Iovance Biotherapeutics Inc

NASDAQ:IOVA

Earnings Call Analysis

Strategic Launch and Financial Outlook Update

The company is gearing up for the launch of Lifileucel, with about 50 treatment centers expected to be ready within 90 days of PDUFA date, given the progress in onboarding centers. Strong reimbursement and high commercial insurance coverage, similar to CAR-T therapies, are expected. Lifileucel's pricing is anticipated to align with the higher range of existing CAR-T treatments, enhancing revenue prospects. Despite the absence of revenues for the quarters ended September 30, 2023, the company anticipates sufficient revenue from Lifileucel and Proleukin sales to maintain operations into 2025. The company's cash position remains solid, and they forecast careful expense management with a cash burn guidance of $320 million to $340 million for the year 2023, barring one-time expenses.

Enhancing Treatment Access and Demand for Lifileucel

The company has been actively onboarding Authorized Treatment Centers (ATCs) to increase access to Lifileucel, a promising treatment for advanced melanoma. Originally aiming to onboard 40 ATCs within 90 days post-PDUFA date, the goal has been updated to approximately 50 centers, indicating increased commitment and a surge in demand for Lifileucel. Additionally, they expect solid reimbursement rates from payers, having engaged with key national and regional players to secure timely access upon approval. These proactive discussions are based on the clinical value and the absence of alternative treatments for advanced melanoma, indicating a strong payer mix favoring commercially insured populations. A further financial advantage is observed in the potential for pricing Lifileucel within the higher range of CAR-T cell therapies, additionally benefited by sales of Proleukin for each patient treated.

Progress in Pipeline and Preparations for Potential Approvals

The company's robust pipeline includes Lifileucel designed as a one-time advanced melanoma therapy, with clinical trials demonstrating durable efficacy. The TILVANCE-301 trial is underway to support accelerated and full approvals in frontline advanced melanoma. Similarly, the positive momentum in non-small cell lung cancer with the LUN-202 trial, based on preliminary data showing significant response rates, paves the way for a potential accelerated approval submission. Plans are also in place for a Phase III trial expected to boost therapy in the frontline setting. Additionally, a new TIL program is being launched to address endometrial cancer, aiming to start a study in the first half of 2024, which is significant for patients with limited treatment options after failing initial therapies.

Solid Financial Footing and a Continued Focus on Streamlining

The company holds a strong cash position of $427.8 million, with a net loss for the third quarter of $469,000. Active management of operating expenses is emphasized, with a guidance of a 2024 cash burn ranging from $320 million to $340 million, excluding one-time expenses. This prudent approach alongside anticipated revenue from Lifileucel and Proleukin sales is expected to sustain operations into 2025. Moreover, investment in research and development has increased, funding new clinical trials and expanding the R&D team. Efforts to contain selling, general, and administrative expenses have proved successful, with a minor decrease in these costs as evidenced in the third quarter of 2023.

Earnings Call Transcript 2023-Q3

[Operator]

Welcome to the Iovance Biotherapeutics Third Quarter and Year-to-Date 2023 Financial Results and Corporate Update Conference Call. My name is Abigail, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Sara Pellegrino, Senior Vice President, Investor Relations and Corporate Communications at Iovance. Sarah, you may begin.

[Sara Pellegrino, executive]

Thank you, Operator. Good afternoon, and thank you for joining us. Speaking on today's call, we have Dr. Fred Vogt, our Interim President and Chief Executive Officer; Dr. Igor Bilinsky, our Chief Operating Officer; Jim Ziegler, Executive Vice President, Commercial; Dr. Friedrich Finckenstein, our Chief Medical Officer; and Jean-Marc Bellemin, our Chief Financial Officer; Dr. Brian Gastman, Executive Vice President, Medical Affairs; and Dr. Raj Puri, our Executive Vice President, Regulatory Strategy and Translational Medicine are available for the Q&A session. This afternoon, we issued a press release that can be found on our corporate website at iovance.com, which includes the financial results for the 3 and 9 months ended on September 30, 2023, as well as recent corporate updates.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, pre-commercial activities, clinical trials and results regulatory interactions, plans and strategies, research and preclinical activities, potential future applications of our technologies, manufacturing capabilities, regulatory feedback and guidance, payer interactions, licenses and collaboration, 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.

[Frederick Vogt, executive]

Thank you, Sara, and good afternoon, everyone. I'm pleased to highlight several recent and important milestones Iovance. We continue to make significant progress towards U.S. commercialization while pursuing opportunities for our TIL therapies in additional geographies in solid tumor cancers. Our top priority is to secure FDA approval on launch Lifileucel in the U.S., a nuclease treatment for advanced melanoma patients with limited options.Overall, the BLA process continues on the priority review with several positive status updates. We remain engaged with the FDA to complete the review as efficiently as possible. As a reminder, the FDA reiterated in September that there are no major review issues and no plans to hold an advisory committee meeting. In addition, all pre-approval inspections of all clinical sites and internal and external manufacturing and testing facilities have been successfully completed. The FDA has also engaged and has no concerns on the status of the TILVANCE-301 confirmatory trial, which remains on track to be well underway by the PDUFA date. We appreciate the FDA review team's efforts to accelerate the remaining review. We are confident in the potential for Lifileucel to redefine the treatment paradigm for these patients who have no approved options after current standard of care.For the strength of our clinical data, manufacturing capabilities and commercial readiness efforts, Iovance is ready to rapidly serve the U.S. melanoma community immediately following approval, including the potential scenario for approval earlier than the February 24, 2024, PDUFA date.Beyond the U.S., we plan to submit additional marketing applications for Lifileucel in Europe and other geographies. Based on positive feedback for the European Medicines Agency on cohorts 2 and 4 of the C-14401 clinical trial, we plan to submit a marketing authorization application in the first half of 2024, with a potential European launch in 2025.We are also engaged with regulatory authorities in the United Kingdom and Canada. We plan to submit marketing applications in both countries in the second half of next year, again, with potential launches in 2025. Key markets such as Germany, France and the U.K. have mechanisms for early access and reimbursement that can begin to drive significant additional near-term revenue by the end of 2025.Next year, we expect to have additional regulatory updates about our expansion plans for Lifileucel in Australia and other countries with a significant number of advanced melanoma patients. Collectively, the advanced melanoma population in Germany, France, the U.K., Canada is slightly larger than the U.S. patient population with the same unmet medical need. Our geographic expansion when complete, can more than double the total addressable patient population for Lifileucel in advanced melanoma. We plan to leverage existing resources to serve the melanoma community in these new geographies without incurring significant additional expenses.For example, our Iovance Cell Therapy Center, or ICTC, has sufficient capacity for these new countries, and we already have an existing options in Amsterdam and field medical support in the region.As we prepare to launch Lifileucel, we are also integrating Proleukin, a currently marketed IL-2 product used as part of TIL therapy regimen. By owning Proleukin, we can offer alongside Lifileucel and have full control of the IL-2 supply chain. We also expect to lower clinical trial expenses and future costs that goes with Lifileucel.Beyond our regulatory and commercial readiness activities, our robust TIL therapy pipeline continues to advance with 7 active clinical trials. These include 2 registrational trials, Iovance -- TILVANCE-301 in frontline melanoma and LUN-202 in previously treated advanced lung cancer, which Friedrich will highlight in a moment. Completing enrollment in LUN-202 in 2024 is a top priority towards a potential supplemental BLA filing. Additional clinical trials include the IOV-COM-202 trial in solid tumors and our first in-human trial of our genetically modified cell therapy IOV-4001.Lastly, we are excited to introduce a new Iovance cell therapy program in endometrial cancer. Checkpoint inhibitors are moving into earlier lines of therapy, leaving an unmet medical need for patients who progress more after immunotherapy and chemotherapy. Friedrich will provide more details on this program later in this call.Turning to our organization. We have more than 500 people with experience in developing and commercializing oncology and cell and gene therapy products. They are ready for our initial U.S. launch ex-U.S. expansion and ongoing pipeline developments. We have recently completed headcount growth and significant onetime investments in commercial manufacturing readiness activities to prepare for launch and expand our pipeline. Following these onetime investments in strategic portfolio prioritization, we can reduce quarterly and annual operating expenses in the remainder of 2023 and full year 2024, while continuing all key clinical programs and internal manufacturing capabilities.In addition, our September 30 cash position of roughly $428 million is expected to fund our operating plan into 2025. Jean-Marc will provide additional color on the expense guidance and cash runway assumptions on today's call. We are excited about the near-term future at Iovance as we advance and broaden our mission to be the global leader in innovating, developing and delivering TIL therapies for people with cancer across multiple solid tumors. I look forward to addressing your questions later in this call. I will now ask Igor to present our manufacturing updates.

[Igor Bilinsky, executive]

Thank you, Fred. We are committed to operational excellence and to date have provided TIL therapy to more than 600 patients with the consistent manufacturing success rate of more than 90%. As part of the BLA review process, the FDA completed successful pre-licensing sections of our Iovance Cell Therapy Center facility or ICTC, and our contract manufacturer's facility. Both sites are prepared with sufficient capacity and staffing to supply our commercial launch and clinical trials. Our manufacturing network strategy supports our vision to establish TIL therapy as the next paradigm shifting course of cancer therapy in the U.S. and beyond. The ICTC is currently built to supply TIL products for more than 2,000 patients annually in the U.S. and our planned geographic expansion. By building out additional existing shelf space, ICTC may ultimately supply TIL products for more than 5,000 patients annually. Longer term, our vision is to build capacity for more than 10,000 patients annually by adding new facilities as well as streamlining and automating manufacturing processes.Intellectual property or IP is also a critical component at Iovance. We currently only 60 granted or allowed U.S. and international patents, including Gen 2 patent rights that we expect to provide exclusivity into 2038. Extensive detail on Iovance owned IP is available on our corporate website and within our annual report on Form 10-K.I would now like to hand the call to Jim Ziegler to highlight our commercial launch preparations. Jim?

[James Ziegler, executive]

Thank you, Igor. At Iovance, we have the potential to transform the practice of medicine in advanced melanoma and additional solid tumors. In the U.S., approximately 8,000 people die of melanoma annually, and the World Health Organization reports higher mortality in Europe. Lifileucel has the potential to be standard of care for patients who have no currently approved treatment options after standard of care frontline therapy. We have a sense of urgency to deliver Lifileucel to these advanced melanoma patients upon approval. Our commercial and cross-functional teams are on track as we approach our PDUFA date. Today, I will highlight onboarding for our Authorized Treatment Centers or ATCs, payer engagement and commercial operational readiness activities. First, onboarding is a strong indication of ATC commitment and Lifileucel demand. Today's press release provided our first status update on ATC onboarding. Approximately 30 centers have completed preapproval onboarding steps to establish their TIL service line capabilities. These centers are educated in all aspects of the Lifileucel treatment regimen with staff and processes to begin treating patients pending the approval.Previously, we shared our goal to onboard 40 ATCs within 90 days of the PDUFA date. Based on our onboarding progress, we now expect to onboard approximately 50 centers within 90 days of the PDUFA date. We are also planning a disciplined approach to organize and schedule each ATC for their first treatments with full Iovance support. We believe a positive initial experience will drive long-term success and peak revenues.Reimbursement is also essential for patient access and provider adoption. Our market access team continues to engage the key national and regional payers to accelerate timely access and appropriate reimbursement for Lifileucel upon approval. We believe payers appreciate the high unmet need, lack of treatment options and clinical value of Lifileucel in advanced melanoma. We expect strong reimbursement for Lifileucel with a payer mix that includes a favorable commercially insured population.More than 3/4 of advanced melanoma patients are currently insured through commercial, Medicare Advantage and Medicare IPPS exempt segment. Based on our payer interactions, we expect coverage similar to CAR-Ts requiring prior authorization with coverage consistent with label, medical coverage policies issued within about 90 to 180 days and single-case agreements for commercially insured patients.Although pricing will be disclosed after approval, we believe the Lifileucel value proposition supports pricing in the higher range of CAR-T cell therapies. The CAR-T prices range from $424,000 to $508,000 based on current and reported price increases with additional price increases expected in early 2024. In addition to Lifileucel, we will receive incremental revenue from the sales of Proleukin for each patient. As a reminder, revenue recognition for Lifileucel occurs upon infusion like other cell therapies.As we approach the U.S. launch, I would like to highlight the extensive cross-functional launch preparations underway. Our commercial and cross-functional teams are on track as we approach our PDUFA date, and we remain confident in our ability to deliver a successful launch.I will now pass the call to Friedrich Finckenstein, our Chief Medical Officer, to highlight our clinical progress.

[Friedrich Graf Finckenstein, executive]

Thank you, Jim. This afternoon's press release highlighted several pipeline updates. On the call today, I would like to focus on our recent data presentations, which are available on our corporate website as well as selected registrational programs in frontline advanced melanoma and non-small cell lung cancer. I will also discuss our new TIL program in endometrial cancer. We are pleased that several recent posters and presentations from our C-144-01 trial continue to support the potential benefit of Lifileucel as a onetime treatment that is differentiated from other immunotherapies for advanced melanoma. In October, during the European Society for Medical Oncology or ESMO Congress and at this week's Society for Melanoma Research or SMR, we highlight clinically meaningful and durable activity for Lifileucel from a subgroup analysis of patients with a rare and difficult-to-treat mucosal melanoma subtype.During the society of the immunotherapy of cancer, or SITC annual meeting last week, we highlighted the durable efficacy shown in a now 4-year analysis of pooled cohorts 2 and 4 of the C-144-01 trial. Our poster reported the longest follow-up data on Lifileucel treatment outcomes in the largest population of patients with anti-PD-1 refractory advanced melanoma treated with TIL therapy. Our registrational trials continue to advance in additional indications.TILVANCE-301 is designed to support accelerated and full approvals of Lifileucel in combination with Pembrolizumab in frontline advanced melanoma. This randomized trial remains on track to be well underway at the time of potential approval and is designed as the confirmatory trial to support full approval for Lifileucel in post-anti-PD-1 advanced melanoma. We continue to randomize patients and activate global sites in the TILVANCE-301 in key geographies with a large presence of melanoma patients and the potential for strong enrollment. We recently activated new sites in the U.S. and the first site in Australia. We also have regulatory clearances to open sites in the United Kingdom and Canada.In non-small cell lung cancer, we have also made significant progress with our registrational strategy. IOV-LUN-202 is our registrational single-arm Phase II trial in post anti-PD-1 lung cancer. Following the positive preliminary data analysis from LUN-202, physician interest and momentum for center participation is strong and remain actively activated with the sites. We also have FDA regulatory feedback that the trial design may be acceptable for an accelerated approval of TIL therapy and post anti-PD-1 non-small cell lung cancer. The preliminary analysis included data from the registrational population in cohorts 1 and 2, which enroll EGFR, ROS, or ALK mutation negative patients who have progressed on or after chemotherapy and anti-PD-1 therapy. 6 patients had a confirmed objective response, representing an ORR of 26.1%. All 6 responses, including 1 complete response and 5 partial responses remained ongoing at the time of the data analysis and ranged from 1.4 plus to 9.7 last month.We remain on track to complete enrollment in LUN-202 in the second half of 2024. Based on this trial, we intend to submit a supplemental BLA for U.S. accelerated approval in post anti-PD-1 non-small cell lung cancer. We are proposing a Phase III registrational trial in frontline lung cancer, which is intended to serve as the confirmatory trial for full approval in the post anti-PD-1 setting and to support an approval in frontline treatment setting.We plan to meet with FDA early next year to discuss the Phase III registrational trial, where our goal is to improve frontline non-small cell lung cancer therapy by adding TIL therapy to standard of care Pembrolizumab maintenance therapy administered after completion of the initial chemo immunotherapy. Our confidence in this frontline trial design is supported by the encouraging responses and response durations that we have observed with the TIL Pembrolizumab combination compared to standard of care benchmarks even without chemotherapy.Turning toward our new program in endometrial cancer. As Fred mentioned, we are starting an Iovance TIL therapy program in endometrial cancer. The standard of care frontline treatment is shifting, and there is a lack of approved treatment options for patients who progress on or after immune checkpoint inhibitor containing treatment regimens. Analogous to other tumor types, our onetime TIL therapy may offer benefit in this setting. Based on the TIL mechanism of action, the benefit of TIL therapy is likely to extend across patients with tumors that are mismatched repair mechanism deficient and proficient, and our clinical program will include patients from both subgroups.We look forward to providing more details as we work towards initiating the study in the first half of 2024. I am available during the question-and-answer session. For now, I will hand the call over to Jean-Marc to discuss our year-to-date 2023 financial results.

[Jean-Marc Bellemin, executive]

Thank you, Friedrich. I will summarize the high-level financial results for the 3 and 9 months ended on September 30, 2023. More details can be found in this afternoon's press release as well as in our SEC filings. Beginning with the balance sheet. Iovance had $427.8 million in cash, cash equivalents, investments and restricted cash as of September 30, 2023 compared to $478.3 million as of December 31, 2022. The current cash position includes approximately [indiscernible] $203.2 million in combined net proceeds from our public offering in July 2023 and the at-the-market equity financing facility. We expect our cash position and anticipated 2024 revenue from Lifileucel and Proleukin to be sufficient to fund the current and planned operation into 2025.As Fred described earlier, we continue to internally prioritize and optimize our operation and completed many onetime investments. As we carefully manage our operating expenses, we are guiding towards 2024 cash burn in the range of $320 million to $340 million, excluding onetime expenses, and we'll continue to look for opportunities to further streamline spending and drive revenue.Transitioning to financial results. Net loss for the third quarter ended September 30, 2023, was $113.8 million or $0.46 per share compared to a net loss of $99.6 million or $0.63 per share for the third quarter ended September 30, 2022. Net loss for the 9 months ended September 30, 2023, was $327.7 million or $1.44 per share compared to a net loss of $290.6 million or $1.80 per share from the same period ended September 30, 2022. We began recording revenue from product sales following the Proleukin acquisition in May 2023 and anticipate significant revenue after the launch of Lifileucel.Revenue for the third quarter and 9 months ended September 30, 2023, was $469,000 and $707,000, respectively. There were no revenue for the third quarter and 9 months ended September 30, 2022. Cost of sales for the third quarter and 9 months ended September 30, 2023, was $4.3 million and $6.4 million, respectively. The cost of sales includes cost of inventory associated with sales of Proleukin as well as $4 million and $5.9 million, respectively, of noncash amortization expenses of the required intangible assets of developed technology in the 3 and 9 months periods ended September 30, 2023. There was no cost of revenues for the third quarter and 9 months ended September 30, 2022.Research and development expenses were $87.5 million for the third quarter ended September 30, 2023, an increase of $15 million compared to $72.5 million for the same period ended September 30, 2022. Research and development expenses were $256.6 million for the 9 months ended September 30, 2023, an increase of $42.4 million compared to $214.2 million for the same period ended September 30, 2022. The increases in research and development expenses in the third quarter and the 9 months ended September 30, 2023, over the prior year periods were primarily attributable to growth of the internal research and development team as well as higher costs related to facilities and the initiation of new clinical trials, including the Phase III TILVANCE trial, which were partially offset by a decrease in stock-based compensation expense.Selling, general and administrative expenses were $27.0 million for the third quarter ended September 30, 2023, a decrease of $0.9 million compared to $27.9 million for the same period ended September 30, 2022. Selling, general and administrative expenses were $77.0 million for the 9 months ended September 30, 2023, a decrease of $0.6 million compared to $77.6 million for the same period ended September 30, 2020. The decrease in selling, general and administrative expenses in the third quarter and the 9 months ended September 30, '23 compared to prior year periods was primarily attributable to the decrease in stock-based compensation expenses and other costs related to the timing of spend compared to the prior year period, including marketing, advertising and legal costs, partially offset by costs associated with the growth in the overall business.As of September 30, 2023, there were approximately $255.8 million common share outstanding.Before handing the call back to the operator to kick off the Q&A session, I want to reiterate our 2020 cash burn guidance in the range of $320 million to $340 million, excluding onetime expenses, as we will carefully manage our operating expenses in the coming months and quarters.Operator, we can now start the Q&A session.

[Operator]

[Operator Instructions] Our first question comes from Peter Lawson with Barclays.

[Peter Lawson, analyst]

Just as we think about a potential E.U. filing, if you can talk about the impact of a single arm study on an E.U. approval and if that kind of changes the way you think about reimbursement as well in the E.U.? And then I've got a follow-up.

[Frederick Vogt, executive]

Sure, Peter. Yes. You're thinking of the CAR-T products and what they did to get approval there. And obviously, we have the TOVANCE-301 study already running, which could provide us that randomized controlled trial that we could use to -- and it will read out right around the time potentially where we could use it to drive reimbursement in Europe. So yes, that's correct. We think, as you know, there's early access programs in all the major countries. The single arm data should be good enough for that. EMA seems fine with a single-arm data. And then you get through the early access program and then TOVANCE is reading out and potentially you're on to longer-term public reimbursement programs in Europe.

[Peter Lawson, analyst]

And then I had a follow-up just around the number of authorized treatment centers that tend to increase. I'm just curious about what drove that increase, whether it was kind of demand-driven essentially or if it was the benefit of the FDA delay?

[Frederick Vogt, executive]

Jim, do you want to take this?

[James Ziegler, executive]

Hi Peter, it's Jim. Yes, it's a combination of both. There's a high sense of urgency and demand from our treatment centers. So we've had a few extra weeks, months to prepare, and we're just increasing the number. And we're very confident to share that number publicly because the demand is so high right now for these centers to be able to offer Lifileucel.

[Operator]

Our next question comes from Colleen Kusy with Baird.

[Colleen Hanley, analyst]

Congrats on all the progress and on the launch prep. So a clarifying question on the 30 centers who have completed the ATC preparation, theoretically, if Lifileucel were approved today, could those centers start preparing to dose a patient today or kind of what else needs to be done for those patients to start using Lifileucel once it's approved, once they're through the training?

[Frederick Vogt, executive]

Yes. Jim can answer this in more detail. Colleen, but yes, basically, these guys are ready to go. Jim, do you want to give a little bit more detail here?

[James Ziegler, executive]

Sure. Thanks, Colleen. Just real quickly, what we've done to date on the preapproval onboarding is, we worked this with the centers to develop their TIL service line, which includes the clinical end-to-end education and training with [ med-on ] surgeons, cell therapy. We've operationalized the tumor journey in terms of building out workflows, SOPs, coordination and procedures on all of the logistics from OR, chain of identity, chain of custody to product handling and logistics. And we've worked extensively on the reimbursement front. So when we say that these centers are ready to go, they're ready to go. The last step in all of this will be for us to use the final label, make sure that all of our training and initiatives are consistent with label. And then we'll roll out a very abbreviated update based upon the label and centers will be ready to enroll their first patients.

[Colleen Hanley, analyst]

And you had some commentary on the size and the mortality rate in some of the ex U.S. territories. Can you just talk a little bit more about the differences in the cell therapy market as you see it in Europe versus the U.S.? And talk about what the manufacturing plans will be in those regions?

[Frederick Vogt, executive]

Sure. The manufacturing plan we mentioned earlier, we're going to use our iCTC facility there. So I want to make it absolutely clear, we're not talking about building a new facility there right now. We're focused on using our existing facility that's already built out, efficient use of our capital. The CAR-T launches in Europe provide a pretty good yardstick for what's available there and what can be done in Europe. You can see from there's 6 CAR-T products that have been approved in Europe at this point in different jurisdictions and you've seen sales figures. You've seen from the European sales of these things that range anywhere from tens of millions up into the low hundreds of millions at this point. So we see this as a pretty good upside opportunity here. Again, it increases the market significantly. We've got more than 3,000 patients a year in Germany dying from melanoma right now and equally bad numbers in France and the U.K. and elsewhere. And then we've also got Canada in play here, and we're going to look at Australia as well as we've mentioned, too, we're well over 1,000 patients you've dying in Australia of melanoma. The demand for TIL therapy in these jurisdictions is very high. We have clinical sites there. We know the physicians very well, and we're very comfortable with launching the product there. We think it can be successful just like the CAR-Ts are.

[Operator]

Our next question comes from Yanan Zhu with Wells Fargo.

[Yanan Zhu, analyst]

Could you give us a sense of how the review is going? Have you had the late cycle meeting? Have you had any labeling discussions? And also, could you talk about your perception of the agency's resource -- the resources allocated to the review and whether the previous constraint has improved? And then I have a follow-up.

[Frederick Vogt, executive]

Raj, would you like to take Yanan's question? I think, Raj, is on the line.

[Raj Puri, executive]

Yes. I'll take that question, Fred. Thank you, Yanan, and thank you for the question. The review is coming along very well. We have been getting IRs and providing all the responses to the agency. Our late cycle meeting is planned. We will announce when that has happened. There are no other additional issues currently that the resource issues seem to be have been under control, and we are expecting that our BLA would be approved perhaps before the PDUFA date in January, sometimes in January, the PDUFA date is February 2024.

[Yanan Zhu, analyst]

And could you elaborate on the estimate of January? Is there anything for us to further understand here?

[Raj Puri, executive]

Yes. So the FDA likes to approve products with the unmet medical need, at least 4 to 6 weeks prior to PDUFA date, as they have done with -- on all CAR-T products and other products as well. So with that, keeping that in mind FDA will like to -- they like to approve the product sooner before the PDUFA date. So we are expecting the same for the Lifileucel.

[Yanan Zhu, analyst]

And then my follow-up is about the number of centers and manufacturing capacity. So great to hear that you have 30 centers virtually ready to go. And by the time of approval, I assume you might have additional centers ready to go. And the question is, would you have any capacity limit that you might place a cap on the number of manufacturing slots at each of these early centers? And my other question is whether you can foresee that you might onboard more than 50 by the time -- by 90 days after the approval? And would your capacity allow that?

[Frederick Vogt, executive]

Yes. Yanan, let me start then maybe Igor can help out here. Yes, obviously, you're aware of our facility. It's a very large facility. It's got capacity as built today for the 2,000-plus patients. FDA is the final decider capacity with [ TIL ] cell therapies. So we can't really say what's going on until we got the feedback from FDA as part of the approval process at the very end, we'll find out more about that. We did announce, as you saw, that we anticipate 50 ATCs within 9 days of PDUFA date. It's possible we can go beyond that. We have to see right now, that's a pretty large launch. It'd be the largest launch ever for cell therapy. So it's pretty aggressive. But let me turn it over to Igor for just some comments on the capacity and our ability to scale up between our own facilities as well as our contract manufacturer.

[Igor Bilinsky, executive]

Yes. Thanks, Fred, Yan. Thanks for the question. So first of all, as I mentioned earlier, the FDA completed pre-license inspections at both sites at our ICTC facility and contract manufacturing facility, both went very, very well, and both were successful. So both sides, our ICTC site and the contract manufacturer site are preparing for the launch and also producing clinical material. The exact capacity, as Fred mentioned, will be determined by what capacity the FDA allows. We've been hiring and training the personnel at what we have been and our contract manufacturing partner has been as well in preparation for launch. But again, the exact capacity of launch we'll know, hopefully, in the next several weeks as we get to approval.

[Operator]

Our next question comes from Michael Yee with Jefferies.

[Dina Elmonshed, analyst]

This is Dina on for Mike. Congrats on all the progress. I just wanted to ask about lung. I know that there was a previous disclosure about potentially seeing some second-line updated lung data, maybe in a medical conference that's coming up by year-end. Is that still on track? Or what are you guys thinking about the long strategy?

[Frederick Vogt, executive]

Yes, Dina, we're looking to put data out along when we think we have meaningful additional numbers available. So we would really like to see more patients, I think, in the study and then we will get that to a medical meeting. I don't know if we're going to get it by the end of the year at this point or it could be next year. But it's important to us to have that data be more significant once we have more patients in the study. Remember, we put out data with 23 patients in a 26.1% ORR with a good signs into our ability. So it could use a dose of additional patients here to help bolster the case. Meanwhile, we're just executing on the study right now and running hard to make sure we can complete enrollments by '24.

[Operator]

Our next question comes from Reni Benjamin with JMP Securities.

[Reni Benjamin, analyst]

Congratulations on all the progress and a very informative call. A couple of quick ones. You mentioned following the strategic portfolio prioritization. I typically think anytime that's mentioned, there have been programs that have been back-burned. Are there any programs that have been back-burned? Because you mentioned that there are 7 clinical studies that are still ongoing. And as part of that, can you just give us an update as to what's happening with the ovarian study? Or do you think the endometrial one that you're going to start will kind of take that one over.

[Frederick Vogt, executive]

Reni, I think you're referring to cervical, I think it's ovarian, right? As we don't have an ovarian program in our [ events ].

[Reni Benjamin, analyst]

Oh sorry, yes, cervical.

[Frederick Vogt, executive]

Yes. So all those studies continue to run, and we actually think we can continue to run these studies in the budget we're on. When we say prioritization, we may focus more on enrolling one particular study or putting our efforts on, for example, the LUN-202 study where we need to enroll fast that doesn't mean we're closing the cervical study, the endometrial study when it does hit, will hit later and so we don't foresee a near-term impact on cash. We could always reevaluate the program at that point. What we're basically saying though is we're focusing on particular studies that are of high importance like LUN-202 and TILVANCE-301 as well as BLA approvals in the ex U.S. filings at this point so we can drive revenues.

[Reni Benjamin, analyst]

And then just switching gears to the ESMO data that Friedrich mentioned, as of the latest long-term follow-up, can you talk a little bit, I guess, about the PFS for the pooled cohorts of [ TIL-4 ]. What kind of -- can you just remind us what kind of subsequent therapies these patients got. And if I'm remembering right, correct me if I'm wrong, the 26% of patients that are surviving 4 years, right, their overall survival is [indiscernible] patients are out 4 years. Does that suggest that patients who have been treated with Lifileucel are not in any way detrimentally impacted by any post therapies? Or is there another way to look at that data?

[Raj Puri, executive]

Reni, I can take this one. So as you know, collecting data, collecting subsequent data is always something that you have to take with a grain of salt. We haven't put out a comprehensive summary of what we are seeing in the study. But again, I think what you're seeing in this long-term follow-up data is really the promise that TIL cell therapy has for patients treated with TIL in a setting where there's really no available care, right? So I don't actually think there is going to be a pattern here in regards to what these patients would be seeing after. We don't -- certainly don't see any signals for detriment. What we think is really fascinating in this data is the fact it's the long-term durability. The fact that we now have patients who have completed the study in a response, meaning a 5-year follow-up, which equals to cure and that we see late deepening of responses and conversions to a complete response, which is speaking to the mechanism of action of a living drug. That I think is the importance of this data.

[Reni Benjamin, analyst]

I guess just one final question regarding the label. Is there any possibility of a blue sky sort of scenario for a labeling discussion, where you get more than what you want? Or really, when we're looking at this data, accelerated approval and the like, you think the base case scenario at least on the trial results from Cohort 3 and Cohort 4 is the best that we can hope for.

[Frederick Vogt, executive]

Well, actually, let me say something, Raj, then you can add in because we didn't answer Yanan on this full either. But on the label front, if we get Cohort 4 followed by pool Cohort 2 plus 4, which is what we think FDA is leading towards right now based on our conversations, we think that's the home run, the best option because that allows promotion on the back of both the Cohort 4 data, the pivotal data as well as the 153 patient data set with mDOR not reached. It's a large data set. It just gives you a lot of different promotional opportunities for the product. And Raj can tell you more about sort of integrity of the details of when the timing for labels and that kind of discussion comes up if you want.

[Raj Puri, executive]

Yes. I think some of -- Fred covered it pretty well. Some of the living discussion actually has begun. We have received a few IRs and we have responded to them. So as far as we're concerned that labeling has started, and we have more discussions regarding that in the next couple of weeks or so.

[Operator]

Our next question comes from Mara Goldstein with Mizuho.

[Mara Goldstein, analyst]

If I could just return to the strategic portfolio prioritization as well as the completion of a number of activities, you mentioned that, that is likely to reduce the quarterly and annual operating expenses. So I'm wondering if you can provide us with some guidance at least directionally as to what that is. And then on the ATM program, how much capacity is left there?

[Frederick Vogt, executive]

Jean-Marc, do you want to take that?

[Jean-Marc Bellemin, executive]

Yes, definitely. Thank you, Mara, for the question. So I'm not going to be really specific, but you can imagine that this year, as we were preparing for launch there was a lot of onetime expenses related to manufacturing readiness even on the CapEx and OpEx front, also ramping up on the commercial all the activities and medical. So there was a lot of spend that occurred in 2023 that will be considered again onetime and not happen next year. So prioritization means also managing investment over time. And that's why we're confident about our ability to reduce our spend both quarterly and annually as we announced during the call. And on the ATM. Yes. So on the ATM, we still have a large amount available because we have a $500 million ATM on which we only had a partial amount in Q2.

[Operator]

Our next question comes from Asthika Goonewardene with Truist.

[Karina Rabayeva, analyst]

This is Karina for Asthika. I had a question if you could share some color on the manufacturing success rate, whether you had any discussions with the FDA on this and the potential for specs to be tighter in the commercial setting as has been previously seen with other parties.

[Frederick Vogt, executive]

Igor do you want to get that?

[Igor Bilinsky, executive]

I'm sorry, could you repeat the question, please, my audio broken up.

[Karina Rabayeva, analyst]

So on the manufacturing success rate, whether you had any discussions with the FDA and for the potential for the specs to be tighter in the commercial setting?

[Igor Bilinsky, executive]

Yes. So as you know, in case of CAR-T, we've seen that happen, in some cases, to an extreme extent. In our case, we've had the manufacturing success rate maintained in the clinic at more than 90% consistently. And in the pivotal cohort, it was 94.7%. The final specs will be set very late at approval. So we cannot comment on the final specs right now, but that's certainly been part of the discussions with the agency and part of the information requests that have been ongoing. But we don't expect -- I mean, right now, we don't expect anything as anywhere close as draconian as you've seen, in some cases, of CAR-T in terms of tightening this mix.

[Operator]

Our next question comes from Ben Burnett with Stifel.

[Benjamin Burnett, analyst]

I wanted to go back and ask another question about just the capacity. I understand that the FDA will sort of help define the capacity at launch just in terms of the number of slots that are available for commercial use. But I guess can you frame for us just maybe like an upper limit of the capacity that you feel like you can handle now?

[Frederick Vogt, executive]

Yes, Ben, the facility right now is actually constructed to go even beyond 2,000 patients a year at our facility. And then on top of that, we have our CDMO, Wuxi that has considerable capacity until we haven't disclosed exactly what that is, but it's quite large. It could represent a good portion of our capacity at launch. So that's really the max that we've got constructed today without the need for additional capital.

[Benjamin Burnett, analyst]

And does that include like the personnel required to sort of run that type of capacity at that level?

[Frederick Vogt, executive]

Yes. The majority of that personnel is in place and the rest of it can be put in place very quickly. Obviously, we don't just sit the personnel there as a fixed cost, if we don't need to, but we are very well skilled in bringing on manufacturing and QC personnel quickly and know how to do that in both Iovance and at our CDMO.

[Benjamin Burnett, analyst]

And then maybe just one other question. Just I guess can you frame for us when one would expect the labeling discussions to start? Would this be something at the late cycle meeting has been the first ever sort of TIL [indiscernible] just any color you can provide on that?

[Raj Puri, executive]

Yes. As I mentioned earlier, thanks for asking this question, that labeling discussion has actually begun. We have received a couple of IRs clarifying things in the label. So -- and it's going to continue until they perhaps earlier approval date. So it's a good news for us that we have already engaged with the agency delivering discussions.

[Operator]

[Operator Instructions] Our next question comes from Kelsey Goodwin with Guggenheim.

[Kelsey Goodwin, analyst]

Just a couple of quick ones for me. I guess, maybe just on ex U.S., is this still something that you're looking to pursue on your own? And I guess, is there any appetite to maybe partner in specific regions or just more broadly ex U.S.? And then moving on to the endometrial cancer trial, I guess, maybe could you just remind us what kind of the efficacy benchmark is in the post-PD-1 setting here?

[Frederick Vogt, executive]

Yes, I can answer the first one, Kelsey and then Friedrich can jump in on the second part on the endometrial benchmarks. So we're always looking for opportunities. And yes, we would consider things like partnerships, strategic alliances and things like that. But right now, we do have the ability to go into these jurisdictions ourselves if needed, and we can do that with minimal capital investments right now as we discussed on the earlier part of the call, we don't need to build a facility there. We don't need to really do a whole lot of hiring there. We can get in there and generate revenues relatively quickly. Now it turns out there's a partnership that would be of value to our shareholders. Certainly, we would consider that in those jurisdictions. But right now, we're looking to do it ourselves as well. And then, Friedrich, can you answer the endometrial benchmark question?

[Friedrich Graf Finckenstein, executive]

Yes, a really good question and I love getting a question on the endometrial program. Thank you. So as you know, what we are seeing happening right now with the [indiscernible] is moving from a second-line treatment setting into frontline, the data on what's being used and the efficacy after use of [ TIL Pembrolizumab ] is really not available. So I think probably the best benchmark of a starting point of where you can -- what you can look at as a potential benchmark would be data that have been used when Pembrolizumab was brought into the second line setting. There the control arm of study Keynote-775 was investigators choice [ Docetaxel Ramucirumab Docetaxel ] monotherapy. And those showed an ORR of about 15% median duration of response of 5.7 months in patients with MMR proficient tumors. The results in the MMR patients were a little lower with ORR 12% and median DOR of 4.1 months. So I think that's probably where you can start given that we would be exploring populations that have seen both chemo, frontline chemo, which was the prior therapy for patients in this study in Keynote-775, but also either concomitant or sequential checkpoint inhibitor therapy, I think it's fair to say that we would be -- we would shoot to beat an ORR of about 10% to 15%.

[Operator]

That concludes the question-and-answer session. At this time, I would like to turn the call back to Fred Vogt for closing remarks.

[Frederick Vogt, executive]

Thank you again for joining the Iovance Biotherapeutics third quarter 2023 financial results and corporate update conference call. We've had a productive year-to-date with a priority review of the BLA, the close of the Proleukin transaction, important milestones to lung cancer and delivering on our key regulatory commercial manufacturing and pipeline activities. I'm grateful for the patients, physicians and regulators as well as for our employees and cross-functional teams who have collaborated on our BLA submission while advancing our mission to be the global leader in TIL therapy. 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.

[Operator]

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.