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Iovance Biotherapeutics Inc
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Good afternoon and welcome to the Iovance Biotherapeutics Fourth Quarter and Year-End 2017 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 this call is being recorded at the Company’s request.
At this time, I would like to turn the conference over to Tim Morris, Chief Financial Officer at Iovance. Sir, please begin.
Thank you, operator. Good afternoon, everyone, and thank you for joining us today. With me on the call are Dr. Maria Fardis, our President and Chief Executive Officer; and Dr. Igor Gorbatchevsky, our Vice President of Clinical Science.
This afternoon, we issued a press release that you could find on our website at iovance.com which includes the financial results for the quarter, and year ended December 31, 2017, achievements for 2017, and brief updates for 2018.
Before I turn the call over to Maria, I would like to remind everyone that statements made during this conference call will include forward-looking statements regarding Iovance’s goals, business focus, business plans, clinical trial plans and results, potential future applications of our technology, manufacturing capabilities, licensing and collaboration transactions, future updates, and cash balance forecasts.
Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time-to-time in our SEC filings. Our results may differ materially from those projected during today’s call. We undertake no obligation to publicly update any forward-looking statements.
With that, let me pass the call over to Maria.
Thank you, Tim. Good afternoon, everyone.
2017 was a year marked with significant accomplishments for Iovance involving manufacturing and clinical aspects of development of TIL as a viable commercial therapy. We’ve also had noteworthy achievements since the end of the year highlighted by the completion of the fully underwritten public offering of $172.5 million worth of common stock. The proceeds from this offerings combined with year-end cash balance of $145 million give us over $300 million in cash and cash equivalents.
During 2017 we have continued building Iovance into a fully integrated biotherapeutics company. We currently have 75 employees including research and development as well as general and administration staff. We continue to build our team as we expand our clinical development programs globally.
During 2017, we completed development of a new manufacturing process which is shorter than original generation 1 manufacturing. This new manufacturing method known as generation 2 or gen 2 lasts 22 days and yields a cryopreserved product. Iovance owns the associated intellectual properties for the generation 2. The shorter manufacturing process minimizes the duration of time and patient waits to receive their TIL product and leads to a lower manufacturing cost. We conducted a clinical study investigating efficacy of this method and reported preliminary data showing efficacy of gen 2 in late line metastatic melanoma patients. With this data, we proceeded to select manufacturing method 2 for all upcoming trials for Iovance and have converted all ongoing studies to utilize the gen 2. We presented data detailing the characteristics of the product of generation 2 at SITC in November of 2017.
We have also expanded our manufacturing capacity in the U.S. in suites which already for commercialization and built capacity in the EU. In 2017, we entered into a new three-year manufacturing services agreement with PharmaCell B.V., now a subsidiary of Lonza Group in the Netherlands to support EU manufacturing. The tech transfer has now been completed and PharmaCell is now able to receive clinical samples and manufacture TIL for patients in Europe.
We continue our work in process optimization, evaluating further shortening of the process as well as generation of more potent TIL products. On the clinical side, we continued to expand our clinical development program during 2017. In melanoma, we presented early clinical data from the first cohort of the Phase 2 trial in metastatic melanoma, known as C-144-01, using gen 1 manufacturing at the 2017 ASCO annual meeting. As mentioned before, we’ve reported preliminary data from the second cohort of this study at the SITC annual meeting in November. The second cohort utilizes TIL manufacturing with the generation 2 process.
We reported an overall response in 10 evaluable patients of 40% in cohort 2 patients treated with LN-144. We continue to enroll patients in the melanoma study and in February 2018 of the first clinical site for this study was activated in Europe.
In June 2017, we began patient dosing in C-145-03, our Phase 2 trial of LN-145 for the treatment of patients with recurrent and/or metastatic squamous cell carcinoma of the head and neck. In January of 2018, we reported early data from this study in eight evaluable patients. The overall response rate in these patients was 38%.
In August 2017, we began patient dosing in C-145-04, our Phase 2 trial of LN-145 in the treatment of patients with recurrent, metastatic or persistent cervical carcinoma. We reported early data from this study in January 2018 in two patients with one patient having partial response and one with stable disease following treatment with LN-145. This study is being expanded into Europe as well and we have activated a site for this study in Europe already.
In 2017, we entered into a new clinical grant agreement with Moffitt to provide funding for a clinical study of TIL therapy in non-small cell lung cancer. Moffitt began patient enrollment in fourth quarter 2017 in this study combining TIL nivolumab in patients who have not responded to treatment with nivolumab. We are also conducting an Iovance sponsored study in non-small cell lung cancer patients who have not received prior anti-PD-1 or anti-PD-L1. In February of 2018, the first site was activated in the Iovance lung study. This study is part of our collaboration with MedImmune, the R&D arm of AstraZeneca and will treat patients with TIL alone or TIL plus nivolumab.
In early 2017, we entered into a multi-year strategic alliance with MD Anderson. Two clinical studies will be conducted as part of this alliance. These clinical studies are designed to treat patients with sarcomas, platinum resistant ovarian cancer and pancreatic cancer. We anticipate initiation of these studies in first half of 2018.
On the regulatory front, we have received fast track designation for LN-144 for the treatment of advanced melanoma. We engaged EU health authorities during 2017 in support of submission of clinical trial applications and proceeded with such submissions of the CTAs. We now have received multiple approvals to commence clinical trials in Europe.
We entered into a collaboration with Ohio State University to evaluate marrow infiltrating lymphocytes or MILs and peripheral-blood associated lymphocytes or PBLs and acute myeloid leukemia or AML and chronic lymphocytic leukemia or CLL. We’ve also undertaken a number of projects to improve potency of TIL products. These efforts include our work in utilization of the IL-2/ IL-15/ IL-21 cocktail to improve growth of TIL and increase the amount of CD8 cells in the product. We presented preliminary data regarding this work at SITC 2017. We have also been working on utilization of co-stimulatory antibodies to improve growth of TIL products and have initiated work utilizing 4-1BB and OX40. Our initial data in utilizing OX40 and improving T-cell effector function will be presented at the upcoming AACR 2018 meeting in April.
For 2018, our corporate goals involve emphasis on enrollment of patients in support of new indications as well as currently ongoing study. In addition, we intend to investigate utilization of TIL in earlier lines of treatment. We will continue our dialogue with the FDA in defining our registration plan for LN-144, and metastatic melanoma. We’ll expand our relationship with academic institutions and corporations in broadening our understanding of unmodified TIL in new indications as well as considering genetic modification of TIL or selection of more potent TIL product.
I would now like to turn the call over to Tim for a discussion of our financials. Tim?
Thank you, Maria. Our GAAP net loss attributable to common stockholders for the fourth quarter of 2017 was $25.9 million or $0.36 per share, this compares to $15.7 million or $0.25 per share for the fourth quarter last year. Non-GAAP net loss attributable to common stock holders for the fourth -- sorry, fourth quarter of 2017 was $23.1 million or $0.32 per share, this compares to $12.6 million or $0.20 per share for the fourth quarter last year. The non-GAAP net loss for the fourth quarters in 2017 and 2016 excludes $2.8 million and $3.1 million of non-cash stock-based compensation. GAAP net loss attributable to common stockholders for the year ended December 31, 2017 was $92.1 million or $1.41 per share, this compares to $102.3 million or $1.85 per share last year. The GAAP net loss last year included a one-time deemed dividend related to a charge of $49.5 million incurred because of the conversion feature of the Series B Preferred stock. Non-GAAP net loss for 2017 was $80.1 million or $1.23 per share, this compares to $34 million or $0.62 per share last year.
At December 31, 2017, the Company held $145.4 million in cash, cash equivalents, and short-term investments. Net cash used in operating activities in 2017 was $79 .7 million. Iovance anticipates cash, cash equivalents and investment balance to be between $190 million and $210 million at December 31, 2018.
We’ll now turn the call over to the operator for your questions.
Thank you. [Operator Instructions] Our first question comes from Joe Pantginis with H.C. Wainwright. Your line is now open.
Thank you. Hey, guys. Thanks for taking the question. Good afternoon. Wanted to look forward a little bit Maria with one of your 2018 goals where you’ve discussed the potential work on potentially genetically engineering TILs. And I guess, I wanted to get a sense of what kind of things you might be looking at? And also, and I know this is -- the experiment has to be done. But any potential things you would consider on the safety standpoint. Thanks a lot.
Hi, Joe. Good afternoon. Thank you for your questions. The genetic modifications, there is a number of known genetic modifications that we have thought about and have shared over the past few years. Some simple ones are associated with potential checkpoint knockouts for example. We have been thinking about doing work on that front. We certainly have rights to selection with PD-1 extracting TIL. And we have initiated some work on that front internally. So, what we are thinking about in 2018 is not only to continue with our internal work but also potentially partner with other organizations who have genetic modification capabilities. It’s an ongoing on sort of work; this is not -- certainly it’s just a beginning and we have a lot of work in front of us. I’d like to go back and make sure I understood your second question. What was your second question regarding safety?
I guess, do you have any potential concerns with regard to genetic modifications of cells. How it might impact how the cells interact with the tumor microenvironment et cetera, when you consider say the safety profile of the CAR-T that have been genetically modified?
Good question. Thank you, Joe. Yes, you’re correct. Of course when you are working with autologous products, there is a certain safety profile that goes with your product. And if you start potentially changing it, there may be consequences. Having said that, I think that CAR-Ts, although they do have a safety profile that needs to be monitored, have shown that this is possible. You can get highly potent product as a result of genetic modification that really adds to the arsenal of therapy for patients. So, I wouldn’t necessarily rule it out, not having even tried it. I think, it’s worth experiment, and we strictly need to be cautious and proceeding with it carefully. But that doesn’t mean we should exclude it just because of potential adverse event profile. It seems like the companies who are doing CAR-Ts are doing a great job of managing it both A, prior and post administration. So, I think it’s a solvable problem for us. It’s not something I’m not necessarily stopping just because we think we might run into special issues. I think, it’s worth exploration, exploring sort of business base.
Thank you. And our next question comes from Biren Amin with Jefferies. Your line is now open.
Hey. Thanks guys for taking my questions. Maybe Maria, if I could just start. Could you give us an update on where you are with the dialogue with FDA on the melanoma program? I think, you were going to approach them at some point this year?
Yes. Hi, Biren. Thank you for the question. We certainly have and it’s an ongoing dialogue as you know because I think that’s the best way of characterizing it. We certainly have been informing them of course of any step we’ve taken. We have been having regular dialogue with them. And I think that the most important for us has been using the data we have with generation 2 to reengage them when there is enough patients and enough follow-up But, the dialogue has been ongoing and there’s -- of course, we don’t do anything without informing FDA first.
And then, for the LUN-201 trial in checkpoint naïve patients, are you enrolling based on PD-L1 status?
We are not, but we’ll monitor that after enrollment continues. So, we are looking at any patient that is interested in terms of PD-1 and PD-L1 naïve but we are not connecting by PD-L1 level of expression level.
And then, for cervical, when can we expect a decision to move into the second of the two final stage trial?
Yes. We continue enrolling in this study and certainly if we trigger that Phase 2, we will be sort of publicly put that out, we have not triggered at this time yet.
Thank you. And our next question comes from Mike Breidenbach with Oppenheimer. Your line is now open.
Just a few quick questions for you. I was just wondering if you can comment on that, now that you’ve got a little bit more comfortable cash runway that’s impacted for your plans for data presentations in 2018, are we going to see maybe fewer presentations with larger cohorts of analyses or is it planned sort of to get data out there with every major oncology conference in 2018?
I’d just answer, yes, there’s certainly has been an impact. It’s always nice to be able to look at sophisticated data with a larger number of patients among you follow-up. And so it has put us in a nice position to be able to do that. Having said that, we still remain committed to provide data in 2018 in addition to what we already provided in January. And current thinking is maybe melanoma and one other indication that still remains in 2018 in the horizon.
And I am just wondering if you plan to actually implement the TrakCel the ongoing trial or is it’s going to be something that’s only used in new trials like the one that’s starting in lung, how long until we are going to see that actually deployed?
TrakCel is being implemented into ongoing trials. As a matter of fact, we have multiple rounds of phases of implementation and we have completed a few of the phases. If test being tested in the ongoing trials and we ultimately will transition over to the upcoming trials. But typically just thinking sort of this type of infrastructure method of monitoring patients and chain of identity and chain of custody is particularly important in larger trials, global trials, and that’s what our strategy has been. So, we are implementing right now in melanoma and we’ll be expanding that into cervical and head and neck.
And one last one for me. Few of us have been kind of watching from the sidelines and we are wondering what it would take to get a combination trial up and running with one of these CD-122 biased agonist instead of NOVA [ph] IL-2, is that something that’s works on the horizons for this year and next year?
Really good question. Yes, there’s definitely interest on our side. It needs to be on both sides of course to pursue something of that nature. When I go back to the first comment you made, we initially were not planning on modifying the regimen for TIL therapy. If we have better financial support to be able to explore that, it is something we are interested in to look at various dosing of IL-2 even in cell and then further analogs that are now potentially coming into the market. So, we are interested exactly when we are able to execute to that type of a plan remains a little bit more flexible. And it requires more than just interest on our part. So, yes, scientifically, definitely very exciting for us to see that there is any analog is coming to the market.
Thank you. And our next question comes from Jim Birchenough with Wells Fargo. Your line is now open.
Good afternoon, It’s Nick in for Jim. Congrats on a quite a year for 2017. So, perhaps, I’d like to start off with understanding a little bit more about the strategy in head and neck cancer. And can you just inform us or educate us as to how complex it is to get a biopsy in these patients versus melanoma or head and neck which I assume provide more cutaneous type of lesions?
Certainly. I’m going to ask Dr. Igor Gorbatchevsky to speak excisional biopsy?
Thank you, Maria. The reminder that in all our studies including metastatic melanoma study, our population [ph] is at metastatic disease. So regardless of indications, our patient may have resistance metastasis. And the lesion that’s available for excision are not that differed in between indications. So, we have patients with the resistance [ph] metastasis as well where from we’re able to harvest tumor to generate TIL.
Thank you. And then, given the fact the metastatic lesions might have different mutational profiles, does it make sense try and make a TIL product from more than one lesion?
I guess I will take on this call as well. In our work with the clinical sites, we do encourage collection of a tumor material from more than 1 available lesions. Of course, we’ll understand that patient still needs to remain with the measurable disease to confirm response assessment. But that is a good question, and that’s what’s we’re working on.
Okay. And then, so you have your sort of the Iovance sponsored combinational Iovance medi combination. And I think Moffitt has two trials ongoing to which you’re helping as the naïve trial but there is also a trial in patients progressing on nivo testing for the nivo combination. Is that correct? So, we have three trials that we should be paying attention to.
So, there is multiple indications that we have collaborations on. One is the metastatic melanoma where we have 2 plus nivo. One is a non-small cell lung cancer, which is patients that they start on nivo; and once they do not see a response, then they’re introduced to TIL and they add nivo on top of that until progression or response. And I think those are the two that you’re specifically referring to. There is other combinations that we work with Moffitt on. So, there are two different indications, I want to be sure that we are not combining them. Is that what you’re asking?
No, just in terms of the multiple cell lung cancer. I guess, that was that progressing patient population, I wasn’t clear about, the design of that study.
Right. So, non-small cell lung cancer, we have two studies. One is the one that we are running with Moffitt and the patients start with nivo NEVO if they do not see a clinical benefit, then they receive their TIL and they are in combination with nivo and they continue. The second study which is now active is a Iovance sponsored study, non-small cell lung cancer patients. Patients are anti-PD-1, anti-PD-L1 naïve and they either receive TIL or TIL plus…
And then just in terms of head and neck trials, you have announced that you’ve seen some nice responses there, and those being in HPV positive and in negative patients?
We did not disclose the status of HPV positivity or negativity of the patients, we do monitor that however. It’s not a criteria for enrollment but we monitor the status of the patients post talk.
And in terms of European site for 144, how many sites do you think will be active by the end of the year?
We have targeted a fairly broad number of sites in both U.S. and EU. There will be an expansion to the protocol and this is an anticipation of that potential expansion of the protocol.
Thank you. And our next question comes from Madhu Kumar with B. Riley FBR. Your line is now open.
So, my first one relates to the regulatory path around head and neck cancer. So, what have you guys taken away from the regulatory experience for Opdivo and Keytruda to think about how quickly you could bring TIL therapy in head and neck cancer to market?
I think a similar approach to melanoma, given that the patient population in terms of lines of therapy is appropriate. In other words, patients that we displayed that our patients have median number of four prior therapies, therefore they’re on the fifth line of the median number of hires, highly refractory patient population and all of them are post checkpoints. The similar strategy to melanoma could be certainly applicable to our head and neck study.
So, to that end, do you think this will be a post checkpoint in head and neck line of therapy or would it be able to based on the data stand up as just a second line after chemo line of therapy in head and neck?
I can only tell you what data we have. We certainly haven’t seen any patients that are only second line post chemo. Having said that that doesn’t mean we are not going to look into that patient population. I have mentioned earlier today that we are interested in moving TIL therapy into earlier line of therapies, but what we are seeing right now in our ongoing study is patients that are post anti-PD-1 checkpoint, every single one of them were.
And then, thinking about melanoma, so is the plan to be just post PD-1 or to be post PD-1 and CTLA-4 when thinking about a potential regulatory filing somewhere down the line?
We have not mandated that the two prior therapies be anti-PD-1 and anti-CTLA-4. There happen to have been cases of those because a lot of patients are seeing that combination as front line therapy. The mandate and the protocol is patients that have received anti-PD-1 and if BRAF mutant, BRAF inhibitor.
And kind of stepping back in melanoma, thinking about patients that are coming for immune therapies in melanoma, have you to this point experienced or do you have any reason to expect that there’ll be a kind of bottleneck around recruitment? I mean, you know that obviously the too many PD-1 drugs have many trials ongoing in melanoma, plus in any other companies have now multiple Phase 3s either planned to soon to start in PD-1refractory melanoma. Is there any concern about a bottleneck in patient recruitment in melanoma?
From my perspective, I think our job is to make sure that we tap into all of our resources and sites to assure that that doesn’t happen. Of course, we can’t control the hundreds of trials that are ongoing with anti-PD-1 and combination. I know, you’re aware, at ASCO last year there was a lot of noise around the patients that are expected to be enrolled into anti-PD-1 combinations as the pool of those patients is larger than available patients right now. So, I recognize that. But I think really the onus of the delivery is on the company to try and find the appropriate patients for the trial. This is part of the reason we have gone to ex-U.S. to assure that we have the best chance of success.
And one last if you don’t mind for Tim. The SG&A assumptions you guys have in head and neck cancer assumptions you mentioned at the end, what do they assume from kind of regulatory perspective? Is it very soon then you’ll have to run a Phase 3 in melanoma or what are the assumptions that go behind that cash burn.
Yes. That’s a good question. I think, our assumptions are that trials essentially will continue on to kind of their natural endpoint as per protocol. As you know, we are adding the lung study this year, we’ll ramp up M.D. Anderson study, and then the other two will continue. We’ll have to adjust depending on what the feedback is from the agency from the registration path forward.
Thank you. We have no further questions in queue. So, I would like to thank you all for attending today’s call. The call will now disconnect.