Iovance Q1 Earnings Review: Not Enough Data To Draw Conclusions On Amtagvi

seekingalpha05-11

Iovance Biotherapeutics reported its Q1 2024 earnings yesterday. The company made a net loss of $(113m), or $(0.42) per share.Iovance secured a historic approval for a first solid tumor targeting cell...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2434893678?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1478735438/image_1478735438.jpg","is_english":true,"pubTime":"2024-05-11 02:40","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2434893678","market":"us","top_or_hot":-1,"title":"Iovance Q1 Earnings Review: Not Enough Data To Draw Conclusions On Amtagvi","media":"seekingalpha","content":"<div>\n<p>Iovance Biotherapeutics reported its Q1 2024 earnings yesterday. The company made a net loss of $(113m), or $(0.42) per share.Iovance secured a historic approval for a first solid tumor targeting cell...</p>\n\n<a href=\"https://seekingalpha.com/article/4691978-iovance-q1-earnings-review-not-enough-data-draw-conclusions-amtagvi\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Iovance Q1 Earnings Review: Not Enough Data To Draw Conclusions On Amtagvi</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIovance Q1 Earnings Review: Not Enough Data To Draw Conclusions On Amtagvi\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-05-11 02:40 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4691978-iovance-q1-earnings-review-not-enough-data-draw-conclusions-amtagvi><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Iovance Biotherapeutics reported its Q1 2024 earnings yesterday. The company made a net loss of $(113m), or $(0.42) per share.Iovance secured a historic approval for a first solid tumor targeting cell...</p>\n\n<a href=\"https://seekingalpha.com/article/4691978-iovance-q1-earnings-review-not-enough-data-draw-conclusions-amtagvi\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"IOVA","symbol_name":"Iovance Biotherapeutics, Inc.","start_time":0,"source_url":"https://seekingalpha.com/article/4691978-iovance-q1-earnings-review-not-enough-data-draw-conclusions-amtagvi","article_id":"2434893678","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1478735438/image_1478735438.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2434893678","pubTimestamp":1715366431,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Iovance Biotherapeutics reported its Q1 2024 earnings yesterday. The company made a net loss of $(113m), or $(0.42) per share.Iovance secured a historic approval for a first solid tumor targeting cell","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"IOVA":"Iovance Biotherapeutics, Inc.","BK4139":"生物科技"},"translate_title":"Iovance Q1收益评论：没有足够的数据对Amtagvi得出结论","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"IOVA":1},"content_text":"Iovance Biotherapeutics reported its Q1 2024 earnings yesterday. The company made a net loss of $(113m), or $(0.42) per share.Iovance secured a historic approval for a first solid tumor targeting cell therapy in mid-Feb, triggering overnight gains of close to 100%.Now, the market is turning its attention to revenue figures and patient enrollment for Amtagvi, approved to treat melanoma.Yesterday's updates provided by management seemed upbeat, but analysts had many questions and the share price has been falling today.In this post, I provide a thorough overview of the state of play post Q1 '24 earnings, and speculate on key themes that will dictate IOVA stock price movements going forward.   jpgfactory/iStock via Getty Images Iovance Biotherapeutics Overview Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), the San Carlos, California-based biotech that secured a historic first approval for a solid tumor targeting cell therapy earlier this year, announced its Q1 2024 earnings yesterday. Iovance's tumor infiltrating lymphocyte (\"TIL\") cell therapy candidate, lifileucel, achieved a 31.4% overall response rate in a study of 73 patients with melanoma, whose cancer had progressed after a commonly used immunotherapy or targeted cancer medication, with 43.5 of responders remaining cancer free after more than 18 months follow-up, which was sufficient to garner an approval from the Food and Drug Agency (the \"FDA\") in mid-February, sending Iovance's stock price soaring from ~$9, to ~$17 overnight. In October 2023, shares had traded at <$3.5 per share. In fact, Iovance was awarded accelerated approval for lifileucel, which will be marketed and sold under the brand name Amtagvi. By the terms of such an approval: Drug companies are still required to conduct studies to confirm the anticipated clinical benefit. If the confirmatory trial shows that the drug actually provides a clinical benefit, then the FDA grants traditional approval for the drug. If the confirmatory trial does not show that the drug provides clinical benefit, FDA has regulatory procedures in place that could lead to removing the drug from the market. Iovance's path to approval was a long and tortuous one, as the FDA considered whether concerns around the durability and safety of lifileucel outweighed the benefits of the drug, hence the low share price last year. The drug comes with a \"boxed warning\" from the FDA, \"for treatment-related mortality, prolonged severe cytopenia, severe infection, cardiopulmonary, and renal impairment.\" According to the National Cancer Institute:  As is the case with CAR T-cell therapy, another type of cellular therapy, lifileucel is made using a patient’s own T cells. And with both therapies, the cells are collected at the hospital where the patient is being treated but are sent away to be manufactured into the final treatment. But there’s a key difference between TILs and CAR T-cell therapies. For the approved CAR T-cell therapies, the T cells are collected from a patient’s circulating blood. For TIL therapy, by contrast, the T cells are collected from the patient’s tumor.  Iovance has set a list price of $515k for Amtagvi, and analysts have suggested the therapy could drive ~$850m in annual revenues by 2029, which, provided Iovance can drive bottom-line profits from its drug as well as hitting top-line expectations, seems to more than justify the current market cap valuation of $3.12bn, and share price of $11 at the time of writing. The Q1 2024 earnings release prompted a market sell-off from ~$13.5 per share - the stock price has fallen by nearly 20% in trading today - but is that an overreaction to the numbers and updates shared yesterday, or a fair conclusion to draw at this stage? In this post, I will cover the main themes and topics discussed yesterday, and try to answer that question. IOVA Q1 2024 Earnings In Review - Key Numbers & Figures For the first quarter of 2024, Iovance incurred a net loss of $(113m), or $(0.42) per share, which was almost the same as in Q1 2023 - a net loss of $(107.4m), and earnings per share (\"EPS\") of $(0.5). R&D costs fell slightly year-on-year, from $82.7m, to $79.8m, while SG&A costs increased $3.3m year-on-year to $31.4m - it certainly makes sense for a company with a newly approved drug to spend a little less on R&D, and a little more on SG&A, so few surprises here. The company reported $356m of cash, while management suggested that: The current cash position and anticipated revenue from Amtagvi and Proleukin are expected to be sufficient to fund current and planned operations well into the second half of 2025. This is potentially concerning, as it places a burden of responsibility on newly launched Amtagvi to hit the ground running commercially, and keep Iovance solvent - but new drug launches are unpredictable, and often it can take a couple of years before physicians and patient populations begin to prescribe and use a new drug, especially a complex therapy such as Amtagvi that comes with safety risks. Proleukin - an interleukin-2 (\"IL-2\") product used to promote T-cell activity following TIL infusion, that Iovance acquired from Clinigen in exchange for a $168m upfront payment, plus $42m on approval of lifileucel and double-digit sales royalties - earned $0.7m of revenues from sales \"in licensed markets outside of the U.S.,\" but no revenues from Amtagvi were reported. Management provided guidance on its earnings call for \"2024 cash burn in the range of $320 million to $340 million,\" and although there was no specific revenue guidance provided, Chief Financial Officer Jean-Marc Bellemin did comment that: The U.S. launch of Amtagvi as well as the sales of Proleukin used in conjunction with the Amtagvi treatment regimen are expected to drive significant revenue in the second half of 2024 and into 2025 and beyond. Amtagvi In Focus Given Amtagvi was only approved in mid-February, it is not surprising there were no revenues to report for it, but management provided plenty of other updates and details. For example, management stated in its earnings press release that it had: 100+ Amtagvi Patients Enrolled Across More Than 40 Current Authorized Treatment Centers (ATCs), with ~50 Total ATCs On Track by End of May and 70+ Total ATCs by Year-End 2024 Frederick Vogt, Ph.D., J.D., Interim President and Chief Executive Officer of Iovance commented that \"immediate demand for Amtagvi is very high and continues to significantly increase across initial ATCs.\" On the earnings call with analysts, he added that \"more than 60 additional patients have been identified at ATCs and are expected to enroll soon.\" Theoretically, this would put Amtagvi on course for ~$80m of revenues in 2024, although given that ATCs are growing in number, perhaps >$150m is achievable in year one, which would be a respectable figure, in my view. Management also revealed that manufacturing turnaround time was \"on-target with initial launch expectations of approximately 34 days from inbound to return shipment to ATCs.\" The company has its own manufacturing facility based in Philadelphia, which is FDA approved for commercial manufacturing of Amtagvi. Iovance also has access to a second facility belonging to a contract manufacturer. Overall capacity is sufficient to support 2k patients per annum at present, Iovance Chief Operating Officer Dr Igor Bilinsky told analysts, suggesting that long-term, capacity could stretch to 10k patients. From a reimbursement perspective, Iovance's Executive Vice President, Commercial, Jim Ziegler told analysts:  Early launch data indicates that more than 75% of patients enrolled for Amtagvi are commercially insured which aligns with our expectations. Thus far payers responsible for more than 200 million lives have approved at least one patient for Amtagvi treatment and notably 13 payers responsible for approximately 90 million covered lives have already published medical coverage policies that are consistent with label, clinical trials and the recently updated NCCN guidelines.  Finally, Iovance says it hopes to make a regulatory submission for approval of Amtagvi in Europe this quarter, for the UK and Canada in the second half of this year, and for \"Australia and additional countries\" in 2025. If successful, these approvals ought to come close to doubling the therapy's earning potential. To summarize progress, on the plus side, management did not report any major issues - for example with supply, manufacturing, insurance coverage, patient enrollment, but nevertheless, the share price has fallen by nearly 20% so far today. It could be that analysts expected a faster uptake of Amtagvi, i.e., more than 160 patients, and it also could be that analysts harbor doubts about how many of the 160 patients will ultimately end up undergoing therapy. In response to such questions, CEO Vogt told analysts:  We can't give you the detail, otherwise you would actually have revenues at that point, but what we can tell you is that right now many of those patients have resected. We're moving through the process with them. Most of the time the dropouts are caused by patient health issues and sadly some of the patients passed away by the way for therapy and we've actually had that happen. When we finally report revenues, we'll be able to say a little bit more about how that actually played out in the transition from enrolled numbers to revenues.  Analysts also had questions about the number of patients paying cash against those being reimbursed by insurers, and the distribution by ACT, which management generally declined to answer, as with the question on the precise number of patients resected. Looking Ahead - A Tricky Quarter Leaves Many Questions Unanswered Management certainly faced some probing questions from Wall Street analysts on its earnings call, although I am not necessarily surprised they declined to provide detailed numbers so early in the launch process. The punishment for declining to do so may be a -20% share price correction, but I suspect management won't let that worry them, and will hope to exceed revenue expectations in the second half of the year. There are ~15k melanoma cases diagnosed each year in the US, with 8k annual deaths (according to data shared by Iovance in a recent investor presentation). 6.3k patients received second line treatment in 2021, and 4.8k third or fourth line therapies. Apparently, more than half of patients treated with immune checkpoint inhibitors - such as Pharma giant Merck's mega-blockbuster, >$25bn per annum selling keytruda - will experience cancer progression within 12 months of receiving that therapy. That implies a total addressable market of ~$5bn for Amtagvi in its current approved indications, I estimate - ~$500k list price multiplied by ~10k patients who may benefit from treatment with Amtagvi. This is for the US alone. A 20% share of that opportunity implies a \"blockbuster\" (>$1bn per annum) revenue opportunity, and in such a scenario, as I suggested in my intro, Iovance would likely be due a valuation upgrade. There are many risks in play that investors ought to consider, however. Although management has provided some guidance around patient uptake, it may not be wise to draw too many conclusions from such numbers, as there may be patient dropouts, or a high number of cash payers that is unsustainable long-term. Funding strikes me as a potentially serious issue. Iovance can - and probably will - complete an at-the-market fundraising, but its rate of cash burn is unsustainably high, so there is an early reliance on Amtagvi generating income, which puts unwanted pressure on the entire launch process. Amtagvi does not yet have full approval and could be withdrawn from the market if the Phase three study data does not support the data that secured the accelerated approval, and the fact that the FDA recently placed a clinical hold on Iovance's lung cancer study after a patient death underlines the risks associated with cell therapies. These are some issues that may negatively affect Iovance's share price - if any of these issues were to worsen, I suspect there is a chance the share price could dip back below ~$6 per share, where it was trading pre-approval, and put the company's long-term future at risk. With that said, we should not dismiss the positives. For example, Amtagvi's strong efficacy profile and the high unmet need for effective second / third / fourth line therapies, given many patients do not respond long term to ICI therapy. The clinical hold on the lung cancer study has been lifted, and clearly, an approval alongside keytruda in lung cancer would be a huge coup for the company, while there are multiple other clinical studies ongoing, in cervical cancer for example, endometrial, and for a second candidate, LN-145, alongside keytruda in cervical, and in non-small cell lung cancer (\"NSCLC\"). The opportunities to secure ex-US approval are also significant. Summarizing the state of play currently, I would nevertheless revise my former \"Buy\" rating - shares are +38% since my note on the company in January - down to a \"Hold\" for now. Drug development is a tricky business and Iovance pulled off an achievement of genuine significance achieving a first-ever approval for a cell therapy targeting solid tumors, but Pharma is a demanding business and no soon as a drug is approved, analysts begin looking at revenue numbers, enrolled patients, financial stewardship, and other matters. It is undeniable that Iovance faces some challenging issues - I would place funding at the top of the list, and although, by overcoming them, the company may trigger a bull-run on its shares, it is not clear enough - to my mind at least - that this is the most likely scenario in play. As such, I am remaining on the Iovance Biotherapeutics, Inc. sidelines until we have more clarity around actual revenues, as opposed to patient enrollment, on funding, and on ongoing clinical studies (if I were Iovance, I would consider streamlining the number of studies it is running to save costs and reallocate funds to the Amtagvi launch).  Clearly, Wall Street is not completely won over by Iovance and early Amtagvi data, and although a brave investor may consider buying today's dip and outwitting the market, the safer option today is to wait until there is more clarity.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.5","shortVersion":"4.22.5","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2434893678"}