Executive Summary / Key Takeaways

• Iovance Biotherapeutics is pioneering the commercialization of Tumor Infiltrating Lymphocyte (TIL) therapy with the launch of Amtagvi, the first FDA-approved one-time, individualized T cell therapy for solid tumors, initially targeting post-anti-PD-1 metastatic melanoma.
• Despite a challenging Q1 2025 impacted by scheduled manufacturing maintenance, temporary increases in patient drop-off/out-of-spec product, and variable ATC ramp-up, the company projects a rebound with 100-110 infusions in Q2 2025 and expects acceleration in the second half of the year.
• Revised full-year 2025 total product revenue guidance is set between $250 million and $300 million, reflecting updated launch trajectory expectations, while maintaining cash runway into the second half of 2026 and targeting cash burn below $300 million for 2025.
• Iovance possesses a differentiated, scalable manufacturing platform (iCTC with planned expansion to >5,000 patients annually) and a robust pipeline targeting significant opportunities in frontline melanoma, NSCLC, endometrial cancer, and next-generation TIL therapies, underpinning a long-term peak sales potential exceeding $2 billion globally for the current indication.
• Key factors for investors to monitor include the pace of ATC adoption and community referrals, optimization of manufacturing processes and success rates, progress in registrational trials (TILVANCE-301, IOV-LUN-202), and successful execution of planned ex-U.S. launches.

Pioneering a New Frontier in Cancer Treatment

Iovance Biotherapeutics is charting a course at the forefront of cancer immunotherapy, specifically within the burgeoning field of cell-based therapies. Founded on the promise of Tumor Infiltrating Lymphocyte (TIL) therapy, the company has evolved from a research-focused entity into a commercial-stage biopharmaceutical company. Its mission is ambitious: to be the global leader in innovating, developing, and delivering TIL cell therapies for patients battling solid tumor cancers. This journey culminated in a landmark achievement in February 2024 with the FDA approval of Amtagvi (lifileucel), marking the first-ever approval for a TIL cell therapy and the first one-time, individualized T cell therapy for a solid tumor indication. This approval fundamentally transformed Iovance, shifting its focus to the complex task of commercializing a novel, personalized medicine.

The company's history is marked by strategic collaborations and significant investments in its core technology and infrastructure. Early partnerships with institutions like the National Cancer Institute (NCI) laid the groundwork for advancing TIL development. A pivotal move was the acquisition of worldwide rights to Proleukin (aldesleukin) in May 2023. This was not merely an opportunistic revenue play; Proleukin is a critical component of the Amtagvi treatment regimen, and owning its supply chain was essential for launch readiness, cost management, and clinical trial efficiency. The subsequent U.S. launch of Amtagvi, supported by a rapidly built network of Authorized Treatment Centers (ATCs) and the company's own manufacturing facility, the Iovance Cell Therapy Center (iCTC), represents the realization of years of research and development.

The Core Technology: Unleashing the Power of TILs

At the heart of Iovance's strategy is its proprietary autologous TIL cell therapy platform. Unlike off-the-shelf therapies or those targeting a limited number of shared antigens, TIL therapy leverages the patient's own immune system. The process involves surgically removing a portion of a patient's tumor, isolating the naturally occurring T cells (TILs) that have infiltrated the tumor microenvironment, and then expanding these polyclonal T cells into the billions in a centralized manufacturing facility. These expanded, rejuvenated TILs are then cryopreserved and infused back into the patient after a lymphodepletion regimen, followed by a short course of Proleukin to support T cell activity. The fundamental principle is to re-arm the patient's immune system with a potent army of T cells specifically trained to recognize and attack the diverse cancer cells unique to that individual's tumor.

Iovance's technological differentiation lies not only in the biological approach but also in its manufacturing process. The company's Gen 2.0 manufacturing process, which is FDA-approved for commercial Amtagvi, is designed to be centralized, scalable, and proprietary. This process consistently achieves a turnaround time of approximately 34 days from receiving the tumor sample to having the final product ready for shipment back to the ATC. The company is actively working to shorten this turnaround time further in 2025. The investment in the iCTC in Philadelphia underscores this commitment to manufacturing control and scalability. The iCTC is a large, dedicated cGMP facility authorized by the FDA for commercial production. As built, it has the capacity to supply TIL products for over 2,000 patients annually. Plans are underway to build out existing shelf space to increase this capacity to over 5,000 patients annually within a couple of years, with a long-term vision to reach over 10,000 patients annually from the campus through further expansion and automation.

The "so what" for investors is significant. This personalized, polyclonal approach has demonstrated the potential for deep, durable responses in patients with solid tumors, even in heavily pre-treated settings. The ability to manufacture at scale is critical for commercial viability and broad patient access. The ongoing efforts to optimize manufacturing success rates, reduce turnaround time, and lower cost of goods through economies of scale are key operational levers that directly impact the company's path to profitability and its competitive positioning.

Strategic Expansion and Next-Generation Innovation

Amtagvi's initial approval in post-anti-PD-1 metastatic melanoma, while addressing a significant unmet need, is viewed by Iovance as just the beginning. The company's strategic roadmap includes expanding the reach of its TIL platform into earlier treatment settings and other solid tumor types, as well as developing next-generation therapies to potentially enhance efficacy and safety.

Key pipeline programs include two ongoing registrational trials:

• TILVANCE-301: A global Phase 3 trial investigating lifileucel in combination with pembrolizumab in frontline advanced melanoma. This trial is intended to support both accelerated and full approvals in the frontline setting and serve as the confirmatory trial for the initial post-anti-PD-1 melanoma approval.
• IOV-LUN-202: A single-arm registrational Phase 2 trial evaluating lifileucel monotherapy in advanced non-small cell lung cancer (NSCLC) patients who have progressed following chemotherapy and anti-PD-1 therapy. Based on positive preliminary data and FDA feedback, the company expects to report additional data in the second half of 2025 and anticipates a potential accelerated U.S. approval in 2027.

Beyond these, Iovance is exploring other indications with significant unmet needs, such as advanced endometrial cancer (IOV-END-201 Phase 2 trial initiated, initial data expected H2 2025), and investigating TIL therapy in combination with other agents (e.g., lifileucel with nivolumab and relatlimab in frontline melanoma).

The company is also investing in next-generation TIL therapies designed to build upon the foundational platform:

• IOV-4001: A PD-1 inactivated TIL therapy using TALEN gene-editing technology, currently in Phase 2 for previously treated advanced melanoma or NSCLC. The goal is to potentially enhance efficacy by overcoming PD-1 mediated suppression without systemic anti-PD-1 therapy.
• IOV-5001: A genetically engineered, inducible, and tethered IL-12 TIL cell therapy in IND-enabling studies, with an IND submission planned for Q4 2025. This program aims to enhance TIL efficacy while optimizing safety by restricting IL-12 expression and preventing systemic secretion. Preclinical data from a prior generation IL-12 TIL showed impressive ORR (63%) at much lower cell doses, providing rationale for this approach.
• IOV-3001: A second-generation modified IL-2 analog in Phase 1/2, designed to improve the safety profile and potentially support less frequent dosing compared to Proleukin when used in the TIL regimen.

These pipeline initiatives and next-generation programs are critical for Iovance's long-term growth, aiming to address larger patient populations and solidify its leadership in the TIL space. Collaborations, such as the renewed CRADA with the NCI, support preclinical and clinical development efforts for enhanced TIL products.

Competitive Landscape: Pioneering in a Crowded Field

The field of cancer therapy is intensely competitive, marked by rapid technological advancements and the presence of numerous well-resourced biotechnology and pharmaceutical companies. Iovance operates within this dynamic environment, facing competition from various angles.

Direct competition comes from companies developing or commercializing immunotherapies for solid tumors, including:

• Checkpoint Inhibitor Developers: Companies like Merck (MRK) (Keytruda) and Bristol-Myers Squibb (BMY) (Opdivo) dominate the current standard of care in many solid tumors, including melanoma. While IOVA's TIL therapy targets patients who have progressed on these therapies, future expansion into earlier lines will put Amtagvi in direct competition. IOVA highlights its potential for durable, potentially curative responses as a key differentiator compared to the chronic treatment nature of checkpoint inhibitors.
• CAR-T and Other Cell Therapy Developers: Companies like Novartis (NVS) (Kymriah) and Gilead Sciences (GILD) (via Kite Pharma) are established in the cell therapy space, primarily with CAR-T therapies for hematologic malignancies. While CAR-T has seen less success in solid tumors due to challenges like target availability and tumor microenvironment suppression, these companies represent significant cell therapy expertise and manufacturing scale. Other companies are also developing various T cell therapies, including genetically engineered TILs and neoantigen-reactive TILs.
• Other TIL Developers: While Iovance is the first to achieve FDA approval, other companies are pursuing TIL-based approaches, potentially offering competing products in the future.

Indirect competition arises from alternative treatment modalities such as chemotherapy (often offered by large pharmaceutical companies like Pfizer (PFE)) and emerging technologies like mRNA-based therapies (e.g., Moderna (MRNA)). These alternatives may offer different risk/benefit profiles, cost structures, or logistical advantages that could influence treatment decisions.

Comparing Iovance to its larger, more established competitors like BMY, MRK, NVS, and GILD reveals a nuanced competitive position. Iovance holds a technological edge as the pioneer with the first FDA-approved TIL therapy, demonstrating promising efficacy in challenging patient populations. Its proprietary manufacturing process and dedicated iCTC facility are significant assets. However, Iovance is at a disadvantage in terms of financial scale, established global commercial infrastructure (though building it), and the sheer breadth of R&D pipelines compared to these multi-billion dollar companies. While IOVA's Gross Profit Margin (TTM 19.20%) and Operating Profit Margin (TTM -187.50%) reflect its early commercial stage and high R&D/launch costs, they lag significantly behind the profitability metrics of established players like MRK (Gross Margin 76%, Operating Margin 35%) or BMY (Gross Margin 71%, Operating Margin 12%). This financial disparity means larger competitors can absorb higher R&D costs, weather market fluctuations more easily, and potentially leverage existing relationships and infrastructure to gain market share.

Iovance's strategic response is to leverage its first-mover advantage in TIL therapy, focus on demonstrating superior clinical outcomes (especially durability), build a specialized commercial infrastructure capable of handling the unique logistics of cell therapy, and continuously innovate to expand its pipeline and manufacturing capabilities. The focus on educating community oncologists and streamlining the patient journey at ATCs is crucial to overcoming logistical hurdles and driving adoption in the face of competition.

Financial Performance and Operational Realities

Iovance's financial profile reflects its transition from a development-stage company to a commercial one. Historically, the company has incurred significant net losses, funding operations primarily through equity financings. This trend continued in Q1 2025, with a net loss of $116.2 million and $103.7 million used in operating activities.

Q1 2025 revenue totaled $49.3 million, comprising $43.6 million from Amtagvi infusions and $5.8 million from Proleukin sales. This represented a substantial increase from Q1 2024 revenue of $0.7 million (solely from Proleukin). However, Q1 2025 revenue was lower than Q4 2024 ($73.7 million), which included $48.7 million from Amtagvi and $25.0 million from Proleukin. Management attributed the sequential decline in Q1 2025 to several factors:

• Scheduled annual maintenance at the iCTC, which temporarily reduced manufacturing capacity.
• Higher rates of patient drop-off and lower manufacturing success rates in the quarter, impacting the volume of sellable product.
• Lower Proleukin sales compared to the prior quarter, although restocking by major distributors is expected in Q2 2025.
• Variable pace of patient treatment initiation across the ATC network.

Cost of sales in Q1 2025 was $49.7 million, including $15.0 million in period costs related to patient drop-off and manufacturing results that did not meet specifications. This contributed to a Q1 2025 standard gross margin of 10% ($5 million), a decrease from Q4 2024's 46% gross margin ($34 million). The increase in period costs and lower revenue volume significantly impacted the Q1 margin. Management is focused on improving manufacturing success rates and capacity utilization to drive gross margin towards the long-term target of over 70%.

Research and development expenses decreased to $76.9 million in Q1 2025 from $79.8 million in Q1 2024, primarily due to the capitalization of Amtagvi manufacturing costs post-approval, partially offset by increased personnel and clinical trial costs for ongoing studies like TILVANCE-301 and IOV-LUN-202. Selling, general, and administrative expenses increased significantly to $43.9 million in Q1 2025 from $31.4 million in Q1 2024, reflecting the build-out of the commercial infrastructure and increased costs associated with launching and marketing Amtagvi and Proleukin.

As of March 31, 2025, Iovance held $366.1 million in cash, cash equivalents, short-term investments, and restricted cash. The company raised approximately $148.9 million in net proceeds through its at-the-market equity offering program during Q1 2025, demonstrating its ability to access capital markets. Despite ongoing losses and cash used in operations, management believes current funds are sufficient to support anticipated operating expenses and capital expenditures into the second half of 2026.

The company expects full-year 2025 cash burn to remain below $300 million, including investments in iCTC expansion.

Outlook and Revised Guidance

Based on the dynamics observed in Q1 2025 and early Q2, Iovance has revised its full-year 2025 total product revenue guidance to between $250 million and $300 million, down from the prior guidance of $450 million to $475 million. This adjustment reflects a more conservative outlook on the pace of ATC adoption and patient treatment initiation, the impact of temporary manufacturing disruptions, and the timing of Proleukin restocking.

Despite the revised guidance, management expressed confidence in the underlying demand and the trajectory of the launch. They project between 100 and 110 commercial patient infusions in Q2 2025, a significant increase from the 80+ infusions in Q1. They anticipate acceleration in revenue growth in the second half of the year as ATCs gain more experience, newer centers become fully operational, and community referral initiatives gain traction. The long-term peak sales potential for Amtagvi in the currently approved indication remains unchanged at over $1 billion in the U.S. and over $2 billion globally.

The path to profitability hinges on increasing revenue volume, improving manufacturing efficiency to drive down cost of goods, and achieving the targeted gross margin above 70%. The company expects cash burn to decrease as revenue grows and margins expand, moving towards a breakeven point.

Key assumptions underpinning the revised 2025 guidance include the successful ramp-up of patient infusions at existing and new ATCs, effective execution of community referral strategies, continued improvement in manufacturing success rates and capacity utilization following the Q1 challenges, and consistent reimbursement access. The guidance does not factor in potential revenue from ex-U.S. launches or new pipeline indications, which represent additional upside potential in 2026 and beyond.

Risks and Challenges

Investing in Iovance involves significant risks inherent in the biotechnology sector, particularly for a company commercializing a novel, complex therapy. Key risks include:

• Commercial Execution: The success of the Amtagvi launch depends heavily on the pace of ATC onboarding, training, and utilization, as well as the effectiveness of community referral strategies. Slower-than-anticipated adoption could impact revenue growth.
• Manufacturing and Operations: The complexity of personalized cell therapy manufacturing presents ongoing risks, including potential for manufacturing failures, patient drop-off before infusion, supply chain disruptions, and challenges in scaling up production while maintaining quality and reducing costs. The Q1 2025 experience highlights the sensitivity to these factors.
• Clinical Development: The success of pipeline programs depends on the outcome of ongoing clinical trials. Delays, inconclusive results, or unexpected safety issues could impact potential label expansions and future revenue streams. The confirmatory trial for Amtagvi's initial approval is critical.
• Regulatory Environment: Obtaining and maintaining regulatory approvals is complex and subject to uncertainty. Changes in regulatory requirements or interpretations could impact development timelines or commercialization.
• Competition: The competitive landscape is intense. While Amtagvi is the first TIL therapy, it competes with established and emerging immunotherapies. The entry of new competitors or the success of alternative therapies could impact market share and pricing power.
• Reimbursement and Market Acceptance: While initial reimbursement has been favorable, securing consistent and adequate coverage from payors and achieving broad market acceptance among physicians and patients are crucial for long-term success.
• Financial Health: The company has a history of losses and will require significant capital to fund operations and pipeline development until profitability is achieved. The need for future financing could dilute existing stockholders.
• Intellectual Property: Protecting and enforcing intellectual property rights is critical in the biotechnology industry and subject to legal challenges.

Conclusion

Iovance Biotherapeutics stands at a pivotal juncture, transitioning into a commercial entity built upon the foundation of its pioneering TIL cell therapy platform. The FDA approval and initial launch of Amtagvi represent a significant validation of its technology and strategy, addressing a critical unmet need in advanced melanoma. While the Q1 2025 results highlighted some of the operational complexities and launch dynamics inherent in a novel, personalized therapy, management's revised guidance for 2025 provides a more grounded outlook based on recent experience.

The core investment thesis centers on Iovance's ability to successfully execute the Amtagvi launch, leveraging its differentiated technology and manufacturing capabilities to capture a significant market opportunity. The potential for label expansion into larger indications like frontline melanoma and NSCLC, coupled with a pipeline of next-generation therapies, provides substantial long-term growth drivers. Despite facing intense competition and operational challenges, Iovance's leadership in the TIL space, supported by its intellectual property and dedicated infrastructure, positions it uniquely. Investors should closely monitor the pace of commercial adoption, manufacturing optimization efforts, and key pipeline milestones as indicators of the company's trajectory towards realizing the full potential of TIL therapy and achieving sustainable profitability.