IOVANCE BIOTHERAPEUTICS, INC. [IOVA] Filings

September 30,

Cash and cash equivalents

10-Q 1 iova-20230930x10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number 001-36860

IOVANCE BIOTHERAPEUTICS, INC.

(Exact name of issuer as specified in its charter)


Delaware	75-3254381
(State or other jurisdiction of	(I.R.S. employer
incorporation or organization)	identification number)

825 Industrial Road, Suite 400, San Carlos, CA 94070

(Address of principal executive offices and zip code)

(650) 260-7120

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.000041666		IOVA		The Nasdaq Global Market

At October 30, 2023, the issuer had 255,918,448 shares of common stock, par value $0.000041666 per share, outstanding.

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IOVANCE BIOTHERAPEUTICS, INC.

FORM 10-Q

For the Quarter Ended September 30, 2023

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		Page
PART I FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	44
PART II OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	95
Item 3.	Defaults Upon Senior Securities	95
Item 4.	Mine Safety Disclosure	95
Item 5.	Other Information	95
Item 6.	Exhibits	96
SIGNATURES		97

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Forward-Looking Statements and Market Data

This Quarterly Report on Form 10-Q contains forward-looking statements that are based on management’s beliefs and assumptions and on information currently available to management. All statements other than statements of historical facts contained in this report are forward-looking statements. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “might,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “aim,” “potential,” “continue,” “ongoing,” “goal,” “forecast,” “guidance,” “outlook,” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words.

These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this report, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

●

the success, cost, enrollment, and timing of our clinical trials;

●

the success, cost and timing of our product development activities;

●

the ability of us or our third-party contract manufacturers to continue to manufacture tumor infiltrating lymphocytes, or TIL, in accordance with our selected process;

●

our ability to design, construct and staff our own manufacturing facility on a timely basis and within the estimated expenses;

●

the success of competing therapies that are or may become available;

●

regulatory developments in the United States of America, or U.S., and foreign countries;

●

the timing of and our ability to obtain and maintain U.S. Food and Drug Administration, or the FDA, or other regulatory authority approval of, or other action with respect to, our product candidates, including with respect to the approval of the Biologics License Application (BLA) for lifileucel for patients with advanced melanoma;

●

our ability to attract and retain key scientific or management personnel;

●

the accuracy of our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

●

our ability to obtain funding for our operations, including funding necessary to complete further development and commercialization of our product candidates;

●

our ability to successfully commercialize Proleukin® and any other product candidates for which we obtain FDA or other regulatory approvals;

●

the ability and willingness of our third-party research institution collaborators to continue research and development activities relating to our product candidates;

●

the potential of our other research and development and strategic collaborations;

●

our expectations regarding our ability to obtain and maintain intellectual property protection for our manufacturing methods and product candidates;

●

our plans to research, develop and commercialize our product candidates;

●

the size and growth potential of the markets for our product candidates, and our ability to serve those markets;

●

our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;

●

fluctuations in the trading price of our common stock; and

●

our use of cash and other resources.

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Actual results may differ from those set forth in this Quarterly Report on Form 10-Q due to the risks and uncertainties inherent in our business, including, without limitation: the FDA may not agree with our interpretation of the results of its clinical trials; later developments with the FDA that may be inconsistent with already completed FDA meetings; the preliminary clinical results, including efficacy and safety results, from ongoing Phase 2 and Phase 3 trials may not be reflected in the final analyses of these trials including new cohorts within these trials; the results obtained in our ongoing clinical trials, such as the studies and trials referred to in this Quarterly Report on Form 10-Q, may not be indicative of results obtained in future clinical trials or supportive of product approval; regulatory authorities may potentially delay the timing of FDA or other regulatory authority approval of, or other action with respect to, our product candidates, specifically, our description of FDA interactions are subject to FDA’s interpretation, as well as FDA’s authority to request new or additional information; we may not be able to obtain or maintain FDA or other regulatory authority approval of its product candidates; our ability to address FDA or other regulatory authority requirements relating to our clinical programs and registrational plans, such requirements including, but not limited to, clinical and safety requirements as well as manufacturing and control requirements; risks related to our accelerated FDA review designations; our ability to obtain and maintain intellectual property rights relating to our product pipeline; and the acceptance by the market of our product candidates and their potential reimbursement by payors, if approved.

We caution you that the risks, uncertainties and other factors referenced above may not contain all the risks, uncertainties and other factors that are important to you. In addition, we cannot guarantee future results, level of activity, performance or achievements. Any forward-looking statement made by us in this Quarterly Report on Form 10-Q speaks only as of the date of this Quarterly Report on Form 10-Q or as of the date on which it is made. Except as required by law, we undertake no obligation to publicly update any forward-looking statements, whether because of new information, future events or otherwise, after the date of this Quarterly Report on Form 10-Q.

Unless the context requires otherwise, in this report the terms “Iovance,” the “Company,” “we,” “us” and “our” refer to Iovance Biotherapeutics, Inc.

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PART I. FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

IOVANCE BIOTHERAPEUTICS, INC.

Condensed Consolidated Balance Sheets

(unaudited; in thousands, except share and per share information)


	September 30,		December 31,
	2023		2022
ASSETS

Current Assets
Cash and cash equivalents	$	267,720	$	231,731
Short-term investments		93,654		240,114
Inventory		9,195		—
Prepaid expenses and other assets		12,017		7,271
Total Current Assets		382,586		479,116

Property and equipment, net		113,142		105,232
Intangible assets, net		223,610		—
Operating lease right-of-use assets		66,265		73,015
Restricted cash		66,430		6,430
Long-term assets		282		189
Total Assets	$	852,315	$	663,982

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities
Accounts payable	$	19,274	$	26,603
Accrued expenses		61,213		52,295
Operating lease liabilities		10,468		12,587
Total Current Liabilities		90,955		91,485

Non-Current Liabilities
Operating lease liabilities – non-current		68,009		71,859
Deferred tax liabilities		18,343		—
Long-term note payable		1,000		1,000
Total Non-Current Liabilities		87,352		72,859
Total Liabilities		178,307		164,344

Commitments and contingencies

Stockholders’ Equity
Series A Convertible Preferred stock, $0.001 par value; 17,000 shares designated, 194 shares issued and outstanding as of September 30, 2023 and December 31, 2022		—		—
Series B Convertible Preferred stock, $0.001 par value; 11,500,000 shares designated, 2,842,158 shares issued and outstanding as of September 30, 2023 and December 31, 2022		3		3
Common stock, $0.000041666 par value; 500,000,000 shares authorized, 255,833,679 and 187,812,072 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		11		8
Accumulated other comprehensive income (loss)		(9,097)		(902)
Additional paid-in capital		2,579,087		2,068,867
Accumulated deficit		(1,895,996)		(1,568,338)
Total Stockholders’ Equity		674,008		499,638
Total Liabilities and Stockholders’ Equity	$	852,315	$	663,982

The accompanying notes are an integral part of these condensed consolidated financial statements.

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IOVANCE BIOTHERAPEUTICS, INC.

Condensed Consolidated Statements of Operations

(unaudited; in thousands, except per share information)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022

Revenue
Product revenue	$	469	$	—	$	707	$	—
Total revenue		469		—		707		—

Costs and expenses
Cost of sales	$	4,340	$	—	$	6,390	$	—
Research and development		87,526		72,502		256,607		214,208
Selling, general and administrative		26,964		27,893		77,013		77,634
Total costs and expenses		118,830		100,395		340,010		291,842

Loss from operations		(118,361)		(100,395)		(339,303)		(291,842)
Other income
Interest income, net		3,358		777		9,925		1,268
Net Loss before income taxes	$	(115,003)	$	(99,618)	$	(329,378)	$	(290,574)
Income tax benefit		1,243		—		1,720		—
Net Loss	$	(113,760)	$	(99,618)	$	(327,658)	$	(290,574)
Net Loss Per Share of Common Stock, Basic and Diluted	$	(0.46)	$	(0.63)	$	(1.44)	$	(1.85)
Weighted Average Shares of Common Stock Outstanding, Basic and Diluted		245,817		157,817		228,115		157,404

The accompanying notes are an integral part of these condensed consolidated financial statements.

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IOVANCE BIOTHERAPEUTICS, INC.

Condensed Consolidated Statements of Comprehensive Loss

(unaudited; in thousands)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net Loss	$	(113,760)	$	(99,618)	$	(327,658)	$	(290,574)
Other comprehensive loss:
Unrealized gain/(loss) on investments		18		659		912		(1,437)
Foreign currency translation adjustment		(9,440)		—		(9,107)		—
Comprehensive Loss	$	(123,182)	$	(98,959)	$	(335,853)	$	(292,011)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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IOVANCE BIOTHERAPEUTICS, INC

Condensed Consolidated Statements of Stockholders’ Equity

For the Three Months Ended September 30, 2023 and 2022

(unaudited; in thousands, except share information)


	Series A			Series B
	Convertible			Convertible						Additional		Accumulated Other				Total
	Preferred Sock			Preferred Stock			Common Stock			Paid-In		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Income (Loss)		Deficit		Equity
Balance - June 30, 2023	194	$	—	2,842,158	$	3	224,688,434	$	9	$	2,360,468	$	325	$	(1,782,236)	$	578,569
Stock-based compensation expense	—		—	—		—	—		—		15,821		—		—		15,821
Vesting of restricted shares issued for services	—		—	—		—	195,243		—		—		—		—		—
Tax payments related to shares retired for vested restricted stock units	—		—	—		—	(49,998)		—		(379)		—		—		(379)
Common stock sold in public and/or at the market offerings, net of offering costs	—		—	—		—	31,000,000		2		203,177		—		—		203,179
Unrealized gain on investments	—		—	—		—	—		—		—		18		—		18
Foreign currency cumulative translation adjustment	—		—	—		—	—		—		—		(9,440)		—		(9,440)
Net loss	—		—	—		—	—		—		—		—		(113,760)		(113,760)
Balance - September 30, 2023	194	$	—	2,842,158	$	3	255,833,679	$	11	$	2,579,087	$	(9,097)	$	(1,895,996)	$	674,008

Balance - June 30, 2022	194	$	—	2,842,158	$	3	157,800,581	$	7	$	1,838,778	$	(2,697)	$	(1,363,401)	$	472,690
Stock-based compensation expense	—		—	—		—	—		—		19,780		—		—		19,780
Common stock issued upon exercise of stock options	—		—	—		—	40,000		—		225		—		—		225
Unrealized loss on short-term investments	—		—	—		—			—		—		659		—		659
Net loss	—		—	—		—	—		—		—		—		(99,618)		(99,618)
Balance - September 30, 2022	194	$	—	2,842,158	$	3	157,840,581	$	7	$	1,858,783	$	(2,038)	$	(1,463,019)	$	393,736

The accompanying notes are an integral part of these condensed consolidated financial statements.

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IOVANCE BIOTHERAPEUTICS, INC

Condensed Consolidated Statements of Stockholders’ Equity

For the Nine Months Ended September 30, 2023 and 2022

(unaudited; in thousands, except share information)


	Series A			Series B
	Convertible			Convertible						Additional		Accumulated Other				Total
	Preferred Sock			Preferred Stock			Common Stock			Paid-In		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Income (Loss)		Deficit		Equity
Balance - December 31, 2022	194	$	—	2,842,158	$	3	187,812,072	$	8	$	2,068,867	$	(902)	$	(1,568,338)	$	499,638
Stock-based compensation expense	—		—	—		—	—		—		48,226		—		—		48,226
Vesting of restricted stock shares issued for services	—		—	—		—	1,112,864		—		—		—		—		—
Tax payments related to shares retired for vested restricted stock units	—		—	—		—	(405,539)		—		(2,609)		—		—		(2,609)
Common stock issued upon purchase through employee stock purchase plan	—		—	—		—	226,196		—		1,271		—		—		1,271
Common stock issued upon exercise of stock options	—		—	—		—	7,860		—		55		—		—		55
Common stock sold in public and/or at the market offerings, net of offering costs	—		—	—		—	67,080,226		3		463,277		—		—		463,280
Unrealized loss on investments	—		—	—		—	—		—		—		912		—		912
Foreign currency cumulative translation adjustment	—		—	—		—	—		—		—		(9,107)		—		(9,107)
Net loss	—		—	—		—	—		—		—		—		(327,658)		(327,658)
Balance - September 30, 2023	194	$	—	2,842,158	$	3	255,833,679	$	11	$	2,579,087	$	(9,097)	$	(1,895,996)	$	674,008

Balance - December 31, 2021	194	$	—	2,842,158	$	3	157,004,742	$	7	$	1,794,695	$	(601)	$	(1,172,445)	$	621,659
Stock-based compensation expense	—		—	—		—	—		—		64,513		—		—		64,513
Common stock issued upon purchase through employee stock purchase plan	—		—	—		—	80,203		—		582		—		—		582
Vesting of restricted shares issued for services	—		—	—		—	898,392		—		—		—		—		—
Tax payments related to shares retired for vested restricted stock units	—		—	—		—	(346,335)		—		(2,649)		—		—		(2,649)
Common stock issued upon exercise of stock options	—		—	—		—	203,579		—		1,642		—		—		1,642
Unrealized loss on investments	—		—	—		—	—		—		—		(1,437)		—		(1,437)
Net loss	—		—	—		—	—		—		—		—		(290,574)		(290,574)
Balance - September 30, 2022	194	$	—	2,842,158	$	3	157,840,581	$	7	$	1,858,783	$	(2,038)	$	(1,463,019)	$	393,736

The accompanying notes are an integral part of these condensed consolidated financial statements.

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IOVANCE BIOTHERAPEUTICS, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited; in thousands)


	Nine Months Ended
	September 30,
	2023		2022
Cash Flows from Operating Activities
Net loss	$	(327,658)	$	(290,574)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		48,226		64,513
Unrealized exchange gains		176		—
Amortization of intangible assets		5,939		—
Amortization of right-of-use assets		8,855		8,932
Depreciation and amortization of property and equipment		8,619		6,496
Deferred tax benefit		(1,720)		—
Accretion of discounts and premiums on investments		(1,878)		1,128
Loss on write-off of fixed assets		—		314
Changes in assets and liabilities:
Prepaid expenses, other assets and long-term assets		(4,914)		(4,976)
Inventory		(9,195)		—
Operating lease liabilities		(8,074)		366
Accounts payable		(6,595)		4,327
Accrued expenses and other liabilities		10,369		(5,612)
Net cash used in operating activities		(277,850)		(215,086)

Cash Flows from Investing Activities
Maturities of investments		247,583		423,586
Purchase of investments		(98,333)		(150,189)
Cash paid for acquisition, net of cash acquired		(212,886)		—
Purchase of property and equipment		(18,761)		(17,403)
Net cash (used in) provided by investing activities		(82,397)		255,994

Cash Flows from Financing Activities
Tax payments related to shares withheld for vested restricted stock units		(2,609)		(2,649)
Proceeds from the issuance of common stock under employee stock purchase plan		1,271		582
Proceeds from the issuance of common stock upon exercise of options		55		1,642
Proceeds from the issuance of common stock, net		463,280		—
Net cash provided by (used in) financing activities		461,997		(425)
Effect of exchange rate changes		(5,761)		—
Net increase in cash, cash equivalents and restricted cash		95,989		40,483
Cash, Cash Equivalents and Restricted Cash Beginning of Period		238,161		84,313
Cash, Cash Equivalents and Restricted Cash End of Period	$	334,150	$	124,796

Supplemental disclosure of non-cash investing and financing activities:
Fair value of net assets acquired	$	222,637	$	—
Net unrealized gain (loss) on investments		912		(1,437)
Acquisition of property and equipment included in accounts payable and accrued expenses		3,752		1,626
Accrued capitalized acquisition costs		63		—
Lease liabilities arising from obtaining right-of-use asset from new leases		177		553
Lease liabilities arising from obtaining right-of-use asset from lease modifications		1,929		7,664

The accompanying notes are an integral part of these condensed consolidated financial statements.

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IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 1. GENERAL ORGANIZATION, BUSINESS AND LIQUIDITY

General Organization and Business

Iovance Biotherapeutics, Inc. (the “Company”) is a biopharmaceutical company pioneering a transformational approach to treating cancer by harnessing the human immune system’s ability to recognize and destroy diverse cancer cells using therapies personalized for each patient. The Company’s mission is to be the global leader in innovating, developing and delivering tumor infiltrating lymphocyte (“TIL”) therapies for patients with solid tumor cancers. The Company’s autologous TIL therapy platform uses a centralized, scalable, and proprietary 22-day manufacturing process to grow polyclonal T-cells unique to each patient and yields a cryopreserved, individualized therapy. In May 2023, the Company acquired the worldwide rights to Proleukin® (aldesleukin), a commercialized interleukin-2 (“IL-2”) product used to promote T-cell activity following TIL infusion. The acquisition of Proleukin® provides a new revenue source, secures the IL-2 supply chain and logistics surrounding TIL therapy administration, and lowers cost of goods and clinical trial expenses for Proleukin® used with TIL therapies.

The Company is currently conducting clinical trials to investigate multiple TIL therapies for multiple indications, including its lead product candidate, lifileucel, for advanced, or metastatic or unresectable, melanoma. The Company completed a rolling Biologics License Application (“BLA”) submission to the U.S. Food and Drug Administration (the “FDA”) for lifileucel for patients with advanced melanoma in March 2023, and the FDA accepted its BLA and granted lifileucel Priority Review in May 2023. The FDA originally assigned November 25, 2023 as the target action date for a decision under the Prescription Drug User Free Act (“PDUFA”); the target action date was recently updated by the FDA to February 24, 2024. The Company is also pursuing registrational strategies for lifileucel in advanced cervical cancer and for its TIL therapy LN-145 in metastatic non-small cell lung cancer (“NSCLC”). In addition, the Company is investigating next generation approaches to optimize TIL products, manufacturing processes and treatment regimens, including a first-in-human clinical trial of its lead genetically modified TIL therapy, IOV-4001. The Company is also exploring a shorter manufacturing process, tumor tissue procurement via core biopsy, additional genetically modified TIL therapies including multiple immune checkpoint gene edits, and cytokine-tethered TIL therapies, as well as a novel IL-2 analog, designated IOV-3001, as potential avenues to improve efficacy, manufacturing timelines, sample collection and supportive treatments involved in the overall TIL therapy process and treatment regimen.

Basis of Presentation of Unaudited Condensed Consolidated Financial Information

The accompanying unaudited condensed consolidated financial statements of the Company for the three and nine months ended September 30, 2023 and 2022 have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for audited financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the Company's financial position and results of operations. Results shown for interim periods are not necessarily indicative of the results that may be expected for the year ended December 31, 2023 or for any other period. The condensed consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 28, 2023. These interim financial statements should be read in conjunction with that report. The reporting currency of the Company is U.S. dollars. The functional currency for most of its foreign subsidiaries is their local currency.

Liquidity

The Company is currently engaged in the development of therapeutics to fight solid tumor cancers. With the completion of the rolling BLA submission for lifileucel for advanced melanoma in March 2023, the Company expects to generate revenue from the sale of its product lifileucel, if the BLA is approved. Furthermore, upon the completion of the closing of the acquisition of the worldwide rights to Proleukin®(as discussed below in Note 4 - Proleukin® Acquisition) in the second quarter of 2023, the Company generated revenue from the sales of Proleukin® during the three and nine months ended September 30, 2023. However, such revenues for Proleukin® and lifileucel may not be material during the 12 months from the date these condensed consolidated financial statements are issued. The Company has incurred a net loss of $327.7 million for the nine months ended September 30, 2023 and used $277.9 million of cash in its operating activities during the nine months ended September 30, 2023. As of September 30, 2023, the Company

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had $427.8 million in cash, cash equivalents, investments, and restricted cash ($267.7 million of cash and cash equivalents, $93.7 million in short-term investments and $66.4 million in restricted cash).

The Company expects to continue to incur significant expenses to support its preparations for the commercialization and launch of lifileucel (if approved), including continuing to prepare the Iovance Cell Therapy Center (the “iCTC”), its manufacturing facility in Philadelphia, to support the Company’s ongoing and planned clinical programs, including its NSCLC registration directed study and its frontline advanced melanoma Phase 3 confirmatory trial, TILVANCE-301, to expand the combination of TIL and immune checkpoint inhibitors (“ICI’s”) in ICI naïve patient cohorts, and to support Proleukin® integration activities during 2023 and beyond. Based on the funds the Company has available as of the date these condensed consolidated financial statements are issued, the Company believes that it has sufficient capital to fund its anticipated operating expenses and capital expenditures as planned for at least the next twelve months from the date these condensed consolidated financial statements are issued.

Concentrations of Risk

The Company is subject to credit risk from its portfolio of cash, cash equivalents, trade accounts receivable and investments. Under its investment policy, the Company limits amounts invested in securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government. The Company does not believe it is exposed to any significant concentrations of credit risk from these financial instruments. The goals of its investment policy are safety and preservation of principal, diversification of risk, and liquidity of investments sufficient to meet cash flow requirements.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash, Cash Equivalents, and Investments

The Company’s cash and cash equivalents include short-term investments with original maturities of three months or less when purchased. The Company's investments are classified as “available-for-sale.” The Company includes these investments in current assets or non-current assets in the condensed consolidated balance sheets based on the length of maturity from the reporting date and carries them at fair value. Unrealized gains and losses on available-for-sale securities are recorded in the condensed consolidated statements of comprehensive loss. Impairment losses related to credit losses (if any) are recorded as an allowance for credit losses with an offsetting entry to Interest income, net. No impairment losses related to credit losses were recognized for the three and nine months ended September 30, 2023 and 2022. The cost of debt securities is adjusted for the amortization of premiums and accretion of discounts to maturity. Such amortization and accretion are included in Interest income, net in the condensed consolidated statements of operations. Gains and losses on securities sold are recorded based on the specific identification method and are included in Interest income, net in the condensed consolidated statements of operations. The Company has not incurred any realized gains or losses from sales of securities to date. The Company’s investment policy limits investments to certain types of instruments such as certificates of deposit, money market instruments, obligations issued by the U.S. government and U.S. government agencies as well as corporate debt securities and commercial paper, and places restrictions on maturities and concentration by type and issuer, except for securities issued by the U.S. government.

Restricted Cash

The Company maintains a required minimum balance in a segregated bank account in connection with its letters of credit for which amounts are restricted as to their use by the Company. Currently, the Company’s letters of credit are primarily comprised of one for the benefit of the landlord for the iCTC used as a security deposit for the lease in the amount $5.45 million and one for $0.6 million for the benefit of the landlord for the Company’s current headquarters’ lease (See Note 12 - Leases), as well as one for $60.0 million, for the future milestone payment as required by the terms of the Option Agreement for the Proleukin® acquisition (See Note 4 – Proleukin® Acquisition). The letter of credit for $5.45 million originally expired on May 28, 2020, however, it automatically extends for additional one-year periods, without written agreement, to May 28 in each succeeding calendar year, through at least 60 days after the lease expiration date. Further, on the expiration of the seventh year of the lease, and each anniversary date thereafter, the letter of credit may be decreased by $1.0 million with a minimum security deposit of $1.5 million maintained through the end of the lease term. The letter of credit with the landlord for the Company’s current headquarters’ lease expires on February 1, 2032, however, it will be automatically extended, without written agreement, for one-year periods to February in each succeeding calendar year. The letter of credit for the $60.0 million expires on May 5, 2024, however, it will be automatically extended, without written agreement, for one-year periods to May in each succeeding calendar year and the final expiration date will be July 20, 2026. Furthermore, the letter of credit will not be automatically extended if a thirty-day written notice is provided prior to the annual extension. As of

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September 30, 2023 and December 31, 2022, Restricted cash totaled $66.4 million and $6.4 million, respectively, in the Company’s condensed consolidated balance sheets.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash, reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows (in thousands):

IOVANCE BIOTHERAPEUTICS, INC. [IOVA] Filings
10-Q	[2023-11-07]
10-Q	[2023-08-08]
10-Q	[2023-05-10]
10-K	[2023-02-28]
10-Q	[2022-11-03]
10-Q	[2022-08-04]
10-Q	[2022-05-05]
10-K	[2022-02-24]
10-Q	[2021-11-04]
10-Q	[2021-08-05]
10-Q	[2021-05-06]
10-K	[2021-02-25]
10-Q	[2020-11-05]
10-Q	[2020-08-06]
10-Q	[2020-05-05]
10-K	[2020-02-25]
10-Q	[2019-11-04]
10-Q	[2019-08-01]
10-Q	[2019-05-07]
10-K	[2019-02-28]
10-Q	[2018-11-06]
10-Q	[2018-08-07]
10-Q	[2018-05-10]
10-K	[2018-03-12]
10-Q	[2017-11-02]
10-Q	[2017-08-03]
10-Q	[2017-05-03]
10-K	[2017-03-09]
10-Q	[2016-11-04]
10-Q	[2016-08-09]
S-1	[2016-07-01]
10-Q	[2016-05-09]
10-K	[2016-03-11]
10-Q	[2015-11-06]
10-Q	[2015-08-10]
10-Q	[2015-05-11]
10-K	[2015-03-16]
10-Q	[2014-11-13]
10-Q	[2014-08-08]
10-Q	[2014-05-14]
10-K	[2014-03-28]
S-1	[2013-12-04]
10-Q	[2013-11-14]
10-Q	[2013-10-23]
10-Q	[2013-10-23]
10-K	[2013-09-23]
10-Q	[2013-01-25]
10-Q	[2012-08-14]
10-Q	[2012-05-15]
10-K	[2012-03-30]