Good day, and thank you for standing by. Welcome to the Iovance Biotherapeutics Second Quarter 2025 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sara Pellegrino, Senior Vice President, Investor Relations and Corporate Communications. Please go ahead.

Senior Vice President of Investor Relations & Corporate Communications Thank you, operator. Good afternoon, and thank you for joining the Iovance conference call and webcast to discuss our second quarter and first half 2025 financial results, as well as recent updates. Dr. Fred Vogt, our Interim Chief Executive Officer and President, will provide an introduction and brief overview of our key financial results, including revenue and revenue guidance, operating expenses and our strategic restructuring; Dan Kirby, Chief Commercial Officer, will discuss product revenue and commercial and regulatory updates for Amtagvi; Dr. Igor Bilinsky, our Chief Operating Officer, will provide a manufacturing update; and Dr. Friedrich Finckenstein, our Chief Medical Officer, will summarize our priority pipeline programs. Additional members of our leadership team, including Dr. Raj Puri, our Chief Regulatory Officer; and Dr. Brian Gastman, our Executive Vice President of Medical Affairs, will be available for the Q&A session. In addition, our new Chief Financial Officer, Corleen Roche, is joining today's call. Earlier this afternoon, we issued a press release that is available 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 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, restructuring plans and workforce reductions, 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, I will turn the call over to Fred.

Thank you, Sara, and welcome to the Iovance Second Quarter and First Half 2025 Conference Call. We are more than a year into our U.S. launch of Amtagvi for advanced melanoma, the first FDA-approved TIL cell therapy. Adoption continues to grow, and for the first time, we surpassed more than 100 patients treated in a single quarter. We are also excited about our first real-world data set for Amtagvi monotherapy in the commercial setting. Top line results showed a nearly 49% response rate among 41 patients and for 23 patients treated in third line or earlier treatment settings and approximately 61% response rate, all from patients treated in accordance with the label. We look forward to sharing more detailed real-world data at an upcoming medical meeting. Another important growth driver for Amtagvi is onboarding large community practices to join our ATC network. We plan to begin treating patients from these practices in the fourth quarter of this year. Patients in the community are generally earlier in their melanoma treatment journey, and we expect that the higher response rates observed in our real-world data set will also be relevant to these patients. Our commercial business is complemented by an exciting pipeline, led by our programs to extend the lifileucel franchise in the new treatment settings in solid tumor types as well as next-generation approaches. We remain on track for multiple clinical milestones in the second half of this year, including updated data from our registrational trial of lifileucel monotherapy in previously treated advanced non-small cell lung cancer, clinical data for lifileucel monotherapy in endometrial cancer and for IV-4001, our next- generation PD-1 and activated TIL cell therapy. Today, I will cover financial results at a high level, focusing on revenue, expenses, cash runway and the expected cost savings from our strategic…

Thanks, Fred. I'd like to build on the earlier revenue discussion by highlighting individual product drivers for Amtagvi and Proleukin. I'll also provide an update across our 3 key focus areas to drive U.S. launch performance as well as our strategy for Amtagvi outside of the United States. Product revenue from U.S. Amtagvi sales was approximately $54 million in the second quarter of 2025, representing a growth of 24% quarter-over-quarter. A total of 102 commercial patients were treated, representing the highest number of Amtagvi infusions for a single quarter to date. Infusion growth was a direct result of increased field activities in existing ATCs and contribution of new ATCs onboarded earlier this year. Our commercial organization is also dedicated to supporting and growing Proleukin sales. Product revenue from Proleukin was approximately $6 million in the second quarter of 2025, an increase of 2% quarter-over-quarter. Two of the 3 major U.S. wholesalers restocked during the most recent quarter. As a reminder, first quarter Proleukin sales were attributed primarily to manufacturing and clinical uses, not the main channel tied to Amtagvi use. These 2 channels represent additional revenue growth opportunities for Proleukin. Now that wholesalers are reordering from the main channel, we expect Proleukin revenue to begin to reflect Amtagvi demand. Looking forward to the remainder of the year, we are confident in continued growth for Amtagvi and Proleukin. We are confirming our full year 2025 total revenue guidance of $250 million to $300 million. This aligns with our U.S. Amtagvi growth forecast, including expected momentum from community referral activities and large community practices. As a reminder, our 2025 guidance includes sales of Amtagvi only in the United States as well as Proleukin. Amtagvi has the opportunity to address more than 30,000 patients globally with previously treated advanced melanoma. As Fred stated,…

Thank you, Dan. I will focus today's manufacturing update on commercial performance and recent organizational changes. I'll also build on Fred's introductory comments about our ongoing initiatives to improve gross margins. Our internal manufacturing facility, the Iovance Cell Therapy Center, or iCTC, supplies the vast majority of patients today for both commercial and clinical manufacturing. Our contract manufacturer provides second source [indiscernible]. Owning our own facility and relying more and more on internal manufacturing provides us with full control to maintain high quality, implement operational efficiencies and optimize cost of sales. iCTC also offers the flexibility to scale up rapidly when needed. Manufacturing success, delivering final product to patients within defined specifications is critical for providing therapies for patients and for recognizing revenue. Across functional areas of Iovance from manufacturing to medical affairs and commercial, we are focused and committed to improving success rates. As a result, the success rate in the second quarter rebounded compared to the first quarter with lower patient drop-offs and lower out-of-spec rates, and we continue to see an improvement in the third quarter to date. I'd also like to highlight that as planned, we delivered on our goal to shorten manufacturing turnaround time, which is now 33 days from receipt of sales at the manufacturing facility to Amtagvi readiness for return shipment to the ATC. Turning to our strategic restructuring, our manufacturing organization has been realigned for operational excellence. We previously staffed our manufacturing network to provide the capacity to meet our prior revenue guidance. Now we have rightsized and optimized the capacity and headcount to align with the revised guidance and growth projections. Our streamlined manufacturing organization and ongoing implementation of operational efficiencies are expected to increase capacity utilization, reduce costs and improve gross margins in the second half of 2025 and beyond. Shifting to the current macroeconomic and geopolitical environment, I'll reiterate that Iovance is operating as a strategic advantage within the biopharma industry. We continue to expect Amtagvi and Proleukin to see minimal impact from tariffs. Regarding our intellectual property, our TIL cell therapy expertise and manufacturing capabilities are protected by a robust patent estate that is domiciled in the U.S. We own approximately 280 granted or allowed U.S. and international patents and patent rights for Amtagvi and other TIL-related technologies expected to provide exclusivity through at least 2042. I'm available to answer questions during the Q&A session, and I will now hand the call to Dr. Friedrich Finckenstein, our Chief Medical Officer, to discuss our clinical pipeline.

Thank you, Igor. Building on my colleagues' comments about Amtagvi or lifileucel, the durability of responses following onetime treatment is a key differentiator from other available and emerging therapies. This durability message was reinforced in the recent publication of the final 5-year analysis from our C-144-01 trial in the Journal of Clinical Oncology and the simultaneous presentation at the American Society of Clinical Oncology Annual Meeting. Unprecedented durability and duration of follow-up were demonstrated in previously treated advanced melanoma patients. 31% of patients responded with nearly 1/3 of responders ongoing. The 5-year overall survival rate was almost 20%. In the real-world treatment settings, we are excited to see even better response rates of approximately 50% overall and 60% in less heavily treated patients following lifileucel. We look forward to presenting this real-world data at a future medical meeting. Following the strategic restructuring, our priorities are to expand Amtagvi into additional solid tumor types and earlier lines of therapy and to advance our key next-generation TIL and TIL treatment regimens. In frontline advanced melanoma, TILVANCE-301 is our global registrational Phase III trial designed with FDA and EMA input to show the contribution of components. We are investigating Amtagvi in combination with pembrolizumab compared to pembrolizumab alone. TILVANCE-301 remains on track as the confirmatory trial for Amtagvi monotherapy in our initial indication, and this trial could also support accelerated and full approvals of Amtagvi in combination with pembrolizumab in frontline advanced melanoma. We look forward to sharing results from several clinical trials before the end of the year for lifileucel in non-small cell lung and endometrial cancers as well as on our PD-1 inactivated TIL cell therapy, IOV-4001. IOV-LUN-202 is our registrational program intended to extend the label for lifileucel monotherapy to include previously treated advanced non-small cell lung cancer. This trial…

[Operator Instructions] Our first question comes from Yanan Zhu with Wells Fargo.

Congrats on the quarter. I was wondering, can you talk about the patient number from 1Q to 2Q because I don't think we had a good sense of exactly how many patients you infused last quarter -- in 1Q. So I wanted to understand the growth in patient number. And I also think you might have increased the price. So perhaps talk about the price change and impact for Amtagvi revenue as well. And if you can also comment on where do you think those infusion numbers will go in the coming quarters relative to your guidance and confidence, that will be super helpful.

Thanks, Yan. I'll start, and then I'll ask Dan Kirby to add some comments to this, too. So the number of infusions we had this quarter was 102 -- last quarter, it was 83. So that was substantial growth over last quarter, obviously. There was a price increase that came into effect on April 1st, which took the price of the product of Amtagvi to USD 562,000. We expect growth, and I'll let Dan talk about what we expect in the second half of this year. Go ahead, Dan.

Sure. So for the price increase, I think your question was, did we see any impact of the price increase on demand. We did see -- we did not see any impact. In fact, demand increased after the price. So we didn't factor that in as being any kind of headwinds to follow. So with that, we also look at the future and where we see patients coming in. We have our new centers coming on as we've talked about in previous quarters, and they continue to ramp up demand as well as our existing centers. What we do see in the future happening is we're in the process of opening some ATCs that are closer in the community networks. I mentioned the distribution channel we added, that is specifically at their request, which gives us access to hospitals that normally were not going to purchase Amtagvi. So we do see demand in the second half continuing to be strong to meet the guidance that we provided.

Sorry, if I may quickly follow up. I think I heard the growth in patient number was from 83 to 102.

Sorry, 85 to 102, Yan.

85 to 102. That's a pretty good growth. Do you anticipate similar growth going forward? Or any color there, just so we have a better sense about what to expect in the coming quarters?

We anticipate demand to continue to be strong. As far as quarter-on-quarter growth, we don't want to guide to that. We want to till stick to the $250 million to $300 million range that we have in our guidance with it, which would indicate second half demand will be strong.

Our next question comes from Peter Lawson with Barclays.

Just [indiscernible] just as we think about the guidance, just your level of confidence around Proleukin, you mentioned it kind of accelerating in the second half, kind of what gives you that level of confidence? And what do you think the Proleukin number could be? And has there been any changes in the number of Proleukin injections?

Peter, I'll take that question. I think for Proleukin in the mainline channel, what we did see as evidenced in the revenue from Q1 was we're seeing the manufacturing and the clinical trial channel that represented the Q1 revenue. In Q2, we started seeing the reordering at a regular basis from 2 of the top 3 wholesalers in the U.S. So what we expect to see moving forward is those orders continuing in from the 2 and then the third one coming on later this year. So it will start to reflect more of the Amtagvi utilization. Along with that, we are seeing strong demand to use with Amtagvi. So we have not seen the number of doses. Again, it's 0 to 6 doses with 1 dose of Amtagvi. We're not seeing the doses of Proleukin change by center. Each one will do it differently, but the average doses remain consistent. And then finally, we do anticipate those other 2 channels we've been talking about that we booked revenue in Q1 on continuing to order throughout the year. So you'll see some pickup in in Proleukin based on the fact that the wholesalers are coming online.

Our next question comes from Andrew Tsai with Jefferies.

So if the guidance for net cash burn is going to be less than $235 million over the next year, and I believe restructuring happens later in the year, it feels as if you're expecting gross margins to improve meaningfully, maybe even as early as Q3 relative to Q2 and Q1. Is that accurate? And if so, can you give us some color why that could be the case in terms of a meaningful margin improvement?

Yes, Andrew, thank you for the question. It was $245 million, not $235 million. You can see it in the press release and in our remarks there, but your question is still a good question. Yes, we expect -- we expect margins to improve. That's the whole -- that's the whole name of the game right now. We're pushing very hard. And a lot of the restructuring activities are really focused on improving margin. Now we're going to enter a phase of operational excellence over the next couple of quarters to really tighten down on cost of sales and do a lot of work to improve margins even more. And as volume ramps up, we'll also see improvements in margins because cost of sales will stay low while revenue goes up, especially as we scale up and use our iCTC facility. So you're absolutely right, we expect to see margin growth. And again, this quarter, we saw a good margin. If you back out the noncash items and things like that, you see a very good margin on a cash basis that we have already now. As you see more Proleukin sales increase and as you see us do all those things, I think you'll see margins go up significantly.

Our next question comes from Salim Syed with Mizuho.

This is [indiscernible] for Salim. Could you elaborate on the decision to withdraw the marketing authorization application in Europe? What was the feedback with the EMA? And what are the steps that you're planning to take to commercialize in Europe? And regarding the announced restructuring, are you also planning to reduce R&D expenses? And if so, could you comment on any specific actions you would be planning to take to reduce, for example, clinical expenses?

Yes, I'll take the second question first. We did reduce some R&D expenses, but we are not expecting any significant changes in our clinical pipeline as we discussed on the call. With respect to the EMA, we withdrew what we learned late in the review process that we need to include an additional analysis in our submission. So what we want to do is go back and resubmit with an additional analysis such as the virtual control arm. We do not -- our strategy does not require us to run additional clinical trials, and we think that can happen relatively quickly. We'll be seeking scientific advice from the EMA soon to try and get back in there and work on that again with them. But that was really what the issue was. It has to do with the data package that was submitted, which we submitted was similar to the FDA package and Health Canada package and everything else, and they would like to see some more. And the easiest route for us to do that is to withdraw and resubmit.

Our next question comes from Tyler Van Buren with TD Cowen.

This is Nick on for Tyler. Can you provide an update on how infusions are tracking for Amtagvi quarter-to-date? And then second, in the first earnings call -- in the first quarter earnings call, you noted that 69% of ATCs have infused patient, while 16% infused 10 or more. Can you provide an update on these metrics and the plan to increase prescribing?

I'll take that one. Thanks for the question. For the infusions quarter-to-date, we do see strong demand. However, we can't comment on how many infusions quarter-to-date. That's been our policy. As far as the percentage increase with it, those percents, they have gone up. Obviously, we have not appreciably a lot more centers that came on in the last quarter. However, we [ went up ] 24% infusion. So those numbers by centers are going up with it, but they -- we decided not to continually track those as a metric.

Our next question comes from Colleen Kusy with Baird.

So this EMA feedback on melanoma, do you expect this to impact your path forward in PD-1 treated non-small cell lung cancer?

No, not right now. Absolutely not. It has nothing to do with the United States whatsoever. And Raj Puri, you can comment on this.

Yes. I think, Colleen, any impact on the going forward continuing non-small cell lung cancer.

Great. And one quick follow-up. What sort of issues does moving to a specialty pharmacy solve for centers versus just buying through you directly?

It's a great question. It really solves -- if you think about the hospitals that are involved with the community clinics and you get close to where the patients are, a lot of times, you're dealing with medium-sized hospitals that have all the capabilities to administer Amtagvi. However, onetime therapies that have higher price tags, the finance department does not want to bring those in. So they would rather go a route, where they would go through a specialty pharmacy, where the purchase would happen through the specialty pharmacy and the specialty pharmacy would get reimbursed from the payer versus the purchase happening directly from the finance department at the hospital.

[Operator Instructions] Our next question comes from Reni Benjamin with Citizens.

Maybe one, can you just talk a little bit about the numbers in terms of patient drop-offs versus the manufacturing kind of out-of-spec rates? I think Igor had some prepared remarks regarding that. Can you just talk about the specifics from first quarter to second quarter and how you see that potentially improving throughout the rest of the year? And then kind of just going back to a previous question regarding McKesson, how do you see this potentially improving revenues going forward? Like is this something that should kind of minimally increase revenues? Like how should we be thinking about the number of patients these one-off hospitals, how much they might use this?

Reni, thanks for the question. So on the first part of the question, the -- as I mentioned, the manufacturing success rates normalized in the second quarter compared to the increase in the first quarter. So both the out-of-spec rate and the patient drop-off rates decreased, and we're seeing further improvement in the third quarter so far. And as you can see in the Q, you will see in the Q, the scrap costs went down in the second quarter compared to the first quarter, if you want to quantify that. Beyond that, we're not sharing the exact percentages. But again, you can look at the scrap costs and see the decrease in both absolute terms and the relative percentage.

And I'll answer the question regarding both patient drop-off as well as the impact of specialty pharmacy, which are a little bit related. So patient drop-off does remain somewhat consistent, although we did see that we were getting patients a bit earlier in this quarter versus previous quarters. and we weren't seeing as many patients that were not making even the tissue procurement. So we are making strides in that avenue. The impact of specialty pharmacy allows us to actually get closer to those patients, so we can get healthier patients upstream. And how we should be thinking about that is we're starting our journey right now. Other cell therapies are following our lead. Gene therapies and other therapies that are higher priced have already gone down this road successfully. So as we think about how this could have an impact on it, this could get us next to those clinics that are affiliated with those hospitals inside of the network that they can treat patients inside of their network without the cost burden. So it could have a big impact long term. We already have several accounts right now that have requested it that we're opening up this channel for. So we will have some impact later this year.

Got it. And if I can just have a quick follow-up just regarding the clinical trials that are ongoing for Friedrich. Just can you provide us any color in terms of how many patients are enrolled in each of these studies? How many patients' worth of data might we see for non- small cell as well as the other ones that we're expecting like endometrial in the second half of this year?

Yes. Happy to respond to that. So I think what we said is that we're going to share data by the end of the year. We will provide that information as part of those updates. I don't think that we will predefine at which patient number we would be doing that.

Our next question comes from David Dai with UBS.

So first question is just around thinking about the patient ramp for Amtagvi, based on current run rate, we calculated that the patients need to grow about [ 26 to 32 ] patients per quarter over the next couple of quarters to hit the midpoint of the guidance. Could you just provide any detail that you're on track to hit that patient growth? And secondly, on the ATCs, you have 80 right now. How many of these ATCs are newly activated compared to last quarter? And how many are still being activated?

So one of the things -- so I'll take that question [ with it ]. As far as the patient ramp, just to let you know, the $250 million to $300 million is combined revenue between Proleukin and Amtagvi. So on the math there, those numbers aren't [ $26 million to $30 million ] per quarter each quarter to grow to hit those numbers in the range. But we are confident that we are tracking towards that range and seeing Amtagvi demand continue to strengthen and grow towards the end of the year as well as Proleukin, as we mentioned before, having all 3 wholesalers starting to order very soon, 2 of those doing so currently in the main channel give us our path forward to hit within that guidance. The second question regarding how many new ATCs, again, we're focusing on quality, not quantity. We have opened several ATCs in the last quarter with it. Each one of those has been carefully vetted to have referral patterns in place so they can get earlier patients in there. And we are seeing -- and I'm not going to give the exact numbers here. We are seeing a substantial number of patients coming in the queue, both that have been already infused by them, but also to where they are enrolling in there to have manufacturing done for Amtagvi for their patients.

Thank you. I'm showing no further questions at this time. I would now like to turn it back to Fred Vogt, Interim Chief Executive Officer and President, for closing remarks.

Thank you, again, for joining the Iovance Biotherapeutics Second Quarter 2025 Financial Results and Corporate Update Conference Call. We look forward to providing future updates on our growing commercial and clinical portfolio, including our Amtagvi real- world data presentation and planned data updates from our long endometrial and next-generation TIL studies. We are motivated by the stories we continue to hear about the patients who benefit from Iovance TIL cell therapies in our clinical trials and in the commercial setting. I'm confident that Iovance will remain the global leader in innovating, developing and delivering current and future generations of TIL cell therapies for patients with cancer. As always, we are thankful to the patients, health care 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.

This concludes today's conference call. Thank you for participating. You may now disconnect.