IOVA US Equity☆

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our results of operations and financial condition should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the “Business” section and elsewhere in this report. We use words such as “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 to identify forward-looking statements, although not all forward-looking statements contain these words. All forward-looking statements included in this report are based on information available to us on the date hereof and, except as required by law, we assume no obligation to update any such forward-looking statements.

Overview

We are a clinical-stage biopharmaceutical company pioneering a transformational approach to cure cancer by harnessing the human immune system’s ability to recognize and destroy diverse cancer cells in each patient. TIL therapy is an autologous, polyclonal cell therapy platform technology that was originally developed by the National Cancer Institute, or NCI, which conducted initial clinical trials of this therapy in diseases such as metastatic melanoma and cervical cancer. Our mission is to be the global leader in innovating, developing and delivering TIL therapies for patients with cancer. We have developed a new, shorter TIL manufacturing

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process known as Gen 2, which yields a cryopreserved TIL product. This centralized, proprietary, and scalable manufacturing method is being investigated in multiple indications. Our lead product candidates include lifileucel for metastatic melanoma and metastatic cervical cancer, as well as LN-145 for metastatic non-small cell lung cancer, or NSCLC. In addition, we are investigating the effectiveness and safety of combinations of TIL therapy with immune checkpoint inhibitors, or ICIs, in metastatic melanoma, cervical cancer, NSCLC, and head and neck squamous cell carcinoma, or HNSCC. We are investigating peripheral blood lymphocyte, or PBL, therapy for patients with relapsed or refractory chronic lymphocytic leukemia, or CLL, and small lymphocytic lymphoma, or SLL, through our sponsored trials. We are developing first-in-class genetically edited TIL products based on the inactivation of genes that encode immune checkpoint proteins and other proteins, as well as the insertion of genes that encode immunomodulatory proteins. We are also developing an alternative interleukin-2, or IL-2, co-therapy for use with TIL therapies. Finally, we are investigating the potential for TIL therapy in other oncology indications and treatment settings through academic collaborations with leading cancer research centers.

Our current product candidate pipeline is summarized in the figure below:

TIL Monotherapy in Metastatic Solid Tumor Cancers

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We have investigated TIL monotherapy in metastatic melanoma, cervical cancer, NSCLC and HNSCC. We are conducting a Phase 2 clinical trial, C-144-01, of our lead TIL product candidate, lifileucel, for the treatment of metastatic melanoma. This multicenter pivotal trial enrolled melanoma patients with disease progression following treatment with at least one systemic therapy, including a PD-1 inhibitor and, if BRAF mutated, a BRAF inhibitor, or a combination of BRAF and MEK inhibitors. Cohort 4 of the C-144-01 clinical trial is a single-arm cohort intended to support the submission of a Biologics License Application, or BLA, to the Food and Drug Administration, or the FDA, for lifileucel. Cohorts 2 and 4 of the C-144-01 trial use our Gen 2 manufacturing process. We completed and closed enrollment of patients into Cohort 2 of the C-144-01 trial in 2018. Results from Cohort 2 of the C-144-01 clinical trial were initially reported at the American Society of Clinical Oncology annual meeting, or ASCO, in June 2019 and subsequently updated at ASCO in June 2021. In addition, detailed Cohort 2 data was published in the Journal of Clinical Oncology in May 2021.

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Pivotal Cohort 4 of the C-144-01 trial was enrolled to evaluate ORR as read out by an Independent Review Committee, or IRC, as the primary endpoint based on our interpretation of discussions with the FDA as part of an End of Phase 2, or EOP2, meeting held with the FDA in the third quarter of 2018. In October 2018, based on the data provided to the FDA during the EOP2 meeting, we announced that lifileucel had received a Regenerative Medicines Advanced Therapy, or RMAT, designation from the FDA. Enrollment in Cohort 4 of the C-144-01 trial commenced in March 2019 and patient dosing was completed in January 2020.

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Previously, we reported the submission of additional potency assay data to the FDA, and at the same time, we also announced that we had reached agreement with the FDA on the minimum duration of follow up for Cohort 4 to support our BLA submission for lifileucel in the treatment of metastatic melanoma. In May 2021, we announced that we had received regulatory feedback from the FDA regarding our potency assays for lifileucel. Following FDA feedback, we have continued our ongoing work developing and validating our potency assays and have engaged in discussions with the FDA during the second half of 2021. Our BLA submission for lifileucel in metastatic melanoma is expected to occur during the first half of 2022. In connection with this BLA submission, the IRC is expected to independently assess responses for Cohort 4 patients through the data cut date, which must be completed prior to BLA submission or disclosure of IRC-read data.

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We are also conducting a Phase 2 clinical trial, C-145-04, which is a multicenter pivotal trial to assess the safety and efficacy of our lead product candidate lifileucel for the treatment of patients with recurrent, metastatic, or persistent cervical cancer. In February 2019, lifileucel received Fast Track designation from the FDA for development in the treatment of cervical cancer with disease progression on or after chemotherapy. In March 2019, the protocol for this trial was amended to modify the primary endpoint of ORR to be determined by IRC. In May 2019, lifileucel received Breakthrough Therapy Designation, or BTD, from the FDA for development in the treatment of cervical cancer. Results from the C-145-04 clinical trial were reported at ASCO in June 2019. In November 2019, we amended the C-145-04 trial to collect additional data on early-line patients as well as late-line patients by adding additional cohorts, in anticipation of a changing landscape in this indication, including Cohort 2 for patients that had previously received chemotherapy and anti-PD-1/anti-PD-L1 therapy. In January 2021, we announced that Cohort 2 of the C-145-04 trial had completed enrollment and that data from this cohort may be supportive of registration because of the expected changing landscape of care for cervical cancer patients. For example, because of recent regulatory approvals for pembrolizumab, there may be a potential shift from chemotherapy in front-line cervical cancer followed by pembrolizumab in second-line cervical cancer. We intend to execute our strategy based on dialog and feedback on these cohorts and continue to plan for a potential BLA submission for lifileucel in cervical cancer.

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In November 2020, we announced that we had finalized the protocol for our potential registrational clinical trial in NSCLC, IOV-LUN-202, to investigate LN-145 in patients with metastatic NSCLC, without driver mutations, who previously received a single line of approved systemic therapy of combined checkpoint inhibitor and chemotherapy. The IOV-LUN-202 clinical trial includes three cohorts. Cohorts 1 and 3 of the IOV-LUN-202 clinical trial are enrolling patients with a PD-L1 TPS of less than one percent at the time they started front-line therapy, and Cohort 2 will enroll patients with a PD-L1 TPS of greater than or equal to one percent at the time they started front-line therapy. Cohort 3 will also explore manufacturing TIL extracted from core biopsies using our third-generation, or Gen 3, manufacturing process. In June 2021, we reported that the first patient was dosed in the IOV-LUN-202 clinical trial. We intend to continue to enroll patients in the IOV-LUN-202 clinical trial throughout 2022. We are engaged in regulatory discussions with the FDA on IOV-LUN-202 and intend to incorporate FDA feedback to optimize this clinical trial to support further registration in NSCLC.

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In June 2021, we reported initial data for LN-145 in Cohort 3B of our IOV-COM-202 clinical trial in metastatic NSCLC. IOV-COM-202 is a Phase 2, multicenter trial for that is composed of seven cohorts. Cohort 3B of IOV-COM-202 enrolled patients with metastatic NSCLC that had progressed on prior ICI therapy, including patients with oncogene-driven tumors who received prior tyrosine kinase inhibitor therapy. Patients were treated with LN-145 monotherapy. All patients treated in Cohort 3B of the IOV-COM-202 trial received prior anti-PD-1/L1 therapy and all six responding patients also received prior chemotherapy. We also provided an update on Cohort 3B in November 2021, at the Society for Immunotherapy in Cancer Annual Meeting, or SITC.

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C-145-03 is our Phase 2, multicenter trial to assess the safety and efficacy of our product candidate LN-145 for the treatment of patients with metastatic HNSCC. We redesigned our C-145-03 trial to include multiple cohorts, in order to allow for dosing of TIL therapies produced by multiple manufacturing methods, including our Gen 2 manufacturing process, our Gen 3 manufacturing process, and our PD-1 selected TIL manufacturing process. Our PD-1 selected TIL manufacturing process results in a product that we refer to as LN-145-S1. In January 2021, we announced that we are closing the C-145-03 clinical trial after the trial reached its pre-specified enrollment target.

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TIL Combinations in Earlier Treatment Settings for Solid Tumors

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We are also investigating the potential of our TIL therapies in earlier lines of treatment in combination with pembrolizumab or other ICIs in cancer patients who are naïve to anti-PD-1 therapy, including in four cohorts in our IOV-COM-202 study in solid tumors

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as well as in one cohort in our C-145-04 clinical study in cervical cancer. In addition to its ongoing enrollment in the U.S., the IOV-COM-202 trial has also received regulatory approval in Canada and in certain European countries.

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In Cohort 1A of the IOV-COM-202 trial, we are enrolling advanced unresectable or metastatic melanoma patients who are naïve to anti-PD-1 therapy. In Cohort 2A of the IOV-COM-202 trial, we are enrolling advanced, recurrent, or metastatic HNSCC patients who are naïve to prior immunotherapy including anti-PD-1/anti-PD-L1 therapy. The patients receive LN-145 in combination with pembrolizumab. In Cohort 3, which is our C-145-04 cervical cancer study, patients receive TIL plus pembrolizumab. We reported results from ongoing Cohort 1A of the IOV-COM-202 trial at ASCO in June 2021, as well as provided updated results in November 2021 at SITC. Our oral presentation at SITC in November 2021 also included initial results for TIL therapy plus pembrolizumab for patients enrolled in Cohort 3 of our C-145-04 cervical cancer study.

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The Cohort 1A and Cohort 2A results from the IOV-COM-202 study as well as Cohort 3 from the C-145-04 study demonstrated that lifileucel or LN-145 can be safely combined with pembrolizumab. The treatment emergent adverse event, or TEAE, profile in all Cohorts was consistent with the underlying advanced disease and the known adverse event profiles of pembrolizumab, lymphodepletion, and IL-2 regimens. Two additional cohorts, Cohort 3A and 3C in the IOV-COM-202 study, explore LN-145/ICI combination therapies in NSCLC patients. Cohort 3A is evaluating LN-145 in combination with pembrolizumab in patients with recurrent or metastatic NSCLC who have not received prior immunotherapy, including checkpoint inhibitors. Cohort 3C is investigating LN-145 therapy in combination with ipilimumab and nivolumab in patients with recurrent or metastatic NSCLC who have previously received one line of approved checkpoint inhibitor monotherapy as the only prior line of systemic therapy.

In September 2021, we announced that our Iovance Cell Therapy Center, or the iCTC, had successfully manufactured and delivered its first clinical batch of LN-145 for the IOV-COM-202 trial, representing our first internally manufactured TIL product. We continue to supply the IOV-COM-202 trial, and other ongoing trials, with both internally manufactured and externally manufactured TIL products.

Next-Generation and Genetically Modified Product Candidates

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Our clinical pipeline also includes next generation TIL product candidates and manufacturing processes, as well as a cytokine-engrafted protein. Our TIL candidate LN-145-S1, in which TIL are selected for PD-1 expression, is being investigated in post-anti-PD-1 melanoma in Cohort 1B of our IOV-COM-202 basket study as well as in post-anti-PD-1 HNSCC in Cohort 4 of our C-145-03 trial.

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We are using our Gen 3 manufacturing process in Cohort 1C of the IOV-COM-202 clinical trial in melanoma and in Cohort 3 of the IOV-LUN-202 clinical trial in NSCLC and have previously used it in the C-145-03 clinical trial in HNSCC.

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In November 2019, we announced that our Investigational New Drug, or IND, application for our PBL therapy, IOV-2001, was authorized by the FDA. Our sponsored clinical trial using this therapy, IOV-CLL-01, was cleared to proceed and patient dosing began in 2020. IOV-2001 is a non-genetically modified, polyclonal T cell product that is manufactured using a nine-day process starting from 50 mL of patient's blood. IOV-CLL-01 is a Phase 1/2 clinical trial evaluating the safety and efficacy of IOV-2001 in patients with relapsed or refractory CLL or SLL.

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In January 2020, we announced a research collaboration and exclusive worldwide licensing agreement with Cellectis S.A., or Cellectis, a clinical-stage biopharmaceutical company focused on developing immunotherapies based on gene-edited allogeneic chimeric antigen receptor modified T cells. The worldwide exclusive license enables us to use certain TALEN® technology addressing multiple gene targets to develop TIL that have been genetically modified to create potentially more potent cancer therapeutics for use in several cancer indications. We are nearing completion of IND-enabling studies under this agreement and expect to initiate our first clinical study in 2022 of a genetically modified TIL product candidate, IOV-4001, in which the gene coding for the PD-1 protein is inactivated. Financial terms of the license include development, regulatory and sales milestone payments from us to Cellectis, as well as royalty payments based on net sales of TALEN-modified TIL products. In addition to IOV-4001, we are currently developing additional targets for genetic modification using the TALEN technology, including double-knock out programs in preclinical development.

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We continue to explore additional transient and permanent genetic modifications of TILs. For example, under the amended and restated patent license agreement we entered into May 2021 with National Institutes of Health, or NIH, an agency of the U.S. Public Health Service within the Department of Health and Human Services, we license a patent family related to cytokine-tethered TILs,

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which are intended to potentially expand and activate TILs to achieve better efficacy while avoiding systemic side effects of cytokines. We are currently developing cytokine-tethered TIL products in preclinical studies.

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In addition, in January 2020, we obtained a license from Novartis Pharma AG, or Novartis, to develop and commercialize an antibody cytokine-engrafted protein, which we refer to as IOV-3001. Under the agreement, we paid an upfront payment to Novartis and may pay milestones involved in initiation of patient dosing in various phases of clinical development for IOV-3001 and approval of a potential product in the U.S., EU, and Japan. We are currently conducting IND enabling studies of this novel IL-2 analog. Novartis is also entitled to low-to-mid single digit percentage royalties from commercial sales of IOV-3001.

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Investigator-Sponsored Trials

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Through our academic collaborators, we are also exploring the potential for TIL therapies in additional indications. As part of our collaboration program with The University of Texas M.D. Anderson Cancer Center, or MDACC, two Phase 2 trials were initiated in 2018. Both trials are sponsored by MDACC. The first trial, NCT03449108, investigates LN-145 manufactured by us, using our manufacturing processes, to treat patients with soft tissue sarcoma, osteosarcoma, platinum resistant ovarian cancer, and thyroid cancer. A second trial under the collaboration with MDACC, NCT03610490, was previously active. This trial treated patients with platinum resistant ovarian cancer, pancreatic and colorectal cancer with TIL manufactured by MDACC. The data obtained using this manufacturing process may not be representative of our data using our Gen 2 manufacturing process. We also collaborate with many other academic institutions using our TIL therapies. For example, a trial in collaboration with The Ohio State University, NCT05176470, is expected to start recruiting in 2022, and explores the use of lifileucel in high-risk melanoma in the neoadjuvant setting.

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Intellectual Property

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We have developed our own patent portfolio based on internal research and development activities. As a result, we now own a number of pending patent applications and granted patents in the fields of TIL therapy, MIL therapy, and PBL therapy, TIL, MIL, and PBL manufacturing processes, and TIL, MIL, and PBL expansion methods. For example, we currently own more than 35 U.S. patents related to TIL therapy, including patents directed to compositions and methods of treatment in a broad range of cancers, such as U.S. Patent Nos. 10,130,659; 10,166,257; 10,272,113; 10,363,273; 10,398,734; 10,420,799; 10,463,697; 10,517,894; 10,537,595; 10,639,330; 10,646,517; 10,653,723; 10,695,372; 10,894,063; 10,905,718; 10,918,666; 10,925,900; 10,933,094; 10,946,044; 10,946,045; 10,953,046; 10,953,047; 11,007,225; 11,007,226; 11,013,770; 11,026,974; 11,040,070; 11,052,115; 11,052,116; 11,058,728; 11,083,752; 11,123,371; 11,141,438 11,168,303; 11,168,304; 11,179,419; 11,202,803; 11,202,804; and 11,241,456. More than 30 of these patents are related to our Gen 2 TIL manufacturing processes and have terms that we anticipate will extend to January 2038, not including any patent term extensions or adjustments that may be available. Our owned and licensed intellectual property portfolio also includes patent applications relating to TIL, MIL, and PBL therapies; frozen tumor-based TIL technologies; remnant TIL and digest TIL compositions, methods and processes; methods of treatment of a broad range of cancers using TIL therapies; methods of manufacturing TIL, MIL, and PBL therapies; the use of costimulatory molecules in TIL therapy and manufacturing; stable and transient genetically-modified TIL therapies; methods of using ICIs in combination with TIL therapies; TIL selection technologies; and methods of treating patient subpopulations.

Impact of COVID-19 on our Business

Operations and Liquidity

The full impact of the novel strain of coronavirus, or COVID-19, pandemic is unknown and rapidly evolving. While the potential economic impact brought by and over the duration of the COVID-19 pandemic may be difficult to assess or predict, the COVID-19 pandemic has resulted in significant disruption of global financial markets, which could in the future negatively affect our liquidity. In addition, a recession or market volatility resulting from the COVID-19 pandemic could affect our business. We have taken proactive, aggressive action throughout the COVID-19 pandemic to protect the health and safety of our employees and expect to continue to implement these measures until we determine that the COVID-19 pandemic is adequately contained for purposes of our business. We may take further actions as government authorities require or recommend or as we determine to be in the best interests of our employees. We do not believe that the COVID-19 pandemic had a material impact on our liquidity or results of operations for the year ended December 31, 2021. Further, to date, the COVID-19 pandemic has not had significant effects on our clinical trial enrollment. Given the nature and type of our short-term investments in U.S. government securities, we do not believe that the COVID-19 pandemic will have a material impact on our current investment liquidity.

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Outlook

Although there is uncertainty related to the anticipated impact of the recent COVID-19 pandemic on our future results, we believe our current cash reserves leave us well-positioned to manage our business through this crisis as it continues to unfold. However, the impacts of the COVID-19 pandemic are broad-reaching and continuing and the financial impacts associated with the COVID-19 pandemic are still uncertain.

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The COVID-19 pandemic is ongoing, and its dynamic nature, including uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the duration of the pandemic, and actions that would be taken by governmental authorities to contain the pandemic or to treat its impact, makes it difficult to forecast any effects on our results for the fiscal year ending December 31, 2022.

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Despite the economic uncertainty resulting from the COVID-19 pandemic, we intend to continue to focus on the development of our product candidates. We continue to monitor the rapidly evolving situation and guidance from international and domestic authorities, including federal, state and local public health authorities and may take additional actions based on their recommendations. In these circumstances, there may be developments outside our control requiring us to adjust our operating plan. As such, given the dynamic nature of this situation, we cannot reasonably estimate the impacts of COVID-19 on our financial condition, results of operations or cash flows in the future.

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Components of Operating Results

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Revenues

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We have not yet generated any revenues since our formation, and we currently do not anticipate that we will generate any significant revenues from the sale or licensing of our product candidates during the 12 months from the date these financial statements are issued. Our ability to generate revenues in the future will depend on our ability to complete the development of our product candidates and to obtain regulatory approval for them.

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Operating Expenses

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Research and Development

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Research and development expenses include personnel and facility-related expenses, outside contracted services including clinical trial costs, manufacturing and process development costs, research costs and other consulting services. Research and development costs are expensed as incurred. Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and amortized over the period that the goods are delivered, or the related services are performed, subject to an assessment of recoverability.

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Clinical development costs are a significant component of research and development expenses. We have a history of contracting with third parties that perform various clinical trial activities on our behalf in connection with the ongoing development of our product candidates. The financial terms of these contracts are subject to negotiations and may vary from contract to contract and may result in uneven payment flow. We accrue and expense costs for clinical trial activities performed by third parties based upon estimates of work completed to date of the individual trial in accordance with agreements established with contract research organizations and clinical trial sites. The duration, costs and timing of our clinical trials and development of our product candidates will depend on a number of factors that include, but are not limited to, the number of patients that enroll in the trial, per patient trial costs, number of sites included in the trial, discontinuation rates of patients, duration of patient follow-up, efficacy and safety profile of the product candidate, and the length of time required to enroll eligible patients.

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We expect our research and development expenses to continue to increase as we prepare for commercial manufacturing of our products and continue to conduct our clinical trials for other indications. However, it is difficult to determine with certainty the duration and completion costs of our current or future preclinical programs and clinical trials of our product candidates.

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General and Administrative

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General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in executive, finance, accounting, legal, investor relations, facilities, business development, marketing, commercial, information technology and human resources functions. Other significant costs include facility costs not otherwise included in research and development expenses, legal fees relating to corporate matters and intellectual property, insurance, public company expenses relating to maintaining compliance with Nasdaq listing rules and SEC requirements, investor relations costs, and fees for accounting and consulting services. General and administrative costs are expensed as incurred, and we accrue for services provided by third parties related to the above expenses by monitoring the status of services provided and receiving estimates from its service providers and adjusting its accruals as actual costs become known.

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We anticipate general and administrative expenses will increase as we continue to prepare for commercialization and support an expected growth of the internal general and administrative team.

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Interest income, net

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Interest income, net results from our interest-bearing cash and investment balances.

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Results of Operations for the Years Ended December 31, 2021 and 2020

Research and development activities are central to our business model. Product candidates in later stage of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. As a clinical stage company that is currently engaged in the development of novel cancer immunotherapy products, we have not yet generated any revenues from our biotechnology business or otherwise since our formation. Our ability to generate revenues in the future will depend on our ability to complete the development of our product candidates and to obtain regulatory approval for them. Our major sources of funding to date have been proceeds from various public and private offerings of our equity securities (both common stock and preferred stock), option and warrant exercises, and interest income. Since 2017 our primary source of funds has been from the public sale of our common stock.

Costs and expenses

Research and Development Expense (in thousands)

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​ ​ Years Ended December 31, ​ Increase (Decrease) ​

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Research and development expense for the year ended December 31, 2021 increased by $57.3 million, or 28%, compared to the year ended December 31, 2020. The increase was primarily attributable to (i) a $29.2 million increase in payroll and related expenses and a $21.1 million increase in stock-based compensation expenses, both driven by increased hiring of research and development employees to support our on-going and planned clinical development activities, (ii) a $14.9 million increase in facility and related costs associated with the iCTC and the build-out of our new corporate headquarters office, (iii) a $5.1 million increase in clinical trial costs driven by continued enrollment in our IOV-COM-202 and IOV-LUN-202 clinical trials and purchases of study drug used in these clinical trials, and (iv) a $2.2 million increase in travel and others, including allocated costs associated with the expansion of our infrastructure, including information systems, to further support the growth in the organization and operations associated with our clinical trials and pre-commercial efforts. These increases were partially offset by a $10.0 million decrease in research alliance costs due to a one-time license fee from Novartis to further develop IOV-3001 which was recognized in full in 2020, and a $5.2 million decrease in manufacturing costs driven by completion of our pivotal clinical trials.

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General and Administrative Expense (in thousands)

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​ ​ Years Ended December 31, ​ Increase (Decrease) ​

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General and administrative expense for the year ended December 31, 2021 increased by $23.5 million, or 39%, compared to the year ended December 31, 2020. The increase was primarily attributable to (i) a $9.8 million increase in payroll and related expenses and a $7.8 million increase in stock-based compensation expenses, both resulting from increases in headcount to support the growth in the overall business and related corporate infrastructure (ii) a $4.3 million increase in insurance and intellectual property filing related costs, and (iii) a $2.8 million increase in other costs, including professional fees and costs associated with the build-out of our new headquarter office and IT infrastructure to support the continued growth in the overall company. These costs were partially offset by a $1.2 million decrease in pre-commercial and marketing costs due to reprioritization of corporate initiatives during the year ended December 31, 2021.

Interest income, net (in thousands)

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​ ​ Years Ended December 31, Increase (Decrease) ​

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Interest income results from our interest-bearing cash and investment balances. Net interest income decreased by $1.9 million, or 81%, due primarily to a decrease in interest rates in 2021 as compared to the same period in 2020.

Net Loss (in thousands)

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​ ​ Years Ended December 31, (Increase) Decrease ​

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Net loss for the year ended December 31, 2021 increased by $82.7 million or 32%, compared to the year ended December 31, 2020. The increase in our net loss was due to the continued expansion of our research and development activities, increased clinical trials, and the overall growth of our corporate infrastructure. We anticipate that we will continue to incur net losses in the future as we further invest in our research and development activities, including our commercial readiness and clinical development.

Results of Operations for the Years Ended December 31, 2020 and 2019

Revenues

We did not generate any revenues during the years ended December 31, 2020 and 2019, respectively.

Costs and expenses

Research and Development Expense (in thousands)

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​ ​ Years Ended December 31, Increase (Decrease)

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Research and development expense for the year ended December 31, 2020 increased by $35.7 million, or 22%, compared to the year ended December 31, 2019. The increase was primarily attributable to (i) a $20.9 million increase in payroll and related expenses driven by a higher number of full-time research and development employees and outside services, (ii) a $10.0 million increase for the license to further develop IOV-3001 obtained from Novartis, (iii) a $8.3 million increase in stock-based compensation expenses, and (iv) a $6.6 million increase in clinical trial costs due to an increase in enrollment across all the trials and initiation of new clinical trials. Further, a $0.8 million increase in research consumables cost contributed to the increase. These increases were partially offset by lower manufacturing costs by $9.1 million due to decreased production runs in 2020 as a result of completion of enrollment in the melanoma pivotal program and a $2.3 million decrease in research alliance expenses due to the COVID-19 pandemic’s impact on patient enrollment in the clinical trials with our research alliance partners.

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General and Administrative Expense (in thousands)

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​ Years Ended December 31, Increase (Decrease)

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General and administrative expense for the year ended December 31, 2020 increased by $19.4 million, or 47%, compared to the year ended December 31, 2019. The increase was primarily attributable to (i) a $8.3 million increase in stock-based compensation expenses and a $7.1 million increase in payroll and related expenses driven by a higher number of full-time general and administrative employees and higher average stock price, (ii) a $2.1 million increase in director’s and officer’s insurance premiums, (iii) a $1.1 million increase in intellectual property legal costs, and (iv) a $1.1 million in market research activities as we prepare for commercialization. These increases were partially offset by a $0.7 million decrease in travel expenses.

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Interest income, net (in thousands)

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​ Years Ended December 31, Increase (Decrease)

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Interest income results from our interest-bearing cash and investment balances. Net interest income decreased by $7.0 million, or 75%, due primarily to a decrease in interest rates in 2020 as compared to the same period in 2019.

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Net Loss (in thousands)

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​ Years Ended December 31, (Increase) Decrease

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Net loss for the year ended December 31, 2020 increased by $62.0 million or 31%, compared to the year ended December 31, 2019. The increase in our net loss was due to the continued expansion of our research and development activities, increased clinical trials, and the overall growth of our corporate infrastructure.

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Liquidity and Capital Resources

We have incurred losses and generated negative cash flows from operations since inception. Historically, we have funded our operations from various public and private offerings of our equity securities (both common stock and preferred stock), from option and warrant exercises, and from interest income. Since 2017, our primary source of funds has been from the public sale of our common stock. We currently do not anticipate that we will generate any significant revenues from the sale or licensing of any products during the 12 months from the date these financial statements are issued. We expect to further increase our research and development activities, especially continuing pre-commercial activities and completing the construction of our tenant improvements to the iCTC facility and new corporate headquarters office, which will increase the amount of cash we will use during 2022 and beyond. Specifically, we expect increased spending on clinical trials, research and development activities, higher payroll expenses as we increase our professional and scientific staff and continue our expansion of manufacturing activities including completion of iCTC

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facility as well as completing the construction of the tenant improvement to our new corporate headquarters office in San Carlos, California.

We currently anticipate making aggregate capital expenditures between approximately $10.0 million and $11.0 million during the next 12 months, which is expected to primarily include equipment to be used for clinical trials, research and manufacturing at iCTC, as well as spending associated with the expansion of our manufacturing facilities of offices.

As of December 31, 2021, we had $602.1 million in cash, cash equivalents, investments, and restricted cash ($78.2 million of cash and cash equivalents, $426.2 million in short-term investments, $91.6 million in long-term investments and $6.1 million in restricted cash). Based on the funds we have available as of the date of the filing of this Annual Report on Form 10-K, we believe that we have sufficient capital to fund our anticipated operating expenses and capital expenditure for at least 12 months from the date of filing this report.

Corporate Capitalization

As of December 31, 2021, we had outstanding 157,004,742 shares of our $0.000041666 par value common stock, 194 shares of our $0.001 par value Series A Convertible Preferred Stock, and 2,842,158 shares of our $0.001 par value Series B Convertible Preferred Stock. The outstanding shares of Series A Convertible Preferred Stock are currently convertible into 97,000 shares of our common stock, and the outstanding shares of Series B Convertible Preferred Stock are currently convertible into 2,842,158 shares of our common stock. The shares of Series A Convertible Preferred Stock and Series B Convertible Preferred Stock do not have voting rights or accrue dividends.

On September 17, 2019, we filed a shelf registration statement with the SEC for the issuance up to an aggregate amount of $400 million (the “2019 Shelf Registration Statement”), which was declared effective on September 24, 2019. The 2019 Shelf Registration Statement was terminated upon effectiveness of the 2020 Automatic Shelf Registration Statement (as discussed below). No shares were sold under the 2019 Shelf Registration Statement prior to its termination.

On May 27, 2020, we filed an automatic shelf registration statement with the SEC for the issuance of an indeterminate amount of Shelf Securities (the “2020 Automatic Shelf Registration Statement”), which was immediately effective upon filing with the SEC. Upon filing of the 2020 Automatic Shelf Registration Statement, the 2019 Shelf Registration Statement was terminated.

On June 2, 2020, we sold 19,475,806 shares of our common stock at a public offering price of $31.00 per share pursuant to the 2020 Automatic Shelf Registration Statement (the “June 2020 Public Offering”). We received gross proceeds of $603.7 million and net proceeds of $567.0 million, after deducting underwriting discounts and offering expenses. Following the public offering, the 2020 Automatic Shelf Registration Statement remains available for the future issuance of an indeterminate amount of Shelf Securities.

On February 8, 2021, we entered into an Open Market Sale Agreement (the “Sales Agreement”), with Jefferies LLC (“Jefferies”), with respect to an “at the market” offering program, under which we may, from time to time, in our sole discretion, issue and sell through Jefferies, acting as sales agent, up to $350.0 million of shares of our common stock. The issuance and sale, if any, of shares of our common stock under the Sales Agreement will be made pursuant to a prospectus supplement, dated February 8, 2021, to the 2020 Automatic Shelf Registration Statement. During the year ended December 31, 2021, we received $203.2 million in net proceeds through the sale of 6,474,099 shares of our common stock.

In the future, we may periodically offer one or more of these securities in amounts, prices and terms to be announced when and if the securities are offered. If any of the securities covered by the 2020 Shelf Registration Statement are offered for sale, a prospectus supplement will be prepared and filed with the SEC containing specific information about the terms of such offering at that time.

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Cash Flows

Cash flows from operating, investing and financing activities (in thousands):

​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ Years Ended December 31,

Net cash (used in) provided by: ​ ​ ​ ​

​

Operating Activities

Net cash used in operating activities represents cash disbursements related to all of our activities other than investing and financing activities. Operating cash flow is derived by adjusting our net loss for non-cash items and changes in operating assets and liabilities. Net cash used in operating activities for the year ended December 31, 2021 was $227.9 million compared to $205.1 million for the same period in 2020. The increase of $22.8 million in cash used in operating activities was primarily due to an increase in net loss driven by increased costs in research and development and pre-commercial activities, which was partially offset by an increase in non-cash charges of $38.3 million primarily driven by higher stock-based compensation expenses, amortization of premiums on investments and operating right-of-use assets associated with our office and manufacturing facility as well as embedded leases, and depreciation expenses. In addition, it reflects a reduction in our operating lease liabilities associated with payments on lease arrangements, offset by an increase in accruals and accounts payable primarily related to our increased workforce, overall growth in the business and operations, and the timing of vendor invoicing and related payments.

Net cash used in operating activities for the year ended December 31, 2020 was $205.1 million compared to $158.9 million for the same period in 2019. The increase of $46.2 million in cash used in operating activities was primarily attributable to an increase in net loss and increase in accruals primarily related to our research and development activities, which were partially offset by an increase in non-cash charges of $22.8 million, primarily driven by higher-stock-based compensation expenses and amortization of premiums on investments.

Net cash used in operating activities for the year ended December 31, 2019 was $158.9 million compared to $101.2 million for the same period in 2018. The increase of $57.7 million in cash used in operating activities was due to an increase in net loss and an increase in operating lease payments, which were partially offset by an increase in non-cash charges of $9.0 million, primarily driven by higher-stock-based compensation expenses and amortization of right-of-use assets, and an increase in accruals due to the timing of vendor invoicing and related payments.

Investing Activities

Net cash (used in) / provided by investing activities primarily consists of purchases, maturities of our investments and capital expenditures. Net cash provided by investing activities for the year ended December 31, 2021 was $0.1 million compared to net cash used in investing activities of $317.9 million. The increase in cash provided by investing activities of $318.0 million was primarily due to the timing of maturities and purchases of investments and lower capital expenditures in 2021.

Net cash used in investing activities for the year ended December 31, 2020 was $317.9 million compared to net cash provided by $90.0 million for the same period in 2019. The increase in net cash used in investing activities of $407.9 million was due primarily to purchases of investments with the proceeds received from the June 2020 Public Offering and an increase in capital expenditures to support the iCTC build-out.

Net cash provided by investing activities for the year ended December 31, 2019 was $90.0 million compared to net cash used in investing activities of $386.3 million for the same period in 2018. The increase in net cash provided in 2019 was due primarily to the timing of maturities and purchases of investments.

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Financing Activities

Net cash provided by financing activities for the year ended December 31, 2021 was $239.3 million compared to net cash provided of $576.4 million. The net cash provided by financing activities during the year ended December 30, 2021 related to $203.2 million cash proceeds from our “at the market” offering and $33.5 million of cash receipts from the issuance of common stock upon the exercise of stock options. The net cash provided by financing activities during the year ended December 31, 2020 primarily related to $567.0 million cash proceeds received in the June 2020 public offering and $9.7 million cash proceeds from issuance of common stock upon exercise of stock options in 2021.

Net cash provided by financing activities for the year ended December 31, 2020 was $576.4 million compared to net cash provided of $6.1 million for the same period in 2019. The net cash provided in financing activities during the year ended December 31, 2020 primarily related to $567.0 million received from the June 2020 Public Offering and $9.7 million cash proceeds received in issuing common stock upon exercise of stock options. Net cash provided by financing activities for the year ended December 31, 2019 related to cash proceeds received in issuing common stock upon exercise of stock options.

Net cash provided by financing activities for the year ended December 31, 2019 was $6.1 million compared to net cash provided of $424.3 million for the same period in 2018. Net cash provided by financing activities for the year ended December 31, 2019 related to cash proceeds received in issuing common stock upon exercise of stock options. The net cash provided by financing activities of $424.3 million for the year ended December 31, 2018 primarily related to $398.8 million of cash proceeds received from January and October 2018 public offerings, $15.8 million cash proceeds from exercise of warrants, and $10.0 million cash proceeds from issuing common stock upon exercise of stock options.

Contractual Obligations

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The following table summarizes our non-cancellable contractual obligations as of December 31, 2021 and the effects that such obligations are expected to have on our liquidity and cash flows in future periods (in thousands):

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​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ Payments due by period

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Off-Balance Sheet Arrangements

As of December 31, 2021, we did not have, and currently do not have, any off-balance sheet arrangements.

Critical Accounting Estimates

Our accounting policies are more fully described in Note 2 of the consolidated financial statements included in this Annual Report on Form 10-K. As described in Note 2, the preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts in the financial statements and related disclosures. On an ongoing basis, we evaluate our significant accounting policies and estimates. We base our estimates on historical experience and on various market-specific and other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Estimates are assessed each period and updated to reflect current information. Actual results may differ from these estimates. We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective and complex judgments.

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Accrued Research and Development Costs

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Research and development costs are expensed as incurred. Clinical development costs compose a significant component of research and development costs. We have a history of contracting with third parties, including contract research organizations (“CROs”), independent clinical investigators, and contract manufacturing organizations (“CMOs”) that perform various clinical trial activities on our behalf in connection with the ongoing development of our product candidates. The financial terms of these contracts are subject to negotiations and may vary from contract to contract and may result in uneven payment flow. We accrue and expense costs for clinical trial activities performed by third parties based upon estimates of work completed to date for each clinical trial in accordance with agreements established with CROs, hospitals, and clinical investigators. Accruals for CROs and CMOs are recorded based on estimates of services received and efforts expended pursuant to agreements established with CROs, CMOs and other outside service providers. We determine our estimates through discussions with internal clinical stakeholders and outside service providers as to the progress or stage of completion of clinical trials or services and the contracted fee to be paid for such services.

​

Included in our clinical development costs are investigator costs, which are costs associated with treatments administered at clinical sites as required under each clinical study protocol. Our estimates for clinical investigator costs and timing of expense recognition will depend on a number of factors that include, but are not limited to, (i) the overall number of patients that enroll in the trial at each individual site, (ii) the length of study enrollment period, (iii) discontinuation and completion rates of patients, (iv) duration of patient safety follow-ups, (v) the number of sites included in the clinical trial, and (vi) the contracted fee of each participating site for patient treatment while on study, which can vary greatly for several reasons including, but not limited to, geographic region, medical center or physician costs, and overhead costs. In addition, our estimates for per patient trial costs will vary based on a number of factors that include, but are not limited to, the extent of additional treatments that may be administered by investigators as a result of patient health status, recoverability of patient costs through insurance carriers of patients, and unanticipated cost of injuries incurred as a result of the study treatment. We accrue for estimated expenses resulting from obligations under investigator site agreements as the timing of payments does not always timely align with the periods over which the treatments are administered by the clinical investigators. These estimates are typically based on contracted amounts, patient visit data, discussions with internal clinical stakeholders and outside service providers, and historical look-back analysis of actual payments made to date.

​

We make judgements and estimates in determining the accrual balance in each reporting period. In the event advance payments are made to a CRO, CMO or other outside service provider, the payments are recorded within prepaid expenses and other current assets and subsequently recognized as research and development expense when the associated services have been performed. As actual costs become known, we adjust our estimates, liabilities and assets. Inputs used in our determination of estimates discussed above may vary from actual, which will result in adjustments to research and development expense in future periods. Changes in these estimates that result in material changes to our accruals could materially affect our results of operations. Our historical estimates have not been materially different from actual amounts recorded.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

Our exposure to market risk is limited primarily to interest income sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because a significant portion of our investments are in interest bearing cash accounts consisting of short-term debt securities issued by the U.S. government. The primary objective of our investment activities is to preserve principal. We adhere to an investment policy that requires us to limit amounts invested in securities based on credit rating, maturity, industry group and investment type and issuer, except for securities issued by the U.S. government. We do not have any derivative financial instruments or foreign currency instruments. As of December 31, 2021, we had $579.0 million invested in marketable securities with a maturity date of less than two years. As such we believe that we are not exposed to any material market risk. If interest rates had varied by 1% in the year ended December 31, 2021, the fair value of our investment portfolio would increase or decrease by approximately $2.9 million.

Inflation Risk

Inflation has not had a material effect on our business, financial condition or results of operations during the years ended

December 31, 2021, 2020, or 2019.

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Item 8. Financial Statements and Supplementary Data

Financial Statements are referred to in Item 15, listed in the Index to Financial Statements as a part of this Annual Report on Form 10-K, and are incorporated herein by this reference.

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

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Item 9A. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures:

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of the end of the period covered by this Annual Report on Form 10-K, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

(b) Management’s Annual Report on Internal Control Over Financial Reporting:

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2021 based on the framework in Internal Control—Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2021.

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The independent registered public accounting firm, Ernst and Young LLP, has issued an audit report on our internal control over financial reporting. The report on the audit of internal control over financial reporting is included in this Annual Report on Form 10-K.

(c) Changes in Internal Control Over Financial Reporting:

There has been no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Item 9B. Other Information

None.

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PART III

Certain information required by Part III is omitted from this Annual Report on Form 10-K because we will file a definitive Proxy Statement for the Annual Meeting of Stockholders pursuant to Regulation 14A of the Securities Exchange Act of 1934 (the Proxy Statement), not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and the applicable information included in the Proxy Statement is incorporated herein by reference.

Item 10. Directors, Executive Officers, and Corporate Governance

Information required by this Item 10 will be presented in the Proxy Statement “Election of Directors,” “Management Executive Officers,” “Section 16(a) Beneficial Ownership Reporting Compliance” and “Board of Directors and Corporate Governance,” and is incorporated herein by reference.

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Item 11. Executive Compensation

The information required by this Item is incorporated herein by reference to the sections entitled “Executive Compensation,” “Executive Compensation—Compensation Discussion and Analysis” and “Directors’ Compensation” in the Proxy Statement.

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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item is incorporated herein by reference to the sections entitled “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in the Proxy Statement.

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Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item is incorporated herein by reference to the section entitled “Certain Relationships and Related Transactions” in the Proxy Statement.

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Item 14. Principal Accountant’s Fees and Services

Information required by this Item is incorporated herein by reference to the section of the Proxy Statement entitled “Principal Accountant Fees and Services.”

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PART IV

Item 15. Exhibits, Financial Statements Schedules

The Company’s consolidated financial statements and related notes thereto are listed and included in this Annual Report on Form 10-K beginning on page F-1. The following exhibits are filed with, or are incorporated by reference into, this Annual Report on Form 10-K.

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EXHIBIT INDEX

Exhibit Description

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21.1 ​ Subsidiaries of the Company.**

23.2 ​ Consent of Marcum, LLP, Independent Registered Public Accounting Firm**

24.1 ​ Power of Attorney (included on the signature page of this Annual Report).

31.1 ​ Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.**

31.2 ​ Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.**

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** Filed herewith.

# Indicates a management contract or compensatory plan or arrangement.

+ Certain portions of the Exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

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Item 16. Form 10-K Summary

We may voluntarily include a summary of information required by Form 10-K under this Item 16. We have elected not to include such summary information.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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IOVANCE BIOTHERAPEUTICS, INC.

Date: February 24, 2022 By: /s/ Frederick G. Vogt

Name: Frederick G. Vogt, Ph.D., J.D.

Title: Interim Chief Executive Officer and President, and General Counsel

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POWER OF ATTORNEY

Know all persons by these presents, that each person whose signature appears below constitutes and appoints Frederick G. Vogt, and Jean-Marc Bellemin, and each of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place, and stead, in any and all capacities, to sign any and all amendments to this Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that all said attorneys-in-fact and agents, or any of them or their or his or her substitute or substituted, may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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Signature Title Date

​ ​

Frederick G. Vogt, Ph.D., J.D. ​ General Counsel (Principal Executive Officer) ​

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Jean-Marc Bellemin ​ (Principal Financial Officer and Accounting Officer) ​

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/s/ Merrill A. McPeak ​ Director ​ February 24, 2022

Merrill A. McPeak ​ ​

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/s/ Michael Weiser ​ Director ​ February 24, 2022

Michael Weiser, M.D., Ph.D. ​ ​

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/s/ Ryan D. Maynard ​ Director ​ February 24, 2022

Ryan D. Maynard ​ ​

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/s/ Iain Dukes ​ Director ​ February 24, 2022

Iain Dukes, D.Phil. ​ ​

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/s/ Wayne Rothbaum ​ Director ​ February 24, 2022

Wayne Rothbaum ​ ​

​ ​ ​ ​ ​

/s/ Athena Countouriotis ​ Director ​ February 24, 2022

Athena Countouriotis, M.D. ​ ​ ​ ​

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IOVANCE BIOTHERAPEUTICS, INC.

Index to Financial Statements

Contents

Page

​ ​

Financial Statements

Consolidated Balance Sheets F-7

Consolidated Statements of Operations F-8

Consolidated Statements of Comprehensive Loss F-9

Consolidated Statements of Stockholders’ Equity F-10

Consolidated Statements of Cash Flows F-11

Notes to Consolidated Financial Statements F-12

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REPORT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Iovance Biotherapeutics, Inc.

​

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Iovance Biotherapeutics, Inc. (the “Company”) as of December 31, 2021, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for the year ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and the results of its operations and its cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 24, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

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Table of Contents

Accrued clinical development costs

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​​

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/s/ Ernst & Young LLP ​

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We have served as the Company’s auditor since 2021. ​ ​

Redwood City, California ​ ​

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REPORT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Iovance Biotherapeutics, Inc.

​

Opinion on Internal Control over Financial Reporting

We have audited Iovance Biotherapeutics, Inc.’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Iovance Biotherapeutics, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the balance sheet of the Company as of December 31, 2021 the related statements of operations, comprehensive loss, stockholders’ equity and cash flows for the year ended December 31, 2021, and the related notes, and our report dated February 24, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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/s/ Ernst & Young LLP ​

​ ​ ​

Redwood City, California ​ ​

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

Iovance Biotherapeutics, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Iovance Biotherapeutics, Inc. (the “Company”) as of December 31, 2020, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Incremental Borrowing Rate (Leases)

Description of the Matter

As discussed in Note 10 to the consolidated financial statements, the Company’s reported right-of-use assets, current lease liabilities and long-term lease liabilities, utilize discount rates to calculate the estimated present value of future lease payments. Since the Company’s leases do not provide an implicit rate, management utilized a third-party valuation specialist to assist in estimating the incremental borrowing rates used in its present value calculation, which required subjectivity. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. As of December 31, 2020, the weighted average incremental borrowing rate used to determine the operating lease liability is 8.3%.

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Table of Contents

Auditing management’s assessment of its incremental borrowing rate is highly subjective and judgmental as the Company has no outstanding debt nor committed credit facilities, secured or otherwise, that would have comparable collateral or similar terms as their underlying leases. Further, changes in the incremental borrowing rate may have a material impact on the measurement of the Company’s right-of-use assets, current lease liabilities and long-term lease liabilities. Based on the level of management judgment, we have determined the incremental borrowing rate to be a critical audit matter. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our valuation specialists, when performing audit procedures to evaluate the reasonableness of management’s estimation of the incremental borrowing rate.

How We Addressed the Matter in Our Audit

Our audit procedures included, amongst others:

/s/ Marcum LLP

Marcum LLP

We served as the Company’s auditor from 2016 to 2021.

New York, NY

February 25, 2021

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F-6

Table of Contents

IOVANCE BIOTHERAPEUTICS, INC.

Consolidated Balance Sheets

(In thousands, except share and per share information)

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​ ​ ​ ​ ​ ​ ​

​ December 31, ​ December 31,

ASSETS ​ ​ ​

​ ​ ​ ​

Current Assets ​ ​ ​

Prepaid expenses and other assets ​ 3,546 ​ 6,663

​ ​ ​

Operating lease right-of-use assets ​ ​ 68,983 ​ ​ 54,756

Long-term investments ​ 91,588 ​ ​ —

​ ​ ​

LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​

​ ​ ​

Current Liabilities ​ ​

Operating lease liabilities ​ ​ 5,057 ​ ​ 6,284

​ ​ ​

Non-Current Liabilities ​ ​

Operating lease liabilities – noncurrent ​ 65,474 ​ 45,375

Long-term note payable ​ ​ 1,000 ​ ​ —

Other liabilities ​ ​ — ​ ​ 11,714

​ ​ ​

Commitments and contingencies ​ ​

​ ​ ​

Stockholders’ Equity ​ ​

Accumulated other comprehensive (loss) income ​ (601) ​ 19

Total Liabilities and Stockholders’ Equity ​ $ 777,333 ​ $ 768,458

​

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

​

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IOVANCE BIOTHERAPEUTICS, INC.

Consolidated Statements of Operations

(In thousands, except per share information)

​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ Years Ended December 31,

Costs and expenses ​ ​ ​

​ ​ ​ ​

Other income ​ ​ ​

​

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

​

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IOVANCE BIOTHERAPEUTICS, INC.

Consolidated Statements of Comprehensive Loss

(in thousands)

​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ Years Ended December 31,

Other comprehensive loss / (gain): ​ ​ ​

Unrealized loss / (gain) on short-term investments ​ (620) ​ (201) ​ 262

​

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

​

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IOVANCE BIOTHERAPEUTICS, INC.

Consolidated Statements of Stockholders' Equity

(In thousands, except share information)

​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ Shares Amount Shares Amount Shares Amount Capital Income (Loss) Deficit Equity

Stock-based compensation expense — ​ — — ​ — — ​ — ​ 24,277 ​ — ​ — ​ 24,277

Net loss ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (197,556) ​ ​ (197,556)

Stock-based compensation expense — ​ — — ​ — ​ — ​ 40,775 ​ — ​ — ​ 40,775

Net loss — ​ — — ​ — — ​ — ​ ​ — ​ ​ — ​ ​ (259,581) ​ (259,581)

Net loss ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (342,252) ​ ​ (342,252)

​

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

​

​

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IOVANCE BIOTHERAPEUTICS, INC.

Consolidated Statements of Cash Flows

(In thousands)

​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ Years Ended December 31,

Cash Flows from Operating Activities ​ ​ ​ ​

Gain on settlement of dispute ​ ​ — ​ ​ — ​ ​ (336)

Loss on disposal of assets ​ — ​ ​ — ​ ​ 16

Changes in assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​

Cash Flows from Investing Activities ​ ​

Net cash provided by (used in) investing activities ​ 132 ​ (317,853) 90,025

​ ​ ​

Cash Flows from Financing Activities ​ ​

Proceeds from the issuance of common stock, net ​ ​ 203,156 ​ ​ 567,043 ​ ​ —

Proceeds from the issuance of debt ​ ​ 1,000 ​ ​ — ​ ​ —

​ ​ ​

Supplemental disclosure of non-cash investing and financing activities: ​ ​

Net unrealized loss on short-term investments ​ $ (620) ​ $ (201) ​ ​ 262

Conversion of convertible preferred stock to common stock ​ ​ 1 ​ ​ — ​ ​ 2

Vesting of restricted stock units ​ ​ — ​ ​ — ​ ​ 1

​

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

​

F-11

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IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

​

NOTE 1. GENERAL ORGANIZATION, BUSINESS AND LIQUIDITY

General Organization and Business

Iovance Biotherapeutics, Inc. (the “Company”) is a clinical-stage biopharmaceutical company pioneering a transformational approach to cure cancer by harnessing the human immune system’s ability to recognize and destroy diverse cancer cells in each patient. Tumor infiltrating lymphocyte (“TIL”) therapy is an autologous cell therapy platform technology that was originally developed by the National Cancer Institute (“NCI”), which conducted initial clinical trials in diseases such as metastatic melanoma and cervical cancer, as well as non-small cell lung cancer. The Company’s mission is to be the global leader in innovating, developing and delivering TIL therapy for patients with cancer. The Company has developed a new, shorter proprietary TIL manufacturing process known as Generation 2 (“Gen 2”), which yields a cryopreserved TIL product. This centralized, proprietary, and scalable manufacturing method is being investigated in multiple indications. The Company’s lead product candidates include lifileucel for metastatic melanoma and metastatic cervical cancer, as well as LN-145 for metastatic non-small cell lung cancer (“NSCLC”). In addition, the Company is investigating the effectiveness and safety of combinations of TIL therapy with immune checkpoint inhibitors (“ICI”), in metastatic melanoma, cervical cancer, NSCLC, and head and neck squamous cell carcinoma (“HNSCC”). The Company is investigating peripheral blood lymphocyte (“PBL”) therapy for patients with relapsed or refractory chronic lymphocytic leukemia (“CLL”) and small lymphocytic lymphoma (“SLL”) through its sponsored trials. The Company is also investigating the potential for TIL therapy in other oncology indications through academic collaborations with leading cancer research centers. On June 1, 2017, the Company reincorporated from a Nevada corporation to a Delaware corporation.

Liquidity

The Company is currently engaged in the development of therapeutics to fight cancer, specifically solid tumors. The Company currently does not have any commercial products and has not yet generated any revenues from its business, nor does the Company currently anticipate that it will generate any significant revenues from the sale or licensing of any of its product candidates during the 12 months from the date these financial statements are issued. The Company has incurred a net loss of $342.3 million for the year ended December 31, 2021 and used $227.9 million of cash in its operating activities during the year ended December 31, 2021. As of December 31, 2021, the Company had $602.1 million in cash, cash equivalents, investments, and restricted cash ($78.2 million of cash and cash equivalents, $426.2 million in short-term investments, $91.6 million in long-term investments and $6.1 million in restricted cash).

The Company expects to continue its research and development activities, increase pre-commercial activities and complete the construction of the tenant improvements for the Iovance Cell Therapy Center (the “iCTC”) as well as its new corporate headquarters’ office in San Carlos, California, all of which are expected to increase the amount of cash used during 2022 and beyond. Specifically, the Company expects continued spending on its current and planned clinical trials, continued expansion of manufacturing activities, higher payroll expenses as the Company increases its professional and scientific staff and continuation of pre-commercial activities. Based on the funds the Company has available as of the date these 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 financial statements are issued.

Concentrations of Risk

The Company is subject to credit risk from its portfolio of cash, cash equivalents 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.

​

​

​

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IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES

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 and carries them at fair value. Unrealized gains and losses on available-for-sale securities are included in accumulated other comprehensive loss or income. Impairment losses related to credit losses (if any) are recorded as an allowance for credit losses with an offsetting entry to net loss. No impairment losses related to credit losses were recognized for the years ended December 31, 2021 and 2020. 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 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 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 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, currently $6.1 million in a segregated bank account in connection with three letters of credit, one for $5.45 million for the benefit of the landlord for the iCTC used as a security deposit for the lease (See Note 10 - Leases), one for $0.1 million for the benefit of a utilities service provider, and one for $0.6 million for the benefit of the landlord for the Company’s new headquarters’ lease. The total amount is classified as Restricted Cash on the Consolidated Balance Sheets. The first letter of credit 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 second letter of credit of $0.1 million expired on March 9, 2021, however, it automatically extends, without written agreement, to the expiration date of December 1, 2022. The third letter of credit of $0.6 million 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. As of December 31, 2021 and 2020, restricted cash consisted of $6.1 million and $5.5 million and these balances have been classified as a non-current asset on the Company’s Consolidated Balance Sheets.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows (in thousands):

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ December 31, December 31, December 31,

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F-13

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IOVANCE BIOTHERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Property and Equipment, net

​

Property and equipment are stated at cost, net of accumulated depreciation and amortization. The cost of property and equipment is depreciated or amortized on the straight-line method over the following estimated useful lives. The depreciation or amortization of capitalized construction in progress costs, a component of property and equipment, net, begins once the underlying asset is placed into service and is recognized over the estimated useful lives:

​

Computer equipment 2 years

Computer software ​ 5 years

Office furniture and equipment ​ 5 years

Lab, process, and validation equipment ​ 5 years

Machinery and equipment ​ 5 – 7 years

​