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

Thank you. Welcome to the Iovance Biotherapeutics second quarter, 2026 conference call. My name is Daniel and I will be your operator for today's call. At this time, all participants are in a listen-only mode. we will conduct a question and answer session. Please note that this conference call is being recorded. I will now turn the call over to Sarah Pellegrino, Senior Vice President, Investor Relations and Corporate Communications at Iovance. Sarah, you may begin.

Thank you, operator. Good morning and welcome to the IO-DAMS webcast to discuss our second quarter of 2026 results business achievement and corporate updates this morning we issued a that is available on our corporate website at iobance.com. This conference call will include forward-looking statements regarding Iobance's goals, business focus, business plans and transactions, revenue and revenue guidance, commercial activities, clinical trials and results, regulatory approvals, submissions, feedback and guidance, plans and strategies, reach, prescription-free clinical activities, potential future applications of our technology, manufacturing capabilities, payer interactions, licenses and collaborations, cash position, 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 FTC filing. Our results may differ materially from those projected during today's call. We undertake no obligation to publicly update any forward-looking statements. I will turn the call over now to Dr. Fred Vogt, Interim CEO and President.

Thank you, Sarah. I-Avans is the global leader in innovating, developing, and delivering TILT therapy for solid tumors today and for the next generation. The second quarter of 2026 was our strongest yet. We delivered record revenue and margin, advanced our pipeline, and secured important new regulatory approvals and designations. I'll start by highlighting a few notable achievements. First, our commercial launch reached new heights in the second quarter, while our foundation for growth expanded. More authorized treatment centers, or ATCs, are activating, enrolling, and infusing patients than ever before. We reported $99.3 million in revenue driven by record and tagging demand. We also greatly exceeded both our antagonist and total revenue guidance ranges for the second quarter. Second quarter margin also reached an all-time high of 56%. We expect margin to keep expanding as we increase revenue, fine-tune execution, and gain efficiency and scale. Looking ahead, we maintain our peak assumptions for Ampagni and Perleukin of more than $1 billion in US sales from advanced melanoma alone. opportunity and other indications is significantly larger. Our third quarter performance of data is very strong. Once we fully assess increasing growth trends, we expect to provide an update to our full year guidance during the third quarter. We are now providing commercially untagged to more than 50 patients a month on top of increasing numbers of clinical patients, which which demonstrates both our manufacturing scale and how broadly accessible our cell therapies become. We are not choosing between growth and discipline. This quarter we delivered both. Research and development expenses improved for the fourth consecutive quarter, even as every lead program advanced and our pipeline grew. We are closing in on our pursuit of the largest opportunities for cancer patients who have the greatest on that need. Our technology platform is scaling quickly. Recent regulatory and clinical milestones bring TELT therapy forward for more patients in the U.S., as well as new markets and additional solid tumor indications. Nearly 2,000 patients have received DiVance Tilt Therapies in commercial and clinical settings across hundreds of centers in the US and in 30 countries. For the coming years, our vision is to reach tens of thousands of patients. In our registrational trials, enrollment is nearly complete in our Lung 202 trial in the pivotal cohorts in non-squamous, non-small cell lung cancer. This indication represents a blockbuster opportunity that is roughly seven times that of advanced melanoma. We look forward to providing program updates in the fourth quarter as we work towards supplemental biologic splicense application in 2027. We're moving quickly with our registrational Saratoga trial for SAR201 and two advanced soft tissue sarcomas. As we announced today, the US FDA granted fast track designation in undifferentiated pleomorphic sarcoma and de-differentiated liposarcoma, validating the promise of the initial clinical data for Lifolucel, as well as the substantial medical need in both indications in a pilot study with one time like hallucinotherapy the objective response rate with an unprecedented 50% in the first six valuable patients compared with the bismal response rates of less than 5% using current standard of care in these refractory treatment settings Our translational data and state-of-the-art technologies are uncovering the next frontier in pill therapy. now able to identify highly responsive patient populations across solid tumor indications that comprise more than 90% of all cancers. For For example, a histology-based biomarker strategy produced striking early phase 2 data in the first five evaluable patients with metastatic serous endometrial cancer. In our N201 trial, we reported a 40% confirmed objective response rate and a 100% disease control rate. We are submitting a protocol amendment engaging with the FDA on an expedited approval pathway based on patient population. Our leadership in tilt therapy includes continuous investment in next-generation programs. A new trial, known as G1-TIL-1, is using IOB5001, our next generation IL-12 tethered TIL therapy. This Phase 1-2 BASCA trial will run across prevalent solid tumors representing more than 100,000 US deaths annually, including metastatic colorectal, triple negative breast, and estrogen-receptor breast cancers. We expect to provide more updates this year. Today, profitability is the site, and with it, lasting value for patients and shareholders alike. iAdvance is the first and only company in the world to take pill therapy from concept to commercial treatment for patients, supported by our scalable manufacturing infrastructure, clinical breadth, commercial experience, and operational discipline. With healthy commercial momentum, broadening plan and solid execution, IVs has never been better positioned for long-term success. I'll now.

I'll ask Corleen Roach, our Chief Financial Officer, to detail our financial results. Thanks, Greg, and good morning, everyone. Our highest ever quarterly revenue and margin clearly demonstrate our commitment to top-line growth, operational excellence, and financial discipline as we build a sustainable, self-funded business. Second quarter total revenue was more than $99 million. That is up 66% year-over-year and 39% sequentially from the first quarter, which have included one-time non-return impact from our internal manufacturing upgrades. MPagD was the key growth driver, reaching a new high of approximately $91 million in the quarter. We exceeded our second quarter MPagD guidance range of $79 to $81 million. quarter in PIV revenue increased roughly 51% over the first quarter of 2026 and 68% year over year, reflecting a robust increase in patient demand and adoption. Perlukan contributed about $9 million in the second quarter, slightly down from $11 million in the prior quarter due to timing of wholesaler inventory stocking. full year of 2026, we anticipate that per weekend as a percentage of total revenue will be in line with 2025. Consistent with the prior quarters, overall gross to net impact remains minimal at less Margin increased to approximately 56%, up from 41% in the first quarter and above our previous all-time high of 50% in the fourth quarter of 2025. With the year-to-date 2026 margin of 50%, the second quarter benefited from higher MTAG volume, continued cost optimization, and maturing internal efficiencies during our first full quarter of manufacturing exclusively in-house. We are also deploying and advancing artificial intelligence tools to drive significant future cost efficiencies and new product pipeline insights. As we expand our business as well as our development pipeline, we are very closely managing offering expenses. Research and development expenses were about $59 million, down from $62 million in the prior quarter, reflecting ongoing efficiency gains as we progress all of our programs. This marks the fourth consecutive quarter of cost savings through R&D optimization. Selling general and administrative expenses held essentially flat at about $39 million, even as revenue grew roughly 39%. With clear operating leverage from our commercial infrastructure, we expect to gain further efficiency with targeted investment across the business. I will now cover our outlook for the rest of the year. From second quarter sales, we are reviewing our previously issued full year 2026 total total revenue guidance of $350 to $370 million and plan to share more detail in the third We are well capitalized to fund both the launch and barrel pipeline. As of June 30th, 2026, we had approximately 304 million dollars in cash, cash equivalents, and short-term investments. This cash position is now expected to fund operations into the second half of 2028. When I joined Iovance, the priorities were clear. Grow revenue, expand margins, and manage spend to reach profitability as quickly as possible. On my one-year anniversary, I am pleased to highlight that all three of these priorities are translating into positive results and lasting value for patients and our shareholders. I will now turn the call to Dan Kirby, our Chief Commercial Officer, to review our commercial progress.

Thank you, Corleen. As mentioned, Antagony generated record revenue with more patients treated than in any prior order. This commercial momentum is carrying into the third quarter. Adoption isn't just growing. It's broadening into new ATCs and earlier lines of treatment. Today, I will highlight three commercial priorities powering that trajectory for MTag v. Groom, which are rising physician awareness, continued expansion of our ATC network, and a deepening body of clinical evidence. The first priority is to continue to increase awareness of antagonists. Among both treating and referring physicians, unaided awareness has increased nearly threefold over the past year. by two factors. One, a new marketing campaign unveiled at ASCO, and two, improvement in sales force effectiveness measured by meaningful growth in both number of treaters and referrers. The second priority is increasing our footprint across both academic and community settings. With more than 95 total ATCs today, we are on track to reach at least 110 by year's end. Community ATCs now represent a third of our network and are expected to increase significantly over the next several quarters. Each new ATC is widening our commercial reach to the patients who need it. The third priority is the continued expansion of our already deep industry leading clinical evidence. published five-year durability data, and real-world response rates of greater than 50% in patients with two or fewer lines of therapy are convincing physicians to adopt Antagni earlier. In addition, at ASCO we released a new survival analysis from our clinical trial. This analysis estimated that the anti-AV 10-year overall survival for responders would be 46.7% or almost half. Independently, a growing number of our ATCs are publishing their own real world experience. Across these studies, response rates and patient outcomes consistently meet or exceed what we observed in our clinical trials, which support the emerging practice pattern of treating patients with MTAGV as soon as possible after checkpoint inhibitor therapy. These aggregated, real-world evidence data are being deployed across our sales force in conversations with ATCs and physicians. This information can be found on the publications page of our website at iovance.com for those interested. Underpinning all three priorities is ensuring coverage and access. MTagD has strong payer coverage. More than 75% of MTagD patients are covered by private payers. Payers and plans that cover more than 250 million lives have added Amtrak to their policies. Our US ATCs are strategically located in proximity to most addressable patients. More than 95% of patients live within 200 miles and 80% of patients live within 100 miles of an ATC. With our rapidly expanding ATC network and increased community presence, we expect even broader access to MTACHI throughout 2026. Importantly, we are also proving we can deliver on our promise to patients with a turnaround time of 31 days or less using the only scaled centralized commercial manufacturing process approved by the FDA for TIL therapy. Demand for Prolucan, our second product, remains strong. All three wholesalers have sold through their previous stocking inventory in the second quarter and are currently ordering in line with MTAGV demand. For the rest of the year, we expect quarter-on-quarter proliferating growth tied to an antagonistic growth on a steady basis of approximately 16% of total revenue. Outside of the US, with two approvals of Mpagni in Canada and Australia, we are continuing to expand the new markets for previously treated melanoma patients, a globally addressable population of more than 30,000 patients annually. Our first ATC candidate is ready to support international private pay patients while we work toward public reimbursement. In Australia, I recently visited several of our onboarding ATCs as we collaborated to raise awareness and expand access to MTagV. Australia has the highest rate of melanoma in the world. We are opening our first ATCs for private pay patients while we work with the government on pricing. Looking ahead, regulatory approvals are pending in the United Kingdom and Switzerland. We continue to work closely with health authorities and the European Union towards resubmission. Together, these foundational international markets augment our growing U.S. franchise for MTAG. In summary, demand for anti-AID is strong and continues to grow. Rising physician awareness is accelerating referrals. A growing network of ATCs is broadening access that is converting into more patients treated. And the deepening clinical evidence is expanding the adjustable patient population. Iovance is committed to serving patients with a one-time cell therapy that delivers meaningful, validated, systemic clinical benefits.

I will now hand the call back to the operator to begin question and answer session. Our first question comes from Andrew Sy with Jefferies. Your line is open.

Hey, good morning. Thanks. Congrats on a great quarter. So, can you talk about this large upswing in Q2 that even came out well ahead of your guidance? Was it purely due to underlying demand or was there kind of any one-offs in the timing of shipments maybe being more favorable in Q2. Just wanted to check the box on that. And then secondly, on the long update later in Q4, just wanted to clarify on the cadence of events we can expect here. Is it fair to assume you would first need to complete enrollment in this pivotal cohort first and then generate follow-up data on every enrolled patients before you top line the data or Can the top line data be on the majority of patients not necessarily all patients with follow-up. Thank you.

So I'll take the first part on demand. It's a great question. What we saw on demand was, as I said on the call script, essentially we saw that awareness is increasing among our physician base, both treaters and referrers. We are expanding our ATC network and then the clinical data is evidence of MTAG-B's efficacy. One thing that did happen in the first quarter that helped us in the second quarter was we had the manuscript published on our real world evidence data that showed over 50% of the patients with two or fewer lines of therapy. we're responding. That data helped propel our sales force and our commercial efforts to raise awareness further and encourage more patients to be treated. We expect this to continue and we are seeing this in the third quarter.

Just to add to Dan, just to be very clear, Andrew, there's not a timing issue or anything. This is organic demand for the product. It's looking very good right now based on all the factors that Dan described and more that we really do expect that demand is going to continue to increase significantly for Ampagby throughout the coming quarters. On the lung, about the Lung 202 update. Yes, I think it's fair to assume we're going to complete enrollment very soon and we would wanna finish that process before we put any kind of, material update out, obviously for FDA purposes we want to do that. But I don't think it's fair to assume that we would wait for every single patient to become a valuable. We really want to make sure the integrity of the trial is clean and we have all patients in before we put some data out. Some of the patients may still be coming for their first evaluation, that kind of thing. Will we put that out or maybe not? Depends on the timing and how the data looks. So just stay tuned. The lung is looking very positive right now. We feel very good about where we stand with the study and we will have a lot to say about that. I know that's a very key thing for investors and I really urge everybody as we talk about that and maybe even more than what people are expecting in this space.

Thanks so much. Congratulations. Thank you. Our next question comes from Yanen Zhu with Wells Fargo. Your line is open.

Great, great. I'll add my congrats on a very strong quarter. Maybe, from Fred's comment, it sounds like for the next two quarters, expect the sales to or the demand to further build upon the current demand demand level or the second quarter demand level just want to see if that's the correct interpretation And in terms of, you know, given your visibility into the third quarter and perhaps also into the fourth quarter, Can you talk about your expectation and also the guidance sounds like it's going to come during the third quarter if that the case rather than at the next quarter's earnings call. Perhaps also a question on Tillvan 301. Can you give an update on where you are? And sounds like you have a presumption Yes, can you talk about what can we expect the data there? Thanks.

Sure, yes. Let me cover the first two, and then Dan can comment, and I'll come back to Till Vance at the end. Yes, I think you heard correctly. We demand trends are very positive right now for the impact of the product, and we expect increasing demand Q3 and Q4. We're obviously seeing quite a bit of Q3 right now. We wanna just evaluate the whole situation because we really focus on long-term guidance here and we wanna make sure we can give good guidance for the full year before we announce it. But you are correct, we are intending to make a separate announcement of guidance. So, you know, one morning, You'll wake up to some hopefully very positive news, I think, from my advance on the guidance as we get that visit. Can't tell you exactly when, but obviously sometime in the third quarter. But yes, that's very strong and tagging strong, and as we pointed out, for a looking demand, it's very strong. Dan, do you want to comment and add some detail to that? Sure. For Q3 right now, as you mentioned, Jan, and we go pretty good side into Q3 and what's going on right now, the demand continues to grow, and so we're very confident.

that Q3 will build upon the success in Q2, and then a Q4, of course, following from that. We've expanded our sales force to continue to evaluate, putting promotional activities in place such as new campaigns, etc. to continue that growth driving not only through 2026 but 2027.

And then I'll come back and answer your question about Tilvan Sio1. That study continues to run well. We're very happy with the performance of the study. At ESMO, we're going to, again, in an oral session there, highlight some of the compelling clinical characteristics of Ampagni plus Pembrolizumab in the frontline setting, including the fact that almost a third of patients go into a complete response. a very rapid velocity of response, meaning we can drive patients into a response much faster than other alternative therapies, we think. And we'll show much more insight, I think, from the predecessor phase two study. Obviously, TILVANCE is a randomized trial that we can't look at right now. It's blinded. We'll read that at the interim point, hopefully relatively soon. although these trials take a long time to run, as you know. But we're going to show the compelling clinical characteristics. And I think it's going to be a very important output for people in the field, especially since some of the excitement around lag 3 has faded, especially post-ASCO with Regeneron's results. And the lag is still, in some cases, being quite question is whether it's the right combination in the frontline setting and there really is a extremely large need for something some alternative ipinevo in the frontline setting for these patients we think like life will lose those characteristics are perfect for this would be one-time therapy combined with what may end up being fairly limited pampered those thing and the the fact that we can drive a large percentage of patients into what's effectively a cure. Great. Thanks for the update.

Thank you. Our next question comes from Edsir DeRoute with Barclays. Your line is open.

Great. Thanks for taking the question and congrats on the strong second quarter. One question on margins and then one on long. You had a meaningful step up, obviously, in gross margin in the second quarter. Maybe if you could talk about the remaining opportunities to improve margins further, relative to current levels and where you think mature commercial margins could ultimately trend to over time, that would be great. And then on lung, obviously the durability exceeds historical benchmarks from what you've previously shown. Is the internal goal there to replicate earlier data from an efficacy and durability standpoint and also with Enrollment nearly complete. Have you continued to enroll patients with similar baseline characteristics from the prior update? Thank you. Hi, answer. It's Coraline. So I'll answer your question.