Iovance Biotherapeutics Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 7, 2025

Key Takeaways

  • Positive Sentiment: In Q2 2025, Iovance reported $60 million in total revenue, up 22% quarter-over-quarter, and reaffirmed its full-year guidance of $250–300 million.
  • Positive Sentiment: Commercial momentum continues with 102 patients treated in a single quarter—the first time above 100—and real-world data showed a 49% response rate overall and 61% in earlier lines.
  • Positive Sentiment: The announced 19% workforce reduction is expected to yield over $100 million in annual cost savings, improve gross margins, and support profitability.
  • Positive Sentiment: With approximately $307 million in cash and net cash burn expected to be below $245 million over the next four quarters, the company sees a runway into 2026.
  • Negative Sentiment: The European Medicines Agency submission for lifileucel was withdrawn amid data alignment issues, delaying potential access in Europe as strategic options are evaluated.
AI Generated. May Contain Errors.
Earnings Conference Call
Iovance Biotherapeutics Q2 2025
00:00 / 00:00

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Operator

Good day, and thank you for standing by. Welcome to the Iovance Biotherapeutics Second Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone.

Operator

You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sarah Pellegrino, Senior Vice President, Investor Relations and Corporate Communications. Please go ahead.

Sara Pellegrino
Sara Pellegrino
SVP - IR & Corporate Communications at Iovance Biotherapeutics

Thank you, operator. Good afternoon, and thank you for joining the Iovance conference call and webcast to discuss our second quarter and first half twenty twenty five financial results as well as recent updates. Doctor. Fred Boats, our Interim Chief Executive Officer and President, will provide an introduction and brief overview of our key financial results, including revenue and revenue guidance, operating expenses, and our strategic restructuring. Dan Kirby, Chief Commercial Officer, will discuss product revenue and commercial and regulatory updates for Amtazi.

Sara Pellegrino
Sara Pellegrino
SVP - IR & Corporate Communications at Iovance Biotherapeutics

Doctor. Igor Volensky, our Chief Operating Officer, will provide manufacturing updates. And Doctor. Fredrik Finkenstein, our Chief Medical Officer, will summarize our priority pipeline program. Additional members of our leadership team, including Doctor.

Sara Pellegrino
Sara Pellegrino
SVP - IR & Corporate Communications at Iovance Biotherapeutics

Raj Puri, our Chief Regulatory Officer, and Doctor. Brian Gaspin, our Executive Vice President of Medical Affairs, will be available for the Q and A session. In addition, our new Chief Financial Officer, Corleen Roche, is joining today's call. Earlier this afternoon, we issued a press release that is available on our corporate website at iovance.com. Before we start, I would like to remind everyone that statements made during this conference call will include forward looking statements regarding Iovance's goals, business focus, business plans and transactions, revenue and revenue guidance, commercial activities, clinical trials and results, regulatory approvals and interactions, plans and strategies, research and preclinical activities, potential future applications of our technologies, manufacturing capabilities, regulatory feedback and guidance, payer interactions, restructuring plans and workforce reductions, licenses and collaborations, cash position and expense guidance, and future updates.

Sara Pellegrino
Sara Pellegrino
SVP - IR & Corporate Communications at Iovance Biotherapeutics

Forward looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time to time in our SEC filings. Our results may differ materially from those projected during today's call. We undertake no obligation to publicly update any forward looking statements. With that, I will turn the call over to Fred.

Frederick Vogt
Frederick Vogt
Interim CEO, President, General Counsel & Director at Iovance Biotherapeutics

Thank you, Sarah, and welcome to the Iovance second quarter and first half twenty twenty five conference call. We are more than a year into our US launch of Antagy for advanced melanoma, the first FDA approved Till cell therapy. Adoption continues to grow and for the first time we surpassed more than 100 patients treated in a single quarter. We're also excited about our first real world data set for amphetamine monotherapy in the commercial setting. Top line results showed a nearly forty nine percent response rate among forty one patients, after twenty three patients treated in third line or earlier treatment settings, an approximately sixty one percent response rate, all from patients treated in accordance with their label.

Frederick Vogt
Frederick Vogt
Interim CEO, President, General Counsel & Director at Iovance Biotherapeutics

We look forward to sharing more detailed real world data at an upcoming medical meeting. Another important growth driver for Amtagni is onboarding large community practices to join our ATC network. We plan to begin treating patients from these practices in the fourth quarter of this year. Patients in the community are generally earlier in their melanoma treatment journey and we expect that the higher response rates observed in our real world data set will also be relevant to these patients. Our commercial business is complemented by an exciting pipeline led by our programs to extend the lipoleucil franchise in the new treatment settings and solid tumour types, as well as next generation approaches.

Frederick Vogt
Frederick Vogt
Interim CEO, President, General Counsel & Director at Iovance Biotherapeutics

We remain on track for multiple clinical milestones in the second half of this year including updated data from our registrational trial of lipoleucil monotherapy and previously treated advanced non small cell lung cancer, clinical data for lipoleucil monotherapy in endometrial cancer, and for IV 4,001 our next generation PD-one inactivated Till cell therapy. Today I will cover financial results at a high level focusing on revenue, expenses, cash runway and the expected cost savings from our strategic restructuring. I'll begin with revenue and gross margin. In the second quarter we reported $60,000,000 in total revenue, a 22% growth over the prior quarter of this year. Total revenue included approximately $54,000,000 from MTAG and infusions and approximately $6,000,000 from ProLucan.

Frederick Vogt
Frederick Vogt
Interim CEO, President, General Counsel & Director at Iovance Biotherapeutics

Based on current growth dynamics and with approximately $109,000,000 in total revenue for the 2025, we are reiterating our full year 2025 revenue guidance of $250,000,000 to $300,000,000 inclusive of sales from Ampagvi in The US and Prolupine globally. We continue to see strong demand for Ampagni and the potential to achieve US peak sales of $1,000,000,000 or more. There's also a significant opportunity to add to the revenue potential in the international markets. Gross margin was 31% excluding non cash items such as intangible amortization, stock based compensation and reserves primarily for excess perleukin inventory. Our recent restructuring is expected to improve gross margins in the near term through reduced cost of sales.

Frederick Vogt
Frederick Vogt
Interim CEO, President, General Counsel & Director at Iovance Biotherapeutics

Gross margins are also expected to increase significantly through near term optimization of manufacturing capacity utilization over the next several years. In summary, we're focused on improving our profitability and are pleased with the strong momentum from our US commercial business. Transitioning the second quarter twenty twenty five expenses, total operating expenses were approximately $117,000,000 compared to approximately $102,000,000 in the prior year period. This increase was primarily related to higher headcount related costs and costs for clinical trials and marketing and advertising support for Amtagvi, partially offset by reductions in stock based compensation. After experiencing a tremendous period of organisational growth in 2023 and 2024, we are fully committed to streamlining expenses and optimising business performance through a strategic restructuring announced today.

Frederick Vogt
Frederick Vogt
Interim CEO, President, General Counsel & Director at Iovance Biotherapeutics

This restructuring includes a workforce reduction of approximately 19% in the 2025 and will generate more than $100,000,000 in annual cost savings starting in the 2025. As I mentioned earlier, in addition to significantly reducing expenses, this restructuring will also significantly reduce our cost of sales and increase gross margins on an ongoing basis. I would like to extend our heartfelt appreciation and best wishes to the employees impacted by the reduction in workforce. Realigning our operating plan and cost structure involves some difficult but necessary decisions to ensure financial discipline while continuing to invest in our commercial launch success. Notably our registrational and early phase programs remain on track and no significant changes to our product pipeline are expected.

Frederick Vogt
Frederick Vogt
Interim CEO, President, General Counsel & Director at Iovance Biotherapeutics

Our net cash burn is significantly reduced over our prior forecast. With the next four quarters through the 2025, net cash burn is expected to be less than $245,000,000 excluding one time charges of less than $6,000,000 associated with the third quarter strategic restructuring. We will continue to optimize and refine our cost structure through operational excellence initiatives over the next two to three quarters, and importantly, we expect ongoing reductions in expenses and improvements in cost of sales. Our current cash position of approximately $3.00 $7,000,000 and anticipated product revenue, including cost savings from the strategic restructuring, are expected to be sufficient to fund current and planned operations into the 2026. I am happy to go into more detail during the Q and A.

Frederick Vogt
Frederick Vogt
Interim CEO, President, General Counsel & Director at Iovance Biotherapeutics

Notably, we're excited to welcome our new Chief Financial Officer, Corleen Roche, who joined our team this week. We look forward to Corleen covering the financial results in detail from next quarter onwards, and she's available for today's Q and A session. I will now turn the call over to Dan Curvey, Chief Commercial Officer, for a detailed update on our commercial launch and our ex U. S. Regulatory milestones.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

Thanks Fred. I'd like to build on the earlier revenue discussion by highlighting individual product drivers for Antagvi and Prolugen. I'll also provide an update across our three key focus areas to drive US launch performance as well as our strategy for Antagvi outside of The United States. Product revenue from US Intagvi sales was approximately $54,000,000 in the 2025, representing a growth of 24% quarter over quarter. A total of 102 commercial patients were treated, representing the highest number of Intag D infusions for a single quarter to date.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

Infusion growth was a direct result of increased field activities in existing ATCs and contribution of new ATCs onboarded earlier this year. Our commercial organization is also dedicated to supporting and growing Proleukin sales. Product revenue from Proleukin was approximately $6,000,000 in the 2025, an increase of 2% quarter over quarter. Two of the three major U. S.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

Wholesalers restocked during the most recent quarter. As a reminder, first quarter Proleukin sales were attributed primarily to manufacturing and clinical uses, not the main channel tied to IMTAGD use. These two channels represent additional revenue growth opportunities for Prolukin. Now that wholesalers are reordering from the main channel, we expect Prolukin revenue to begin to reflect EMTAG D demand. Looking forward to the remainder of the year, we are confident in continued growth for AMTAGB and PROLOCON.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

We are confirming our full year 2025 total revenue guidance of $250,000,000 to $300,000,000 This aligns with our U. S. Antagy growth forecast, including expected momentum from community referral activities and large community practices. As a reminder, our 2025 guidance includes sales of Antagy only in The United States, as well as Prolecan. Antagd has the opportunity to address more than thirty thousand patients globally with previously treated advanced melanoma.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

As Fred stated, we continue to see the potential to achieve Antagd U. S. Peak sales of equal to or greater than $1,000,000,000 There is also significant opportunity to add to this potential through international sales of AMTAGV. Moving on to key launch performance drivers. Our number one goal is to establish Antagy as the preferred option for all appropriate patients.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

Antagy is a game changer for melanoma patients who have failed first line treatment. For the first time in advanced melanoma and solid tumors, cell therapy made from the patient's own cells has been shown to induce long term benefit with curative intent. On last quarter's call, I highlighted three key areas to drive performance and would like to comment on our progress. First, adoption across our ATC network continues with strong steady growth at early centers, new centers treating patients, and increased integration with community practices. A second performance driver is engaging medical oncologists to guide earlier consideration for mTagging.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

Our first real world data shows approximately half of all patients responding, including sixty percent of patients responding in earlier treatment settings. These results reinforce our messaging in the field and can guide earlier treatment practices within the scope of our label. Our disease education focuses on the benefits of durable responses with one time cell therapies like mTagni versus temporary responses and ongoing side effects seen with other treatments. The third area is to penetrate US community oncology networks and increase the frequency, speed, and overall timeliness for mTagni referrals. Last quarter I mentioned that we were working to identify alternative distribution channels on top of our traditional specialty distributor model, such as specialty pharmacy, that may offer flexibility to support community access for one time therapies like mTag.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

In direct response to requests from large community practices, we entered our first agreement with McKesson's Biologic Specialty Pharmacy and other transactions are planned. This new channel will allow hospitals to have the choice to either buy mTag D directly or go through a specialty pharmacy where they do not have to directly purchase the product. Transitioning to our ex US strategy, we are making progress toward approval in four additional markets. Canadian approval is expected imminently and we are making progress toward approval in The UK. We gained priority review for our submission in Australia.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

We are also in the submission process for Switzerland. In the European Union, as noted in the press release today, we recently withdrew our submission from the European Medicines Agency following lack of alignment during discussions of our clinical data. We are currently evaluating strategic options such as including a virtual control arm in the submission to make EMTAGV and Till therapy broadly accessible to advanced melanoma patients with unmet medical need in Europe. We look forward to providing updates on our regulatory interactions in the near future. As stated previously, our full year 2025 total revenue guidance does not include mTagD sales outside of The United States.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

As part of the restructuring, our customer facing teams remain well resourced and focused to deliver mTagD infusions for patients, drive demand, and generate revenue for mTagD and Probuphine to move Iovance forward. I am committed and motivated to lead our commercial organization towards success. I am deeply committed to Iovance's mission of pioneering a new treatment paradigm for physicians who treat patients with solid tumors, which represent ninety percent of all cancers. I will now pass the call over to Ivor Belinski, our Chief Operating Officer, to highlight our manufacturing progress.

Igor Bilinsky
Igor Bilinsky
COO at Iovance Biotherapeutics

Thank you, Dan. I will focus today's manufacturing update on commercial performance and recent organizational changes. I'll also build on Fred's introductory comments about our ongoing initiatives to improve gross margins. Our internal manufacturing facility, the IOM Cell Therapy Center, or ITTC, supplies the vast majority of patients today for both commercial and clinical manufacturing. Our contract manufacturer provides second source to backup.

Igor Bilinsky
Igor Bilinsky
COO at Iovance Biotherapeutics

Owning our own facility and relying more and more on internal manufacturing provides us with full control to maintain high quality, implement operational efficiencies, and optimize cost of sales. ICTC also offers us flexibility to scale up rapidly when needed. Manufacturing success delivering final product to patients within defined specifications, is critical for providing therapies for patients and for recognizing revenue. Across functional areas of Iovance, from manufacturing to medical affairs and commercial, we are focused and committed to improving success rates. As a result, the success rates in the second quarter rebounded compared to the first quarter, with lower patient drop offs and lower out of spec rates, and we continue seeing improvement in the third quarter to date.

Igor Bilinsky
Igor Bilinsky
COO at Iovance Biotherapeutics

I'd also like to highlight that as planned, we delivered on our goal to shorten manufacturing turnaround time, which is now thirty three days from receipt of sales at the manufacturing facility to untag the readiness for return shipment to the ATC. Turning to our strategic restructuring, our manufacturing organization has been realigned for operational excellence. We previously staffed our manufacturing network to provide the capacity to meet our prior revenue guidance. Now we have right sized and optimized the capacity and headcount to align with the revised guidance and growth projections. Our streamlined manufacturing organization and ongoing implementation of operational efficiencies are expected to increase capacity utilization, reduce costs, and improve gross margins in the 2025 and beyond.

Igor Bilinsky
Igor Bilinsky
COO at Iovance Biotherapeutics

Shifting to the current macroeconomic and geopolitical environment, I will reiterate that BioVent is operating as a strategic advantage within the biopharma industry. We continue to expect Imtagvi and Prolukin to see minimal impact from tariffs. Regarding our intellectual property, our Till cell therapy expertise and manufacturing capabilities are protected by a robust patent state that is domiciled in The US. We own approximately two eighty granted or allowed US and international patents and patent rights for emtagvi and other Till related technologies expected to provide exclusivity through at least 02/1942. I'm available to answer questions during the Q and A session, and I will now hand the call to Doctor.

Igor Bilinsky
Igor Bilinsky
COO at Iovance Biotherapeutics

Friedrich Pinkenstein, our Chief Medical Officer, to discuss our clinical pipeline.

Friedrich Graf Finckenstein
Friedrich Graf Finckenstein
Chief Medical Officer at Iovance Biotherapeutics

Thank you, Igor. Building on my colleague's comments about EMTAGV or lifileucel, the durability of responses following one time treatment is a key differentiator from other available and emerging therapies. This durability message was reinforced in the recent publication of the final five year analysis from our C14401 trial in the Journal of Clinical Oncology and the simultaneous presentation at the American Society of Clinical Oncology annual meeting. Unprecedented durability and duration of follow-up were demonstrated in previously treated advanced melanoma patients. 31 of patients responded, with nearly a third of responders ongoing.

Friedrich Graf Finckenstein
Friedrich Graf Finckenstein
Chief Medical Officer at Iovance Biotherapeutics

The five year overall survival rate was almost twenty percent. In the real world treatment settings, we are excited to see even better response rates of approximately fifty percent overall and sixty percent in less heavily treated patients following live elusal. We look forward to presenting this real world data at a future medical meeting. Following the strategic restructuring, our priorities are to expand mTagvi into additional solid tumor types and earlier lines of therapy and to advance our key next generation Till and Till treatment regimen. In frontline advanced melanoma, TILVANCE-three zero one is our global registrational Phase III trial designed with FDA and EMA input to show the contribution of components.

Friedrich Graf Finckenstein
Friedrich Graf Finckenstein
Chief Medical Officer at Iovance Biotherapeutics

We are investigating mTag B in combination with pembrolizumab compared to pembrolizumab alone. Till then, three zero one remains on track as the confirmatory trial for mTag B monotherapy in our initial indication. And this trial could also support accelerated and full approval of mTag B in combination with pembrolizumab in frontline advanced melanoma. We look forward to sharing results from several clinical trials before the end of the year for lifalusol in non small cell lung and endometrial cancers, as well as on our PD-one inactivated Till cell therapy, IOV-four thousand and one. IOV LUN two zero two is our registrational program intended to extend the label for life and lucid monotherapy to include previously treated advanced non small cell lung cancer.

Friedrich Graf Finckenstein
Friedrich Graf Finckenstein
Chief Medical Officer at Iovance Biotherapeutics

This trial design aligns with FDA guidance for single arm trials to support accelerated approvals for single agents in conditions with unmet medical need. Chemotherapy, the current standard of care in this treatment setting, provides limited rate and duration of responses. The FDA previously provided positive regulatory feedback on the IOV LUN two zero two clinical trial design and the proposed potency assay matrix to support registration. We expect data from IOV LUN two zero two to support a potential regulatory decision on US accelerated approval in 2027 for previously treated non small cell lung cancer patients. In our IovEND-two zero one clinical trial, we've seen promising signs of initial efficacy for lysosomal monotherapy in previously treated patients with advanced endometrial cancer.

Friedrich Graf Finckenstein
Friedrich Graf Finckenstein
Chief Medical Officer at Iovance Biotherapeutics

Our PD-one inactivated tilt cell therapy, IOV4001, is in a first in human trial and reflects our leadership in next generation approaches to optimize Till and Till treatment regimens. We are also treating patients in a phase onetwo clinical trial of IOV3001, a next generation IO2 for use with the Till cell therapy treatment regimen. Finally, we plan to submit an investigational new drug application to FDA early next year for IOV5001. This genetically engineered inducible and tethered IL-twelve Till cell therapy may expand our development opportunities into a wide range of common solid tumor cancers. I'm happy to address questions during the Q and A session.

Friedrich Graf Finckenstein
Friedrich Graf Finckenstein
Chief Medical Officer at Iovance Biotherapeutics

Now I'll turn the call over to the operator to begin the question and answer session.

Operator

As a reminder, ask a question, please press star, 11 on your telephone, and wait for your name to be announced. To withdraw your question, please press star, 11 again. In the interest of time, we ask that you please limit yourself to one question. You may rejoin the queue for any additional questions or follow ups. Please stand by while we compile the Q and A roster.

Operator

Our first question comes from Yanan Zhu with Wells Fargo. Your line is open.

Yanan Zhu
Yanan Zhu
Senior Analyst, Biotechnology Equity Research at Wells Fargo

Great. Thanks for taking our questions and congrats on the quarter. I was wondering, can you talk about the patient number from 1Q to 2Q? Because I don't think we had a good sense of exactly how many patients you've infused last quarter in 1Q. So, wanted to understand the growth in patient number.

Yanan Zhu
Yanan Zhu
Senior Analyst, Biotechnology Equity Research at Wells Fargo

And I also think you might have increased the price, so perhaps talk about the price change and impact NTAPIvy revenue as well. And if you can also comment on where do you think those infusion numbers will go in the coming quarters relative to your guidance and confidence? That would be super helpful. Thank you.

Frederick Vogt
Frederick Vogt
Interim CEO, President, General Counsel & Director at Iovance Biotherapeutics

Thanks, John, and I'll start and then I'll ask Dan Kirby to add some comments to this too. So the number of infusions that we had this quarter was 102, last quarter it was 83, so that was substantial growth over last quarter obviously. There was a price increase that came into effect on April 1, which took the price of the product of vampagmi to $562,000 We expect growth and I'll let Dan talk about what we expect in the second half of this year. Go ahead, Dan.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

Sure. So for the price increase, I think your question was did we see any impact of the price increase on demand? We did not see any impact. In fact, demand increased after the price. So we didn't factor that in as being any kind of headwinds to follow.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

So with that, we also look at the future and where we see patients coming in. We have our new centers coming on as we've talked about in previous quarters and they continue to ramp up demand, as well as our existing centers. What we do see in the future happening is we're in the process of opening some ATCs that are closer in the community networks. I mentioned the distribution channel we added that is specifically at their request, which gives us access to hospitals that normally were not going to purchase Empact. So we do see demand in the second half continuing to be strong to meet the guidance that we provided.

Yanan Zhu
Yanan Zhu
Senior Analyst, Biotechnology Equity Research at Wells Fargo

Sorry, if I may quickly follow-up. I think I heard the growth in patient number was from eighty three to 102.

Frederick Vogt
Frederick Vogt
Interim CEO, President, General Counsel & Director at Iovance Biotherapeutics

Sorry, eighty five to 102.

Yanan Zhu
Yanan Zhu
Senior Analyst, Biotechnology Equity Research at Wells Fargo

85 to 102. That's a pretty good growth. Do you anticipate similar growth going forward? Or any color there, just so we have a better sense about what to expect in the coming quarters? Thank you.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

We anticipate demand to continue to be strong. As far as quarter on quarter growth, we don't want to guide to that. We want to still stick to the $2.50 to 300 range that we have in our guidance with it, which would indicate second half demand will be strong.

Yanan Zhu
Yanan Zhu
Senior Analyst, Biotechnology Equity Research at Wells Fargo

Great. Thanks.

Operator

Thank you. Our next question comes from Peter Lawson with Barclays. Your line is open.

Peter Lawson
Peter Lawson
MD - US Biotech Equity Analyst at Barclays Capital

Great. Thanks so much. Thanks for the detail on the call. Fred, just as we think about the guidance, just your level of confidence around Prolukin. You mentioned it kind of accelerating in the second half.

Peter Lawson
Peter Lawson
MD - US Biotech Equity Analyst at Barclays Capital

Kind of what gives you that level of confidence? And what do you think the the Prolukin number could be? And has there been any changes in the number of Prolukin injections? Thank you.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

Hi, Peter. I'll take that question. I think for Prolukin in the mainline channel, what we did see as evidenced in the revenue from Q1 was we're seeing the manufacturing and the clinical trial channel that represented the Q1 revenue. In Q2, we started seeing the reordering at regular basis from two of the top three wholesalers in The U. S.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

So what we expect to see moving forward is those orders continuing in from the two and then the third one coming on later this year. So it'll start to reflect more of the mTagi utilization. Along with that, we are seeing strong demand to use with mTagV, so we have not seen the number of doses, again, it's zero to six doses with one dose of mTagV. We're not seeing the doses of Prolukin change by center. Each one will do it differently, but the average doses remain consistent.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

And then finally, we do anticipate those other two channels we've been talking about that we booked revenue in Q1 on continuing to order throughout the year. So you'll see some pickup in ProBleukin based on the fact that the wholesalers are coming online.

Peter Lawson
Peter Lawson
MD - US Biotech Equity Analyst at Barclays Capital

Gotcha. Thank you so much.

Operator

Thank you. Our next question comes from Andrew Tsai with Jefferies. Your line is open.

Andrew Tsai
Andrew Tsai
SVP at Jefferies

Hey, good afternoon. Thanks for the updates. Appreciate you taking the question. So if the guidance for net cash burn is going to be less than $2.35 over the next year and I believe restructuring happens later in the year, it feels as if you're expecting gross margins to improve meaningfully, maybe even as early as Q3 relative to Q2 and Q1. Is that accurate? And if so, can you give us some color why that could be the case in terms of a meaningful margin improvement? Thank you.

Frederick Vogt
Frederick Vogt
Interim CEO, President, General Counsel & Director at Iovance Biotherapeutics

Andrew, thank you for the question. Was 2.45%, not 2.35%. You can see it in the press release and in our remarks there, but your question is still a good question. Yes, we expect margins to improve. That's the whole name of the game right now.

Frederick Vogt
Frederick Vogt
Interim CEO, President, General Counsel & Director at Iovance Biotherapeutics

We're pushing very hard and a lot of the restructuring activities are really focused on improving margin. Now we're going to enter a phase of operational excellence over the next couple of quarters to really tighten down cost of sales and do a lot of work to improve margins even more. And as volume ramps up, we'll also see improvements in margins because cost of sales will stay low while revenue goes up, especially as we scale up and use our ICPT facility. So you're absolutely right, we expect to see margin growth. And again, this quarter we saw a good margin. If you back out the non cash items and things like that, you see a very good margin on a cash basis that we have already now.

Frederick Vogt
Frederick Vogt
Interim CEO, President, General Counsel & Director at Iovance Biotherapeutics

As you see more Proleukin sales increase and as you see us do all those things, think you'll see margins go up significantly.

Andrew Tsai
Andrew Tsai
SVP at Jefferies

Thank you.

Operator

Thank you. Our next question comes from Salim Syed with Mizuho. Your line is open.

Analyst

Hi, this is Bennett for Salim. Thanks for taking our questions. Could you elaborate on the decision to withdraw the marketing authorization application in Europe? What was the feedback with EMA? And what are the steps that you're planning to take to commercialize in Europe?

Analyst

And regarding the announced restructuring, are you also planning to reduce R and D expenses? And if so, could you comment on any specific actions you would be planning to take to reduce, for example, clinical expenses? Thank you.

Frederick Vogt
Frederick Vogt
Interim CEO, President, General Counsel & Director at Iovance Biotherapeutics

Yeah, I'll take the second question first. We didn't reduce some R and D expenses, but we are not expecting any significant changes in our clinical pipeline as we discussed on the call. With respect to the EMA, we withdrew what we learned late in the review process that we need to include additional analysis in our submission. So what we want to do is go back and resubmit with an additional analysis such as the virtual control arm. Our strategy does not require us to run additional clinical trials, and we think that can happen relatively quickly. We'll be seeking scientific advice from the EMA soon to try and get back in there and work on that again with them. But that was really what the issue was. It has to do with the data package that was submitted, which we submitted was similar to the FDA package and the LCADA package and everything else, and they would like to see some more. And the easiest route for us to do that is to withdraw and resubmit.

Analyst

All right, thank you.

Operator

Thank you. Our next question comes from Tyler Van Buren with TD Cowen. Your line is open.

Nick Lorusso
VP - Biotech Equity Research at TD Cowen

Great. Thanks. This is Nick on for Tyler. Thanks for taking our question. Can you provide an update on how infusions are tracking for mTagV quarter to date?

Nick Lorusso
VP - Biotech Equity Research at TD Cowen

And then second, in the first earnings call, in the first quarter earnings call, you noted that sixty nine percent of ADCs have infused one patient, while sixteen percent infused 10 or more. Can you provide an update on these metrics and the plan to increase prescribing? Thanks.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

I'll take that one. Thanks for the questions. For the infusions quarter to date, we do see strong demand. However, we can't comment on how many infusions quarter to date. That's been our policy.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

As far as the percentage increase with those percents, they have gone up. Obviously, we have not appreciably a lot more centers that came on in the last quarter. However, we went up twenty four percent infusion. So those numbers by centers are going up with it, but we decided not to continually track those as a metric.

Nick Lorusso
VP - Biotech Equity Research at TD Cowen

Thank you.

Operator

Thank you. Our next question comes from Colleen Cusi with Baird. Your line is open.

Colleen Kusy
Senior Research Analyst at Robert W. Baird & Co

Hi, good afternoon. Thanks for taking our questions. So this EMA feedback on melanoma, do you expect this to impact your path forward in PD-one treated non small cell lung cancer?

Frederick Vogt
Frederick Vogt
Interim CEO, President, General Counsel & Director at Iovance Biotherapeutics

No, not right now. Absolutely not. It has nothing to do with The United States whatsoever. And Raj, Jorge can comment on this.

Raj Puri
Raj Puri
Chief Regulatory Officer at Iovance Biotherapeutics

Yeah, don't think, Colleen, any impact on the going forward continuing non small cell lung cancer.

Colleen Kusy
Senior Research Analyst at Robert W. Baird & Co

Great. And one quick follow-up. What sort of issues does moving to a specialty pharmacy solve for centers versus just buying through you directly?

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

It's a great question. It really solves if you think about the hospitals that are involved with the community clinics and you get close to where the patients are, a lot of times you're dealing with medium sized hospitals that have all the capabilities to administer emtagni. However, one time therapies that have higher price tags, the finance department does not want to bring those in. So they would rather go around where they would go through a specialty pharmacy where the purchase would happen through the specialty pharmacy and the specialty pharmacy would get reimbursed from the payer versus the purchase happening directly from the finance department at the hospital.

Colleen Kusy
Senior Research Analyst at Robert W. Baird & Co

Great, thank you.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

Sure.

Operator

Thank you. As a reminder, to ask a question, please press 11. Again, that is 11, ask a question. You may rejoin the queue for any additional questions or follow ups. Our next question comes from Roni Benjamin with Citizens. Your line is open.

Reni Benjamin
Managing Director at Citizens Capital Markets and Advisory

Hey, guys. Thanks for taking the questions. Maybe one, can you just talk a little bit about the numbers in terms of patient drop offs versus the manufacturing kind of out of spec rates. I think Igor had some prepared remarks regarding that. Can you just talk about the specifics from first quarter to second quarter and how you see that potentially improving throughout the rest of the year?

Reni Benjamin
Managing Director at Citizens Capital Markets and Advisory

And then kind of just going back to a previous question regarding McKesson, how see do this potentially improving revenues going forward? Like, is this something that should kind of minimally increase revenues? Like, how should we be thinking about the number of patients these one off hospitals, you know, how much they might use this?

Igor Bilinsky
Igor Bilinsky
COO at Iovance Biotherapeutics

Ren, thanks for the question. So on the first part of the question, as I mentioned, the manufacturing success rates normalized in the second quarter compared to the increase in the first quarter, so both the out of spec rate and the patient drop off rates decreased, and we're seeing further improvement in the third quarter so far. And as you can see in the Q, you will see in the Q that scrap costs went down in the second quarter compared to the first quarter, if you want to quantify that. Beyond that, we're not sharing the exact percentages, but again, you can look at the scrub costs and see the decrease in both absolute terms and the relative percentage.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

And I'll answer the question regarding both patient drop off as well as the impact of specialty pharmacy, which are a little bit related. So patient drop off does remain somewhat consistent, although we did see that we were getting patients a bit earlier in this quarter versus previous quarters. And we weren't seeing as many patients that were not making an even the tissue procurement. So we are making strides in that that avenue. The impact of specialty pharmacy allows us to actually get closer to those patients so we can get healthier patients upstream.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

And how we should be thinking about that is we're starting our journey right now. Other cell therapies are following our lead gene therapies and other therapies that are higher priced have already gone down this road successfully. So as we think about how this could have an impact on it, this could get us next to those clinics that are affiliated with those hospitals inside of network that they can treat patients inside of their network without the cost burden. So it could have a big impact long term. We already have several accounts right now that have requested it that we're opening up this channel for. So we will have some impact later this year.

Reni Benjamin
Managing Director at Citizens Capital Markets and Advisory

Got it. And if I can just have a quick follow-up just regarding the clinical trials that are ongoing for Friedrich. Just can you provide us any color in terms of how many patients are enrolled in each of these studies? How many patients worth of data might we see for non small cell as well as the other ones that we're expecting like endometrial in the second half of this year?

Friedrich Graf Finckenstein
Friedrich Graf Finckenstein
Chief Medical Officer at Iovance Biotherapeutics

Yeah, happy to respond to that. So I think what we said is that we're going going to share data by the end of the year. We will provide that information as part of those updates. I don't think that we will predefine at which patient number we would be doing that.

Reni Benjamin
Managing Director at Citizens Capital Markets and Advisory

Okay. Thank you.

Operator

Thank you. Our next question comes from David Dye with UBS. Your line is open.

David Dai
David Dai
Director at UBS Group

Hey, Yes, thanks for taking my questions. So first question just around thinking about the patient ramps for Entypy. So based on current run rate, we calculated that patients need to grow about 26 to 32 patients per quarter over the next couple of quarters and hit midpoint of the guidance. Could you just provide any detail that you're on track to hit that patient growth? And secondly, on the ATCs, you have 80 right now.

David Dai
David Dai
Director at UBS Group

How many of these ATCs are newly activated compared to last quarter? And how many are still being activated?

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

So one of the things I'll take that question. Far as the patient ramp, just to let you know, $250,000,000 to $300,000,000 is combined revenue between Probliq and Emtagny. So on the map there, those numbers aren't 26 to 30 per quarter, each quarter in a row to hit those numbers in the range. But we are confident that we are tracking towards that range and seeing mTagvi demand continue to strengthen and grow towards the end of the year, as well as Proleukin, as we mentioned before, having all three wholesalers starting to order very soon, two of those doing so currently in the main channel, give us our path forward to hit within that guide. The second question regarding how many new ATCs, again we're focusing on quality not quantity.

Dan Kirby
Dan Kirby
Chief Commercial Officer at Iovance Biotherapeutics

We happen to open several ATCs in the last quarter with it. Each one of those has been carefully vetted to have referral patterns in place so they can get earlier patients in there. And we are seeing, and I'm not going to give the exact numbers here, we are seeing substantial number of patients coming in the queue, both that have been already infused by them, but also two where they're enrolling in there to have manufacturing done for IMTAGI for their patients.

Operator

Thank you. I'm showing no further questions at this time. I would now like to turn it back to Fred Voatte, Interim Chief Executive Officer and President, for closing remarks.

Frederick Vogt
Frederick Vogt
Interim CEO, President, General Counsel & Director at Iovance Biotherapeutics

Thank you again for joining the Ivant Biotherapeutics second quarter twenty twenty five financial results and corporate updates conference call. We look forward to providing future updates on our growing commercial and clinical portfolio, including our AMPAGNI real world data presentation and planned data updates from our lung, endometrial and next generation Till studies. We are motivated by the stories we continue to hear about the patients who benefit from Iovance Till cell therapies in our clinical trials and in the commercial setting. I'm confident that Iovance will remain the global leader in innovating, developing and delivering current and future generations of tel cell therapies for patients with cancer. As always, are thankful to the patients, healthcare and advocacy communities, our partners and our exceptional Iovance team.

Frederick Vogt
Frederick Vogt
Interim CEO, President, General Counsel & Director at Iovance Biotherapeutics

I would also like to thank our shareholders and covering analysts for their support. Thank you.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

Executives
    • Sara Pellegrino
      Sara Pellegrino
      SVP - IR & Corporate Communications
    • Frederick Vogt
      Frederick Vogt
      Interim CEO, President, General Counsel & Director
    • Dan Kirby
      Dan Kirby
      Chief Commercial Officer
    • Igor Bilinsky
      Igor Bilinsky
      COO
    • Friedrich Graf Finckenstein
      Friedrich Graf Finckenstein
      Chief Medical Officer
    • Raj Puri
      Raj Puri
      Chief Regulatory Officer
Analysts
    • Yanan Zhu
      Senior Analyst, Biotechnology Equity Research at Wells Fargo
    • Peter Lawson
      MD - US Biotech Equity Analyst at Barclays Capital
    • Andrew Tsai
      SVP at Jefferies
    • Analyst
    • Nick Lorusso
      VP - Biotech Equity Research at TD Cowen
    • Colleen Kusy
      Senior Research Analyst at Robert W. Baird & Co
    • Reni Benjamin
      Managing Director at Citizens Capital Markets and Advisory
    • David Dai
      Director at UBS Group
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