Iovance Biotherapeutics Inc

NASDAQ:IOVA

Earnings Call Transcript 2019-Q1

[Operator]

Good afternoon, and welcome to the Iovance Biotherapeutics First Quarter 2019 Financial Results Conference Call. All participants are in a listen-only mode. Following the formal remarks, we will open the call up for your questions. Please be advised that the call is being recorded at the Company's request.

Now I would like to turn the conference over to Tim Morris, Chief Financial Officer at Iovance. Sir, please go ahead.

[Tim Morris, Chief Financial Officer]

Thank you, Angella. Good afternoon, everyone. Thank you for joining us today. With me on the call is Kelly DiTrapani, Vice President of Medical Affairs; and Michael Swartzburg, Vice President of Finance. We'd like to note that Maria Fardis, our Chief Executive Officer, is unfortunately unavailable to participate in today's call due to a last-minute trip involving the health of a relative, and we are extending our well wishes to her and her family at this time.

This afternoon, we issued a press release that you can find on our website at iovance.com, which includes the financial results for the first quarter 2019, as well as the company update.

Before we start, I'd like to remind everyone that statements made during this conference call will include forward-looking statements regarding Iovance's goals, business focus, business plans, clinical trial plans or results, potential future applications of our technologies, manufacturing capabilities, regulatory feedback and guidance, licensing and collaboration agreements, future updates and cash guidance.

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.

Iovance is off to a strong start to the year in the first quarter with great progress on multiple fronts. Since our last call, we continue to take great strides towards registration of TIL therapy and have made excellent progress in recent months. I'd like to take a moment to highlight two recent achievements: First, we dosed the first patient in Cohort 4, the pivotal cohort of our melanoma study, bringing us one step closer to filing for regulatory approval of lifileucel, which is planned for late 2020.

Second, two data-related abstracts have been accepted for presentation at the American Society of Clinical Oncology or ASCO Annual Meeting, one from the melanoma trial and one from the cervical trial. The data will be presented June 1 and includes updates from Cohort 2 of our melanoma program and data from our ongoing cervical study.

The melanoma data will include an update beyond the SITC presentation given last November. The cervical update will include only Gen 2 patients. This ASCO presentation is the first time data from the cervical study is being presented at a medical conference.

Since our last call, additional updates from the quarter are as follows: We have progressed with our clinical development programs, achieved significant regulatory milestones, advanced our forward-looking and collaborative projects, and further reinforced our corporate infrastructure.

The pivotal study of our lead program, lifileucel and metastatic melanoma, is progressing well. The study, innovaTIL-01, is on track for full enrollment of the pivotal study cohort, Cohort 4, by early 2020. As a potential onetime treatment that has demonstrated an Objective Response or ORR of 37%, lifileucel has significant promise to improve on current standards of care for these patients. We continue to work toward filing for regulatory approval by the end of 2020.

For the cervical program, we are continuing to enroll patients on our global Phase 2 trial of LN-145 for the treatment of patients with advanced cervical cancer. In anticipation of a meeting to discuss a path to registration with the FDA, we have amended this cervical protocol. The sample size has been increased to 59. In addition, we have modified the primary endpoint, which remains as ORR, but as determined by Blinded Independent Review Committee.

As noted at ASCO, we will present updated interim results from this study. We see significant potential for TIL therapy as monotherapy or as a component of combination treatment and continue to enroll PD-1 naive patients with melanoma or head and neck cancer in a Basket study with LN-145 in combination with pembrolizumab.

In addition, we have updated our clinical development plans to reflect the advancing landscape for treatment options for non-small cell lung cancer, including adding an arm to the IOV-COM-202 study or Basket study. The new arm will allow for treatment of PD-1 and PDL-1 naive lung cancer patients in combination with 145 and pembro. The studies are being conducted at multiple sites in the United States and Europe.

In the first quarter, LN-145 received fast-track designation from the FDA for the treatment of advanced cervical cancer. We are encouraged for the recognition of the promise of TIL therapy that comes with this designation. We recently presented analysis of data from Cohort 2 of our study of lifileucel in the treatment of melanoma at the American Association of Cancer Research or AACR Annual Meeting.

Results from an analysis of the persisting T cell clones, circulating 42 days following infusion as compared to the initial TIL product demonstrated two phenomenon: First that TIL from all of the evaluated patients in Cohort 2 are persisting in circulation at day 42; and second that each patient has unique TIL product with almost no overlap between patients for expanding clones.

These observations provide additional support for potential use of a polyclonal product, such as Iovance bulk TIL in the treatment of high mutational load tumors. The polyclonal approach of TIL therapy is an important point, a differentiation for TIL among other cancer cell therapies and underscores its promise for the treatment of cancers with high mutational load, including many types of solid tumors.

We are working with researchers at Roswell Park Cancer Center to generate data from the 22-day, Gen 2 manufacturing process of TIL from patient-derived bladder cancer tissue. These data will be presented later this month at an AACR- sponsored conference on bladder cancer. The partnership with Roswell Park reflects our productive working relationships with leading research institutions to fully explore the opportunities for TIL therapy as a potential treatment option in diverse areas.

Our other collaborations include clinical studies in sarcoma, ovarian cancer and pancreatic cancer. In addition, we continue to work towards the filing of an IND for peripheral blood lymphocytes or PBL or hematological indications later in the year.

I'd like to briefly note that we continue to work to reinforce our corporate infrastructure and this month, opened a satellite office in Philadelphia to house various functions, including members from the Iovance legal and manufacturing teams.

Finally, I'd like to highlight the strength of our financial resources, which we expect to provide sufficient operating capital to complete our pivotal study in advanced melanoma and to file for regulatory approval of lifileucel in late 2020. And now I'd like to turn the call over to Michael for a brief discussion of our financial results.

[Michael Swartzburg, Vice President-Finance]

Thank you, Tim. Our quarterly news results released contains details of our financial results. Rather than read through all these details, my comments will focus on a few highlights. Net loss for the quarter ended March 31, 2019 was $37 million or a loss of $0.30 per share compared to a net loss of $26.5 million or $0.31 per share for the quarter ended March 31, 2018.

The increase in net loss was due to higher R&D and G&A expenses from increases in headcount and related compensation and stock-based compensation, higher manufacturing costs and clinical trial expenses as compared to the first quarter of last year.

At March 31, 2019, the company held $440 million in cash, cash equivalents and short-term investments compared to $468.5 million at December 31, 2018 a decrease of $28.5 million for the quarter.

I would like to turn the call back to Tim for an update on upcoming events.

[Tim Morris, Chief Financial Officer]

Thank you, Michael. In May and June, we will participate in and present at the following investor and scientific conferences: The New York Academy of Sciences, a frontier in cancer immunotherapy in New York; the Oppenheimer Oncology Insight Summit in New York; the AACR Bladder Cancer Conference: Transforming the Field in Denver; the B. Riley FBR Investor Conference in Beverly Hills; ASCO in Chicago; and the Jefferies Healthcare Conference in New York.

Now, I'd like to turn the call over to the operator to answer your question.

[Operator]

[Operator Instructions] Our first question comes from the line of Mark Breidenbach with Oppenheimer. Caller your line is open.

[Mark Breidenbach, Oppenheimer]

Thanks for taking the questions and Tim congrats on the progress. Please send my regards to Maria. Congrats on getting the ASCO abstracts accepted. I guess I'm wondering if you can give us a sense for how many patients worth of cervical data we might see who have received the Gen 2 version of the TIL? And what the timeline might be before we could hear a response or receive guidance from the FDA regarding registrational requirements in cervical?

[Tim Morris, Chief Financial Officer]

Sure, Mark. As you know last October, we reported data in 15 patients. That was a mix of Gen 1 and Gen 2. Keep in mind that, that cervical study started in September of 2017, and we switched everyone to Gen 2 starting early in 2018. So you are going to get some of those patients. We haven't given a specific number for the ASCO abstract, but I would say, it's a meaningful amount of patients that will be, and they will be all Gen 2 patients.

From a timing standpoint, I think we've guided that we should be able to give a regulatory update, probably midyear or so. We do want to take some of this data, obviously, that will be presented at ASCO and have a discussion with the agency to talk about a registration path forward. We do believe some of the learnings that we took from melanoma, including modification of the primary end point, including BIRC and increase in the sample size, will help us with that discussion.

So let's stay tuned for an update, probably, midyear on the regulatory pathway for cervical.

[Mark Breidenbach, Oppenheimer]

Okay, fair enough. Can you just give us kind of a status report on the Basket trial? We know there have been some changes to that, so I was trying to get a sense for whether or not any of the cohorts are actively enrolling right now or are we still in sort of patient screening and TIL production mode.

[Tim Morris, Chief Financial Officer]

Yes. That's a fair question. Actually, I think we've picked up some activity in that. One of the – we did get three abstracts accepted at ASCO. One of them is a tip for the Basket study. So I think that helps. We have opened a fair number of sites in New York for that as well. I think we have probably over 15 sites between the U.S. and Europe for the Basket study. We do have patients in screening. We haven't quite infused anyone just yet. We obviously would press release that. But I sense that there's a lot of good activity around Baskets and maybe a little more enthusiasm. I think some of the data points will help as people recognize TIL therapy in multiple tumor types. So stay tuned for that one.

I don't have any patients just yet. But – and as you mentioned, we are going to add another arm to that. It's going to look for lung cancer as a replacement to the prior lung study. So stay tuned for updates on the Basket, but it looks good for now.

[Mark Breidenbach, Oppenheimer]

Okay. And any partner toward selection of a manufacturing site?

[Tim Morris, Chief Financial Officer]

Yes. We will provide an update here before the end of the second quarter, probably sooner rather than later. We have selected the site. We've narrowed down and are kind of in the final stages of documentation and negotiations. So stay tuned for that in the near-term.

[Mark Breidenbach, Oppenheimer]

All right. You're keeping us on the edge of our seats. Okay, thanks for taking the questions and congrats, again.

[Tim Morris, Chief Financial Officer]

Thank you, Mark.

[Operator]

And your next question comes from the line of Biren Amin with Jefferies. Caller, please go ahead.

[Biren Amin, Jefferies]

Yes. Hi, thanks for taking my questions. And please convey my warmest regards to Maria and her family. So maybe – yes, I just wanted to start with the cervical study. When you say Gen 2, Tim, is it strictly PD-1 naïve, one that's pretty far in line?

[Tim Morris, Chief Financial Officer]

Well, it's definitely all Gen 2. That was one exclusion. As you know, we did previously amend the protocol to exclude PD-1 and to limit to three or less lines of treatment. There may have been some patients that were included on Gen 2 that may have had prior PD-1 treatment, but I think that detail will come out at the abstract or at the presentation.

So there may or may not be – it won't be exclusively no-PD-1 treatment. I suspect there may be a remainder patient in there. But given the efficacy of PD-1 in this indication, we don't think it will make a difference, frankly.

[Biren Amin, Jefferies]

Got it. And then on the bladder cancer data, what can we expect? Is this efficacy data that's going to be presented? And can you maybe describe patient background history, number of patients that we should expect at this meeting in Denver?

[Tim Morris, Chief Financial Officer]

No. So this is a preclinical poster, Biren. This is prior to doing any clinical activity. We usually discuss can we grow TIL and what does that TIL look like. We have presented several these kind of papers over the years I think starting back in 2016. So this one is specifically working in collaboration with Roswell Park, using our manufacturing progress – or process that we're able to take and grow TIL from bladder cancer patient that came from Roswell Park. Correct, Kelly?

[Kelly DiTrapani, Vice President-Medical Affairs]

Correct.

[Tim Morris, Chief Financial Officer]

Yes. So this is a preclinical – but it gives you a little bit of attributes and talks about what that TIL will look like. And really as a precursor to a full-blown IST involving bladder cancer at Roswell Park.

[Biren Amin, Jefferies]

Got it. And then on the melanoma Cohort 2, I know the company was going to do a central review. When can we expect data from that analysis?

[Tim Morris, Chief Financial Officer]

Yes. You're right. We are in the process of doing a central review. I think the timeline may have been pushed out slightly because we wanted to make sure that the same design that – in the same group that was going to be used for the central read for Cohort 4 was going to be same as Cohort 2. So we're in process of doing that right now. It takes a little bit longer than one would like, but as soon as we have something there, we're happy to talk about it. But it won't be included in the ASCO abstracts or the ASCO presentation, but it will be done sometime clearly before the end of the year.

[Biren Amin, Jefferies]

Got it. Thank you.

[Tim Morris, Chief Financial Officer]

Sure. Thank you, Biren.

[Operator]

And your next question comes from the line of Boris Peaker with Cowen. Caller, your line is open.

[Boris Peaker, Cowen]

Great. Quick couple of questions. On ASCO, the Cohort 2, can you remind us what specific new data we anticipate there that we haven't seen? Would there be more patients? Or is this just maturation just of existing patients?

[Tim Morris, Chief Financial Officer]

Yes, Boris, thanks for joining today. So really, you're going to see two things. You're going to see additional patients from the 47 we presented at SITC last year. The trial was set to enroll up to 60. And anyone that was in the queue and had consented when we released the data last fall will be in there. So the abstract that will come out next week won't quite have the full 60, but we clearly expect that ASCO will have the full 60.

So you'll get additional patients. Obviously, you'll get any additional responses and you should also get, as you mentioned, the maturation of the data for those in the data that we had presented previously. So swimlanes and waterfalls and I don't know if we'll have a spider in there or not. But it should just be an update on those existing patients plus the new patients.

[Boris Peaker, Cowen]

Great. And also can you remind us when and how much IL-2 was administered to patients in Cohort 2? And will that be the same regimen or different in regards to IL-2 in the Cohort 4 currently enrolling?

[Tim Morris, Chief Financial Officer]

Yes. Kelly, why don't you go ahead?

[Kelly DiTrapani, Vice President-Medical Affairs]

Sure. The IL-2 is administered within 24 hours post the TIL infusion, and the patients receive up to six doses of IL-2 post TIL infusion. The data – the protocol is the same as that for the IL-2 in both Cohort 2 and Cohort 4 at the melanoma trial.

[Boris Peaker, Cowen]

Great, fantastic. And just my last question, you also believe in enrolling Cohort 4, which is kind of retreatment of Cohort 2. Can you comment on how many patients are actually in there? And when will we see those results?

[Tim Morris, Chief Financial Officer]

Are you asking about Cohort 3, Biren – sorry, Boris?

[Boris Peaker, Cowen]

Yes, Cohort 3. Exactly, yes.

[Tim Morris, Chief Financial Officer]

Yes. So we do have this retreatment cohort that remains open. We have treated a few patients in there. It's obviously not a registrational, it's probably more of a research. At some point, I almost think it's compassionate use. When there's a significant number of patients and some data, we would present that, but I wouldn't expect it anytime soon. Really the focus has been on the Cohort 2 and Cohort 4. Cohort 3 does remain open though.

[Boris Peaker, Cowen]

Great, thank you very much for taking my questions.

[Tim Morris, Chief Financial Officer]

Thank you for joining today, Boris.

[Operator]

And your next question comes from the line of Madhu Kumar with R.W. Baird. Caller, your line is open.

[Madhu Kumar, R.W. Baird]

Hey, Tim, thanks for taking my question. So thinking about the manufacturing of TILs, when you look at the process as it is today, how many of the steps that exist now do you guys believe could be fully automated?

[Tim Morris, Chief Financial Officer]

Madhu, that's a good question. As I think about it, I mean there's – it's a – when I look at the steps, and we have automated I think more of the steps on the back end, there's a question that whether you could automate those on the front end. And then the other question I have, if they're automated does it save you any time? So it's clearly something that we're working on.

There is clearly still needs to be I think some ability for a human to look at the cells and to make sure that they're growing properly and they frankly look right. I'm not sure how much of that you can be replaced. There may be some mechanical steps in terms of transferring media from vessel to vessel along the way. But in terms of what efficiencies you can gain from automation, you could always gain some.

We continue to look at that. I don't want to speculate as to the exact steps or what can be automated, actually not my department. But I know the team is working on it. We want to continue to improve and make that process very efficient. And as we do that, we'll let you guys know.

[Madhu Kumar, R.W. Baird]

So then also thinking on the question of process, has there been any discussion about kind of sampling pre even, say, frontline PD-1 treatment in melanoma for TIL so that they would be on and again to try to shorten the period of time kind of PD-1 failure to TIL administration?

[Tim Morris, Chief Financial Officer]

So let me make sure I answer your question. So you're suggesting we take resection prior to PD-1 treatment?

[Madhu Kumar, R.W. Baird]

Yes.

[Tim Morris, Chief Financial Officer]

Okay. Well, obviously, I think there's a lot of interest in looking at different ways to make the treatment better. And clearly, if we go back to some of the early work from Dr. Rosenberg, I mean he did have very nice results in pre-PD-1 patients. We obviously discussed a lot of that internally in terms of how do we make the TIL better. I mean, that's clearly one idea.

I think most of our focus still has been in terms of looking at the process itself and seeing if there are ways for certain tumor types to make the TIL more potent as evidenced by the collaboration we have with MD Anderson, looking at their process and also is their ways through the genetic modification programs we have or in the selection programs we have. So I think those are going to be our areas of focus right now. Clearly, our goal is to get these things through and approved, and then we want to open ourselves up to looking at newer lines of therapy, which could include what you're suggesting. But we don't have a definitive program that's going to actively look at that at the present time.

[Madhu Kumar, R.W. Baird]

And then kind of a factual question, I apologize if you addressed it earlier. The Roswell Park program, is that part of your like the recent NCI bladder cancer trial?

[Tim Morris, Chief Financial Officer]

Yes. So we've signed a collaboration with Roswell Park, I believe, last fall. And obviously, as part of that, the first step is to get a sample of tumor tissue and see if it can grow a TIL. You can do that if you can, and we'll find out with the abstract, then filing an IND and actually running it patients is the next logical step. So yes, it is all part of the collaboration with Roswell Park for bladder.

[Madhu Kumar, R.W. Baird]

So that's also part of the NCI trial as well?

[Tim Morris, Chief Financial Officer]

NCI – are you talking about the trial that just came on clin trials?

[Madhu Kumar, R.W. Baird]

Yes.

[Tim Morris, Chief Financial Officer]

Yes. We'll have to look and see. I think that should have been only – I wasn't aware of the NCI's component of that.

[Madhu Kumar, R.W. Baird]

Okay, thanks.

[Tim Morris, Chief Financial Officer]

We'll check that clin trial list and get back to you.

[Madhu Kumar, R.W. Baird]

Thank you very much.

[Tim Morris, Chief Financial Officer]

Sure.

[Operator]

And your final question comes from the line of Joe Catanzaro with Piper Jaffray. Caller, please go ahead.

[Tim Morris, Chief Financial Officer]

Joe? Did we lose him, operator?

[Operator]

And Joe, your line is open.

[Tim Morris, Chief Financial Officer]

Okay. Well, I guess if Joe's not on, then we can probably move on.

[Operator]

And as we have no more questions, we would now like to turn – return the call to Tim Morris for closing remarks.

[Tim Morris, Chief Financial Officer]

Very good. So thank you, operator. We're glad we've had the opportunity to reflect on our progress toward bringing TIL therapy to patients. We're in clear need of new treatment options. Our work is possible. Thanks to the value contributions of many individuals, committed shareholders, hard working employees, clinical investigators, collaboration partners and patients who motivate our efforts. We look forward to realizing the shared vision of these individuals. Finally, we'd like to thank those for joining us on the call today and look forward to providing further updates in the months ahead.

[Operator]

Ladies and gentlemen, thank you for your participation in today's conference. This concludes today's program, and we hope you all have a pleasant day. You may now disconnect.

[Tim Morris, Chief Financial Officer]

Thank you.