Iovance Biotherapeutics, Inc. (IOVA) Earnings Call Transcript & Summary

Good afternoon. Thanks for joining us. I'm Salveen Richter, biotechnology analyst at Goldman Sachs. And we're pleased to have Iovance Biotherapeutics with us. We have Maria Fardis, President and CEO here. And with that, Maria, thanks for joining us.

And to start, adoptive cell therapy is a rapidly expanding field. And can you just talk about your choice of using TILs to target cancer? And how this is differentiated, I guess, from the other approaches that we're seeing with CAR Ts, TCRs and some of the others? And are there particularly -- particular indications here that you see as more appropriate to be addressed with TILs? Or do you see -- and where you see widespread potential of this modality? Lots of questions in one.

Thank you, Salveen. Can I confirm you can hear me?

Yes, we can hear you.

Thank you so much. Thank you. Thank you for the invitation. I appreciate it. As you're aware -- and thank you for the question. It's a great question. Iovance is a cell therapy company. We are developing a product for solid tumors, and we are targeting cell therapy for solid tumor. We believe we are the furthest along among the companies that are developing cell therapies for solid tumor. Now thinking about the question you were asking, which is, yes, the field is very rapidly developing. It's nice to see additional companies enter the field and wanting to adopt a cell therapy for solid tumors. TIL itself is a very polyclonal product. The benefit of the product of this nature is when we do not know what the target is and what we are trying to target. We are using our own body's natural selection of the T cells. And that recognition of the tumor neoantigen, we're using that process in selecting the T cells. If you know what the target is, for example, if the target is something like a CD19 or potentially [ NY ] ISL1 or something that is a well-known, well-defined target, we certainly can target that better with a specific type of T cell. When we don't know what the target is, such as diseases in high-mutational load setting, melanoma or non-small cell lung cancer, head and neck and even down to cervical, which is an average disease in terms of tumor mutational load, and we don't have an identifiable, clear target that is a neoantigen we can go after, then perhaps we can use the body's own natural selection of the T cells that came to the site of the tumor because they recognize that neoantigen. So I think that when we think about what is the utility of TIL versus other therapies, TIL is an excellent tool when we don't know what is the target and/or if the target is not one but is highly diverse and a large number of targets. In those settings, TIL probably is a better option. Someday in the future, from a scientific perspective, we might get to know what is the target for each patient. We might get to know that there's 2,000 clonotypes that we need to have in order to target 2,000 neoantigens. It's important to recall that we have seen both from the Rosenberg Lab as well as Iovance's publications that it seems like, at least in melanoma, the patients are highly, highly individualized and they have their own signature of mutations. This makes it complicated. So every patient seems to have a unique signature of neoantigens. There's very little that's common between them, and therefore recognition of one specific clonotype to target these tumor types is not easy as of today. So we don't have enough information to sort of have a very broad set of products that we go after. So why not use body's natural selection of our own immune system? So in thinking about where the bookends are, if you know the target, we can certainly go after it with a specific type of T cell. If we don't know the target, probably the best use right now is still very much TIL. And we can turn the dial up in potency of TIL, make them more potent. And those are things that we are working on in -- at Iovance. That's how I would categorize it between TILs and other approaches.

Great. And then within the field of TIL development itself, how do you see your approaches differentiated? And what do you see as key to bringing therapy for it successfully? What needs to be optimized on which levels?

Absolutely. In any cell therapy, I think one of the first points of optimization is manufacturing and manufacturing process. One has to have a very robust process that is reproducible, perhaps central. It needs to have a cryopreserved product to allow for flexibility of dosing. And of course, there needs to be a potent-enough product for that patient population that you're addressing. So I think a focus on manufacturing is first. Cost of goods needs to be optimized and be considered, and it certainly needs to be a well-characterized product so FDA accepts the submission that goes before them. I think those are important characteristics to think about and consider.

And just building off of that, could you just walk us through the process of how TILs are created and administered to patients? And what preconditioning is required prior to infusion of TILs?

Absolutely. There is a patient journey, which I'll talk about, and then there is a TIL or a tumor journey, which I can separate. When -- in a clinical setting, when the patient comes in and they get consented initially, it means that they qualify for our clinical trial. They initially are rescheduled for a resection. We do an excisional biopsy during which we remove about a centimeter cube of the tumor from the patient. The tumor is put in a tube and is shipped to our central manufacturing facilities, and the patient typically is dismissed that day or the next day and they go home. When the tumor arrives at our manufacturing facility, it is fragmented. It is placed in media, and the manufacturing duration of what we call our Gen 2 manufacturing is 22 days. And in the course of 22 days, we amplify the cells and we rejuvenate them to multiple billions. The first 11 days allow for the cells that are in the tumor to leave the fragmented tumors. And in the course of the second 11 days, we amplify the cells to multiple billions. At the end of the 22-day manufacturing process, which, as I noted, we call Gen 2 or Generation 2, we wash the cells. We dispense them into an infusion bag. We cryopreserve or we freeze the bag, and so we are ready for infusion. When the patient and the clinical site is ready to receive the TIL, they bring the patient in, typically 7 days before infusion. They start a regimen of cyclophosphamide and fludarabine, which is a lymphodepletion regimen. And the idea around this lymphodepletion is to remove the tumor at the hostile microenvironment that is present in the patient and around the tumors. So we try and remove that hostile microenvironment by the day 0, if we started 7 days of lymphodepletion 7 days before. We infuse them with their TILs. And we usually follow with up to 6 doses of IL-2. And the purpose of IL-2 is to keep the cells continuing to survive and proliferate in the human body. They have been grown in a clean, pristine environment outside of the human body. We want them to continue to thrive and proliferate in the human body. The duration of IL-2 administration is about 3 days. And once this regimen is over to the onetime therapy and once the regimen is over and if there's no adverse event for the patient, the patient is dismissed and that's -- the therapy is completed.

Now with regard to the preconditioning regimen and IL-2 as well as you just mentioned, is it standard for all patients? Or can it be standardized and be patient-specific here?

The IL-2 analog, is that what you were asking, Salveen?

Yes.

Yes. So if the administration of IL-2 is standard, we give up to 6 doses. If the patient doesn't tolerate up to 6 doses, we stop. It cannot go past a 3-day period. That's the idea. Does that make sense?

Yes. That makes sense here. And you're now on your third generation of TILS. Can you describe the optimization process that's played out since first generation? And we see even cell therapy in this world, there's constant optimization, so where are you trying to go?

Yes. So our current manufacturing process, which is the 22-day duration is something that, obviously, we're very pleased we think we can take into commercial landscape, but we prefer to have a shorter manufacturing process. So we are trying to -- we initiated this process of Gen 3 where we were thinking, could we have a shorter manufacturing process. And we ended up with a 16-day process by which we are able to produce TILs that are quite comparable to our Gen 2 and maybe even slightly more potent in terms of their interferon and other sort of measurements that we conduct at the end of the manufacturing process. So that was our initial goal, and we introduced this Gen 3 into head and neck indication because we felt that, that was a very difficult patient population, rapidly progressing patient population. So that was our strategy in thinking through Gen 3 manufacturing.

Got it. And your methodology also requires that TILs are expanded to billions in numbers. So how consistent is the requirement from patient to patient? And is there a minimum threshold needed to elicit a therapeutic benefit?

Thank you. We have a fairly consistent process in melanoma. Average number of TILs that have been infused into the patients was around 27 billion, and in cervical approximately the same. So between 27 billion and 28 billion has been our average number of TILs infused into the patients quite consistent, I have to say. There has not been a minimum seen in terms of necessary for potency. We obviously have set a minimum because we use those numbers for release criteria, and we have used 1 billion to 150 billion as our release criteria for cell therapy. But a minimum has not been seen. And in fact, it appears that even less than 1 billion may be efficacious. We haven't really explored that because we have had a very clear release criteria in place.

And so when you look at all these steps, I guess, how do you think about the scalability for commercial purposes? So with regard to manufacturing, distribution and then even the impact here of COGS.

Definitely. It is an autologous process. So this is a product that is patient by patient, patient specific, I recognize that. At the same time, it's important to note that although we have a 22-day manufacturing process, not every day of this process something is happening. Many of the days are -- the cells are resting and growing and duplicating. So the touch points along the way are not that many days. So in that time frame where the cells are growing, we can certainly use the resources that you would have in our facility to be doing another batch of the patient product or other things. So the touch points is not extremely excessive in a sense that it cannot be done. I feel that this is very much a commercializable process. We obviously are continuing to look at optimizing our COGS. But the process certainly is something that is robust. We have had more than well above 90% in the manufacturing success. And we are very pleased with the duration that we have. 22 days is a reasonable time in the commercial landscape, and we continue to optimize and strive to both reduce the COGS as well as reduce the manufacturing duration.

Great. Maria, could you describe your lead product candidate and the market opportunities that it's setting out to address here?

Absolutely. Our lead commercial product is, in fact, our lifileucel for LN -- or called LN-144 for melanoma. This particular product, it seems to be maybe slightly ahead of LN-145 in reaching the market. LN-145 is for cervical cancer. Lifileucel has about a 22-day manufacturing process. We feel that that's completely reasonable for the commercial landscape. In terms of the opportunity in melanoma, for example, as we think about the commercialization of the product, we know that in U.S. alone, still 96,000 patients get diagnosed with metastatic melanoma, and about 1/5 of this patient population is absolutely getting treated right away. Depending on the label that lifileucel receives, it appears that, if it is aligned with our patient population and our clinical program, the way we have designed the studies have been lifileucel would be expected to be for second line if the patient have received anti-PD-1 and possibly as early as third line if they have received their anti-PD-1 and if they have a BRAF mutation. So the patient population certainly would be dependent on the label that we negotiate with FDA, which, obviously, we are in the early dialogue with them in terms of the pre-BLA discussions. But we believe that the patient population is large enough and the opportunity is quite attractive, subsequent to anti-PD-1. There's not a lot of opportunities once the patient has received their anti-PD-1. And if they have a BRAF mutation, once they have received their BRAF/MEK, there's really not a lot of opportunities. And in fact, Salveen, we have received fast track and RMAT designation for that reason, because the patient population is recognized as being an unmet medical need.

And then could you just walk us through the design of the Phase II C-144-01 study for melanoma patients? What's the rationale between the 4 separate cohorts in that trial?

Yes, absolutely. So the cohort 1 initially was started with what was our Gen 1 manufacturing process. Our Gen 1 manufacturing process was loosely based on the license we had received from NCI, and it was around a 6-week manufacturing duration with a non-cryopreserved product. So we initiated dosing patients in the melanoma program in cohort 1 with that product. In parallel to that, we then developed a Gen 2 manufacturing process, which we discussed a little bit earlier, a shorter manufacturing process with a cryopreserved product. In order not to mix the data, we then started cohort 2 with patient population, which is post PD-1; and if they have a BRAF mutation, post BRAF. So this was a very iterative process in the sense that we continued working with FDA in defining the patients, and this became our patient population. In cohort 2, we dosed 66 patients with this definition as well as the product that is Gen 2. That led -- that allowed us, enabled us to meet with FDA as part of a pre -- as part of an end of Phase II meeting, where an RMAT designation was granted and an agreement from FDA was reached that the existing study could house a cohort which could be pivotal. And so once we reached that agreement, we closed cohort 2, and we started cohort 4, which is our pivotal cohort, where we started patient dosing in March of 2019, and we closed patient dosing in January of 2020. Cohort 3 is a bit of an exploratory cohort for us. Cohort 3 allows for a second product for TIL to be infused into the patients. And it was more a hypothesis testing for us that could a second resection from a patient that may have had a new lesion give us a different TIL product and create a different type of responses. So cohort 3 is very much exploratory. Cohort 1 was based on our Gen 1 manufacturing. Cohorts 2 and 4 are very similar. Cohort 4 is pivotal and Cohort 2 is supportive.

And how are you thinking about -- I guess patients responded independently of the PD-L1 status or status of BRAF mutations. Was there any other correlations that you saw with biomarkers here?

Not particularly, and it's kind of remarkable to see that -- I've always said that regardless of the patient journey and how they come to receive their TIL, they seem to have an opportunity to respond. So we did not see correlation to their PD-L1 expression levels as sort of decided by TPS score. We did not see a correlation to their BRAF mutation status, and we did not see a correlation to their prior anti-CTLA-4 exposure. That tells me that the response is broad. It doesn't have a specific patient population that we need to select for. And it allows for a patient to come to receive TIL therapy regardless of the path that they have taken.

And Maria, could you help us understand what else we'll see in terms of updated data, whether it's later this year or next year and just frame the expectations? And feel free to highlight any data sets that explain the totality of the programs here.

Sure. From a data perspective, we had cut 68 patients' worth of data from Cohort 4, which is our pivotal program just recently as part of an early discussion to pre-BLA discussion with FDA. As part of that, we, of course, did a round of financing. But the data for 68 patients at a very, very high level was quite comparable to our Cohort 2 patients, so we were pleased to see that comparability. And the patient populations were very similar. From a data flow perspective, I think we are going to look forward to presenting the data next time as part of a medical conference. And I want to make sure that we have agreed with the agency on the amount of data that is needed and the amount of follow-up that is needed. So we have not committed to necessarily a data flow on melanoma remaining part of the year because it really depends on the agreement with the agency in terms of what is sufficient for a BLA submission. The same is probably true for cervical cancer. We have continued enrollment into the cervical program. And we want to make sure that we, of course, complete enrollment and then engage the agency as to what would be adequate follow-up for them before we think about cutting the data and presenting it. So from a data flow perspective, I'm not sure if we are going to have data necessarily on melanoma or surgical because the next steps are we're very focused on the regulatory interactions and agreement from the agency in submission of the BLA. That's where our focus is.

And are there any other upcoming milestones that you want to highlight for Iovance that should play out over the next 12 months?

I think -- and now that we have submitted our round of -- completed a round of financing, we certainly are very focused on the non-small cell indication in terms of clinical indications. So we are thinking about a broader program where we can look to see what Iovance TIL would do in that setting. From a milestone completion perspective, we are very focused on our commercial manufacturing facility to assure that it stays very much on course in terms of time line and completion of building of the core and shell as well as the clean rooms. We also are highly focused as an organization on preparation for the BLA and 1, maybe 2 indications. So there's a number of execution -- sort of execution-type milestones that we are focused on in the next 12 months with the BLA and support of BLA being very much high priority in terms of execution. With scientific perspective, as I noted, we will continue with our COM protocol, which is a basket study. It has a number of different indications in that basket study as well as initiation of potentially new indications, specifically focused on non-small cell lung cancer.

And what are the BLA submission plans here? You mentioned like you still are awaiting some clarity from the FDA in terms of the totality of data, but what is the strategy?

Yes. Absolutely. So we provided 2 sets of data to the agency for them to have visibility. We had the 68 patients with 2 radiological assessments that we provided to the agency from Cohort 4, and we also provided them a combination of Cohort 2 plus Cohort 4. And the reason we wanted to make sure that they have visibility to Cohort 2 follow-up, it gives them a nice long follow-up. In terms of strategy, we are just making sure that they have visibility to everything we have. And we absolutely want to make sure we reach alignment with the agency, of course, from a pre-BLA meeting in terms of amount of follow-up. So I don't know if you have given necessarily complete sort of clarity in terms of first strategy or second strategy, but we actually gave the investors that full visibility of whatever it is that we submitted to the agency. So I think those options, either cohort 4 alone or Cohort 4 plus Cohort 2, are certainly viable options for the agency to consider. Cohort 2, whether it gets combined or it's just supportive, both of them are certainly viable strategies that Cohort 2 data is going to be in the BLA.

And then with regard to cervical cancer, what is the market opportunity there? And how much overlap is there between cervical and melanoma sites as you look to your commercial opportunity here? And can this just be one team focused on these 2 indications?

Yes. Very good. So cervical has been -- it's an interesting indication in the sense that once HPV vaccination was developed, I think a lot of drug developers felt that it might be an indication that would become -- the prevalence of cervical cancer may become smaller. What we are seeing from the oncologists that are in the field are -- they're noticing that there is a plateauing effect that has taken place, and approximately 13,000 new cases are diagnosed every year in U.S. alone. The global prevalence is much, much larger, actually much broader. And in U.S., approximately 25% of the patients die on an annual basis. And again, this death rate is much higher in a global setting. There absolutely is a need for therapy for cervical cancer patients. In terms of site overlap, we do have some overlapping sites. Probably around 20% to 30% of the sites are approximately overlapping between melanoma and cervical. In the sense, as you noted for, either -- we don't call them sales force, but we call the CTAM, cell therapy account managers, or our infrastructure that supports indications, there absolutely is overlap because it is the same product and the same process. So yes, from an infrastructure perspective, we will take advantage of one infrastructure supporting multiple indications.

And then as you look to the launches that have played out for the autologous CAR Ts that are approved, what lessons have you learned from them? And how is that going to help you with your launch?

Absolutely. I think the first lesson we learned was the number of sites that are engaged in a clinical program. It's very important to have a very broad footprint in the clinical program to understand the capacity of each site and for the sites that have touched a product. And so this was a strategic move where we increased our number of sites in U.S. and globally as well as part of our clinical program to make sure that we understand their internal capabilities and they understand how to utilize TIL. In a completely different sort of thinking about the products sort of being well adopted, the coding coverage and payment has been aware of these limitations for CAR T products. There was no clear coding at the time when these products reached the market, and so there has been a lot of learning from the CAR T products coming into the market in terms of payer landscape and reimbursement landscape. Great progress has been made because of the CAR Ts being in the commercial landscape and additional codes being potentially offered for cell therapy products, and top -- limits have been increased. And these are very encouraging from our perspective and adoption of cell therapies. I think that the payers have recognized that cell therapies are here to stay. And therefore, a better accommodation in payments back and reimbursement to the hospital is being put in place, and we are hopeful to have a strong voice in that work stream as well. So we learned a lot of lessons from CAR Ts coming into the landscape. And I think it has been -- remarkable progress has been made in the past 2 years. We still have quite a bit to do, but it has allowed us to start not from ground zero but much more advanced position than we would have been otherwise if these products were not in the market.

And then you mentioned lung cancer earlier, and we saw some data out of Moffitt here with complete responses that generated some excitement. But what are the key takeaways from the Moffitt trial and how that reads through to the Iovance TIL program and what this means for your own study design here?

Absolutely. I agree. I think it was highly encouraging to see complete responses, durable complete responses seen from TIL therapy in non-small cell lung cancer. This data is what encouraged us to start an undertaking of TIL in non-small cell to begin with. This is exactly why we thought TIL might work. There are points of differentiation between the Moffitt program and Iovance program. The products are different. Moffitt is using a local manufacturing method, which is based on -- it's more similar to our Gen 1 manufacturing process. And we are obviously using our Gen 2 manufacturing process. There's other points of differentiation as well. So I think in terms of the read-through from that data to ours is -- remains to be seen. This is precisely why we are conducting the study we are conducting. As part of the financing, we also committed to a non-small cell program that could be registration directed. What we learned is fairly similar to melanoma. It seems like TIL response is not dependent of oncogene-driven patients, PD-L1 status or otherwise. And those are excellent messages that we have learned. So that allows us to maybe narrow our patient population in our upcoming studies. But I think at the core conclusion, which TIL seems to have a play in treatment of non-small cell lung cancer patients, is definitely a lesson that we all learned and we are excited about seeing what Iovance still could do for these patients.

Could you give us some color on the registration trial that you're going to design for lung cancer here? And do you need data from your basket study before it can begin? Or is it possible through a single arm study? How are you thinking about this?

Yes, exactly. So I sort of used analogy of what we did in melanoma for non-small cell. In melanoma, we started with defining the patient population as to what is unmet medical need. And once we had that definition nailed down -- and that became our Cohort 2, for example, in terms of registration supporting. Once we knew the patient population, then we decided what is the response rate in this patient population which would be adequate if one is using TIL as a single therapy. Not in combination, just a single therapy. And once we learned what that response was and the TIL did actually have a response well above that available care response was, we were able to talk to the agency as part of end of Phase II and continue with the registration cohort in that existing program. So one can imagine a registration-directed study where the patient population has to be well defined. And so that's very much the first area of focus for a sponsor, potentially in consideration of a Simon's two-stage design, for example, where one can think about what is the bar for response that one has to see. And if we have a response above that, we can continue with this study. And if you don't have that response, that's fine. We consider a different patient population otherwise. So that's how we are thinking about it in a broad setting. We haven't disclosed the specific patient population that we're thinking through or exactly what the study design would be. But in the grand scheme of things, those are sort of main features that, again, very much mirror what we did for melanoma.

And then you're looking to bring in the 16-day third-generation manufacturing process as well as a PD-1 selected TIL into the clinic in head and neck. What's the rationale for picking that indication first? And then how do you improve upon the earlier data based on this selection?

Absolutely. What we noted in head and neck was that we had a response with TIL therapy in head and neck, but the duration of response for the patient population that we were seeing was between 2 to 7 months approximately. So we were encouraged by the fact that TIL seems to be doing something for these patients, but we would love to see a longer duration of response. The patient population back then that we were seeing earlier on in this study were particularly treatment exposed. So we decided to consider a patient population which is not as particularly heavily pretreated and to offer them what we thought might be better products, including Gen 3, which is a shorter manufacturing duration, expectedly a younger TIL product as well as the PD-1 selected product, which is expected to be a more potent TIL product as well. We had presented some preliminary data a couple of years ago at SITC showing that the PD-1 selected TIL is expected to be more potent. So that was the strategy for us that we think we have a more potent set of products. We think head and neck could use that. Why don't we put that into the head and neck indication?

And then are there any other tumor types that you think would really benefit from the TIL approach outside of what you're studying that you see as kind of the next programs to advance?

Absolutely. It appears that we briefly talked about this earlier that when we don't have a very well-defined target, and we have that in high mutational load diseases, then why don't we rely on body's own natural selection of the T cells and use those TILs for therapeutic? By the way, and in a setting of a healthy population, this happens every day. We have cells that are not healthy and they may be -- in fact, they might have an oncogene expressing proteins in those cells, and these cells are detected by immune system and eradicated. So in the setting of the disease when cancer develops, either because of genetic factors or otherwise, the cells don't seem to have quite the potency that they should have had to begin with to remove the disease. So we -- if I think about where I think the best utilization for TIL may be and given how little we know about the target in certain solid tumors, particularly in high mutational load diseases, I think those are areas of unmet need. We still don't have a lot of options beyond checkpoint therapy or combination of checkpoints, and I think TIL could play a strong role there. So diseases such as -- I do maintain this thinking about a high mutational load spectrum when we think about Shriver's mutational spectrum, for example, in melanoma, head and neck, non-small cell, maybe triple-negative breast, those indications are certainly indications that are of interest to us. When we choose an indication, Salveen, I think I want to just add that, a regulatory component is also considered. It's not just a clinical one, but where do we think we can add value to the patients.

And then some of your trials you're setting up look like you're doing a combination with pembro but after patients have already progressed from a checkpoint inhibitor. What's the mechanistic rationale for that?

So we don't have any studies that we are combining in -- with pembro subsequent to progression on anti-PD-1. We do have studies -- in our basket study, we have cohorts where the patients have not received prior anti-PD-1 and so we are combining with available care. Given the patients have a standard therapy, typically, one in drug development has to start with allowing the patients to receive this standard of therapy and then we add TIL on top of that.

Got it. Right. And then maybe just one final question here. So as you think of building out the commercial infrastructure, are you looking to build into a global organization? Or are you looking to partner in specific territories? And maybe you could just also comment on the executive team as you ready for this commercial stage. Are you going to have some adds to the team as you -- from an R&D to a commercial story?

Absolutely. Yes, Iovance is well positioned for a global footprint. In fact, in our clinical program, we engaged a number of EU countries as well as Canada, and our clinical program has a number of sites in EU and Canada engaged already. So we have talked to the local health authorities in Europe, for example. Obviously, we got our CTAs approved and started our studies in those regions. So we stand ready to take the product in a global setting ourselves. I think it's not a product that requires a very large sales force. It's a very targeted sales team and commercial team that goes behind this type of a product. Now from an expertise and skill set, the company actually has about 14% of our resources are in commercial and medical affairs already, and we are expanding that team very rapidly. We have a very focused team in cell therapy. They come with great expertise in prior cell therapy launches, and so I'm very excited about having the right team in place. We continue to expand our team, both in management as well as in operating team members. But I'm very convinced that we have the right group in place to take this product into the commercial landscape.

Great. Well, with that, Maria, thank you so much. Really appreciate your time today.

Thank you, Salveen.