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Item 7. Management’s Discussion and Analysis

2023-02-28 compared with 2022-02-24 · 129 added, 169 removed, 176 unchanged (63% 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 clinical-stage biopharmaceutical company pioneering a transformational approach to cure cancer by harnessing the human immune system’s ability to recognize and destroy diverse cancer cells in each patient.

TIL therapy is an autologous, polyclonal cell therapy platform technology that was originally developed by the National Cancer Institute, or NCI, which conducted initial clinical trials of this therapy in diseases such as metastatic melanoma and cervical cancer.

Our mission is to be the global leader in innovating, developing and delivering TIL therapies for patients with cancer.

We have developed a new, shorter TIL manufacturing

process known as Gen 2, which yields a cryopreserved TIL product.

This centralized, proprietary, and scalable manufacturing method is being investigated in multiple indications.

Our lead product candidates include lifileucel for metastatic melanoma and metastatic cervical cancer, as well as LN-145 for metastatic non-small cell lung cancer, or NSCLC.

In addition, we are investigating the effectiveness and safety of combinations of TIL therapy with immune checkpoint inhibitors, or ICIs, in metastatic melanoma, cervical cancer, NSCLC, and head and neck squamous cell carcinoma, or HNSCC.

We are investigating peripheral blood lymphocyte, or PBL, therapy for patients with relapsed or refractory chronic lymphocytic leukemia, or CLL, and small lymphocytic lymphoma, or SLL, through our sponsored trials.

We are developing first-in-class genetically edited TIL products based on the inactivation of genes that encode immune checkpoint proteins and other proteins, as well as the insertion of genes that encode immunomodulatory proteins.

We are also developing an alternative interleukin-2, or IL-2, co-therapy for use with TIL therapies.

Finally, we are investigating the potential for TIL therapy in other oncology indications and treatment settings through academic collaborations with leading cancer research centers.

Our current product candidate pipeline is summarized in the figure below:

TIL Monotherapy in Metastatic Solid Tumor Cancers

We have investigated TIL monotherapy in metastatic melanoma, cervical cancer, NSCLC and HNSCC.

We are conducting a Phase 2 clinical trial, C-144-01, of our lead TIL product candidate, lifileucel, for the treatment of metastatic melanoma.

This multicenter pivotal trial enrolled melanoma patients with disease progression following treatment with at least one systemic therapy, including a PD-1 inhibitor and, if BRAF mutated, a BRAF inhibitor, or a combination of BRAF and MEK inhibitors.

Cohort 4 of the C-144-01 clinical trial is a single-arm cohort intended to support the submission of a Biologics License Application, or BLA, to the Food and Drug Administration, or the FDA, for lifileucel.

Cohorts 2 and 4 of the C-144-01 trial use our Gen 2 manufacturing process.

We completed and closed enrollment of patients into Cohort 2 of the C-144-01 trial in 2018.

Results from Cohort 2 of the C-144-01 clinical trial were initially reported at the American Society of Clinical Oncology annual meeting, or ASCO, in June 2019 and subsequently updated at ASCO in June 2021.

In addition, detailed Cohort 2 data was published in the Journal of Clinical Oncology in May 2021.

Pivotal Cohort 4 of the C-144-01 trial was enrolled to evaluate ORR as read out by an Independent Review Committee, or IRC, as the primary endpoint based on our interpretation of discussions with the FDA as part of an End of Phase 2, or EOP2, meeting held with the FDA in the third quarter of 2018.

In October 2018, based on the data provided to the FDA during the EOP2 meeting, we announced that lifileucel had received a Regenerative Medicines Advanced Therapy, or RMAT, designation from the FDA.

Enrollment in Cohort 4 of the C-144-01 trial commenced in March 2019 and patient dosing was completed in January 2020.

Previously, we reported the submission of additional potency assay data to the FDA, and at the same time, we also announced that we had reached agreement with the FDA on the minimum duration of follow up for Cohort 4 to support our BLA submission for lifileucel in the treatment of metastatic melanoma.

In May 2021, we announced that we had received regulatory feedback from the FDA regarding our potency assays for lifileucel.

Following FDA feedback, we have continued our ongoing work developing and validating our potency assays and have engaged in discussions with the FDA during the second half of 2021.

Our BLA submission for lifileucel in metastatic melanoma is expected to occur during the first half of 2022.

In connection with this BLA submission, the IRC is expected to independently assess responses for Cohort 4 patients through the data cut date, which must be completed prior to BLA submission or disclosure of IRC-read data.

We are also conducting a Phase 2 clinical trial, C-145-04, which is a multicenter pivotal trial to assess the safety and efficacy of our lead product candidate lifileucel for the treatment of patients with recurrent, metastatic, or persistent cervical cancer.

In February 2019, lifileucel received Fast Track designation from the FDA for development in the treatment of cervical cancer with disease progression on or after chemotherapy.

In March 2019, the protocol for this trial was amended to modify the primary endpoint of ORR to be determined by IRC.

In May 2019, lifileucel received Breakthrough Therapy Designation, or BTD, from the FDA for development in the treatment of cervical cancer.

Results from the C-145-04 clinical trial were reported at ASCO in June 2019.

In November 2019, we amended the C-145-04 trial to collect additional data on early-line patients as well as late-line patients by adding additional cohorts, in anticipation of a changing landscape in this indication, including Cohort 2 for patients that had previously received chemotherapy and anti-PD-1/anti-PD-L1 therapy.

In January 2021, we announced that Cohort 2 of the C-145-04 trial had completed enrollment and that data from this cohort may be supportive of registration because of the expected changing landscape of care for cervical cancer patients.

For example, because of recent regulatory approvals for pembrolizumab, there may be a potential shift from chemotherapy in front-line cervical cancer followed by pembrolizumab in second-line cervical cancer.

We intend to execute our strategy based on dialog and feedback on these cohorts and continue to plan for a potential BLA submission for lifileucel in cervical cancer.

In November 2020, we announced that we had finalized the protocol for our potential registrational clinical trial in NSCLC, IOV-LUN-202, to investigate LN-145 in patients with metastatic NSCLC, without driver mutations, who previously received a single line of approved systemic therapy of combined checkpoint inhibitor and chemotherapy.

The IOV-LUN-202 clinical trial includes three cohorts.

Cohorts 1 and 3 of the IOV-LUN-202 clinical trial are enrolling patients with a PD-L1 TPS of less than one percent at the time they started front-line therapy, and Cohort 2 will enroll patients with a PD-L1 TPS of greater than or equal to one percent at the time they started front-line therapy.

Cohort 3 will also explore manufacturing TIL extracted from core biopsies using our third-generation, or Gen 3, manufacturing process.

In June 2021, we reported that the first patient was dosed in the IOV-LUN-202 clinical trial.

We intend to continue to enroll patients in the IOV-LUN-202 clinical trial throughout 2022.

We are engaged in regulatory discussions with the FDA on IOV-LUN-202 and intend to incorporate FDA feedback to optimize this clinical trial to support further registration in NSCLC.

In June 2021, we reported initial data for LN-145 in Cohort 3B of our IOV-COM-202 clinical trial in metastatic NSCLC.

IOV-COM-202 is a Phase 2, multicenter trial for that is composed of seven cohorts.

Cohort 3B of IOV-COM-202 enrolled patients with metastatic NSCLC that had progressed on prior ICI therapy, including patients with oncogene-driven tumors who received prior tyrosine kinase inhibitor therapy.

Patients were treated with LN-145 monotherapy.

All patients treated in Cohort 3B of the IOV-COM-202 trial received prior anti-PD-1/L1 therapy and all six responding patients also received prior chemotherapy.

We also provided an update on Cohort 3B in November 2021, at the Society for Immunotherapy in Cancer Annual Meeting, or SITC.

C-145-03 is our Phase 2, multicenter trial to assess the safety and efficacy of our product candidate LN-145 for the treatment of patients with metastatic HNSCC.

We redesigned our C-145-03 trial to include multiple cohorts, in order to allow for dosing of TIL therapies produced by multiple manufacturing methods, including our Gen 2 manufacturing process, our Gen 3 manufacturing process, and our PD-1 selected TIL manufacturing process.

Our PD-1 selected TIL manufacturing process results in a product that we refer to as LN-145-S1.

In January 2021, we announced that we are closing the C-145-03 clinical trial after the trial reached its pre-specified enrollment target.

TIL Combinations in Earlier Treatment Settings for Solid Tumors

We are also investigating the potential of our TIL therapies in earlier lines of treatment in combination with pembrolizumab or other ICIs in cancer patients who are naïve to anti-PD-1 therapy, including in four cohorts in our IOV-COM-202 study in solid tumors

as well as in one cohort in our C-145-04 clinical study in cervical cancer.

In addition to its ongoing enrollment in the U.S., the IOV-COM-202 trial has also received regulatory approval in Canada and in certain European countries.

In Cohort 1A of the IOV-COM-202 trial, we are enrolling advanced unresectable or metastatic melanoma patients who are naïve to anti-PD-1 therapy.

In Cohort 2A of the IOV-COM-202 trial, we are enrolling advanced, recurrent, or metastatic HNSCC patients who are naïve to prior immunotherapy including anti-PD-1/anti-PD-L1 therapy.

The patients receive LN-145 in combination with pembrolizumab.

In Cohort 3, which is our C-145-04 cervical cancer study, patients receive TIL plus pembrolizumab.

We reported results from ongoing Cohort 1A of the IOV-COM-202 trial at ASCO in June 2021, as well as provided updated results in November 2021 at SITC.

Our oral presentation at SITC in November 2021 also included initial results for TIL therapy plus pembrolizumab for patients enrolled in Cohort 3 of our C-145-04 cervical cancer study.

The Cohort 1A and Cohort 2A results from the IOV-COM-202 study as well as Cohort 3 from the C-145-04 study demonstrated that lifileucel or LN-145 can be safely combined with pembrolizumab.

The treatment emergent adverse event, or TEAE, profile in all Cohorts was consistent with the underlying advanced disease and the known adverse event profiles of pembrolizumab, lymphodepletion, and IL-2 regimens.

Two additional cohorts, Cohort 3A and 3C in the IOV-COM-202 study, explore LN-145/ICI combination therapies in NSCLC patients.

Cohort 3A is evaluating LN-145 in combination with pembrolizumab in patients with recurrent or metastatic NSCLC who have not received prior immunotherapy, including checkpoint inhibitors.

Cohort 3C is investigating LN-145 therapy in combination with ipilimumab and nivolumab in patients with recurrent or metastatic NSCLC who have previously received one line of approved checkpoint inhibitor monotherapy as the only prior line of systemic therapy.

In September 2021, we announced that our Iovance Cell Therapy Center, or the i CTC, had successfully manufactured and delivered its first clinical batch of LN-145 for the IOV-COM-202 trial, representing our first internally manufactured TIL product.

We continue to supply the IOV-COM-202 trial, and other ongoing trials, with both internally manufactured and externally manufactured TIL products.

Next-Generation and Genetically Modified Product Candidates

Our clinical pipeline also includes next generation TIL product candidates and manufacturing processes, as well as a cytokine-engrafted protein.

Our TIL candidate LN-145-S1, in which TIL are selected for PD-1 expression, is being investigated in post-anti-PD-1 melanoma in Cohort 1B of our IOV-COM-202 basket study as well as in post-anti-PD-1 HNSCC in Cohort 4 of our C-145-03 trial.

We are using our Gen 3 manufacturing process in Cohort 1C of the IOV-COM-202 clinical trial in melanoma and in Cohort 3 of the IOV-LUN-202 clinical trial in NSCLC and have previously used it in the C-145-03 clinical trial in HNSCC.

In November 2019, we announced that our Investigational New Drug, or IND, application for our PBL therapy, IOV-2001, was authorized by the FDA.

Our sponsored clinical trial using this therapy, IOV-CLL-01, was cleared to proceed and patient dosing began in 2020.

IOV-2001 is a non-genetically modified, polyclonal T cell product that is manufactured using a nine-day process starting from 50 mL of patient's blood.

IOV-CLL-01 is a Phase 1/2 clinical trial evaluating the safety and efficacy of IOV-2001 in patients with relapsed or refractory CLL or SLL.

In January 2020, we announced a research collaboration and exclusive worldwide licensing agreement with Cellectis S.A., or Cellectis, a clinical-stage biopharmaceutical company focused on developing immunotherapies based on gene-edited allogeneic chimeric antigen receptor modified T cells.

The worldwide exclusive license enables us to use certain TALEN® technology addressing multiple gene targets to develop TIL that have been genetically modified to create potentially more potent cancer therapeutics for use in several cancer indications.

We are nearing completion of IND-enabling studies under this agreement and expect to initiate our first clinical study in 2022 of a genetically modified TIL product candidate, IOV-4001, in which the gene coding for the PD-1 protein is inactivated.

Financial terms of the license include development, regulatory and sales milestone payments from us to Cellectis, as well as royalty payments based on net sales of TALEN-modified TIL products.

In addition to IOV-4001, we are currently developing additional targets for genetic modification using the TALEN technology, including double-knock out programs in preclinical development.

We continue to explore additional transient and permanent genetic modifications of TILs.

For example, under the amended and restated patent license agreement we entered into May 2021 with National Institutes of Health, or NIH, an agency of the U.S.

Public Health Service within the Department of Health and Human Services, we license a patent family related to cytokine-tethered TILs,

which are intended to potentially expand and activate TILs to achieve better efficacy while avoiding systemic side effects of cytokines.

We are currently developing cytokine-tethered TIL products in preclinical studies.

In addition, in January 2020, we obtained a license from Novartis Pharma AG, or Novartis, to develop and commercialize an antibody cytokine-engrafted protein, which we refer to as IOV-3001.

Under the agreement, we paid an upfront payment to Novartis and may pay milestones involved in initiation of patient dosing in various phases of clinical development for IOV-3001 and approval of a potential product in the U.S., EU, and Japan.

We are currently conducting IND enabling studies of this novel IL-2 analog.

Novartis is also entitled to low-to-mid single digit percentage royalties from commercial sales of IOV-3001.

Investigator-Sponsored Trials

Through our academic collaborators, we are also exploring the potential for TIL therapies in additional indications.

As part of our collaboration program with The University of Texas M.D.

Anderson Cancer Center, or MDACC, two Phase 2 trials were initiated in 2018.

Both trials are sponsored by MDACC.

The first trial, NCT03449108, investigates LN-145 manufactured by us, using our manufacturing processes, to treat patients with soft tissue sarcoma, osteosarcoma, platinum resistant ovarian cancer, and thyroid cancer.

A second trial under the collaboration with MDACC, NCT03610490, was previously active.

This trial treated patients with platinum resistant ovarian cancer, pancreatic and colorectal cancer with TIL manufactured by MDACC.

The data obtained using this manufacturing process may not be representative of our data using our Gen 2 manufacturing process.

We also collaborate with many other academic institutions using our TIL therapies.

For example, a trial in collaboration with The Ohio State University, NCT05176470, is expected to start recruiting in 2022, and explores the use of lifileucel in high-risk melanoma in the neoadjuvant setting.

We are a clinical-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 preparing for potential U.S.

regulatory approval and commercialization of the first autologous T-cell therapy to address a solid tumor cancer.

Our mission is to be the global leader in innovating, developing and delivering tumor infiltrating lymphocyte, or TIL, therapies for patients with solid tumor cancers.

Our autologous TIL therapy platform uses a centralized, scalable and proprietary 22-day manufacturing process to grow polyclonal T-cells unique to each patient and yields a cryopreserved, individualized therapy.

We have applied multiple TIL therapy modalities in clinical trials in solid tumors, including TIL monotherapies for patients with later stage disease who have progressed on or after standard of care, as well as TIL combinations with standard of care therapies in patients who are earlier in their disease, to potentially improve outcomes compared to current standard(s) of care.

Our lead product candidate, lifileucel, is being developed in advanced, or metastatic or unresectable, melanoma as well as in other indications.

Lifileucel was investigated in two consecutive cohorts in a clinical trial of advanced melanoma patients post-anti-PD-1 therapy, including in a prospectively defined pivotal cohort.

These patients had progressed on or after standard of care therapy, which is immune checkpoint inhibitors, or ICIs, and targeted BRAF/MEK inhibitor therapy where appropriate.

Based on the positive results of these cohorts, we initiated a rolling Biologics License Application, or BLA, submission to the U.S.

Food and Drug Administration, or FDA, for lifileucel in August 2022.

We expect to complete this rolling BLA submission in the first quarter of 2023.

Our Phase 3 clinical trial of lifileucel in combination with pembrolizumab, TILVANCE-301, is intended to be registrational in frontline advanced melanoma and serve as a confirmatory clinical trial to support full approval of lifileucel monotherapy in post-anti-PD-1 melanoma.

We are also pursuing registrational strategies for lifileucel in advanced cervical cancer and for our TIL therapy, LN-145, in metastatic non-small cell lung cancer, or NSCLC.

To continuously innovate and maintain our global leadership within the field, we are investigating next generation approaches to optimize TIL products, manufacturing processes and treatment regimens, including a first-in-human clinical trial of our lead genetically modified TIL therapy, IOV-4001.

We are also exploring a 16-day manufacturing process, tumor tissue procurement via core biopsy, additional genetically modified TIL therapies including multiple immune checkpoint gene edits and cytokine-tethered TIL therapies, and a novel interleukin-2, or IL-2, analog, designated IOV-3001, as potential avenues to improve manufacturing timelines, sample collection and supportive treatments involved in the overall TIL therapy process and treatment regimen.

Highlights of our current development pipeline are presented in the figure below:

Platform Technologies and Manufacturing

Our T-cell-based immunotherapy technology platforms are potentially applicable to many solid tumor types and blood cancers.

Each platform is focused on leveraging patient-specific cells to recognize and attack diverse cancer cells that are unique to each patient.

Unlike cell therapies that act on a single or small number of shared antigen targets common to certain tumors, our polyclonal T-cells are personalized therapies designed to target a variety of neoantigens that are unique to the patient or tumor.

The majority of solid tumor immune targets are patient-specific, with fewer than 1% shared among patients.

TIL therapy is our lead T-cell-based immunotherapy platform in multiple advanced solid tumor cancers.

For blood cancers, our peripheral blood lymphocyte, or PBL, therapy platform is based on polyclonal T-cells that are collected from a patient’s blood sample, and then amplified and reinvigorated.

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

Building on the prior TIL therapy clinical trials conducted at single academic centers, including the National Cancer Institute, or NCI, we have investigated TIL therapy in global, multi-center Phase 2 clinical trials in advanced melanoma, cervical cancer, NSCLC and head and neck squamous cell carcinoma, or HNSCC.

Additional information about our clinical trials is summarized below.

In post-anti-PD-1 advanced melanoma, we are investigating lifileucel in our C-144-01 clinical trial that supports our BLA submission and potential approval of lifileucel in advanced post-anti-PD-1 melanoma.

In frontline advanced melanoma patients who are naïve to anti-PD-1 therapy, we are investigating lifileucel in combination with pembrolizumab in the IOV-COM-202 clinical trial and the Phase 3 TILVANCE-301 clinical trial.

TILVANCE-301 is a randomized Phase 3 clinical trial intended to support registration in advanced frontline melanoma as well as to serve as a confirmatory trial for full approval in advanced post-anti-PD-1 melanoma.

We are also executing a registrational strategy for lifileucel in advanced cervical cancer.

C-145-04 is a multicenter Phase 2 clinical trial that is currently enrolling a pivotal cohort to support a BLA in cervical cancer following progression on or after chemotherapy and pembrolizumab.

In NSCLC, we are investigating our TIL therapy, LN-145, in two clinical trials in several NSCLC patient populations with significant unmet need.

IOV-LUN-202 is a clinical trial of LN-145 in advanced NSCLC patients who have progressed following chemotherapy and anti-PD-1 therapy.

IOV-COM-202 also includes cohorts of NSCLC patients treated with LN-145 monotherapy and combination therapy.

Our first genetically modified, PD-1 inactivated TIL therapy, IOV-4001, entered a first-in-human Phase 1/2 clinical trial, IOV-GM1-201, in 2022 in patients with previously treated advanced melanoma and NSCLC.

IOV-4001 utilizes the gene-editing TALEN® technology, licensed from Cellectis S.A., or Cellectis, to inactivate the gene coding for the programmed cell death protein-1, or PD-1.

In metastatic head and neck cancer squamous cell carcinoma, or HNSCC, we are evaluating LN-145 as monotherapy and in combination with pembrolizumab.

The Phase 2 C-145-03 trial began in June 2017 and closed in January 2021 after reaching its pre-specified enrollment target to investigate LN-145 using various manufacturing processes.

Cohort 2A in IOV-COM-202 is evaluating LN-145 in combination with pembrolizumab in patients with HNSCC who are naïve to anti-PD-1 therapy.

PBL Therapy in Blood Cancers

In blood cancers, our clinical trial IOV-CLL-01 is a Phase 1/2 clinical trial evaluating the safety and efficacy of IOV-2001, our polyclonal PBL therapy, in patients with relapsed or refractory chronic lymphocytic leukemia, or CLL, and small lymphocytic lymphoma, or SLL, to receive IOV-2001.

Beyond our Iovance-sponsored clinical trials, we have academic collaborations with leading cancer research centers to investigate TIL therapy, including next-generation processes and technologies, in other cancers and treatment settings.

Next-Generation Therapeutic and Manufacturing Approaches

Our current next-generation technology platforms are designed to optimize TIL therapy, as well as TIL treatment regimen and manufacturing processes, across four key initiatives:

genetic modifications, potency, process optimization and new treatment regimens.

● Genetic modifications:

We are pursuing several targets for genetic modification that utilize the gene-editing TALEN® platform licensed from the clinical-stage biotechnology company, Cellectis.

Programs include single- and double- knockout candidates to further harness the immune system response to cancer and potentially increase the efficiency, potency and application of TIL therapy.

Preclinical development is also ongoing with cytokine-tethered TIL products and additional TIL products and TIL-cell lines using transient and stable gene insertion and inactivation.

Additional transient and permanent genetic modifications of TIL, such as cytokine-tethered TIL, may expand and activate TIL to achieve better efficacy while avoiding systemic side effects of cytokines.

Potential approaches to increase potency of the final TIL product include the sorting and selection of specific TIL, such as PD-1+ selected TIL and CD39/69 double-negative TIL, and the use of certain inhibitors or other reagents in TIL expansion cultures.

Our TIL candidate LN-145-S1 is manufactured from TIL selected for PD-1 expression and has been investigated in post-anti-PD-1 melanoma and post-anti-PD-1 HNSCC patient cohorts in our clinical trials.

● Process optimization:

We are committed to further optimizing and streamlining the processes for manufacturing TIL therapy and collecting tumor samples.

We are investigating a 16-day manufacturing process, or Gen 3, in patient cohorts included in the C-145-03 clinical trial in HNSCC and the IOV-COM-202 clinical trial.

We are also exploring our Gen 3 process to manufacture TIL from core biopsy as a less-invasive collection of tumor samples in a cohort of patients with NSCLC in our IOV-LUN-202 clinical trial.

● New treatment regimens:

We are exploring potential avenues to improve aspects of the TIL treatment regimen.

In 2020, we licensed an antibody cytokine-engrafted protein, or IL-2 analog, which we refer to as IOV-3001, from Novartis.

IOV-4001 is in IND-enabling studies supporting its use as part of the TIL treatment regimen following TIL infusion.

Intellectual Property

We have developed our own patent portfolio based on internal research and development activities.

As a result, we now own a number of pending patent applications and granted patents in the fields of TIL therapy, MIL therapy, and PBL therapy, TIL, MIL, and PBL manufacturing processes, and TIL, MIL, and PBL expansion methods.

For example, we currently own more than 35 U.S.

We have established a leading intellectual property portfolio developed internally and licensed from third parties.

We currently own more than 60 U.S.

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

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More than 35 of these patents are related to our Gen 2 TIL manufacturing processes and have terms that we anticipate will extend to January 2038, not including any patent term extensions or adjustments that may be available.

Our owned and licensed intellectual property portfolio also includes patent applications relating to TIL, MIL, and PBL therapies;

Our owned and licensed intellectual property portfolio also includes patents and patent applications relating to TIL, MIL, and PBL therapies;

frozen tumor-based TIL technologies;

remnant TIL and digest TIL compositions, methods and processes;

methods of treatment of a broad range of cancers using TIL therapies;

methods of manufacturing TIL, MIL, and PBL therapies;

the use of costimulatory molecules in TIL therapy and manufacturing;

stable and transient genetically-modified TIL therapies;

the use of costimulatory and T-cell modulating molecules in TIL therapy and manufacturing;

stable and transient genetically-modified TIL therapies, including genetic knockouts of immune checkpoints;

cytokine-tethered TIL therapies;

methods of using ICIs in combination with TIL therapies;

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Operations and Liquidity

The full impact of the novel strain of coronavirus, or COVID-19, pandemic is unknown and rapidly evolving.

The full impact of the novel strain of coronavirus, or COVID-19, pandemic is unknown and continuously evolving.

While the potential economic impact brought by and over the duration of the COVID-19 pandemic may be difficult to assess or predict, the COVID-19 pandemic has resulted in significant disruption of global financial markets, which could in the future negatively affect our liquidity.

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government securities, we do not believe that the COVID-19 pandemic will have a material impact on our current investment liquidity.

Although there is uncertainty related to the anticipated impact of the recent COVID-19 pandemic on our future results, we believe our current cash reserves leave us well-positioned to manage our business through this crisis as it continues to unfold.

Although there is uncertainty related to the anticipated impact of the recent COVID-19 pandemic on our future results, we believe our current cash reserves leave us well positioned to manage our business in light of the COVID-19 pandemic.

However, the impacts of the COVID-19 pandemic are broad-reaching and continuing and the financial impacts associated with the COVID-19 pandemic are still uncertain.

The COVID-19 pandemic is ongoing, and its dynamic nature, including uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the duration of the pandemic, and actions that would be taken by governmental authorities to contain the pandemic or to treat its impact, makes it difficult to forecast any effects on our results for the fiscal year ending December 31, 2022.

Despite the economic uncertainty resulting from the COVID-19 pandemic, we intend to continue to focus on the development of our product candidates.

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Components of Operating Results

We have not yet generated any revenues since our formation, and we currently do not anticipate that we will generate any significant revenues from the sale or licensing of our product candidates during the 12 months from the date these financial statements are issued.

We have not yet generated any revenues since our formation, With the submission of the rolling BLA for lifileucel for metastatic melanoma and our expected completion of the submission in the first quarter of 2023, we anticipate generating revenues from the sale of products during the 12 months from the date these financial statements are issued, however, such revenue may not be material.

Our ability to generate revenues in the future will depend on our ability to complete the development of our product candidates and to obtain regulatory approval for them.

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General and Administrative

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

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 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.

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As a clinical stage company that is currently engaged in the development of novel cancer immunotherapy products, we have not yet generated any revenues from our biotechnology business or otherwise since our formation.

Our ability to generate revenues in the future will depend on our ability to complete the development of our product candidates and to obtain regulatory approval for them.

Our ability to generate revenues in the future will depend on our ability to complete the development of our product candidates and to

obtain regulatory approval for them.

Our major sources of funding to date have been proceeds from various public and private offerings of our equity securities (both common stock and preferred stock), option and warrant exercises, and interest income.

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Research and development expense for the year ended December 31, 2022 increased by $35.7 million, or 14%, compared to the year ended December 31, 2021.

The increase was primarily attributable to (i) a $29.2 million increase in payroll and related expenses and a $21.1 million increase in stock-based compensation expenses, both driven by increased hiring of research and development employees to support our on-going and planned clinical development activities, (ii) a $14.9 million increase in facility and related costs associated with the i CTC and the build-out of our new corporate headquarters office, (iii) a $5.1 million increase in clinical trial costs driven by continued enrollment in our IOV-COM-202 and IOV-LUN-202 clinical trials and purchases of study drug used in these clinical trials, and (iv) a $2.2 million increase in travel and others, including allocated costs associated with the expansion of our infrastructure, including information systems, to further support the growth in the organization and operations associated with our clinical trials and pre-commercial efforts.

These increases were partially offset by a $10.0 million decrease in research alliance costs due to a one-time license fee from Novartis to further develop IOV-3001 which was recognized in full in 2020, and a $5.2 million decrease in manufacturing costs driven by completion of our pivotal clinical trials.

The increase was primarily attributable to (i) a $23.9 million increase in payroll and related expenses and a $9.4 million increase in stock-based compensation expenses, both driven by increased hiring of research and development employees to support our on-going and planned clinical development activities, (ii) a $16.2 million increase in facility related expenses, including depreciation expenses associated with the i CTC and the build-out of our new corporate headquarters office, (iii) a $3.5 million increase in research and research alliance activities due to increased spend in lab supplies and consumables to support preclinical activities, (iv) a $2.7 million increase in patient advocacy and physician outreach and travel to support our planned commercial launch, and (v) a $2.4 million increase in license costs associated with the expansion of our information technology infrastructure to support our clinical and manufacturing activities at the i CTC.

These increases were partially offset by a $17.4 million decrease in clinical trial costs, including clinical trial drug costs, and a $5.0 million decrease in manufacturing costs driven by completion of enrollment in pivotal cohorts of our clinical trials.

General and Administrative Expense (in thousands)

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General and administrative expense for the year ended December 31, 2022, increased by $20.4 million, or 24%, compared to the year ended December 31, 2021.

The increase was primarily attributable to (i) a $9.8 million increase in payroll and related expenses and a $7.8 million increase in stock-based compensation expenses, both resulting from increases in headcount to support the growth in the overall business and related corporate infrastructure (ii) a $4.3 million increase in insurance and intellectual property filing related costs, and (iii) a $2.8 million increase in other costs, including professional fees and costs associated with the build-out of our new headquarter office and IT infrastructure to support the continued growth in the overall company.

These costs were partially offset by a $1.2 million decrease in pre-commercial and marketing costs due to reprioritization of corporate initiatives during the year ended December 31, 2021.

The increase was primarily attributable to (i) a $10.0 million increase in payroll and related expenses and a $4.8 million increase in stock-based compensation expenses, both resulting from increases in headcount to support the growth in the overall business and related corporate infrastructure, (ii) a $3.4 million increase in marketing, advertising and travel related costs related to branding awareness to support our planned commercial launch, (iii) a $1.7 million increase in other costs, including professional fees and costs associated with the build-out of our new headquarter office and our information technology infrastructure to support the continued growth in the overall company, and (iv) a $0.5 million increase in depreciation expenses and facility related costs associated with the build-out of our new corporate headquarters.

Interest income, net (in thousands)

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

Net interest income decreased by $1.9 million, or 81%, due primarily to a decrease in interest rates in 2021 as compared to the same period in 2020.

Net interest income increased by $2.5 million, or 562%, due primarily to an increase in cash and cash equivalents as well as returns resulting from increased interest rates in 2022 as compared to the same period in 2021.

Net Loss (in thousands)

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Net loss for the year ended December 31, 2022, increased by $53.6 million or 16%, compared to the year ended December 31, 2021.

The increase in our net loss was due to the continued expansion of our research and development activities, increased clinical trials, and the overall growth of our corporate infrastructure.

The increase in our net loss was due to the continued expansion of our research and development activities, and the overall growth of our corporate infrastructure.

We anticipate that we will continue to incur net losses in the future as we further invest in our research and development activities, including our commercial readiness and clinical development.

Results of Operations for the Years Ended December 31, 2021 and 2020

We did not generate any revenues during the years ended December 31, 2020 and 2019, respectively.

Costs and expenses

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Research and development expense for the year ended December 31, 2021, increased by $57.3 million, or 28%, compared to the year ended December 31, 2020.

The increase was primarily attributable to (i) a $20.9 million increase in payroll and related expenses driven by a higher number of full-time research and development employees and outside services, (ii) a $10.0 million increase for the license to further develop IOV-3001 obtained from Novartis, (iii) a $8.3 million increase in stock-based compensation expenses, and (iv) a $6.6 million increase in clinical trial costs due to an increase in enrollment across all the trials and initiation of new clinical trials.

Further, a $0.8 million increase in research consumables cost contributed to the increase.

These increases were partially offset by lower manufacturing costs by $9.1 million due to decreased production runs in 2020 as a result of completion of enrollment in the melanoma pivotal program and a $2.3 million decrease in research alliance expenses due to the COVID-19 pandemic’s impact on patient enrollment in the clinical trials with our research alliance partners.

The increase was primarily attributable to (i) a $29.2 million increase in payroll and related expenses and a $21.1 million increase in stock-based compensation expenses, both driven by increased hiring of research and development employees to support our on-going and planned clinical development activities, (ii) a $14.9 million increase in facility and related costs associated with the i CTC and the build-out of our new corporate headquarters office, (iii) a $5.1 million increase in clinical trial costs driven by continued enrollment in our IOV-COM-202 and IOV-LUN-202 clinical trials and purchases of clinical trial drug used in these clinical trials, and (iv) a $2.2 million increase in travel and others, including allocated costs associated with the expansion of our infrastructure, including information systems, to further support the growth in the organization and operations associated with our clinical trials and pre-commercial efforts.

General and Administrative Expense (in thousands)

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General and administrative expense for the year ended December 31, 2021, increased by $23.5 million, or 39%, compared to the year ended December 31, 2020.

The increase was primarily attributable to (i) a $8.3 million increase in stock-based compensation expenses and a $7.1 million increase in payroll and related expenses driven by a higher number of full-time general and administrative employees and higher average stock price, (ii) a $2.1 million increase in director’s and officer’s insurance premiums, (iii) a $1.1 million increase in intellectual property legal costs, and (iv) a $1.1 million in market research activities as we prepare for commercialization.

These increases were partially offset by a $0.7 million decrease in travel expenses.

These costs were partially offset by a $1.2 million decrease in pre-commercial and marketing costs due to reprioritization of corporate initiatives during the year ended December 31, 2021.

Interest income, net (in thousands

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The increase in our net loss was due to the continued expansion of our research and development activities, increased clinical trials, and the overall growth of our corporate infrastructure.

We anticipate that we will continue to incur net losses in the future as we further invest in our research and development activities, including our commercial readiness and clinical development.

Liquidity and Capital Resources

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

We currently do not anticipate that we will generate any significant revenues from the sale or licensing of any products during the 12 months from the date these financial statements are issued.

We expect to further increase our research and development activities, especially continuing pre-commercial activities and completing the construction of our tenant improvements to the i CTC facility and new corporate headquarters office, which will increase the amount of cash we will use during 2022 and beyond.

Specifically, we expect increased spending on clinical trials, research and development activities, higher payroll expenses as we increase our professional and scientific staff and continue our expansion of manufacturing activities including completion of i CTC

facility as well as completing the construction of the tenant improvement to our new corporate headquarters office in San Carlos, California.

We currently anticipate making aggregate capital expenditures between approximately $10.0 million and $11.0 million during the next 12 months, which is expected to primarily include equipment to be used for clinical trials, research and manufacturing at i CTC, as well as spending associated with the expansion of our manufacturing facilities of offices.

As of December 31, 2021, we had $602.1 million in cash, cash equivalents, investments, and restricted cash ($78.2 million of cash and cash equivalents, $426.2 million in short-term investments, $91.6 million in long-term investments and $6.1 million in restricted cash).

With the submission of the rolling BLA for lifileucel for metastatic melanoma and the expected completion of the submission in the first quarter of 2023, we anticipate generating revenue from the sale of products during the 12 months from the date these consolidated financial statements are issued, however such revenues may not be material.

We expect to continue to incur significant expenses to support our research and development activities, on-going pre-commercial activities and completion of the construction of tenant improvements for the i CTC facility during the remainder of 2023 and beyond.

Specifically, we expect increased spending on clinical trials, research and development activities, and higher payroll expenses as we increase our professional and scientific staff and continue our expansion of manufacturing activities, including the ramp-up of the i CTC.

Based on the funds we have available as of the date of our consolidated financial statements, 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 from the date these consolidated financial statements are issued.

We currently anticipate making aggregate capital expenditures of approximately $20.0 million during the next 12 months, which is expected to primarily include equipment to be used for clinical trials, research and manufacturing at the i CTC, as well as spending associated with the expansion of our manufacturing facilities of offices.

As of December 31, 2022, we had $478.3 million in cash, cash equivalents, investments, and restricted cash ($231.7 million of cash and cash equivalents, $240.1 million in short-term investments, and $6.4 million in restricted cash).

Based on the funds we have available as of the date of the filing of this Annual Report on Form 10-K, we believe that we have sufficient capital to fund our anticipated operating expenses and capital expenditure for at least 12 months from the date of filing this report.

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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 September 17, 2019, we filed a shelf registration statement with the SEC for the issuance up to an aggregate amount of $400 million (the “2019 Shelf Registration Statement”), which was declared effective on September 24, 2019.

The 2019 Shelf Registration Statement was terminated upon effectiveness of the 2020 Automatic Shelf Registration Statement (as discussed below).

On September 17, 2019, we filed a shelf registration statement, or the 2019 Shelf Registration Statement, with the SEC for the issuance up to an aggregate amount of $400 million, which was declared effective on September 24, 2019.

The 2019 Shelf

Registration Statement was terminated upon effectiveness of the 2020 Automatic Shelf Registration Statement as discussed below.

No shares were sold under the 2019 Shelf Registration Statement prior to its termination.

On May 27, 2020, we filed an automatic shelf registration statement with the SEC for the issuance of an indeterminate amount of Shelf Securities (the “2020 Automatic Shelf Registration Statement”), which was immediately effective upon filing with the SEC.

On May 27, 2020, we filed an automatic shelf registration statement, or the 2020 Automatic Shelf Registration Statement, with the SEC for the issuance of an indeterminate amount of securities (the “Shelf Securities”), which was immediately effective upon filing with the SEC.

Upon filing of the 2020 Automatic Shelf Registration Statement, the 2019 Shelf Registration Statement was terminated.

On June 2, 2020, we sold 19,475,806 shares of our common stock at a public offering price of $31.00 per share pursuant to the 2020 Automatic Shelf Registration Statement (the “June 2020 Public Offering”).

We received gross proceeds of $603.7 million and net proceeds of $567.0 million, after deducting underwriting discounts and offering expenses.

Following the public offering, the 2020 Automatic Shelf Registration Statement remains available for the future issuance of an indeterminate amount of Shelf Securities.

On February 8, 2021, we entered into an Open Market Sale Agreement (the “Sales Agreement”), with Jefferies LLC (“Jefferies”), with respect to an “at the market” offering program, under which we may, 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.

The issuance and sale, if any, of shares of our common stock under the Sales Agreement will be made pursuant to a prospectus supplement, dated February 8, 2021, to the 2020 Automatic Shelf Registration Statement.

During the year ended December 31, 2021, we received $203.2 million in net proceeds through the sale of 6,474,099 shares of our common stock.

On June 2, 2020, we sold 19,475,806 shares of our common stock at a public offering price of $31.00 per share pursuant to the 2020 Automatic Shelf Registration Statement, or the June 2020 Public Offering.

We received gross proceeds of $603.7 million and net proceeds of $567.0 million from the June 2020 Public Offering, after deducting underwriting discounts and offering expenses.

Following the June 2020 Public Offering, the 2020 Automatic Shelf Registration Statement remains available for the future issuance of an indeterminate amount of Shelf Securities.

On February 8, 2021, we entered into an Open Market Sales Agreement, or the First Sales Agreement, with Jefferies LLC, or Jefferies, with respect to an “at the market” offering program, under which we may, 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 Sales Agreement, or the Second Sales Agreement, with Jefferies, which superseded and replaced the First Sales Agreement dated February 8, 2021.

Pursuant to the terms of the Second Sales Agreement, we may, from time to time, in our sole discretion, issue and sell through Jefferies, acting as sales agent, up to $500.0 million of shares of our common stock.

The issuance and sale, if any, of shares of our common stock under the First Sales Agreement and the Second Sales Agreement will be made pursuant to a prospectus supplement, dated February 8, 2021, and November 18, 2022, respectively, to the 2020 Automatic Shelf Registration Statement.

During the year ended December 31, 2022, we received gross proceeds of $194.2 million and net proceeds of $189.5 million, after deducting underwriting discounts and offering expenses, through the sale of 29,788,993 of our common stock, under both the First Sales Agreement and Second Sales Agreement.

During the year ended December 31, 2021, we received gross proceeds of $207.9 million and net proceeds of $203.2 million, after deducting underwriting discounts and offering expenses, through the sale of 6,474,099 shares of our common stock, under the First Sales Agreement.

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.

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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.

Net cash used in operating activities for the year ended December 31, 2021 was $227.9 million compared to $205.1 million for the same period in 2020.

The increase of $22.8 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 $38.3 million primarily driven by higher stock-based compensation expenses, amortization of premiums on investments and operating right-of-use assets associated with our office and manufacturing facility as well as embedded leases, and depreciation expenses.

In addition, it reflects a reduction in our operating lease liabilities associated with payments on lease arrangements, offset by an increase in accruals and accounts payable primarily related to our increased workforce, overall growth in the business and operations, and the timing of vendor invoicing and related payments.

In addition, it reflects a $5.6 million reduction in our operating lease liabilities associated with payments on lease arrangements, offset by a $16.0 million increase in accruals and accounts payable primarily related to our increased workforce, overall growth in the business and operations, and the timing of vendor invoicing and related payments.

Net cash used in operating activities for the year ended December 31, 2020 was $205.1 million compared to $158.9 million for the same period in 2019.

The increase of $46.2 million in cash used in operating activities was primarily attributable to an increase in net loss and increase in accruals primarily related to our research and development activities, which were partially offset by an increase in non-cash charges of $22.8 million, primarily driven by higher-stock-based compensation expenses and amortization of premiums on investments.

Net cash used in operating activities for the year ended December 31, 2019 was $158.9 million compared to $101.2 million for the same period in 2018.

The increase of $57.7 million in cash used in operating activities was due to an increase in net loss and an increase in operating lease payments, which were partially offset by an increase in non-cash charges of $9.0 million, primarily driven by higher-stock-based compensation expenses and amortization of right-of-use assets, and an increase in accruals due to the timing of vendor invoicing and related payments.

Investing Activities

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, 2021 was $0.1 million compared to net cash used in investing activities of $317.9 million.

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.

Net cash provided by investing activities for the year ended December 31, 2021 was $0.1 million compared to net cash used in investing activities of $317.9 million for the same period in 2020.

The increase in cash provided by investing activities of $318.0 million was primarily due to the timing of maturities and purchases of investments and lower capital expenditures in 2021.

Net cash used in investing activities for the year ended December 31, 2020 was $317.9 million compared to net cash provided by $90.0 million for the same period in 2019.

The increase in net cash used in investing activities of $407.9 million was due primarily to purchases of investments with the proceeds received from the June 2020 Public Offering and an increase in capital expenditures to support the i CTC build-out.

Net cash provided by investing activities for the year ended December 31, 2019 was $90.0 million compared to net cash used in investing activities of $386.3 million for the same period in 2018.

The increase in net cash provided in 2019 was due primarily to the timing of maturities and purchases of investments.

Financing Activities

Net cash provided by financing activities for the year ended December 31, 2021 was $239.3 million compared to net cash provided of $576.4 million.

The net cash provided by financing activities during the year ended December 30, 2021 related to $203.2 million cash proceeds from our “at the market” offering and $33.5 million of cash receipts from the issuance of common stock upon the exercise of stock options.

The net cash provided by financing activities during the year ended December 31, 2020 primarily related to $567.0 million cash proceeds received in the June 2020 public offering and $9.7 million cash proceeds from issuance of common stock upon exercise of stock options in 2021.

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 in financing activities during the year ended December 31, 2020 primarily related to $567.0 million received from the June 2020 Public Offering and $9.7 million cash proceeds received in issuing common stock upon exercise of stock options.

Net cash provided by financing activities for the year ended December 31, 2019 related to cash proceeds received in issuing common stock upon exercise of stock options.

The net cash provided by financing activities during the year ended December 30, 2022, related to $189.5 million net cash proceeds from our “at the market” offering, $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.

Net cash provided by financing activities for the year ended December 31, 2021 was $239.3 million compared to net cash provided of $576.4 million for the same period in 2020.

The net cash provided by financing activities during the year ended December 30, 2021, related to $203.2 million net cash proceeds from our “at the market” offering and $33.5 million of cash receipts from the issuance of common stock upon the exercise of stock options.

The net cash provided by financing activities during the year ended December 31, 2020, primarily related to $567.0 million net cash proceeds received in the June 2020 public offering and $9.7 million cash proceeds from issuance of common stock upon exercise of stock options in 2021.

Net cash provided by financing activities for the year ended December 31, 2020, was $576.4 million compared to net cash provided of $6.1 million for the same period in 2019.

The net cash provided in financing activities during the year ended December 31, 2020, primarily related to net cash proceeds of $567.0 million received from the June 2020 Public Offering and $9.7 million cash

proceeds received in issuing common stock upon exercise of stock options.

Net cash provided by financing activities for the year ended December 31, 2019, related to cash proceeds received in issuing common stock upon exercise of stock options.

The net cash provided by financing activities of $424.3 million for the year ended December 31, 2018 primarily related to $398.8 million of cash proceeds received from January and October 2018 public offerings, $15.8 million cash proceeds from exercise of warrants, and $10.0 million cash proceeds from issuing common stock upon exercise of stock options.

Contractual Obligations

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These arrangements may be material individually, and in the event that milestones for multiple products covered by these arrangements were reached in the same period, the aggregate charge to expense could be material to the results of operations in any one period.

In addition, these arrangements often give us the discretion to unilaterally terminate development of the product, which would allow us to avoid making the contingent payments.

The contractual obligations table above excludes estimated equipment and construction costs of approximately $10.0 million to $11.0 million over the next year for the i CTC facility in Philadelphia, PA and our new corporate headquarters’ office in San Carlos, CA.

In addition, these arrangements often give us the discretion to unilaterally terminate development of the product, which would allow us to avoid making contingent payments.

The contractual obligations table above excludes estimated equipment and construction costs of approximately $20.0 million over the next year for the i CTC facility in Philadelphia, PA.

Off-Balance Sheet Arrangements

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The financial terms of these contracts are subject to negotiations and may vary from contract to contract and may result in uneven payment flow.

We accrue and expense costs for clinical trial activities performed by third parties based upon estimates of work completed to date for each clinical trial in accordance with agreements established with CROs, hospitals, and clinical investigators.

Accruals for CROs and CMOs are recorded based on estimates of services received and efforts expended pursuant to agreements established with CROs, CMOs and other outside service providers.

We determine our estimates through discussions with internal clinical stakeholders and outside service providers as to the progress or stage of completion of clinical trials or services and the contracted fee to be paid for such services.

Included in our clinical development costs are investigator costs, which are costs associated with treatments administered at clinical sites as required under each clinical study protocol.

Our estimates for clinical investigator costs and timing of expense recognition will depend on a number of factors that include, but are not limited to, (i) the overall number of patients that enroll in the trial at each individual site, (ii) the length of study enrollment period, (iii) discontinuation and completion rates of patients, (iv) duration of patient safety follow-ups, (v) the number of sites included in the clinical trial, and (vi) the contracted fee of each participating site for patient treatment while on study, which can vary greatly for several reasons including, but not limited to, geographic region, medical center or physician costs, and overhead costs.

In addition, our estimates for per patient trial costs will vary based on a number of factors that include, but are not limited to, the extent of additional treatments that may be administered by investigators as a result of patient health status, recoverability of patient costs through insurance carriers of patients, and unanticipated cost of injuries incurred as a result of the study treatment.

We accrue for estimated expenses resulting from obligations under investigator site agreements as the timing of payments does not always timely align with the periods over which the treatments are administered by the clinical investigators.

We accrue and expense costs for clinical trial activities performed by third parties based upon the work completed to date for each clinical trial in accordance with agreements established with CROs, hospitals, and clinical investigators.

Accruals for CROs and CMOs are recorded based on services received and efforts expended pursuant to agreements established with CROs, CMOs and other outside service providers.

We determine our costs through discussions with internal clinical stakeholders and outside service providers as to the progress or stage of completion of clinical trials or services and the contracted fee to be paid for such services.

Included in our clinical development costs are investigator costs, which are costs associated with treatments administered at clinical sites as required under each clinical trial protocol.

Our estimates for clinical investigator costs and timing of expense recognition will depend on a number of factors that include, but are not limited to, (i) the overall number of patients that enroll in the trial at each individual site, (ii) the length of clinical trial enrollment period, (iii) discontinuation and completion rates of patients, (iv) duration of patient safety follow-ups, (v) the number of sites included in the clinical trial, and (vi) the contracted fee of each participating site for patient treatment while on clinical trial, which can vary greatly for several reasons including, but not limited to, geographic region, medical center or physician costs, and overhead costs.

We accrue estimated expenses resulting from obligations under investigator site agreements as the timing of payments does not always timely align with the periods over which the treatments are administered by the clinical investigators.

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.

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Inputs used in our determination of estimates discussed above may vary from actual, which will result in adjustments to research and development expense in future periods.

Changes in these estimates that result in material changes to our accruals could materially affect our results of operations.

Our historical estimates have not been materially different from actual amounts recorded.

Inflation has not had a material effect on our business, financial condition, or results of operations over our two most recent fiscal years.

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