biren Amin of Jefferies. And your line is open.

Yes thanks for taking my questions. Just gen 2 for LN-144 Maria do you expect patient baseline to be comparable in cohort 2 compared to cohort 1, I believe all patients in cohort 1 fail PD-1 and the vast majority fail on CTLA-4.

Yes hi Biren, thank you for the question. I do I mean there will be written protocol that's the patient population they’re going to see. If you recall earlier on we had patients that have subsequent to one prior therapy, the patients are enrolling we have based on a feedback from FDA -- we have defined it fairly clearly that these patients have progressed on Anti-PD-1. I’m going to ask our Head of Clinical Tools to also speak to it in terms of whether the patients are mostly Anti-CTLA-4 as well as Anti-PD-1 experience. Igor?

Yes, thank you, Maria. There are [indiscernible] cohort 1 data presented at ASCO you will see later it's just information on cohort 2 data but majority of patients if not everybody received prior therapy with [indiscernible] cell treatment and all of them received anti-PD1 treatment and regarding kinase CTLA-4 antibodies majority of those patients in cohort received anti-CTLA-4 as well and similar situations is in cohort 2. So we don't see the difference in patient demographics or dispositions here.

And Maria on the patient data from ASCO, should we expect should see that you will update us on the cohort 1 patient group as well?

So Biren, our focus currently is on cohort 2 because we have an eminent decision before for us and we thought to share that data with the community. So likely what you're going to see the bulk of the data is going to be on cohort 2 and maybe some comparisons that we draw with cohort 1 but really the bulk of the data is going to be on cohort 2, because that's our focus on decisions right now.

Got it. And then so for the gen 2 for cohort 2 do you have a threshold to rely on all hypotheses?

Really good question, not too dissimilar to a question that was asked earlier today. We don't really have -- I think haven’t disclosed the walk away point but I have disclosed that other sponsors had viewed something of the nature of 11% as a product that could be approved in this patient population and they’re pursuing it. So while I’m not saying what our walk away point is, I’m saying that other large pharma sponsors have looked at that type of a response as a product that can and should be developed.

Got it. And then just on the European sites is that think about the start to come on, which process do you plan to use for those sites for LN-144?

So we have just first clarify the question, both LN-144 and 145 will be available in Europe and we are prepared to take whichever product we make a decision on in Europe given patient dosing would be after our decision making internally, we are able to take whichever process that we make a decision on into Europe, we’re prepared for that decision and the process.

And that’s for all tumor types?

It’s for the two indications that we are going into Europe for. We're going into Europe for metastatic melanoma on the LN-144 products as well as cervical cancer which is LN-145.

Thank you. Our next question is from the line of Mark Breidenbach of Oppenheimer. Your line is open.

Hi guys, congrats on the progress for the quarter. Maria you had mentioned during the prepared remarks that the gen 2 manufacturing process comes with reduced COGS relative to the gen 1 process, can you just give us some color on by how much is that a factor of two or just a slight reduction in COGS.

Sure. Thanks Mark for the question. Yes indeed, it’s fairly similar to the duration of times that we are reducing. As of now approximately 35% or so of the COGS have reduced the needle to gen 2 and this is not even optimized. So we are fairly confident that once if we decide that gen 2 is a product we can certainly go back and optimize the COGS further.

Okay, understood. And I noticed that the NCI process which is similar to your gen 1 process actually implements or has implemented prior preservation in the past. I’m just wondering why in your gen 1 process you didn’t include that prior preservation set given that it appears to work in hands of NCI?

I think some of it is historical, Mark. When I arrived at backed in Lion, the company had tech transfer of gen 1 as Professor Rosenberg had been using it with non-cryopreserved product. As we set our goal into changing the process and shortening the process, we also put in cryopreservation into that gen 2 process and instead of going back and redoing the gen 1, we decided we’re going to transfer our wish list at that point of time into gen 2. So some of it is historical, as Jim noted earlier if you want to go back and go to gen 1 we certainly can go back to gen 1 cryopreserved product, I don’t think that's a still stopper.

Got it, got it and a final question from me, you’re currently relying on three different CMOs for manufacturing. Are you kind of looking down at the road at a consolidation down to a single facility in the future or would you even consider investing in your own manufacturing facility?

As we go forward we certainly will consolidate in fact we’re in process of doing that. I'm not sure if we'll ever will go down to one, my concern always would be to have contingency plans should something happen all sort of national disasters happen we have seen this past year. So we need to have preparation in at least a second site it could be co-located but they have to be very nice until it is separated. In terms of making a decision regarding Iovance facility there is certainly pros and cons and we have taken that under strong consideration. It would have to be at a point where we are very clear what our regulatory path is. We want to know what our patient population would be and how far away from a VLA would be. So those two factors would be the driver of as to how to make a decision and how to position ourselves.

Thank you. And our next question is from the line of Madhu Kumar of FBR Capital Markets. And your line is open.

Yes, thanks for taking my question. So first if you would assume a blue sky scenario for the gen 2 TILs in the 60 data set melanoma would you consider transitioning the head and neck and cervical cancer programs over to the gen 2 process and if so, what you estimate would be the effect on demand and capacity among your existing manufacturer.

Okay, hi Madhu. Thank you for the questions. In a blue sky setting I’d fairly comfortable taking cervical into gen 2 because it's similar process that Rosenberg last gave is similar type of responses in cervical. Head and neck it would give us a little bit of time we still have another month, month-and-a-half to make that final decision. But in an ideal world if you see response ES would be fairly comfortable going into gen 2 at that point in time. The manufacturing perspective and capacity I'm not concerned we have ample capacity in order to if we decided to move everybody over to gen 2 we have ample capacity to be able to provide everybody with that product and for all the ongoing studies.

Okay. And then you mentioned earlier that gen 2 has around a 35% lower COGS compared to gen 1 how much of that COGS reduction scales at the reduction and the length of manufacturing time. And with further reductions in length of manufacturing can kind of scale with the effect on COGS.

If I understood your question correctly the impact is in fact from duration being reduced. That the time and this still being reduced, the staff being reduced for that shorter time. The material -- most of the material so, anything that is variable cost is still the same between the two processes for the most part.

Thank you. And we have no more questions and we thank everybody for attending today’s call. We will now disconnect.