Iovance Biotherapeutics(US:IOVA)2021-05-06 21:28PART I FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) This section provides the unaudited condensed consolidated financial statements for Iovance Biotherapeutics, Inc., detailing its financial position and performance - The company is a clinical-stage biopharmaceutical company focused on developing and commercializing cell therapies, specifically Tumor Infiltrating Lymphocyte (TIL) therapy, with lead candidates lifileucel for metastatic melanoma and cervical cancer25 - The company has not generated any revenue and incurred a net loss of $75.4 million for the three months ended March 31, 2021, though management believes existing capital is sufficient for the next twelve months2728 Condensed Consolidated Balance Sheets The balance sheet shows total assets decreased slightly to $750.6 million as of March 31, 2021, primarily due to reduced short-term investments Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $131,954 | $67,329 | | Short-term investments | $461,976 | $562,108 | | Total Current Assets | $605,218 | $636,100 | | Total Assets | $750,573 | $768,458 | | Liabilities & Equity | | | | Total Current Liabilities | $55,059 | $54,871 | | Total Liabilities | $103,142 | $111,960 | | Total Stockholders' Equity | $647,431 | $656,498 | Condensed Consolidated Statements of Operations The company reported a net loss of $75.4 million for Q1 2021, an increase from the prior year, primarily due to higher general and administrative expenses Statement of Operations Summary (in thousands, except per share data) | Item | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Research and development expenses | $55,949 | $56,952 | | General and administrative expenses | $19,621 | $13,858 | | Total costs and expenses | $75,570 | $70,810 | | Loss from operations | ($75,570) | ($70,810) | | Net Loss | ($75,449) | ($69,595) | | Net Loss Per Share, Basic and Diluted | ($0.51) | ($0.55) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $62.4 million in Q1 2021, offset by cash from investing and financing, leading to a $65.2 million net increase in cash Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($62,391) | ($65,292) | | Net cash provided by investing activities | $77,211 | $100,105 | | Net cash provided by financing activities | $50,364 | $3,833 | | Net increase in cash, cash equivalents, and restricted cash | $65,184 | $38,646 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial condition and operational results, highlighting clinical program progress, expense changes, and liquidity, while noting BLA submission delays and COVID-19 impacts Overview and Clinical Development This section provides an overview of the company's TIL cell therapy development, focusing on lifileucel's clinical progress in melanoma and cervical cancer, including BLA submission updates - The Biologics License Application (BLA) for lifileucel in metastatic melanoma was delayed due to FDA feedback on potency assays, with submission now anticipated in 2021176 - In the C-144-01 trial for metastatic melanoma (Cohort 2), lifileucel demonstrated an objective response rate (ORR) of 36% in 66 patients, with a median duration of response (DOR) not yet reached after 28.1 months of follow-up173 - For metastatic cervical cancer (C-145-04), lifileucel showed an ORR of 44% in 27 patients and received Breakthrough Therapy Designation, with BLA submission discussions planned for 2021177 Results of Operations Q1 2021 results show a 2% decrease in R&D expenses to $55.9 million and a 42% increase in G&A expenses to $19.6 million, leading to an 8% higher net loss Comparison of Operating Expenses (in thousands) | Expense Category | Q1 2021 | Q1 2020 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $55,949 | $56,952 | ($1,003) | (2)% | | General and administrative | $19,621 | $13,858 | $5,763 | 42% | - The decrease in R&D expense was primarily due to a $10.0 million license cost from Novartis recognized in Q1 2020 and a $5.0 million decrease in manufacturing costs in Q1 2021201 - The increase in G&A expense was mainly driven by a $2.8 million increase in payroll and a $2.6 million increase in stock-based compensation202 Liquidity and Capital Resources As of March 31, 2021, the company held $604.2 million in cash and investments, with management confident in sufficient capital for at least the next 12 months despite expected increased spending - As of March 31, 2021, the company had $604.2 million in cash, cash equivalents, and investments216322 - In Q1 2021, the company received approximately $42.9 million in net proceeds from its 'at the market' (ATM) offering program by selling 1,278,243 shares21488 - Management believes that existing capital is sufficient to fund anticipated operating expenses and capital expenditures for at least 12 months from the filing date217 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate sensitivity on its $472.2 million investment portfolio, with a 1% rate change impacting fair value by $1.9 million - The company's main market risk is interest income sensitivity from its $472.2 million in marketable securities, primarily short-term U.S. government debt229 - A hypothetical 1% change in interest rates would cause the fair value of the investment portfolio to change by approximately $1.9 million229 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting during the quarter - Management, including the principal executive and financial officers, concluded that disclosure controls and procedures were effective as of the end of the quarter230 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls231 PART II OTHER INFORMATION Item 1. Legal Proceedings This section details legal proceedings, including a December 2020 stockholder derivative complaint and ongoing lawsuits with Solomon Capital, LLC, with no other material pending matters - Information on legal proceedings is incorporated by reference from Note 9 to the Condensed Consolidated Financial Statements232 - Key legal matters include a derivative lawsuit filed in December 2020 concerning director compensation and lawsuits involving Solomon Capital, LLC123124 Item 1A. Risk Factors This section outlines key risks, including dependence on product candidate success, clinical trial delays, manufacturing challenges, competition, financing needs, regulatory hurdles, third-party reliance, and health epidemics - The company is substantially dependent on the success of its product candidates and cannot guarantee they will receive regulatory approval or be successfully commercialized235245 - The manufacturing of cell-based therapies is complex and subject to difficulties in process development, quality control, and scaling, which could delay or stop the supply of product candidates235299 - The company may need additional financing to fund operations and complete development, which may cause dilution to existing stockholders or require relinquishing rights to technologies235322 - The business could be adversely affected by health epidemics, including the COVID-19 pandemic, impacting manufacturing, clinical trial sites, and third-party partner operations239392 Item 2. Unregistered Sales of Securities and Use of Proceeds There were no unregistered sales of securities or specific uses of proceeds to report for the period - Nothing to report505 Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities during the period - Nothing to report506 Item 4. Mine Safety Disclosure This item is not applicable to the company - Nothing to report507 Item 5. Other Information There was no other information to report for the period - Nothing to report508 Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including lease agreements, an executive employment agreement, and required officer certifications - The report includes several exhibits, such as new and amended lease agreements, an executive employment agreement, and required officer certifications510 Signatures - The report was duly signed and authorized on May 6, 2021, by the Chief Executive Officer, Maria Fardis, and the Chief Financial Officer, Jean-Marc Bellemin514516