IOVANCE BIOTHERAPEUTICS INC

Previous wording

We are a commercial-stage biopharmaceutical company pioneering a transformational approach to treating cancer by harnessing the human immune system’s ability to recognize and destroy diverse cancer cells using therapies personalized for each patient. Our mission is to be the global leader in innovating, developing and delivering tumor infiltrating lymphocyte, or TIL, cell therapies for patients with solid tumor cancers. With the recent approval of our biologics license application, or BLA, we are executing the U.S. launch of Amtagvi™ (lifileucel), the first product within our autologous TIL cell therapy platform, while also marketing Proleukin® (aldesleukin), an interleukin-2, or IL-2, product used in the Amtagvi™ treatment regimen. Amtagvi™ is a tumor-derived autologous T cell immunotherapy indicated for the treatment of adult patients with unresectable or metastatic melanoma previously treated with a PD-1 blocking antibody, and if BRAF V600 mutation positive, a BRAF inhibitor with or without a MEK inhibitor. This indication is approved under accelerated approval based on an endpoint of overall response rate, or ORR. Continued approval for this indication may be contingent upon verification and description of clinical benefit in future confirmatory trials. Amtagvi™ is the first and the only one-time, individualized T cell therapy to receive U.S. Food and Drug Administration, or the FDA, approval for a solid tumor cancer. Amtagvi™ and Proleukin® are part of a treatment regimen that also includes lymphodepletion.

Current wording

We are a commercial-stage biopharmaceutical company pioneering a transformational approach to treating cancer by harnessing the human immune system’s ability to recognize and destroy diverse cancer cells using therapies personalized for each patient. Our mission is to be the global leader in innovating, developing and delivering tumor infiltrating lymphocyte, or TIL, cell therapies for patients with solid tumor cancers. We are executing the U.S. launch of Amtagvi™ (lifileucel), the first product within our autologous TIL cell therapy platform, while also marketing Proleukin® (aldesleukin), an interleukin-2, or IL-2, product used in the Amtagvi™ treatment regimen. Amtagvi™ is the first and the only one-time, individualized T cell therapy to receive U.S. Food and Drug Administration, or the FDA, approval for a solid tumor cancer. Amtagvi™ is a tumor-derived autologous T cell immunotherapy indicated for the treatment of adult patients with unresectable or metastatic melanoma previously treated with a PD-1 blocking antibody, and if BRAF V600 mutation positive, a BRAF inhibitor with or without a MEK inhibitor. This indication was approved in February 2024 under accelerated approval based on an endpoint of overall response rate, or ORR. Continued approval for this indication may be contingent upon verification and description of clinical benefit in future confirmatory trials. Amtagvi™ and Proleukin® are part of a treatment regimen that also includes lymphodepletion.

Previous wording

Iovance was founded to build upon the promise of TIL cell therapy that was previously demonstrated in single-center clinical trials at academic centers, including the National Cancer Institute, or the NCI. Our multi-center trials, novel TIL products, manufacturing processes, facilities, and bioanalytical platforms have transformed TIL cell therapy into a commercially viable treatment which many more patients with cancer can access.

Current wording

Iovance was founded to build upon the promise of TIL cell therapy that was previously demonstrated in single-center clinical trials at academic research centers, including the National Cancer Institute, or the NCI. Our multi-center trials, novel TIL products, manufacturing processes, facilities, and bioanalytical platforms have transformed TIL cell therapy into a commercially viable treatment which thousands of patients with cancer can access.

Previous wording

Our development pipeline includes multicenter trials of TIL cell therapies in additional treatment settings for solid tumor cancers. We are investigating TIL monotherapies for patients with later stage disease who were previously treated with standard of care therapies and TIL combinations with standard of care therapies to potentially improve outcomes in patients who are earlier in their disease. These trials include two ongoing registrational trials to support a supplementary BLA, or sBLA, of our TIL cell therapies in frontline advanced melanoma and in advanced non-small cell lung cancer following standard of care chemo-immunotherapy. We are also developing next generation therapies using TIL, such as genetically modified TIL cell therapy.

Current wording

Our development pipeline includes multicenter trials of TIL cell therapies in additional treatment settings for solid tumor cancers. We are investigating TIL monotherapies for patients with later stage disease who were previously treated with standard of care therapies and TIL combinations with standard of care therapies to potentially improve outcomes in patients who are earlier in their disease. We are conducting two ongoing registrational trials to support a supplementary BLA, or sBLA, of our TIL cell therapies in frontline advanced melanoma and in advanced non-small cell lung cancer, or NSCLC, following standard of care chemo-immunotherapy. We are also developing next generation therapies, such as genetically modified TIL cell therapy and next generation cytokines.

Previous wording

We are the first company to obtain FDA approval for a TIL cell therapy product. We believe that we are the only company in the U.S. to have a centralized, scalable, and commercially viable TIL manufacturing process. To date, more than 700 patients have been treated with Iovance TIL cell therapy products manufactured using our proprietary processes across multiple indications. Iovance TIL cell therapies are manufactured for commercial use and clinical trials at our manufacturing facility, the Iovance Cell Therapy Center, or theiCTC, and by a contract manufacturing organization, or CMO.

Current wording

We are the first company to obtain FDA approval for a TIL cell therapy product. We believe that we are the only company in the U.S. to have a centralized, scalable, and commercially viable TIL manufacturing process. To date, more than 700 patients have been treated in clinical trials with Iovance TIL cell therapy products manufactured using our proprietary processes across multiple indications. Iovance TIL cell therapies are manufactured for commercial use and clinical trials at our manufacturing facility, the Iovance Cell Therapy Center, or theiCTC, and by a contract manufacturing organization, or CMO. Amtagvi™ is FDA-approved for commercial manufacturing at theiCTC. In addition, our CMO is FDA-approved for additional capacity to supplement our internal manufacturing. The two facilities together have capacity as built to treat several thousands of cancer patients annually.

Previous wording

We are building capacity to treat several thousands of cancer patients annually at theiCTC, which is the first centralized and scalable current Good Manufacturing Practice, or cGMP, manufacturing facility dedicated to producing TIL. Located in Philadelphia, Pennsylvania, the 136,000 square feetiCTC is also among the largest cell therapy manufacturing facilities in existence. Additional expansion at theiCTC is under way which will significantly increase this capacity. The proximity of theiCTC to multiple airports facilitates delivery of TIL cell therapies to treatment centers, with theiCTC expected to cover logistics and delivery of TIL cell therapies in both North America and Europe. Owning our own facility allows us to control manufacturing capacity and product quality, manage logistics around supply and delivery, implement process improvement and realize potential cost efficiencies for TIL cell therapies that we may develop and commercialize. We are also exploring future TIL manufacturing processes, as well as next-generation treatments and technologies, which may further streamline development timelines and costs. TheiCTC has a flexible design that allows future expansion within existing shell space and an option to build on an adjacent lot to support future growth and capacity needs.

Current wording

TheiCTC is the first centralized and scalable current Good Manufacturing Practice, or cGMP, manufacturing facility dedicated to producing TIL, as well as the first FDA-approved facility for commercial TIL cell therapy. Located in Philadelphia, Pennsylvania, the 136,000 square footiCTC is also among the largest cell therapy manufacturing facilities. Expansion at theiCTC is underway, which will increase capacity to supply several thousands of additional patients, with a long-term goal of establishing a manufacturing network to address tens of thousands of patients. The proximity of theiCTC to multiple airports facilitates delivery of TIL cell therapies to treatment centers, with theiCTC expected to cover logistics and delivery of TIL cell therapies in both North America and Europe. Owning our own facility allows us to control manufacturing capacity and product quality, manage logistics around supply and delivery, implement process improvement and realize potential cost efficiencies for TIL cell therapies that we may develop and commercialize. We are also exploring future TIL manufacturing processes, as well as next-generation treatments and technologies, which may further streamline development timelines and costs. TheiCTC has a flexible design that allows future expansion within existing shell space and an option to build on an adjacent lot to support future growth and capacity needs.

Previous wording

Amtagvi™ is approved for commercial manufacturing at theiCTC. In addition, our CMO is approved for additional capacity to supplement our internal manufacturing. We plan to carefully manage our cost structure and reduce the long-term cost of manufacturing our products. Details of related agreements are provided in the Research, Development, Manufacturing and License Agreements for TIL Cell Therapy section of this Quarterly Report on Form 10-Q.

Current wording

We plan to carefully manage our cost structure and reduce the long-term cost of manufacturing our products. Details of related agreements are provided in Note 11. Licenses and Agreements of the notes to the condensed consolidated financial statements included in Part I. Financial Information of this Quarterly Report on Form 10-Q.

Previous wording

Amtagvi™ (lifileucel) was approved by the FDA on February 16, 2024, for the treatment of adult patients with unresectable or metastatic melanoma previously treated with a PD-1 blocking antibody, and if BRAF V600 mutation positive, a BRAF inhibitor with or without MEK inhibitor. The approval is based on safety and efficacy results from the C-144-01 clinical trial, a global, multicenter trial investigating Amtagvi™ in patients with advanced melanoma previously treated with anti-PD-1 therapy and targeted therapy, where applicable. We completed the BLA submission in March 2023, which the FDA accepted in May 2023 for Priority Review.

Current wording

Amtagvi™ (lifileucel) was approved by the FDA on February 16, 2024, for the treatment of adult patients with unresectable or metastatic melanoma previously treated with a PD-1 blocking antibody, and if BRAF V600 mutation positive, a BRAF inhibitor with or without MEK inhibitor. The approval is based on safety and efficacy results from the C-144-01 clinical trial, a global, multicenter trial investigating Amtagvi™ in patients with advanced melanoma previously treated with anti-PD-1 therapy and targeted therapy, where applicable. We completed the BLA submission in March 2023, which the FDA accepted in May 2023 for Priority Review. Based on the unmet need in post-anti-PD-1 advanced melanoma, as well as initial clinical data, lifileucel previously received a Regenerative Medicine Advanced Therapy, or RMAT, designation from the FDA in 2018.

Previous wording

Amtagvi™ is manufactured using a proprietary process to collect and multiply a patient’s unique T cells from a portion of their tumor. Amtagvi™ returns billions of the patient’s T cells back to the body to fight cancer. ATCs will administer Amtagvi™ to patients as part of a treatment regimen that includes lymphodepletion and a short course of high-dose Proleukin® (aldesleukin).

Current wording

Amtagvi™ is manufactured using a proprietary process to collect and multiply a patient’s unique T cells from a portion of their tumor. Amtagvi™ returns billions of the patient’s T cells back to the body to fight cancer. ATCs administer Amtagvi™ to patients as part of a treatment regimen that includes lymphodepletion and a short course of high-dose Proleukin® (aldesleukin).

Previous wording

●**Step 1: Sample Collection.**At an ATC, a tumor tissue sample of at least 1.5 cm in diameter is removed and collected during a surgical resection and shipped to an approved, centralized manufacturing facility.

Current wording

●**Step 1: Sample Collection.**At an ATC, a tumor tissue sample of at least 1.5 cm in diameter is removed and collected during a surgical resection and shipped to an FDA-approved, centralized manufacturing facility.

Previous wording

TIL cell therapy is a T cell-based immunotherapy technology platform that leverages patient-specific cells to recognize and attack diverse cancer cells that are unique to each patient. Unlike other cell therapies that act on a single or small number of shared antigen targets common to certain tumors, our individualized T cell therapies are polyclonal or designed to target a variety of neoantigens that are unique to the patient or tumor. We believe this polyclonal cell therapy is potentially applicable to many solid tumor cancers, where the majority of immune targets are patient-specific. Our TIL cell therapy platform and manufacturing process have been initially validated through the FDA approval of Amtagvi™.

Current wording

TIL cell therapy is a T cell-based immunotherapy technology platform that leverages patient-specific cells to recognize and attack diverse cancer cells that are unique to each patient. Unlike other cell therapies that act on a single or small number of shared antigen targets common to certain tumors, our individualized T cell therapies are polyclonal or designed to target a variety of

Previous wording

We have investigated TIL cell therapy in global, multicenter clinical trials in advanced melanoma, cervical cancer, non-small cell lung cancer, or NSCLC, and head and neck squamous cell carcinoma, or HNSCC. Through ongoing academic collaborations, as well as government and other partners, we are investigating the next frontier for TIL cell therapy in other tumor types and treatment settings.

Current wording

We have investigated TIL cell therapy in global, multicenter clinical trials in advanced melanoma, gynecological cancers, NSCLC, and head and neck squamous cell carcinoma, or HNSCC. Through ongoing academic collaborations, as well as government and other partners, we are investigating the next frontier for TIL cell therapy in other tumor types and treatment settings.

Previous wording

11,369,637; 11,384,337; 11,433,097; 11,517,592; 11,529,372 ; 11,541,077; 11,713,446; 11,819,517; and 11,866,688. More than 40 of these patents are related to our Gen 2 TIL manufacturing processes and have terms that we anticipate will extend to January 2038, not including any patent term extensions or adjustments that may be available. Our owned and licensed intellectual property portfolio also includes patents and patent applications relating to TIL, marrow-infiltrating lymphocytes, or MIL, and peripheral blood lymphocyte, or PBL, therapies; frozen tumor-based TIL technologies; remnant TIL and digest TIL compositions, methods and processes; methods of manufacturing TIL, MIL, and PBL therapies; the use of costimulatory and T cell modulating molecules in TIL cell therapy and manufacturing; stable and transient genetically-modified TIL cell therapies, including genetic knockouts of immune checkpoints; cytokine-tethered TIL cell therapies; methods of using ICIs in combination with TIL cell therapies; TIL selection technologies; and methods of treating patient subpopulations.

Current wording

We have established a leading intellectual property portfolio developed internally and licensed from third parties. We currently own more than 210 granted or allowed U.S. and international patents and patent applications pertaining to Amtagvi™ and other TIL-related technologies that are expected to provide Amtagvi™ with exclusivity through at least 2042. More than 70 U.S. patents are related to TIL cell therapy, including patents directed to compositions and methods of treatment in a broad range of cancers, such as U.S. Patent Nos.10,130,659; 10,166,257; 10,272,113; 10,363,273; 10,398,734; 10,420,799; 10,463,697; 10,517,894; 10,537,595; 10,639,330; 10,646,517; 10,653,723; 10,695,372; 10,894,063; 10,905,718; 10,918,666; 10,925,900; 10,933,094; 10,946,044; 10,946,045; 10,953,046; 10,953,047; 11,007,225; 11,007,226; 11,013,770; 11,026,974; 11,040,070; 11,052,115; 11,052,116; 11,058,728; 11,083,752; 11,123,371; 11,141,438; 11,168,303; 11,168,304; 11,179,419; 11,202,803; 11,202,804; 11,220,670; 11,241,456; 11,254,913; 11,266,694; 11,273,180; 11,273,181; 11,291,687; 11,304,979; 11,304,980; 11,311,578; 11,337,998; 11,344,579; 11,344,580; 11,344,581; 11,351,197; 11,351,198; 11,351,199; 11,364,266; 11,369,637; 11,384,337; 11,433,097; 11,517,592; 11,529,372 ; 11,541,077; 11,713,446; 11,819,517; 11,857,573; 11,865,140; 11,866,688; 11,939,596; 11,969,444; 11,975,028; 12,024,718; and 12,031,157. More than 40 of these patents are related to our Gen 2 TIL manufacturing processes and have terms that we anticipate will extend to October 2037 or January 2038, not including any patent term extensions or adjustments that may be available. Our owned and licensed intellectual property portfolio also includes patents and patent applications relating to TIL, marrow-infiltrating lymphocytes, or MIL, and peripheral blood lymphocyte, or PBL, therapies; frozen tumor-based TIL technologies; remnant TIL and digest TIL compositions, methods and processes; methods of manufacturing TIL, MIL, and PBL therapies; the use of costimulatory and T cell modulating molecules in TIL cell therapy and manufacturing; stable and transient genetically-modified TIL cell therapies, including genetic knockouts of immune checkpoints; cytokine-tethered TIL cell therapies; methods of using ICIs in combination with TIL cell therapies; TIL selection technologies; and methods of treating patient subpopulations.

Previous wording

Cost of sales includes the cost of Proleukin® inventories and other costs that are directly associated with the purchase and sales of Proleukin® and period costs related to overhead and manufacturing costs of Amtagvi™ at theiCTC during the period from approval through March 31, 2024. In addition, amortization expense for the fair value step-up of acquired Proleukin® inventory and the acquired intangible asset related to developed technology, as well as the amortization related to the intellectual property license intangible asset, are included in cost of sales.

Current wording

Cost of sales includes inventory and period costs related to overhead and manufacturing costs of Amtagvi™ during the period from approval through June 30, 2024, as well as the cost of inventories and other costs that are directly associated with the purchase and sales of Proleukin®. In addition, cost of sales includes royalties payable on sales of our products, as well as amortization expense for the fair value step-up of acquired Proleukin® inventory, the acquired intangible asset related to developed technology, and the intellectual property license intangible assets.

Previous wording

expected increase in commercial activities and selling, general and administrative expense due to the approval of Amtagvi TM. However, it is difficult to determine with certainty the duration and completion costs of our current or future preclinical programs and clinical trials of our product candidates.

Current wording

We expect to continue to incur research and development expenses for the foreseeable future as we continue to conduct our clinical trials for our various product candidates. We expect our research and development expenses to decrease in conjunction with an expected increase in commercial activities and selling, general and administrative expense due to the approval of Amtagvi™. However, it is difficult to determine with certainty the duration and completion costs of our current or future preclinical programs and clinical trials of our product candidates.

Previous wording

Results of Operations for the Three Months Ended March 31, 2024, and 2023

Current wording

Results of Operations for the Three and Six Months Ended June 30, 2024 and 2023

Previous wording

Cost of sales for the three months ended March 31, 2024 was $7.3 million, which consists of $0.8 million in cost of inventory and related inventoriable costs associated with sales of Proleukin®, $4.6 million of amortization expense for the developed technology intangible asset recorded as part of the Acquisition, and $1.9 million of period costs primarily related to overhead and manufacturing costs at theiCTC during the period from approval through March 31, 2024. These period costs resulted from under absorption of overhead costs during the period, which was driven by our decision to launch with capacity sufficient to address anticipated commercial demand in 2024 and beyond. We expect to continue to incur such period costs through the upcoming fiscal quarters, while we continue to ramp up for the launch of Amtagvi TM, until such time that we can fully utilize our manufacturing capacity. No cost of sales was incurred for the same period in 2023.

Current wording

Cost of sales for the three and six months ended June 30, 2024 also included $8.7 million and $10.6 million, respectively, of period costs primarily related to patient drop-off driven by patient health and ability to receive the Amtagvi™ treatment, as well as manufacturing results that did not meet required specifications, resulting in increased scrap costs in the period. In addition, to a lesser extent such costs included period costs related to overhead and manufacturing costs at theiCTC during the period from approval resulting from under absorption of overhead costs during the period, which was driven by our decision to launch with capacity sufficient to address anticipated commercial demand in 2024 and beyond. We continue to focus on manufacturing execution as the launch of Amtagvi™ continues but expect to incur such period costs through the upcoming fiscal quarters while we continue to implement initiatives associated with manufacturing quality and until such time that we can fully utilize our manufacturing capacity.

Previous wording

Research and development expense for the three months ended March 31, 2024 decreased by $2.9 million, or 4%, compared to the same period in 2023. The decrease was primarily attributable to a $5.6 million decrease in clinical manufacturing costs, driven by capitalization of qualified costs for Amtagvi™ manufacturing resulting from our BLA approval and transition to commercial manufacturing to support the commercial launch of Amtagvi™. These decreases were partially offset by (i) a $2.2 million increase in costs associated with lifileucel regulatory submissions in the European Union and our Phase 3 TILVANCE-301 clinical trial, net of a decrease in costs driven by lower patient enrollment across other studies, and (ii) a $0.5 million increase in other costs, including license costs related to the expansion of our information technology infrastructure to support our clinical activities, and depreciation expenses.

Current wording

Research and development expense for the six months ended June 30, 2024 decreased by $27.2 million, or 16%, compared to the same period in 2023. The decrease was primarily attributable to (i) a $32.6 million decrease in clinical manufacturing costs, driven by capitalization of qualified costs for Amtagvi™ manufacturing resulting from our BLA approval and the transition to commercial manufacturing to support the commercial launch of Amtagvi™, (ii) a $2.6 million decrease in payroll and related costs, driven by the reclassification of costs of certain employees supporting Amtagvi™ into general and administrative expenses upon BLA approval based on their functional activities, and (iii) a $1.8 million decrease in clinical costs due to lower patient enrollment across certain studies. These decreases were partially offset by (i) a $7.9 million increase in stock-based compensation expenses, primarily driven by

Previous wording

Research and development activities are central to our business model. Product candidates in later stage of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We separate our research and development expenses into two broad categories: direct and indirect. Additionally, with respect to direct research and development expenses, we further divide expenses into the following sub-categories: “TIL, including combination therapy,” “Next Generation,” and “Other clinical, preclinical and research programs under development.” For direct research and development expenses, we track specific project research and development expenses that are directly attributable to our preclinical and clinical development candidates that have been selected for further development. Such direct research and development expenses include third-party contract costs relating to the manufacturing of TILs as well as preclinical and clinical trial activities.

Current wording

Research and development activities are central to our business model. Product candidates in later stage of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We separate our research and development expenses into two broad categories: direct and indirect. Additionally, with respect to direct research and development expenses, we further divide expenses into the following sub-categories: “TIL, including combination therapy,” “Next Generation,” and “Other clinical, preclinical and research programs under development.” Lifileucel monotherapy includes our TIL monotherapy clinical trials, including clinical trials previously reported as LN-145. For direct research and development expenses, we track specific project research and development expenses that are directly attributable to our preclinical and clinical development candidates that have been selected for further development. Such direct research and development expenses include third-party contract costs relating to the manufacturing of TILs, as well as preclinical and clinical trial activities.

Previous wording

Selling, general and administrative expenses for the three months ended March 31, 2024 increased by $3.3 million, or 12%, compared to the same period in 2023. The increase was primarily attributable to (i) a $1.8 million increase in payroll and related expenses, including $1.5 million in stock-based compensation expenses, resulting from increases in headcount to support the commercialization of Amtagvi™ and Proleukin® as well as the increased number of stock awards granted at a higher average stock price in 2024 as compared to the same period in 2023, and (ii) a $1.5 million increase in other costs, driven by costs incurred in support of the distribution and commercialization of Amtagvi™ and Proleukin®, which were partially offset by a decrease in legal costs.

Current wording

Selling, general and administrative expenses for the three months ended June 30, 2024 increased by $17.6 million, or 80%, compared to the same period in 2023. The increase was primarily attributable to (i) a $7.8 million increase in stock-based compensation expenses, driven by an increase in headcount to support the commercialization of Amtagvi™, as well as the increased number of stock awards granted at a higher average stock price, (ii) a $3.8 million increase in legal costs driven by a reduction in legal costs in 2023 resulting from the capitalization of previously expensed costs directly associated with the Acquisition, (iii) a $2.5 million increase in payroll and related expenses resulting from increased headcount to support growth in the overall business, (iv) a $1.8 million increase in costs incurred in support of the distribution and commercialization of Amtagvi™ and Proleukin®, and (v) a $1.7 million increase in other costs, including costs associated with marketing and advertising to support the commercialization and launch of Amtagvi™, and software license costs related to the expansion of our information technology infrastructure.

Previous wording

Interest income, net for the three months ended March 31, 2024 decreased by $0.1 million, or 4%, compared to the same period in 2023. The decrease was primarily driven by a decrease in average investment balances, which was partially offset by a higher rate of return on our investments as well as a shift in our portfolio to interest bearing investments such as U.S. treasury securities and money market funds.

Current wording

Interest income, net for the three and six months ended June 30, 2024 increased by $0.3 million, or 9%, and $0.1 million, or 2%, compared to the same periods in 2023, respectively. The increase was primarily driven by an increase in average investment balances, resulting from net proceeds from recent public and at-the-market financings as well as a higher rate of return on our investments.

Previous wording

Income tax benefit for the three months ended March 31, 2024 was $1.4 million, as a result of the tax benefit from the realization of the related deferred taxes for operations in the United Kingdom. No benefit or expense was recorded for the same period in 2023.

Current wording

Income tax benefit for the three and six months ended June 30, 2024 was $1.5 million and $2.9 million, respectively, as a result of the tax benefit from the realization of the related deferred taxes for operations in the United Kingdom. Income tax benefit resulting from the realization of the related deferred taxes of operations in the United Kingdom for the three and six months ended June 30, 2023 was $0.5 million.

Previous wording

Net loss for the three months ended March 31, 2024 increased by $5.6 million, or 5%, compared to the same period in 2023. The increase in our net loss was due to the continued expansion of our research and development activities, ongoing and newly initiated clinical trials, and the overall growth in our workforce and corporate infrastructure. We anticipate that we will continue to incur net losses in the future as we further invest in our clinical and internal research and development programs as well as execution of the launch of Amtagvi™.

Current wording

Net loss for the three and six months ended June 30, 2024 increased by $9.4 million, or 9%, and $3.8 million, or 2%, compared to the same periods in 2023, respectively. The increase in our net loss was due to the overall growth in our workforce and corporate infrastructure to support the ongoing launch of Amtagvi™ in the U.S. and anticipated expansion in additional markets as well as continued sales of Proleukin®, continued expansion of our research and development activities, and ongoing and newly initiated clinical trials. We anticipate that we will continue to incur net losses in the future as we further invest in our clinical and internal research and development programs, as well as execution of the launch of Amtagvi™.

Previous wording

As of March 31, 2024, we had $362.6 million in cash, cash equivalents, investments, and restricted cash ($134.2 million of cash and cash equivalents, $222.0 million in short-term investments, and $6.4 million in restricted cash). We have incurred losses and generated negative cash flows from operations since inception. Historically, we have funded our operations from various public and private offerings of our equity securities, both common stock and preferred stock, from option and warrant exercises, and from interest income. Since 2017, our primary source of funds has been from the public sale of our common stock. With the recent approval of our BLA, we expect to generate revenue from the sale of our first internally developed product, Amtagvi™, in the remaining quarters of 2024. Furthermore, upon the completion of the closing of the acquisition of the worldwide rights to Proleukin® in the second quarter of 2023, we began to generate revenue from the sales of Proleukin®. However, such revenues for Amtagvi™ and Proleukin® may not be material enough to generate positive operational cash flows during the 12 months from the date the condensed consolidated financial statements are issued and this Quarterly Report on Form 10-Q is filed.

Current wording

income. Since 2017, our primary source of funds has been from the public sale of our common stock. With the recent approval of our BLA, we expect to continue to generate revenue from the sale of our first internally developed product, Amtagvi™, in the remaining quarters of 2024. Furthermore, as Proleukin®inventory that was previously with distributors in the U.S. market at the time of the acquisition of the worldwide rights to Proleukin®in May 2023 has been substantially depleted, we also began to sell Proleukin®into the U.S. market, where product margins are substantially higher than in other markets, to support ongoing and anticipated infusions related to the continued strong commercial launch of Amtagvi™. However, such revenues for Amtagvi™ and Proleukin® may not be material enough to generate positive operational cash flows during the 12 months from the date the condensed consolidated financial statements are issued and this Quarterly Report on Form 10-Q is filed.

Previous wording

We expect to continue to incur significant expenses to support our execution of the commercial launch of Amtagvi™, fund ongoing clinical programs, including our NSCLC registration study, IOV-LUN-202, and our frontline advanced melanoma Phase 3 confirmatory trial, TILVANCE-301, continue the development of our pipeline candidates, and for other general corporate purposes. Based on the funds we have available as of the date our condensed consolidated financial statements for the three months ended March 31, 2024 are issued, we believe that we have sufficient capital to fund our anticipated operating expenses and capital expenditures as planned for at least the twelve months following the issuance of our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Current wording

We expect to continue to incur significant expenses to support our execution of the commercial launch of Amtagvi™, fund ongoing clinical programs, including our NSCLC registration study, IOV-LUN-202, and our frontline advanced melanoma Phase 3 confirmatory trial, TILVANCE-301, continue the development of our pipeline candidates, and for other general corporate purposes. Based on the funds we have available as of the date our condensed consolidated financial statements for the six months ended June 30, 2024 are issued, we believe that we have sufficient capital to fund our anticipated operating expenses and capital expenditures as planned for at least the twelve months following the issuance of our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Previous wording

As of March 31, 2024, we had outstanding 279,756,339 shares of our $0.000041666 par value common stock, 194 shares of our $0.001 par value Series A Convertible Preferred Stock, and 2,842,158 shares of our $0.001 par value Series B Convertible Preferred Stock. The outstanding shares of Series A Convertible Preferred Stock are currently convertible into 97,000 shares of our common stock, and the outstanding shares of Series B Convertible Preferred Stock are currently convertible into 2,842,158 shares of our common stock. The shares of Series A Convertible Preferred Stock and Series B Convertible Preferred Stock do not have voting rights or accrue dividends.

Current wording

As of June 30, 2024, we had outstanding 297,305,999 shares of our $0.000041666 par value common stock, 194 shares of our $0.001 par value Series A Convertible Preferred Stock, and 2,842,158 shares of our $0.001 par value Series B Convertible Preferred Stock. The outstanding shares of Series A Convertible Preferred Stock are currently convertible into 97,000 shares of our common stock, and the outstanding shares of Series B Convertible Preferred Stock are currently convertible into 2,842,158 shares of our common stock. The shares of Series A Convertible Preferred Stock and Series B Convertible Preferred Stock do not have voting rights or accrue dividends.

Previous wording

On June 16, 2023, we entered into a new Open Market Sale Agreement, or the 2023 Sale Agreement, with Jefferies with respect to an “at the market” offering program. Under the terms of the 2023 Sale Agreement, we may, from time to time, in our sole discretion, issue and sell up to $450.0 million of shares of our common stock pursuant to the “at the market” offering program. The 2023 Sale Agreement superseded and replaced in its entirety the 2022 Sale Agreement, which was terminated by the Company. The

Current wording

On June 16, 2023, we entered into a new Open Market Sale Agreement, or the 2023 Sale Agreement, with Jefferies with respect to an “at the market” offering program. Under the terms of the 2023 Sale Agreement, we may, from time to time, in our sole discretion, issue and sell up to $450.0 million of shares of our common stock pursuant to the “at the market” offering program. The 2023 Sale Agreement superseded and replaced in its entirety the 2022 Sale Agreement, which was terminated by the Company. The issuance and sale, if any, of shares of our common stock under the 2023 Sale Agreement was or will be made pursuant to a prospectus supplement dated June 16, 2023 to our Registration Statement on Form S-3ASR, which became effective immediately upon filing with the U.S. Securities and Exchange Commission on June 16, 2023. We received $301.7 million in proceeds, net of offering costs, through the sale of 44,080,226 shares of our common stock during the year ended December 31, 2023 through the 2022 Sale Agreement and the 2023 Sale Agreement.

Previous wording

On July 13, 2023, we closed an underwritten public offering of 23,000,000 shares of our common stock, which included 3,000,000 shares issued pursuant to the exercise of the option granted to the underwriters, at a public offering price of $7.50 per share, before underwriting discounts and commissions. The total estimated net proceeds to us from the offering, including the exercise of the option by the underwriters, were $161.5 million after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

Current wording

On July 13, 2023, we closed an underwritten public offering of 23,000,000 shares of our common stock, which included 3,000,000 shares issued pursuant to the exercise of the option granted to the underwriters, at a public offering price of $7.50 per share, before underwriting discounts and commissions. The total net proceeds to us from the offering, including the exercise of the option by the underwriters, were $161.5 million after deducting underwriting discounts and commissions and offering expenses payable by us.

Previous wording

On February 22, 2024, we closed an underwritten public offering of 23,014,000 shares of our common stock at a public offering price of $9.15 per share, before underwriting discounts and commissions. The total estimated net proceeds to us from the offering are expected to be approximately $197.4 million after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

Current wording

On February 22, 2024, we closed an underwritten public offering of 23,014,000 shares of our common stock at a public offering price of $9.15 per share, before underwriting discounts and commissions. The total net proceeds to us from the offering were $197.4 million after deducting underwriting discounts and commissions and offering expenses payable by us.

Previous wording

Net cash used in operating activities represents cash disbursements related to all activities other than investing and financing activities. Operating cash flow is derived by adjusting our net loss for non-cash items and changes in operating assets and liabilities. Net cash used in operating activities for the three months ended March 31, 2024 was $122.3 million as compared to $99.8 million for the same period in 2023. The $22.5 million increase in cash used in operating activities was driven by a $5.6 million increase in net loss related to increased costs associated with the overall expansion of our clinical trials for new TIL therapies, and our commercialization activities for Amtagvi™ and Proleukin®, as well as the overall growth in our workforce and corporate infrastructure. In addition, it reflects a net increase in non-cash charges of $2.9 million, primarily driven by higher stock-based compensation expense and amortization of intangible assets, the latter of which is driven primarily by the amortization associated with the developed technology intangible asset recorded as part of the Acquisition. The increase in non-cash charges was partially offset by a decrease in accretion of discounts on investments and deferred tax benefits resulting from the realization of the related deferred taxes for operations in the United Kingdom. Further, net cash used in operating activities related to changes in operating assets and liabilities increased by $30.0 million, driven primarily by a decrease in accounts payable and accrued expenses, resulting from cash utilized for payments associated with the continued growth in the business, including our increased workforce, timing of vendor invoicing and related payments, and cash used for purchases of raw material inventory in support of the commercial launch of Amtagvi™. These increases in the use of cash were partially offset by a $10.1 million decrease in cash used for prepaid expenses, other assets, and long-term assets in the current period compared to the corresponding period in 2023, which resulted from the timing of payments made as well as the receipt of cash for other miscellaneous receivables.

Current wording

Net cash used in operating activities for the periods presented represents cash disbursements related to all activities other than investing and financing activities. Operating cash flow is derived by adjusting our net loss for non-cash items and changes in operating assets and liabilities. Net cash used in operating activities for the six months ended June 30, 2024 was $220.7 million as compared to $193.8 million for the same period in 2023. The $26.9 million increase in cash used in operating activities was driven by a $3.8 million increase in net loss related to increased costs associated with our commercialization and manufacturing activities for Amtagvi™ and overall growth in our workforce and corporate infrastructure. In addition, it reflects a net increase in non-cash charges of $16.2 million, primarily driven by higher stock-based compensation expense and amortization of intangible assets, the latter of which is driven primarily by the amortization associated with the developed technology intangible asset recorded as part of the Acquisition and intellectual property license intangible assets associated with Amtagvi™. The increase in non-cash charges was partially offset by a decrease in accretion of discounts on investments and deferred tax benefits resulting from the realization of the related deferred taxes for operations in the United Kingdom. Further, net cash used in operating activities related to changes in operating assets and liabilities increased by $59.7 million, driven primarily by an increase in trade accounts receivable, resulting from the sale of our products and a decrease in accounts payable and accrued expenses, resulting from cash utilized for payments associated with the continued growth in the business, including our increased workforce, timing of vendor invoicing and related payments, and cash used for purchases of raw material inventory in support of the commercial launch of Amtagvi™. These increases in the use of cash were partially offset by a $12.7 million decrease in cash used for prepaid expenses, other assets, and long-term assets in the current period compared to the corresponding period in 2023, which resulted from the timing of payments made, as well as the receipt of cash for other miscellaneous receivables.

Previous wording

Net cash (used in) provided by investing activities for the periods presented primarily relates to the cash utilized to fund the Acquisition, the purchase and maturity of investments, and capital expenditures. Net cash used in investing activities for the three months ended March 31, 2024 was $111.5 million, compared to net cash provided by investing activities of $153.4 million for the same period in 2023. The increase in cash used of $264.9 million was driven by a $213.8 million increase associated with changes in the timing of maturities and purchases of investments and $52.6 million for the milestone payment required as part of the Acquisition upon the BLA approval for Amtagvi™. These increases were partially offset by a $1.5 million decrease in the purchase of property and equipment.

Current wording

Net cash used in investing activities for the periods presented primarily relates to the cash utilized to fund the Acquisition, the purchase and maturity of investments, and capital expenditures. Net cash used in investing activities for the six months ended June 30, 2024 was $71.7 million, compared to net cash used by investing activities of $3.4 million for the same period in 2023. The increase in cash used of $67.9 million was driven by a $235.4 million increase associated with changes in the timing of maturities and purchases of investments, which was partially offset by a $156.9 million decrease in cash used for the Acquisition in May 2023 and a $10.6 million decrease in capital expenditures.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2024 was $193.6 million compared to net cash provided of $258.2 million for the same period in 2023. The decrease in net cash provided by financing activities of $64.6 million was primarily driven by a decrease in net proceeds of $62.2 million received from our public offering in February 2024 as compared to the net proceeds received through sales of common stock through our “at the market” offering program in the first quarter of 2023, as well as an increase in tax payments related to shares withheld for vested restricted stock units. These increases in net cash provided were partially offset by a $0.4 million increase in proceeds from issuance of common stock upon exercise of stock options.

Current wording

Net cash provided by financing activities for the six months ended June 2024 was $346.4 million compared to net cash provided of $259.2 million for the same period in 2023. The increase in net cash provided by financing activities of $87.2 million was primarily driven by an increase in net proceeds of $89.7 million received from our public offering in February 2024 and through the sales of common stock through our “at the market” offering program in the second quarter of 2024, as compared to the net proceeds

Previous wording

We review intangible assets for impairment at least annually and whenever events or changes in circumstances have occurred which could indicate that the carrying value of the assets are not recoverable. If such indicators are present, we assess the recoverability of affected assets by determining if the carrying value of the assets is less than the sum of the undiscounted future cash flows of the assets. If the assets are found to not be recoverable, we measure the amount of impairment by comparing the carrying value of the assets to their fair values. We determined that no indicators of impairment existed as of March 31, 2024. No intangible assets existed as of March 31, 2023.

Current wording

We review intangible assets for impairment at least annually and whenever events or changes in circumstances have occurred which could indicate that the carrying value of the assets are not recoverable. If such indicators are present, we assess the recoverability of affected assets by determining if the carrying value of the assets is less than the sum of the undiscounted future cash flows of the assets. If the assets are found to not be recoverable, we measure the amount of impairment by comparing the carrying value of the assets to their fair values. We determined that no indicators of impairment existed as of June 30, 2024. No impairment of intangible assets existed as of June 30, 2023.

Previous wording

Products are sold principally to distributors and wholesalers and to a lesser extent outside of the U.S. to hospitals and clinics. Contractual performance obligations are usually limited to transfer of control of the product to the customer. The transfer occurs either upon shipment, upon receipt of the product after considering when the customer obtains legal title to the product, or in the case of Amtagvi™, upon infusion. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring our products and is generally based on a list of fixed price less allowances for product returns, rebates and discounts. Our payment terms to customers range from 45 to 105 days; payment terms differ by customer and by product. Discounts, rebates, returns and certain other adjustments are accounted for as variable consideration.

Current wording

In the U.S., products are sold principally to hospitals and clinics, as well as distributors and wholesalers, and outside of the U.S. to hospitals and clinics. Contractual performance obligations are usually limited to transfer of control of the product to the customer. In the case of Amtagvi™, revenue is recognized upon infusion while for Proleukin®, transfer of control occurs either upon shipment or upon receipt of product after considering when the customer obtains legal title to the product. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring our products and is generally based on a list of fixed prices less allowances for chargebacks, product returns, rebates and discounts. Our payment terms to customers range from 45 to 105 days; payment terms differ by customer and by product.

Previous wording

Research and development costs are expensed as incurred. Clinical development costs compose a significant component of research and development costs. We have a history of contracting with third parties, including CROs, independent clinical investigators, and CMOs, that perform various clinical trial activities on our behalf in connection with the ongoing development of our product candidates. The financial terms of these contracts are subject to negotiations and may vary from contract to contract and may result in uneven payment flow. We accrue and expense costs for clinical trial activities performed by third parties based upon the work

Current wording

Research and development costs are expensed as incurred. Clinical development costs compose a significant component of research and development costs. We have a history of contracting with third parties, including CROs, independent clinical investigators, and CMOs, that perform various clinical trial activities on our behalf in connection with the ongoing development of our product candidates. The financial terms of these contracts are subject to negotiations and may vary from contract to contract and may result in uneven payment flow. We accrue and expense costs for clinical trial activities performed by third parties based upon the work completed to date for each clinical trial in accordance with agreements established with CROs, hospitals, and clinical investigators.

Previous wording

completed to date for each clinical trial in accordance with agreements established with CROs, hospitals, and clinical investigators. Accruals for CROs and CMOs are recorded based on services received and efforts expended pursuant to agreements established with CROs, CMOs, and other outside service providers. We determine our costs through discussions with internal clinical stakeholders and outside service providers as to the progress or stage of completion of clinical trials or services and the contracted fee to be paid for such services.

Current wording

Accruals for CROs and CMOs are recorded based on services received and efforts expended pursuant to agreements established with CROs, CMOs, and other outside service providers. We determine our costs through discussions with internal clinical stakeholders and outside service providers as to the progress or stage of completion of clinical trials or services and the contracted fee to be paid for such services.