IOVA - Iovance And Its Struggle To Bring TIL Therapy To Market

Summary

• Iovance Biotherapeutics is a company that develops cancer immunotherapies, including lifileucel, an autologous cancer immunotherapy.
• Lifileucel is produced by collecting TILs from a patient's tumor and infusing them back into the patient and is a form of personalized medicine.
• The company is facing challenges in the regulatory process for lifileucel, including developing potency assays and the complicated process of the therapy.
• Metastatic melanoma is the current focus for lifileucel, which has shown promising results and meaningful differentiation from current treatments.
• The potential market for lifileucel is large, as more than 40% of metastatic melanoma patients do not respond to anti-PD-1 therapy, but Iovance may need additional funding in the future.

Introduction

Iovance Biotherapeutics (IOVA) develops cancer immunotherapies, with lifileucel, an autologous cancer immunotherapy, being its primary asset, produced by expanding tumor-infiltrating lymphocytes collected from a patient's tumor in the lab and infusing them back into the patient to attack cancer cells, making it a personalized therapy. The company is also developing other T cell therapies for head and neck and cervical cancers and recently initiated a rolling BLA submission to the FDA for lifileucel for metastatic melanoma and expects to complete it this quarter, but bringing it to patients remains a challenge.

The following article will focus on lifileucel's prospects in metastatic melanoma.

Financials

Before starting, let's review Iovance's financials . The company generated no revenue for Q3 2022 and incurred a net loss of $99.6M. As the company plans to market lifileucel for melanoma and continue progressing clinical prospects, expenses may increase. As of January 30, 2023, Iovance has a market cap of $1.25B, cash and investments of $360M, and long-term debt of $80M. The estimated cash runway is .75 years, meaning the company may need to increase debt or issue new shares for additional funds beyond that period.

The struggle is real

Iovance has faced some challenges in the regulatory process for lifileucel, mainly due to issues with developing potency assays, which they hope they have now resolved. As lifileucel is an autologous cancer immunotherapy, the approval process is more complex than for traditional drugs, leading to increased time and expenses for market launch.

Additional barriers include:

1. Narrow patient demographic: Only those with tumors that contain TILs are eligible for autologous cancer immunotherapy, limiting the range of patients that can undergo this therapy.

2. Expensive operations: Acquiring TILs from a patient's tumor, extending them in a lab, and then administering them back to the patient is a costly and time-consuming process.

3. Payment issues: Autologous cancer immunotherapy is a new form of therapy and reimbursement for it is not yet fully established, making it challenging to secure payment for the treatment.

4. Scant production capability: The collection and expansion of TILs requires specialized facilities and equipment, which can impede widespread access to the therapy.

5. Complicated coordination: Autologous cancer immunotherapy involves multiple steps and the involvement of various parties, making the logistics of the therapy difficult to handle.

Current treatments for metastatic melanoma and their limitations

Metastatic melanoma is a stage of skin cancer where the cancer has spread to other parts of the body. The current treatment options for metastatic melanoma include drugs such as immunotherapies such as pembrolizumab (Keytruda), nivolumab (Opdivo), and ipilimumab (Yervoy), as well as targeted therapies like vemurafenib (Zelboraf) and dabrafenib (Tafinlar). Chemotherapy and radiation therapy may also be used in some cases. While these treatments can provide benefits, they are not always effective and can have significant side effects. Additionally, melanoma can become resistant to these treatments over time.

Lifileucel provides meaningful differentiation over current treatments for melanoma

TIL therapy, and lifileucel, has shown promising results in the treatment of metastatic melanoma. TIL therapy has demonstrated higher response rates compared to traditional therapies such as chemotherapy and checkpoint inhibitors. Additionally, TIL therapy is unique in that it is a personalized approach tailored to each patient's specific cancer, which can result in a longer duration of response and potentially better outcomes. Furthermore, TIL therapy has shown a favorable safety profile with minimal toxicities, making it a promising alternative to current treatments.

Market prospects for lifileucel

The American Cancer Society states that melanoma is the fifth most common cancer among men and the sixth most common among women in the US. In 2020, an estimated 76,380 new cases of invasive melanoma were diagnosed, resulting in 9,310 estimated deaths. The number of cases is expected to increase . Data shows that more than 40% of metastatic melanoma patients do not respond to anti-PD-1 therapy, making them potential candidates for TIL therapy if Iovance's indication is approved.

Based on the same number of new cases, around 30,000 patients may benefit from TIL therapy. If only a third of them are eligible and the cost of lifileucel ranges from $100,000 to $200,000, this could result in peak annual revenue of $1B to $2B for Iovance in this indication alone.

Conclusion

Although Lifileucel has shown promise in the treatment of metastatic melanoma, it faces challenges in the regulatory process and expenses, patient eligibility, specialized facilities and equipment, complicated logistics and reimbursement issues. The current treatments for metastatic melanoma have limitations, while TIL therapy, including lifileucel, has shown higher response rates, personalized approach, favorable safety profile and is a promising alternative. With the expected increase in melanoma cases, TIL therapy could have potential market prospects if approved. The road to get there, however, will prove to be a lengthy and complicated one.

Shares of Iovance are likely to experience volatility after the FDA's decision, but their current value likely takes into consideration the associated risks and potential benefits of TIL therapy and appears to be fairly valued with room for growth.

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