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Item 7. Management’s Discussion and Analysis

2026-02-24 compared with 2025-02-27 · 220 added, 269 removed, 276 unchanged (64% of the section changed)

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All forward-looking statements included in this report are based on information available to us on the date hereof and, except as required by law, we assume no obligation to update any such forward-looking statements.

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.

We are a commercial-stage biopharmaceutical company pioneering a transformational approach to treating cancer.

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 and in other applications.

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.

Beyond the U.S., we plan to launch Amtagvi ® into additional markets with a high prevalence of advanced melanoma, including the European Union, or EU, United Kingdom, or UK, Canada, Switzerland, and Australia.

In June 2024, we submitted a centralized marketing authorization application, or MAA, to the European Medicines Agency, or the EMA, for lifileucel.

In August 2024, the MAA was validated and accepted for review by the EMA.

In October 2024, an MAA was submitted to the Medicines and Healthcare products Regulatory Agency in the UK.

A new drug submission, or NDS, was deemed eligible for Notice of Compliance with Conditions or NOC/c by Health Canada and submitted in December 2024 and then accepted in January 2025.

The NOC/c policy includes a prioritized 200-day review process for potential NDS approval in mid-2025.

If approved, lifileucel is expected to be the first and only approved therapy in this treatment setting in these markets.

Across the U.S.

and other targeted global markets, Amtagvi ® has the potential to address more than 20,000 previously treated advanced melanoma patients annually.

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 cell therapy 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.

We manufacture Amtagvi ® and our investigational TIL cell therapies using centralized, scalable, and proprietary manufacturing processes which rejuvenate and multiply polyclonal T cells unique to each patient into the billions and yields a cryopreserved, individualized therapy.

Amtagvi ® is manufactured for commercial use at our manufacturing facility, the Iovance Cell Therapy Center, or the i CTC, and by a contract manufacturing organization, or CMO.

Our development pipeline includes multicenter trials of TIL cell therapies in additional treatment settings and indications for solid tumor cancers.

To potentially improve outcomes for patients, we are investigating TIL monotherapies for patients previously treated with standard of care therapies and TIL cell therapy in combination with standard of care therapies for patients in earlier treatment settings.

We are conducting two ongoing registrational trials to support a supplementary BLA, or sBLA, of lifileucel in frontline advanced melanoma and in advanced non-small cell lung cancer, or NSCLC, following standard of care chemo-immunotherapy.

are also developing next generation therapies, such as genetically modified TIL cell therapy and next generation cytokines for use in the TIL cell therapy regimen.

TIL cell therapies harness the individual immune system’s ability to recognize and destroy diverse cancer cells that are unique to each patient.

These individualized therapies are manufactured using centralized, scalable, and proprietary manufacturing processes which rejuvenate and multiply each patient’s polyclonal T cells into the billions.

Iovance was founded to build upon the promise of TIL cell therapy initially developed at academic research centers, including the National Cancer Institute, or the NCI.

Our multi-center trials, scalable manufacturing, regulatory approvals and commercial infrastructure have transformed TIL cell therapy from a research product available to only a small number of patients, into a commercially viable treatment that is accessible for thousands of cancer patients.

Our two commercial products include Amtagvi ® (lifileucel) and Proleukin ® (aldesleukin), an interleukin-2, or IL-2, product used in the Amtagvi ® treatment regimen and other applications.

Amtagvi ® is the first one-time, individualized T cell therapy for a solid tumor cancer and for the treatment of adult patients with previously treated advanced, or unresectable or metastatic melanoma.

Amtagvi ® is administered as part of a treatment regimen that includes lymphodepletion and a short course of Proleukin ® .

Globally, Amtagvi ® has the potential to address more than 30,000 previously treated advanced melanoma patients annually.

Amtagvi ® is approved in the U.S.

and Canada, and we plan to launch into additional markets with a high prevalence of advanced melanoma.

Potential approvals are pending in the United Kingdom, or UK, and Australia in the first half of 2026 and Switzerland in 2027.

In the European Union, or EU, we withdrew our initial marketing authorization application, or MAA, in July 2025.

We are working with the European Medicines Agency, or EMA, to resubmit a centralized MAA in 2026.

Our development pipeline consists of TIL cell therapies and next generation approaches in additional solid tumor cancers, including one-time TIL monotherapies for previously treated patients and TIL cell therapy combined with standard of care in earlier treatment settings.

We are conducting two ongoing registrational trials in frontline advanced melanoma and previously treated advanced non-small cell lung cancer, or NSCLC.

We plan to commence a registrational trial in previously treated advanced

undifferentiated pleomorphic sarcoma and dedifferentiated liposarcoma in the second quarter of 2026 and engage with the FDA on a path to expedited approval.

Corporate Strategy

A global leader in innovating, developing, and delivering TIL cell therapy

Our mission is to be the global leader in innovating, developing, and delivering TIL cell therapy for patients with solid tumor cancers.

We are pioneering this transformational approach to cure cancer by harnessing the human immune system’s ability to recognize and destroy diverse cancer cells in each patient.

As we continue to execute the U.S.

launch of Amtagvi® and advance our pipeline, we are committed to continuous innovation to develop TIL cell therapies and optimize TIL treatment regimens that may extend and improve life for patients with cancer.

Successfully commercialize our lead product Amtagvi ® for the treatment of post-anti-PD-1 advanced melanoma in the U.S.

Following U.S.

FDA approval of Amtagvi ® for the treatment of patients with post-anti-PD-1 advanced melanoma on February 16, 2024, our top priority is continuing to leverage our experienced marketing, payer access, and distribution teams, as well as a sales force with extensive experience in oncology and cell therapy for our commercialization efforts.

Our medical affairs team is also educating key opinion leaders, or KOLs, about Amtagvi ® and TIL cell therapy, as well as presenting and publishing our clinical results.

We are focusing ongoing Amtagvi ® commercialization efforts on four primary areas:

● supporting operations and patient enrollment at authorized treatment centers, or ATCs, in the U.S.

and activating ATCs in the EU, UK, and Canada to prepare for anticipated 2025 regulatory approvals in those markets;

● educating, training, and collaborating with healthcare professionals, or HCPs, who will be administering our product, as well as community oncologists who will be referring patients to our ATCs and larger community practices that may become ATCs;

● operational excellence in launch execution, commercial manufacturing, and delivery of therapy;

● continuous communication with payors about the value of Amtagvi ® to facilitate strong reimbursement and patient access.

Our mission is to be the global leader in innovating, developing, and delivering TIL cell therapy.

Our vision is to pioneer this transformational approach to cure solid tumor cancers.

We are committed to continuous innovation to develop TIL cell therapies and optimize TIL treatment regimens that may extend and improve life for patients with cancer.

Our top priority is to drive commercial success of Amtagvi ® for previously treated advanced melanoma across four primary areas:

● Educating, training, and collaborating with healthcare professionals, or HCPs, who will be administering our product at academic and community authorized treatment centers, or ATCs, as well as community oncologists and advocacy groups who will refer patients to our ATCs;

● Providing operational and patient support at ATCs in the U.S.

and onboarding ATCs in preparation for anticipated regulatory approvals and product launches in additional global markets;

● Collaborating with payors about the value of Amtagvi ® to continue to facilitate strong reimbursement and patient access;

● Driving operational excellence in launch execution, commercial manufacturing success, and delivery of therapy.

Commercial Launch of the First TIL Cell Therapy in Advanced Melanoma

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 a 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.

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.

Amtagvi ® is administered to patients as part of a treatment regimen that includes lymphodepletion and a short course of high-dose Proleukin ® (aldesleukin).

There are three key steps in the Amtagvi ® treatment process.

Sample Collection.

A tumor tissue sample of at least 1.5 cm in diameter is collected during a surgical resection and shipped to an approved, centralized manufacturing facility.

Manufacturing.

Upon arrival at the manufacturing facility, TIL are separated from other cells within the patient’s tumor tissue sample.

Over the next 22 days, the cells are multiplied into the billions.

Upon completion of manufacturing, Amtagvi ® is quality tested to meet specific product release criteria.

The final product is cryopreserved and sent back to the ATC for administration to the patient.

Additional details on the Gen 2 manufacturing process are provided in the Manufacturing Process section of our Annual Report on Form 10-K.

Treatment Regimen.

The Amtagvi® treatment regimen begins with non-myeloablative lymphodepletion, or NMA-LD, to suppress the immunosuppressive tumor microenvironment, which we believe enhances the efficacy of TIL cell therapy.

After NMA-LD, Amtagvi® is infused and followed by a short course of up to six doses of Proleukin® to promote T cell activity.

Prior to the FDA approval of Amtagvi ® , there were no FDA approved therapies for patients with advanced melanoma following anti-PD-1 therapy.

Proleukin ® (aldesleukin) is an IL-2 product used in the Amtagvi ® treatment regimen and manufacturing process, as well as other commercial, clinical, manufacturing, and research settings, which provides additional revenue.

In May 2023, we acquired the worldwide rights to Proleukin ® as well as the manufacturing, supply, and commercialization income generated from such rights and associated operations from Clinigen Holdings Limited, Clinigen Healthcare Limited, and Clinigen, Inc, which we refer to collectively as Clinigen.

Ownership of Proleukin ® provides an additional revenue source, secures our Proleukin ® supply chain, lowers cost of goods, and reduces clinical trial expenses for Proleukin ® used with our TIL cell therapies.

Proleukin ® has received regulatory approvals for treatment of adults with metastatic melanoma and metastatic renal cell carcinoma in the U.S.

Proleukin ® is also licensed in multiple countries around the world for treatment of patients with metastatic renal cell carcinoma and/or metastatic melanoma.

We also sell aldesleukin for clinical trial use and for use in the manufacturing of various cell and gene therapies to numerous third-party clients.

Manufacturing capacity for forecasted commercial and clinical demand

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.

In clinical trials, 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 i CTC, and by a CMO.

The FDA authorized i CTC for commercial manufacturing of Amtagvi ® as well as our CMO for additional capacity to supplement our internal manufacturing.

As built, the two facilities together have capacity to treat several thousands of cancer patients annually with commercial product and clinical supply.

The i CTC is the first centralized and scalable current Good Manufacturing Practice, or cGMP, manufacturing facility dedicated to producing TIL cell therapies, as well as the first FDA-approved facility for commercial TIL cell therapy.

Located in Philadelphia, Pennsylvania, the 136,000 square foot i CTC is among the largest cell therapy manufacturing facilities globally.

i CTC expansion is underway which is expected to increase capacity to supply over five thousand patients annually.

Our long-term goal is to establish a manufacturing network that can supply TIL cell therapies to over ten thousand patients per year.

The proximity of the i CTC to multiple airports facilitates delivery of TIL cell therapies to treatment centers.

The i CTC is expected to cover logistics and delivery of TIL cell therapies in North America, Europe, and Australia.

Ownership of our manufacturing facility allows us to control internal manufacturing capacity and product quality, manage supply and delivery logistics, implement process improvement and realize potential cost efficiencies for TIL cell therapies that we may develop and commercialize.

We are also exploring next generation TIL cell therapy manufacturing processes, treatments and technologies that may further streamline development timelines and costs.

The i CTC has a flexible design that facilitates our expansion within the existing shell space and an option to build on an adjacent lot to support future growth and capacity needs.

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 Annual Report on Form 10-K.

TIL Cell T herapy Clinical Development in Advanced, Metastatic or Unresectable Solid Tumor Cancers

Our TIL cell therapy platform and manufacturing process have been initially validated through the FDA approval of Amtagvi ® .

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 may be applicable to many solid tumor cancers, where the majority of immune targets are patient-specific.

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.

● Frontline Advanced Melanoma:

In frontline advanced melanoma patients who are naïve to anti-PD-1 therapy, we are investigating lifileucel in combination with pembrolizumab in TILVANCE-301, a randomized Phase 3 clinical trial intended to support registration in advanced frontline melanoma as well as to serve as a confirmatory trial to support full approval in post-anti-PD-1 advanced melanoma.

TILVANCE-301 is expected to enroll approximately 670 patients and features dual primary endpoints of ORR and progression free survival, or PFS, assessed by blinded independent review committee.

We also added Cohort 1D to our IOV-COM-202 trial to investigate lifileucel in combination with relatlimab and nivolumab in frontline advanced melanoma patients.

● Advanced Non-Small Cell Lung Cancer:

In NSCLC, we are investigating lifileucel TIL cell therapy in two clinical trials in NSCLC patient populations with significant unmet need.

IOV-LUN-202 is a registrational clinical trial of lifileucel in advanced NSCLC patients who have progressed following chemotherapy and anti-PD-1 therapy.

The IOV-COM-202 trial in solid tumors includes cohorts of NSCLC patients treated with lifileucel monotherapy and combination therapy.

We added Cohorts 3D and 3E to our IOV-COM-202 trial to investigate lifileucel in combination with pembrolizumab and chemotherapy in frontline advanced NSCLC patients.

● Advanced Endometrial Cancer:

We initiated a clinical trial, IOV-END-201, in the second quarter of 2024 for lifileucel in endometrial cancer to potentially address the unmet need for patients previously treated with platinum-based chemotherapy and anti-PD-1 therapy regardless of mismatch repair.

● Next Generation TIL Cell Therapy:

Our first genetically modified, TIL cell therapy, IOV-4001, is being investigated in the multi-center Phase 2 efficacy portion of a first-in-human clinical trial, IOV-GM1-201, in previously treated patients with advanced melanoma or NSCLC.

IOV-4001 utilizes the gene-editing TALEN® technology, licensed from the clinical-stage biotechnology company, Cellectis S.A., or Cellectis, to inactivate the gene coding for PD-1.

A second next generation TIL cell therapy, IOV-5001, is in Investigational New Drug, or IND, enabling studies.

IOV-5001 is a genetically engineered, inducible, and tethered interleukin-12 TIL cell therapy designed to enhance TIL efficacy while optimizing safety.

● Next Generation IL-2:

A Phase 1/2 clinical trial is underway to investigate IOV-3001, a second-generation, modified interleukin-2 analog, for use in the TIL therapy treatment regimen.

Preclinical studies of IOV-3001 demonstrated the potential for improved safety with strong effector T cell expansion.

● Additional Solid Tumor Cancers:

Iovance TIL cell therapy has been investigated in additional solid tumor cancers in Iovance- and investigator-sponsored clinical trials.

Lifileucel was evaluated as a monotherapy and in combination with pembrolizumab in the Phase 2 C-145-03 and IOV-COM-202 clinical trials in multiple patient cohorts with metastatic HNSCC, and in patients with advanced cervical cancer in the C-145-04 multicenter Phase 2 clinical trial.

Indications studied in investigator sponsored clinical trials supported by Iovance include soft tissue sarcoma, osteosarcoma, pancreatic and colorectal cancer, platinum resistant ovarian cancer, anaplastic thyroid cancer, and triple negative breast cancer.

Next-Generation TIL Therapy Product Candidates

Our next-generation technology platforms are designed to optimize outcomes with TIL cell therapy across three key initiatives:

genetic modifications, potency, and new treatment regimens.

● Genetic modifications:

In addition to IOV-4001, we are pursuing several targets for genetic modification that utilize the gene-editing TALEN ® platform licensed from Cellectis.

Single- and multiple- knockouts may further harness the immune system response to cancer and potentially increase the potency of TIL cell therapy.

Preclinical development is ongoing with additional TIL products and TIL-cell lines using transient and stable gene inactivation, which may expand and activate TIL to achieve better efficacy while avoiding systemic side effects.

● Cytokine-Tethered TIL Therapy :

Our genetically engineered, inducible, and tethered IL-12 TIL cell therapy, designated IOV-5001, is in IND-enabling studies.

In preclinical studies, IOV-5001 augmented anti-tumor activity in vitro, and a clinical trial of

a prior generation IL-12 TIL therapy at the NCI showed improved efficacy.

A pre-IND meeting is planned with the FDA to discuss IOV-5001 in the first quarter of 2025 and then an IND application submission in 2026.

● New treatment regimens:

We are exploring potential improvements to the TIL treatment regimen.

We are investigating IOV-3001, a second generation, modified IL-2 analog, which we licensed from Novartis Pharma AG in 2020.

We submitted an IND application for a phase 1/2 clinical trial of IOV-3001 for use in the TIL therapy treatment regimen in the third quarter of 2024, which was accepted in the fourth quarter of 2024.

Results from non-human primate and IND-enabling studies of IOV-3001 were presented at the American Society of Clinical Oncology’s 2024 Annual Meeting and demonstrate the potential for improved safety with strong effector T cell expansion.

Amtagvi ® (lifileucel) is the first one-time, individualized T cell therapy approved for a solid tumor cancer and for the treatment of adult patients with previously treated advanced melanoma.

Amtagvi ® returns billions of individualized patient T cells back to the body to fight cancer and is administered as part of a treatment regimen.

Amtagvi ® is indicated for the treatment of adult patients with advanced melanoma previously treated with a PD-1 blocking antibody, and if BRAF V600 mutation positive, a BRAF inhibitor with or without a MEK inhibitor.

accelerated approval of Amtagvi ® is based on safety and efficacy results from the C-144-01 global, multicenter clinical trial.

A global, randomized Phase 3 confirmatory trial, TILVANCE-301, is investigating Amtagvi ® in combination with pembrolizumab in frontline advanced melanoma.

Amtagvi ® has multiple growth drivers, including:

● Awareness of clinical and real-world evidence data to drive adoption as well as earlier and higher volume of patient referrals for better outcomes across our ATC network.

● Higher penetration at academic ATCs through earlier tissue procurement for patients at high risk of disease progression, such as BRAF mutant patients, so they can be treated before their health status declines.

● Expansion of the ATC network with new academic and community ATCs.

● Additional approvals in new global markets.

We sell Proleukin ® (aldesleukin), an interleukin-2, or IL-2, product to three main distributors in the U.S., distributors outside the U.S., and numerous third-party clients across the three revenue channels:

1) use in the Amtagvi ® treatment regimen, or other approved oncology uses, or the primary channel, 2) use in the manufacturing process for Amtagvi ® and other cell therapies and 3) use in clinical and research settings.

Proleukin ® is approved in the U.S., and licensed in multiple international markets, for treatment of adults with metastatic renal cell carcinoma and/or metastatic melanoma.

In May 2023, we acquired the worldwide rights to Proleukin ® from Clinigen Holdings Limited, Clinigen Healthcare Limited, and Clinigen, Inc., which we refer to collectively as Clinigen.

Scalable TIL manufacturing for commercial and clinical demand

The Iovance Cell Therapy Center, or i CTC, in Philadelphia, Pennsylvania is the first FDA-approved facility to manufacture commercial TIL cell therapy.

We also believe that the i CTC is the only current Good Manufacturing Practice, or cGMP, facility with a centralized, scalable TIL manufacturing process.

To date, more than 1,500 patients have been treated with commercial and investigational TIL cell therapies manufactured using Iovance processes.

Facilitated by its proximity to multiple airports, the i CTC covers logistics and delivery of TIL cell therapies to treatment centers in North America, Europe, and Asia Pacific.

We have historically relied on our own manufacturing capabilities, together with other third parties, for the manufacturing and processing of commercial and investigational TIL cell therapy products.

The i CTC currently supplies the vast majority of commercial Amtagvi ® and clinical lifileucel with additional capacity previously supplemented by a contract manufacturer.

The i CTC has the potential capacity to supply TIL cell therapies for more than 5,000 cancer patients annually.

To utilize our internal manufacturing suites at greater scale, improve gross margin and reduce operating expenses, we are transitioning all manufacturing activities for Amtagvi ® and lifileucel to the i CTC.

Our contract manufacturer concluded production of Amtagvi ® and lifileucel and our agreement terminated in the first quarter of 2026.

This internal manufacturing strategy aligns with our ongoing initiatives to manage and reduce long-term product manufacturing costs.

We will have full control of manufacturing capacity and product quality, supply and delivery logistics, cost efficiencies and process improvements, such as automation and next generation approaches that may further streamline timelines and costs.

Certain clinical trials for our next-generation investigational TIL cell therapies will continue to be supported by contract manufacturing organizations, or CMOs.

Details of related agreements are provided in the Research, Development, Manufacturing and License Agreements in this Annual Report on Form 10-K.

TIL Cell Therapy Platforms for Advanced, or Metastatic or Unresectable, Solid Tumor Cancers

Our T cell-based immunotherapy technology platform of TIL cell therapies leverages patient-specific cells to recognize and attack diverse cancer cells that are unique to each patient.

We believe this approach is the emerging backbone for immuno-oncology approaches to treat solid tumor cancers.

We have investigated TIL cell therapy in global, multicenter Iovance-sponsored clinical trials in various treatment settings in advanced melanoma, NSCLC, cervical cancer, endometrial cancer, and head and neck squamous cell carcinoma, or HNSCC.

Through ongoing academic collaborations, as well as government and other partners, we are investigating additional solid tumor types and treatment settings.

We have provided prior or ongoing support for investigator-sponsored clinical trials in soft tissue sarcoma, osteosarcoma, pancreatic and colorectal cancer, platinum resistant ovarian cancer, anaplastic thyroid cancer, and triple negative breast cancer.

Applying our expertise in TIL cell therapy, our next-generation technology platforms are designed to optimize outcomes with TIL cell therapy across three key initiatives:

genetic modifications, potency, and new treatment regimens using an improved IL-2.

Intellectual Property

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patents related to TIL cell therapy, including patents directed to compositions and methods of treatment in a broad range of cancers, such as U.S.

11,141,434;11,141,438;

and 12,495,791.

More than 50 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;

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;

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Components of Operating Results

Revenues for the year ended December 31, 2024 represent product sales of Amtagvi ® , as well as Proleukin ® , primarily driven from sales in the U.S.

Revenue for the year ended December 31, 2025 represents product sales of Amtagvi ® , as well as Proleukin ® , primarily driven from sales in the U.S.

to support the ongoing commercial launch of Amtagvi ® , which received FDA approval in February 2024.

Proleukin ® , which we acquired the worldwide rights to in May 2023, is also sold in markets outside the U.S., primarily in the EU and UK.

Prior to May 2023, we had not recognized any revenue.

Amtagvi ® revenue is recognized upon patient infusion, while Proleukin ® revenue is recognized upon shipment or delivery to customers, which include specialty distributors, clinical manufacturers, research organizations, and ATCs.

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In addition, non-U.S.

government programs include different pricing schemes such as cost caps and volume discounts.

government programs may include different pricing schemes such as cost caps and volume discounts.

Costs and Expenses

Cost of sales

Cost of sales includes inventory and period costs, as well as non-cash expenses, related to overhead and manufacturing costs of Amtagvi ® during the period from approval through December 31, 2024, as well as the cost of inventories and other costs, and non-cash expenses 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 non-cash expenses including amortization of the fair value step-up of acquired Proleukin ® inventory which is recognized as the acquired inventory units are sold, amortization expense for the developed technology intangible asset and the milestone payment recorded as part of the Acquisition, and the intellectual property license intangible assets.

In the event that the manufactured product does not meet specifications, or a patient is unable to receive the infusion, the Amtagvi ® product is destroyed and the costs associated with manufacturing and inventory associated with the product is generally required to be expensed as cost of sales.

However, if the out-of-specifications product can be administered as part of a clinical trial, in an expanded or early access program, or single-patient IND, as requested by the treating physician, the costs of the product are recorded as research and development expense based on the fact that we receive clinical data related to these infusions.

Cost of sales includes cost of inventories sold, including overhead and manufacturing costs of Amtagvi ® , reserves for excess and obsolete inventory, royalties payable on the sales of our products and other costs that are directly associated with the purchase and sales of Proleukin ® .

In the event that the manufactured product does not meet specifications, or a patient is unable to receive the infusion, the Amtagvi ® product is generally destroyed and the costs associated with manufacturing and inventory associated with the product is generally required to be expensed as cost of sales.

However, if the out-of-specifications product can be administered as part of a clinical trial, in an expanded or early access program, or single-patient investigational new drug submission, as requested by the treating physician, the costs of the product are recorded as research and development expense based on the fact that we receive clinical data related to these infusions.

The manufacturing process for Amtagvi ® is highly complex and subject to stringent FDA guidelines and requirements, as well as internal specifications and quality guidelines.

Our ability to successfully manufacture Amtagvi ® and deliver finished product to ATCs for infusion into patients is dependent on several factors, including patient selection and quality of tumors provided by the treatment centers for use in the manufacturing of Amtagvi ® .

We focus significant effort and attention on working with the treatment centers during the onboarding process regarding these matters, as well as on our internal manufacturing processes.

Research and development

We focus significant effort and attention on working with the treatment centers regarding these matters, as well as on our internal manufacturing processes.

Research and development expense

Research and development expenses include personnel and facility-related expenses, outside contracted services including clinical trial costs, manufacturing and process development costs, research costs, and other consulting services.

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We have a history of contracting with third parties 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 an uneven payment flow.

The financial terms of these contracts are subject to negotiations and may vary from contract to contract and

may result in an uneven payment flow.

We accrue and expense costs for clinical trial activities performed by third parties based upon estimates of work completed to date of the individual trial in accordance with agreements established with contract research organizations and clinical trial sites.

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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.

Selling, general, and administrative

Selling, general, and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in executive, finance, procurement, legal, investor relations, facilities, business development, marketing, commercial, information technology and human resources functions.

Other significant costs include facility costs not otherwise capitalized in inventory or included in research and development expenses, legal fees relating to corporate matters and intellectual property, insurance, public company expenses relating to maintaining compliance with Nasdaq listing rules and SEC requirements, investor relations costs, and fees for accounting and consulting services.

Selling, general, and administrative expense

Selling, general, and administrative expenses consist primarily of salaries and other related costs, including facility costs not otherwise capitalized in inventory or included in research and development expenses, legal fees relating to corporate matters and intellectual property, insurance, public company expenses relating to maintaining compliance with Nasdaq listing rules and SEC requirements, investor relations costs, and fees for accounting and consulting services.

Selling, general, and administrative costs are expensed as incurred, and we accrue for services provided by third parties related to the above expenses by monitoring the status of services provided and receiving estimates from its service providers and adjusting its accruals as actual costs become known.

We anticipate selling, general, and administrative expenses will increase as we execute the launch of Amtagvi ® and market Proleukin ® , as well as execute an expected expansion in the U.S.

We anticipate selling, general, and administrative expenses will increase as we expand the use of Amtagvi ® and market Proleukin ® , as well as expected growth in the internal general and administrative team to align with the overall growth in the business as we execute an expected expansion in both the U.S.

market and outside of the U.S.

of the internal general and administrative team to support the overall growth in our business.

Depreciation and amortization

Depreciation and amortization includes depreciation and amortization expense for the property and equipment as well as non-cash amortization of intangible assets, including amortization expense for the fair value step-up of acquired Proleukin ® inventory which is recognized as the acquired inventory units are sold, the developed technology intangible asset and the milestone payment recorded as part of the Acquisition, and the intellectual property license intangible asset related to Amtagvi ® .

These expenses are recorded on a straight-line basis over the estimated useful lives of the assets.

Restructuring charges

Restructuring charges consist primarily of employee severance payments and other postemployment benefit related expenses.

The Company records restructuring charges based on whether the termination benefits are provided under an on-going benefit arrangement or under a one-time benefit arrangement.

The Company recognizes charges related to restructuring plans when the liabilities have been incurred and can be reasonably estimated.

Interest and other income, net

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Results of Operations for the Years Ended December 31, 2025 and 2024

Years Ended December 31,

Year Ended December 31,

Increase (Decrease)

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Revenue for the year ended December 31, 2025, increased by $99.4 million, or 61% compared to the same period in 2024.

The increase was driven by the completion of the acquisition of worldwide rights to Proleukin ® in May 2023, or the Acquisition, as well as the commercial launch of Amtagvi ® in February 2024.

Through the first quarter of 2024, product revenue was comprised entirely of product sales of Proleukin ® in markets outside of the U.S.

With the BLA approval of Amtagvi ® in February 2024, we began generating revenue for Amtagvi ® in the second quarter of 2024 as infusions occurred at our ATCs.

Furthermore, in the second quarter of 2024, we began selling Proleukin ® in the U.S.

The Proleukin ® inventory that was previously with distributors at the time of the Acquisition to support the U.S.

market has been substantially sold, and, as a result, we experienced significant re-stocking demand from specialty distributors in both the second and third quarter of 2024 to support ongoing and anticipated infusions related to the strong commercial launch of Amtagvi ® .

GTN adjustments did not materially affect net product revenue in the years ended December 31, 2024 and 2023.

As it relates to revenue timing for our products, Amtagvi ® infusions are expected to lag behind Amtagvi ® related Proleukin ® sales by 2-3 months, and we expect ATCs to utilize 15-18 Proleukin ® vials per Amtagvi ® infusion.

The increase was driven by the continued commercial launch of Amtagvi ® that commenced in February 2024.

The increase was partially offset by a decrease in Proleukin ® sales, as compared to the same period in 2024, when we experienced significant re-stocking demand from specialty distributors in the U.S.

due to the depletion of inventory that was previously with distributors at the time of the acquisition of Proleukin ® , or the Acquisition, as well as to support ongoing and anticipated infusions resulting from the commercial launch of Amtagvi ® .

GTN adjustments did not materially affect net product revenue for the years ended December 31, 2025 and 2024.

As it relates to revenue timing for our products, Amtagvi ® infusions are expected to lag behind Amtagvi ® related Proleukin ® sales by 2-3 months, and we expect ATCs to utilize approximately 15 Proleukin ® vials per Amtagvi ® infusion.

While such Proleukin ® sales are not directly indicative of future Amtagvi ® revenues because of the timing of stocking activities by specialty distributors and because of sales that are not related to Amtagvi ® infusions, such as sales of Proleukin ® utilized in clinical manufacturing or clinical trials, such sales are one indicator of future Amtagvi ® revenues.

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(in thousands)

Costs and expenses

Cost of sales **

Research and development expense

Selling, general, and administrative expense

Research and development **

Selling, general, and administrative **

Depreciation and amortization

Restructuring charges

Total costs and expenses

** Excludes depreciation and amortization

Cost of sales

Cost of sales for the year ended December 31, 2024, increased by $113.2 million, or 1,053% driven by the increase in sales of Amtagvi ® and Proleukin ® , as well as costs related to the manufacturing of Amtagvi ® .

Cost of sales included $21.0 million for the year ended December 31, 2024, compared to $9.7 million for the year ended December 31, 2023, of non-cash amortization expense for the developed technology intangible asset and the milestone payment recorded as part of the Acquisition as well as intellectual property license intangible assets.

In addition, cost of sales included non-cash expense for the amortization of the fair value step-up of acquired Proleukin ® inventory sold of $5.2 million for the year ended December 31, 2024, compared to $0.3 million for the year ended December 31, 2023.

This expense is recorded as the units acquired in the Acquisition are sold, and we expect this amount to decrease over the next six to twelve months as this inventory is sold.

In addition to the non-cash amortization expense, cost of sales included $14.2 million of

royalties payable related to sales of our products for the year ended December 31, 2024.

There were no royalties payable for the year ended December 31, 2023.

Cost of sales for the year ended December 31, 2024, also included $26.3 million 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, and were not otherwise utilized under an expanded access program or single-patient IND to generate clinical data, resulting in manufacturing costs in the period for which we were not able to recognize revenue.

In addition, to a lesser extent, such costs included period costs incurred for the first few quarters after the launch of Amtagvi ® related to overhead and manufacturing costs at the i CTC 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 could incur such period costs while we continue to implement initiatives associated with manufacturing quality.

Cost of sales, excluding depreciation and amortization, for the year ended December 31, 2025, increased by $79.9 million, or 86%, compared to the same period in 2024.

The increase was driven by (i) a $56.4 million increase from increased sales of Amtagvi ® products, including costs related to the manufacturing of Amtagvi ® , (ii) a $9.5 million increase in excess and obsolescence reserve primarily related to excess Proleukin ® inventory resulting from a manufacturing and supply agreement inherited in the Acquisition for which we cannot yet fully utilize the required purchase quantities, and (iii) a $18.1 million increase in period costs primarily related to patient drop-off driven by patient health as well as manufacturing results that did not meet required specifications.

These increases were partially offset by a $4.1 million decrease in royalties payable related to the decrease in sales of Proleukin ® in the U.S.

Research and development expense

Research and development expense for the year ended December 31, 2024, decreased by $61.7 million, or 18%, compared to the same period in 2023.

The decrease was primarily attributable to (i) a $97.7 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 $4.4 million decrease in costs associated with the reclassification of certain activities supporting Amtagvi ® into general and administrative expenses upon BLA approval based on their function, and (iii) a $0.9 million decrease in clinical costs, driven primarily by lower patient enrollment across certain studies.

These decreases were partially offset by (i) a $29.5 million increase in payroll and related costs, including stock-based compensation, primarily driven by an increase in the number of employees and the number of stock awards granted at a higher average stock price, (ii) a $5.0 million charge for the impairment of leasehold improvements driven by the early termination of our headquarters lease during the fourth quarter of 2024 (exclusive of the gain on lease termination which is recorded in interest and other income, net), (iii) a $2.6 million increase in lab and consumable costs for the development of next generation candidates, (iii) a $2.9 million increase in license costs related to the expansion of our information technology infrastructure to support our clinical activities, and (iv) a $1.3 million increase in other costs, including travel and facility related costs.

Research and development expense for the year ended December 31, 2025, increased by $24.0 million, or 9%, compared to the same period in 2024.

The increase was primarily attributable to (i) a $17.6 million increase in payroll and related costs, including stock-based compensation, primarily driven by an increase in the average number of employees and consultants during the year as compared to prior year, (ii) a $23.4 million increase in clinical costs, driven primarily by continued enrollment in existing trials, including TILVANCE-301, the initiation of new trials, including MEL-202 and IOV-3001, and the resumption of the LUN-202 study,

and (iii) a $4.3 million increase in license costs primarily due to the expansion of our information technology infrastructure to support our clinical activities.

These increases were partially offset by (i) a $16.0 million decrease in commercial manufacturing costs, driven by increases in capitalization of qualified costs for Amtagvi ® manufacturing, (ii) a $5.0 million decrease in impairment of leasehold improvements driven by the early termination of our headquarters lease during the fourth quarter of 2024 (exclusive of the gain on lease termination which is recorded in interest and other income, net), and (iii) a $0.3 million increase in others, including travel, lab and consumable costs.

Research and development activities are central to our business model.

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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 “Others clinical, preclinical, and research programs under development.” Lifileucel monotherapy includes our TIL monotherapy clinical trials, including clinical trials previously reported as LN-145.

“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.

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All remaining research and development expenses are categorized as indirect research and development expenses.

Such indirect

research and development expenses include employee salaries and benefits, stock-based compensation, consulting and contracted services to supplement our in-house activities, and costs associated with our facilities.

Such indirect research and development expenses include employee salaries and benefits, stock-based compensation, consulting and contracted services to supplement our in-house activities, and costs associated with our facilities.

These expenses are not directly tied to any individual project and are generally deployed across multiple projects.

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Selling, general, and administrative expense

Selling, general and administrative expense for the year ended December 31, 2024, increased by $46.1 million, or 43%, compared to the same period in 2023.

The increase was primarily attributable to (i) a $28.0 million increase in payroll and related expenses, including stock-based compensation, driven by an increase in headcount to support the growth in the overall business as well as to support the commercialization of Amtagvi ® , an increased number of stock awards granted at a higher average stock price, and the reclassification of costs of certain employees previously supporting research and development activities into general and administrative expense upon BLA approval based on their functional activities, (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 $7.0 million increase in costs incurred in support of the distribution and commercialization of Amtagvi ® and Proleukin ® , and (iv) a $2.4 million charge for the impairment of the leasehold improvements driven by the early termination of our headquarters lease during the fourth quarter of 2024 (exclusive of the gain on lease termination which is recorded in interest and other income, net), and (v) a $4.9 million increase in other costs, including costs associated with increased travel, software licenses related to the expansion of our information technology infrastructure, and professional fees.

Selling, general and administrative expense for the year ended December 31, 2025, was flat as compared to the same period in 2024.

The overall $0.1 million increase was primarily attributable to (i) a $4.9 million increase in costs incurred in support of the distribution and commercialization of Amtagvi ® and Proleukin ® , and (ii) a $3.5 million increase in other costs, primarily related to software license costs for the expansion of our information technology infrastructure.

This increase was offset by (i) a $5.9 million decrease in payroll and related expenses, including stock-based compensation, primarily driven by the number of stock awards granted at lower average stock price, partially offset by an increase in the average number of employees during the year, mainly in the commercial organization, as compared to prior year, and (ii) a $2.4 million decrease in impairment of leasehold improvements driven by the early termination of our headquarters lease during the fourth quarter of 2024 (exclusive of the gain on lease termination which is recorded in interest and other income, net).

Depreciation and amortization

Depreciation and amortization expense for the year ended December 31, 2025, decreased by $1.7 million, or 4% as compared to the same period in 2024.

The decrease was primarily related to the decrease in expense for the amortization of the fair value step-up of acquired Proleukin ® inventory sold as the acquired inventory continues to be depleted, partially offset by an increase in depreciation costs related to the expansion of i CTC.

Restructuring charges

Restructuring charges were $5.1 million for the year ended December 31, 2025;

there were no such charges in the comparable period for 2024.

Expense in 2025 was primarily related to severance payments, costs for outplacement services, and post-employment benefits associated with our August 2025 strategic restructuring plan, resulting from a review of current strategic priorities, the strategic restructuring plan included an associated reduction in workforce, resource allocations, and costs, intended to reduce operating costs, streamline operations and extend cash runway.

Interest and other income, net

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Interest and other income, net

Interest and other income, net for the year ended December 31, 2024, increased by $7.2 million, or 55%, compared to the same period in 2023.

The increase was primarily driven by a $8.6 million gain on the termination of our headquarters lease during the fourth quarter of 2024 (exclusive of leasehold improvement impairments recorded as operating expense), partially offset by a $3.1 million lease termination related fee, and a $1.1 million increase in interest income, net, driven by an increase in average investment balances, resulting from net proceeds from recent public and at-the-market financing as well as a higher rate of return on our investments.

Interest and other income, net for the year ended December 31, 2025, decreased by $10.0 million, or 49%, as compared to the same period in 2024.

The decrease was primarily driven by a $6.7 million decrease in other income, mainly due to a $5.5 million gain received in 2024 associated with the termination of our headquarters lease during the fourth quarter of 2024 (exclusive of leasehold improvement impairments recorded as operating expense), net of lease termination related fees.

The decrease also included losses due to changes in foreign currency exchange rates, and a $3.3 million decrease in interest income driven by a decrease in average investment balances and interest rates.

Income tax benefit

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Income tax benefit

Income tax benefit for the year ended December 31, 2024, decreased by $0.7 million, or 19%, compared to the same period in 2023.

This decrease was the result of increased operations in the UK.

Income tax benefit for the year ended December 31, 2025 decreased by $0.8 million or 27%, as compared to the same period in 2024.

The increase was mainly driven by the mix of income across jurisdictions that have varying effective tax rates.

Years Ended December 31,

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(in thousands)

Net loss for the year ended December 31, 2024 decreased by $71.9 million, or 16%, compared to the year ended December 31, 2023.

The decrease in our net loss was due to generating product revenue from product sales of Proleukin ® and Amtagvi ® in 2024, partially offset by an increase in cost of sales and 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 ® , 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 ® .

Net loss for the year ended December 31, 2025 increased by $18.8 million, or 5%, compared to the year ended December 31, 2024.

The increase in net loss is primarily due to the related increase in cost of sales, along with anticipated expansion in additional markets, continued growth in sales of Proleukin ® , 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 ongoing execution of the launch of Amtagvi ® .

Results of Operations for the Years Ended December 31, 2024 and 2023

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Total product revenue

Revenue for the year ended December 31, 2023 was $1.2 million and related entirely to product sales of Proleukin ® in licensed markets outside of the U.S following the completion of the Acquisition.

To date, there have been no product sales of Proleukin ® in the U.S.

market, which at the time of the Acquisition had sufficient Proleukin ® inventory in existing distributors to support U.S.

market demand.

There was no revenue for the year ended December 31, 2022.

Revenue for the year ended December 31, 2024, increased by $162.9 million, or 13,698% compared to the same period in 2023.

The increase was driven by the completion of the acquisition of worldwide rights to Proleukin ® in May 2023, or the Acquisition, as well as the commercial launch of Amtagvi ® in February 2024.

Through the first quarter of 2024, product revenue was comprised entirely of product sales of Proleukin ® in markets outside of the U.S.

With the BLA approval of Amtagvi ® in February 2024, we began generating revenue for Amtagvi ® in the second quarter of 2024 as infusions occurred at our ATCs.

Furthermore, in the second quarter of 2024, we began selling Proleukin ® in the U.S.

The Proleukin ® inventory that was previously with distributors at the time of the Acquisition to support the U.S.

market has been substantially depleted, and, as a result, we experienced significant re-stocking demand from U.S.

specialty distributors in both the second and third quarter of 2024 to support ongoing and anticipated infusions related to the commercial launch of Amtagvi ® .

GTN adjustments did not materially affect net product revenue in the years ended December 31, 2024 and 2023.

As it relates to revenue timing for our products, Amtagvi ® infusions are expected to lag behind Amtagvi ® related Proleukin ® sales by 2-3 months, and we expect ATCs to utilize 15 – 18 Proleukin ® vials per Amtagvi ® infusion.

Costs and expenses

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(in thousands)

Costs and expenses

Cost of sales **

Research and development expense

Selling, general, and administrative expense

Research and development **

Selling, general, and administrative **

Depreciation and amortization

Total costs and expenses

** Excludes depreciation and amortization

Cost of sales

Cost of sales for the year ended December 31, 2023 was $10.7 million, which consists of $1.0 million cost of inventory and related inventoriable costs associated with sales of Proleukin ® and $9.7 million of amortization expense for the developed technology intangible asset recorded as part of the Acquisition.

No cost of sales was incurred for the year ended December 31, 2022.

Cost of sales, excluding depreciation and amortization, for the year ended December 31, 2024, increased by $92.2 million, or 8,927%, driven by the increase in sales of Amtagvi ® and Proleukin ® products, as well as costs related to the manufacturing of Amtagvi ® .

Cost of sales included $14.2 million of royalties payable related to sales of our products for the year ended December 31, 2024.

There were no royalties payable for the year ended December 31, 2023.

In addition, to a lesser extent, such costs included period costs incurred for the first few quarters after the launch of Amtagvi ® related to overhead and manufacturing

costs at the i CTC 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.

Research and development expense

Research and development expense for the year ended December 31, 2023 increased by $49.3 million, or 17%, compared to the year ended December 31, 2022.

The increase was primarily attributable to (i) a $40.0 million increase in payroll and related expenses, driven by increased hiring of research and development employees to support our manufacturing at the i CTC and clinical development activities, (ii) a $10.3 million increase in manufacturing costs to support the increased production and qualifying i CTC suites for commercial manufacturing readiness, (iii) a $7.0 million increase in clinical trial costs driven primarily by the initiation of our Phase 3 TILVANCE-301 clinical trial, (iv) a $5.9 million increase in facility and related costs, including depreciation, maintenance, environmental monitoring, and other costs primarily related to the i CTC build-out intended to expand manufacturing capacity, and (v) a $2.4 million increase in other costs, including license costs related to the expansion of our information technology infrastructure to support our clinical activities and research alliance costs.

These expenses were partially offset by (i) a $15.3 million decrease in stock-

based compensation expenses, primarily driven by a lower average stock price, and (ii) a $1.0 million decrease in costs associated with travel and medical affairs activities such as publications and medical conferences.

Research and development expense for the year ended December 31, 2024, decreased by $57.0 million, or 17%, compared to the same period in 2023.

The decrease was primarily attributable to (i) an $83.3 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 $4.4 million decrease in costs associated with the reclassification of certain activities supporting Amtagvi ® into general and administrative expenses upon BLA approval based on their function, and (iii) a $0.9 million decrease in clinical costs, driven primarily by lower patient enrollment across certain studies.

These decreases were partially offset by (i) a $19.8 million increase in payroll and related costs, including stock-based compensation, primarily driven by an increase in the number of employees and the number of stock awards granted at a higher average stock price, (ii) a $5.0 million charge for the impairment of leasehold improvements driven by the early termination of our headquarters lease during the fourth quarter of 2024 (exclusive of the gain on lease termination which is recorded in interest and other income, net), (iii) a $2.6 million increase in lab and consumable costs for the development of next generation candidates, (iv) a $2.9 million increase in license costs related to the expansion of our information technology infrastructure to support our clinical activities, and (v) a $1.3 million increase in other costs, including travel and facility related costs.

Research and development activities are central to our business model.

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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 “Others 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.

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Personnel related (excluding stock-based compensation)

Stock-based compensation expenses

Stock-based compensation expense

Contractors and outside services

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Selling, general, and administrative expense

Selling, general, and administrative expense for the year ended December 31, 2023, increased by $2.8 million, or 3%, compared to the year ended December 31, 2022.

The increase was primarily attributable to (i) a $12.6 million increase in payroll and related expenses, resulting from increases in headcount to support the growth in the overall business and related corporate infrastructure, and (ii) a $5.0 million increase in professional fees and travel costs, including costs associated with Proleukin ® integration.

These increases were partially offset by (i) a $6.1 million decrease in stock-based compensation expenses, primarily driven by a lower average stock price, (ii) a $4.3 million decrease in legal costs related to intellectual property related matters, and (iii) a $4.4 million decrease in other costs, including marketing, advertising and software license costs.

Selling, general and administrative expense for the year ended December 31, 2024, increased by $46.2 million, or 44%, compared to the same period in 2023.

The increase was primarily attributable to (i) a $27.9 million increase in payroll and related expenses, including stock-based compensation, driven by an increase in headcount to support the growth in the overall business as well as to support the commercialization of Amtagvi ® , an increased number of stock awards granted at a higher average stock price, and the reclassification of costs of certain employees previously supporting research and development activities into general and administrative expense upon BLA approval based on their functional activities, (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 $7.0 million increase in costs incurred in support of the distribution and commercialization of Amtagvi ® and Proleukin ® , and (iv) a $2.4 million charge for the impairment of the leasehold improvements driven by the early termination of our headquarters lease during the fourth quarter of 2024 (exclusive of the gain on lease termination which is recorded in interest and other income, net), and (v) a $5.1 million increase in other costs, including costs associated with increased travel, software licenses related to the expansion of our information technology infrastructure, and professional fees.

Depreciation and amortization

Depreciation and amortization expense for the year ended December 31, 2024, increased $16.2 million, or 76% compared to the same period in 2023.

The increase was primarily related to non-cash amortization expense for the developed technology intangible asset and the milestone payment recorded as part of the Acquisition as well as intellectual property license intangible assets, and non-cash amortization expense of the fair value step-up of acquired Proleukin ® inventory sold as the acquired inventory continues to be depleted.

This expense is recorded as the units acquired in the Acquisition are sold, and we expect this amount to decrease over the next six to twelve months as this inventory is sold.

Restructuring charges

There were no restructuring charges recorded for the year ended December 31, 2024 and the comparable period December 31, 2023.

Interest and other income, net

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Interest and other income, net

Interest and other income, net results from our interest-bearing cash and investment balances.

Net interest income increased by $10.1 million, or 337%, primarily due to increases in interest rates as well as a shift in our portfolio to interest bearing investments such as U.S.

treasury securities and money market funds.

Interest and other income, net for the year ended December 31, 2024, increased by $7.2 million, or 55%, compared to the same period in 2023.

Income tax benefit

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Income tax benefit

Income tax benefit for the year ended December 31, 2023 was $3.5 million as a result of the tax benefit from the realization of the related deferred taxes for operations in the UK.

No benefit or expense was recorded for the year ended December 31, 2022

Income tax benefit for the year ended December 31, 2024, decreased by $0.7 million, or 19%, compared to the same period in 2023.

This decrease was the result of increased operations in the UK.

Years Ended December 31,

(Increase) Decrease

Net loss for the year ended December 31, 2023, increased by $48.1 million, or 12.0%, compared to the year ended December 31, 2022.

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 as well as our pre-commercialization activities for lifileucel.

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 the execution of the launch of Amtagvi ® , the Proleukin ® business integration, and both clinical and internal development programs.

(in thousands)

Net loss for the year ended December 31, 2024 decreased by $71.9 million, or 16%, compared to the year ended December 31, 2023.

and anticipated expansion in additional markets, as well as continued sales of Proleukin ® , and ongoing and newly initiated clinical trials.

Liquidity and Capital Resources

As of December 31, 2024, we had $330.1 million in cash, cash equivalents, investments, and restricted cash ($115.7 million in cash and cash equivalents, $208.1 million in short-term investments, and $6.4 million in restricted cash).

As of December 31, 2025, we had $303.0 million in cash, cash equivalents, short-term investments, and restricted cash ($163.1 million of cash and cash equivalents, $133.9 million in short-term investments, and $6.0 million in restricted cash).

We have incurred losses and generated negative cash flows from operations since inception.

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Since 2017, our primary source of funds has been from the public sale of our common stock.

With the approval of our BLA, we expect to continue to generate revenue from the sale of our product, Amtagvi ® .

Furthermore, as Proleukin ® inventory that was previously with distributors in the U.S.

market at the time of the Acquisition has been substantially depleted, we also began to sell Proleukin ® into the U.S.

With the approval of our BLA, we have to date and expect to continue to generate revenue from the sale of our first internally developed product, Amtagvi ® .

Furthermore, starting in 2024 we began selling 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 consolidated financial statements are issued and this Annual Report on Form 10-K is filed.

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 registrational 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 consolidated financial statements for the year ended December 31, 2024 are issued, which includes net proceeds of approximately $122.3 million raised through the open market sales agreement through February 14, 2025, we believe that we have sufficient capital to fund our anticipated operating expenses and capital expenditures as planned for at least the next twelve months following the issuance of our consolidated financial statements included in this Annual Report on Form 10-K.

We expect to continue to incur significant expenses to support commercial activities for Amtagvi ® , fund ongoing clinical programs, including our NSCLC registrational 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 consolidated financial statements for the year ended December 31, 2025 are issued, we believe that we have sufficient capital to fund our anticipated operating expenses and capital expenditures as planned for at least the next twelve months following the issuance of our consolidated financial statements included in this Annual Report on Form 10-K.

In August 2025, we approved a strategic restructuring plan with an associated reduction in workforce as a result of a review of current strategic priorities, resource allocation, and cost reduction intended to reduce operating costs, streamline operations and extend our cash runway.

The restructuring plan is expected to optimize business performance, prioritize key manufacturing and research and development efforts, as well as reduce headcount by approximately 19 percent.

Corporate Capitalization

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The shares of Series A Convertible Preferred Stock and Series B Convertible Preferred Stock do not have voting rights or accrue dividends.

On February 8, 2021, we entered into an Open Market Sale Agreement, or the 2021 Sale Agreement, with Jefferies LLC, or Jefferies, with respect to an “at the market” offering program, under which we were able to, from time to time, in our sole discretion, issue and sell through Jefferies, acting as sales agent, up to $350.0 million of shares of our common stock.

On November 18, 2022, we entered into a new Open Market Sale Agreement, or the 2022 Sale Agreement, with Jefferies with respect to an “at the market” offering program.

Under the terms of the 2022 Sale Agreement, we were able to, from time to time, in our sole discretion, issue and sell up to $500.0 million of shares of our common stock pursuant to the “at the market” offering program.

The 2022 Sale Agreement superseded and replaced in its entirety the 2021 Sale Agreement, which was terminated by the Company.

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.

On August 22, 2025, we entered into an Amended and Restated Open Market Sale Agreement, or the 2025 Sale Agreement, with Jefferies with respect to an “at the market” offering program.

Under the terms of the 2025 Sale Agreement, we may, from time to time, in our sole discretion, issue and sell up to $350.0 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 2023.

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.

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 $197.1 million after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

During the year ended December 31, 2024, we received $200.0 million in net proceeds, after offering costs, through the sale of 23,127,726 shares of common stock through the 2023 Sale Agreement.

The 2025 Sale Agreement superseded and replaced in its entirety the 2023 Sale Agreement.

The issuance and sale, if any, of shares of our common stock under the Sale Agreement was or will be made pursuant to a prospectus supplement dated August 22, 2025 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, or the Registration Statement.

During the year ended December 31, 2025, we received $306.3 million in net proceeds, net of offering costs, through the sale of 101,899,334 shares of common stock cumulatively through the 2023 and 2025 Sale Agreements.

In the future, we may periodically offer one or more of these securities in amounts, prices, and terms to be announced when and if the securities are offered.

If any of the securities covered by the 2020 Shelf Registration Statement are offered for sale, a prospectus supplement will be prepared and filed with the SEC containing specific information about the terms of such offering at that time.

If any of the securities covered by the Registration Statement are offered for sale, a prospectus supplement will be prepared and filed with the SEC containing specific information about the terms of such offering at that time.

Cash flows from operating, investing and financing activities (in thousands):

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Financing activities

Net (decrease) increase in cash, cash equivalents and restricted cash*

Net increase (decrease) in cash, cash equivalents and restricted cash*

* Excludes effect of exchange rate changes

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Net cash used in operating activities for the year ended December 31, 2025, was $302.4 million compared to $353.0 million for the same period in 2024.

The $50.6 million decrease in cash used in operating activities was driven by an $18.8 million increase in net loss resulting from increased cost of sales driven by an increase in sales of Amtagvi ® and investment in our clinical and internal research and development programs.

The increase in net loss was offset by a net decrease in non-cash charges of $33.4 million.

The net decrease in non-cash was primarily driven by lower stock-based compensation expenses and a decrease in the gain on the derecognition of lease assets and liabilities of our corporate headquarters lease as a result of the early termination in 2024.

These decreases were partially offset by an increase in excess and obsolescence costs, and accretion of discounts and amortization of premiums on investments.

In addition, net cash used in operating activities decreased by $102.8 million, primarily related to changes in operating assets and liabilities, including a $56.1 million decrease in trade accounts receivable, resulting from the collection of cash from the sale of our products, a $21.2 million increase in accounts payable and accrued expenses, resulting from timing of vendor invoicing and related payments, and a $25.5 million decrease in net cash used driven primarily by purchases of inventory, and an increase in prepaid expenses and other assets in the current period compared to the corresponding period in 2024 that resulted from the timing of related payments.

Net cash used in operating activities for the year ended December 31, 2024, was $353.0 million compared to $361.8 million for the same period in 2023.

The $8.8 million decrease in cash used in operating activities was driven by a $71.9 million decrease in net loss as we collect generated revenues from commercialization of Amtagvi ® and distribution of Proleukin ® .

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The increase of $69.1 million in cash used in operating activities was primarily due to a $48.1 million increase in net loss related to increased costs in research and development, including the overall expansion of our clinical trials for new TIL cell therapies as well as our pre-commercialization activities for lifileucel, and the overall growth in our workforce and corporate infrastructure.

In addition, it reflects a decrease in non-cash charges of $17.3 million primarily driven by lower stock-based compensation expenses and accretion of discount on investments, partially offset by increases in amortization of intangible assets driven primarily by the amortization associated with the developed technology intangible asset acquired as part of the Acquisition and in depreciation expense resulting primarily from additional fixed assets put in service at the i CTC.

driven primarily by the amortization associated with the developed technology intangible asset acquired as part of the Acquisition and in depreciation expense resulting primarily from additional fixed assets put in service at the i CTC.

Further, net cash used by changes in operating assets and liabilities increased by $27.1 million, driven primarily by cash used for the purchase of Proleukin ® inventory as part of the Acquisition and an increase in lease payments for our lease arrangements, resulting primarily from the full utilization of tenant improvement allowances offered under our lease agreements during 2022.

These increases in the use of cash were partially offset by a net $23.4 million decrease in cash used, driven by an increase in accounts payable and accrued expenses, which primarily resulted from the timing of vendor invoicing and related payments.

Net cash used in operating activities for the year ended December 31, 2022, was $292.8 million compared to $227.9 million for the same period in 2021.

The increase of $64.8 million in cash used in operating activities was primarily due to an increase in net loss driven by increased costs in research and development and pre-commercial activities, which was partially offset by an increase in non-cash charges of $16.3 million primarily driven by higher stock-based compensation expenses, operating right-of-use assets associated with our office and manufacturing facility as well as embedded leases, and depreciation expenses, partially offset by accretion of discount on investments.

In addition, it reflects a $31.4 million increase in cash used by assets and liabilities driven primarily by changes in

accruals and accounts payable as well as prepaid assets, resulting from the increased workforce, overall growth in the business and operations, and the timing of vendor invoicing and related payments.

These increases were offset by a net increase in our operating lease liabilities primarily driven by receipts of tenant improvement allowances for our new corporate headquarters office.

Investing Activities

Net cash (used in) / provided by investing activities primarily relates to the cash utilized to fund the Acquisition and the purchases and maturities of our investments and capital expenditures.

Net cash used in investing activities for the year ended December 31, 2024, was $96.4 million compared to net cash provided by investing activities of $155.2 million for the same period in 2023.

Net cash provided by investing activities for the year ended December 31, 2025, was $47.5 million compared to net cash used by investing activities of $96.4 million for the same period in 2024.

The decrease in cash used of $143.9 million was driven by a $114.1 million increase associated with changes in the timing of maturities and purchases of investments, and a $22.8 million increase in cash utilized to fund capital expenditures.

These increases were partially offset by a $52.6 million decrease in cash used for the Acquisition, net of cash acquired.

Net cash used in investing activities for the year ended December 31, 2024, was $96.4 million compared to net cash used in investing activities of $155.2 million for the same period in 2023.

The decrease in cash used of $58.8 million was driven by a $112.5 million increase associated with changes in the timing of maturities and purchases of investments, which was partially offset by a $160.1 million decrease in cash used for the Acquisition in May 2023 and a $11.2 million decrease in capital expenditures.

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The increase in cash used of $411.7 million was driven by the $212.6 million payment for the acquisition of the Proleukin ® business, excluding the payment of acquired inventories, which is presented in operating activities, and a $1.9 million increase in capital expenditures, offset by a $197.2 million net increase in the timing of maturities and purchases of investments.

Net cash (used in) / provided by investing activities primarily consists of purchases, maturities of our investments and capital expenditures.

Net cash provided by investing activities for the year ended December 31, 2022 was $256.5 million compared to net cash provided by investing activities of $0.1 million for the same period in 2021.

The increase in cash provided by investing activities of $256.4 million was primarily due to the timing of maturities and purchases of investments and lower capital expenditures in 2022.

Financing Activities

Net cash provided by financing activities for the year ended December 31, 2025 was $300.8 million compared to net cash provided of $390.7 million for the same period in 2024.

The decrease in net cash provided by financing activities of $89.9 million was primarily driven by a decrease in net proceeds of $91.0 million received through the sales of common stock through our “at the market” offering program during the year ended December 31, 2025, as compared to the net proceeds received from our public offering in February 2024 and through the sales of common stock through our “at the market” offering program during the year ended December 31, 2024.

In addition, a $4.7 million decrease in proceeds from the issuance of common stock upon the exercise of stock options and from our employee stock purchase plan program, and a $5.8 million increase in tax payments related to shares withheld for vested restricted stock units, contributed to the overall decrease in cash provided by financing activities.

Net cash provided by financing activities for the year ended December 31, 2024 was $390.7 million compared to net cash provided of $463.0 million for the same period in 2023.

The decrease in net cash provided by financing activities of $72.3 million was primarily driven by a decrease in net proceeds of $66.0 million received from our public offering in February 2024 and through the sales of common stock through our “at the market” offering program during the year ended December 31, 2024, as compared to the net proceeds received through the “at the market” offering program in the first quarter of 2023, and a $10.1 million increase in tax payments related to shares withheld for vested restricted stock units, or RSUs.

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These increases were partially offset by a $1.6 million decrease in proceeds from the issuance of common stock upon the exercise of stock options.

Net cash provided by financing activities for the year ended December 31, 2022 was $190.2 million compared to net cash provided of $239.3 million for the same period in 2021.

The net cash provided by financing activities during the year ended December 31, 2022 related to $189.5 million net cash proceeds from our “at the market” offering program, $1.7 million of cash receipts from the issuance of common stock under the 2020 ESPP, and $1.6 million of cash receipts from the issuance of common stock upon the exercise of stock options.

This was offset by cash used of $2.6 million for tax payments related to vested RSUs.

Contractual Obligations

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Purchase obligations (2)

Our operating lease obligations consist of obligations under non-cancellable operating leases for our facilities in Philadelphia, Pennsylvania, and Tampa, Florida, and our non-cancellable operating sublease in San Carlos, California.

Our operating lease obligations consist of obligations under non-cancellable operating leases for our facilities in San Carlos, California, Philadelphia, Pennsylvania, and Tampa, Florida.

Excluded from the above are contractual obligations with a CMO for the manufacturing facilities and minimum fixed commitment fees included in our manufacturing contracts, such as personnel, general support fee, and minimum production or material fees.

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However, these contracts are cancellable upon prior notice and as a result, are not included in the above table.

We have purchase obligations of $27.2 million related to manufacturing and supply agreements for Proleukin ® under a contract we inherited as part of the Acquisition.

We have purchase obligations of $61.9 million related to manufacturing and supply agreements for Proleukin ® under a contract we inherited as part of the Acquisition, which was subsequently extended through 2028.

We acquire assets still in development and enter into research and development arrangements with third parties that often require milestone and royalty payments to the third-party contingent upon the occurrence of certain future events linked to the success of the asset in development.

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Asset Acquisitions

We make certain judgments to determine whether transactions should be accounted for as acquisitions of assets or business combinations using the guidance in Accounting Standard Codification, or ASC, Topic 805, Business Combinations by first applying a screen test to assess if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of assets.

We make certain judgments to determine whether transactions should be accounted for acquisitions of assets or business combinations using the guidance in Accounting Standard Codification, or ASC, Topic 805, Business Combinations, by first applying a screen test to assess if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of assets.

If the screen test is met, the transaction is accounted for as an asset acquisition.

If the screen test is not met, further assessment

is required to determine whether we have acquired inputs and processes that have the ability to create outputs, which would meet the requirements of a business.

If the screen test is not met, further

assessment is required to determine whether we have acquired inputs and processes that have the ability to create outputs, which would meet the requirements of a business.

If the assets acquired do not constitute a business, we account for asset acquisitions using the cost accumulation and allocation method.

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Intangible Assets

Our intangible assets are initially measured based on an allocation of the cost of the acquisition to the assets acquired on a relative fair value basis and are recorded net of accumulated amortization.

We amortize the intangible assets on a straight-line basis over their estimated useful lives.

Our acquired intangible assets are initially measured based on an allocation of the cost of the acquisition to the assets acquired on a relative fair value basis and are recorded net of accumulated amortization, while intangible assets recorded as the result of milestone or license payments are recorded at the amount paid.

We amortize our intangible assets on a straight-line basis over their estimated useful lives.

When contingent consideration is a component of the cost of an asset acquisition, we capitalize the amount of incremental cost from the contingent consideration related to the intangible asset acquired in the period the underlying contingency is resolved.

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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 December 31, 2024 or December 31, 2023.

We determined that no indicators of impairment or impaired intangible assets existed as of December 31, 2025 or December 31, 2024.

Inventory and Cost of Sales

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Our assessment of net realizable value requires the use of estimates regarding the net realizable value of our inventory balances, including an assessment of excess or obsolete inventory.

We determine excess or obsolete inventory based on multiple factors, including an estimate of recent sales forecast compared to quantities on hand and the expiration date of the product and materials.

We determine excess or obsolete inventory based on multiple factors, including our most recent sales and manufacturing forecast compared to quantities on hand and the expiration date of the product and materials.

Revenue Recognition

We recognize revenue from product sales in accordance with Topic ASC 606, Revenue from Contracts with Customers, or ASC 606.

We recognize revenue from product sales in accordance with ASC 606, Revenue from Contracts with Customers .

Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.

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payment terms differ by customer and by product.

Revenue is reduced at the time of recognition for expected chargebacks, product returns, discounts, rebates, and sales allowances, collectively referred to as gross to net adjustments, or GTN adjustments.

Revenue is reduced at the time of recognition for expected chargebacks, discounts, rebates, and sales allowances, collectively referred to as gross to net adjustments, or GTN adjustments.

In the U.S., these GTN adjustments are attributable to various commercial arrangements and government programs.

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These estimates are typically based on contracted amounts, patient visit data, discussions with internal clinical stakeholders and outside service providers, and historical look-back analysis of actual payments made to date.

We make judgements and estimates in determining the accrual balance in each reporting period.

We make judgments and estimates in determining the accrual balance in each reporting period.

In the event advance payments are made to a CRO, CMO, or other outside service provider, the payments are recorded within prepaid expenses and other current assets and subsequently recognized as research and development expense when the associated services have been performed.

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Recent Accounting Standards

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which enhances the disclosures required for operating segments in annual and interim consolidated financial statements.

ASC 2023-07 was effective for us in our annual reporting for fiscal year 2024 and for interim period reporting beginning in fiscal year 2025 on a retrospective basis, which we adopted as of December 31, 2024.

See Note 11 to the consolidated financial statements included in the Annual Report on Form 10-K.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which enhances the disclosures of income taxes.

ASU 2023-09 is effective for us in our annual reporting for fiscal year 2025 on a prospective basis.

Early adoption and retrospective reporting are permitted.

We are currently evaluating the impact of ASU 2023-09 on our consolidated financial statements.

Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction.

ASU 2023-09 was effective for us in our annual reporting for fiscal year 2025 and for interim period reporting beginning in fiscal year 2026.

See Note 14 to the consolidated financial statements included in the Annual Report on Form 10-K.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

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ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted, and may be applied either prospectively or retrospectively to financial statements issued for reporting periods after the effective date of ASU 2024-03 or retrospectively to any or all prior periods presented in the financial statements.

We are currently evaluating the impact of ASU 2024-03 on our consolidated financial statements.

We are currently evaluating the impact of adopting ASU 2024-03 on our consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses for Accounts Receivable and Contract Assets, which amends ASC 326 and provides a practical expedient to assume that current conditions as of the balance sheet date will persist through a reasonable and supportable forecast period when estimating credit losses for current accounts receivable and current contract assets.

Entities will still be required to adjust historical data used in the estimation to reflect current conditions.

ASU 2025-05 is effective for all entities for annual reporting periods beginning after December 15, 2025, and interim periods within those annual reporting periods.

We are currently evaluating the impact of adopting ASU 2025-05 on our consolidated financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis