Iovance Biotherapeutics Inc Aktie

Good day, and thank you for standing by. Welcome to the Iovance Biotherapeutics first quarter 2026 financial results conference call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sara Pellegrino, SVP of Investor Relations and Corporate Communications. Please go ahead.

Thank you, operator. Good morning, welcome to the Iovance webcast to discuss our first quarter 2026 financial results, business achievements, and corporate updates. This morning, we issued a press release that is available on our corporate website at iovance.com.

This conference call will include forward-looking statements regarding Iovance'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, research and preclinical activities, potential future applications of our technologies, manufacturing capabilities, payer interactions, licenses and collaboration, cash position and expense guidance, 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 SEC filings. Our results may differ materially from those projected during today's call. We undertake no obligation to publicly update any forward-looking statement.

I will now turn the call over to Dr. Fred Vogt, our Interim Chief Executive Officer and President.

Thank you, Sara. Iovance is the global leader in innovating, developing, and delivering current and future generations of TIL cell therapy in solid tumors. We are executing to maximize patient and shareholder value across four pillars: curative platform potential, commercial execution, technology extension, and fully owned manufacturing.

During the first quarter of 2026, we drove Amtagvi adoption, advanced our development pipeline, and streamlined costs and efficiencies. First quarter revenue grew approximately 45% year-over-year. Owning manufacturing is critical for our success. We navigated a temporary capacity reduction to complete maintenance upgrades at our internal manufacturing facility, the iCTC. Since resuming full production, Amtagvi is now exclusively manufactured in-house, and our modular facility can provide uninterrupted supply while supporting global demand and scale. Research and development expenses declined for the third consecutive quarter, helping to extend our cash runway into 2028.

Looking ahead, Amtagvi enrollment and referral trends are at an all-time high in support of our second quarter and full year 2026 guidance issued today. Second quarter total revenue guidance is $86 million to $88 million. Amtagvi revenue is expected to grow to $79 million to $81 million in the second quarter. This is an increase of approximately 23% over our highest quarterly revenue to date in the fourth quarter of last year. For the full year 2026, total revenue guidance for Amtagvi and Proleukin is $350 million to $370 million, predominantly fueled by Amtagvi. Over time, we project we project a $1 billion peak -- $1 billion plus peak sales trajectory for Amtagvi and Proleukin in the U.S. For the rest of 2026 and beyond, we expect gross margins to benefit from our financial discipline, in-house scale, and operational efficiencies.

Shifting to our TIL platform, we're expanding the curative potential across solid tumors. This morning, we announced compelling and clinically differentiated early Phase II data in metastatic serous endometrial cancer. The confirmed Objective Response Rate was 40% with a 100% disease control rate in the first five patients. Metastatic serous endometrial cancer is difficult to treat with an estimated 5,000 annual U.S. deaths. The second-line treatment setting represents a significant unmet medical need with response rates below 15%. We plan to engage with the U.S. FDA to pursue an expedited approval pathway.

I will now highlight additional registrational trials for lifileucel in new indications. To expand the Amtagvi's market potential into advanced frontline melanoma, we continue to execute our global TILVANCE-301 trial. In previously treated non-squamous, non-small cell lung cancer, lifileucel received FDA Fast Track Designation following best-in-class unprecedented response rate and strong durability. This U.S. blockbuster market is about 7x larger than our peak opportunity in advanced melanoma. We plan to complete enrollment and provide a clinical update this year, targeting accelerated approval and U.S. launch in the second half of 2027.

In advanced and difficult to treat soft tissue sarcomas, IOV-SAR-201, our new registrational trial, is underway in refractory patients with advanced undifferentiated pleomorphic sarcoma and dedifferentiated liposarcoma. The trial is beginning enrollment in the third quarter of 2026.

We are building upon positive early clinical results with a 50% confirmed response rate in comparison to the abysmal response rates of less than 5% with current standard of care. We are actively engaging with FDA soon on path to expedited approval.

As the global leader in TIL cell therapy, we are making significant progress to our next generation programs. IOV-5001 is our IL-12-tethered TIL therapy for highly prevalent solid tumors. A prior generation IL-12 TIL therapy at the National Cancer Institute improved clinical efficacy without IL-2 and informs how we optimize IOV-5001 to enhance efficacy and safety. We recently submitted the investigational new drug or IND application for a Phase I/II clinical trial, which includes indications that represent more than 15% of U.S. cancer deaths annually.

Among these indications are advanced colorectal cancer as well as triple-negative and estrogen receptor-low breast cancers, adding large populations of massive commercial opportunities to our strategy. The trial is expected to begin in the second half of 2026.

Our next generation IL-2 product, IOV-3001, may optimize the TIL treatment regimen. A Phase I safety cohort using IOV-3001 is advancing through multiple dose levels in a Phase I/II trial. We continue to enroll in our clinical trial with our PD-1-inactivated TIL therapy, IOV-4001, which reduces inhibitory signals to enhance the ability of TIL therapies to fight and kill cancer. We are initially exploring melanoma and non-small cell lung cancer. We look forward to reporting data and updates soon.

As we expand our clinical strategy in solid tumor cancers, we now have the opportunity and capability to identify enriched patient populations that are highly responsive to TIL therapy. We are identifying these enriched populations such as the serous endometrial cancer population we highlighted today and our selected populations within soft tissue sarcomas and even within non-small cell lung cancer and other indications, which you will hear more about later this year.

Iovance is well-positioned as the only company to have taken TIL therapy from concept to commercial scale with the manufacturing infrastructure, clinical breadth, commercial experience and operational discipline to back it up. We have momentum, a broadening pipeline and an improving line of sight to profitability. The foundation is built, and as we continue to expand across indications, our ambition is clear. To extend our leadership not just in TIL therapy, but as the backbone of immuno-oncology and solid tumor cancers.

As I conclude this pipeline update, I would like to extend my sincere gratitude to Friedrich Finckenstein, our Chief Medical Officer, as he prepares to retire in June. During nearly 7-years at Iovance, he was instrumental in leading us towards the FDA approval of the first-ever TIL therapy and our leadership position today. Friedrich is available during today's question-and-answer session, and I wish him the best in his retirement. I will now turn the call over to Corleen Roche, our Chief Financial Officer, who will provide further updates on our first quarter financials and full year expectations. Corleen?

Thanks, Fred, and good morning, everyone. Our commitment to operational excellence, commercial growth, and financial discipline drove strong top-line year-over-year growth and meaningful cost containment in the first quarter. We transformed our internal manufacturing facility to meet demand growth and scale for the future without major additional capital investment.

First quarter revenue of $71 million grew roughly 45% year-over-year, driven by strong Amtagvi demand. Amtagvi revenue of $60 million increased by 38% year-over-year on strong demand growth, our second-highest quarterly revenue for Amtagvi. We mitigated the first quarter impact from a temporary capacity reduction as we upgraded our facility.

Moving to Proleukin, $11 million in first quarter revenue nearly doubled from the year ago period on higher Amtagvi adoption. Importantly, gross-to-net impact remains extraordinary and consistent with past quarters at less than 2%. Our first quarter gross margin from cost of sales was about 41%, which absorbed one-time nonrecurring costs related to our facility upgrades. Margin is expected to trend higher for the rest of 2026, excluding one-time items, as we operate our in-house capabilities more efficiently.

We continue to manage our operating expenses carefully, including optimizing research and development while expanding our pipeline. Notably, research and development expense declined for the third consecutive quarter, a reduction of 18% over the prior period and 12% over the prior quarter.

Moving to our revenue outlook. After thorough analysis of demand trends and internal forecasts, we expect total revenue between $86 million and $88 million for the second quarter, driven by strong Amtagvi demand. This momentum carries through into our full year 2026 guidance of $350 million to $370 million for the full year. As of March 31, we had approximately $319 million in cash and equivalents. Thanks to careful cost management and financial discipline, we expect to fund our operations into 2028.

In closing, we are building momentum and focusing on operational excellence to grow revenue, manage expenses, and improve margins. We are on a clear path to profitability and remain committed to creating lasting value for our shareholders. I will now turn the call to Dan Kirby, our Chief Commercial Officer, to review our strong commercial progress.

Thank you, Corleen. Building on Corleen's comments, strong demand in the first quarter culminated in our second-highest quarter of Amtagvi revenue. This performance was achieved with reduced capacity and yielded much better results compared to the first quarter of 2025. Demand continued to increase throughout the quarter. March was our largest month ever for reported Amtagvi revenue. Second quarter is off to a very strong start with projections supporting our guidance that this will be our best Amtagvi quarter to-date.

In addition to generating demand, our three commercial priorities are further solidifying Amtagvi as the choice for patients. First, our expanding ATC network of academic ATCs together with new community ATCs are creating more patients, establishing both a reliable base of business as well as driving additional growth in 2026. Second, patients are increasingly referred for Amtagvi earlier in the treatment cycle. The recently published real world evidence combined with published 5-year durability data has been very impactful in educating physicians on the value of earlier referrals and optimal treatment with Amtagvi. Our field teams are committed to educating our physicians while advocating for our patients. Third, Amtagvi awareness continues to build among our key target physicians. Our latest market research shows physician awareness increased to 70%, up from 50% over the last 6-months. Earlier this year, we further expanded our field sales force with plans for additional increases in field staff as more ATCs onboard and demand continues to strengthen.

Proleukin is seeing robust demand, driven primarily by its use alongside Amtagvi. Proleukin sales were $11 million in the first quarter, down from the prior quarter due to wholesale buying patterns, but a substantial increase from the prior year as all 3 wholesalers ordered. We expect Proleukin to stabilize and grow throughout the year with increasing Amtagvi demand. Globally, we are making meaningful progress on [ ex-U.S. expansion ]. Amtagvi has the potential to reach more than 30,000 patients annually with previously treated advanced melanoma.

Following Amtagvi approval in Canada, the first ex-U.S. treatment center is officially authorized to support international [ private-pay ] patients. At the same time, we are advancing reimbursement discussions with the Canadian government. Regulatory decisions are anticipated in Australia in the first half of this year and in Switzerland next year. We continue making progress with regulatory submissions in other markets as well.

Finally, May is Melanoma Awareness Month. We are collaborating with advocacy groups to celebrate the patient experience while spreading awareness of Amtagvi. Yesterday, the Today Show posted an inspiring story highlighting Jennifer, a mother of 3, who is back to enjoying her family after receiving Amtagvi more than a year ago. Her story is one of many that represents the hope of Amtagvi. Jennifer is now also featured on our website, amtagvi.com. A growing network of patients are sharing how this one-time cell therapy has helped their own immune system, fight cancer.

I will now hand the call back to the operator to begin question and answer session.

[Operator Instructions] Our first question comes from Andrew Tsai with Jefferies.

Hey, guys. This is John on for Andrew. Congrats on all the progress. For Q2, if your Amtagvi sales guidance of $79 million to $81 million, how much can that improve gross margins quarter-over-quarter as well? And then can we assume that the Q2 gross margins will be better than the Q4 gross margins at 50%?

Yeah. Thanks, John. Well obviously, the margins we showed in Q4 of 2025 were really where we aspire to be or above that. We can't say just yet where our margins are going to be exactly. But I would expect generally that they will trend upwards throughout the year. We're working very hard on that. It depends a lot on the product mix and a lot of other factors. So we really do want margins to be better throughout the year and then of course, in 2027 and beyond, we're driving towards higher and higher margins all the time.

Yeah. Just to emphasize, John, the margin was impacted, like I mentioned, from one-time nonrecurring costs. That should not happen again. It will be nonrecurring. Our margins should be continuing to grow. As i keep mentioning, we have a lot of efforts. We brought everything in-house, right? So we use the capacity of our own facility. We'll have economies of scale there. We also have targeted projects focused on operational excellence in the plan specifically. And as you see, as revenue grows, that also helps. Does that help you?

Yes, definitely. And then also maybe just a quick follow-up, if I can. Is it fair to assume that the lung data would come at a major medical meeting in the second half of 2026 versus something like Q2 at ASCO? And then would you be inclined to press release the data before? Any timing granularity would be helpful. And maybe also just remind us your expectations on ORR and potentially even DOR?

Yes. As you can see, we released data in lung only about 6 months ago that had excellent durability, which is typical of immuno-oncology approaches that work really well. So you can go back and look at our November press release, that's basically what we're looking at for this product and what we think is something that we get approved for non-squamous non-small cell lung. I can't really say much more about conference stuff except that we've guided, obviously, to 2026 disclosure at a medical meeting, and we continue to plan to do that.

Our next question comes from Reni Benjamin with Citizens.

Congrats on the progress. Maybe two questions. One, as we think about the ATC network and now bringing to the 90, I think you're targeting 110 by the year-end. Can you maybe talk to us a little bit about what the split will be between these academic ATCs and community ATCs? And what do you think will be the max capacity across these ATCs?

And I think, Fred, you mentioned that the sales force is going to be growing throughout this year. Can you give us an idea as to what the optimal number of that may be? That's the commercial question. One for Friedrich because this will be the last time that we're speaking to him. Congratulations, Friedrich, on retirement. Kind of wanted to just get a sense as to the 40% confirmed ORR in endometrial, kind of your thoughts and any kind of details you can provide us in terms of depth of response or durability and how it compares to what's already out there?

So Remi, thank you very much for the question. I'll start first and hand to Friedrich. In regard to the ATC network, we see ATCs now on-boarding and starting to treat faster than they were last year. So the ones that on-boarded in the second half of the year are treating faster. Our academic and community mix is starting to get more balanced, whereas at the beginning, we were mostly academic. Now we're going more into the community hospitals, and getting closer to the patients, where the opportunity is greater for us. So we do see that, that is going to, over the year, mix more into a greater percentage of community entering-in because we do have the key academics already onboard and treating.

In regard to sales force, we did increase our sales force going into this year based on the second half ATCs entering into Amtagvi authorization. We did see and have seen and are seeing increased demand from those ATCs. The new reps are being very impactful in the field with it, and we have a plan now to expand in Q2 as well as looking at later this year based on the timing and pace of both demand in our current ATCs and on-boarding new ATCs. Hopefully, that answers your question. I'll hand over to Friedrich for the second half.

Yes. Thank you. Thanks for the question, Remi. Yes, so this is a really, really exciting result that we're seeing there. As you know, in endometrial cancer, the checkpoint inhibitors are -- have moved into frontline therapy. So standard of care or really available therapy, if you want, in second line is dire. Usually, these patients are being treated with monotherapy, chemotherapy and response rates are usually below 10%, 15% highest when you look at control arms of randomized trials. So that's not good enough. These patients have highly unmet medical need and seeing another immunotherapy come through with these response rates and typically durability that is differentiated from chemotherapy, that's really important. That's why we're planning on jumping on this and taking this further.

Our next question comes from Etzer Darout with Barclays.

Congrats on the quarter. Just looking again at your 2Q guide, just wondered how much of this rebound with the step-up from the first quarter is maintenance disruption versus maybe underlying demand trends, and what the key assumptions are behind the outlook there?

And then maybe secondly, on the pipeline, just as you think about the endometrial regulatory path, should we think about a potentially similar framework for -- as you're employing for sarcoma in terms of the regulatory path to accelerated approval?

Yes. So let me take the second question first actually because, yes, that's correct. We are looking at a similar regulatory path for serous endometrial versus UPS and [ DDPS ], and we'll come back soon after we have some interactions with FDA. We're going to try to optimize as much as we possibly can to supplemental BLA filings and if possibly, we combine stuff and work together to make sure that we can get these things approved as quickly as possible with the FDA. So stay tuned for a lot more detail on that. We're very excited, obviously, about all 3 indications. We think they all significantly to Amtagvi's potential, and we're currently built to launch all these indications quite quickly on the back of our commercial expertise and manufacturing.

On the Q2 guide, you were asking about maintenance versus demand. Demand trends are extremely strong, as Dan highlighted earlier. I really don't think about it as a maintenance issue. I think about it as something that we had to address. We fixed it, it's done. We won't talk about maintenance ever again. It's now built in our system so we can do it without any kind of -- any kind of impact whatsoever. Demand is very, very, very strong for the product right now. So Dan, do you want to emphasize again some of the points you made during the prepared remarks on demand trends?

We continue to see demand increase. This has happened through fourth quarter and the first quarter and carried into the second quarter. I mentioned before that March was our largest reported month to date. We continue to see a strong start to Q2, which is why we have the guidance set.

Our next question comes from Colleen Kusy with Baird.

It's Nick on for Colleen. Congrats on the progress. Just -- so with the new guidance, expecting $209 million in product sales in the back half of the year, can you just speak to your confidence in hitting that goal? And what else needs to be done to get there?

Yes. So right now, Nick, we're highly confident we can achieve that. We've obviously already done a lot of it. We have visibility right now in Q2 into essentially the entire quarter. That's why we're giving such strong guidance for Q2 Amtagvi revenues as well as Proleukin. And then the back end of the year, we can see very clearly, too. And when you look at the guidance that we gave today, it's easily achievable with some growth as we go from Q2 to Q3, Q4 that we have line of sight and visibility to.

We have a much better understanding of our ATDCS and how they perform, how we can produce the product and every step of the process of getting Amtagvi to the patient. And I think it's extremely responsible guidance that we've given -- its guidance that we will do everything in our power to beat, of course, but it's guidance that we can stand by and live with and it's quite strong compared to where we were last year.

And I would just add on to that, Nick, that this is our second full year on the market. We're over 2 years since launch. So variables such as seasonality, et cetera, we have a much better handle on. And we can project based on new ATCs coming and growth in the current ATCs where demand is picking up and where demand continues to increase. And that's why we look at the second half of the year as being extremely strong. It starts right now in the fourth quarter. We're seeing it right now in the demand and what's lining up for the centers.

[Operator Instructions] Our next question comes from Tyler Van Buren with TD Cowen.

Can you talk about the progress you made with the TILVANCE-301 enrollment, where you are in terms of percent enrollment? And what's been working to enroll patients? And what are some of the hurdles that you've had to overcome like sites in the U.S. using Nivo Ipi in the front line?

Yes, I can get that and then maybe Friedrich can add a little bit to it, too. We're seeing good enrollment in TILVANCE-301. Obviously, we do a lot of it outside the United States because it's easier outside the United States with standard of care. But it's a study that we think is well designed. We have very good FDA feedback on the design of the study. We're very focused on getting to the interim read where we can read ORR and have an early discussion with FDA about confirming Amtagvi's approval as well as getting additional approval. You can go on clinicaltrials.gov and see the vast scope of sites that we're running right now. It's all over the place.

There's -- obviously, with any trial, there's things that you have to do to pound through it and succeed. Every company has to deal with this, and we're encountering and overcoming, I think, a lot of those right now, with this trial. So we expect good things for TILVANCE, and we think that TIL therapy in the frontline setting, especially combined with pembrolizumab can vastly improve the chances of a good overall survival outcome for patients. Our COM-202-1A data shows that. You've seen that publicly. We'll talk about that more this year, but that's really what's driving the study right now. Friedrich, do you want to add anything?

No, I think you've said it. I think it's important to remind folks that pembrolizumab is standard of care, and there are some geographic differences around this and not everyone believes that everyone should be getting -- frontline combination therapy. And then, Fred, you already highlighted the data from Cohort 1A from COM-202 that is proof for the potential for durable meaningful benefit for patients in that treatment setting from TIL therapy when used as early. So I totally agree.

Our next question comes from Salim Syed with Mizuho.

Would love to ask more than two questions here, but I'll limit myself. Corleen, Fred, maybe just one -- I'll limit myself to two here. On the ATM usage, this is now the fifth quarter you guys have access to ATM in a row, 4 of the 5 quarters, it's been pretty heavy usage. What -- could you just outline for us just your financing plans here? I mean this seems to be egregious at this point beyond any biotech company that I'm aware of how much you've access to your ATM. Why don't you just do a more traditional sort of financing path here? Or what are your financing plans going forward, should we expect this continued sort of practice?

And then just second, on guidance, could you just outline for us, please, how do you come up with your guidance now? Like is it -- you have your sort of internal forecast and it's a plus/minus when you get to that? Or is it just downside? Just how conservative is this guidance?

Yes, we don't think the ATM usage is egregious at all. We dipped on the ATM occasionally, and we use it as needed to sort of top up where we are, and we've been really, really disciplined in how we use it. We're really driving the cash runway extension and now we pushed the cash runway out 2 quarters, more than 2 quarters in this most recent. By the way, every single quarter, we're pushing it out a quarter. So we're now all the way well into 2026, as you can see in the press release today. That's largely on the back of cost discipline. And we're getting -- internally, we're getting better and better at saving money when we run our trials, and we're obviously boosting margins and we're making more revenue to the top line. Everything is coming together to really extend our runway. And we are very, very focused on breakeven and any dilution for the shareholders.

So yes, we do have to make use of the ATM. We still explore non-dilutive options. We're still working on them right now, but we think the lowest cost of capital right now for the company is to do a little bit of equity here and there, to make sure that we are getting closer and closer to that breakeven every quarter.

On the guidance, we think this guidance is responsible. We are in possession, of course, as a company of detailed information about each ATC, the performance of each ATC, performance of our manufacturing, every aspect of what we do with Amtagvi, much more detailed than we were when we launched the product in the beginning. Now we have all the information we need. Dan's team is doing a great job identifying all the trends. As we onboard new ATCs, we have a much better understanding of what they're going to add to the picture. We know which ATCs to focus our sales teams on and which ATCs can produce for us reliably -- product that is the highest quality that we can make very reliably for them.

And so we have internally, I would call them extremely sophisticated forecasts that we are watching every day to make sure that they are accurate in the launches. So for example, for Q2, practically every resection that we have for Q2 has already been performed. So we already have a very good understanding right now of what's going to happen for Q2. That's why we can give that guidance so tightly. And we're really, really comfortable in that guidance. That's why we're giving it. We know investors want it. And like I said earlier, we're going to do our absolute best to beat it.

I'll just add on to that, Fred. Looking at that, and I agree that the guidance that we said, I've been here over a year and really, we've learned a lot about this market and how to forecast and understanding it. So that's responsible, as Fred said.

But I would also say that my teams are focused on beating that. That is our mission. That's what we're going to do and our expectations are higher than that. But again, the guidance is responsible, what we believe we're going to do based on the current information we have, but we will seek to onboard more ATCs than our goal. We'll seek to treat more patients than our goal. So I hope that gives you an idea of the mindset from my teams on that, but also to what we issued publicly is what we believe is responsible and what we are going to do based on the information we have today.

I'm showing no further questions at this time. I would now like to turn it back to Fred Vogt for closing remarks.

Thank you again for joining the Iovance Biotherapeutics First Quarter 2026 Conference Call on the heels of record high demand for Amtagvi as well as significant progress across our pipeline. As we continue to work on therapies with curative potential in solid tumors, we are energized by the growing number of patient stories reflecting the impact of our TIL therapies, some benefiting upwards of 6 years and counting. We remain deeply grateful to the patients, partners, health care professionals and advocacy communities we serve.

Finally, I want to thank our exceptional Iovance team, our dedicated shareholders and covering analysts for their continued support and commitment to our mission to innovate, develop and deliver current and next-generation TIL cell therapies for patients with cancer. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Hello, everyone. My name is Etzer Darout, the senior biotech analyst at Barclays. It's my pleasure to have Iovance Therapeutics for our next fireside chat. With me today, I have Brian Gastman, Executive Vice President of Translational Medicine and Research; and Sara Pellegrino, Head of IR. Thank you so much for joining us this morning. Maybe just Brian -- just Sara, just maybe give us an overview of Iovance for those less familiar with the story.

Great. So that's a great place to start. At Iovance, we have 3 key pillars of strength that we are focusing on in 2026 and into the future. Our first pillar of strength is our U.S. commercial business, driven by our commercial product, Amtagvi, which is approved in previously treated advanced melanoma in the United States and has at least a $1 billion U.S. peak sales potential. The next pillar of strength is our pipeline, which we are building as the backbone of immuno-oncology in solid tumors.

And our lead program there is a registrational program in advanced non-small cell lung cancer, where we have potential best-in-class profile that Brian can talk more about today. And third, we are honing our operational excellence as we grow revenue, reduce expenses and realize efficiencies on our path to profitability.

So we'll talk in more detail about these pillars of strength today. But on the heels of a strong 2025, we are confident in remarkable revenue growth, financial discipline and important pipeline catalysts in 2026.

So I guess, maybe take a step back just in terms of what Iovance was able to accomplish in 2025, around sort of commercial traction for Amtagvi and improving margins. Maybe you can just start with what gives you confidence in the business and your ability to execute on that in 2026?

Well, for me personally, I can just say that we're seeing growth. I think the second half of 2025 is quite strong. The fact that we're penetrating into the community, which we really didn't do prior to that, I give our new CCO, he's not so new anymore, a lot of credit for those initiatives, a number of ATCs have stepped up that were slow to start and now have really not only showing good volume, but also good quality in that volume and the strong commitment to getting these patients early. I think that's the main thing we're seeing across the board.

It helps with our manufacturing. It helps with us getting the drug manufactured to the patients. And then ultimately, we'll talk about this for real-world evidence, the results have been dramatically better when we do so. So I think all those give us a lot of confidence. And I think -- and finally, I would just say just the sentiment enthusiasm in the community. I came 18 years in practice with those same people. You can feel probably the change.

Yes. When a new ATC in the community setting comes online, what tends to be the hardest part of the learning curve for that facility?

Yes. So each one has its own challenges potentially depending on their strengths, depending on whether or not they participate in clinical trials. But ultimately, what ends up happening is a trifecta of the medical oncologists who are identifying and referring these patients, the cell therapists who control the floor that the patients can be treated on and the -- all the reimbursement specialists and case management and the surgeons.

And when we see them come together and work as a team, not as just technicians as part of something needs to get done, that's when we see the excellence from the centers. Some centers, of course, are built in with gigantic volumes the usual players, so to speak. And when we do so, these really drive our business. And I think each center has its own version of that. So I can't say specifically. I don't want to call it specific means. But you can imagine you can -- we know how to tailor those issues to the center.

Great. And with the real world data that you recently disclosed, obviously, higher responses with earlier use and that was interesting to us. How are you seeing that data sort of update influencing, again, uptake of Amtagvi or just any conversations that you're having based on that data set?

Sure. So let me just remind the audience. What we're talking about here is that our pivotal trial showed a 31% response rate with really -- and I think we may talk about this also incredible durability not seen prior and not seen since. But the question has always been what will happen in the real world. We've seen in immune check inhibitors is actually worse real-world evidence than actually we saw on some of those top line trials that was even Nobel Prizes, for example. So we were pleasantly surprised that, first of all, we saw at least as good, if not better, in all lines of therapy. And ultimately, what we found was a 44% response rate, which was definitely higher than 31%.

However, when we broke it down by lines of therapy, the early patients actually drove that to be higher. It was over 50% response rates. And you can see our responses tend to be so durable, sometimes immeasurably durable. So we're very excited that if we can get every patient and almost every melanoma patient in this class is a TIL-worthy patient, if we can get them at the right time, everybody should be able to achieve those kind of responses.

And so I think your question then is, what has that data done? Well, first of all, for some centers, it's validated what they already knew, but they didn't have it objectify. Two, it allows centers to question why are they doing so much better than we are to now understand what the gap was. And three, they now can communicate to the non-authorized treatment centers why they need to and should absolutely ethically refer these patients as early as possible because ultimately, we want the best for our patients.

And then quite frankly with you, a lot of referring physicians, they may not be giving you the therapy, but they actually get the benefit both the personal satisfaction, but also even the business satisfaction of being able to treat these patients and follow them for many years to come. So there's a lot of win-win for everybody, but ultimately for the patients.

Right. And the deepening of response dynamic, I think you presented some data at ASCO, I think, is another sort of access this. Are you hearing anything around sort of adoption or anything around sort of driving more adoption based on that deepening of responses? Are physicians aware of the data in your conversations with different communities?

Well, for those who are absolutely aware, it is very impactful. First of all, to have a onetime therapy that can work even years later is incredible. And I think that not only goes to the living therapy side of it, but also it's polyclonality. So for example, if the tumor immuno edits one of the targets that our therapy goes after, we have other targets that all of a sudden as that tumor changes, our therapy actually can actually go after.

We saw patients go from a partial response to complete response almost 3 years later, but no therapy. They're just sitting at home and the therapy is just working, which is incredible. What it does though, it goes back to my point earlier, many -- especially in the oncology world, a lot of their business -- I mean, sadly, there's palliative care, there's current treatment, but a lot of it's follow-up on these patients.

That's what they do. They order scans, they get blood work. Well, when they see that if I can send someone to a center and my patient can come back to me for years on end, always with smiles on each other's faces, and I get to actually run my business by just following them for years, it's very impactful. I think the challenges on our centers and us to get down to the people who need to know this information, ASCO is great, but people go to ASCO for many things, not just the melanoma sessions. But for those who've heard it, it's been very impactful.

Right. For U.K. and Australia, given potential approvals in the first half of '26, do you expect to start generating initial revenues in '26 in those regions?

Great topic. So we're really excited about the opportunity to expand -- to expand Amtagvi beyond the U.S. And there's approximately 30,000 patients globally that could potentially benefit from Amtagvi around the world. We really think that the ex U.S. markets are upside beyond 2026. We're approved in Canada. We're pending in the U.K. and Australia this year, and the reimbursement and pricing discussions are happening in parallel, but they also do continue after the approvals. So the process is a little bit longer than outside of the U.S., and that would be -- something that would be factored in more after 2026.

Great. Maybe we can switch over to lung cancer for cell. So lung cancer, different market than melanoma, it's larger, more heterogeneous, also more competitive. I guess when physicians look at this data later this year, what do you think will matter most for them when they take a look at that data set?

Sure. So let me remind the audience that if you look at the best-in-class frontline therapy for non-small cell lung cancer, essentially the 5-year data shows that everybody is basically progressing. Less than 20% of those patients are alive, let alone not progressing in 5 years. So I think to many in the field, there's really not a cure out there, whereas in melanoma, if you do well in front line, you could do well. So there's less of this. Let's just keep trying these therapies in more what else is next.

To have a drug with this potential durability and as you've seen some of the data that we've put out there where in swimmers plots, these patients are swimming for years on and it's reminiscent of melanoma, and there's a deep need for this type of therapy. There's just nothing else out there. It's competitive but most of the competition is just get responses, not for durability. And again, I think that's our strength. And I think that's what's really going to be energizing the community moving forward. So ultimately, bigger unmet need, a lot more patients and then the fact that we hit the unmet need with an incredible amount of durability. I think that's what I would be looking for when we show this data.

Right. And maybe just remind audience around sort of the second-line nonsmall cell lung cancer setting in terms of responses, the duration of responses we've seen historically? And what you sort of view as sort of a benchmark that you would view as a positive update when we get that lung cancer data?

Generally speaking, docetaxel or docetaxel plus something else, which causes lots of toxicity are the benchmarks. But you'll see docetaxel used mostly as your standard. And I think the main thing is whether you see a 10% or more response rate, the median progression-free survival, somewhere between 4 and 6 months. It's very -- it really is a palliative drug. So where we went out on this is less on the responses and more of the fact that if you get a response, it could be immeasurable.

And so I think the bar is extremely low. And ultimately, you see that because as I told you in the frontline patients, most of them don't -- aren't really surviving, A lot of them actually got that docetaxel. And then they got some clinical trial and a fourth line. And now they're in that 5-year status where most of them are not live. So whatever it is out there, benchmarked or not, there's a major dissatisfaction in the current options.

Right. And when you think about the ATC network currently in place for melanoma lung cancer significantly bigger opportunity. Is there going to be teaching involved? How are you thinking about expanding sort of the ATC network to be able to meet the demand of a much larger population in lung versus melanoma?

Well, first of all, there's a huge overlap here. I mean, basically, it's the exact same centers. It's the exact same cell therapists, same case management, reimbursement team, cell therapy force, all that's the same. Even surgery, I know centers -- personally, I'm a surgeon, so I could talk to a lot of surgeons who they love if they're going to go for a visceral starting material for Amtagvi to go to the lung.

So they're using already the same surgeons. And then finally, there's a growing number of medical oncologists who are like basically saying, yes, I started out melanoma doing TIL, but I really wanted to do TIL and cell therapy in general in solid tumors. And so I'm starting with melanoma, Oh, I can't wait to start with 1, 2. So there's -- I don't want to call it just derisking, but just lack of -- there's a higher floor.

So -- and then finally, the manufacturing is literally the same place. In fact, where we do our manufacturing for clinical trials literally will then simply flip a switch and it's the same place and you're doing it commercially. We don't have to now go somewhere else to show it works commercially. It's literally the same place. So there's so much. It's so ready to go, unlike what we had done before. And I don't think there is a single other company that has such a ready-to-go model as we do in solid tumor cell therapy.

Maybe we can just switch to lifileucel and cell tissue on sarcoma. You obviously presented some pretty encouraging data during your last call, particularly given how refractory those patients were. When you think about a registrational study for sarcomas, which I think starts in the second quarter. What does success look like? And what type of population can we expect you to explore in a pivotal study?

Sure. So let me just tell the audience a little background on that. One of the things I get to do is run these ISTs. And in fact, this was not meant to be as fast as it was, and it was a relationship I had with my own CEO, and we did it, and it's been a special relationship with MSK. And we have looked at other soft tissue sarcoma. Sarcoma in general is sort of like this grab bag of all kinds of tumors, they don't want us to call them, right? So although they're called sarcomas, they're not -- they can be very disparate diseases.

And there were some reasons why these 2 in particular, which we had not really studied before, despite studying others, look interesting. So we decided to do it. And first thing we know is right away we're able to manufacture, which is terrific. Second thing was our first patient, which was almost a response, patients start telling the doctors, I feel really well. I mean, I'm like really, this is crazy. These patients I've treated them before, they are really sick. And they have very little to treat them with other than things that don't work and make them sick, and they're getting it constantly.

Second patient response. And then before you know it, 6 patients -- 3 out of 6 responded. Now let me explain to you, even if one of those was by fluke, that will be 2/6, 1/3. The benchmark in the second line is less than 5% responses. And talk about progression-free survival, it's even worse than long. It's 2 to 3 months. It's basically -- it's -- I'm not sure it's much better than placebo. That's how bad it is. In fact, I would argue that there -- because there are 8,000 frontline patients like this in Europe and the United States, there's about 3,500 of which get second-line therapy. Many of the reasons why it's not 8,000 is because doctors like, look, there's -- you fail your front line, which almost all of them do, you can take the second line or you could just go to hospice.

I -- in my mind, that means likely the real number is 8,000 and by the way, it's growing. And these patients are desperate. I mean they wait they succumb to this disease, it should not happen to anybody. So my point is it was exciting to see this level of response. Those are patients that are continuing to respond. Ultimately, patients' quality of life is improving. And remember, it's a onetime therapy. They are just at home with nothing else being treated to them. They're not coming back to infusion chairs every 3 weeks. They're living their lives. And we know patients have gone back to work. I mean it's an early trial, but the benchmarks are exceedingly low. And what we do with our ISTs, I think to answer your other question, is we design them is if they -- because if they're successful, we want them to be used to derisk the experimental arm of a clinical trial.

We know that about 40-plus patients is all we need per indication in sarcoma as has been previously approved. Single arm trial is a style that we would do. And that's what we're going to plan on doing in a registrational trial. And it's going to be reminiscent already of what we've done, our IST with some tightening of the restrictions that make it a more homogeneous population to make it easier for an approval pathway. But we're extremely excited because these responses are unprecedented, and it's a huge opportunity for patient, doctors and trial events.

And I would also point out that our current registrational program in non-small cell lung cancer we decided to move that forward because of some early data that we had seen out of the academic setting, and it's now a registrational program. So it's a good model for us.

Yes. In fact, I didn't know when it was going to come up. But we know that our current trial for lung, which is designed to be about 70 or 80 patients, matches very well with 5 recent FDA approvals in lung cancer. So we've really -- we get these questions asked a lot, as I say, why people sweeten up their models, they are -- this is what is getting approved and how it's being approved. And so we're following a similar model here, too. And ultimately, Amtagvi got approved through a 73-patient single-arm trial.

Right. And as far as where sort of TIL can go next, obviously, right now, you can show activity now across 3 tumor types. And there's more to come. And when you think about sort of how you sort of triage the opportunities for TIL, maybe you can talk about sort of what you view as potentially the next opportunities for lifileucel in various solid tumors.

So there's 2 ways of looking at it. The first is our current manufacturing style of making lifileucel. There, we're using certain aspects of tumor such as they get immune checkpoint inhibitors in the front line. There's really no good second-line therapy. And of course, the solid tumors. That's where we tend to focus. And for those kind of metrics, with those kind of qualities, we are using ISTs to help like we did with sarcoma and I can tell you, we have another one that's opened now. You can look at clinicaltrials.gov looking at continuos squamous cell and Merkel cell, as an example.

So these are -- that's how we do it. These are sort of like feelers. And if we get responses, you see how fast we turn those responses into an investment. And also, we realize when it doesn't work. We have a large amount of data on where that TIL does not work in. That leads me to the other side of what we're doing, and that is our genetically modified next-generation cell. There is no company that is as advanced in that as we are. We have the first genetically modified 4001 program, which I could say -- I can't give you public data now, but we're very excited about the responses that we're seeing and we're trying to figure out where to apply that to. We want to make sure it's the right setting for the right indication.

I think what makes me even more excited is our 5001 program, running research and knowing this came from the research area in Iovance is really exciting. And basically, this is a TIL that is tissue sensing. It actually notices where it is and it only then armors itself with a tethered IL-12. One of the advantage of Iovance over almost anybody else, including [ anemia ] is that we get to work in something that has already worked in humans and then work backwards. So this is based on a trial that was published that had over 60% response rate, very few cells, even as much as 1,000 full cells can give complete responses than our current TIL. The problem was toxicity. And the issue was the TIL that was used secreted IL-12.

So we're trying to capture lightning in the bottle by -- instead of secreting it, tethering it. So it only travels with that cell to the tumor. And what's exciting about that is that if we can not only have low safety signal, have incredible efficacy, we can start then going into tumors that don't have a lot of T cells to begin with because we don't need a lot of T cells to end with. And that allows us to go into all kinds of indications that we've tested and not done well with or you haven't even tested, and you will see that happening this year.

And can you remind folks for 4001, 5001 programs, what you're communicating about sort of data disclosures?

Yes. So for 4001, we haven't announced when we're going to present it. I know there's a commitment to do that, but we have to go through phases with the FDA. There's a Phase I., there's a safety run in, there's analyses, and there are reasons to or not to present that data. So I can't give you public timing of that right now. For 5001, I can tell you, I'm presenting it at -- this is SITC spring in a couple of weeks in Tucson, we'll be discussing again the preclinical background of this, including showing that the tumor doesn't -- excuse me, the T cells don't shed the IL-12 and what kind of effects it can do, and they actually head to head against our Gen 2 product. So if anybody is interested, please look out for that presentation. And that's the kind of data we'll have until we'll actually get into patients.

Great. Maybe a last question around margins and the margins improvements that we've seen with Amtagvi, maybe can you speak to sort of maybe where you see sort of further operating leverage coming from? Is it just really is volume increases, other dynamics that we should be thinking about for margins?

Sure. So margin expansion is a top priority at Iovance and there are a lot of key positive drivers. In the fourth quarter, we reported our best ever margin from cost of sales at 50%. That was driven primarily by optimization, disciplined use of capital and high manufacturing volume as well as high manufacturing success, the highest that we have had to date.

Now more recently, in the first quarter, we transitioned all Amtagvi into our internal facility. So the in-house manufacturing is going to drive even more improvements on an ongoing basis and over time. And the ongoing execution and more discipline and focus on excellence will also be impacting gross margin on top of that. So stay tuned.

Great. Thank you. Brian, Sara, thank you for your participation. Thank you for our listeners for listening in, and we'll be back soon with our next session. Thank you.

Thank you.

Good day, and thank you for standing by. Welcome to the Iovance Biotherapeutics Fourth quarter and full year 2025 Financial Results and Corporate Updates Conference Call.

[Operator Instructions]

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sara Pellegrino - Senior Vice President of Investor Relations & Corporate Communications at Iovance.

Thank you, operator. Good morning, and welcome to the Iovance webcast to discuss our Fourth Quarter and Full Year 2025 financial results, business achievements and corporate updates. This morning, we issued a press release that is available on our corporate website at iovance.com. This conference call will include forward-looking statements regarding Iovance's goals, business focus, business plans and transactions, revenue, commercial activities, clinical trials and results, regulatory approvals and interactions, plans and strategies, research and preclinical activities, potential future applications of our technology, manufacturing capabilities, regulatory feedback and guidance, payer interactions, licenses and collaboration cash position and expense guidance 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 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.

I will now turn the call over to Dr. Frederick G. Vogt - Interim CEO and President of Iovance.

Thank you, Sara. In 2025, Iovance delivered substantial revenue growth, achieved groundbreaking data milestones and strengthen our financial performance. Our Fourth Quarter and Full Year 2025 results underscore our focus on value creation for patients and shareholders. We drove an Amtagvi adoption while streamlining costs and opting operations. Our operational strength resulted in a robust 30% revenue growth, driven by Amtagvi and our best ever 50% margin from cost of sales in the fourth quarter.

For the full year, total revenue of about $264 million was well within our annual guidance range. Our cash runway bolstered by our ongoing cost savings initiatives now extends into the third quarter of 2027. Following our exceptional performance in 2025, we are well positioned in 2026 to surge toward a highly profitable and broad business in solid tumor cancer immunotherapy. We plan to execute across 3 core pillars: first, continue accelerating our U.S. commercial launch of Amtagvi in advanced melanoma; second, harness the power of our TIL pipeline to expand into new indications and next-generation products; and third, how our operational excellence as our foundation for success.

First and foremost, we are gaining positive uptake commercially with a significant potential for Amtagvi and Proleukin to reach $1 billion plus U.S. sales at peak. After a considerable increase in fourth quarter demand for Amtagvi enrollment volumes in 2026 are accelerating within our broad and continuous expanding network of both academic and community authorized treatment centers or ATCs. These ATCs are further reinforced by excitement surrounding the real-world experience and benefits of early treatment with Amtagvi.

On top of increasing demand, we are benefiting from operational improvements throughout the entire Amtagvi treatment journey. From patient identification through manufacturing to infusion. When the heels of positive momentum in the fourth quarter, we expect remarkable revenue growth in 2026, driven by Amtagvi. In the very near future, we will provide revenue guidance with our growth projections. Our second color is the massive expansion potential for our to platform to positively impact patients into new indications. We are harnessing the overlap and scalability of our TIL platform, manufacturing leadership and commercial capabilities across solid tumors.

Our lead indication for lifileucel previously treated nonsquamous non-small cell lung cancer. This blockbuster U.S. market is about 7x larger than our PQS sales opportunity in advanced melanoma. In our registrational patient population, lifileucel has demonstrated best-in-class clinical response rates and durability. This morning, we announced the FDA has granted fast track designation that validates our clinical trial data and reaffirms the substantial unmet medical need for lifileucel in this indication. We are rapidly advancing towards a supplemental biologics license application with a potential accelerated approval and launch in the second half of 2027.

This morning, I am also excited to introduce entirely new indications for lifileucel announced in a press release alongside positive early data. In previously treated patients with 2 aggressive difficult-to-treat advanced soft tissue sarcomas, lifileucel demonstrated an unprecedented 50% confirmed response rate. As Brian will highlight, lifileucel may offer the first durable immunotherapy option in this treatment setting. Current outcomes with standard of care arm abysmal with response rates below 5% and short median overall survival of only 9 to 10 months.

Together, these sarcomas impact than 8,000 patients in the U.S. and Europe annually, significantly increasing our market opportunity for lifileucel in the U.S. and beyond. We are working expeditiously to initiate and complete a single-arm registrational trial to launch the sarcomas. Our robust pipeline is the backbone of immuno-oncology and multiple cell tumors today to the future as we build upon our established global leadership and define next-generation approaches for to cell therapy. Our 2 clinical-stage genetically engineered TiL therapies have the potential to transform the treatment paradigm across a vast number of sawtimber cancers where patients have few options.

Our next-generation IL-2 product may facilitate more accessible TIL therapies, and we expect to provide many more updates on our pipeline in 2026. Finally, our third pillar is operational excellence as we increase revenue, optimize costs and drive efficiencies toward profitability. In the fourth quarter, we reported our best ever gross margin as Corleen will discuss. Additionally, our ongoing execution, discipline and focus on financial excellence will improve current and future gross margin and further extend our cash runway.

Within our operational excellence pillar, as Igor will highlight, manufacturing success has improved across the board. By optimizing our processes, we have infused more patients while reducing dropouts to be more efficient ahead of future launches. Importantly, we own and control all manufacturing for Amtagvi within our U.S.-based Iovance Cell-Therapy Center, or ICTC, as well as critical components of our supply chain. We have never been in a stronger position to execute while scaling to new heights. In 2026, we are laser-focused on maximizing shareholder value, ending dilution and supercharging future profitability.

I'll now turn the call over to Corleen Roche, our Chief Financial Officer, who will provide further updates on our fourth quarter and full year financials.

Thanks, Fred, and good morning, everyone. Iovance finished 2025 with positive momentum as we reported approximately 30% revenue growth with 50% margin from cost of sales in the fourth quarter. Fourth quarter product revenue of $87 million demonstrated meaningful growth of approximately 30% from the prior quarter driven by Amtagvi. Our first full year launch total product revenue of $264 million increased by 61% over the prior year, driven by Amtagvi revenue growth of 112% year-over-year. That was well within our annual guidance range. We drove this impressive revenue growth in 2025 through ongoing market penetration and earlier treatment with Amtagvi for more patients and an expanding number of treatment centers.

The impact of gross to net adjustments remains minimal at less than 2% overall in 2025. Fourth quarter gross margin from cost of sales increased to 50% from 43% in the third quarter. This margin improvement resulted from ongoing operational optimization and disciplined use of capital. The full internalization of manufacturing operations at ICTC also provides uninterrupted supply with agility for further efficiency. Today, we are capable of scale and expansion into new indications globally to bolster revenue without the need for significant capital expenses.

Turning to our balance sheet. Our cash position was approximately $303 million at year-end, driven by our commitment to commercial and clinical execution, operational efficiency and financial discipline. We successfully extended our cash position to fund operations into the third quarter of 2027. In closing, our 2025 financial results reflect our commitment to flawless execution and commercial utilization, improved margin and extended cash runway that supports our path to profitability.

I will now turn the call to Dan Kirby, our Chief Commercial Officer, to provide additional context.

Thank you, Corleen. Over the course of 2025, we made tremendous progress in 3 key areas towards our ultimate goal to establish Amtagvi and the preferred treatment option for all eligible patients who deserve a onetime cell therapy with curative intent. First, our ATC network is continuously expanding. In the fourth quarter, new community centers as well as high-volume academic centers contributed to our highest ever quarterly demand for Amtagvi, which drove our Q4 revenue.

Second, penetrating the community market will unlock Amtagvi's tremendous potential as we expedite higher quality referrals to ATCs and begin to treat patients in the community setting. Recently launched campaigns focused on health care professionals and patients are having a positive impact. The community market will expand further and accelerate growth as we build awareness and access.

Our third key focus area is to drive treatment and increase penetration earlier when patients being benefit most from Amtagvi. Real-world data resonating with medical oncologists has shown unprecedented efficacy with more than 1 in 2 patients responding in the second-line setting and 1 in 3 patients in later lines of therapy. Initiatives within academic ATCs are also generating positive results from earlier tissue procurement and earlier treatment for specific patient types. For example, ATCs are offering Amtagvi treatment before health status declines in patients with a BRAF mutation who have no current or pending options beyond targeted therapy.

On the heels of our substantial fourth quarter performance, positive trends are an increasing demand have persisted into the first quarter and support our confidence in remarkable growth for 2026. Globally, Amtagvi has the potential to reach more than 30,000 patients annually with previously treated advanced melanoma. We have made significant strides towards expansion, including Amtagvi approval in Canada, pending approvals in the United Kingdom, Australia and Switzerland and additional progress towards resubmitting the marketing authorization application to the European Medicines Agency this year.

Beyond melanoma, we are preparing for commercial launch in previously treated nonsquamous non-small cell lung cancer, the most common form of lung cancer. This blockbuster opportunity is approximately 7x larger than our current melanoma opportunity, with 50,000 addressable patients for peak sales of $10 billion in the U.S. alone. Our entire Amtagvi ATC network of U.S. academic and community practices can leverage their existing TIL infrastructure for rapid adoption in non-small cell lung cancer upon approval as well as future pipeline indications such as sarcomas. After recently celebrating my 1-year anniversary at Iovance, I am proud of our accomplishments and inspired by our science and the patient stories that paint a bright nature. I will now pass the call to Igor.

Thank you, Dan. In the fourth quarter of 2025, we achieved both our largest manufacturing volume and highest commercial manufacturing success to date. Building upon this progress, all like follows manufacturing has transitioned to the ICTC, which is a significant milestone to optimize internal capacity utilization, improve operational excellence, reduced cost of sales and further improve gross margin. I'll also highlight that around year-end, we successfully completed routine annual maintenance at ICTC. During this time, we minimized the impact of manufacturing volume by leveraging our contract manufacturer and increasing internal capacity surrounding the maintenance window.

Importantly, ICTC has transformed into a modular facility with capability to provide uninterrupted supply and fully support anticipated global demand today and scale up for the future even during future annual maintenance periods. I will now pass the call to Friedrich.

Thanks, Igor. Today, I'll focus on our 2 registrational programs. First, enrollment is accelerating across a broad and expanding global footprint on our Phase III TILVANCE-301

Trial. We are investigating Amtagvi to support a potential U.S. full approval in the current labeled indication and accelerated AMF approval in combination with pembrolizumab in frontline advanced melanoma. We Shifting to our IOV-MEL-202 registrational trial, lifileucel has demonstrated a best-in-class clinical profile and recently received Fast Track designation from the U.S. FDA. We -- the objective response rate was 26%. Disease control rate was 72% and median duration of response was not yet reached after more than 25 months of follow-up.

We plan to present updated data at a medical meeting this year. Key opinion leaders are enthusiastic about these data, which resulted in a meaningful uptick in recent enrollment. We are excited to be on track to complete enrollment this year in support of a supplemental biologics license application. We are also pleased with the progress across the rest of our pipeline, which I am happy to discuss during the Q&A session. I now give the floor to Brian for the Sarcoma update.

Thank you, Friedrich. I'm excited to share positive initial data from a pilot clinical trial in patients with previously treated advanced undifferentiated pleomorphic sarcoma or dedifferentiated liposarcoma. They have no group immunotherapy options. Among 6 evaluable patients, the confirmed objective response rate was an unprecedented 50% and Responses were deep and improved over time, consistent with the durability for lifileucel in melanoma and non-small cell lung cancer. These high mortality aggressive soft tissue sarcomas effect more than 3,000 patients in the United States and more than 5,000 in Europe, including more than 3,500 cases of advanced disease. These patients have poor prognosis and a very high unmet medical need, [indiscernible] outcomes with second-line standard of care include response rates below 5% and median overall survival of less than 1 year.

In summary, these extraordinary results are why I hope and believe, I would see TIL the redo in solid tumor cancers when I chose to leave academic medicine to join team Iovance. I'm heartened by this major opportunity for patients and the future of TIL therapy. We look forward to commencing and advancing a single-arm registrational trial as soon as possible. As part of this developmental program, we will also explore other subtypes of high-grade soft tissue sarcoma where patients have no approved effective therapies and urgently await better treatment options.

I will now hand the call back to the operator to begin the question-and-answer session.

[Operator Instructions]

Our first question comes from Andrew Tsai with Jefferies.

Thanks for the update -- maybe for the Telvance update that you provided, it sounds like enrollment is picking up nicely. So is it possible that we could get first-line melanoma data with Amtagvi PD-1 combo data later this year? And -- but regardless of timing, what kind of ORR and PFS do we want to see compared to PD-1 alone?

Yes. Maybe I can take the first part of that, Andrew, and then Friedrich can cover the rest of it. We do have an early interim read in this study, which is the benefit of some of the agreement we have with FDA illness, where we can read ORR as an interim partyway through the study. It's in the near term that we'll be able to do that. We can't really commit to doing that in 2026 right now. It's such a large study, but we are very excited to be able to get that data read.

And then, of course, if we read that data, it's a blinded study, we don't bind to do the analysis. And if we announce that we're basically announcing that we're coming to a supplemental BLA at the same time. That's what we'll point out. Friedrich, do you want to talk about the ORR and PFS considerations on that trial, please? Friedrich is muted.

I'm sorry about that. I needed to find my window here. Yes, glad to do so. So I think the best idea around the benchmark for this is the pembrolizumab monotherapy data from the KEYNOTE-006 trial. Remember, the trial design of Telvance comparison of the combination of pembro plus TIL versus pembro monotherapy. The trial is designed with 2 dual primary end points with one of them being ORR and the other 1 being the PFSO giving us an opportunity for early read.

The benchmark in the KEYNOTE-006 trial for ORR was about in the mid-30s probably the true real life or with the pembro monotherapy is probably more in the third slightly below percent range. Remember, we have very encouraging data on the efficacy of the combination from our Cohort 1A, which showed response rates up into the 60% range. So that's what's giving us the confidence around a successful readout for the ORR endpoint.

Our next question comes from Tyler Van Buren with TD Cowen.

Can you please elaborate on the big quarter-over-quarter jump in Proleukin revenue and the anticipated split of Amtagvi to Proleukin revenue moving forward. And if the gross margin can continue to improve quarter-over-quarter despite Proleukin likely contributing to a smaller percentage of sales in subsequent quarters.

Tyler, it's Corleen. So first, you talked about Q4 split. We did have all 3 distributors ordering in Q4 and we also took -- so there's a little bit of buy in there, not crazy. We haven't guided so I don't have a split for you going forward. What I can tell you on the margins is, yes, we expect further improvement.

And I'll just add on to that, Tyler. We did see all 3 wholesalers, as are mentioned, order in Q4. We've already seen reordering happen in Q1. And moving forward, you should see again regular orders for Proleukin to go with Amtagvi sales. That's our major line of business there. Other 2 channels will come on this year as they did last year, but it mainly is driven by Amtagvi demand or Proleukin sales.

Our next question comes from Yanan Zhu with Wells Fargo.

Can you share with us how the manufacturing success rate change over time? And what is the great cost for this quarter?

Can you clarify the last part of that question, what cost?

The scrap cost.

Scrap costs will be in our 10-K filing that will come out around $915, but it's consistent with prior quarters. I'll maybe give some comments on manufacturing success and the year can jump in and help as well. I think we don't release actual percentages and stuff here. We don't think that's helpful to investors. It's improving. We're getting better at it. The margins reflect that. You can see the margins are growing. As Corleen mentioned, these margins are being driven not just really being driven by Amtagvi performance, Proleukin comes in and out. But we've had good margins for 2 quarters in a row now with Proleukin moving up and down. And we expect that to continue and manufacturing success is driving that improvement at the end of the day.

Igor, do you want to make any comment specifically about what you made what you said in the earlier part of the call.

Yes, happy to. Thanks for the question, Yanan. So there are really 2 avenues for improving success rates. One is internal, where we continue implementing improvements in manufacturing and those are a lot that have been implemented and more are coming. And the other avenue is commercial and medical affairs teams working with ATCs and physicians to improve tumor procurement that also results in better product. So those -- both of those have bear fruit so far, and we continue working on both fronts.

Our next question comes from Salim Syed with Mizuho.

Maybe just 1 on guidance from us. So you didn't provide '26 guidance. Fred, you mentioned that you plan to provide it shortly. Just curious what was the logic not to provide it now? And when we do get it, can you just give us some context like -- is it going to be total revenue product? Is it more like a mean or a conservative guide? Just help us framework how we should be thinking about that?

Yes. Right now, we're seeing remarkable growth in the Amtagvi business. We do need to be sure that our projections are well supported. So we're taking some time to do that. It's very early in the year right now, of course. But as I mentioned during the prepared remarks, we're going to be putting guidance out very, very soon. I think you'll see total product guidance. You'll see some guidance potentially on quarters. We'll have to see how our data is supported.

One thing I do want to mention is when -- I know you asked about breaking out the products. For the full year of 2025, the revenue from Proleukin, the revenue from Amtagvi

have now fallen right in the line with what we were saying a year ago. And that Proleukin generates about 17% of our revenue. If you recall, many, many calls we talked about the 16% number based on the ratio of the price. So we are seeing that long-term balance come into play. And as Dan mentioned, ordering patterns are stabilizing. And we expect normality on that through the year. So you may not see us particularly put a number of Proleukin for 1 quarter over another, but you can be confident in the long-term ratio of these things and use the numbers you have right now to help support that.

Our next question comes from Reni Benjamin with Citizens.

Congrats on hitting the guidance. Maybe just a couple of questions. One, can you talk a little bit about the fourth quarter kind of acceleration? How much of that came from new community ATCs versus existing academic centers and as we think about going into 2026, do we hope that the new community ATCs, that number maybe double? Does it triple? Can you give us a sense as to how this is going to grow potentially this year? And then I have a follow-up on the sarcoma data.

Reni, it's Dan. Thank you very much for the question. So for Q4, our base book of business is the academic ATC, and we saw significant growth in that segment. We did see new community agencies come on the line, come online last year. They're coming online as well this year. We expect a learning curve as we saw with the initial academics coming online. So you'll see them slowly increase as the year goes forward. But for Q4, what we saw in the academic ATCs, which is carrying over to what we're seeing in Q1 is that there are certain patient types there that we're not making into Amtagvi treatment that I mentioned during the script, we have earlier procurement strategies for patients such as BRAF mutated patients, which make up a significant number of those patients inside of the academic ATC that we were not previously able to access that our initiatives now are allowing us to access.

So we expect growth to continue in the academic segment. And then the community ATCs are coming online now. They're having their process of testing a few patients out and they will be ramping up as the year goes on. So we'll see more of them starting in the second quarter through the end of the year into '27. Right now, our base book of business is strong and growing with the academics.

Got it. Okay. And then just a follow-up regarding the sarcoma data, is quite new and as you mentioned, unprecedented. Can you -- it's in 6 evaluable patients, can you give us a sense as to when we might see the full data and at what medical conference? And then also, can you share with us maybe any details on the depth and durability of response, right, that you're seeing here for these patients I guess if you can just -- if I can squeeze 1 more in regarding the registrational study. How big do you think this study could be given this rare disease?

Reni, I'll take the first part of that, and then I'll ask Brian and Raj to answer the other part of it. We will -- we're excited to present this at a Medical Congress this year. We haven't identified that congress yet, but obviously, we really like the big ones like ASCO and ESMO, we'll have to see how the timing goes, but the data is available right now, I do expect we'll be able to get it very quickly for a presentation. So stay tuned for that. It should be pretty exciting. Brian, do you want to take the second part?

Yes. So in terms of depth and durability, I think it's important to note that, obviously, the trial has been running for years. Like all of our trials, our durability tends to be measured in a very long time frame. So I think it will be a while before will be able to tell you because of the power of having living therapy on board. In terms of though the depth, what's really exciting to see is these responses, similar to what we saw in lung and melanoma cancers, we can actually see them get stronger over time. Of course, sometimes it happens right away, but we've actually watched really excitingly, these scans get better and better and better. And.

so we still have patients that -- if it was on a some plot, we would see them swimming and on a spider plot, they'd still be dropping. And so we don't even know how good these patients will get, but I think for all of us, it was really remarkable when we saw how many respires we got and how they were deepening. So I think more to come there, but I think it gives us a lot of encouragement.

Marc will provide any sample size of the...

Yes. Thank you for the question. So based upon the prior approvals in very soft tissue sarcoma, sometimes recently by approval size for the various subtypes range between 30 patients and 60 patients, but predominantly in the 40-patient range and based on the characteristics of this these 2 cell types that we are discussing today, and we really expect very similar patient numbers for registration strategy.

Our next question comes from Colleen Kusy with Baird.

This is Nick on for Colleen. Just for a commentary on the recent enrollment trends for the non-small cell lung cancer study. And could you talk about just latest thoughts on path to full approval in non-small cell lung cancer? And then I had a follow-up question as well.

Yes. The Fast Track designation that we announced today, Nick was obviously very helpful that provides us with a lot of benefits in working with FDA. We already, as I mentioned in the prepared remarks today, we are planning on the same timing we mentioned before. With this potentially launching in 2027. This is pretty exciting to us. We're finishing the trial right now. And we're very confident that this product provides a great benefit for a non-small-cell lung patients.

And then just a quick 1 on sarcoma. Just wondering if you're considering expanding any -- into other subtypes of sarcoma outside of these initial too.

Yes. And we mentioned that in both the press release and in the prepared remarks. We are looking at additional subtypes maybe on 1 of the private calls, Brian can tell you more about it, but we are looking at additional besides UPS and DDLPS, there's a number of other sarcoma subtypes that are of interest and now we see strong activity for TIL in the space. and a lot of approved options, including approved checkpoint options for these patients nor are there anybody interested apparently getting their checkpoints approved here? Are they lack the efficacy to do so? We're really going to look across the entire space and really try to tap into this area of unmet medical need.

Our next question comes from David Dai with UBS.

Congrats on the progress. Just first on the prelude sales, we see a little uptick in the fourth quarter. I'm just curious how much is coming from restocking and how much is coming from real antagonic demand. And then moving forward with Proleukin fair to assume that it will stabilize around that level with maturity of contributing to real demand from Amtagvi demand? And then I have a follow-up question.

Sure, David. So this is Dan. I'll take the question on Proleukin. We sell on Proleukin, as you recall, all throughout last year, we had when first wholesaler came on in Q2, 2 were reordering in Q3, all 3 were ordered in Q4. We started to see regular demand come in. We did do a price increase effective February 1. So there was a little bit of volume, but not much going into the end of the year with it. The primary driver for Proleukin in Q4 was Amtagvi demand. As we look at Q1, we already have the wholesale is reordering. 2 have already placed orders. We're expecting the third to order soon. And then they will continue to move forward with Proleukin orders based on Amtagvi demand. That is our #1 source of revenue. You are going to see this level out. And as we look at having Q1 price increases in the future, this will even out as you look at yearly forecast.

Got it. And then just a follow-up on Fred's earlier comment around Amtagvi being a $1 billion peak sales opportunity. Maybe just help us understand how you get there, especially, how should we think about contribution of melanoma and non-small cell lung cancer also sub-tissue sarcoma?

Yes. I think when I talk about that, David, I'm talking about continued growth in the Amtagvi melanoma in the U.S. franchise. And we're seeing that growth. So we're only in our first year launch here and we're at $264 million in revenue. And again, I know this is all this discussion about Proleukin versus Amtagvi, but Amtagvi is driving the whole thing. Yes, we do sell a small amount of Proleukin for other things, but the vast majority of numbers are coming from Amtagvi. That's the point we're trying to make. We talk about $1 billion, we think that's the ultimate potential for this product in the U.S. and melanoma.

On top of that, you've got non-small cell lung at 7x. On top of that, you've got sarcoma, on top of that frontline melanoma. So just bear that online. Do you want to follow up, Dan?

Sure. So $1 million in on is completely achievable. If you look at where we are right now, a quarter away through that journey, -- and we are just loading up the community ATCs right now. If you look at cell therapy launches in the liquid tumor space, they did have the advantage of following an allo transplant treatment modality with hematology/oncology pathway. We're creating a pathway with the solid tumor medical oncologists. So we are standing that up now. And in the initial phase, we're doing over $0.25 billion with both products. And we see that escalating in the U.S. alone to over $1 billion. We talk about layering lung in, I mentioned in the script, that is a $10 billion opportunity, a much larger market to go into.

In sarcoma, we do see as being equivalent to melanoma. So we do see tremendous potential to be well over $10 billion to $12 billion in the U.S. with Amtagvi

Our next question comes from Etzer Darout with Barclays.

Great. And congrats on the quarter. Just on gross margins. I wondered if you could comment at all on what may be the near-term impact on the ex U.S. commercial launches, Canada and others could have on gross margins given the improvement that you've seen to date?

So well, I think -- I just want to make sure I'm understanding you're asking what will the ex U.S. launches, what impact will they have on margins? So all of our manufacturing operations today are in-house. So we're going to have economies of scale. I think that can only help more right, as we grow and add an additional volume from those launches.

And I can add on to that correctly. As we look at manufacturing for ex U.S. launches, will be out of our Philadelphia facility. So we do not plan on adding additional manufacturing facilities worldwide. We're already servicing those regions in our clinical trials, and we can service them commercially. So there no added expense there. Also, too, if you look at what's going on in the landscape, most favoration, et cetera, we do not have an ex U.S. price negotiated yet. We're in the process of that as our approvals come. So we do not have a lower price outside the U.S. We are going to see how this situation evolves, but we are in a good position not to have that as we're going through our negotiations with the U.K., Canada, et cetera..

And our final question comes from Asthika Goonewardene with Truist.

So let me start thinking about you painted into the community in the U.S. and say you have agencies there. Is there going to be a material difference in the timing, it place to get a community site up and running versus, let's say, what on average it takes you to get an academic center up and running and how should we think about that? Is there a lot of diversity in the different community settings, maybe one who already have some sort of a cell therapy program versus those who don't?

And then I have 2 follow-up questions. I'll ask on them now. Can you comment on the Tandem data and the better ORR that was seen early this year when that was presented -- can you use this real-world data when your MSLs are talking to physicians?

So great questions. I'll start with the first 1 regarding the community uptake. One of the things that we do see with the community will be similar to what we saw in the academics and that is just the relationship with the surgeon, the medical oncologist and the cell therapy lab to get up and running for it. That should be a similar learning curve. We did have some academic sites in the clinical trial. So that was the initial wave with the Amtagvi launch. But we are seeing them come online. This is also balanced with the fact that they are closer to where these patients are being treated with frontline melanoma and subsequent therapy.

So we can get them to treatment quicker. So the learning curve will go up. As you see with most ATCs, it is a financial reimbursement where they want to run 1 or 2 patients first make sure the financial reimbursement is there with the payers, we have that established and tremendous coverage with Amtagvi and Proleukin throughout all the payers. So once they see the first 2 go through, they start to accelerate patients and treatment.

So it should be similar to the academics when we look at getting them up and running. You can see the first couple are even on the website right now. In regard to the real-world evidence that was presented at the cell therapy meeting earlier this month, I will say that the MSLs already have that information reactively, and we are submitting that for publication as well to allow it to be more broadly distributed. I don't know if Brian has anything to add on to the real-world data. It is tremendous news about the earlier line treatments. Brian?

Yes. Thank you, Dan. Well, first of all, we presented nationally or internationally, at the Tandem meeting in Salt Lake City a couple of weeks ago. It got a lot of attention I've heard personally people very excited but not just because the detail was out, but also it validated what many PIs, KOLs physicians have been seeing in the clinic, and they need this data and actually help get their message out to their local physicians because the right time to treat the patient is as soon as possible. And you can see what happens, how great the responses are. They're better than we saw in our trial they're the best in class, and this is the kind of results that we've been looking for.

And then lastly, just on the Proleukin reordering that happened in Q1. Just curious, you mentioned you had a February 1 price increase. Did any of the reordering happen after the February 1 price increase?

So they typically over before the price increase. wholesalers operate on very low margins. So we did a 9% price increase on both products effective February 1 of this year. So they would do the buy-in for Proleukin in advance of that price increase. We did announce it to allow for payer case rates to adjust, which have happened because we're post price increase right now. So they were aware of the price increase pending and would buy accordingly.

Thank you. This concludes the question-and-answer session. I would now like to turn it back to Fred Vogt for closing remarks.

Thank you again for joining the Iovance Biotherapeutics Fourth Quarter and Full Year 2025 Conference Call. We plan to provide more detail on U.S. launch for our community [indiscernible] when we introduce our full year revenue guidance in the near future. Please stay tuned to updates to 2026 on our commercial launch and pipeline as well as our cost optimization initiatives to drive towards profitability.

We are motivated by the frequent stories for more and more patients who are benefiting from our TIL cell therapies. As always, we're thankful to our patients, health care professionals and advocacy communities as well as our partners. I would also like to thank our exceptional Iovance team in addition to our dedicated shareholders in covering analyst for their commitment to the mission to remain the global leader in innovating, developing and delivering current future generations of TIL cell therapy. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Welcome to the Iovance Biotherapeutics Third Quarter and Year-to-Date 2025 Conference Call. My name is Daniel, and I will be your operator for today's call. [Operator Instructions] Please note that this conference call is being recorded.

I will now turn the call over to Sara Pellegrino, Senior Vice President, Investor Relations and Corporate Communications at Iovance. Sara, you may begin.

Thank you, operator. Good morning, and welcome to the Iovance webcast to discuss our business achievements, pipeline milestones and third quarter 2025 results.

Members of our executive leadership team speaking on today's call include Dr. Fred Vogt, Interim CEO and President; Corleen Roche, Chief Financial Officer; Dan Kirby, Chief Commercial Officer; Dr. Igor Bilinsky, Chief Operating Officer; and Dr. Friedrich Finckenstein, Chief Medical Officer.

During the question-and-answer session, we will also welcome Dr. Raj Puri and Mark Theoret from our Regulatory Affairs executive leadership team; and Dr. Brian Gastman, Executive Vice President of Translational Medicine and Research.

This morning, we issued a press release that is available on our corporate website at iovance.com. I would like to remind everyone that this conference call will include forward-looking statements regarding Iovance's goals, business focus, business plans and transactions, revenue and revenue guidance, commercial activities, clinical trials and results, regulatory approvals and interactions, plans and strategies, research and preclinical activities, potential future applications of our technologies, manufacturing capabilities, regulatory feedback and guidance, payer interactions, restructuring, licenses and collaborations, cash position and expense guidance 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 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.

I will now like to turn the call over to Fred.

Thank you, Sara. I will start by sharing our continued progress to increase revenue and margins, advance our pipeline, reduce expenses and improve operational execution.

Third quarter revenue grew 13% over the prior quarter and notably, gross margin improved and was 43% following the initial results of our strategic restructuring and cost optimization. More improvements are coming, including today's announcement of our centralization of manufacturing at our internal manufacturing facility.

Our highest priority is to accelerate revenue growth to increase Amtagvi adoption across our network of academic and community authorized treatment centers or ATCs. We have expanded to include new academic ATCs and multiple community ATCs. Initial patients are being treated in the community and are generally earlier in their melanoma treatment journey.

As we educate community oncologists across our ATCs, including the major academic centers, we are seeing earlier and more frequent patient referrals to drive growth. Real-world data showed response rates of 60% in the second-line treatment setting, which has provided a strong foundation to amplify our compelling story to the melanoma community for the power of TIL therapy in melanoma.

We are on track to achieve our revenue guidance range of $250 million to $300 million for the full year 2025. With robust current demand, we expect a strong fourth quarter for Amtagvi alongside increasing Proleukin sales as we saw in late 2024. We continue to project Amtagvi peak sales of more than $1 billion in the U.S. and melanoma with larger additional opportunities in international markets and in future indications. For example, our interim clinical data in previously treated non-squamous non-small cell lung cancer showed a best-in-class -- apologies for technical difficulty here for one second.

For the -- for example, our interim clinical data in previously treated non-squamous non-small lung cancer showed a best-in-class profile and unprecedented durability compared to standard of care in this population, including an objective response rate of 26% and a median duration of response not reached at more than 25 months of follow-up. There is a significant market opportunity in this lung cancer indication, which is about 7x greater than our current advanced melanoma indication.

We expect to quickly complete enrollment in our LUN-202 registrational trial in 2026 with approximately 80 patients. This sample size will support an accelerated approval given the unmet need in non-small cell lung cancer, precedent of the Amtagvi approval in 73 melanoma patients and recent accelerated approvals based on 70 to 80 patients from defined non-small cell lung cancer population.

The U.S. FDA previously provided positive feedback on our trial design, which aligns with FDA guidance for single-arm trials to support accelerated approvals for single agents in conditions with unmet medical need. We look forward to advancing toward a supplemental biologics license application in non-squamous non-small cell lung cancer and a potential launch in the second half of 2027.

As we increase revenue and advance our pipeline, we are laser-focused on expense management and profitability. Following our third quarter reorganization, we are refining our operating plan to ensure we are appropriately investing in our commercial launch and high-value programs. Again, cost of sales and gross margin will improve significantly as we transition manufacturing to our internal facility in early 2026. During this call and our future quarterly updates, we will highlight our ongoing efforts toward further expense reductions and resource allocation.

Corleen will now highlight our third quarter financials in further detail.

Thanks, Fred. Good morning, everyone. During my first quarter as Chief Financial Officer, I want to emphasize our focus on driving the company towards sustained profitability. Our strategy included prioritizing top line growth, significantly improving margin and controlling costs with a disciplined approach.

In the third quarter, our top line revenue remained strong. Total product revenue increased approximately 13% over the prior quarter to about $68 million. This included Amtagvi sales of approximately $58 million and global Proleukin revenue of nearly $10 million. As expected and consistent with prior quarters, overall gross to net was less than 2% and is expected to remain minimal. As Fred mentioned, we are on track to achieve our revenue guidance in the first full calendar year of Amtagvi sales.

Next, I am pleased to highlight initial improvements in expenses and gross margin from the corporate restructuring and continued cost optimization initiatives implemented in the third quarter. We reduced total costs and expenses by approximately 10% over the prior quarter, excluding restructuring charges of approximately $5 million. We lowered cost of sales by approximately 21% over the prior quarter, resulting in improved gross margin of approximately 43%. Importantly, costs associated with patient drop-off and manufacturing results continue to decline as our revenue continues to grow.

Gross margin will improve over time as we accrue benefits from our recent restructuring, implement additional cost savings initiatives and centralize manufacturing at our internal facility. Our cash position of approximately $307 million as of September 30 was bolstered by expense reductions and is expected to fund operations into the second quarter of 2027.

I will now turn the call to Dan Kirby, our Chief Commercial Officer.

Thanks, Corleen. Our ultimate goal is to establish Amtagvi as the preferred option for all eligible patients. Patients deserve a onetime cell therapy with curative intent, and we are steadfast in delivering on that promise. My conversations with patients and caregivers remind us of the commitment to the Iovance mission, pioneering a new treatment paradigm for patients with solid tumor cancers.

At the recent Melanoma Research Foundation Gala in Denver, Iovance received the Corporate Leadership Award in recognition of our efforts to advance care for melanoma patients. In my first 8 months at Iovance, we have made notable progress to lay the foundation for revenue growth by driving adoption across our ATCs.

I'll highlight 3 key areas of focus. First, new ATCs are driving growth. In the third quarter, we added community ATCs alongside new high-volume academic ATCs. These new ATCs contributed to the highest number of patient starts with better capture in the third quarter. Our first community ATCs are beginning to treat patients with Amtagvi in this setting. New ATCs continue to come online and will drive further growth in the fourth quarter and beyond.

Second, penetrating the community market is key to unlocking Amtagvi's tremendous potential as we increase the frequency, speed and efficiency of community referrals to ATCs. Health care professional and patient-focused campaigns are having a positive impact. Under our specialty pharmacy agreement with Biologics by McKesson, patients have broader access to Amtagvi. Hospitals now have flexibility to obtain Amtagvi directly or through a specialty pharmacy, giving their finance teams confidence to place more orders.

Our third focus area is to drive earlier treatment with Amtagvi. This will increase penetration in our academic centers. We are educating medical oncologists on the advantages of cell treatment with Amtagvi when it has the greatest benefit. Earlier shifts in referral patterns are supported by our first real-world data that shows 60% of patients respond in the second-line setting. In addition, new initiatives in academic ATCs will address earlier tissue procurement for patient types, such as BRAF mutations, so they can be treated before their health status declines.

Proleukin revenue also grew in the third quarter. Our main revenue channel for Proleukin is use with Amtagvi. Two U.S. wholesalers ordered in the third quarter, and all 3 wholesalers are expected to order significant volume in the fourth quarter. Proleukin will continue to grow through this main revenue channel in addition to the 2 other revenue channels for clinical and manufacturing use. Like other companies, we are evaluating our Proleukin pricing strategy outside of the United States based on the current environment, which may help drive future revenue growth.

Amtagvi has the potential to reach more than 30,000 patients with advanced melanoma globally. Canada became the first new market to approve Amtagvi and approvals are pending in 3 additional markets. The United Kingdom and Australia in the first half of 2026 and Switzerland in early 2027. In the European Union, we are confident in our planned strategy. We are seeking scientific advice from the European Medicines Agency and intend to resubmit for regulatory approval shortly thereafter.

Looking at the broader potential of lung cancer, our interim data demonstrates that onetime treatment with Lifileucel represents a true game changer and potential cure for patients with non-squamous advanced non-small cell lung cancer. With approximately 50,000 addressable patients in the U.S. alone, the market opportunity is about 7x larger than our current melanoma opportunity and represents potential U.S. peak sales of $10 billion.

U.S. academic and community practices are enthusiastic about our lung cancer program. All of our current and future ATCs are expected to launch in non-small cell lung cancer. A significant portion of them already treat patients in our LUN-202 trial. The ATC footprint for lung cancer is essentially the same as our melanoma treatment network. ATCs are eager to leverage their current TIL infrastructure to quickly adopt Lifileucel in lung cancer upon approval.

I will now pass the call to Igor.

Thank you, Dan. I will provide a brief manufacturing update. We have streamlined our manufacturing organization while reducing costs and improving our manufacturing success rate as reflected in our third quarter gross margin.

Importantly, we are finalizing an expansion at our internal facility, the Iovance Cell Therapy Center, or iCTC, that will enable us to support anticipated demand without the need for a contract manufacturer. All Amtagvi and clinical manufacturing will transition to iCTC in early 2026 to maximize capacity utilization, lower cost of sales and drive future gross margin growth.

We will complete a key step in this facility expansion during routine annual maintenance around the end of this year. During this time, our contract manufacturer will provide continued access for patients to meet demand before we transition all manufacturing to iCTC. We will also boost capacity immediately prior and following the maintenance period to provide additional manufacturing slots for patients, allowing smooth supply through the next 2 quarters.

Bringing all manufacturing internally will be an important milestone for us as a company. In addition to the cost benefits, we will maintain uninterrupted supply during routine maintenance in the future using internal capabilities. We can also scale up within the existing facility to support future markets globally and indications, including lung cancer.

I will now pass the call to Friedrich.

Earlier this week, we reported interim data from our registrational IOV-LUN-202 clinical trial of Lifileucel. The data demonstrated a potentially best-in-class clinical profile and meaningful improvement over current standard of care in previously treated patients with non-squamous non-small cell lung cancer.

Following onetime treatment with Lifileucel monotherapy, the objective response rate was an impressive 26%. An objective response was observed in 10 out of 39 patients, which included 2 complete responses. The disease control rate was 72%, showing a meaningful benefit for many patients with stable disease. Importantly, median duration of response was not reached at more than 25 months of follow-up, which is unprecedented durability for non-small cell lung cancer therapy in the post-chemo and immune checkpoint inhibitor setting.

Standard of care docetaxel monotherapy recently showed an objective response rate of only 13% and a median duration of response of only 5.6 months without any complete responses in the same patient population. We are on track to quickly complete enrollment of approximately 80 patients in 2026. We have seen a strong increase in enrollment this year, driven by the positive reception of the efficacy data among trial investigators. In addition to the 39 patients in the data set, a double-digit number of patients are awaiting or have recently received TIL infusions and more patients have entered the trial as of today.

We plan to share more data from LUN-202 at a medical meeting next year, including a meaningful number of additional patients and longer follow-up. We also look forward to advancing towards a supplemental biologic license application for Lifileucel in non-squamous non-small cell lung cancer and a potential launch in the second half of 2027. We also continue to make progress across the rest of our pipeline, which I am happy to discuss during the Q&A session. Thank you.

[Operator Instructions] Our first question comes from Andrew Tsai with Jefferies.

Nice execution this quarter. Great to see various dynamics improving. Good job. So my question this quarter is on the lung cancer data update that you had. It's interesting that the signal did not necessarily degrade compared to the prior data cut. In fact, maybe the efficacy on DOR seemed to get better. So for the remaining batch of patients, would you expect the third data cut to be also similar or even better than what we're seeing in this interim that you just had? Or would you expect some kind of efficacy degradation on a larger sample size?

Thanks, Andrew. I can start and then maybe Friedrich can chime in here. I don't -- we don't expect any degradation in the efficacy signal. We're getting very good within the LUN-202 trial at making sure our investigators identify the right patients for the trial. And we are obviously going to be cutting the data with longer and longer follow-ups. And with ongoing responders, as you can see in the swimmers plot from that data cut, we would expect to see that durability improve even beyond what we have today.

I'll let Friedrich comment a little bit on the details of how we think that study is going to play out, but that's the big picture view.

Yes, I agree with Fred. Not much to add there. I think the study now has reached that phase where folks know what they're doing. They're familiar with the therapy. They know how to identify patients. We are able to communicate best practices. So I think this is all in a very stable place.

What is noticeable is that we saw a true uptick in enrollment, which is really driven by the positive data that we were able to share with the investigators lately. That's also fairly typical. It's kind of an inflection point where then things just take off because folks see and believe in the therapy and things are working really well.

Our next question comes from Yanan Zhu with Wells Fargo.

Congrats on the quarter. Just a quick one on the lung cancer. Can you talk about when did you touch base with FDA regarding the path and the regulatory path? And you did mention 80 patients. I wanted to hear your confidence that 80 patients is enough for the lung cancer filing.

Then on Amtagvi in melanoma, can you talk about infusion growth into fourth quarter and into 2026, your confidence for inflection point in the patient infused?

And lastly, sorry, if I may, on the improved gross margin, great to see that result. Can you comment on how much of it is coming from patient dropout and manufacturing success rate improvements versus how much is coming from cost reduction measures?

Thanks, Yanan. Why don't I start on the FDA point and then Raj Puri will jump in, and I'll ask Dan and Corleen to help out with the Amtagvi, the inflection point as well as the gross margin questions here.

We've engaged heavily with FDA on the LUN-202 trial and gotten guidance from them, feedback on the trial design, patient population, CMC, things like the potency assay. We feel very comfortable that we're on the right track here. Obviously, engagement with FDA is a continuous process during the trial. As I'm sure investors know, we have to engage frequently and we do engage frequently. A lot of it doesn't get talked about. So we'll continue to do that on this trial, but we're very comfortable with where we stand right now in the trial design and what we need to do to get a supplemental BLA submitted on time.

On the sample size for the patient -- for the 80 patients, we pointed out during a lot of our calls earlier this week as well as during our prepared remarks here that we think 80 patients will be sufficient based on the precedent of Amtagvi with 73 patients which led to the approvals on label in melanoma as well as a lot of recent FDA meeting the last couple of months, FDA approvals in non-small cell lung.

So I'll let Raj and maybe Mark comment on that on what they've seen with the FDA and why they think that's reasonable.

In addition to what Fred said that we in continuous interaction with the FDA, we plan to apply for many different priority designations such as Fast Track designation, RMAT designation, et cetera. And as Fred mentioned that 80 patients also based on the 73 melanoma patients that we got Amtagvi approval on.

And recently, Mark will elaborate further that the FDA has approved about 4 non-small cell lung cancer trials based on accelerated approval of patients list to 70 to 80 patients.

I agree with what you had said, Raj. I think there's recent precedent for this number of patients in patients with non-small cell lung cancer and very high unmet medical needs with the response rate and particularly this unprecedented duration of response, we feel based on the precedent and the data thus far, patient data set would be sufficient and compelling.

All right. So on the inflection question and fourth quarter growth, obviously, we feel very confident having a strong fourth quarter, but I'll let Dan talk about some of the details there.

Thank you. And thanks, Fred, and thanks, Yanan, for the question. First, the answer is yes, we expect continued growth in the fourth quarter and beyond into 2026. The reasons behind that are -- I'm going to separate this from academic and community.

In the academic setting, we've launched field efforts, including a disease awareness campaign in Q3 to educate medical oncologists for earlier referral into those centers. We're seeing some results from that right now that will continue moving forward. We also are launching in the academic setting initiatives to increase penetration, which would have to do with addressing certain patient types that we haven't been able to capture such as BRAF mutations I mentioned, where we have opportunities to get tissue earlier. So we do see growth in the academic setting.

Moving to community. I mentioned that we're onboarding now and we've started to treat at the first community sites. We have several large ones that are coming on in this quarter that will drive significant growth in Q4 and beyond in 2026, and that also sets the table for...

Gross margin, let me just focus you on 2 areas, and I think you mentioned them, one, which is patient drop-off and manufacturing results. So if you think about the dollars that are written off from out specs since the beginning of the year, they have decreased by 40%. They're about $9 million this quarter. And we are now seeing the initial benefit of the restructuring that we announced in Q3. So those are 2 key areas that are driving revenue improvement or margin improvement.

Our next question comes from Salim Syed with Mizuho.

Congrats on the progress. I guess one for me on the guidance here. I know you're reiterating the guidance quarterly. And I guess, is there any scenario here in your mind where you're going to actually hit closer to the top end here? I'm just curious why at this point, 2 months left in the year, why we haven't narrowed it down the top end of the range to a lower number that seems more reasonable.

Yes, Salim, we reiterated our guidance range of $250 million to $300 million, which is a pretty narrow range to begin with. It's our first full calendar year on the market, as you know, and we're on track right now towards that guidance.

Fourth quarter, as Dan was just mentioning a minute ago, we have a large influx of new ATCs. We've got Proleukin sales to contend with, which we think will be very strong in the quarter, especially based on fourth quarter last year. You can go back and look at those numbers. And we have got this ATC growth both in the community and in the academic setting.

So I think at this point, we're just comfortable with the guide that we put out, $250 million to $300 million, and we'll be in that range, and that's what we're comfortable saying right now.

Our next question comes from Tyler Van Buren with TD Cowen.

This is Nick on for Tyler. Just one for me. Can you let us know how many Amtagvi patients were treated this quarter? And then also, how will the CTC maintenance this quarter impact Amtagvi infusions and sales?

Yes. Nick, we're not going to -- we're not talking about infusions anymore. We're just going to use revenue going forward, as you can see from our press release. We think that's the ultimate story here, and we hope investors appreciate that we're focusing on the dollars, and that's what matters at the end of the day.

On the iCTC maintenance, I'll pass it to Igor for that question. I think he had covered it in his prepared remarks, maybe you can highlight it again, Igor.

Yes, of course. Thanks for the question, Nick. So as I mentioned, as part of the routine maintenance this year, we'll complete the expansion part of the facility that's important for centralizing manufacturing at iCTC and also kind of continue providing uninterrupted capacity from iCTC during future maintenance periods.

And this year, we've learned from our experience in Q1 2025. So we made several improvements. We will boost manufacturing capacity immediately and prior to the iCTC maintenance that will provide additional manufacturing slots for patients, and that will allow essentially smooth supply through the next 2 quarters.

Our next question comes from David Dai with UBS.

A couple of questions from me. So just on the ATC ramp, you're seeing early community initiatives in there. I'm just curious in terms of what are the timeline for the community activation to actually see patients treated. That's the first question.

And the second question is just around the margin improvement. You said you're planning to have more margin improvement over the next few quarters. So I'm just curious what is sort of like the margin we should be expecting over the next quarters, essentially, one should be expecting the plateauing of the margin over time?

So I'll take the ATC one first and look at the ramp for that. So you mentioned specifically community. Our first community centers are starting to treat now. Typically, with centers, they treat a few patients, they make sure the insurance goes through, they get comfortable with it and they start ramping patients after that. That is expected to continue with our community ones that are just starting to treat now.

The newer ones coming on with the volume will start slow in -- with a few patients in there for it, but then will start to ramp up. The key with the community is that the referral patterns are already there to get those patients in earlier. So as we discuss with those larger entities opening them, we also have robust discussions regarding referral patterns and patients lining up. So we will see a ramp there a little faster than you'll see with the academics, but it should be coming over in the next quarter and 2, and then we'll get to full peak probably by mid next year.

David, on the gross margin, yes, we mentioned that it will continue to improve. So that will be further benefit from the restructuring, but also a number of initiatives across operational efficiency in the manufacturing plant as well as cost savings initiatives to run the organization as efficiently as possible.

And just to finish off, we did announce one of those things today, David, by transitioning all manufacturing to internal as Igor and Corleen and others have discussed, we expect this to have additional margin improvements on the back of that. That's not something that's reflected in the 43% that we reported today.

Our next question comes from Colleen Kusy with Baird.

Congrats on the progress. On the community ATCs that you're seeing come online, can you just speak to the capacity that you see at those centers versus what the capacity is that you're seeing at the academic centers?

Sure. So thank you very much, Colleen, for the question. The capacity with community centers, they are hospitals. They do have the bed space comparable to the academics. What we do see with them, though, is less of a clinical trial allocation and other competing priorities for those beds and more of a priority in the solid tumor space than we see in the academics for it because they do split beds in the academics with the hematology space, where the CAR-Ts are, et cetera. So we do see an opportunity to have a larger percent of their capacity in the community setting.

And our final question comes from Reni Benjamin with Citizens.

I'm sorry, I jumped on the call a little late. So you may have answered this already, so just indulge me. I'd like to understand a little bit more about the global expansion that you highlighted. How do you envision these programs or the expansion without a partner? Should we really be -- should we be thinking about any sort of a meaningful contribution in terms of revenues going forward or at least in 2026? Or is this something that goes out much further?

And just a follow-up question regarding both TILVANCE and the LUN-202 study. It seems like enrollment will slow at least from the 202 study. Can you just give us a better sense as to how enrollment is progressing in each of those studies? That would be great.

Yes, Ren. So first, on the global expansion, we're not thinking right now really about partnership. TIL technology and the science of delivering TILs to patients, the medicine behind it is complicated. We're not really sure there's a partner out there that would give us any kind of advantage. And we're always really cautious about asset dilution and giving anybody rights to anything that we do because we think that TILs are going to be extremely powerful in the future, and we would like to own all of that.

That said, we may work with distributors in certain markets. We may work with people that can help enter markets for us. We tend to staff very light and lean in those markets while we wait for revenue to appear. In 2026, I don't expect a significant amount of revenue from those markets. However, we'll start to see that business grow. And then over time, I think it will become a major component of our business in the future.

And since Dan heads those teams, I'll let him give some color and maybe just highlight the markets that we're going to go back into, include the U.K. and we're going to be entering for the first time in the U.K. and Australia and other places where there's a significant number of melanoma patients in need.

Sure. And so Reni, one of the things we've always said about our global expansion, if you look at the history of cell therapies globally, this has been more of a long-term strategy to produce revenue in 2027 and beyond, but you needed to get the filing and approvals in place because reimbursement does take a while in those regions, you want to make sure you do it in the proper sequence.

So where we are right now with it, we are ramping up in Canada with our first ATC. We have pending approvals in the U.K. as well as Australia. We're in discussion right now in the U.K. about getting an NHS support on which ATCs will go up and running there. So we're getting the process in place as well as within Switzerland and then refiling in the EU.

So this has been a long-term strategy with it and something that we will see, if you look at Kite, who did a great job with Yescarta globally, it took them several years from the approvals to get revenue in there. So we follow that model, knowing it would take 2027 would be our first year to have any appreciable revenues. Not saying we won't get any next year, but really appreciable revenues in 2027 from ex U.S.

And then on the enrollment question, I'll focus on LUN-202, Reni, because TILVANCE, we really haven't said anything publicly about the enrollment there beyond that it's going well, and we think that's on track right now. But on LUN-202, enrollment has really picked up lately. And if you heard on the calls earlier this week, we have double-digit patients right now waiting for infusions, and we have a lot of activity there.

I'll let Friedrich comment in a second here, but we think we can easily hit the time line that we gave for the launch of Lifileucel in non-small cell lung in the second half of 2027 based on our current enrollment timings in the LUN-202 trial.

Friedrich, do you want to add to that?

Yes. Just really quick, Reni. Since I don't know when you joined, I described that before earlier in the call. I think in the lung study, we've now reached this point where, number one, we have stability and familiarity of the investigators and the sites with the therapy. They know how to pick patients. And important, we have a data set that has the size and the quality and the data that are driving investigator engagement. They see the potential for this therapy, they see the benefit in the patients, and they now are enrolling at the speed of what is typical for a trial that has shown data like this. So I share Fred's confidence in us being on track here with our goals.

Got it. And just as a quick follow-up, maybe, Fred, to your comments about TILVANCE that enrollment is going well and things are on schedule. Can you just remind me when do you think ultimately enrollment would be complete or when you might be filing the BLA? Have you provided any of that guidance before?

Not yet. We're still pretty early in this trial here. This is a longer-term study. We do have the ability to read at an interim time point for ORR and seek an accelerated approval in first-line melanoma in the study. And that's not too far off. We have not guided anything publicly, and there's obviously a first 670-patient trial, at least 600 patients on the main population. That's tough to predict accurately right now. But we should be in touch pretty soon with some more updates on that as that starts to crystallize for us.

This concludes the question-and-answer session. I would now like to turn it back to Fred Vogt for closing remarks.

Thank you again for joining the Iovance Biotherapeutics Third Quarter 2025 Conference Call. We look forward to providing future updates on our commercial launch and pipeline as well as our cost optimization initiatives to drive towards profitability.

We are motivated by the stories we continue to hear about the patients who benefit from Iovance TIL cell therapies. I'm confident that Iovance will remain the global leader in innovating, developing and delivering current and future generations of TIL cell therapies for patients with cancer.

As always, we are thankful to our patients, the health care and advocacy communities, our partners and our exceptional Iovance team. I would also like to thank our dedicated shareholders and covering analysts for their support. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Iovance Biotherapeutics Second Quarter 2025 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Sara Pellegrino, Senior Vice President, Investor Relations and Corporate Communications. Please go ahead.

Thank you, operator. Good afternoon, and thank you for joining the Iovance conference call and webcast to discuss our second quarter and first half 2025 financial results, as well as recent updates.

Dr. Fred Vogt, our Interim Chief Executive Officer and President, will provide an introduction and brief overview of our key financial results, including revenue and revenue guidance, operating expenses and our strategic restructuring; Dan Kirby, Chief Commercial Officer, will discuss product revenue and commercial and regulatory updates for Amtagvi; Dr. Igor Bilinsky, our Chief Operating Officer, will provide a manufacturing update; and Dr. Friedrich Finckenstein, our Chief Medical Officer, will summarize our priority pipeline programs.

Additional members of our leadership team, including Dr. Raj Puri, our Chief Regulatory Officer; and Dr. Brian Gastman, our Executive Vice President of Medical Affairs, will be available for the Q&A session. In addition, our new Chief Financial Officer, Corleen Roche, is joining today's call. Earlier this afternoon, we issued a press release that is available on our corporate website at iovance.com.

Before we start, 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 and transactions, revenue and revenue guidance, commercial activities, clinical trials and results, regulatory approvals and interactions, plans and strategies, research and preclinical activities, potential future applications of our technologies, manufacturing capabilities, regulatory feedback and guidance, payer interactions, restructuring plans and workforce reductions, licenses and collaborations, cash position and expense guidance 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 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, I will turn the call over to Fred.

Thank you, Sara, and welcome to the Iovance Second Quarter and First Half 2025 Conference Call. We are more than a year into our U.S. launch of Amtagvi for advanced melanoma, the first FDA-approved TIL cell therapy. Adoption continues to grow, and for the first time, we surpassed more than 100 patients treated in a single quarter. We are also excited about our first real-world data set for Amtagvi monotherapy in the commercial setting.

Top line results showed a nearly 49% response rate among 41 patients and for 23 patients treated in third line or earlier treatment settings and approximately 61% response rate, all from patients treated in accordance with the label. We look forward to sharing more detailed real-world data at an upcoming medical meeting.

Another important growth driver for Amtagvi is onboarding large community practices to join our ATC network. We plan to begin treating patients from these practices in the fourth quarter of this year. Patients in the community are generally earlier in their melanoma treatment journey, and we expect that the higher response rates observed in our real-world data set will also be relevant to these patients.

Our commercial business is complemented by an exciting pipeline, led by our programs to extend the lifileucel franchise in the new treatment settings in solid tumor types as well as next-generation approaches. We remain on track for multiple clinical milestones in the second half of this year, including updated data from our registrational trial of lifileucel monotherapy in previously treated advanced non-small cell lung cancer, clinical data for lifileucel monotherapy in endometrial cancer and for IV-4001, our next-generation PD-1 and activated TIL cell therapy.

Today, I will cover financial results at a high level, focusing on revenue, expenses, cash runway and the expected cost savings from our strategic restructuring. I'll begin with revenue and gross margin. In the second quarter, we reported $60 million in total revenue, a 22% growth over the prior quarter of this year. Total revenue included approximately $54 million for Amtagvi infusions and approximately $6 million from Proleukin.

Based on current growth dynamics and with approximately $109 million in total revenue for the first half of 2025, we are reiterating our full year 2025 revenue guidance of $250 million to $300 million, inclusive of sales from Amtagvi in the U.S. and Proleukin globally.

We continue to see strong demand for Amtagvi and the potential to achieve U.S. peak sales of $1 billion or more. There's also a significant opportunity to add to the revenue potential in the international markets.

Gross margin was 31%, excluding noncash items such as intangible amortization, stock-based compensation and reserves primarily for excess Proleukin inventory. Our recent restructuring is expected to improve gross margins in the near term through reduced cost of sales.

Gross margins are also expected to increase significantly through near-term optimization of manufacturing capacity utilization over the next several years. In summary, we are focused on improving our profitability and are pleased with the strong momentum from our U.S. commercial business.

Transitioning to second quarter 2025 expenses, total operating expenses were approximately $117 million compared to approximately $102 million in the prior year period. This increase was primarily related to higher headcount and related costs and costs for clinical trials and marketing and advertising support for Amtagvi, partially offset by reductions in stock-based compensation.

After experiencing a tremendous period of organizational growth in 2023 and 2024, we are fully committed to streamlining expenses and optimizing business performance through a strategic restructuring announced today. This restructuring includes a workforce reduction of approximately 19% in the third quarter of 2025 and will generate more than $100 million in annual cost savings starting in the fourth quarter of 2025. As I mentioned earlier, in addition to significantly reducing expenses, this restructuring will also significantly reduce our cost of sales and increase gross margins on an ongoing basis.

I would like to extend our heartfelt appreciation and best wishes to the employees impacted by the reduction in workforce. Realigning our operating plan and cost structure involves some difficult but necessary decisions to ensure financial discipline, while continuing to invest in our commercial launch success. Notably, our registrational and early phase programs remain on track and no significant changes to our product pipeline are expected.

Our net cash burn is significantly reduced over our prior forecast. For the next 4 quarters through the second quarter of 2025, net cash burn is expected to be less than $245 million, excluding onetime charges of less than $6 million associated with the third quarter strategic restructuring.

We will continue to optimize and refine our cost structure through operational excellence initiatives over the next 2 to 3 quarters. And importantly, we expect ongoing reductions in expenses and improvements in cost of sales.

Our current cash position of approximately $307 million in anticipated product revenue, including cost savings from the strategic restructuring are expected to be sufficient to fund current and planned operations into the fourth quarter of 2026. I am happy to go into more detail during the Q&A.

Notably, we're excited to welcome our new Chief Financial Officer, Corleen Roche, who joined our team this week. We look forward to Corleen covering the financial results in detail from next quarter onwards, and she's available for today's Q&A session.

I will now turn the call over to Dan Kirby, Chief Commercial Officer, for a detailed update on our commercial launch and our ex-U.S. regulatory milestones.

Thanks, Fred. I'd like to build on the earlier revenue discussion by highlighting individual product drivers for Amtagvi and Proleukin. I'll also provide an update across our 3 key focus areas to drive U.S. launch performance as well as our strategy for Amtagvi outside of the United States.

Product revenue from U.S. Amtagvi sales was approximately $54 million in the second quarter of 2025, representing a growth of 24% quarter-over-quarter. A total of 102 commercial patients were treated, representing the highest number of Amtagvi infusions for a single quarter to date. Infusion growth was a direct result of increased field activities in existing ATCs and contribution of new ATCs onboarded earlier this year.

Our commercial organization is also dedicated to supporting and growing Proleukin sales. Product revenue from Proleukin was approximately $6 million in the second quarter of 2025, an increase of 2% quarter-over-quarter.

Two of the 3 major U.S. wholesalers restocked during the most recent quarter. As a reminder, first quarter Proleukin sales were attributed primarily to manufacturing and clinical uses, not the main channel tied to Amtagvi use.

These 2 channels represent additional revenue growth opportunities for Proleukin. Now that wholesalers are reordering from the main channel, we expect Proleukin revenue to begin to reflect Amtagvi demand.

Looking forward to the remainder of the year, we are confident in continued growth for Amtagvi and Proleukin. We are confirming our full year 2025 total revenue guidance of $250 million to $300 million. This aligns with our U.S. Amtagvi growth forecast, including expected momentum from community referral activities and large community practices. As a reminder, our 2025 guidance includes sales of Amtagvi only in the United States as well as Proleukin.

Amtagvi has the opportunity to address more than 30,000 patients globally with previously treated advanced melanoma. As Fred stated, we continue to see the potential to achieve Amtagvi U.S. peak sales of equal to or greater than $1 billion. There is also a significant opportunity to add to this potential through international sales of Amtagvi.

Moving on to key launch performance drivers. Our #1 goal is to establish Amtagvi as the preferred option for all appropriate patients. Amtagvi is a game changer for melanoma patients, who have failed first-line treatment. For the first time in advanced melanoma and solid tumors, cell therapy made from the patient's own cells has been shown to induce long-term benefit with curative intent.

On last quarter's call, I highlighted 3 key areas to drive performance and would like to comment on our progress. First, adoption across our ATC network continues with strong steady growth at early centers, new centers treating patients and increased integration with community practices.

A second performance driver is engaging medical oncologists to guide earlier consideration for Amtagvi. Our first real-world data shows approximately half of all patients responding, including 60% of patients responding in earlier treatment settings. These results reinforce our messaging in the field and can guide earlier treatment practices within the scope of our label.

Our disease education focuses on the benefits of durable responses with onetime cell therapies like Amtagvi versus temporary responses and ongoing side effects seen with other treatments.

The third area is to penetrate U.S. community oncology networks and increase the frequency, speed and overall timeliness for Amtagvi referrals. Last quarter, I mentioned that we are working to identify alternative distribution channels on top of our traditional specialty distributor model, such as specialty pharmacy that may offer flexibility to support community access for onetime therapies like Amtagvi.

In direct response to requests from large community practices, we entered our first agreement with McKesson's Biologics Specialty Pharmacy and other transactions are planned. This new channel will allow hospitals to have the choice to either buy Amtagvi directly or go through a specialty pharmacy where they do not have to directly purchase the product.

Transitioning to our ex-U.S. strategy, we are making progress toward approval in 4 additional markets. Canadian approval is expected imminently, and we are making progress toward approval in the U.K. We gained priority review for our submission in Australia. We are also in the submission process for Switzerland.

In the European Union, as noted in the press release today, we recently withdrew our submission from the European Medicines Agency following lack of alignment during discussions of our clinical data. We are currently evaluating strategic options such as including a virtual control arm in the submission to make Amtagvi and TIL therapy broadly accessible to advanced melanoma patients with unmet medical need in Europe.

We look forward to providing updates on our regulatory interactions in the near future. As stated previously, our full year 2025 total revenue guidance does not include Amtagvi sales outside of the United States.

As part of the restructuring, our customer-facing teams remain well resourced and focused to deliver Amtagvi infusions for patients, drive demand and generate revenue for Amtagvi and Proleukin to move Iovance forward. I am committed and motivated to lead our commercial organization towards success. I'm deeply committed to Iovance's mission of pioneering a new treatment paradigm for physicians, who treat patients with solid tumors, which represent 90% of all cancers.

I will now pass the call over to Igor Bilinsky, our Chief Operating Officer, to highlight our manufacturing progress.

Thank you, Dan. I will focus today's manufacturing update on commercial performance and recent organizational changes. I'll also build on Fred's introductory comments about our ongoing initiatives to improve gross margins.

Our internal manufacturing facility, the Iovance Cell Therapy Center, or iCTC, supplies the vast majority of patients today for both commercial and clinical manufacturing. Our contract manufacturer provides second source [indiscernible].

Owning our own facility and relying more and more on internal manufacturing provides us with full control to maintain high quality, implement operational efficiencies and optimize cost of sales. iCTC also offers the flexibility to scale up rapidly when needed.

Manufacturing success, delivering final product to patients within defined specifications is critical for providing therapies for patients and for recognizing revenue. Across functional areas of Iovance from manufacturing to medical affairs and commercial, we are focused and committed to improving success rates. As a result, the success rate in the second quarter rebounded compared to the first quarter with lower patient drop-offs and lower out-of-spec rates, and we continue to see an improvement in the third quarter to date.

I'd also like to highlight that as planned, we delivered on our goal to shorten manufacturing turnaround time, which is now 33 days from receipt of sales at the manufacturing facility to Amtagvi readiness for return shipment to the ATC.

Turning to our strategic restructuring, our manufacturing organization has been realigned for operational excellence. We previously staffed our manufacturing network to provide the capacity to meet our prior revenue guidance. Now we have rightsized and optimized the capacity and headcount to align with the revised guidance and growth projections.

Our streamlined manufacturing organization and ongoing implementation of operational efficiencies are expected to increase capacity utilization, reduce costs and improve gross margins in the second half of 2025 and beyond.

Shifting to the current macroeconomic and geopolitical environment, I'll reiterate that Iovance is operating as a strategic advantage within the biopharma industry. We continue to expect Amtagvi and Proleukin to see minimal impact from tariffs.

Regarding our intellectual property, our TIL cell therapy expertise and manufacturing capabilities are protected by a robust patent estate that is domiciled in the U.S. We own approximately 280 granted or allowed U.S. and international patents and patent rights for Amtagvi and other TIL-related technologies expected to provide exclusivity through at least 2042.

I'm available to answer questions during the Q&A session, and I will now hand the call to Dr. Friedrich Finckenstein, our Chief Medical Officer, to discuss our clinical pipeline.

Thank you, Igor. Building on my colleagues' comments about Amtagvi or lifileucel, the durability of responses following onetime treatment is a key differentiator from other available and emerging therapies. This durability message was reinforced in the recent publication of the final 5-year analysis from our C-144-01 trial in the Journal of Clinical Oncology and the simultaneous presentation at the American Society of Clinical Oncology Annual Meeting.

Unprecedented durability and duration of follow-up were demonstrated in previously treated advanced melanoma patients. 31% of patients responded with nearly 1/3 of responders ongoing. The 5-year overall survival rate was almost 20%.

In the real-world treatment settings, we are excited to see even better response rates of approximately 50% overall and 60% in less heavily treated patients following lifileucel. We look forward to presenting this real-world data at a future medical meeting.

Following the strategic restructuring, our priorities are to expand Amtagvi into additional solid tumor types and earlier lines of therapy and to advance our key next-generation TIL and TIL treatment regimens.

In frontline advanced melanoma, TILVANCE-301 is our global registrational Phase III trial designed with FDA and EMA input to show the contribution of components. We are investigating Amtagvi in combination with pembrolizumab compared to pembrolizumab alone. TILVANCE-301 remains on track as the confirmatory trial for Amtagvi monotherapy in our initial indication, and this trial could also support accelerated and full approvals of Amtagvi in combination with pembrolizumab in frontline advanced melanoma.

We look forward to sharing results from several clinical trials before the end of the year for lifileucel in non-small cell lung and endometrial cancers as well as on our PD-1 inactivated TIL cell therapy, IOV-4001.

IOV-LUN-202 is our registrational program intended to extend the label for lifileucel monotherapy to include previously treated advanced non-small cell lung cancer. This trial design aligns with FDA guidance for single-arm trials to support accelerated approvals for single agents in conditions with unmet medical need.

Chemotherapy, the current standard of care in this treatment setting provides limited rate and duration of responses. The FDA previously provided positive regulatory feedback on the IOV-LUN-202 clinical trial design and the proposed potency assay matrix to support registration. We expect data from IOV-LUN-202 to support a potential regulatory decision on U.S. accelerated approval in 2027 for previously treated non-small cell lung cancer patients.

In our IOV-END-201 clinical trial, we've seen promising signs of initial efficacy for lifileucel monotherapy in previously treated patients with advanced endometrial cancer. Our PD-1 inactivated TIL cell therapy, IOV-4001 is in a first-in-human trial and reflects our leadership in next-generation approaches to optimize TIL and TIL treatment regimens. We are also treating patients in a Phase I/II clinical trial of IOV-3001, a next-generation IL-2 for use with the TIL cell therapy treatment regimen.

Finally, we plan to submit an investigational new drug application to FDA early next year for IOV-5001. This genetically engineered inducible and tethered IL-12 TIL cell therapy may expand our development opportunities into a wide range of common solid tumor cancers. I'm happy to address questions during the Q&A session.

And I'll now turn the call over to the operator to begin the question-and-answer session.

[Operator Instructions] Our first question comes from Yanan Zhu with Wells Fargo.

Congrats on the quarter. I was wondering, can you talk about the patient number from 1Q to 2Q because I don't think we had a good sense of exactly how many patients you infused last quarter -- in 1Q. So I wanted to understand the growth in patient number. And I also think you might have increased the price. So perhaps talk about the price change and impact for Amtagvi revenue as well. And if you can also comment on where do you think those infusion numbers will go in the coming quarters relative to your guidance and confidence, that will be super helpful.

Thanks, Yan. I'll start, and then I'll ask Dan Kirby to add some comments to this, too. So the number of infusions we had this quarter was 102 -- last quarter, it was 83. So that was substantial growth over last quarter, obviously. There was a price increase that came into effect on April 1st, which took the price of the product of Amtagvi to USD 562,000. We expect growth, and I'll let Dan talk about what we expect in the second half of this year. Go ahead, Dan.

Sure. So for the price increase, I think your question was, did we see any impact of the price increase on demand. We did see -- we did not see any impact. In fact, demand increased after the price. So we didn't factor that in as being any kind of headwinds to follow. So with that, we also look at the future and where we see patients coming in. We have our new centers coming on as we've talked about in previous quarters, and they continue to ramp up demand as well as our existing centers.

What we do see in the future happening is we're in the process of opening some ATCs that are closer in the community networks. I mentioned the distribution channel we added, that is specifically at their request, which gives us access to hospitals that normally were not going to purchase Amtagvi. So we do see demand in the second half continuing to be strong to meet the guidance that we provided.

Sorry, if I may quickly follow up. I think I heard the growth in patient number was from 83 to 102.

Sorry, 85 to 102, Yan.

85 to 102. That's a pretty good growth. Do you anticipate similar growth going forward? Or any color there, just so we have a better sense about what to expect in the coming quarters?

We anticipate demand to continue to be strong. As far as quarter-on-quarter growth, we don't want to guide to that. We want to till stick to the $250 million to $300 million range that we have in our guidance with it, which would indicate second half demand will be strong.

Our next question comes from Peter Lawson with Barclays.

Just [indiscernible] just as we think about the guidance, just your level of confidence around Proleukin, you mentioned it kind of accelerating in the second half, kind of what gives you that level of confidence? And what do you think the Proleukin number could be? And has there been any changes in the number of Proleukin injections?

Peter, I'll take that question. I think for Proleukin in the mainline channel, what we did see as evidenced in the revenue from Q1 was we're seeing the manufacturing and the clinical trial channel that represented the Q1 revenue. In Q2, we started seeing the reordering at a regular basis from 2 of the top 3 wholesalers in the U.S. So what we expect to see moving forward is those orders continuing in from the 2 and then the third one coming on later this year. So it will start to reflect more of the Amtagvi utilization.

Along with that, we are seeing strong demand to use with Amtagvi. So we have not seen the number of doses. Again, it's 0 to 6 doses with 1 dose of Amtagvi. We're not seeing the doses of Proleukin change by center. Each one will do it differently, but the average doses remain consistent.

And then finally, we do anticipate those other 2 channels we've been talking about that we booked revenue in Q1 on continuing to order throughout the year. So you'll see some pickup in in Proleukin based on the fact that the wholesalers are coming online.

Our next question comes from Andrew Tsai with Jefferies.

So if the guidance for net cash burn is going to be less than $235 million over the next year, and I believe restructuring happens later in the year, it feels as if you're expecting gross margins to improve meaningfully, maybe even as early as Q3 relative to Q2 and Q1. Is that accurate? And if so, can you give us some color why that could be the case in terms of a meaningful margin improvement?

Yes, Andrew, thank you for the question. It was $245 million, not $235 million. You can see it in the press release and in our remarks there, but your question is still a good question. Yes, we expect -- we expect margins to improve. That's the whole -- that's the whole name of the game right now. We're pushing very hard. And a lot of the restructuring activities are really focused on improving margin. Now we're going to enter a phase of operational excellence over the next couple of quarters to really tighten down on cost of sales and do a lot of work to improve margins even more.

And as volume ramps up, we'll also see improvements in margins because cost of sales will stay low while revenue goes up, especially as we scale up and use our iCTC facility. So you're absolutely right, we expect to see margin growth.

And again, this quarter, we saw a good margin. If you back out the noncash items and things like that, you see a very good margin on a cash basis that we have already now. As you see more Proleukin sales increase and as you see us do all those things, I think you'll see margins go up significantly.

Our next question comes from Salim Syed with Mizuho.

This is [indiscernible] for Salim. Could you elaborate on the decision to withdraw the marketing authorization application in Europe? What was the feedback with the EMA? And what are the steps that you're planning to take to commercialize in Europe?

And regarding the announced restructuring, are you also planning to reduce R&D expenses? And if so, could you comment on any specific actions you would be planning to take to reduce, for example, clinical expenses?

Yes, I'll take the second question first. We did reduce some R&D expenses, but we are not expecting any significant changes in our clinical pipeline as we discussed on the call.

With respect to the EMA, we withdrew what we learned late in the review process that we need to include an additional analysis in our submission. So what we want to do is go back and resubmit with an additional analysis such as the virtual control arm. We do not -- our strategy does not require us to run additional clinical trials, and we think that can happen relatively quickly.

We'll be seeking scientific advice from the EMA soon to try and get back in there and work on that again with them. But that was really what the issue was. It has to do with the data package that was submitted, which we submitted was similar to the FDA package and Health Canada package and everything else, and they would like to see some more. And the easiest route for us to do that is to withdraw and resubmit.

Our next question comes from Tyler Van Buren with TD Cowen.

This is Nick on for Tyler. Can you provide an update on how infusions are tracking for Amtagvi quarter-to-date? And then second, in the first earnings call -- in the first quarter earnings call, you noted that 69% of ATCs have infused patient, while 16% infused 10 or more. Can you provide an update on these metrics and the plan to increase prescribing?

I'll take that one. Thanks for the question. For the infusions quarter-to-date, we do see strong demand. However, we can't comment on how many infusions quarter-to-date. That's been our policy. As far as the percentage increase with it, those percents, they have gone up. Obviously, we have not appreciably a lot more centers that came on in the last quarter. However, we [ went up ] 24% infusion. So those numbers by centers are going up with it, but they -- we decided not to continually track those as a metric.

Our next question comes from Colleen Kusy with Baird.

So this EMA feedback on melanoma, do you expect this to impact your path forward in PD-1 treated non-small cell lung cancer?

No, not right now. Absolutely not. It has nothing to do with the United States whatsoever. And Raj Puri, you can comment on this.

Yes. I think, Colleen, any impact on the going forward continuing non-small cell lung cancer.

Great. And one quick follow-up. What sort of issues does moving to a specialty pharmacy solve for centers versus just buying through you directly?

It's a great question. It really solves -- if you think about the hospitals that are involved with the community clinics and you get close to where the patients are, a lot of times, you're dealing with medium-sized hospitals that have all the capabilities to administer Amtagvi. However, onetime therapies that have higher price tags, the finance department does not want to bring those in. So they would rather go a route, where they would go through a specialty pharmacy, where the purchase would happen through the specialty pharmacy and the specialty pharmacy would get reimbursed from the payer versus the purchase happening directly from the finance department at the hospital.

[Operator Instructions] Our next question comes from Reni Benjamin with Citizens.

Maybe one, can you just talk a little bit about the numbers in terms of patient drop-offs versus the manufacturing kind of out-of-spec rates? I think Igor had some prepared remarks regarding that. Can you just talk about the specifics from first quarter to second quarter and how you see that potentially improving throughout the rest of the year?

And then kind of just going back to a previous question regarding McKesson, how do you see this potentially improving revenues going forward? Like is this something that should kind of minimally increase revenues? Like how should we be thinking about the number of patients these one-off hospitals, how much they might use this?

Reni, thanks for the question. So on the first part of the question, the -- as I mentioned, the manufacturing success rates normalized in the second quarter compared to the increase in the first quarter. So both the out-of-spec rate and the patient drop-off rates decreased, and we're seeing further improvement in the third quarter so far.

And as you can see in the Q, you will see in the Q, the scrap costs went down in the second quarter compared to the first quarter, if you want to quantify that. Beyond that, we're not sharing the exact percentages. But again, you can look at the scrap costs and see the decrease in both absolute terms and the relative percentage.

And I'll answer the question regarding both patient drop-off as well as the impact of specialty pharmacy, which are a little bit related. So patient drop-off does remain somewhat consistent, although we did see that we were getting patients a bit earlier in this quarter versus previous quarters. and we weren't seeing as many patients that were not making even the tissue procurement. So we are making strides in that avenue.

The impact of specialty pharmacy allows us to actually get closer to those patients, so we can get healthier patients upstream. And how we should be thinking about that is we're starting our journey right now. Other cell therapies are following our lead. Gene therapies and other therapies that are higher priced have already gone down this road successfully.

So as we think about how this could have an impact on it, this could get us next to those clinics that are affiliated with those hospitals inside of the network that they can treat patients inside of their network without the cost burden. So it could have a big impact long term. We already have several accounts right now that have requested it that we're opening up this channel for. So we will have some impact later this year.

Got it. And if I can just have a quick follow-up just regarding the clinical trials that are ongoing for Friedrich. Just can you provide us any color in terms of how many patients are enrolled in each of these studies? How many patients' worth of data might we see for non-small cell as well as the other ones that we're expecting like endometrial in the second half of this year?

Yes. Happy to respond to that. So I think what we said is that we're going to share data by the end of the year. We will provide that information as part of those updates. I don't think that we will predefine at which patient number we would be doing that.

Our next question comes from David Dai with UBS.

So first question is just around thinking about the patient ramp for Amtagvi, based on current run rate, we calculated that the patients need to grow about [ 26 to 32 ] patients per quarter over the next couple of quarters to hit the midpoint of the guidance. Could you just provide any detail that you're on track to hit that patient growth?

And secondly, on the ATCs, you have 80 right now. How many of these ATCs are newly activated compared to last quarter? And how many are still being activated?

So one of the things -- so I'll take that question [ with it ]. As far as the patient ramp, just to let you know, the $250 million to $300 million is combined revenue between Proleukin and Amtagvi. So on the math there, those numbers aren't [ $26 million to $30 million ] per quarter each quarter to grow to hit those numbers in the range.

But we are confident that we are tracking towards that range and seeing Amtagvi demand continue to strengthen and grow towards the end of the year as well as Proleukin, as we mentioned before, having all 3 wholesalers starting to order very soon, 2 of those doing so currently in the main channel give us our path forward to hit within that guidance.

The second question regarding how many new ATCs, again, we're focusing on quality, not quantity. We have opened several ATCs in the last quarter with it. Each one of those has been carefully vetted to have referral patterns in place so they can get earlier patients in there.

And we are seeing -- and I'm not going to give the exact numbers here. We are seeing a substantial number of patients coming in the queue, both that have been already infused by them, but also to where they are enrolling in there to have manufacturing done for Amtagvi for their patients.

Thank you. I'm showing no further questions at this time. I would now like to turn it back to Fred Vogt, Interim Chief Executive Officer and President, for closing remarks.

Thank you, again, for joining the Iovance Biotherapeutics Second Quarter 2025 Financial Results and Corporate Update Conference Call. We look forward to providing future updates on our growing commercial and clinical portfolio, including our Amtagvi real-world data presentation and planned data updates from our long endometrial and next-generation TIL studies.

We are motivated by the stories we continue to hear about the patients who benefit from Iovance TIL cell therapies in our clinical trials and in the commercial setting. I'm confident that Iovance will remain the global leader in innovating, developing and delivering current and future generations of TIL cell therapies for patients with cancer.

As always, we are thankful to the patients, health care and advocacy communities, our partners and our exceptional Iovance team. I would also like to thank our shareholders and covering analysts for their support. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good afternoon, everyone. Thanks so much for joining us. I'm really pleased to be joined by Brian Gastman, EVP of Medical Affairs; and Dan Kirby, CCO of Iovance. Thank you both for joining us.

Thank you.

Dan, maybe I can start with you here. Just -- given Amtagvi has been on the market now for over a year, what have been the biggest learnings from this launch? And what has been maybe easier in some ways or what has been more difficult than maybe the prelaunch expectations? And Brian, I'll pull you in here since you have been here for the entirety of this launch to date.

So it's a great question. I joined in February and looking at the first year of launch for Amtagvi, a lot of success was had following the CAR-T launches. And really, the centers being so receptive to the first time that a cell therapy was there for solid tumor and treating patients was a great experience, and you saw that in the first year of launch.

As we get to the learnings from the first year and where we go as we expand past that is really the identification of patients that can be referred in earlier in their treatment journey and looking at -- in metastatic melanoma, the number of patients and just the opportunity there to get to them really brings us to the point of going earlier with the patients into the community to be able to get a better capture of more patients early in their journey to be able to treat. So that's really where our focus is in the second year. So in short, great launch, the next wave will bring even better success for patients.

Yes. I'll just add quickly that the enthusiasm as you see these ATCs mature has just increased. The number of feel-good stories of patients getting complete responses with nothing else as an option, we just hear about it all the time. Sometimes we hear about it on the news, but many times, it's the centers themselves. And that drives enthusiasm not just in their hospitals but also internally in our company.

Maybe to that point about the feel-good stories, the evidence of Amtagvi's benefit in patients, you did recently present at ASCO 5-year data. Maybe speak to what you saw, what you presented and just how meaningful is that for this patient population?

Well, it's huge because, first of all, I would like to call it rare. There's never been a study in the post-PD-1 setting that's prospective that was a registrational trial that has ever even come close to this. Remember, this is a onetime therapy. The overall survival was based on that therapy alone without salvage therapies to raise that number up.

To be a 5-year final analysis, that's like a 7-year interim analysis of a 10-year study. 20% of patients were alive at the 5 years, 1/3 of the responders were still at the 5-year mark to be analyzed. This is huge because when you get these kind of responses, you know you'll be able to treat your patients and be with them for years on end, maybe even decades. So I think for both the referring physicians as well as the authorized treatment centers themselves, this is a big shift for them to really think that this is something that's not just about responses but about durabilities of those responses.

And you guys hosted a panel. And one of the things that I was struck by was one of the physicians talking about the meaningfulness of Amtagvi in being able to essentially bring patients to a cure for nearly 60%. When you combine it when you think about checkpoint inhibitors and then Amtagvi following thereafter, a majority of patients being able to reach a cure. How much has that been appreciated by the broader prescribing behavior or prescriber community?

It's certainly growing. Number one, it started off that KOL panel that with Dan Olson saying, it's treated over 2 dozen patients with a 40% -- at least 40% response rate. One of his main referrals is -- Bruce Brockstein is the one who mentioned that. And this idea that the ideal sequence is you have your frontline followed by Amtagvi gives you those incredibly high numbers that you mentioned. I think doing anything other than that sequence in their minds is not -- is no longer standard.

This is the right way to go. And then what's -- if that majority is not that person's journey, they still have the myriad of other options to choose from. I think this is -- as centers have these feel-good stories, as it gets out in the community, this message is getting stronger and it's getting louder.

And one thing just to add to that is from a cell therapy perspective at the ATCs, it's to be expected, they've had cell therapy starting with allo transplant 50 years ago. So to give a onetime therapy and have a durable response, it's less surprising to them. But when you get into the med/onc community and the refers in, that's something that we have an educational opportunity because they haven't seen this before.

When the patient is done literally after they're infused between the lymphodepletion to the actual finishing of the regimen, it's a couple of weeks, and there's no need for ongoing treatment with it to see these types of responses. That's something that's been eye-opening in the community and something that we're working to continue to educate on.

Maybe one other point that one of the KOLs mentioned is that what they're seeing in the real-world setting is exceeding what your clinical trials would suggest on a response rate. Maybe how broadly applicable -- or are many of your other physicians also seeing such high success rates? Maybe talk to us about what you're hearing from the ATCs.

I think it's key to note that in our LN-144 trial, the average patient had at least 3 prior lines of therapy. They really exhausted everything and then many of them had those same therapies doubled and tripled compounded. What we're trying to educate the community is that this is a truly second-line therapy.

And as they move toward earlier intervention, not only does it cover the vast majority of all melanoma patients in the setting, but also gives these kind of outcomes and maybe even better because we've had data in the frontline setting, which had even higher response rates.

So I think the earlier you get to them, is driving those numbers. The other thing that Dan Olson said as well that is that treating patients that maybe traditionally we thought were harder to treat, and we're resetting what is a hard-to-treat patient. So altogether, you're seeing those kind of numbers. And we are hearing from other centers, not every center, but -- and again, this is just word of mouth at this point. We are working toward with consortiums to get actual data to present, but we're hearing numbers like this and even in some cases, higher than that.

Fantastic. Maybe we can talk here about your 2025 guidance, recently reset on your last earnings call. Just remind us what led to that revised guidance? And then what gives you the conviction that the reset number now is truly achievable?

So great question. We did reset guidance between $250 million and $300 million on the last earnings call. What we did was we looked at the numbers of patients coming in. And so there's good and bad to the story with it. The good is the patients are there. The bad is they're not getting referred to the ATCs in time. So we're seeing a lot of patients go to hospice or death as they go in.

So when we started looking at that and calculating out to 2025, we wanted to reset guidance with the plan of addressing the current ATCs and growth in the current ATC while we are going to onboard new ATCs within community networks. So again, we're looking at the speed to which to do that. So in 2025, that guidance is reflective of our current ATCs plus the new ones coming on and us driving referrals in there earlier from the community. As we look for long term, we're also simultaneously building out ATCs within community networks and different approaches there, so we can bring the product closer to the patient.

What can Iovance do, to your point, to help drive that referring behavior -- to try to ensure that patients really do experience the benefits of Amtagvi versus unfortunately, maybe being ineligible?

Absolutely. So the first step is education. So right now, we're working on a disease education campaign that's all about cell therapy. Because Amtagvi is the only cell therapy for metastatic melanoma, we want to educate on cell therapy and onetime treatment with curative intent to the med/oncs out there that would refer in. So you educate them first.

Secondly, we have field teams for expanding that calls on the community, and that is something that we're working now, giving them the messaging and having them go out. And again, as we get new ATCs up, putting them out in the community that are going to refer in and then having that push come in along with the education. The third step here is really to talk about -- talk to the leadership directly at community organizations and community networks and form a partnership with them to be able to not only have them refer in, in some cases, we have ATCs stood up in their area that they can refer into very easily, having that happen in the short term, but also aligning with them on which ATCs we need to stand up or hospitals inside of their networks that are already referral patterns existing that we can maximize. And that's -- there are 3 things that we're doing right now to try to get that education and action out there.

Great. You mentioned, as you think about the number of infusions that you reported for the first quarter, 85 infusions, some of that being impacted by reduced capacity during the scheduled annual maintenance of iCTC. In that context of 85, you've then provided the guidance of 100 to 110 infusions in the second quarter. Maybe help us understand how much line of sight do you have to that, just given the timing of when you reported when you made this -- when you provided this guidance, how much line of sight, how much confidence do you have in that number?

So first, we're very confident in that number as well as the number for the full year with it. And again, the full year is looking at $250 million to $300 million. Now when you look at the journey from a patient when they're referred in for Amtagvi, they get referred into the center, they get enrolled. After they're enrolled, we schedule out a tissue procurement. We have the tissue procurement and then we manufacture and then it's delivered and they're infused with it.

So that is a little bit of a time lag. So we look at the leading indicators to say that we're confident that number can take place. But again, you don't know until the end of the quarter when the infusions [indiscernible] place that they're occurring with it, but the modeling suggested that, that's a viable path forward for it. And again, we want to make sure that we not only meet, but we want to exceed those numbers at the end of the year.

Got it. So the leading indicators are all suggesting 100 to 110 is very much.

We're confident in the number.

Great. Maybe touching on ATCs. I think as of your last disclosure, you noted 80 within your network. Where do these stand in terms of being operationally ready?

Most of them are operationally ready and treating patients right now with it. There are a few that have come on recently that are ramping up that journey. Typically, when an ATC comes on, they want to test a few patients out from an insurance perspective. So therefore, they can -- their finance department makes sure that it's going to get paid by the payer, and then they start quickening pace after that.

There's also a learning curve on the surgeon side that Brian's teams work on to make sure the surgeons are getting a white glove service in the initial phase of it until they can get their legs under them, so to speak, and they can -- that they know how to do the tissue procurement to give us the best starting sample possible with it. So most of them are up and treating right now. A few are coming on and ramping up, and then we'll continue to see that as we bring new one and the newer ones start evolving.

Are all the ATCs receiving this white glove treatment?

Well, first of all, we certainly wanted to focus on centers that are new or older centers that have new surgeons, mainly where -- we've always offered this option for every center. But what we've done as a concerted effort is to actually go to the surgeons as well as presurgery tumor decision-making steps of the way and offer them anywhere from there to in the operating room and beyond to help them not only get the best tumor -- the best preparation of the tumor, but also make sure that the patient gets to infusion and gets through that okay.

What's happening now, though, is that because they're letting us in the operating room, when we are able to get in there, which is happening more and more, we're actually seeing a significant drop in dose-related out of spec, which is the most common reason for out of spec, and we expect that to continue. But also, as we say, we will let the birdie fly on their own because we do see once we've done enough of these and we've seen that they're able to do it on their own, they should be able to. And also should be somewhat infectious that surgeons should be able to train other surgeons for best practices.

How much of -- to that point, let them -- once you're confident in their ability to do this procedure correctly, how much retraining needs to be done? Or over what frequency would you expect that you would need to maybe go back in, make sure things are still going kind of well there?

Well, all of our teams, but -- we each do it a little bit differently, but in my team, in particular, we study each ATC individually, and we track by time what's happening there, what happened to each infusion, how much of the dose was in spec, whether it was in spec, out of spec, that type of thing. We have centers now that are doing so well. There really isn't much more we can teach them, so to speak.

They're doing excellently. In fact, these are the kind of centers that we'd want to go out and teach other centers, like, again, sort of infectious education. That being said, at that point, it's really just their communication with Dan's team and referrals and growth in the program. But the goal is that everyone ends up being like that. And we have centers now that are really already in a sweet spot for that level of quality.

Right. And we also to -- we look at the metrics all the time, as you can imagine, with every single ATC. So we have quarterly scheduled business reviews with them where we go through and we tell them how they're doing, what their patients' response was, everything we have those open discussions with them. But if we see anything blip up, the teams are there right away to work with them and ensure it's corrected.

And when -- you've reported some metrics as it relates to your ATCs, the proportion that have resected a tumor, have infused 1-plus patients, have infused 10-plus patients. What does it really take to get an ATC from an infusion in 1 plus patient to the 10-plus?

So actually, it's a lot of work going on with them and making sure they have the right -- mainly they have the surgery, cell therapy and med/onc, that triangle is working very well together. When we get somebody to the expert level of 10-plus then it really is down to how many patients we can have referred in. So those are when we have the open discussions about who are the large community practices in your area and how can we help you network them.

In some cases, we provide -- in all cases, we offer, but some cases, we join in with them on advertising that they do to those sites. I mentioned the staff that we can send into the sites. But going through there and making sure that once they hit that expert level, we're sending as many patients to them as possible and putting the pipeline there so they can treat.

I guess right now, out of your 80 ATCs, what proportion are at that -- remind us again what proportion are at that expert level right now?

So we're about 17% at the last earnings call we said and that number continues to grow.

At steady state, any guesses as to where that number can go?

Steady state as we look at not only with the academics, but as the community come on, over half of ours will be that expert going in where it's a relationship on they've mastered the TTP, the process with it, how to infuse, everything is going very smoothly with them. We anticipate over half will be at that level and then the other half will just be ones that we'll work closer to, to evolve them.

Got it. And then to the extent that you're able to share, but we heard from one of the KOLs and you mentioned this, that they've treated double-digit number of patients right now. How many infusions have your top centers done?

Anywhere, I think the one that was mentioned was Dan Center at 25. We have 25 plus in the top centers for it. And again, we continue to see that number grow at those centers plus also the new ones coming up. So that's where we see them evolving to it.

And when you've engaged with the ATCs and patient identification is such a key part of this process to your point. What are they telling you with respect to the patients that are still available and still likely candidates for Amtagvi?

So we see new patient enrollments every single day and patients going through the channel as well as getting to infusion. So there are a lot of patients out there. I think one of the things that we share with our existing ATCs is the urgency to get patients in there earlier because there's nothing more heartbreaking than getting the announcement. I have an e-mail feed that happens every time an order or an enrollment is canceled.

And if I see patient death or hospice, I know that's happening before we can even get tissue from them. So we have a joint effort with the ATCs to get patients earlier. But that said, we get enrollments every day. We have TTPs every day. We have infusions every day so the patient numbers keep flowing through.

Got it. And I guess maybe just remind us here the profile of the patient that is receiving Amtagvi. Now obviously, you want to move it to the second line. That is the ultimate goal here. But what line setting are they predominantly right now?

Third line plus.

Okay. And that hurdle -- I guess, maybe how much of a hurdle is it to get it to the second line? Is it just the education, it's the experience of these physicians, it's the earlier referrals. But anything else you can do to ensure that it becomes a more predominant part of the second-line therapy?

I think the biggest thing other than what we talked about, and I was -- I've been talking a little bit about this is the phenotype of the ATCs that we're going after and looking at where we're headed to the future with it and going where existing referral patterns are there versus trying to build them and that's something that the CAR-Ts talk about all the time, too. I think the famous quote they have is 2 of 10 patients receive treatment. I think we even have a bigger opportunity in metastatic melanoma by expanding the ATC definition.

And as you think about maybe what you're seeing commercially and in the real-world setting relative to your clinical trial experience, maybe just put that into context for us, how similar or how different this has been as it relates to manufacturing or patient experience or the like?

It's been consistent on the manufacturing front. I do think that if you look at from the real-world experience, we have the ability to treat more patients than clinical trials. So that's something where we see those patients still going in and going through. But on the other side of this commercially, there's so much more opportunity to get those patients in there. And again, we have a lot of later patients inside the clinical trial as well, but really going after that second-line patient and going upstream is the huge opportunity.

So much of this really hinges on the ATCs, the quality of the ATCs and their level of familiarity, their expertise as it relates to this process. How do you think about bringing on a new ATC, just given the high bar that you need to be able to make sure that they're achieving. How do you think about bringing those on? And what is the ideal number if it's not 80, if you're expanding, what is the ideal number?

And so one thing I'll be consistent. I've never said the ideal number because I don't think it's a finite number out there. I will say we have changed our criteria. And when we go to nominating ATC, the teams have to establish with the ATC the referral patterns, what community presence that they have, the fact that they have the ability to get patients from day 1. And so that lift that I talked about for us is less on day 1 to get patients in and more about educating them on how to use.

One instance that just happened recently, we said no to an ATC and they asked to be on the phone with me, and they were listing out their criteria of clinic affiliations and everything, and they were signing up for commitments for large numbers, and that was a great sign to see that the new process is working for it that we can have them work with us and commit and we can see what their referral patterns are and the fact that they're an existing community network center versus an academic center that's relying on the community to refer in.

Got it. So just really reinforcing there the importance of the referral network that's really being leveraged to drive into Amtagvi utilization. I guess maybe as you think about the competitive landscape and how it's evolving here, particularly in the second line where you would ideally like Amtagvi to be positioned, maybe speak to us about what you're seeing across that landscape and how you think that this might impact Amtagvi.

So I think with new competitors in the market, it always gives attention to metastatic melanoma and the need to treat for patients. And I believe that during our panel at ASCO, this was brought up and the philosophy that Dan Olson and others said during the panel is the philosophy we keep hearing from the KOLs. When you look at Amtagvi, it's a onetime treatment and you look at the long-term data now, what you want to do is you want to offer Amtagvi first because that's the best chance for that patient to have a long-term response without having to be on chronic therapy for years or go through dosing cycles that can last 4 months and then 2 years of chronic therapy.

So if you look at the approach they have, it's really strategic. If you give Amtagvi first or evaluate for Amtagvi first, you allow 2 shots on goal. You give the Amtagvi. If you can't give the Amtagvi, you always have a fallback. If you can give the Amtagvi, which is in most cases, you proceed with that. And then you'll know within a few months with 3 weeks of start to finish, they're done their dosing. And then when they get a response, there's no need to go somewhere else.

If for some reason, they don't get a response, you always have that fallback that's sitting there for it. So that's what we've heard. So I think the noise is going to be helpful to the market with it, but also, too, we're confident with our KOLs that Amtagvi is the first option.

Great. I guess maybe as we think about the regulatory path and the expansion into ex U.S. territories, what learnings will you take from the U.S. launch to apply to the European countries?

It's a great question with them. We have our European and U.K. GM right now. Her and I talk about this about 3 times a week about what are the launches. Some of that is infrastructure and how we can approach better. So that's one of the things that we can do internally to make sure we have a seamless between medical affairs, Brian's teams and my teams to ensure that we're working in sync.

And then also to what we've learned in the community, I talked about going to where the patients are and asking them what centers to stand up. We have learned that of going to the government authorities and going to the centers and find out where the patients are right now from the derm oncs primarily in Europe and what centers we need to stand up on that side. And there's a straightforward selection process in some of the countries that we're going through right now to ensure that we can access those patients. And it is within their infrastructure to do so.

And remind us here, you've noted how many ATCs you're planning on onboarding to support this launch in Europe?

So 15 ex U.S. ATCs as we've committed to. We're well on our way to accomplishing that. We have over 10 deep in the process right now, halfway through the year.

And what is the coverage, I guess, across those 15 ATCs, how many patients are associated with those ATCs?

So it's hard to give you exact patient number per ATC with it. What I can tell you is that there is a network mapping that we go through. In each country, it's a little bit different. I know the U.K., we're going through that right now of being able to select the ATCs there, but really making sure that they're within not only where the patient proximity is, but also to their centers that are authorized and typically the cell therapy centers, but they have a good relationship with the derm oncs, the surgeons as well as the cell therapists.

Got it. So it would be a fair assumption then for these ATCs they are already familiar, they're interested in cell therapies and they're knowledgeable to...

We have received a lot of interest proactively from ATCs outside of the U.S. in countries that we're pursuing.

How [indiscernible] your capacity to offer the white glove service to U.S. ATCs?

So first of all, you should know that most of the ones that we're standing up outside the United States are ones that we're working with on trials. Many of them have large experiences. They have very large infrastructures and some of them -- you might have seen them on panels already about cell therapy. So these are the high-end experts to begin with.

In terms of the white glove service or I should say, mirroring the services we have in the United States, we're actually pulling from a lot of our U.S. resources so that we don't have to completely double everything. In fact, you're going to see a very smaller footprint from, let's say, a medical affairs perspective to achieve the same thing we have there that we have here.

A lot of our strategic leadership will stay here on this side because we have the experience. And a lot of things that we did less efficiently at the beginning will not occur. So to speak, the new centers will start at a much higher floor than the ones that started here. And so I think for all those reasons, there are things that will just be part of the norm that had to be changes or amendments in the United States that will just be something baked into the system. So I think there'll be higher efficiency, less of a need in general and a smaller footprint. But I do think we will be able to do the same thing there as we have here.

Any notable differences in the treatment paradigm in ex-U.S. territories versus U.S.? Or is it fairly similar?

I think it's interesting. One of the things that we're not seeing as an obstacle is what we talked about before the community into the academic. It's much more seamless. Maybe it's a single payer structure. The financial incentives aren't there to keep the patient. But also to -- you have a much more defined treatment algorithm to be able to get them to the centers and evaluate it quicker.

That said, we have to make -- we also need to ensure that the cell therapists and the derm oncs that usually don't speak to each other, we're forming those relationships and going in. In fact, we've actually had centers we've had the cell therapists sit through the onboarding discussion with the derm onc there and help the derm onc understand onetime cell therapy and how that is to treat their patients and how they need this. And we've seen great responses doing that.

Great. Maybe one last question here on Amtagvi. But as it relates to your frontline trial, just any updates you can share there? And particularly on the back of the ASCO data that you did have last year, what has been the receptivity to potentially moving Amtagvi to the frontline setting?

Well, TILVANCE, as we call it, is still on track. It's still our confirmatory trial. As you know, it's a Phase III trial. A lot of it is happening in Europe to be consistent with what I just said before. And that's also helping us sort of let these centers cut their teeth on the use of cell therapy through our processes. At a minimum, this is going to not only be confirmatory, but it's also going to promote good practices to try to get these patients as early as possible. And the maximum, it would bring Amtagvi into the front line.

And there's excitement for a therapy like Amtagvi for the front line?

Well, when you see CR rates of 30% and at least with the Rosenberg's data, if you hit the CR, you have a 10-year nearly 100% survival. It's hard to unsee that. And especially for those younger patients who are thinking about long lives with little children, this gives you -- this is really where this could have the most impact.

Great. And then maybe just one more point here. As you think about your revenue guidance of $250 million to $300 million, obviously, a component of that is Proleukin, Proleukin generating revenue not just from Amtagvi but a number of other sources. Help us think through how the Proleukin revenue cadence should look through the remainder of the year.

Absolutely a great question. I know in Q4, we had wholesalers that were loading up one coming on, the third major one came on. So what we've seen so far this year is the bleeding down of that inventory with it. So I had said in the last earnings call, we expected 2 to reorder this quarter with it, continue that expectation with it that 2 will place at least 1 order from us this quarter with it.

As we look through the other channels with Amtagvi, the manufacturing channel, you saw a strong purchase in the first quarter for that. We continue to put efforts against going to the other manufacturers for cell therapies and having them select Proleukin versus the other IL-2s. Proleukin is the only FDA approved for use in humans. So there are reasons why you'd want to use that in your manufacturing.

And we do have customers of ours that are other cell therapy companies with commercial products that are using Proleukin in their supply chain with it and having great success there. So we do see that replicating across and putting efforts towards that. And of course, the clinical trial pathway for IL-2 use as well is a huge opportunity for us. So we look at this. It's mainly going to be tied to Amtagvi, [indiscernible] that are a pretty decent business to stand up on their own, and we're putting more efforts against that.

Great. And maybe in the last couple of minutes that we have here, just your pipeline, you will have 2 data reads coming later this year. Maybe talk us through both for lung cancer as well as endometrial cancer, just the expectations here.

Sure. So for lung cancer, we believe that we will have enough response as well as persistent durability that we've seen that will be similar to the data that we've shown previously in previous press releases. That should be well within the metric that we need to be able to submit that to the FDA. Our plan is to have a large data set presented by the end of this year.

We haven't stated specifically where we're going to do that. It's still under internal discussion. That being said, generally, those kind of large data sets tend to not change much as you add the last bits of data in patients so that you have the full registrational cohort to be able to submit and that's the main plan.

But the main thing is that since we started this, the landscape really has not improved. And it's actually been very dour, so to speak, because one would have expected some of these other therapies would have done something in that second line, and the unmet need continues to grow, both for responses as well as durability of responses.

In terms of endometrial, we expect to have a sort of signal-finding cohort by the end of this year as well that we're going to present. The key there is that we are looking at both proficient and deficient MMR patients. There's a need for both. But the fact of the matter is that while lifileucel is in immunotherapy, its mechanism of action is distinct from checkpoint inhibitors. We've seen that in our lung cancer data. We expect to see that also here as well. And this is critical because as you might see a lot of immune-based therapies try to get those PD-L1 highs or very high hot tumors, so to speak.

We don't necessarily need to fall into that. And that gives us the opportunity not just to go into the second line, but also to affect patients where probably the first line wasn't that great either.

Great. As you think about lung cancer, I mean, you just mentioned second line, still very much an unmet need here. How would you anticipate a launch in lung cancer going relative to melanoma? I guess, are there parallels there? Is it more difficult? Is it easier in some ways?

I think the biggest thing, it will be very difficult if we didn't have melanoma out first because what we've seen with lung cancer is very fast, and it's something where the patients are sitting in the community. So getting them to an academic center, a lot of times, even less so than melanoma that they'll actually get there. So as we look at what we're doing in melanoma and success we're having there that is setting up lung very well because it's the same community treaters, and we will have already opened up those ATCs within the community network. So that gives us an opportunity to launch fast and help as many patients as possible as quickly as possible.

Have you thought or maybe shared the expectations for what could this opportunity represent on a dollar basis? We've talked about melanoma. I think Fred has talked about this being a $1 billion-plus opportunity in the U.S. alone. How does lung cancer compare to that?

It's multiples of melanoma. It really is. It's a huge opportunity going forward.

Exciting opportunity ahead then. Great. Thank you, guys, both for joining us.

Thank you.

Thank you.

Thank you, everyone.