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

[Audio Gap] From Barclays as one of the biotech analysts, just wanted to thank everyone to our Global Healthcare Conference in Miami. Really pleased to have up on stage with us management from Iovance. So we've got Igor Bilinsky, Chief Operating Officer; and Brian Gastman, EVP of Medical Affairs.

And I guess the first question, just with the initial launch, and we got some initial metrics, at least around how things were proceeding. If there's any feedback you can share around how launch is progressing over the last few weeks, that would be great?

Thanks, Peter. Good to be here. Good morning, everyone. The launch is going very well, exceeding our expectations. It's -- we started day 1 at launch with an unprecedented number of Authorized Treatment Centers about 30 for cell therapy launch. And the first patient underwent tumor procurement, the first business day of the approval and the commercial manufacturing of Amtagvi started the next day.

Yes, I think it's really pleasing to us to be part of a historic launch, not just because of the first in class but also the number of ATCs being the largest that we believe in cell therapy history. And what we're seeing is a very strong, robust interest from those centers that obviously have invested to be part of this momentous occasion.

Perfect. And then just in terms of like access, reimbursement, what's the feedback been like so far from reimbursement organizations and precisions?

Yes. So we've seen significant alignment with payers. A lot of that was done prior to our launch. I know our Head of Commercial has said multiple times how we were able to establish a DRG 18, whereas a lot of cell therapy companies had to start with a 16. I think it's also important to note that the IPPS system is exempted certain high-level cancer centers. Most of those are aligned with our -- or part of our ATC. And so if what you see [indiscernible] those Medicare, Medicaid exempted centers, plus the rest of the centers, we expect that grouping of patients to be about 75% of our cohorts. And so overall, though, we're quite pleased with our alignment with payers.

Got you. And then is there a bolus of patients in any way? Or how do we think about that as kind of the patients that were ready and waiting, and how long does that go on for?

So the term bolus or wave, if you think about it as a shape of a mountain, I think we're just at the beginning of going up that mountain. What we saw are a lot of centers that had already identified patients. And at this point, we could say the majority of centers have identified at least one patient. We publicly announced some of our early numbers. Since then, those numbers have matured. We're pleasantly seeing the evolution going in the right direction. And so I would say at this point, the larger, maybe less nimble centers are just really starting to get their stride. So I expect this just to be the beginning of the wave or the bolus or the mountain, the initial one. And so we expect this just to continue. And I should also add that the centers have told us and we expect that with experience, they're only going to want to do this more because it's going to be something simpler for them to do than the first patient there they trying that.

And Peter, you may have seen there was an article published in Precision Oncology, maybe a week or two ago, and one of the KOLs actually from Florida from Orlando Health mentioned that they have about 13 of 14 patients at their center who are waiting for Amtagvi and going through financial clearance. So that's one example of a number that's quite high.

Got you. And would you regard that as kind of a log forward out or if you have standard deviation out of the normal or above normal?

Yes, we don't want to give guidance but there's a range, obviously. Some ATCs are large and they'll see a lot of patients. And one, for example, already has two surgeries in the single day for two different patients for tumor procurements. But this is quite a range that what Brian mentioned the bolus then gets spread. As more and more ATCs come online, we're getting bolus from those. So essentially, we're expecting to see a steady ramp in the number of patients over the months.

And you kind of view this more as it's a steady ramp or there is some kind of initial flow of patients that don't repeat in a sense?

From each ATC, there's a bolus of patients who have been waiting for some time but then additional new patients come in and I'll use my math terms, if you integrate a bunch of delta functions, you get something smooth because different sites come up with different types.

Perfect. That's great way of explaining it.

And you could also add the fact that our ATCs represent a mixture, pretty much all high-functioning cancer centers of different sizes. Some of the smaller ones are more nimble. And so they came on very fast. Some of the bigger ones, which will -- which have actually discussed publicly how many patients they're going to have, I think, another one in Florida said they expect at least 60 patients a year, just from one center. A lot of them wanted to wait until we actually got approved before starting to discuss with patients. So they're a little bit more of juggernauts. But once they get going, they're even much bigger and I think that gave us a lot of enthusiasm that the bolus is going to just continue or the wave is going to continue to get higher, and as Igor said even wider perhaps as well.

And how should we think about like revenue starting in 2Q, is that kind of an end of 2Q thing or beginning? How do we think about like the timing of patients in taking some pole, et cetera, and [indiscernible] helping bank?

So Peter, we're not giving revenue guidance yet. But as you know, the first patient underwent tumor procurement soon after approval, so we expect revenue to start picking up early in Q2.

Okay. And then how does that get reported out? Do you have the IL-2 and TIL reported out separately?

Again, we'll share that once we report in the first quarter of revenues. So please stay tuned. But just as a reminder, so each patient received some Amtagvi and then they typically receive about 18 vials of Proleukin to help with the T cell proliferation. So those would be the rough numbers. But again, the -- please stay tuned for the first quarter of sales and then we'll share that information.

Okay. But it's something internally you can easily track, right?

Easily.

Whether we get to see that level of granularity of IL-2 versus TIL?

Absolutely.

Okay. Perfect. And then I guess the question always comes up around manufacturing within the [indiscernible] difficult in some instances. Just how do you look at failure rates for your own product?

So in part, we built our own manufacturing facility to control of our investment, so to speak. The OS rate, again, too early to give guidance. But in general, the trajectory we expect to see similar to other cell therapies where initially the rate may be a little higher, and then it comes down in the second half of the year of launches the patient profile and just the earlier lines of therapy and so we expect to see that type of thematics but specific numbers, let's wait until we get the first quarter sales.

Got you. And is there a difference in manufacturing success for earlier-line patients versus later-line patients?

What's different is, maybe, Brian, you can speak to that.

Well, yes, there's a lot of advantages for the commercial setting over what we saw in the trial. So first of all, in the trial, the average patient between 3 and 4 lines of previous therapy. And you can imagine the type of patient who has gone through 3, 4, even 9 lines of therapy, what's available surgically to resect to making the therapy because remember, the surgery is the foundation of what we use as our building block, so to speak, for our manufacturing. Also patient health and dropout. A lot of that was because these were very sick patients. This was -- they were going on a clinical trial. Their physicians can make changes very quickly to what is now the first approved drug for melanoma in the second line, every drug that's used in the second line is not in the USPI except for Amtagvi. So we know from working -- onboarding our ATCs and the KOLs that are there that they plan on making real-world decisions, not clinical trial-based decisions, which are much faster. All of those will allow us to make -- to get earlier patients, healthier patients. And in addition, this concept of bridging therapy, which immediately excluded from the trials is now allowed in the real world. So there's a lot of reason why -- because talk about out of spec, it's also a drop out. The dropout rate certainly should be lower. We have a lot of interaction in this peer-to-peer process to reduce poor patient selection or increased good patient selection. And also to discuss with them training of our drug with patient's actual biology of disease. And then finally, tumor selection. A lot of times what you'll see is the earlier-line patients, and I would say this as a clinician who just came out of 18 years of practice, they generally have a lot more options surgically than a lot of these 6-line patients with that radiation and other various therapies, intra-tumor therapies, et cetera, all that together gives a significant damage for the commercial usage of Amtagvi or what we had to deal with lifileucel, yet that was enough for us to get that [indiscernible].

Got you. And then just a final question. If you move on the COGS with that, all of that look like eventually? And where is that at the moment?

So generally, we expect COGS to be similar to CAR T, but we don't need to deal with [indiscernible]. And again, without getting specific numbers, the trajectory, we expect COGS to improve over time with has always been [indiscernible] our specifically with cell therapies. You go down the experience curve, and as you go down the skill curve the COGS gets better as we get higher volumes, better capacity utilization. And as we introduce additional improvements in the manufacturing process that are intended to improve cost of goods that our team is working on actively right now.

Got you.

I think it is to be noted also that the COGS for Proleukin, which is the percentage of the whole therapy is pretty well worked out and Igor probably can tell you more than I can. But that's already fairly optimal and ready.

Okay. Perfect. And I just have to move on to TILVANCE study kind of what you started in 2Q last year. How is enrollment proceeding for that?

So it definitely meets the definition of well underway. We've activated sites both in the United States and around the world, Canada, Europe, Australia and other countries. And you can imagine with Amtagvi there's renewed interest in patients seeking out the therapy in various endpoints in their cancer journey. So overall, we can say that it is well underway, which is exactly what the FDA expected from us as part of a validation study.

Got you. And then the expectation for that trial in terms of response rate, PFS, et cetera. Does they have to beat ipi/nivo, rela/nivo? How do you view that?

Well, so first of all, the trial was designed with 2 end points, which has a strong advantage. Before accelerated approval, we only need one of them. So ORR reads out much quicker than the other endpoint PFS. So in terms of when we will see it, it could be much quicker than multi-multiyear studies. Secondly, the -- when you compare our data that we had, which the signal allowed us to consider this, which was our 1A data, we had a 67% overall response rate, a 25% CR rate. CR rates are actually quite low even with ipi/nivo [indiscernible] in term of rela/nivo. But that is very favorable. It's both of their ORRs. And so I think we met quite well in that setting.

Okay. Perfect. And I guess I'd love to touch upon just the kind of pretty quickly at least before -- I'd love to jump back to the long pipe just pivot for cervical to endometrial cancer, I know that's happened over the last 6 months. So just kind of if you could walk through the kind of the logic there and why make that pivot?

Well, I can tell you why endometrial, the company's philosophy is really to hit an unmet need in solid tumors, especially kind of myoepithelial cancers. If you look at endometrial carcinoma, like the other ones that we are actively pursuing such as what we did with melanoma, there really isn't a good second-line option for those patients. It is a cancer therapy that used in the frontline sounds a lot like melanoma story and the lung story. And so it was very intuitive that we would go after that. And because we have worked with the gynecologic oncologists, in the cervical world, it also -- we had a lot of inroads already built into the system to move forward within endometrial cancer. The KOLs were set. They already knew us, we knew them. And so it made a lot of sense. Whereas the cervical world continues to evolve, and we will -- obviously, itself we'll report our data there as well. But right now, that's -- I think, there's a major unmet need for endometrial cancer and that exactly aligns with our philosophy.

Got you. And I guess when do we see data, what's the bar and kind of there's the two main questions there in the future?

Well, the bar sadly is sort of low because the -- because there really isn't a good second-line therapy for those patients. Chemotherapy in the second line as for DOR and really for ORR. So there's ADCs in that space. There are other companies trying to find something but we -- the last major conference is ESMO. And if you saw the endometrial data there, it's pretty clear that there's a large opening for different therapy.

And then just back to LUN if we think about that you've got complete enrollment for the Phase II in sort of 2025 for the LUN-202 study. Just if you want to talk through kind of the importance of that trial and kind of when we should expect to see data.

Well, I think the first thing to note is we all know that trials' on hold. However, in almost historic expedition or speediness, we were taking off a hold. We broke every expectation that I have heard. I wouldn't say instantaneously but basically, the FDA knows that we know how to assess concerns that they have, and we clearly hit the mark right away because it essentially accepted all of our provisions, and we were taken off hold extremely quickly once we took the time to address their concerns. And so the issue with when you're on hold though, you have to go back to those sites and you got to do the addendums and those addendums have to go to the IRB, and so each site has its own time line for that. So obviously, our time line, which was faster before the hold, is going to be delayed somewhat. Still, we are quite confident that we'll be able to meet the time lines that we need publicly.

Got you. And how has that changed, whether it's the inclusion, exclusion criteria as you came of hold adjusted in any way?

So we publicly have gone through all the protocol details. What I can say is even before the hold, we were already assessing reduced lymphodepletion regimens, which was well accepted by the physicians to care of these patients because they both have to deal with any complications from the [indiscernible] but also have to deal with the potentiality of changing efficacy. And people actually treat the patients. It's really important to listen to them and they felt very comfortable with the options we gave them. And all I can tell you is that what we addressed with the FDA in part is aligned with that philosophy. And absolutely is in line with what our KOLs, RPIs or trial want us to continue to do. And I think basically, we're just trying to make it a safer trial. Obviously, it wasn't that far off because we got off hold very quickly but also maintain the efficacy. And we think with what we proposed, we could do both.

Got you. What gives you the confidence around maintaining the efficacy as you've changed the conditioning?

Well, if you think about just what we do in -- as a company and in medicine, we usually go from known and unknown. So the known was [ 6025 ] of [indiscernible] Steve Rosenberg that was in our LN-144 trial, right? But the typical melanoma patients have never seen hemopoietic suppressing chemotherapy. Thus, their hemopoietic reserve is much better than a patient who is second-line lung who's been through a significant amount of chemotherapy. So likely, they don't necessarily need as much lymphodepletion, get the same kind of effect that we need to see. Remember, lymphodepletion has many benefits for TIL therapy. And then there's data out there that's not just from us but from others that we can get what we need out of a lower dose [indiscernible], but also the fact that our physicians who've already started working with us prior to the hold have also clearly discussed that with us this should not change much from an efficacy standpoint.

Got you. Okay. Jumping in the last second of this just jumping back to the TILVANCE study and just PD-1 usage in the neoadjuvant setting. Is that allowed? And does that change the potential outcome?

We do allow for it in the trial. However, we expect it to be a very small number. For a number of reasons, which I can go into, but I can just say quickly, it should be a very small percentage of our trial.

So that's kind of low 20% or lower than that?

I expect it even lower, much lower but I can't give you exact numbers.

Perfect. Thank you so much. It was a pleasure, gentlemen.

Thank you.

Thanks, Peter. Thanks, everyone.

Thank you.