Earnings Call Transcript - IBRX Q4 2025

Operator, Operator

Good afternoon, and welcome to ImmunityBio's Full Year 2025 Earnings Conference Call. Please be advised that today's call is being recorded, and a replay will be available on the Investor Relations section of ImmunityBio's website. Before we begin, I'd like to remind you that this presentation and accompanying discussion will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, are forward-looking statements, including, but not limited to, statements regarding our future financial performance, expected revenues, operating expenses, cash runway, clinical development plans, regulatory submissions and approvals, strategic collaborations, manufacturing capabilities, commercial launch planning and timing, market opportunities, and business strategy. These statements involve risks and uncertainties that could cause actual results to differ materially from those described. For a discussion of risk factors that could cause these differences, please refer to ImmunityBio's most recent filings with the Securities and Exchange Commission, including our Form 10-K filed on February 23, 2026. The company cautions you not to place undue reliance on any forward-looking statements, which speak only as of today's date. The company will not be providing forward financial guidance on today's call. Joining us today are Dr. Patrick Soon-Shiong, Founder, Executive Chairman, and Global Chief Scientific and Medical Officer; and Richard Adcock, President and Chief Executive Officer. I'll now turn the call over to Dr. Patrick Soon-Shiong.

Patrick Soon-Shiong, Founder, Executive Chairman, and Global Chief Scientific and Medical Officer

Welcome, everybody, to our conference call, and it's really a seminal moment for the company where on an annual basis, we provide an update. But this year, it's really very special because not only do we have an approval, we have the commercial results that we can show that's operational excellence on execution. We will have Rich Adcock, the CEO, present that. But before we go into the commercial launch of ANKTIVA, I would like to take this opportunity to really give a little context and history of ImmunityBio, its evolution, and more importantly, the strategy that we've embarked on since 2015 when NantKwest went public and then all the way to its merger with NantCell and the public offering of ImmunityBio. I want to indulge in doing so because I think it explains to our audience the platform of the products that make up the BioShield platform. On the one hand, we have ANKTIVA, which is truly the backbone of this entire BioShield platform. And the reason it's a backbone is: one, it is approved; two, its mechanism of action is unique. It's the first time in medical history, quite literally, that there is a cytokine molecule called IL-15 that is now approved that one has been identified by the National Cancer Institute as the #1 molecule to cure cancer as far back as 2007. And by 2024, the FDA affirmed this IL-15 by stating in the package insert, its mechanism of action is to stimulate the NK cells, CD4, CD8 T cells, and memory T cells without upregulating Treg cells. That's a mouthful. But that mouthful as a backbone serves as the foundation to take ANKTIVA and combine it with standard of care or combine it with our natural killer cell therapy and combine it all with the adenovirus. Most importantly, it serves as a backbone to treat this condition, which we will talk about called lymphopenia. So again, welcome to all. I will take the first opportunity to present the evolution and history of ImmunityBio and how through our ambition is to actually truly make a different impact in patients with cancer, patients with infectious disease, and patients with lymphopenia. After my presentation, I will turn the call over to Richard Adcock, the CEO, to discuss the current commercial status of the company, and then we will open it up for questions. I would like to provide some context. Some of you may know that over the past 3 to 6 months, we have shared the mission and vision of ImmunityBio on various media platforms, including a TV show on NewsNation discussing cancer and a significant meeting we had with the Director of the NIH and NCI along with our patients. It's crucial for me to outline our strategy from the beginning. Let's take a step back to explore the last decade, starting from July 2015 to today, to understand our approach with the molecules ImmunityBio develops, our strategy for building manufacturing facilities, and controlling master cell banks to facilitate combinations. We aim to prove that the immune system's collapse is a fundamental cause of cancer, and by addressing the immune system comprehensively, both innate and adaptive, we can alter the course of cancer. Our journey began in July 2015 when NantKwest went public after identifying NK-92, a natural killer cell available commercially. By 2016, we were invited to launch the Cancer Moonshot initiative. I created a whitepaper and presented a program to then Vice President Biden, envisioning a collaborative national effort among Big Pharma, the FDA, and the NIH to integrate multiple platforms that activate the innate and adaptive immune systems, enabling the body to fight cancer internally. Unfortunately, we realized we would need to pursue this alone, as the Biden Cancer Moonshot separated from Big Pharma and academic institutions, leading us to establish ImmunityBio. This is a long-term strategy that began in 2016, reflected in the diagram I refer to as the mind map and the concept of quantum oncotherapeutics. Let me briefly describe to you how our thinking and strategy relate directly to our products and our goal of curing cancer. I had to challenge many concepts when the idea of starving the tumor arose with the development of Avastin. I questioned that idea, which led to the creation of Abraxane to feed the tumor. Early in my career, I realized that the anti-angiogenesis theory of Avastin was flawed; starving the tumor would induce micrometastasis, which was not the solution. Voicing that perspective, especially against a large company like Genentech and Roche, was challenging at that time. In reflecting on the biology, I believed it would lead to micrometastasis because the tumor could shape-shift. By starving it, the tumor would relocate and become unrecognizable until metastasis occurred. Therefore, I believe the opposite approach should be taken: feeding the tumor. Since the tumor utilizes albumin as a delivery system, I thought, why not create a nanoparticle of albumin that the tumor would recognize as food and, within that, include a chemotherapeutic agent like paclitaxel? Hence, I developed Abraxane. Instead of starving the tumor, we opted to feed it, even though it went against conventional thinking. Next, we need to understand the tumor microenvironment, a relatively new concept during that time, which includes lymphocytes. Lymphocytes are crucial as their depletion results in a disease state called lymphopenia, which we will return to later. Lymphocytes include natural killer cells and T cells, and importantly, the interaction between CD4 and CD8 T cells and natural killer cells is essential for generating memory T cells. The generation of memory T cells is critical for ensuring that the body can remember and combat a recurring tumor, aiming for long-term remission. Duration is a significant aspect here at ImmunityBio as it indicates the generation of memory T cells and suggests being cancer-free, transforming cancer into a chronic disease. Our objective is to enable patients to be disease-free while maintaining a high quality of life over ten years. For this, we must address the tumor microenvironment. What exists within the tumor microenvironment is important as the tumor itself can change form. It can avoid T cells and also evade natural killer cells. The microenvironment consists of both killer and suppressor elements that can adapt. Natural killer cells and T cells are designed to eliminate abnormal cells, but to maintain balance, the body also develops suppressor cells. For instance, a killer T cell can become a regulatory suppressor cell, an M1 macrophage can transform into an M2 suppressor macrophage, and a neutrophil can switch from N1 to N2 suppression. We need to acknowledge this balance and engineer products that not only activate the killers but also suppress the suppressors. This ongoing conflict within the body changes in real-time based on treatment actions. This paradigm shift represents a complexity I have aimed to clarify since 2016 through multiple meetings, calling them breakthroughs in medicine, alongside thought leaders like Dr. Jeffrey Schlom and Dr. James Gulley from the National Cancer Institute, with whom we have enjoyed a productive partnership for the past decade. We established a Cooperative Research and Development Agreement to support this theory's exploration. The pivotal moment occurred in September 2016 when I met with the FDA and was invited by Sean Khozin to present to the leadership of the Oncology Center for Excellence regarding our concept of quantum oncotherapeutics and the QUILT trial, which stands for QUantum Immuno-oncology Lifelong Trial. The FDA expressed excitement and granted us permission to file an IND, marking a significant turning point. By 2017, we began developing our work, which we believe will show remarkable advances by 2027. ANKTIVA is intended to serve as a cornerstone treatment across various conditions and can complement standard therapies such as chemotherapy, radiation, and checkpoint inhibitors without discarding existing standards of care. Our goal is also to create a cancer vaccine by activating dendritic cells, using adenoviruses or molecules to present tumor antigens and educate T lymphocytes. We envision combining ANKTIVA with agents that would enhance dendritic cell activity and potentially harvesting NK cells to enhance their effectiveness. This leads us to consider creating targeted NK cells to tackle suppressors or directly target specific cancers. I appreciate the FDA for permitting us to file the IND and approving it in 2017. I will share the actual language from our initial submission to the FDA for the QUILT trials, highlighting that we identified an opportunity for Regenerative Medicine Advanced Therapy designation. The Nant Cancer Vaccine represents a modern cancer treatment designed to maximize tumor cell death while preserving immune function, addressing the problem of lymphopenia caused by current therapies. Our treatments combine immunomodulatory agents to boost the body's immune response. We noted the significance of various chemotherapy agents and their roles beyond merely eradicating tumors, such as modulating the tumor microenvironment. We received clearance to develop treatment protocols for patients who have not responded to standard therapies across various cancers, including lung and triple-negative breast cancer. This advancement has led to our platform’s first indication in bladder cancer and ongoing data on combinations like ANKTIVA with checkpoint inhibitors. Recent discussions highlighted findings from a 2007 workshop identifying IL-15 as a key molecule for cancer treatment, alongside checkpoint inhibitors. Understanding the need for T cells in the tumor microenvironment is crucial, as a lack of T cells means checkpoint inhibitors may be ineffective. We recognized that after multiple failures with traditional therapies, there is a significant need for innovative solutions. Furthermore, I emphasized the promising mechanism of action underlying ANKTIVA’s function. Both ANKTIVA and the Nant Cancer Vaccine aim to grow T and NK cells, aligning with findings on critical molecules for cancer therapy. This connection reinforces our focus on developing treatments that enhance the immune response for long-term effectiveness.

Richard Adcock, President and Chief Executive Officer

Thank you, Patrick. Good afternoon, everyone. I appreciate you all joining us today, and I'm excited to walk you through what was truly a transformational year for ImmunityBio. Before I get into the numbers, I want to reinforce a point that Patrick made. ImmunityBio is not a single-product company. ANKTIVA is our lead commercial asset and the backbone of our platform. Still, we are a multi-platform, multi-indication immunotherapy company with many trials completed and many more trials in progress across multiple tumor types, a proprietary NK cell and DNA vaccine vector platform, and a growing portfolio of regulatory designations. The commercial and financial results I'm about to walk you through reflect the strong execution of our broader strategy. With that context, I am pleased to report that ImmunityBio delivered a transformational year in 2025. Full year net product revenue for ANKTIVA was $113 million, representing a 700% year-over-year increase. To put that in context, we generated $14.1 million in net product revenue in 2024, the year of our FDA approval. In 2025, with the addition of our billing J-code, that number grew to $113 million. That is a fundamental shift in the company's trajectory and tells you that the commercial opportunity for ANKTIVA is real and growing. We also achieved a 750% increase in unit sales volume over the same period. This is an important metric because it indicates revenue growth is driven by real clinical adoption, not pricing. Clinicians are choosing ANKTIVA for their patients. And with that adoption, it is accelerating. We closed the year with a 20% quarter-over-quarter revenue growth from Q3 to Q4, demonstrating the commercial momentum we built in 2025 has continued and strengthened as we exited the year. That trajectory matters because it tells you we are not just growing off a small base, we are sustaining and accelerating growth as our base scales. Each sequential quarter in 2025 was stronger than the one before it. ANKTIVA is now authorized across 33 countries with 4 major regulatory jurisdictions: the United States, the United Kingdom, the Kingdom of Saudi Arabia, and the entire European Union. All of these were achieved within 2 years from our initial FDA approval. We believe this represents the most rapid international expansion for an immunotherapy in this indication and reflects both the strength of the clinical data and the global unmet need in bladder cancer and beyond. Let me walk you through our commercial performance, then I will cover our financial results and our strategic outlook. Starting with the United States, ANKTIVA continues to see strong and growing uptake among urologists and oncologists treating BCG-unresponsive nonmuscle-invasive bladder cancer, CIS plus and minus papillary disease. The clinical unmet need in this population is well understood. These are patients who have exhausted standard of care BCG therapy and face the prospect of a radical cystectomy, which is the removal of the bladder that is a life-altering surgery with significant morbidity. ANKTIVA offers these patients a treatment that has demonstrated a durable complete response while preserving the bladder, and clinicians are responding to that value proposition. We are seeing adoption across both community urology practice and academic medical centers. The feedback we received from treating physicians consistently highlights the favorable tolerability profile and the durable response they are seeing in their patients. Importantly, we are also seeing repeat prescribing behavior where physicians who treat continue to treat additional patients with ANKTIVA. That repeating prescribing dynamic is a strong indicator of physician confidence in the product and a key driver to the growth trajectory you are seeing in our numbers. We have invested in building our sales force and medical affairs infrastructure throughout 2025 to support this growth. Our commercial team has established strong relationship with key opinion leaders and high-volume treatment centers across the country, and we continue to expand our reach into community practice where most bladder cancer patients are seen and treated today. We are generating real-world evidence strengthening the clinical case for ANKTIVA as a routine practice. The vast majority of our $113 million in net product revenue was driven by U.S. commercial performance, and we are confident in the durability and the continued growth of that demand base as we enter into 2026. The U.S. remains our largest and most mature commercial market, and we see meaningful room for continued penetration as awareness of ANKTIVA grows amongst the broader urology and oncology communities. Turning to Europe. The European Commission granted conditional marketing authorization for ANKTIVA in February of 2026, covering all 27 European Union member states plus Iceland, Norway, and Lichtenstein. This is a major milestone that opens an enormous patient population to this treatment and represents our second largest regulatory jurisdiction after the United States. To ensure we can move rapidly towards commercial launch across this complex and diverse European regulatory landscape, we've partnered with Accord Healthcare. Accord will deploy over 100 dedicated sales, medical, and marketing professionals across 31 countries in the EU, U.K., and the European Free Trade Association member states. Accord brings a proven commercial infrastructure, established payer relationships, and deep experience with oncologists and specifically urologists in this region. This partnership allows us to access a pan-European commercial footprint without the time and capital required to build that infrastructure from scratch. We have also established an Irish subsidiary in Dublin to support European distribution and the commercialization strategy. This structure positions us for efficient coordinated execution across the region as we work through a country-by-country reimbursement and market access process. While market access time lines will vary by country, we are prioritizing the 5 largest European markets: Germany, France, Italy, Spain, and the United Kingdom, where we expect the highest patient volumes and where Accord has particularly strong commercial capabilities. In the Kingdom of Saudi Arabia, we received 2 approvals from the Saudi FDA in January of 2026. The first is the approval of ANKTIVA for BCG-unresponsive nonmuscle-invasive bladder cancer, CIS plus and minus papillary disease. The second is the conditional approval for ANKTIVA in combination with checkpoint inhibitors for metastatic nonsmall cell lung cancer. That nonsmall cell lung cancer approval is significant because it marks Saudi Arabia as first jurisdiction worldwide to authorize ANKTIVA for lung cancer, and it validates ANKTIVA's broader platform beyond bladder cancer. We recognize the ongoing global challenges and especially those affecting the Middle East today, but cancer never pauses and neither does ImmunityBio. We are actively preparing to launch ANKTIVA in Saudi Arabia for both lung and bladder cancers, with product shipments ready to commence. We will work closely with the Kingdom of Saudi Arabia to manage imports amid the current escalating circumstances. The Saudi Arabia market is increasingly important for oncology therapies as the Kingdom continues to invest heavily in health care infrastructure under its Vision 2030 program. We have partnered with Biopharma and Cigalah to expand access across and through the region with ANKTIVA to the broader Middle East and North Africa region. Biopharma and Cigalah bring deep regional expertise and established relationships with oncology centers and regulatory authorities across the Middle East and North African region. We have formed a subsidiary of the Kingdom of Saudi Arabia to support commercial launch operations in country. The Middle East-North Africa region represents a significant and underpenetrated market for advanced immunotherapies, and we believe our early-mover position gives us a meaningful competitive advantage as we build out this commercial territory. Turning now to our financial performance for the full year. 2025 was a year of significant financial progress. And I want to take you through the numbers in detail because they reflect both the commercial momentum we are generating and the discipline with which we are managing the business. As I mentioned, full year net product revenue was $113 million compared to $14.1 million in fiscal year 2024. That growth was driven by accelerating commercial uptake of ANKTIVA following our FDA approval. On a unit basis, we achieved a 750% increase in sales volumes compared to 2024, which underscores that the revenue growth reflects real clinical adoption. In the fourth quarter, net product revenue increased from $31.1 million to $38.3 million. On a sequential basis, Q4 represents a 20% increase over Q3, reflecting sustained commercial momentum through year-end. That sequential acceleration is important as it signals as we head into 2026 that the European and Saudi launches will allow for additional growth. Full year research and development expenses were $218.6 million compared to $190.2 million in 2024. The increase was driven by accelerating clinical trial expenses our programs are rapidly advancing, combined with manufacturing costs for expanding production capabilities in ANKTIVA, our CAR-NK, and DNA vaccine vectors, as well as a normal course $14 million one-time fixed asset write-off for manufacturing equipment. Our full year selling, general, and administrative expenses, or SG&A, decreased to $150 million from $168.8 million in 2024, an $18.8 million reduction. This reflects lower consulting activities as we internally developed and expanded our commercial teams as we scale our sales and expand our marketing operations. Full year net loss attributable to ImmunityBio common stockholders was $351.4 million compared to $413.6 million in 2024. The reduction of approximately $62 million in net loss is meaningful because it reflects the significant progress we have made in converting revenue growth into a narrowing loss profile. Even as we continue to invest aggressively in our clinical programs, commercially globally growing and expanding as well as our manufacturing capabilities expanding, we are on a clear trajectory towards a favorable financial profile as revenue continues to scale. As of December 31, 2025, we had a consolidated cash, cash equivalent, and marketable securities of $242.8 million. Net cash used before operating activities in the full year was $304.9 million. The major liabilities at the year-end include $505 million in related-party convertible notes and approximately $325 million in revenue interest liability on the balance sheet. For full details on the balance sheet and capital structure, I refer you to our 10-K with the SEC filing. Before I hand the call over to Patrick, let me step back and frame our 3-year global clinical and commercial strategy. We have a clear road map for how we intend to grow this company from a commercial-stage immunotherapy business into a diversified oncology platform, and it is built on our 3 platform technologies. First, ANKTIVA, our IL-15 super agonist. ANKTIVA is the backbone of our approach with its application across bladder cancer, lung cancer, colorectal cancer, pancreatic cancer. This platform leverages the approved and authorized indications we have today and the near-term label expansions we are pursuing, including BCG-naive bladder cancer and the international expansion of nonsmall cell lung cancer. The second platform is our off-the-shelf CAR-NK cell therapy programs, including our PD-L1 and CD19 CAR-NK, as well as our memory cytokine enhanced natural killer cells, or m-ceNK. This is where the combination with ANKTIVA becomes a differentiator. We are pursuing the combination of ANKTIVA and our natural killer cells in glioblastoma, non-Hodgkin's lymphoma, pancreatic cancer, triple-negative breast cancer, amongst others. Patrick will take you through the clinical data supporting this platform in detail. The third platform is our DNA vaccine vector technology, which has demonstrated a targeted immune response against specific tumor-associated antigens. We are advancing clinical programs targeting PSA in prostate cancer, HPV in cervical and head and neck cancers, as well as our NCI-NIH sponsored trial in Lynch syndrome. Our DNA vaccine platform, used in combination with ANKTIVA in treatment of Lynch syndrome, we believe represents a potential paradigm shift towards cancer prevention. ANKTIVA activates the immune system. Our natural killer cells provide direct tumor killing, and our DNA vaccine vectors deliver targeted antigen-specific responses. These modalities can be deployed individually or in combination, depending upon the tumor type and clinical setting. This versatility is a strategic advantage because it allows us to pursue multiple high-value indications from a shared manufacturing and commercial infrastructure. ImmunityBio additionally is confronting a prolonged 13-year global shortage of BCG. We have worked directly with the FDA and launched an FDA-authorized expanded access program for our recombinant BCG. This expanded access program has approximately 100 clinical sites that are active or activating, consisting of both academic medical centers and community urology practices. Today, there are more than 500 patients that have received eBCG. As a result, we have delivered several thousand doses in either a monotherapy or in combination with ANKTIVA. Across ImmunityBio's pipeline, the BCG-naive indication represents one of the most immediate commercial catalysts as we have reached 100% of the enrollment. We intend to submit a BLA, or biologics licensing application, for this indication in the fourth quarter of 2026. Approval of this would considerably broaden the addressable market for bladder cancer for ImmunityBio. Last but not least, I am pleased today to introduce you to askIB. This is ImmunityBio's internally developed and hosted artificial intelligence solution. askIB utilizes advanced large language models and parallel agentic frameworks to integrate with our global enterprise application suite directly. This integration will drive AI-powered advancements across all areas of ImmunityBio, from our cutting-edge research and development to our fully robotic manufacturing to predictive analytics that generate real-time operational insights. askIB will transform how ImmunityBio operates and innovates as we prepare for global expansion across our pipeline. In summary, we have a clear commercial franchise that is growing at 700% year-over-year. Our global footprint is now spanning 33 countries, 3 major markets that are underway, a narrowing loss profile, a 3-year platform strategy that positions us for sustained growth across multiple tumor types and modalities, and now askIB powering AI-driven innovation across the enterprise. With that strategic overview, let me hand the call over to Dr. Soon-Shiong, who will take you through the deep science and clinical data and the pipeline priorities for this platform moving forward.

Patrick Soon-Shiong, Founder, Executive Chairman, and Global Chief Scientific and Medical Officer

Let me take you through the portfolio of the products that we already have, the stages of where they are, the commercialization stages at the bladder cancer level, and the opportunity for us to have a paradigm-changing platform, all housed thankfully in one single company, without any single large pharma control, any single large pharma role, participation, so that this biotech platform could be made available to the country, to the nation, and to the world. So now let me turn my attention to the entire platform under ImmunityBio. I call this platform Immunotherapy 2.0, which combines cytokines, which is ANKTIVA; with vaccines, which is the adenovirus platform; with cell therapy platforms, which is the off-the-shelf NK-92 as well as the Apheresis Leonardo Platform. And this slide spells out this entire platform. And obviously, each of these elements of the platform are under clinical trials. So the focus of clarity will start with ANKTIVA, which is really the backbone of the 4 programs at ImmunityBio. First, ANKTIVA when combined with just standard of care, and we'll get into that; second, ANKTIVA when combined with ImmunityBio's off-the-shelf CAR-NKs, which are either PD-L1 t-haNK or CD19 t-haNK or ANKTIVA combined with ImmunityBio's apheresis program of m-ceNK. So that's ANKTIVA combined with cell therapy. Third is ANKTIVA combined with the vaccine program of adenovirus, and we'll get into that in patients with Lynch syndrome, patients with HPV, patients with colon cancer. And then finally, ANKTIVA in its own right in the treatment of lymphopenia. So these are the 4 pillars of therapies that are all in phases of clinical trials, some already approved, obviously, for bladder cancer, where I would like to take you through not only the scientific rationale, but the exciting data we're already seeing as we do these combinations. Starting with ANKTIVA alongside the standard treatment for bladder cancer, which is currently BCG. Patients with nonmuscle-invasive bladder cancer are typically treated with BCG. This type of cancer, referred to as nonmuscle-invasive bladder cancer, has a high incidence rate and remains on the mucosal layer without invading the muscle. I want to explain this to the general public: nonmuscle-invasive bladder cancer is mainly characterized by two subtypes that originate from the same clone, known as CIS and papillary. CIS presents as flat tumors, while papillary tumors are raised, resembling grapes. We have commenced a trial named QUILT-2.005 involving patients newly diagnosed with BCG nonmuscle-invasive bladder cancer exhibiting either CIS or papillary disease. In this randomized study, 366 patients were allocated to receive either BCG alone or BCG combined with ANKTIVA. Our hypothesis was that the combination of BCG and ANKTIVA would stimulate NK cells and lead to longer survival. In February of this year, we announced the full enrollment of all 366 patients in the QUILT-2.005 study. Early in the study's progression, the FDA requested us to unblind and conduct an interim analysis of the enrolled patients. The analysis revealed that complete response rates were 85% for the combination of ANKTIVA and BCG compared to 57% for BCG alone at the 6-month mark. At 9 months, the results showed an even more significant difference, with a durable complete response rate of 84% for the combination versus 52% for BCG alone. This indicates a statistically significant enhancement in the duration of complete response, supporting our hypothesis that ANKTIVA activates memory T cells and is in line with the existing approval for BCG-unresponsive nonmuscle-invasive bladder cancer. I would like to share that we have now fully accrued the patients and are aiming for the BLA submission for these naive patients in the fourth quarter of 2026. It's important to note that these studies are currently in an interim analysis phase with the FDA, and the trial remains blinded for the final analysis. We won't know the data until we unblind the complete results. Next, we'll discuss the patients who are BCG-unresponsive, known as QUILT-3.032. BCG-unresponsive refers to patients with nonmuscle-invasive bladder cancer who receive BCG treatment that fails repeatedly; after failing multiple attempts, they are considered unresponsive. Unfortunately, there is no approved drug for CIS and papillary beyond this point when we began the trial, apart from undergoing a total radical cystectomy, which means removing the bladder and creating an artificial bladder. This is a significantly life-altering procedure and carries its own risks of mortality and morbidity. Thus, patients and doctors, particularly urologists, strive to do everything possible to preserve the bladder and prevent the progression from nonmuscle-invasive to muscle-invasive cancer, as this progression dramatically increases mortality rates due to metastasis. Regarding the approval history, this trial began ten years ago. In the pivotal QUILT-3.032 trial, there were two cohorts. Cohort A consisted of patients with CIS with or without papillary disease and has received FDA approval. The complete response rate for this indication has been reported at 71% among the 100 patients included, with a duration of response lasting beyond 53 months, as reported at the AUA 2025 meeting in Las Vegas. Now turning to Cohort B, which focuses on papillary disease without CIS, this cohort represents the opposite side of BCG-unresponsive nonmuscle-invasive bladder cancer. The results from Cohort B were published in the Journal of Urology in 2026, where the papillary cohort successfully met its primary endpoint with a 12-month disease-free rate of 58%, and an impressive 24-month disease-free rate of 52%. Notably, the disease-specific survival rate—indicating patients did not succumb to bladder cancer—was 96% at the 36-month mark, with a median not yet reached, signifying that fewer than half of patients have died at this point. About 82% of these patients managed to retain their bladders after 36 months. It is crucial to highlight that for this Cohort B of papillary-only cases with BCG-unresponsive nonmuscle-invasive bladder cancer, there is currently no approved therapy other than total radical cystectomy. We have announced that the FDA has requested us to submit additional data. After they declined our request to file in May 2025, we had a Type B meeting with the FDA in January 2026. Following that, the FDA asked us for more new data, which we have recently submitted and announced. Regarding our work in bladder cancer, there has been a longstanding BCG shortage. Merck is the only supplier of BCG, and this has created a significant shortage in the country, leaving many patients unable to receive adequate treatment. However, we now have a solution to that problem. Our efforts in recombinant BCG have gained traction, and the FDA granted us expanded access to this treatment, authorizing the program on February 19, 2025, to help alleviate the ongoing TICE BCG shortage in the United States. Our first U.S. dosing took place in March 2025, and as of February 2026, we have enrolled 580 patients nationwide. This recombinant BCG is administered directly into the bladder, and we have scheduled a meeting with the FDA this month to discuss its future and how to address this chronic BCG shortage. Switching to lung cancer, we are conducting a trial involving ANKTIVA combined with standard care. In bladder cancer, the standard care was BCG, but now we are focusing on ANKTIVA's combination with checkpoint inhibitors, which help activate T cells to recognize tumors. These checkpoint inhibitors, like KEYTRUDA, function by removing restrictions on T cells, thus allowing them to target tumors more effectively. However, when tumors encounter T cells, they can alter the MHC-I receptor, making it harder for T cells to recognize them, leading to what we call checkpoint failures. This can also happen when patients have undergone chemotherapy or radiation, which can lower T cell counts in the tumor environment, limiting their effectiveness. Many patients have received multiple approvals of KEYTRUDA, but oncologists currently face the challenge of treating patients who have not responded to checkpoint inhibitors. This leads us to consider whether we could combine ANKTIVA, the highest-ranked molecule, with KEYTRUDA, the second-ranked molecule, to potentially improve survival rates. This forms the basis of our trial QUILT-3.055, designed to evaluate the addition of ANKTIVA for patients who are progressing on checkpoint inhibitors. The trial exclusively gives ANKTIVA alongside the checkpoint inhibitor. In lung cancer treatment, current literature indicates that the median survival time with docetaxel in second or third-line therapy is roughly 6 to 9 months. If we can extend survival beyond this, by potentially even doubling it to 14 months, this could signify a major breakthrough, particularly for advanced patients. We saw promising outcomes in QUILT-3.055, which led to our approval from the Saudi FDA. We have multiple trials exploring the combination of ANKTIVA with our NK cell therapy and other treatments in progress. Now, let’s address lymphopenia, which refers to low levels of NK and T cells in the body. It can be diagnosed through absolute lymphocyte count, a simple test that has been underutilized despite being available for reimbursement since 2015. One concerning finding is that approximately 20% of Americans suffer from lymphopenia, which can significantly increase mortality risk if left untreated. Our clinical trials have demonstrated that ANKTIVA can effectively raise ALC levels. The FDA has confirmed that ANKTIVA increases NK and T cell counts, and we are testing its effects on various patient populations, including those with sepsis or treatment-induced infections. Lastly, we are excited about the NANT Leonardo, a cutting-edge AI-driven platform for scalable and cost-effective cell therapy manufacturing, whether for NK cell therapy or CAR T-cell therapy. Our facility in Dunkirk, New York is poised to utilize this platform, and we are in discussions with U.S. officials regarding national preparedness at this site. We believe it can be a tremendous asset for biologics and U.S. domestic manufacturing. Thank you for your attention, and I appreciate your listening to our updates. We are now open to questions.

Operator, Operator

Our first question comes from Ted Tenthoff with Piper Sandler.

Edward Tenthoff, Analyst

Thank you for that extensive overview. It's been incredible to see the progress of the company. So that really explains a lot of what's going on at ImmunityBio. Dr. Soon-Shiong, thanks for taking time to speak with us today. Perhaps you can tell us a little bit more about this new pathway on plausible mechanism of action. Why would the FDA consider accelerated approval of ANKTIVA plus CPI in lung cancer and other indications?

Patrick Soon-Shiong, Founder, Executive Chairman, and Global Chief Scientific and Medical Officer

Thank you, Ted, for your question. I believe this new policy advocated by the FDA Commissioner is truly exciting. It was even mentioned by Jay Bhattacharya, the NIH Head, on Friday. The best way to understand it is to refer directly to the article in the New England Journal of Medicine published on December 11th, 2025, which is very recent. I would like to read from that article, which is a brief two-page piece. Specifically, it states that for a single disease with 150 different genetic mutations that have the same functional implications, we may require 150 different therapies, and the plausible mechanism pathway would ideally accommodate such therapies. Clearly, with 150 different mutations, it would not be practical to conduct 150 different trials. The article by Commissioner Makary highlights that an appropriately designed study with a small sample size can support the licensing of a product when the pharmacological effect aligns with biological plausibility. In the case of ANKTIVA, its pharmacological effect involves stimulating NK and T-cells through IL-15 without immunosuppressive regulatory cells, which is consistent with biological plausibility, as NK cells and T-cells are necessary to combat cancer. It further states the importance of this effect being congruent with observed clinical outcomes. So, to reiterate, an appropriately designed study with a small sample size can support the licensing of a product when its pharmacological effect aligns with biological plausibility and matches observed clinical outcomes. The article emphasizes that this philosophy essentially embodies the plausible mechanism pathway. So, in response to your question, yes, ANKTIVA does fall under the plausible mechanism pathway, as its biological effect aligns with its clinical outcomes. I hope that clarifies things for you.

Operator, Operator

Our next question comes from the line of Andres Maldonado with H.C. Wainwright.

Andres Maldonado, Analyst

Congrats on all the amazing progress you guys have done. So maybe one for Dr. Shiong here. As we think about all the ANKTIVA combinations, maybe specifically with your other cellular platforms, could you provide additional color on the implementation of your AI-driven robotic cellular manufacturing capabilities for us today?

Patrick Soon-Shiong, Founder, Executive Chairman, and Global Chief Scientific and Medical Officer

Thank you for that question. We are making significant progress that will be implemented very quickly. There are two perspectives to consider. We have an NK cell therapy platform that includes PD-L1 NK and CD19 NK, referred to as CAR-NKs, as well as another platform called m-ceNK. Let's focus on the m-ceNK platform first because it has remarkable scalable potential. To create an m-ceNK, we can take white cells from anyone, whether a healthy person or a cancer patient, similar to a donation at the Red Cross. These white cells can then be expanded into billions of activated NK cells and cryopreserved. This ability to freeze the cells allows us to provide them to anyone globally. As we conceptualized scalability and affordability, we collaborated with a company developing robots that we trained to produce NK cells from apheresis samples without human involvement. This system operates continuously, reduces contamination risk associated with human contact, and enhances safety. Additionally, the automation offers significant scalability advantages. Thus, we are introducing the world's first automated system that utilizes AI to manufacture natural killer cells, either in the form of targeted CAR-NK or supercharged m-ceNK. We believe we are at the forefront, not only nationally but globally, in applying AI automation, machine vision, and robotics to usher in a new era of automated manufacturing processes.

Operator, Operator

Our next question comes from the line of Jeet Mukherjee with BTIG.

Jeet Mukherjee, Analyst

Congrats on the progress. Just to follow the thread on the plausible mechanism pathway and as it relates to your QUILT-3.055 study. How many patients have you treated, and how does that perhaps compare to the number of patients treated in the single-arm studies run for pembrolizumab across tumor types?

Patrick Soon-Shiong, Founder, Executive Chairman, and Global Chief Scientific and Medical Officer

That's a great question. The inquiry is about the potential for drugs to be approved based on single-arm studies, and there is clear evidence for that. A relevant comparison is Merck's approval for microsatellite instability-high, or MSI, across all tumor types. They received approval based on five single-arm trials involving 149 patients in total. For example, there were 6 patients with gastric bladder cancer and triple-negative breast cancer, 5 patients with biliary, esophageal, or endometrial cancer, and 19 patients classified as non-colorectal. Thus, these single-arm, uncontrolled open-label trials accounted for 149 patients, which led to full approval for using KEYTRUDA regardless of tumor type, as long as they had MSI high. In our QUILT-3.055, we treated 147 patients, which is almost the same number, of whom 86 were in later lines of treatment for non-small cell lung cancer. The QUILT-3.055, which we will discuss with the FDA, includes either PD-L1 high or low patients with significantly prolonged survival where no other treatment options are available, except for further chemotherapy. This aligns with the concept of single-arm trials. To highlight the significance of single-arm trials, KEYTRUDA was approved for multiple indications based on single-arm trials, including for head and neck cancer, Hodgkin's lymphoma, and urothelial cancer, among others. It demonstrates the precedent that the FDA has set for single-arm trials in T-cell immunotherapy where no other treatment exists. I hope this answers your question.

Operator, Operator

Our next question comes from the line of Clara Dong with Jefferies.

Yuxi Dong, Analyst

Congrats on all the progress. So you've made a lot of progress recently, both in the U.S. and outside of the U.S. So just curious how you're thinking about the global commercial growth of ANKTIVA and maybe also talk to us about what the market access looks like in different regions as well.

Patrick Soon-Shiong, Founder, Executive Chairman, and Global Chief Scientific and Medical Officer

You will take that, Rich?

Richard Adcock, President and Chief Executive Officer

Thank you. Thank you, Clara. As you know, we've already launched distribution agreements with Accord, Cigalah and Biopharma. And in each of those, there were very specific reasons that we picked them. Accord is going to collaborate with ImmunityBio for the United Kingdom and all of the European Union. And in the U.K. and EU, each one of those member states have their own reimbursement process you have to go through. So you have to do a country-by-country and that's one of the biggest reasons we selected Accord because they have deep resources that do this regularly through those. So if you look at that, as I indicated, the big 5 is where we'll start with those. Germany is likely to be first just by the nature of how progressed we are and the work that we've already done with that one. And so we're looking forward to that in 2026. Much of the work is really getting it to be accelerated. So we are prepared in ramping up in '26 heading into '27. But for the Middle East regions, we've already secured, as you know, 2 approvals from the Saudi FDA for both bladder and lung. But beyond that, we're already in direct conversations with multiple other health regulatory authorities about approvals in that region as well. And so each of those will represent new growth opportunities. Now, Saudi, as I indicated, we already have product that is literally ready to be delivered as soon as possible. Same way with Germany. So there's no holdup from any supply constraints. It's just us working through the process on those. So if you take a look at that, '26, we'll be working country by country through those and adding new regulatory approvals is what our focus will be.

Operator, Operator

Our next question comes from the line of Jason Kolbert with D. Boral Capital.

Jason Kolbert, Analyst

Dr. Shiong, thank you for outlining the paradigm shift. It's evident to me that ImmunityBio is fundamentally altering our understanding of cancer therapy. I would like to delve deeper into your remarks regarding the mode of failure. How much insight do we have about the failures associated with checkpoint inhibitors that indicate the reconstitution of NK cells can either suppress or eliminate malignant cells? We are observing the anecdotal clinical data you're generating, but I'm trying to grasp the extent of scientific literature that supports this mechanism. Also, I appreciate your efforts and the clarity of your explanation. What you're doing is groundbreaking and, in many respects, poses a significant challenge to Big Pharma. We are all observing this closely and are very excited about it.

Patrick Soon-Shiong, Founder, Executive Chairman, and Global Chief Scientific and Medical Officer

Thank you, Jason. While this may seem like new science, it’s exciting for us since we’ve been working on this for a decade. I encourage you to search PubMed, particularly for Jeffrey Schlom, the head of the immuno-oncology program at the National Cancer Institute. We’ve been making strides to answer your core question about the mode of failure of checkpoint inhibitors. Essentially, these inhibitors depend on T cells because they remove the brakes, allowing T cells to function. However, over time, tumors become adept at evading detection by withdrawing the receptor that T cells target. This inability to recognize the tumor represents a major failure point for BCG, checkpoint inhibitors, and chemotherapy alike. Additionally, chemotherapy and radiation can eliminate T cells and NK cells, further impairing the effectiveness of checkpoint inhibitors since there's nothing left to activate. Currently, there’s a significant concern in the American population, especially with the anticipated 40 approvals of KEYTRUDA by 2025 based on many single-arm trials spanning various tumor types. The influx of checkpoint inhibitors has overwhelmed oncologists, creating a crisis. This raises the question: Could a natural killer cell save checkpoint inhibitors that are failing? Picture patients with second, third, or fourth line lung cancer facing a survival window of 6 to 9 months, often suffering through a painful last half-year with chemotherapy. However, if we can shift that outcome by combining the top-ranked molecule, ANKTIVA, with KEYTRUDA, we should explore whether this could improve survival. That methodology forms the basis of our QUILT-3.055 trial, designed to assess if adding ANKTIVA to patients who are progressing on a checkpoint inhibitor could make a difference without introducing chemotherapy. It's critical to understand that eligibility for this trial requires patients to be progressing on the checkpoint inhibitor, after which we introduce ANKTIVA. This combination aims to evaluate overall survival. The literature suggests that for patients undergoing second and third-line treatments with docetaxel, median survival ranges from 6 to 9 months. If we could enhance survival for these very ill lung cancer patients, potentially increasing it from 7 to 14 months, that would represent a significant breakthrough, even in advanced cases. We believe that we have achieved this in QUILT-3.055, which was recognized with approval by the Saudi FDA. Due to time constraints, I can't detail all the trials, but you can refer to our press release for information on trials combining ANKTIVA with our NK cell therapy and with adenoviruses. There are several trials implementing this BioShield platform through both single-arm and randomized studies.

Operator, Operator

And we have reached the end of the question-and-answer session and this also concludes today's conference call. And as a quick reminder, you can find the recording of the conference in its entirety available on the company's website. We do thank you for your participation and have a great day.