Iovance Biotherapeutics, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. Amounts below are in U.S. dollars; financial figures are in millions unless stated otherwise.
Business context
Iovance is a clinical-stage biopharmaceutical company developing autologous tumor-infiltrating lymphocyte (TIL) and related cell therapies. It had no commercial products and generated no revenue. Lead programs include lifileucel for metastatic melanoma and cervical cancer, and LN-145 for metastatic non-small cell lung cancer. The company was expanding clinical and pre-commercial activities and building out its Iovance Cell Therapy Center (iCTC).
Financial results and liquidity
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $68.3 | $55.9; up 22% |
| General and administrative expense | $23.4 | $19.6; up 19% |
| Total operating expenses / loss from operations | $91.7 | $75.6 |
| Net loss | $91.6 | $75.4 |
| Net loss per share | $0.58 | $0.51 |
| Net cash used in operating activities | $73.8 | $62.4 |
| Cash, cash equivalents and restricted cash at quarter-end | $98.4 | — |
| Cash, cash equivalents, investments and restricted cash at quarter-end | $516.0 | — |
Revenue-based margins are not meaningful because the company had no revenue. Investing activities provided $86.5 million, mainly reflecting investment maturities net of purchases; financing provided $1.4 million, primarily from option exercises. Cash, cash equivalents and restricted cash increased $14.1 million during the quarter. At March 31, total assets were $701.3 million, total liabilities $149.3 million, and stockholders’ equity $552.0 million. Liabilities included $1.0 million of long-term notes payable and $78.9 million of operating lease liabilities; undiscounted operating lease payments totaled $138.1 million.
Material changes versus the prior comparable period
- Net loss increased $16.2 million, or 21%, as research and development and corporate infrastructure spending grew.
- R&D expense rose $12.4 million: increases in payroll, stock-based compensation and facility costs, including the iCTC and headquarters build-out, more than offset lower clinical-trial costs.
- Operating cash use increased $11.4 million to $73.8 million.
- No shares were sold under the at-the-market program in Q1 2022; Q1 2021 included $42.9 million of net proceeds from common stock sales. Common shares outstanding were 157.2 million at quarter-end, versus 157.0 million at December 31, 2021.
Outlook, commentary and risks
- Management said available funds were expected to cover planned operating expenses and capital expenditures for at least 12 months from issuance of the financial statements. It anticipated higher cash use during the remainder of 2022 and beyond for trials, manufacturing expansion, hiring, pre-commercial work and iCTC construction.
- The company expected to request an FDA pre-BLA meeting for lifileucel in July 2022 and targeted a melanoma BLA submission by August 2022, subject to potency-assay work and regulatory discussions. These were forward-looking expectations, not assurances.
- Iovance announced in March 2022 that the FDA allowed its first genetically modified TIL therapy, IOV-4001, to proceed under an IND; it expected to begin a clinical trial in 2022.
- Key risks include clinical or regulatory delays, FDA feedback on potency assays and manufacturing, scale-up and product-supply challenges, competition, and the need for future financing. The company had no approved products and expected continued losses.
- Management reported no material Q1 2022 impact from COVID-19 on liquidity, operations or trial enrollment, while noting continuing uncertainty. The filing also highlighted potential effects of the Russia-Ukraine conflict on markets and supply chains.
- Pending derivative and Solomon-related litigation remained unresolved; the company said the possible loss ranges could not be estimated. Management did not believe pending matters would materially adversely affect financial position, results or cash flows.
- Disclosure controls and procedures were assessed as effective at quarter-end; no material change in internal control over financial reporting was reported.
Important facts for investors to verify
- Progress on FDA discussions, potency-assay validation and the stated lifileucel BLA timetable.
- Actual cash burn, investment balances and financing needs as clinical, pre-commercial and iCTC spending increases.
- Manufacturing readiness and capacity at the iCTC and third-party facilities, including any supply or quality issues.
- Clinical-trial results, enrollment, safety and regulatory feedback for lifileucel, LN-145 and IOV-4001.
- Potential dilution from equity awards, convertible preferred stock and future use of the $350 million at-the-market program.