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Item 7. Management’s Discussion and Analysis

2025-02-27 compared with 2024-02-28 · 268 added, 175 removed, 277 unchanged (62% of the section changed)

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

With the recent approval of our biologics license application, or BLA, we are executing the U.S.

launch of Amtagvi™ (lifileucel), the first product within our autologous TIL cell therapy platform, while also marketing Proleukin ® (aldesleukin), an interleukin-2, or IL-2, product used in the Amtagvi™ treatment regimen.

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 is approved under accelerated approval based on an endpoint of overall response rate, or ORR.

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™ is the first and the only one-time, individualized T cell therapy to receive U.S.

Food and Drug Administration, or FDA, approval for a solid tumor cancer.

Amtagvi ® and Proleukin ® are part of a treatment regimen that also includes lymphodepletion.

Iovance was founded to build upon the promise of TIL cell therapy that was previously demonstrated in single-center clinical trials at academic centers, including the National Cancer Institute, or the NCI.

Our multi-center trials, novel TIL products, manufacturing processes, facilities, and bioanalytical platforms have transformed TIL cell therapy into a commercially viable treatment which many more patients with cancer can access.

We manufacture Amtagvi™ and our investigational TIL cell therapies using a centralized, scalable and proprietary 22-day manufacturing process which rejuvenates and multiplies polyclonal T cells unique to each patient into the billions and yields a cryopreserved, individualized therapy.

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

We are investigating TIL monotherapies for patients with later stage disease who were previously treated with standard of care therapies and TIL combinations with standard of care therapies to potentially improve outcomes in patients who are earlier in their disease.

These trials include two ongoing registrational trials to support a supplementary BLA, or sBLA, of our TIL cell therapies in frontline advanced melanoma and in advanced non-small cell lung cancer following standard of care chemo-immunotherapy.

We are also developing next generation therapies using TIL, such as genetically modified TIL cell therapy.

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.

Corporate Strategy

Be the global leader in innovating, developing and delivering TIL cell therapy

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.

Through the U.S.

launch of Amtagvi™ and the advancement of our pipeline, we are committed to continuous innovation in developing TIL cell therapy and optimizing 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

Our top priority is commercialization of Amtagvi™ in the U.S.

for the treatment of patients with post-anti-PD-1 advanced melanoma, for which we received FDA approval on February 16, 2024.

We have experienced marketing, payer access and distribution teams as well as a sales force with extensive experience in oncology and cell therapy.

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

More than half of the members of our field teams have prior cell therapy experience.

The four primary areas of our Amtagvi™ launch efforts include:

● onboarding of authorized treatment centers, or ATCs, for commercial launch with the goal of activating 50 ATCs within 90 days of the BLA Prescription Drug User Fee Act date of February 24, 2024;

● collaboration with healthcare professionals, or HCPs, who will be administering our product;

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;

● ongoing and continuous communication with payors about the value of Amtagvi™.

Prepare for commercial manufacturing to meet forecasted 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.

To date, more than 700 patients have been treated with Iovance TIL cell therapy products manufactured using our proprietary processes across multiple indications.

Iovance TIL cell therapies are manufactured for commercial use and clinical trials at our manufacturing facility, the Iovance Cell Therapy Center, or the i CTC, and by a contract manufacturing organization, or CMO.

We are building capacity to treat several thousands of cancer patients annually at the i CTC, which is the first centralized and scalable current Good Manufacturing Practice, or cGMP, manufacturing facility dedicated to producing TIL.

Located in Philadelphia, Pennsylvania, the 136,000 square feet i CTC is also among the largest cell therapy manufacturing facilities in existence.

Additional expansion at the i CTC is under way which will significantly increase this capacity.

The proximity of the i CTC to multiple airports facilitates delivery of TIL cell therapies to treatment centers, with the i CTC expected to cover logistics and delivery of TIL cell therapies in both North America and Europe.

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

We are also exploring future TIL manufacturing processes, as well as next-generation treatments and technologies, which may further streamline development timelines and costs.

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

In 2018, we began using our Gen 2 TIL manufacturing process, which reduced TIL manufacturing time to 22 days while producing a cryopreserved TIL product.

The Gen 2 process was used to manufacture Amtagvi™ for the clinical trial that supported FDA approval, and most of our ongoing clinical trials use the Gen 2 process.

Amtagvi™ is approved for commercial manufacturing at the i CTC.

In addition, our CMO is approved for additional capacity to supplement our internal manufacturing.

We plan to carefully manage our cost structure and reduce the long-term cost of manufacturing our products.

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

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

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 MEK inhibitor.

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.

Based on the unmet need in post-anti-PD-1 advanced melanoma, as well as initial clinical data, lifileucel previously received a Regenerative Medicine Advanced Therapy, or RMAT, designation from the FDA in 2018.

Amtagvi ® is manufactured using a proprietary process to collect and multiply a patient’s unique T cells from a portion of their tumor.

Amtagvi ® returns billions of the patient’s T cells back to the body to fight cancer.

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

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.

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

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.

Patient-specific TIL are manufactured using our commercial Gen 2 manufacturing process.

Upon arrival at the 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, so they can be returned to the patient to fight cancer cells.

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.

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Treatment Regimen.

The patient’s cell therapy treatment begins with a preparative regimen of non-myeloablative lymphodepletion, or NMA-LD, to suppress the immunosuppressive tumor microenvironment, which we believe will enhance the efficacy of TIL cell therapy.

After NMA-LD, the patient is treated at the ATC with Amtagvi™, followed by a short course of up to six doses of Proleukin ® to promote T cell activity in the body after TIL infusion.

Until now, there were no FDA approved therapies in this treatment setting for advanced melanoma after anti-PD-1 therapy.

In May 2023, we acquired the worldwide rights to Proleukin ® (aldesleukin) 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, allows Iovance to secure its supply chain and logistics surrounding TIL cell therapy administration and lowers cost of goods and clinical trial expenses for Proleukin ® used with TIL cell therapies.

Proleukin ® is an IL-2 product used in the Amtagvi™ treatment regimen.

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

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

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

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.

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● 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 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 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, by blinded independent review committee.

● Non-Small Cell Lung Cancer:

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

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

The IOV-COM-202 trial in solid tumors also includes cohorts of NSCLC patients treated with LN-145 monotherapy and combination therapy.

● Gynecological Cancers:

We are planning to initiate a clinical trial for lifileucel TIL cell therapy in endometrial cancer to potentially address the unmet need for patients previously treated with anti-PD-1 therapy.

We also are exploring lifileucel in advanced cervical cancer in the C-145-04 multicenter Phase 2 clinical trial.

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, PD-1 inactivated TIL cell 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.

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.

LN-145 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

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.

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● 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.

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 also ongoing with cytokine-tethered TIL products and additional TIL products and TIL-cell lines using transient and stable gene insertion and inactivation, which may expand and activate TIL to achieve better efficacy while avoiding systemic side effects of cytokines.

We are exploring potential approaches to increase potency of the final TIL product through sorting and selection of specific TIL, such CD39/69 double-negative TIL, and the use of certain inhibitors or other reagents in TIL expansion cultures.

We have also manufactured and investigated patient cohorts treated with TIL candidate, LN-145-S1, manufactured from TIL selected for PD-1 expression.

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.

IND-enabling studies are investigating IOV-3001, an antibody cytokine-engrafted protein, or IL-2 analog, which we licensed from Novartis Pharma AG.

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.

Intellectual Property

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12,188,048 and 12,194,061.

More than 40 of these patents are related to our Gen 2 TIL manufacturing processes and have terms that we anticipate will extend to January 2038, not including any patent term extensions or adjustments that may be available.

More than 40 of these patents are related to our Gen 2 TIL manufacturing processes and have terms that we anticipate will extend to October 2037 or January 2038, not including any patent term extensions or adjustments that may be available.

Our owned and licensed intellectual property portfolio also includes patents and patent applications relating to TIL, marrow-infiltrating lymphocytes, or MIL, and peripheral blood lymphocyte, or PBL, therapies;

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cytokine-tethered TIL cell therapies;

methods of using ICIs in combination with TIL cell therapies;

methods of using immune checkpoint inhibitor, or ICIs, in combination with TIL cell therapies;

TIL selection technologies;

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Components of Operating Results

Subsequent to the acquisition of Proleukin ® in May 2023, or the Acquisition, we began to sell Proleukin ® .

Proleukin ® is currently being used in multiple active studies across multiple therapeutic areas and indications and investigated alongside TIL cell therapies within a number of oncology indications.

Proleukin ® is also part of our regimens of TIL cell therapy, including Amtagvi™ (lifileucel), and is used in our multiple clinical trials.

Revenues for the year ended December 31, 2023 represents product sales of Proleukin ® primarily in licensed markets outside of the U.S.

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

With the recent BLA approval, we expect to generate revenues from the sale of our product Amtagvi™.

However, such revenues for Amtagvi™ and Proleukin ® may not be material during the 12 months from the date the consolidated financial statements are issued and this Annual Report on Form 10-K is filed.

Our ability to generate revenues in the future will depend on our ability to successfully execute the launch of Amtagvi™, integrate the Proleukin ® business and market Proleukin ® , and complete the development of our product candidates and obtain regulatory approval for them.

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.

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.

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.

In addition, non-U.S.

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

Costs and Expenses

Cost of sales

Cost of sales includes the cost of Proleukin ® inventories and other costs that are directly associated with the purchase and sales of Proleukin ® .

In addition, amortization expense for the fair value step-up of acquired Proleukin ® inventory and the acquired intangible asset related to the developed technology are included in 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.

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

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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 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 TM (lifileucel).

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.

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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 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.

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

Interest income, net

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

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 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.

market and outside of the U.S.

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

Interest and other income, net

Interest and other income, net is derived from our interest-bearing cash, cash equivalents and investment balances as well as other income associated with non-recurring activities such as lease terminations.

Income tax benefit

Income tax benefit pertains to the operations in the United Kingdom and realization of related deferred taxes.

Income tax benefit pertains to the operations in the UK and realization of related deferred taxes.

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

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(in thousands)

Revenue - product sales

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 of worldwide rights to Proleukin ® in May 2023.

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.

Total product revenue

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 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.

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.

Costs and expenses

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Years Ended December 31,

Increase (Decrease)

(in thousands)

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Cost of sales

Cost of sales for the year ended December 30, 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 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.

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 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 $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 activities are central to our business model.

Product candidates in later stage of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

We separate our research and development expenses into two broad categories:

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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 “Other clinical, preclinical and research programs under development.” For direct research and development expenses, we track specific project research and development expenses that are directly attributable to our preclinical and clinical development candidates that have been selected for further development.

“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.

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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Years Ended December 31,

Increase (Decrease)

Direct research and development expense by product candidate

TIL, including combination therapy

Lifileucel monotherapy

Combination Therapy

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Others clinical, preclinical, and research programs under development

Indirect research and development expenses

Indirect research and development expense

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.

Interest income, net

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.

Interest and other income, net

Years Ended December 31,

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(in thousands)

Interest income, net

Interest income 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

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.

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 United Kingdom.

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,

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(in thousands)

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.

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 ® .

Results of Operations for the Years Ended December 31, 2023 and 2022

No revenue was recorded for the years ended December 31, 2022 and 2021.

Years Ended December 31,

Increase (Decrease)

(in thousands)

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.

Costs and expenses

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Years Ended December 31,

Increase (Decrease)

(in thousands)

Cost of sales

Research and development expense

Selling, general, and administrative expense

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.

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 $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 iCTC 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.

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 activities are central to our business model.

We separate our research and development expenses into two broad categories:

direct and indirect.

Additionally, with respect to

direct research and development expenses, we further divide expenses into the following sub-categories:

“TIL, including combination

therapy,” “Next Generation,” and “Other clinical, preclinical and research programs under development.” For direct research and development expenses, we track specific project research and development expenses that are directly attributable to our preclinical and clinical development candidates that have been selected for further development.

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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Years Ended December 31,

Increase (Decrease)

Direct research and development expense by product candidate

TIL, including combination therapy

Lifileucel monotherapy

Combination Therapy

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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 $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

Interest and other income, net

Years Ended December 31,

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(in thousands)

Interest income, net

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

Net interest income increased by $2.5 million, or 562%, primarily due to an increase in interest rates as well as a shift in our portfolio to interest bearing investments such as U.S.

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.

Income tax benefit

Years Ended December 31,

1 unchanged sentence

(in thousands)

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

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, 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 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.

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).

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 recent approval of our BLA, we expect to generate revenue from the sale of our product, Amtagvi™ (lifileucel).

Furthermore, upon the completion of the closing of the acquisition of the worldwide rights to Proleukin ® in the second quarter of 2023, we began to generate revenue from the sales of Proleukin ® .

As of December 31, 2023, we had $346.3 million in cash, cash equivalents, investments, and restricted cash ($114.9 million of cash and cash equivalents, $165.0 million in short-term investments, and $66.4 million in restricted cash).

We expect to continue to incur significant expenses to support our execution of the commercial launch of Amtagvi™, fund ongoing clinical programs, including our NSCLC registration study, IOV-LUN-202, and our frontline advanced melanoma Phase 3 confirmatory trial, TILVANCE-301, continue the development of our pipeline candidates, and for other general corporate purposes.

Based on the funds we have available as of the date our consolidated financial statements for the year ended December 31, 2023 are issued, which include estimated net proceeds (after deducting underwriting and other offering expenses) of approximately $197.1 million from the public offering of our common stock completed on February 22, 2024, 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.

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.

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.

Corporate Capitalization

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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.

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.

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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Financing activities

Net increase in cash, cash equivalents and restricted cash

Net (decrease) increase 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, 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 ® .

In addition, it reflects a net increase in non-cash charges of $53.0 million, primarily driven by higher stock-based compensation expense and amortization of intangible assets, the latter of which is driven primarily by the amortization associated with the developed technology intangible asset recorded as part of the Acquisition and intellectual property license intangible assets associated with Amtagvi ® , and an impairment charge of the long-lived assets that resulted from an early termination of our corporate headquarters lease.

The increase in non-cash charges was partially offset by a decrease in accretion of discounts on investments, amortization of right of assets, gain on derecognition of lease assets and liabilities as a result of the early termination of our corporate headquarters lease, and deferred tax benefits resulting from the realization of the related deferred taxes for operations in the UK.

Further, net cash used in operating activities related to changes in operating assets and liabilities increased by $124.0 million, driven primarily by an increase in trade accounts receivable, resulting from the sale of our products and a decrease in accounts payable and accrued expenses, resulting from cash utilized for payments associated with the continued growth in the business, including our increased workforce, timing of vendor invoicing and related payments, and cash used for purchases of raw material inventory in support of the commercial launch of Amtagvi ® .

These increases in the use of cash were partially offset by a $7.9 million decrease in cash used for prepaid expenses, other assets, and long-term assets in the current period compared to the corresponding period in 2023, which resulted from the timing of payments made, as well as the receipt of cash for other miscellaneous receivables.

Net cash used in operating activities for the year ended December 31, 2023, was $361.8 million compared to $292.8 million for the same period in 2022.

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.

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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.

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 $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.

Investing Activities

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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.

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.

Net cash used in investing activities for the year ended December 31, 2023 was $155.2 million, compared to net cash provided by investing activities of $256.5 million for the same period in 2022.

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.

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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.

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.

These decreases were partially offset by $3.7 million increase in proceeds from the issuance of common stock upon the exercise of stock options and from our employee stock purchase plan program.

Net cash provided by financing activities for the year ended December 31, 2023 was $463.0 million compared to net cash provided of $190.2 million for the same period in 2022.

The increase in net cash provided by financing activities of $272.8 million was driven by a $273.8 million increase in net proceeds received from sales of common stock pursuant to the June 2023 underwritten public offering and our “at the market” offering program as well as $0.8 million received from the issuance of common stock under the 2020 Employee Stock Purchase Plan, or the 2020 ESPP.

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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 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.

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.

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.

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 San Carlos, CA, Philadelphia, PA, and Tampa, FL.

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.

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.

These obligations met the conditions of embedded leases under Topic ASC 842 and were included in the Operating lease liabilities in the consolidated balance sheets.

These obligations met the conditions of embedded leases under Accounting Standard Codification (ASC) Topic 842 and were included in the Operating lease liabilities in the consolidated balance sheets.

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

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Because of the contingent nature of these milestone payments, they are not included in the table of contractual obligations.

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.

These arrangements may be material individually, and in the event that milestones for multiple products covered by these arrangements are 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 contingent payments.

Off-Balance Sheet Arrangements

As of December 31, 2023 we did not have, and currently do not have, any off-balance sheet arrangements.

As of December 31, 2024, we had no obligations that would require disclosure as off-balance sheet arrangements.

Critical Accounting Policies and Significant Judgements and Estimates

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Asset Acquisitions

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.

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.

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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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, 2023.

No intangible assets existed as of December 31, 2022.

We determined that no indicators of impairment existed as of December 31, 2024 or December 31, 2023.

Inventory and Cost of Sales

Inventory is stated at the lower of cost or net realizable value on a first-in, first-out basis.

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.

Revenue Recognition

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

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

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.

To the extent the transaction price includes variable consideration, we estimate the amount of variable consideration that should be included in the transaction price using the most likely method based on historical experience, as well as applicable information currently available.

In the U.S., products are sold principally to hospitals and clinics, as well as distributors and wholesalers, and outside of the U.S.

to hospitals and clinics.

Contractual performance obligations are usually limited to transfer of control of the product to the customer.

In the case of Amtagvi ® , revenue is recognized upon infusion while for Proleukin®, transfer of control occurs either upon shipment or upon receipt of product after considering when the customer obtains legal title to the product.

Revenue is measured as the amount of consideration we expect to receive in exchange for transferring our products and is generally based on a list of fixed prices less allowances for chargebacks, product returns, rebates and discounts.

Our payment terms to customers range from 45 to 105 days;

payment terms differ by customer and by product.

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.

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

In addition, non-U.S.

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

Cash discounts are recorded as a reduction to receivables and settled through the issuance of credits, typically within one month.

All other GTN adjustments are recorded as a liability and settled through cash payments to the customer.

Significant judgement is required in estimating GTN adjustments considering legal interpretations of applicable laws and regulations, historical experience, payer channel mix, current contract prices under applicable programs, processing time lags, and inventory levels in the distribution channel.

Indirect taxes collected from customers and remitted to government authorities that are related to sales of our products, primarily in Europe, are excluded from revenues.

Accrued Research and Development Costs

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We have a history of contracting with third parties, including CROs, independent clinical investigators, and CMOs, that perform various clinical trial activities on our behalf in connection with the ongoing development of our product candidates.

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

uneven payment flow.

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

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

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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):

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

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 is 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.

Early adoption is permitted.

We are currently evaluating the impact of ASC 2023-07 on our consolidated financial statements

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

Disaggregation of Income Statement Expenses, which requires the disaggregation of certain expense captions into specified categories in disclosures within the notes to the financial statements to provide enhanced transparency into the expense captions presented on the face of the income statement.

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.

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