Earnings Call Transcript - IOVA Q3 2023

Operator, Operator

Welcome to the Iovance Biotherapeutics Third Quarter and Year-to-Date 2023 Financial Results and Corporate Update Conference Call. My name is Abigail, and I will be your operator for today's call. I will now turn the call over to Sara Pellegrino, Senior Vice President, Investor Relations and Corporate Communications at Iovance. Sarah, you may begin.

Sara Pellegrino, Senior Vice President, Investor Relations and Corporate Communications

Thank you, Operator. Good afternoon, and thank you for joining us. Speaking on today's call, we have Dr. Fred Vogt, our Interim President and Chief Executive Officer; Dr. Igor Bilinsky, our Chief Operating Officer; Jim Ziegler, Executive Vice President, Commercial; Dr. Friedrich Finckenstein, our Chief Medical Officer; and Jean-Marc Bellemin, our Chief Financial Officer; Dr. Brian Gastman, Executive Vice President, Medical Affairs; and Dr. Raj Puri, our Executive Vice President, Regulatory Strategy and Translational Medicine are available for the Q&A session. This afternoon, we issued a press release that can be found on our corporate website at iovance.com, which includes the financial results for the 3 and 9 months ended on September 30, 2023, as well as recent corporate updates. 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, pre-commercial activities, clinical trials and results regulatory interactions, plans and strategies, research and preclinical activities, potential future applications of our technologies, manufacturing capabilities, regulatory feedback and guidance, payer interactions, licenses and collaboration, cash position and expense guidance and future updates. 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, Interim President and CEO

Thank you, Sara, and good afternoon, everyone. I'm pleased to share some significant recent milestones at Iovance. We are making substantial progress toward U.S. commercialization while exploring opportunities for our TIL therapies in other regions for solid tumor cancers. Our main focus is to secure FDA approval for the launch of Lifileucel in the U.S., a treatment for advanced melanoma patients who have limited options. The BLA process is ongoing with priority review, and we have received several positive updates. We are in close communication with the FDA to ensure an efficient review process. The FDA confirmed in September that there are no major review issues and no advisory committee meeting planned. All pre-approval inspections of clinical sites and manufacturing facilities have been successfully completed. The FDA is also engaged and has no concerns regarding the TILVANCE-301 confirmatory trial, which is on track to begin by the PDUFA date. We appreciate the efforts of the FDA review team to expedite the remaining review. We believe Lifileucel has the potential to redefine treatment options for patients who lack approved therapies after the current standard of care. With our strong clinical data, manufacturing capabilities, and readiness for commercialization, Iovance is prepared to swiftly serve the U.S. melanoma community following approval, which could occur as early as the PDUFA date of February 24, 2024. Internationally, we plan to submit additional marketing applications for Lifileucel in Europe and other regions. Based on positive feedback from the European Medicines Agency regarding specific cohorts of the C-14401 trial, we aim to submit a marketing authorization application in the first half of 2024, with a potential European launch in 2025. We are also in discussions with regulatory authorities in the U.K. and Canada, planning to submit marketing applications in both countries in the second half of next year, with potential launches in 2025. Key markets such as Germany, France, and the U.K. have early access and reimbursement mechanisms that could generate significant additional revenue by the end of 2025. We expect to provide further regulatory updates next year regarding our expansion plans for Lifileucel in Australia and other countries with many advanced melanoma patients. Collectively, the advanced melanoma population in Germany, France, the U.K., and Canada slightly exceeds that of the U.S., providing a chance to more than double the addressable patient population for Lifileucel once our geographic expansion is complete. We intend to utilize existing resources to support the melanoma community in these new regions without incurring major additional costs. For instance, our Iovance Cell Therapy Center has the necessary capacity for these new countries, and we already have operations in Amsterdam and medical support in the area. As we prepare for the Lifileucel launch, we are also integrating Proleukin, an already marketed IL-2 product used in the TIL therapy regimen. By owning Proleukin, we will offer it alongside Lifileucel and maintain full control of the IL-2 supply chain, which we anticipate will lower clinical trial expenses and future costs associated with Lifileucel. In addition to our regulatory and commercial readiness activities, our TIL therapy pipeline is advancing with seven active clinical trials. These include two registrational trials: TILVANCE-301 in frontline melanoma and LUN-202 in previously treated advanced lung cancer, which Friedrich will discuss shortly. Completing enrollment in LUN-202 in 2024 is a key priority for a potential supplemental BLA filing. Additional trials include the IOV-COM-202 trial in solid tumors and our first in-human trial of genetically modified cell therapy IOV-4001. Lastly, we are excited to launch a new Iovance cell therapy program in endometrial cancer, as checkpoint inhibitors are moving into earlier treatment lines and leaving a gap for patients who progress after immunotherapy and chemotherapy. Friedrich will provide further details on this program later in the call. Regarding our organization, we have over 500 experienced professionals in developing and commercializing oncology and cell and gene therapy products, ready for our initial U.S. launch, international expansion, and ongoing pipeline development. We have recently completed headcount increases and made significant one-time investments in commercial manufacturing readiness activities to prepare for the launch and expand our pipeline. Following these investments and our strategic portfolio prioritization, we can reduce our quarterly and annual operating expenses for the remainder of 2023 and all of 2024, while still continuing key clinical programs and maintaining internal manufacturing capabilities. Additionally, our cash position as of September 30, approximately $428 million, is expected to fund our operations into 2025. Jean-Marc will provide more details on expense guidance and cash runway assumptions during today's call. We are excited about the near-term future at Iovance as we strive to be the global leader in innovating, developing, and delivering TIL therapies for cancer patients across various solid tumors. I look forward to addressing your questions later in this call. I will now ask Igor to present our manufacturing updates.

Igor Bilinsky, Chief Operating Officer

Thank you, Fred. We are committed to operational excellence and to date have provided TIL therapy to more than 600 patients with a consistent manufacturing success rate of more than 90%. As part of the BLA review process, the FDA completed successful pre-licensing inspections of our Iovance Cell Therapy Center facility, or ICTC, and our contract manufacturing facility. Both sites are prepared with sufficient capacity and staffing to supply our commercial launch and clinical trials. Our manufacturing network strategy supports our vision to establish TIL therapy as the next paradigm-shifting course of cancer therapy in the U.S. and beyond. The ICTC is currently built to supply TIL products for more than 2,000 patients annually in the U.S. and our planned geographic expansion. By building out additional existing shelf space, the ICTC may ultimately supply TIL products for more than 5,000 patients annually. Longer term, our vision is to build capacity for more than 10,000 patients annually by adding new facilities as well as streamlining and automating manufacturing processes. Intellectual property or IP is also a critical component at Iovance. We currently hold 60 granted or allowed U.S. and international patents, including Gen 2 patent rights that we expect to provide exclusivity into 2038. Extensive detail on Iovance owned IP is available on our corporate website and within our annual report on Form 10-K. I would now like to hand the call to Jim Ziegler to highlight our commercial launch preparations. Jim?

James Ziegler, Executive Vice President, Commercial

Thank you, Igor. At Iovance, we have the potential to transform the practice of medicine in advanced melanoma and additional solid tumors. In the U.S., approximately 8,000 people die of melanoma annually, and the World Health Organization reports higher mortality in Europe. Lifileucel has the potential to become the standard of care for patients who have no currently approved treatment options after standard-of-care frontline therapy. We have a sense of urgency to deliver Lifileucel to these advanced melanoma patients upon approval. Our commercial and cross-functional teams are on track as we approach our PDUFA date. Today, I will highlight onboarding for our Authorized Treatment Centers or ATCs, payer engagement, and commercial operational readiness activities. First, onboarding is a strong indication of ATC commitment and Lifileucel demand. Today's press release provided our first status update on ATC onboarding. Approximately 30 centers have completed preapproval onboarding steps to establish their TIL service line capabilities. These centers are educated in all aspects of the Lifileucel treatment regimen with staff and processes to begin treating patients pending the approval. Previously, we shared our goal to onboard 40 ATCs within 90 days of the PDUFA date. Based on our onboarding progress, we now expect to onboard approximately 50 centers within 90 days of the PDUFA date. We are also planning a disciplined approach to organize and schedule each ATC for their first treatments with full Iovance support. We believe a positive initial experience will drive long-term success and peak revenues. Reimbursement is also essential for patient access and provider adoption. Our market access team continues to engage the key national and regional payers to accelerate timely access and appropriate reimbursement for Lifileucel upon approval. We believe payers appreciate the high unmet need, lack of treatment options, and clinical value of Lifileucel in advanced melanoma. We expect strong reimbursement for Lifileucel with a payer mix that includes a favorable commercially insured population. More than 3/4 of advanced melanoma patients are currently insured through commercial, Medicare Advantage, and Medicare IPPS exempt segments. Based on our payer interactions, we expect coverage similar to CAR-Ts, requiring prior authorization with coverage consistent with label, medical coverage policies issued within about 90 to 180 days, and single-case agreements for commercially insured patients. Although pricing will be disclosed after approval, we believe the Lifileucel value proposition supports pricing in the higher range of CAR-T cell therapies. The CAR-T prices range from $424,000 to $508,000 based on current and reported price increases, with additional price increases expected in early 2024. In addition to Lifileucel, we will receive incremental revenue from the sales of Proleukin for each patient. As a reminder, revenue recognition for Lifileucel occurs upon infusion like other cell therapies. As we approach the U.S. launch, I would like to highlight the extensive cross-functional launch preparations underway. Our commercial and cross-functional teams are on track as we approach our PDUFA date, and we remain confident in our ability to deliver a successful launch. I will now pass the call to Friedrich Finckenstein, our Chief Medical Officer, to highlight our clinical progress.

Friedrich Finckenstein, Chief Medical Officer

Thank you, Jim. This afternoon's press release highlighted several pipeline updates. On the call today, I would like to focus on our recent data presentations, which are available on our corporate website, as well as selected registrational programs in frontline advanced melanoma and non-small cell lung cancer. I will also discuss our new TIL program in endometrial cancer. We are pleased that several recent posters and presentations from our C-144-01 trial continue to support the potential benefit of Lifileucel as a one-time treatment that is differentiated from other immunotherapies for advanced melanoma. In October, during the European Society for Medical Oncology or ESMO Congress and at this week's Society for Melanoma Research or SMR, we highlighted clinically meaningful and durable activity for Lifileucel from a subgroup analysis of patients with a rare and difficult-to-treat mucosal melanoma subtype. During the Society of Immunotherapy for Cancer or SITC annual meeting last week, we highlighted the durable efficacy shown in a now 4-year analysis of pooled cohorts 2 and 4 of the C-144-01 trial. Our poster reported the longest follow-up data on Lifileucel treatment outcomes in the largest population of patients with anti-PD-1 refractory advanced melanoma treated with TIL therapy. Our registrational trials continue to advance in additional indications. TILVANCE-301 is designed to support accelerated and full approvals of Lifileucel in combination with Pembrolizumab in frontline advanced melanoma. This randomized trial remains on track to be well underway at the time of potential approval and is designed as the confirmatory trial to support full approval for Lifileucel in post-anti-PD-1 advanced melanoma. We continue to randomize patients and activate global sites in the TILVANCE-301 in key geographies with a large presence of melanoma patients and the potential for strong enrollment. We recently activated new sites in the U.S. and the first site in Australia. We also have regulatory clearances to open sites in the United Kingdom and Canada. In non-small cell lung cancer, we have also made significant progress with our registrational strategy. IOV-LUN-202 is our registrational single-arm Phase II trial in post-anti-PD-1 lung cancer. Following the positive preliminary data analysis from LUN-202, physician interest and momentum for center participation are strong and remain actively activated with the sites. We also have FDA regulatory feedback that the trial design may be acceptable for an accelerated approval of TIL therapy in post-anti-PD-1 non-small cell lung cancer. The preliminary analysis included data from the registrational population in cohorts 1 and 2, which enroll EGFR, ROS, or ALK mutation-negative patients who have progressed on or after chemotherapy and anti-PD-1 therapy. Six patients had a confirmed objective response, representing an ORR of 26.1%. All six responses, including one complete response and five partial responses, remained ongoing at the time of the data analysis and ranged from 1.4 plus to 9.7 last month. We remain on track to complete enrollment in LUN-202 in the second half of 2024. Based on this trial, we intend to submit a supplemental BLA for U.S. accelerated approval in post-anti-PD-1 non-small cell lung cancer. We are proposing a Phase III registrational trial in frontline lung cancer, which is intended to serve as the confirmatory trial for full approval in the post-anti-PD-1 setting and to support an approval in the frontline treatment setting. We plan to meet with the FDA early next year to discuss the Phase III registrational trial, where our goal is to improve frontline non-small cell lung cancer therapy by adding TIL therapy to standard of care Pembrolizumab maintenance therapy administered after completion of the initial chemo-immunotherapy. Our confidence in this frontline trial design is supported by the encouraging responses and response durations that we have observed with the TIL Pembrolizumab combination compared to standard of care benchmarks, even without chemotherapy. Turning toward our new program in endometrial cancer. As Fred mentioned, we are starting an Iovance TIL therapy program in endometrial cancer. The standard of care frontline treatment is shifting, and there is a lack of approved treatment options for patients who progress on or after immune checkpoint inhibitor containing treatment regimens. Analogous to other tumor types, our one-time TIL therapy may offer benefit in this setting. Based on the TIL mechanism of action, the benefit of TIL therapy is likely to extend across patients with tumors that are mismatched repair mechanism deficient and proficient, and our clinical program will include patients from both subgroups. We look forward to providing more details as we work towards initiating the study in the first half of 2024. I am available during the question-and-answer session. For now, I will hand the call over to Jean-Marc to discuss our year-to-date 2023 financial results.

Jean-Marc Bellemin, Chief Financial Officer

Thank you, Friedrich. I will summarize the high-level financial results for the 3 and 9 months ended on September 30, 2023. More details can be found in this afternoon's press release as well as in our SEC filings. Beginning with the balance sheet, Iovance had $427.8 million in cash, cash equivalents, investments and restricted cash as of September 30, 2023 compared to $478.3 million as of December 31, 2022. The current cash position includes approximately $203.2 million in combined net proceeds from our public offering in July 2023 and the at-the-market equity financing facility. We expect our cash position and anticipated 2024 revenue from Lifileucel and Proleukin to be sufficient to fund the current and planned operations into 2025. As Fred described earlier, we continue to internally prioritize and optimize our operations and completed many one-time investments. As we carefully manage our operating expenses, we are guiding towards 2024 cash burn in the range of $320 million to $340 million, excluding one-time expenses, and we'll continue to look for opportunities to further streamline spending and drive revenue. Transitioning to financial results, the net loss for the third quarter ended September 30, 2023, was $113.8 million or $0.46 per share compared to a net loss of $99.6 million or $0.63 per share for the third quarter ended September 30, 2022. The net loss for the 9 months ended September 30, 2023, was $327.7 million or $1.44 per share compared to a net loss of $290.6 million or $1.80 per share from the same period ended September 30, 2022. We began recording revenue from product sales following the Proleukin acquisition in May 2023 and anticipate significant revenue after the launch of Lifileucel. Revenue for the third quarter and 9 months ended September 30, 2023, was $469,000 and $707,000, respectively. There were no revenue for the third quarter and 9 months ended September 30, 2022. Cost of sales for the third quarter and 9 months ended September 30, 2023, was $4.3 million and $6.4 million, respectively. The cost of sales includes the cost of inventory associated with sales of Proleukin as well as $4 million and $5.9 million, respectively, of noncash amortization expenses of the required intangible assets of developed technology in the 3 and 9 months periods ended September 30, 2023. There was no cost of revenues for the third quarter and 9 months ended September 30, 2022. Research and development expenses were $87.5 million for the third quarter ended September 30, 2023, an increase of $15 million compared to $72.5 million for the same period ended September 30, 2022. Research and development expenses were $256.6 million for the 9 months ended September 30, 2023, an increase of $42.4 million compared to $214.2 million for the same period ended September 30, 2022. The increases in research and development expenses in the third quarter and the 9 months ended September 30, 2023, over the prior year periods were primarily attributable to growth of the internal research and development team as well as higher costs related to facilities and the initiation of new clinical trials, including the Phase III TILVANCE trial, which were partially offset by a decrease in stock-based compensation expense. Selling, general, and administrative expenses were $27.0 million for the third quarter ended September 30, 2023, a decrease of $0.9 million compared to $27.9 million for the same period ended September 30, 2022. Selling, general and administrative expenses were $77.0 million for the 9 months ended September 30, 2023, a decrease of $0.6 million compared to $77.6 million for the same period ended September 30, 2022. The decrease in selling, general, and administrative expenses in the third quarter and the 9 months ended September 30, '23 compared to prior year periods was primarily attributable to the decrease in stock-based compensation expenses and other costs related to the timing of spend compared to the prior year period, including marketing, advertising, and legal costs, partially offset by costs associated with the growth in the overall business. As of September 30, 2023, there were approximately 255.8 million common shares outstanding. Before handing the call back to the operator to kick off the Q&A session, I want to reiterate our 2024 cash burn guidance in the range of $320 million to $340 million, excluding one-time expenses, as we will carefully manage our operating expenses in the coming months and quarters. Operator, we can now start the Q&A session.

Operator, Operator

Our first question comes from Peter Lawson with Barclays.

Peter Lawson, Analyst

Just as we think about a potential E.U. filing, if you can talk about the impact of a single arm study on an E.U. approval and if that kind of changes the way you think about reimbursement as well in the E.U.? And then I've got a follow-up.

Frederick Vogt, Interim President and CEO

Sure, Peter. Yes, you're referring to the CAR-T products and their approval process. We have the TILVANCE-301 study already underway, which could give us the randomized controlled trial data we need. This is expected to be available around the time we might pursue reimbursement in Europe. There are early access programs in all major countries, and we believe the single-arm data will be sufficient for those. The EMA seems to accept single-arm data, allowing us to navigate through the early access program. As TILVANCE's results come in, we may move towards longer-term public reimbursement programs in Europe.

Peter Lawson, Analyst

And then I had a follow-up just around the number of authorized treatment centers that tend to increase. I'm just curious about what drove that increase, whether it was driven by demand, essentially, or if it was the benefit of the FDA delay?

James Ziegler, Executive Vice President, Commercial

Hi Peter, it's Jim. Yes, it's a combination of both. There's a high sense of urgency and demand from our treatment centers. So we've had a few extra weeks, months to prepare, and we're just increasing the number. And we're very confident to share that number publicly because the demand is so high right now for these centers to be able to offer Lifileucel.

Operator, Operator

Our next question comes from Colleen Kusy with Baird.

Colleen Kusy, Analyst

Congrats on all the progress and on the launch prep. So a clarifying question on the 30 centers who have completed the ATC preparation, theoretically, if Lifileucel were approved today, could those centers start preparing to dose a patient today or kind of what else needs to be done for those patients to start using Lifileucel once it's approved, once they're through the training?

Frederick Vogt, Interim President and CEO

Yes. Jim can answer this in more detail, Colleen, but yes, basically, these guys are ready to go. Jim, do you want to give a little bit more detail here?

James Ziegler, Executive Vice President, Commercial

Sure. Thanks, Colleen. Just real quickly, what we've done to date on the preapproval onboarding is, we worked this with the centers to develop their TIL service line, which includes the clinical end-to-end education and training with surgeons, cell therapy. We've operationalized the tumor journey in terms of building out workflows, SOPs, coordination and procedures on all of the logistics from OR, chain of identity, chain of custody to product handling and logistics. And we've worked extensively on the reimbursement front. So when we say that these centers are ready to go, they're ready to go. The last step in all of this will be for us to use the final label, make sure that all of our training and initiatives are consistent with the label. And then we'll roll out a very abbreviated update based upon the label, and centers will be ready to enroll their first patients.

Colleen Kusy, Analyst

And you had some commentary on the size and the mortality rate in some of the ex U.S. territories. Can you just talk a little bit more about the differences in the cell therapy market as you see it in Europe versus the U.S.? And talk about what the manufacturing plans will be in those regions?

Frederick Vogt, Interim President and CEO

Sure. The manufacturing plan we mentioned earlier, we're going to use our ICTC facility there. So I want to make it absolutely clear that we're not talking about building a new facility there right now. We're focused on using our existing facility that's already built out, efficient use of our capital. The CAR-T launches in Europe provide a pretty good yardstick for what's available there and what can be done in Europe. You can see from there's 6 CAR-T products that have been approved in Europe at this point in different jurisdictions, and you've seen sales figures. You've seen from the European sales of these things that range anywhere from tens of millions up into the low hundreds of millions at this point. So we see this as a pretty good upside opportunity here. Again, it increases the market significantly. We've got more than 3,000 patients a year in Germany dying from melanoma right now and equally concerning numbers in France and the U.K. and elsewhere. And then we've also got Canada in play here, and we're going to look at Australia as well, as we've mentioned too, we have well over 1,000 patients dying in Australia of melanoma. The demand for TIL therapy in these jurisdictions is very high. We have clinical sites there. We know the physicians very well, and we're very comfortable with launching the product there. We think it can be successful just like the CAR-Ts are.

Operator, Operator

Our next question comes from Yanan Zhu with Wells Fargo.

Yanan Zhu, Analyst

Could you provide an update on how the review is progressing? Have you conducted the late cycle meeting? Have there been any discussions regarding labeling? Also, can you share your thoughts on the agency's resources allocated to the review and whether any previous constraints have improved? I have a follow-up as well.

Raj Puri, Executive Vice President, Regulatory Strategy and Translational Medicine

Yes. I'll take that question, Fred. Thank you, Yanan, and thank you for the question. The review is coming along very well. We have been getting IRs and providing all the responses to the agency. Our late-cycle meeting is planned. We will announce when that has happened. There are no other additional issues currently that the resource issues seem to be under control, and we are expecting that our BLA would be approved perhaps before the PDUFA date in January; sometimes in January, the PDUFA date is February 2024.

Yanan Zhu, Analyst

And could you elaborate on the estimate of January? Is there anything for us to further understand here?

Raj Puri, Executive Vice President, Regulatory Strategy and Translational Medicine

The FDA typically approves products with unmet medical needs approximately 4 to 6 weeks before the PDUFA date, as they have done with all CAR-T products and others. Keeping this in mind, we expect the FDA to approve Lifileucel before its PDUFA date.

Yanan Zhu, Analyst

I would like to follow up on the number of centers and manufacturing capacity. It's great to hear that you have 30 centers nearly ready. By the time of approval, I assume there will be more centers prepared as well. My question is whether you plan to set a limit on the number of manufacturing slots available at each of these initial centers. Additionally, do you anticipate onboarding more than 50 centers within 90 days post-approval? Will your capacity accommodate that?

Frederick Vogt, Interim President and CEO

Yes. Yanan, let me start then maybe Igor can help out here. Yes, obviously, you're aware of our facility. It's a very large facility. It's got capacity as built today for the 2,000-plus patients. The FDA is the final decider on capacity with cell therapies. So we can't really say what's going on until we get the feedback from FDA as part of the approval process at the very end, we'll find out more about that. We did announce, as you saw, that we anticipate 50 ATCs within 90 days of PDUFA date. It’s possible we can go beyond that. We have to see right now, that's a pretty large launch. It'd be the largest launch ever for cell therapy. So it's pretty aggressive. But let me turn it over to Igor for just some comments on capacity and our ability to scale up between our own facilities and our contract manufacturer.

Igor Bilinsky, Chief Operating Officer

Yes. Thanks, Fred. Yan, thanks for the question. So first of all, as I mentioned earlier, the FDA completed pre-license inspections at both sites, our ICTC facility and contract manufacturing facility, both went very well and both were successful. So both sites, our ICTC site, and the contract manufacturer site are preparing for the launch and also producing clinical material. The exact capacity, as Fred mentioned, will be determined by what capacity the FDA allows. We've been hiring and training the personnel that we have been and our contract manufacturing partner has been as well in preparation for launch. But again, the exact capacity of the launch we'll know, hopefully, in the next several weeks as we get to approval.

Operator, Operator

Our next question comes from Michael Yee with Jefferies.

Dina Elmonshed, Analyst

This is Dina on for Mike. Congrats on all the progress. I just wanted to ask about lung. I know that there was a previous disclosure about potentially seeing some second-line updated lung data, maybe in a medical conference that's coming up by year-end. Is that still on track? Or what are you guys thinking about the lung strategy?

Frederick Vogt, Interim President and CEO

Yes, Dina, we're looking to put data out along when we think we have meaningful additional numbers available. So we would really like to see more patients, I think, in the study and then we will get that to a medical meeting. I don't know if we're going to get it by the end of the year at this point; it could be next year. But it's important to us to have that data be more significant once we have more patients in the study. Remember, we put out data with 23 patients in a 26.1% ORR with good signs into our ability. So it could use a dose of additional patients here to help bolster the case. Meanwhile, we're just executing on the study right now and running hard to make sure we can complete enrollments by '24.

Operator, Operator

Our next question comes from Reni Benjamin with JMP Securities.

Reni Benjamin, Analyst

Congratulations on all the progress and a very informative call. A couple of quick ones. You mentioned following the strategic portfolio prioritization. I typically think anytime that's mentioned, there have been programs that have been back-burned. Are there any programs that have been back-burned? Because you mentioned that there are 7 clinical studies that are still ongoing. And as part of that, can you just give us an update as to what's happening with the ovarian study? Or do you think the endometrial one that you're going to start will kind of take that one over.

Frederick Vogt, Interim President and CEO

Reni, I think you're referring to cervical; we don't have an ovarian program in our pipeline. Yes. So all those studies continue to run, and we actually think we can continue to run these studies in the budget we're on. When we say prioritization, we may focus more on enrolling one particular study or putting our efforts on, for example, the LUN-202 study, where we need to enroll fast. That doesn't mean we're closing the cervical study. The endometrial study when it does hit will hit later, and so we don't foresee a near-term impact on cash. We could always reevaluate the program at that point. What we're basically saying, though, is we're focusing on particular studies that are of high importance like LUN-202 and TILVANCE-301, as well as BLA approvals in the ex-U.S. filings at this point so we can drive revenues.

Reni Benjamin, Analyst

Switching to the ESMO data that Friedrich mentioned, could you discuss the progression-free survival for the pooled cohorts based on the latest long-term follow-up? Can you remind us about the subsequent therapies these patients received? If I'm correct, 26% of patients are surviving for four years. Does that indicate that patients treated with Lifileucel are not adversely affected by any post-therapies, or is there another interpretation of that data?

Raj Puri, Executive Vice President, Regulatory Strategy and Translational Medicine

Reni, I can take this one. So as you know, collecting data, collecting subsequent data is always something that you have to take with a grain of salt. We haven't put out a comprehensive summary of what we are seeing in the study. But again, I think what you're seeing in this long-term follow-up data is really the promise that TIL cell therapy has for patients treated with TIL in a setting where there's really no available care, right? So I don't actually think there is going to be a pattern here in regards to what these patients would be seeing after. We certainly don't see any signals for detriment. What we think is really fascinating in this data is the fact it's the long-term durability. The fact that we now have patients who have completed the study in a response, meaning a 5-year follow-up, which equals to a cure, and that we see late deepening of responses and conversions to a complete response, which speaks to the mechanism of action of a living drug. That I think is the importance of this data.

Reni Benjamin, Analyst

I guess just one final question regarding the label. Is there any possibility of a blue-sky sort of scenario for a labeling discussion, where you get more than what you want? Or really, when we're looking at this data, accelerated approval and the like, you think the base case scenario at least on the trial results from Cohort 3 and Cohort 4 is the best that we can hope for.

Frederick Vogt, Interim President and CEO

Well, actually, let me say something, Raj, then you can add in because we didn't answer Yanan on this fully either. But on the label front, if we get Cohort 4 followed by pool Cohort 2 plus 4, which is what we think FDA is leading towards right now based on our conversations, we think that's the home run, the best option because that allows promotion on the back of both the Cohort 4 data, the pivotal data, as well as the 153 patient data set with not reached mDOR. It's a large data set. It just gives you a lot of different promotional opportunities for the product. And Raj can tell you more about the integrity of the details of when the timing for labels and that kind of discussion comes up if you want.

Raj Puri, Executive Vice President, Regulatory Strategy and Translational Medicine

I think Fred covered it pretty well. Some of the labeling discussions have actually begun. We have received a few IRs and we have responded to them. So as far as we're concerned, that labeling has started, and we have more discussions regarding that in the next couple of weeks or so.

Operator, Operator

Our next question comes from Mara Goldstein with Mizuho.

Mara Goldstein, Analyst

If I could just return to the strategic portfolio prioritization as well as the completion of a number of activities, you mentioned that this is likely to reduce the quarterly and annual operating expenses. So I'm wondering if you can provide us with some guidance at least directionally as to what that is. And then on the ATM program, how much capacity is left there?

Frederick Vogt, Interim President and CEO

Jean-Marc, do you want to take that?

Jean-Marc Bellemin, Chief Financial Officer

Yes, definitely. Thank you, Mara, for the question. So I'm not going to be really specific, but you can imagine that this year, as we were preparing for launch, there were a lot of one-time expenses related to manufacturing readiness even on the CapEx and OpEx front, also ramping up on the commercial activities, medical. So there was a lot of spending that occurred in 2023 that will be considered one-time and not happen next year. So prioritization means also managing investment over time. And that's why we're confident about our ability to reduce our spend both quarterly and annually, as we announced during the call. And on the ATM, yes. So on the ATM, we still have a large amount available because we have a $500 million ATM on which we only had a partial amount in Q2.

Operator, Operator

Our next question comes from Asthika Goonewardene with Truist.

Karina Rabayeva, Analyst

This is Karina for Asthika. I had a question if you could share some color on the manufacturing success rate, whether you had any discussions with the FDA on this and the potential for specs to be tighter in the commercial setting as has been previously seen with other parties.

Frederick Vogt, Interim President and CEO

Igor do you want to get that?

Igor Bilinsky, Chief Operating Officer

Yes. As you know, in the case of CAR-T, we have observed extreme variations in some instances. In our situation, we have consistently maintained a manufacturing success rate of over 90% in the clinic, with the pivotal cohort achieving 94.7%. The final specifications will be determined very late in the approval process, so we cannot discuss them right now. However, this topic has certainly been part of our discussions with the agency and ongoing information requests. At this moment, we do not anticipate any significant tightening similar to what has been seen in some CAR-T cases.

Operator, Operator

Our next question comes from Ben Burnett with Stifel.

Benjamin Burnett, Analyst

I wanted to go back and ask another question about just the capacity. I understand that the FDA will sort of help define the capacity at launch just in terms of the number of slots that are available for commercial use. But I guess can you frame for us just maybe like an upper limit of the capacity that you feel like you can handle now?

Frederick Vogt, Interim President and CEO

Yes, Ben, the facility right now is actually constructed to go even beyond 2,000 patients a year at our facility. And then on top of that, we have our CDMO, Wuxi, that has considerable capacity. We haven't disclosed exactly what that is, but it's quite large. It could represent a good portion of our capacity at launch. So that's really the max that we've got constructed today without the need for additional capital.

Benjamin Burnett, Analyst

And does that include the personnel required to sort of run that type of capacity at that level?

Frederick Vogt, Interim President and CEO

Yes. The majority of that personnel is in place, and the rest of it can be put in place very quickly. Obviously, we don't just sit the personnel there as a fixed cost if we don't need to, but we are very well skilled in bringing on manufacturing and QC personnel quickly and know how to do that in both Iovance and at our CDMO.

Benjamin Burnett, Analyst

Could you give us an idea of when we might expect the labeling discussions to begin? Will this be something that comes up at the late cycle meeting, potentially the first TIL? Any insight you can share on that would be appreciated.

Raj Puri, Executive Vice President, Regulatory Strategy and Translational Medicine

Yes, as I mentioned earlier, thank you for your question. The labeling discussion has actually started. We have received a couple of requests for information clarifying details in the label. This process will continue until we potentially reach an earlier approval date. It's positive for us that we have already initiated discussions with the agency regarding labeling.

Operator, Operator

Our next question comes from Kelsey Goodwin with Guggenheim. Raj Puri, Executive Vice President of Regulatory Strategy and Translational Medicine, indicated that labeling discussions have commenced. They have received a few inquiries clarifying aspects of the label, and these discussions will continue, potentially leading to an earlier approval date. It is encouraging that they have already engaged with the agency on labeling matters.

Kelsey Goodwin, Analyst

Just a couple of quick ones for me. I guess, maybe just on ex-U.S., is this still something that you're looking to pursue on your own? And I guess, is there any appetite to maybe partner in specific regions or just more broadly ex-U.S.? And then moving on to the endometrial cancer trial, I guess, maybe could you just remind us what kind of the efficacy benchmark is in the post-PD-1 setting here?

Frederick Vogt, Interim President and CEO

Yes, I can answer the first one, Kelsey, and then Friedrich can jump in on the second part on the endometrial benchmarks. So we're always looking for opportunities, and yes, we would consider things like partnerships, strategic alliances and things like that. But right now, we do have the ability to go into these jurisdictions ourselves if needed, and we can do that with minimal capital investments right now, as we discussed in the earlier part of the call, we don't need to build a facility there. We don't need to really do a whole lot of hiring there. We can get in there and generate revenues relatively quickly. Now it turns out there's a partnership that would be of value to our shareholders, certainly, we would consider that in those jurisdictions. But right now, we're looking to do it ourselves as well. And then, Friedrich, can you answer the endometrial benchmark question?

Friedrich Finckenstein, Chief Medical Officer

Yes, that’s a great question, and I appreciate the opportunity to discuss the endometrial program. Currently, we are witnessing a shift in the standard of care from a second-line treatment to a frontline approach. However, the data on the usage and effectiveness following the use of checkpoint inhibitors is still limited. A solid reference point might be the data collected when Pembrolizumab was introduced in the second-line setting. In that case, the control arm of Study Keynote-775 used investigator's choice monotherapy, which resulted in an objective response rate of approximately 15% and a median duration of response of 5.7 months for patients with MMR proficient tumors. For MMR patients, the figures were slightly lower, with an objective response rate of 12% and a median duration of response of 4.1 months. Therefore, this could serve as a starting point, especially considering that we will be looking at populations that have received both frontline chemotherapy and either concurrent or sequential checkpoint inhibitor therapy. It’s reasonable to anticipate that we will aim for an objective response rate of about 10% to 15%.

Operator, Operator

That concludes the question-and-answer session. At this time, I would like to turn the call back to Fred Vogt for closing remarks.

Frederick Vogt, Interim President and CEO

Thank you again for joining the Iovance Biotherapeutics third quarter 2023 financial results and corporate update conference call. We've had a productive year-to-date with a priority review of the BLA, the close of the Proleukin transaction, important milestones in lung cancer, and delivering on our key regulatory commercial manufacturing and pipeline activities. I'm grateful for the patients, physicians, and regulators as well as for our employees and cross-functional teams who have collaborated on our BLA submission while advancing our mission to be the global leader in TIL therapy. I'd also like to thank our shareholders and covering analysts for their support. Please feel free to reach out to our Investor Relations team for follow up. Thank you.

Operator, Operator

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.