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

All right. Well, thank you, and good afternoon, and thank you for joining us on one of our afternoon sessions. I have the great pleasure of hosting Iovance here with me on the 2021 Global Jefferies Healthcare Conference. With us from Iovance is the Interim President and CEO, Fred Vogt, who also serves as General Counsel and has been with the company for many years now. So has a good perspective about things and certainly has some taste of everything going on and certainly capable of talking a lot about all the topics we have at hand.

I guess I would just start off, Fred. First, maybe with a brief introduction to yourself briefly and to what extent you can talk a bit to Wall Street about the recent changes with management and where we're going with that. First is just an introduction. That would be a great start.

Sure. Thank you, Michael. Maybe I can give a brief intro to myself. I've been with the company since 2016. Obviously, I was working in the legal profession, but I've had operational roles at Iovance as well for many years here. Prior to Iovance, beyond my legal career at a big law firm, I was also at GlaxoSmithKline for 13 years, where I had a lot of experience, particularly on the scientific side with respect to drug development and successful oncology product development with respect to the portfolio that GSK used to have and now is largely owned by Novartis. So I've got a lot of background in drug development as well as the legal background that I can talk quite a bit about potency assays and some of the CMC things because that was the area that I focused on when I was at GSK for many years. With respect to the change in management, Michael's question on that, we really enjoyed working with Maria, and we thank her for her service. It's unfortunate that she went at the time that she went. However, and she went for personal reasons, she resigned. It's never a good time to go, but people change jobs in biotech. What I can tell you is that we're committed to a search for a new CEO right now. We're very active working on getting that resolved as soon as we possibly can. The time frame sometimes can take months for these things, but we've got a big C-suite in place, including an experienced COO, CFO and CMO and many others. And we're committed to executing on our path forward with the FDA with our potency assay as well as all our clinical programs and our pipeline development.

That's very helpful. First, I guess, emphasizing that she resigned, and she's leaving and there's never a great time. I mean, I guess, it makes people feel nervous that someone who has been in that seat for a long time. And certainly, with the origins of the company with Wayne and others to really get Iovance to where it is today, it was a huge success. And that her stepping away, certainly as a face and the public facing figure on Wall Street, makes people nervous that the challenge perhaps is more an uphill battle than people are led to believe. Can you maybe just make a comment about that view and whether you can comfort folks into saying, look, hey, she's leaving, what are shareholders supposed to expect. How are they left holding it?

Sure. The company is a big company with a big management team and a lot of people who are experts at regulatory affairs and CMC, which is the area of chemistry, manufacturing, controls, the area where potency assays sit. We've also given some guidance near term here on regulatory interactions in the second half of '21 and a BLA filing in the first half of '22, which is our way of telling the Street that we think this is resolvable. We've got conviction that this is resolvable in a fairly short time frame. These are not long time frames in the world of drug development to get these things resolved. So we are confident in our science. We are confident in lifileucel, the products. Yes, the company, Maria's been instrumental in getting the company where it is today. I was here the entire, roughly her entire tenure. I started a few months after she did. And I witnessed it, and I can tell you, really, the company moved forward leaps and bounds. But now here we are. We're on the cusp of a BLA. We've made tremendous progress in this company. We've a huge manufacturing commitment that we think we'll be moving on pretty soon and then obviously spend a lot of time and effort. We've got a big clinical pipeline with a lot of good candidates. It's got a lot of good data coming out, including at ASCO later on this week. And so we feel like we're in the right place to be. And when the CEO joins, he or she will be jumping in at a company that's got a fantastic growth profile.

Let me ask about, I appreciate that there's guidance and the guidance is you'll meet, and then you can file in the first half '22. With all due respect, that guidance is just based on the similar ideas that you've proposed information, they will accept that information and you can file. Obviously, that was the same basis for the guidance of filing by the end of this year based on interactions that would happen recently. Those interactions didn't play out, hence, the push out. What's to say that, that wouldn't just happen again?

Well, it could. It absolutely could, but you learn something with every interaction with FDA. And when FDA gives you feedback, you take it and you use it for your next round with them. So that's what gives us some conviction that we can resolve this pretty quickly. We've heard them. We've had interactions with them. And also, one thing I should add is the situation is not new to us. We've been planning all along that we may have to have additional interactions with FDA. At the time we gave our guidance last year, we thought we might be able to resolve it. Just in case, we have backup options. And we talked about those in our public disclosures. And now those backup options are things that we intend to go back to FDA with and are going to become, we think are going to become the answer to these particular challenges that we're facing here.

Can you put some more meat on the bone with respect to that? So for those who are listening, there is interactions on determining which assays, it could be a couple of assays, right, help me out, that would be utilized to determine adequate potency of your product such that, that product is potent, is active, is alive, it's working. And obviously, it could be used for a patient. Typically, that's more straightforward for a single antigen. But here, there's a lot of different things going on that could be driving the efficacy of the product, right, or the potency. So I think that's been disclosed if there's at least 1 or 2 different potency assays you guys have proposed. Can you just kind of walk us through somewhat layman's, but with a little depth about where you are today, and where you were perhaps 6 months ago? And why you'd feel confident that then you'd be okay this year?

Sure. So we had disclosed previously that we had an assay that we were working on with FDA. And then we disclosed we had a second assay, and we disclosed we had some backups. With respect to all of those, we haven't put everything on the table yet with FDA. But from the feedback we've got on what we have put on the table with FDA, we feel like we know what to do with respect to the additional assays that we can bring forward and the data packages that will come with them. We've also got a lot of confidence in the assays themselves having done some development work and having seen some of the things that we think we can do with them. We kind of think we know what FDA is asking at the end of the day, what FDA is asking us to do. It's a hurdle that needs to be jumped, but it's not an unreasonable hurdle. It's the agency's job to protect the U.S. population from products that may not work, and they want to make sure that what we're giving patients hasn't been negatively affected by manufacturing, whatever it might be, and potency assays is a big part of that. So we're on the same page, I think, with them in terms of going forward. We know what they need. We think we know what they need, and we're tailoring our response to their questions.

Sounds like you're making progress. But some folks on Wall Street wonder, how does that work because you can measure different things, whether it's cytokine, TNF, granzyme B, different things that could be signs of potency and cell killing. But perhaps all you have to do is just correlate data from responders or people who have responses to what those levels of those things would be. Is that what we're talking about and just trying to agree which ones those are, but then you have to justify what that is? So I guess I just want to understand, what are they asking for? Is it how to measure it? Is it why would that be the case? Maybe just walk us through a little bit more than just, we have these assays, and we think these will be good.

Sure. The way FDA works is they don't really tell you what to do or ask you for things in the way that you and I would converse. You present data packages to them and they basically respond. You ask them questions. Is this adequate? Is this data sufficient for FDA? And then they respond and basically say, no, yes, whatever they might say. In that response, you try to glean that information about what they might truly be looking for. You can also have interactions with them at meetings, too, where we can have the same kind of conversations and sometimes in more detail. We don't know the full answer to your question yet, Michael, as to what exactly they're looking for at the end of the day. We think we know based on the interactions that we've had with them that we can go forward with either an assay or assays, depending on how things go, that would address the concerns that they've sort of raised throughout the process here, that they've pointed out with the prior submissions. So there are all sorts of readouts. There's all sorts of ways of running assays. You can run them so they measure cytokines. They can measure cell surface marker expression. They can measure killing of an actual target cell. There's all sorts of ways you can stimulate T cells and TILs to react to these things. We have, through our extensive experience here at the company, we've developed all sorts of methods that can see these things. And we're looking to take forward what we think is the best method or methods to FDA based on the feedback we've got so far in second half of this year.

Okay. Two follow-up questions then, and we'll then move to other aspects. One is, you have RMAT, I believe, for cervical. I don't think you have breakthrough per se for melanoma. So that's actually a question to this. Did you ever file for breakthrough? But question number one is just, we are, I guess, befuddled by the fact that this is such a high unmet need and you have various designations for this drug, why something couldn't be accelerated forward and that they're holding this drug up. Do you have a comment on that and do they understand? Can't you just call up the Head of ODAC and explain what's going on here. Can we do this on a rolling basis? I don't know.

We have what's called RMAT designation you mentioned for melanoma. And that gives us the opportunity to have extensive interactions with FDA, including additional meetings with them that we can schedule fairly quickly in the regulatory world, quick meaning months in the regulatory world, but fairly quick interactions with them. And we can, in those interactions, we can try to resolve these issues. And we plan to use that completely here. That's probably our biggest advantage with the RMAT. As I mentioned, we have BTD on cervical, RMAT on melanoma. Also, we have and we continue to engage with FDA at ultimately many different levels to try and get their attention on the product where really what it boils down to is potency is a very key concern for them in cell and gene products. And they want to make sure sponsors have thought about this and have done the work. Sponsors are blazing a new trail with these cell and gene products each time. They're brand-new products. We're coming to them with a polyclonal T cell product. They've never anything like this. Well, there's no book on potency assays for these things. They expect the sponsor to figure that out, come to them with the science and the data and everything else that supports that. You can use your accelerated review designations to enhance that. But they're not going to bow down solely to clinical data in a setting like this. They're going to make sure they're enforcing the regulations that they have to enforce and potency assays are part of that. So you're going to have to, sponsors have to convince them that the potency assay issue is under control and then the rest of the regulatory team would kick in and give it the urgency it needs from the clinical side.

Well, on one hand, there was being contactless, but there was, I think, some public comments actually made by an FDA spokesperson about the importance of potency for new cell and gene therapies and that they would like sponsors to give them that adequate information. So there was a recent discussion about that in an industry conference they spoke about that. I'm sure you're probably aware of that. And the other part is, I guess, once this could be resolved, it sort of sets the tone presumably for other indications and other things. Is that fair to say? It's sort of just like once you get over this, you're kind of good to go. And others would have to go through their own thing. Hopefully, you don't share all that information to everybody. I don't know.

Correct. And we generate some new IP around that. But we have some confidence that once we overcome this hurdle for melanoma, this should be translatable to other indications. There's no reason to think that the way we make TILs, there's no reason to really think that it's going to differ that much. So we can't say for certain, but we are pretty comfortable right now where we're at today that we have to jump this hurdle for melanoma and then things will speed up. And others will have to solve the problem as well.

Yes. Another question revolves, I guess, around more basic stuff like, should we be comfortable that you have sufficient primary tumor samples, that there's plenty of tumor biopsies all frozen or whatever that is. And none of those things would ever be an issue. And if you have to run multiple assays multiple times, certainly back on the pivotal study on those patient samples, and you would presumably have to validate it, I guess, on those patients. Maybe just answer that, but then you also have plenty of sample, there's no issues there?

Yes. So we have access to a broad selection of research samples and then retain of our clinical samples. So we have, samples are available to us to develop assays, to validate assays and so on. Clinical samples, if you're asking specifically about our retained reserves, yes, we have retains of the cohorts that matter. We could always do that anyway if we have that today. And so we are pretty comfortable in that space that we've got that. Can we say for sure we're going to have everything FDA wants? No. But we're comfortable where we are today, and we can do all the things we can do with the potency assay development and validation to achieve the ultimate filing goal we put out there, which is first half of '22.

Right. And just to be clear, because we understand that whatever assay you guys develop for commercial use, that, that would also have to be validated and tested on the pivotal study. Is that fair?

Yes. So that's typically what's going to be required, and that's what we're preparing for. Yes.

Okay. How about some other questions? Is there any reason you haven't unblinded the study in melanoma fully? It's been a while. Is there a wise reason why you shouldn't do that or could do that? And same for cervical, where you have not even given the initial top line, but you did for melanoma. Can you just talk about those 2 things?