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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-K

(Mark One)

For the fiscal year ended December 31, 2022

For the transaction period from __________ to __________

Commission file number: 001-36860

IOVANCE BIOTHERAPEUTICS, INC.

(Exact Name of Registrant as Specified in Its Charter)

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

(Address of Principal Executive Offices) (Zip Code)

(650) 260-7120

(Registrant’s Telephone Number, Including Area Code)

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

Name Of Each Exchange

Title of Each Class Trading Symbol(s) On Which Registered

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

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes⌧ No ◻

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ◻No⌧

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

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

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

Large accelerated filer þ Accelerated filer ◻

Non-accelerated filer ◻ Smaller reporting company ☐

Emerging growth company ☐

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ⌧

If the securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ̈

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ̈

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

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

Title of each class Trading Symbol(s) Name of each exchange on which registered

Common stock, par value $0.000041666 per value IOVA The Nasdaq Stock Market, LLC

The aggregate market value of the registrant’s common stock held by non-affiliates on June 30, 2022, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $1.6 billion. Shares of common stock held by directors and executive officers and any ten percent or greater stockholders and their respective affiliates have been excluded from this calculation, because such stockholders may be deemed to be "affiliates" of the Registrant. This is not necessarily determinative of affiliate status of other purposes. As of February 21, 2023, there were 224,238,882 shares of the registrant’s common stock outstanding.

Documents Incorporated By Reference

Portions of registrant’s proxy statement relating to registrant’s 2023 Annual Meeting of Stockholders (the “Proxy Statement”) to be filed with the Securities and Exchange Commission pursuant to Regulation 14A, not later than 120 days after the close of the registrant’s fiscal year, are incorporated by reference in Part III of this Annual Report on Form 10-K. Except with respect to information specifically incorporated by reference in this Annual Report on Form 10-K, the Proxy Statement is not deemed to be filed as part of this Annual Report on Form 10-K.

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Page

PART I 4

Item 1. Business 4

Item 1A. Risk Factors 35

Item 1B. Unresolved Staff Comments 82

Item 2. Properties 82

Item 3. Legal Proceedings 84

Item 4. Mine Safety Disclosures 84

Item 6. [Reserved] 86

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 98

Item 8. Financial Statements and Supplementary Data 99

Item 9A. Controls and Procedures 99

Item 9B. Other Information 100

Item 10. Directors, Executive Officers and Corporate Governance 100

Item 11. Executive Compensation 100

Item 14. Principal Accounting Fees and Services 101

Item 15. Exhibits, Financial Statements Schedules 101

Signatures 105

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Forward-Looking Statements and Market Data

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

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

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

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

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

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

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

● fluctuations in the trading price of our common stock; and

● our use of cash and other resources.

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

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

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

PART I

Item 1. Business

Overview

We are a clinical-stage biopharmaceutical company pioneering a transformational approach to treating cancer by harnessing the human immune system’s ability to recognize and destroy diverse cancer cells using therapies personalized for each patient. We are preparing for potential U.S. regulatory approval and commercialization of the first autologous T-cell therapy to address a solid tumor cancer. Our mission is to be the global leader in innovating, developing and delivering tumor infiltrating lymphocyte, or TIL, therapies for patients with solid tumor cancers. Our autologous TIL therapy platform uses a centralized, scalable and proprietary 22-day manufacturing process to grow polyclonal T-cells unique to each patient and yields a cryopreserved, individualized therapy. We have applied multiple TIL therapy modalities in clinical trials in solid tumors, including TIL monotherapies for patients with later stage disease who have progressed on or after standard of care, as well as TIL combinations with standard of care therapies in patients who are earlier in their disease, to potentially improve outcomes compared to current standard(s) of care.

Our lead product candidate, lifileucel, is being developed in advanced, or metastatic or unresectable, melanoma as well as in other indications. Lifileucel was investigated in two consecutive cohorts in a clinical trial of advanced melanoma patients post-anti-PD-1 therapy, including in a prospectively defined pivotal cohort. These patients had progressed on or after standard of care therapy, which is immune checkpoint inhibitors, or ICIs, and, targeted BRAF/MEK inhibitor therapy where appropriate. Based on the positive results of these cohorts, we initiated a rolling Biologics License Application, or BLA, submission to the U.S. Food and Drug Administration, or FDA, for lifileucel in August 2022. We expect to complete this rolling BLA submission in the first quarter of 2023. Our Phase 3 clinical trial of lifileucel in combination with pembrolizumab, TILVANCE-301, is intended to be registrational in frontline advanced melanoma and serve as a confirmatory clinical trial to support full approval of lifileucel monotherapy in post-anti-PD-1 melanoma.

We are also pursuing registrational strategies for lifileucel in advanced cervical cancer and for our TIL therapy, LN-145, in metastatic non-small cell lung cancer, or NSCLC. To continuously innovate and maintain our global leadership within the field, we are investigating next generation approaches to optimize TIL products, manufacturing processes and treatment regimens, including a first-in-human clinical trial of our lead genetically modified TIL therapy, IOV-4001. We are also exploring a 16-day manufacturing

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process, tumor tissue procurement via core biopsy, additional genetically modified TIL therapies including multiple immune checkpoint gene edits and cytokine-tethered TIL therapies, and a novel interleukin-2, or IL-2, analog, designated IOV-3001, as potential avenues to improve manufacturing timelines, sample collection and supportive treatments involved in the overall TIL therapy process and treatment regimen.

Highlights of our current development pipeline are presented in the figure below:

Platform Technologies and Manufacturing

Our T-cell-based immunotherapy technology platforms are potentially applicable to many solid tumor types and blood cancers. Each platform is focused on leveraging patient-specific cells to recognize and attack diverse cancer cells that are unique to each patient. Unlike cell therapies that act on a single or small number of shared antigen targets common to certain tumors, our polyclonal T-cells are personalized therapies designed to target a variety of neoantigens that are unique to the patient or tumor. The majority of solid tumor immune targets are patient-specific, with fewer than 1% shared among patients. TIL therapy is our lead T-cell-based immunotherapy platform in multiple advanced solid tumor cancers. For blood cancers, our peripheral blood lymphocyte, or PBL, therapy platform is based on polyclonal T-cells that are collected from a patient’s blood sample, and then amplified and reinvigorated.

TIL Clinical Development in Advanced, Metastatic or Unresectable Solid Tumor Cancers

Building on the prior TIL therapy clinical trials conducted at single academic centers, including the National Cancer Institute, or NCI, we have investigated TIL therapy in global, multi-center Phase 2 clinical trials in advanced melanoma, cervical cancer, NSCLC, and head and neck squamous cell carcinoma, or HNSCC. Additional information about our clinical trials is summarized below.

In post-anti-PD-1 advanced melanoma, we are investigating lifileucel in our C-144-01 clinical trial that supports our BLA submission and potential approval of lifileucel in advanced post-anti-PD-1 melanoma.

In frontline advanced melanoma patients who are naïve to anti-PD-1 therapy, we are investigating lifileucel in combination with pembrolizumab in the IOV-COM-202 clinical trial and the Phase 3 TILVANCE-301 clinical trial. TILVANCE-301 is a randomized Phase 3 clinical trial intended to support registration in advanced frontline melanoma as well as to serve as a confirmatory trial for full approval in advanced post-anti-PD-1 melanoma.

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We are also executing a registrational strategy for lifileucel in advanced cervical cancer. C-145-04 is a multicenter Phase 2 clinical trial that is currently enrolling a pivotal cohort to support a BLA in cervical cancer following progression on or after chemotherapy and pembrolizumab.

In NSCLC, we are investigating our TIL therapy, LN-145, in two clinical trials in several NSCLC patient populations with significant unmet need. IOV-LUN-202 is a clinical trial of LN-145 in advanced NSCLC patients who have progressed following chemotherapy and anti-PD-1 therapy. IOV-COM-202 also includes cohorts of NSCLC patients treated with LN-145 monotherapy and combination therapy.

Our first genetically modified, PD-1 inactivated TIL therapy, IOV-4001, entered a first-in-human Phase 1/2 clinical trial, IOV-GM1-201, in 2022 in patients with previously treated advanced melanoma and NSCLC. IOV-4001 utilizes the gene-editing TALEN® technology, licensed from Cellectis S.A., or Cellectis, to inactivate the gene coding for the programmed cell death protein-1, or PD-1.

Beyond our Iovance-sponsored clinical trials, we have academic collaborations with leading cancer research centers to investigate TIL therapy, including next-generation processes and technologies, in other cancers and treatment settings.

Next-Generation Therapeutic and Manufacturing Approaches

Our current next-generation technology platforms are designed to optimize TIL therapy across four key initiatives: genetic modification, potency, manufacturing process and treatment regimens. More information on our next-generation approaches is included in the Next-Generation Product Candidates section of this Annual Report on Form 10-K.

Intellectual Property

We have established a leading intellectual property portfolio developed internally and licensed from third parties. We currently own more than 60 U.S. patents related to TIL therapy, including patents directed to compositions and methods of treatment and manufacturing in a broad range of cancers. Pending patent applications and granted patents cover the fields of TIL therapy, marrow infiltrating lymphocytes, or MIL therapy, and PBL therapy. We also license rights to a broad range of technologies related to our platforms. More details on our intellectual property portfolio are included within this Annual Report on Form 10-K.

Corporate Strategy

Be the global leader in innovating, developing and delivering TIL therapy

Our mission is to be the global leader in innovating, developing and delivering TIL therapy for patients with cancer. We are pioneering this transformational approach to cure cancer by harnessing the human immune system’s ability to recognize and destroy diverse cancer cells in each patient. We are committed to continuous innovation in developing TIL cell therapy and optimizing the TIL treatment regimen that may extend and improve life for patients with cancer.

Obtain regulatory approval and successfully commercialize our lead product candidate lifileucel for the treatment of post-anti-PD-1 advanced melanoma

Our top priority is to expedite the regulatory approval and commercialization of our lead product candidate, lifileucel, for the treatment of patients with post-anti-PD-1 advanced melanoma. We initiated a rolling BLA for lifileucel in post-anti-PD-1 advanced melanoma in August 2022 and plan to complete the BLA submission in the first quarter of 2023.

Our medical affairs team is in the field educating key opinion leaders, or KOLs, and presenting and publishing our clinical results. Our U.S. commercial leadership team is preparing to launch lifileucel in 2023, if approved. We have experienced marketing, payer access and distribution teams, and we are building a specialty oncology sales force for launch. More than half the team has prior cell therapy experience.

The five primary areas of our pre-launch efforts include:

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● communication with payors about the value of lifileucel; and

● establishment of a cross-functional, patient-centric organization.

Prepare for commercial manufacturing to meet forecasted demand

We believe that we are the only company in the U.S. to have a centralized, demonstrated, and commercially viable TIL manufacturing process. To date more than 600 patients have been treated with Iovance TIL therapy manufactured using our proprietary processes, by contract manufacturing organizations, or CMOs, and by us at our own manufacturing facility, the Iovance Cell Therapy Center, or iCTC.

The iCTC is currently manufacturing TIL for our ongoing clinical trials and preparing to provide commercial supply upon potential BLA approval. We began construction of the iCTC in 2019, in Philadelphia, Pennsylvania, in order to control manufacturing capacity, product quality, manage logistics around supply and delivery, implement process improvement and realize potential cost efficiencies for TIL therapies that we may develop or commercialize. We intend to carefully manage our cost structure, and reduce the long-term cost of manufacturing our products, although there can be no assurance that we will be able to reduce our manufacturing costs to commercially attractive levels. We are building capacity to treat thousands of cancer patients annually, with flexibility to expand within existing shell space and an option to build on an adjacent lot to support future growth. We expect iCTC to supply most of our commercial TIL therapies at launch, with CMOs to supplement our internal manufacturing capacity under various manufacturing services agreements, or MSAs. Details of related agreements are provided in the Research, Development, Manufacturing and License agreements section of this Annual Report on Form 10-K.

Continue to improve our TIL manufacturing processes and technology

In 2018, we first utilized our TIL manufacturing process known as Gen 2, which reduced TIL manufacturing time from 5-6 weeks to 22 days while producing a cryopreserved TIL product for ease of administration and handling. We intend to establish Gen 2 as a viable commercial manufacturing process for our initial TIL therapies. Gen 2 was utilized in all patients in both Cohorts 2 and 4 of our C-144-01 clinical trial and is the manufacturing process for registration and the BLA submission for lifileucel. Gen 2 is also being utilized in most of our ongoing TIL clinical development programs. We also continue to develop and evaluate potential future TIL manufacturing processes, including our 16-day Gen 3 process, as well as processes for genetically modified and other next generation TIL products.

Advance and expand our pipeline of polyclonal T-cell therapies

We seek to collaborate with government, academic research institutions, and corporate partners to improve TIL manufacturing, and to develop and explore next generation approaches as well as TIL therapies for new indications. We have a Cooperative Research and Development Agreement, or CRADA, with the National Institutes of Health, or NIH, and the National Cancer Institute, or NCI. We also have ongoing licensing agreements and collaborations with H. Lee Moffitt Cancer Center, or Moffitt, The University of Texas M.D. Anderson Cancer Center, or MDACC, Yale University, The Ohio State University, Cellectis, Novartis Pharma AG, or Novartis, Melanoma Institute Australia, or MIA, and Beth-Israel Deaconess Medical Center, or BIDMC. A description of some of these collaborations and related agreements is provided in the Collaborations for New Tumor Types and Treatment Settings section of this Annual Report on Form 10-K.

Iovance-Sponsored Clinical Trials

TIL Therapy in Advanced Solid Tumor Cancers

Lifileucel for Advanced Melanoma

Melanoma is a common type of skin cancer, accounting for an estimated 99,780 patients diagnosed and 7,650 deaths in 2022 in the U.S. according to the Surveillance, Epidemiology and End Results program, or SEER, program. We are developing lifileucel to treat advanced melanoma. Our Phase 2 clinical trial, C-144-01, is a prospective, clinical trial evaluating lifileucel in advanced melanoma patients who have progressed on or after prior anti-PD-1 therapy and if BRAF mutant, after BRAF or BRAF/MEK inhibitor therapy. There are no FDA approved therapies in this treatment setting for advanced melanoma after anti-PD-1 therapy.

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Based on the unmet need in post-anti-PD-1 advanced melanoma, as well as initial clinical data, lifileucel received a Regenerative Medicine Advanced Therapy, or RMAT, designation from the FDA in 2018.

In the C-144-01 trial, our Generation 1, or Gen 1, manufacturing process with non-cryopreserved product was used in Cohort 1, which was closed to enrollment in 2017. Our Gen 2 process with cryopreserved product was used in subsequent patients enrolled in both Cohorts 2 and 4. Cohort 2 was closed to enrollment in late 2018. Cohort 3 is an optional retreatment cohort.

Cohort 4, a pivotal cohort, was added in 2019, following an end of Phase 2, or EOP2, meeting held with the FDA in the third quarter of 2018 and completed dosing in January 2020. Cohort 4 built on the Cohort 2 results in the same patient population and used the same eligibility criteria, treatment and manufacturing process. Cohort 4 was designed to evaluate objective response rate, or ORR, read by an independent review committee, or IRC, using RECIST v1.1 as the prospectively defined primary endpoint.

The results from Cohort 2, including ORR as assessed by investigator, were presented at several medical meetings since 2018 and published in the Journal of Clinical Oncology in May 2021. We reported durable responses across a wide age range of metastatic melanoma patients, among those who have received prior anti-CTLA-4 and BRAF targeted treatments, regardless of BRAF mutation status, and in patients with PD-L1 high and low status. In May 2022, we announced topline IRC read data from the C-144-01 clinical trial from Cohort 4, which met the primary endpoint, ORR, of the clinical trial. In addition, we reported updated data from Cohort 2 and pooled Cohorts 2 and 4.

We presented additional data from C-144-01 Cohorts 2 and 4 at the Society for Immunotherapy of Cancer, or SITC, Annual Meeting in November 2022. The SITC 2022 presentation included pooled efficacy data read by IRC and safety data from 153 patients with advanced melanoma, including 66 patients enrolled in Cohort 2 and 87 patients enrolled in Cohort 4, with a median study follow up of 36.5 months and a data cutoff date of July 15, 2022. Across both cohorts, patients had received a median of 3 lines of prior therapy, including anti-PD-1 therapy in 100% of patients and anti-CTLA-4 therapy in 81.7% of patients, with prior combination anti-PD-1 and anti-CTLA-4 therapy received in 53.6% of patients. Baseline disease characteristics were generally similar between Cohorts 2 and 4. However, Cohort 4 patients showed both a higher disease burden and a higher proportion of patients with elevated lactate dehydrogenase, or LDH, a well-known negative prognostic factor in melanoma. The ORR assessed by an IRC using RECIST v1.1 was 31.4%, with 9 complete responses and 39 partial responses. The median time from lifileucel infusion to best response was 1.5 months, and responses deepened over time. Median duration of response, or mDOR, was not reached as estimated by Kaplan-Meier, or KM, method. Responses lasted for 24 months or greater in 41.7% of responders, including 47.8% of responders in Cohort 2 and 36.0% of responders in Cohort 4. Median overall survival, or mOS, had not been reached in patients who achieved a response at first assessment at 6 weeks, and mOS in all patients was 13.9 months. The treatment-related adverse event, or TEAE, profile was generally consistent with the underlying advanced disease and the safety profile of the lymphodepletion and IL-2 regimens. In December 2022, we published additional detail from C-144-01 in the Journal for Immuno Therapy of Cancer, or JITC.

Based on results from the C-144-01 clinical trial, we held a pre-BLA meeting with the FDA in July 2022 and initiated a rolling BLA for lifileucel in metastatic melanoma in August 2022. The BLA submission includes C-144-01 data from pivotal Cohort 4 and supportive Cohort 2. We plan to complete the rolling BLA submission in the first quarter of 2023.

We are also pursuing a registrational path for lifileucel in combination with pembrolizumab in frontline advanced melanoma. Our strategy is based on clinical results from Cohort 1A of the IOV-COM-202 clinical trial that support the combination, as well as prior published NCI data for TIL monotherapy in anti-PD-1 naïve melanoma patients. We reported initial results and updates from ongoing Cohort 1A of the IOV-COM-202 clinical trial at the American Society of Clinical Oncology, or ASCO, annual meeting in June 2021, SITC in November 2021. The Cohort 1A results to date have demonstrated that lifileucel can be safely combined with pembrolizumab. At our most recent medical meeting oral presentation at SITC, in November 2021, updated results from 10 patients demonstrated ORR of 60%. Six out of the 10 patients had a confirmed objective response, including three complete responses and three partial responses. The TEAE profile was consistent with the underlying advanced disease and the known adverse event profiles of pembrolizumab, lymphodepletion, and IL-2 regimens.

In an April 2022 corporate announcement, we provided updated data that demonstrated a 67% ORR in 12 patients in Cohort 1A. Eight patients had a confirmed objective response per RECIST v1.1, including three complete responses and five partial responses. Six of the eight responders had ongoing response at the time of the last data cut, and five responders had a duration of response of more than one year. In a January 2023 corporate press release, we disclosed that updated efficacy and safety results from nearly 20 patients treated in Cohort 1A remain consistent with previously reported Cohort 1A data and continue to support our strategy in frontline advanced melanoma.

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During the fourth quarter of 2022, we reached agreement with the FDA and began start up activities for a Phase 3 multicenter, open-label, randomized, parallel group, treatment clinical trial, TILVANCE-301, in frontline advanced melanoma. The TILVANCE-301 trial, or NCT05727904, will randomize 670 patients to investigate lifileucel in combination with pembrolizumab in the experimental arm compared with pembrolizumab monotherapy in the control arm. The clinical trial will enroll participants with unresectable or metastatic melanoma who have had no prior therapy for metastatic disease. Previous adjuvant/neoadjuvant therapy with a single line of BRAF-targeted therapy, PD-1 inhibitor, or CTLA-4 inhibitor is allowed, if completed at least 6 months before progression to metastatic disease. In the experimental arm, a tumor sample is resected from each patient for lifileucel manufacturing. Patients receive pembrolizumab prior to and after the lifileucel regimen, every 6 weeks until disease progression. In the control arm, pembrolizumab monotherapy is given every 6 weeks until disease progression, with an optional crossover period to lifileucel monotherapy upon confirmed progressive disease verified by a blinded independent review committee, or BIRC, and if patients meet eligibility criteria. The FDA agreed to dual primary endpoints of ORR to support accelerated approval and progression free survival, or PFS, to support full approval of lifileucel in frontline advanced melanoma. TILVANCE-301 is also designed to serve as a confirmatory clinical trial to support full approval of lifileucel in post-anti-PD-1 advanced melanoma. The dual primary endpoints will be verified by BIRC using RECIST v1.1.

Lifileucel for Cervical Cancer

According to estimates from the SEER program, in 2022 approximately 14,100 women would be diagnosed with cervical cancer and approximately 4,280 cervical cancer-related deaths would occur in the U.S.

We are developing lifileucel alone and in combination with pembrolizumab for the treatment of advanced, unresectable or metastatic, cervical cancer. Lifileucel for advanced cervical cancer was formerly known as LN-145. C-145-04 is an ongoing Phase 2, multicenter pivotal clinical trial. In March 2019, the protocol for this clinical trial was amended to modify the primary endpoint of from ORR by investigator to ORR based on IRC assessment. Initial results from the C-145-04 clinical trial were reported at ASCO in June 2019.

In anticipation of a changing landscape, we amended the protocol for the C-145-04 clinical trial in November 2019 from a single cohort design into a multicohort study. Cohort 1 was defined to include patients who had progressed during or after systemic chemotherapy excluding ICI. Cohort 2 was newly added to include patients who have progressed during or after treatment with anti-PD-1/-L1 checkpoint inhibitor in addition to systemic chemotherapy. Cohort 3 was added to enroll patients who had not received prior systemic therapy to investigate lifileucel in combination with pembrolizumab. Cohort 3 results from 14 initial patients were included as part of an oral presentation at SITC in November 2021. The ORR was 57.1 % with eight out of 14 patients achieving an objective response, including one complete response, six partial responses and one unconfirmed partial response. The TEAE profile was consistent with the underlying advanced disease and the known adverse event profiles of pembrolizumab, lymphodepletion, and IL-2 regimens.

In the C-145-04 trial, we completed enrollment of Cohort 1 in 2020, Cohort 2 in 2021 and Cohort 3 in 2022. During 2022, following the FDA discussions and feedback on a registration strategy to address the shift in standard of care following the FDA approval of pembrolizumab in the frontline cervical cancer setting, we reopened Cohort 2 to enroll additional patients and to be a pivotal cohort to support a BLA for cervical cancer following progression on chemotherapy and pembrolizumab. We expect to continue enrollment in Cohort 2 in 2023.

LN-145 for Advanced, or Metastatic or Unresectable NSCLC

According to SEER program estimates, approximately 236,740 people would be diagnosed with lung and bronchus cancers, and approximately 130,180 deaths would occur related to these cancers in the U.S. in 2022.

We are developing our TIL therapy LN-145 alone and in combination with approved therapies to treat advanced NSCLC in the IOV-LUN-202 and IOV-COM-202 clinical trials. IOV-LUN-202 is investigating LN-145 monotherapy in patients with metastatic NSCLC who previously received approved systemic therapy of combined or sequential ICI and chemotherapy in three cohorts. The programmed death-ligand 1, or PD-L1, tumor proportion score, or TPS, in patients at the time they started frontline therapy was less than one percent or unknown in patients in Cohort 1 and greater than or equal to one percent in patients in Cohort 2. In Cohort 3, we are exploring treatment with TIL that is extracted from core biopsy and manufactured using our Gen 3 process.

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In June 2021, the first patient was treated in the IOV-LUN-202 clinical trial. In a poster on IOV-LUN-202 at the American Association for Cancer Research, or AACR, Annual Meeting in April 2022, we featured protocol updates including changes to eligibility criteria, and the option for pre-progression tumor harvest, to broaden enrollment in reflection of the unmet need in NSCLC. We enrolled patients during 2022 and intend to continue enrollment in 2023.

IOV-COM-202 is a clinical trial that includes 2 active cohorts and one previously completed cohort in patients with recurrent or metastatic NSCLC as follows:

We have reported full results from Cohort 3B and initial results from Cohort 3A in the IOV-COM-202 study.

Cohort 3B results were reported in June 2021 and presented at SITC in November 2021. For the completed Cohort of 28 patients in the analysis population, the ORR was 21.4%, including one complete response and five partial responses. All patients had received prior anti-PD-1/-L1 therapy, and all six responding patients had also received prior chemotherapy. The TEAE profile was consistent with the underlying disease and known adverse event profiles of non-myeloablative lymphodepletion and IL-2. As of a data extract in November 2022 provided in a corporate slide deck, one complete response remained ongoing at 37 months following treatment with LN-145.

In a January 2023 press release, we shared initial topline results in 17 patients from Cohort 3A which comprises three distinct clinical subsets of anti-PD-1 naïve patients: 1) treatment-naïve, 2) post-chemotherapy, and 3) estimated glomerular filtration rate, or EGFR, -mutant after prior treatment with TKIs. Confirmed ORR by RECIST v1.1 was 47%, with an objective response observed in 8 patients treated with LN-145 in combination with pembrolizumab. Responses were observed regardless of PD-L1 status. Two patients achieved complete responses and remain on study, including one patient who was post-chemotherapy and anti-PD-1 naive, and one patient who was EGFR-mutant after prior treatment with TKI. Safety was consistent with other studies of Iovance TIL therapies in combination with pembrolizumab. Study enrollment remains ongoing. Observed differences between the patient subsets are informing the design of a subsequent potential registration study. Detailed clinical results will be shared at a future medical meeting.

We plan to continue to discuss registrational strategies for LN-145 with the FDA in 2023. Based on initial results from Cohort 3A, we plan to meet with the FDA in 2023 to discuss Cohort 3A results and a potential registration clinical trial of lifileucel in frontline advanced NSCLC.

IOV-4001 for Advanced Melanoma and NSCLC

Our lead genetically modified TIL therapy, IOV-4001, utilizes the gene-editing TALEN® technology licensed from Cellectis, to inactivate the gene coding for PD-1. The worldwide exclusive license enables us to use certain TALEN® technology addressing multiple gene targets in several cancer indications, to develop genetically edited and potentially more potent TIL therapies. We are investigating the safety and efficacy of IOV-4001 in the IOV-GM1-201 multicenter, first-in-human Phase 1/2 clinical trial in previously treated patients with advanced melanoma, who have progressed following anti-PD-1/PD-L1 blocking antibody therapy and, in those patients with BRAF mutations, after BRAF/MEK inhibitor therapy in Cohort 1, or metastatic NSCLC who have received no more than three prior lines of therapy, with or without oncogene driver mutations in Cohort 2. We treated the first patient with IOV-4001 in the third quarter of 2022. We published posters that highlight the “trial in progress” for IOV-GM1-201 at SITC in November 2022 and preclinical results for antitumor activity of IOV-4001 at the AACR Annual Meeting in April 2022.

TIL Therapy for HNSCC

In metastatic head and neck cancer squamous cell carcinoma, or HNSCC, we are evaluating LN-145 as monotherapy and in combination with pembrolizumab. The Phase 2 C-145-03 trial began in June 2017 and closed in January 2021 after reaching its pre-specified enrollment target to investigate LN-145 using various manufacturing processes. Cohort 2A in IOV-COM-202 is evaluating

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LN-145 in combination with pembrolizumab in patients with HNSCC who are naïve to anti-PD-1 therapy. Initial and updated Cohort 2A results were presented at the SITC Annual Meetings in November 2020 and 2021, respectively.

PBL Therapy in Blood Cancers

In blood cancers, our clinical trial IOV-CLL-01 is a Phase 1/2 clinical trial evaluating the safety and efficacy of IOV-2001, our polyclonal PBL therapy, in patients with relapsed or refractory chronic lymphocytic leukemia, or CLL, and small lymphocytic lymphoma, or SLL, to receive IOV-2001.

Next-Generation Product Candidates

We are committed to innovating individualized T-cell therapies that may recognize a multitude of diverse patient-specific cancer cells. Our current next-generation technology platforms are designed to optimize TIL therapy across four key initiatives: genetic modifications, potency, process optimization and new treatment regimens.

Collaborations for New Tumor Types and Treatment Settings

Our ongoing academic collaborations with leading cancer research centers as well as government and corporate partners are exploring the potential for TIL therapy in other tumor types and treatment settings, such as in the following example studies:

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Immune System and Cancer Surveillance

The immune system recognizes danger signals and responds to threats at a cellular level. The most significant components of the cellular aspect of the adaptive immune response are T-cells, or T lymphocytes, so called because they mature in the thymus and are distinguished from B-cells which mature in the bone marrow. T-cells can be distinguished from other white blood cells by T-cell receptors present on their cell surface. These receptors contribute to tumor surveillance by helping T-cells recognize infected as well as cancerous cells. T-cells are involved in both sensing and killing infected or cancerous cells, as well as coordinating the activation of other cells in an immune response.

Challenges for Cancer Immunotherapy

Despite progress over the past several decades, effective treatment of solid tumors continues to be challenging for several reasons, including: (i) intratumoral heterogeneity, (ii) numerous mutations and tumor neoantigens, with <1% shared across patients and lack of clarity on which mutations or neoantigens are critical, and (iii) ability to adapt and evade treatments that target a single mutation. In addition, the tumor itself and the tumor microenvironment can suppress the patient’s natural immune response. When T-cells with cancer-specific receptors are absent, present in low numbers, of poor quality, or rendered inactive by suppressive mechanisms employed by tumor tissue, the cancer can grow and spread to various organs. In addition, standard of care treatments for cancer can be deleterious to T-cells’ ability to kill cancer.

Advancing Immuno-Oncology with Our Tumor-Infiltrating Lymphocyte Technology Platforms

Our T-cell-based immunotherapy technology platforms are potentially applicable to many solid tumor types and blood cancers. Each platform is focused on leveraging patient-specific cells to recognize and attack diverse cancer cells that are unique to each patient. Unlike cell therapies that act on a single or small number of shared antigen targets common to certain tumors, our polyclonal T-cells are personalized therapies designed to target a variety of neoantigens that are unique to the patient or tumor.We believe that adoptive cell therapy, specifically with the use of human polyclonal TIL cells to reengage the immune system, may be a significant advancement in the treatment of cancer.

Using our lead TIL immunotherapy platform, our initial strategy is to deliver polyclonal T-cell-based therapies for patients with late-stage solid tumor cancers. After infusion, TIL can potentially infiltrate the tumor to eliminate cancer cells, further proliferate in the body and potentially overcome several mechanisms of tumor escape to which endogenous T-cells may be susceptible due to the immune-suppressive tumor microenvironment.

For earlier intervention, we are investigating the potential of our TIL therapy in combination with a class of immunotherapy drugs called ICIs that seek to overcome one of the main escape mechanisms of cancer against an immune system attack. TIL therapy and ICIs may work synergistically to target and attack cancer cells while breaking down barriers for the immune system to mount a response.

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There are three key steps in the TIL therapy process.

●Step 1: Sample Collection. A tumor sample of about 1.5 cm in diameter is removed during a surgical biopsy and shipped to our centralized manufacturing facility, where the TIL are isolated.

●Step 2: Manufacturing. Patient-specific TIL are amplified and reinvigorated using our proprietary Gen 2 manufacturing process, reflecting our successful efforts to centralize and streamline TIL manufacturing from several weeks to 22 days. Additional detail on Gen 2 is provided below in the Manufacturing Process section of our Annual Report on Form 10-K.

●Step 3: Treatment. The patient begins with a preparative regimen of non-myeloablative lymphodepletion, or NMA-LD, to suppress the immunosuppressive tumor microenvironment, which we believe will enhance the efficacy of TIL therapy. After NMA-LD, the expanded and rejuvenated, patient-specific TIL cells are delivered back into the body by infusion. The treatment regimen is completed with a short course of IL-2 of up to 6 doses to promote T-cell activity in the body after TIL infusion. If a patient is receiving TIL as a monotherapy, their treatment may be complete. If a patient is receiving TIL therapy as part of the combination approach, they will continue treatment with ICIs following TIL infusion.

Historical Clinical Results with Other TIL Therapies in Metastatic Melanoma

To date, more than 600 patients have been treated with TIL therapies manufactured using our proprietary processes. Prior to our clinical trials, hundreds of advanced melanoma patients were treated with TIL therapy produced locally using different manufacturing methods at different academic institutions and hospitals in the U.S., Europe, Canada, and Israel.

At the NCI, clinical responses have been relatively consistent in several trials of TIL therapy in anti-PD-1 naïve melanoma patients that were conducted prior to anti-PD-1 treatment becoming the available standard of care for melanoma patients. Over 50% of patients achieved an objective response, and approximately 22-24% of patients had a complete response, as defined by RECIST v1.1 criteria. Most patients who have had a complete response remained in response in 3-7 years of follow up.

In August 2021, patient outcomes based on two decades of experience with TIL therapy in a cohort of 226 patients with metastatic melanoma were published by Seitter, et al., in a collaboration led by Dr. Steven Rosenberg from the Surgery Branch of the NCI, in Clinical Cancer Research. The ORR was 51%, with a complete response rate of 22%. The 49 patients achieving a complete response had a 10-year melanoma-specific survival of 96%. In the 192 patients who had not received prior anti-PD-1 therapy, ORR was 56% with a median melanoma-specific survival of 28.5 months. Of the 43 patients who were refractory to anti-CTLA-4 therapy without exposure to anti-PD-1, the 60 % response rate showed no difference when compared to the 55% response rate in those naïve to any immune checkpoint therapy. Baseline demographic features, including BRAF status, did not influence outcome. Exposure to prior therapies, including refractoriness to anti-PD-1 and BRAF/MEK inhibitors, affected outcome. In the population most comparable to Cohorts 2 and 4 of our C-144-01 trial, 34 of the reported patients were refractory to anti-PD-1 therapy and had an ORR of 24%, with a median melanoma-specific survival of 11.6 months. Decreased melanoma-specific survival was seen in patients that are refractory to BRAF/MEK inhibitors regardless of prior anti-PD-1 exposure with a median survival of 8.7 months in patients who were refractory to anti-PD-1 and 12.1 months in patients who were naïve to anti-PD-1.

In December 2022, in the New England Journal of Medicine, a team from The Netherlands Cancer Institute and the National Center for Cancer Immune Therapy, Department of Oncology, of the Copenhagen University Hospital published the results of a multicenter, open-label phase 3 clinical trial of 168 patients with unresectable stage IIIC-IV melanoma randomized 1:1 to TIL or single agent ipilimumab. The study began in 2014. Patients in the study had received a maximum of one line of prior therapy, of which 86% were refractory to anti-PD-1 therapy. With a median follow-up of 33.0 months, median PFS was 7.2 months for TIL compared to 3.1 months for ipilimumab. ORR was 49% for TIL with 20% complete responses, compared to 21% ORR and 7% complete response rate for ipilimumab. mOS for TIL was 25.8 months compared to 18.9 months for ipilimumab. Grade 3 and higher treatment-related adverse events occurred in all TIL and 57% of ipilimumab patients.

Manufacturing Processes

Iovance was founded to deliver broad access to TIL therapy for people with cancer by conducting multicenter clinical trials and developing centralized, scalable manufacturing processes to enable regulatory approvals and commercial launches. The NCI and other academic centers have historically manufactured TIL therapies for research purposes. To date, these site-specific processes have not been scalable or standardized to serve sizeable patient populations.

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Our Gen 1 TIL manufacturing process modified the NCI’s original TIL manufacturing and processing so that it could be reproduced in a current good manufacturing practice, or cGMP, environment. TIL expansion occurred over a 5-to-6-week period and produced a non-cryopreserved product.

Our internal research and process development team developed our proprietary Gen 2 technology to include manufacturing and logistical efficiencies aimed at further optimizing treatment and streamlining distribution processes. Gen 2 manufacturing takes 22 days while allowing for a cryopreserved product. We currently use Gen 2 in almost all Iovance clinical trials for product registration and our BLA submission. We also continue to develop new processes. We have developed a shorter, 16-day, Gen 3 manufacturing process as well as next generation manufacturing processes to genetically modify TIL and to select for TIL that potentially more potent.

Gen 2 Manufacturing Process

During the Gen 2 process, TIL are expanded exponentially ex vivo to yield billions or 109 – 1011 of TIL. The process begins with the collection of the patient’s tumor by surgical biopsy, which is sent to a central manufacturing facility. The tumor is fragmented to facilitate a clear path for TIL to leave the tumor tissue and placed in media that optimizes the growth of TIL rather than other cell types. Initially, from days 0-11, cells grow slowly during the pre-rapid expansion, or pre-rep phase. Following the pre-rep phase, the cells are transferred to a larger bioreactor and feeder cells are introduced to further activate the TIL to proliferate during the rapid expansion, or REP phase, from days 11-22. During the REP phase, on day 16, the TIL are harvested while maintaining a closed system before they are counted and placed into multiple bioreactors which are incubated one last time until day 22. On day 22, TIL are filtered, washed, concentrated and finally formulated with cryopreservation media before being placed in up to four final product bags, depending on total cell count. The final product is shipped back to the center where it can be administered to the patient. The following diagram illustrates our Gen 2 TIL manufacturing process.

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Our Iovance Cell Therapy Center, or iCTC, for Large-Scale Centralized Manufacturing

Our iCTC is the first centralized and scalable cGMP manufacturing facility dedicated to producing TIL as a potential therapy for patients with solid tumors. At 136,000 square feet, the iCTC is among the largest cell therapy manufacturing facilities in existence. It currently supplies investigational TIL therapy for Iovance clinical trials, with commercial manufacturing expected to begin after initial product approval. The proximity of the iCTC to multiple airports facilitates delivery of TIL therapies to treatment centers, with the iCTC expected to cover logistics and delivery of TIL therapy in both North America and Europe. This location may also offer future tax savings under Pennsylvania’s Keystone Opportunity Improvement Zone, or KOIZ.

Clinical Manufacturing

In 2021, we completed the commissioning activities at the iCTC and successfully initiated manufacturing of clinical batches of lifileucel and LN-145. In addition, we have entered into MSAs with WuXi Advanced Therapies, Inc., or WuXi, and Moffitt pursuant to which they have agreed to manufacture, package, ship and handle quality assurance and quality control of certain clinical trials for our TIL products working closely with our employees. In the future, we may rely on them or other third parties, or our own manufacturing capabilities, for the manufacturing and processing of TIL-based product candidates for our clinical trials.

Commercial Manufacturing Preparations

To meet projected needs for commercial quantities, we continue our launch readiness and scale up activities to supply commercial TIL upon potential BLA approval. We expect to rely primarily on our own iCTC facility for commercial supply, with flexibility to use CMOs to meet anticipated clinical trial and, if approved, commercial demands. For example, we expect to be able to use two suites for clinical or commercial manufacturing at WuXi in Philadelphia if needed based on demand. If we are unable to meet manufacturing capabilities and demand at our own commercial manufacturing facility, we may need to rely on CMOs, including both current and alternate suppliers, to ensure sufficient capacity is available for commercial purposes. Our CMO relationship is described in more detail in the Research, Development, Manufacturing and License agreements section of this Annual Report on Form 10-K.

Cell processing activities are conducted at all facilities under cGMP, using qualified equipment and materials. We believe that all materials and components utilized in the production of the final TIL product are readily available from qualified suppliers.

Intellectual Property

We aim to lead in the field of T-cell-based immunotherapy by building and augmenting the patent rights for our proprietary TIL technology platform, which we have developed internally and licensed from third parties. Intellectual property is of importance in our field and in biotechnology generally. We seek to protect and enhance proprietary technology, inventions, and improvements that are commercially important to the development of our business by seeking, maintaining, and defending patent rights. We also plan to rely on regulatory protection afforded through Orphan Drug Designation, or ODD, available regulatory exclusivities and patent term extensions where available. To achieve this objective, our strategic focus has been to develop our own intellectual property, while also identifying and licensing patents from third parties that provide protection and serve as an optimal platform to enhance our intellectual property and technology base. We expect to further develop our patent portfolio as a strategic focus in 2023.

We currently own more than 60 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; 11,241,456; 11,254,913; 11,266,694; 11,273,180; 11,273,181; 11,291,687; 11,304,979; 11,304,980; 11,311,578; 11,337,998; 11,344,579; 11,344,580; 11,344,581; 11,351,197; 11,351,198; 11,351,199; 11,364,266; 11,369,637; 11,384,637; 1,433,097; 11,529,372; and 11,541,077. More than 35 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 patents and 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 manufacturing TIL, MIL, and PBL therapies; the use of costimulatory and T-cell modulating molecules in TIL therapy and manufacturing; stable and transient genetically-modified TIL therapies, including genetic knockouts of immune

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checkpoints; cytokine-tethered TIL therapies; methods of using ICIs in combination with TIL therapies; TIL selection technologies; and methods of treating patient subpopulations.

Research, Development, Manufacturing and License Agreements

WuXi Advanced Therapies, Inc.

Manufacturing and Services Agreements

In November 2016, we entered into a three-year manufacturing services agreement, or the First WuXi MSA, with WuXi, pursuant to which WuXi agreed to provide manufacturing and other services, which has since been amended and assigned to our subsidiary Iovance Biotherapeutics Manufacturing LLC. Under the First Wuxi MSA, we entered into two statements of work for two cGMP manufacturing suites to be operated by WuXi for us. The terms of one of these statements of work was extended to December 2022.

In October 2022, Iovance Biotherapeutics Manufacturing LLC entered into an additional three-year MSA, or the Second WuXi MSA, with WuXi and its parent company WuXi Apptec, Co, Ltd. The Second WuXi MSA and its related statement of work will supersede the statement of work under the First WuXi MSA with respect to commercial and clinical manufacturing for the two existing manufacturing suites. Both suites are expected to be capable of being used for the commercial manufacture of our products.

National Institutes of Health and the National Cancer Institute

Cooperative Research and Development Agreement

We entered into a CRADA with the NCI to develop adoptive cell immunotherapies in multiple solid tumor types, including unmodified TIL as a stand-alone therapy or in combination, improved methods for the generation and selection of TIL with anti-tumor reactivity, and strategies for more potent TILs.

In August 2011, we signed a five-year CRADA with the NCI, to work on the development of adoptive cell immunotherapies that are designed to destroy metastatic melanoma cells. The CRADA was amended in 2015 and 2016, to, among other things, extend the term of the CRADA through August 2023, include new indications such as bladder, lung, triple-negative breast, and Human Papilloma Virus, or HPV, -associated cancers and modify the focus on the development of unmodified TIL as a stand-alone therapy or in combination. The parties have continued the development of improved methods for the generation and selection of TIL with anti-tumor reactivity in metastatic melanoma, bladder, lung, breast, and HPV-associated cancers.

In August 2021, a third amendment extended the term of the CRADA by three years to August 2024, among other things. The research plan in this third amendment includes the evaluation in clinical trials of strategies for development of more potent TILs, such as selection of CD39/69 double negative cells and the use of certain inhibitors or other reagents in TIL expansion cultures.

Pursuant to the terms of the CRADA, as amended, we are required to make quarterly payments of $0.5 million to the NCI for support of research activities. To the extent we license patent rights relating to a TIL-based product candidate, we will be responsible for all patent-related expenses and fees, past and future. In addition, we may be required to supply certain test articles, including TIL, grown and processed under Current Good Manufacturing, or cGMP, conditions, suitable for use in clinical trials. We or the NCI may unilaterally terminate the CRADA for any reason or for no reason, at any time, by providing written notice at least 60 days before the desired termination date.

Patent License Agreement Related to the Development and Manufacture of TIL Therapies

We have licensed exclusive, co-exclusive, and non-exclusive licenses from NIH to certain technologies relating to autologous tumor infiltrating lymphocyte adoptive cell therapy products.

We entered into an Exclusive Patent License Agreement, or the Patent License Agreement, with the NIH, in 2011, which was amended in 2015. Pursuant to the Patent License Agreement, as amended, the NIH granted us licenses, including exclusive, co-exclusive, and non-exclusive licenses, to certain technologies relating to autologous tumor infiltrating lymphocyte adoptive cell therapy products for the treatment of metastatic melanoma, lung, breast, bladder and HPV-positive cancers.

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In May 2021, we entered into an Amended and Restated Patent License Agreement with NIH, which included the grant of additional exclusive, worldwide patent rights in the indications to interleukin-15 and interleukin-21 cytokine-tethered TIL technology, and expanded the non-exclusive, worldwide field of use to all cancers. Effective August 1, 2022, we entered into a Second Amended and Restated Patent License Agreement with NIH to include additional exclusive, worldwide patent rights to TIL products expressing interleukin-12, expanded rights to TIL selection technologies previously licensed under the Exclusive Patent License Agreement below, and additional non-exclusive, worldwide patent rights to certain technologies related to enhancing TIL potency.

The Second Amended and Restated Patent License Agreement requires us to pay royalties based on a percentage of net sales in jurisdictions where patent rights exist, which percentage can fall into a tier that may be less than one percent to mid-single digits depending upon certain events, including the exclusivity of the rights, and we expect lower overall royalty payments as a result. We also agreed to pay potential milestone payments on the achievement of certain clinical, regulatory, and commercial sales milestones for each of the indications and other direct costs incurred by the NIH pursuant to the Second Amended and Restated Patent License Agreement. We anticipate making milestone payments, including payments ranging from several hundred thousand dollars to the mid-single-digit millions of dollars, in conjunction with certain development milestones, the approval of a BLA or its foreign equivalent, or the first U.S. and foreign commercial sales of any of our product candidates covered by the Second Amended and Restated Patent License Agreement. The term of the Second Amended and Restated Patent License Agreement continues until the expiry of the last-to-expire patent rights licensed thereunder, and the agreement contains standard termination provisions.

Exclusive Patent License Agreement Related to TIL Selection

In February 2015, we entered into an exclusive patent license agreement, or the Exclusive Patent License Agreement, with the NIH under which we received an exclusive worldwide license under the selected TIL patents. This license was superseded and replaced by the Second Amended and Restated Patent License Agreement.

H. Lee Moffitt Cancer Center

Sponsored Research Agreement

In June 2016, we entered into a Sponsored Research Agreement with Moffitt, which expired in December 2019. In June 2020, we entered into a new Sponsored Research Agreement with Moffitt, with a term that ends either upon completion of the research thereunder or on July 1, 2022, whichever is sooner. In June 2022, this agreement was extended until the later of December 19, 2022 or a mutually acceptable completion of the Research Agreement, which is currently expected in mid-2023.

Clinical Grant Agreements

In December 2016, we entered into a clinical grant agreement with Moffitt to support an ongoing clinical trial at Moffitt that combines TIL therapy with nivolumab for the treatment of patients with metastatic melanoma. In June 2017, we entered into a second clinical grant agreement with Moffitt to support a new clinical trial at Moffitt that combines TIL therapy with nivolumab for the treatment of patients with non-small cell lung cancer, under which we obtained a non-exclusive, royalty-free license to any new Moffitt inventions made in the performance of the agreement. Under both clinical grant agreements with Moffit, we have non-exclusive rights to clinical data arising from the respective clinical trials.

Exclusive License Agreements

We have exclusive license agreements to Moffitt’s patent-pending technologies related to methods for improving TIL for adoptive cell therapy using toll-like receptor, or TLR, agonists, the use of 4-1BB agonists in conjunction with TIL manufacturing processes and therapies, and tumor digests in conjunction with TIL manufacturing processes and therapies.

We entered into a license agreement with Moffitt, or the First Moffitt License, effective as of June 28, 2014, under which we received a worldwide license to Moffitt’s rights to patent-pending technologies related to methods for improving TIL for adoptive cell therapy using TLR agonists. Unless earlier terminated, the term of the license extends until the earlier of the expiration of the last issued patent related to the licensed technology or 20 years after the effective date of the license agreement.

Pursuant to the First Moffitt License, we paid an upfront licensing fee, and a patent issuance fee will also be payable under the First Moffitt License, upon the issuance of the first U.S. patent covering the subject technology. In addition, we agreed to pay

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milestone license fees upon completion of specified milestones, customary royalties based on a specified percentage of net sales, which percentage is in the low single digits, and sublicensing payments, as applicable, and annual minimum royalties beginning with the first sale of products based on the licensed technologies, which minimum royalties will be credited against the percentage royalty payments otherwise payable in that year. We will also be responsible for all costs associated with the preparation, filing, maintenance and prosecution of the patent applications and patents covered by the First Moffitt License related to the treatment of any cancers in the U.S., Europe and Japan and in other countries designated by us in agreement with Moffitt.

In May 2018, we entered into a second license agreement with Moffitt, or the Second Moffitt License, under which we received an exclusive license to Moffitt’s rights to patent-pending technologies related to the use of 4-1BB agonists in conjunction with TIL manufacturing processes and therapies. Pursuant to the Second Moffitt License, we paid an upfront licensing fee, and an annual license maintenance fee is also payable commencing on the first anniversary of the effective date. We also agreed to pay an annual commercial use payment for each indication for which a first sale has occurred.

We subsequently exercised an option to exclusively license Moffitt’s rights to patent pending technologies related to the use of tumor digests in conjunction with TIL manufacturing processes and therapies and entered into an amended and restated Second Moffitt License in October 2021, or the Amended & Restated Second Moffit License, to include these rights. Pursuant to the Amended & Restated Second Moffitt License, we paid an upfront licensing fee in 2021. We also agreed to pay an annual commercial use payment for each indication for which a first sale has occurred for products relating to the use of 4-1BB agonists and for products relating to the use of tumor digests covered by the license.

The University of Texas M.D. Anderson Cancer Center, or MDACC

Strategic Alliance Agreement

In April 2017, we entered into a Strategic Alliance Agreement, or the SAA, with MDACC, under which we and MDACC agreed to conduct clinical and preclinical research studies. We agreed in the SAA to provide total funding not to exceed approximately $14.2 million for the performance of the multi-year studies under the SAA. In return, we acquired all rights to inventions resulting from the studies and have been granted a non-exclusive, sub-licensable, royalty-free, and perpetual license to specified background intellectual property of MDACC reasonably necessary to exploit, including the commercialization thereof. We have also been granted certain rights to clinical data generated by MDACC outside of the clinical trials to be performed under the SAA. The SAA’s term shall continue in effect until the later of the fourth anniversary of the SAA or the completion or termination of the research and receipt by us of all deliverables due from MDACC thereunder.

Cellectis S.A.

Research Collaboration and Exclusive Worldwide License Agreement

In December 2019, we entered into a research collaboration and exclusive worldwide license agreement whereby we will license gene-editing technology from Cellectis, a clinical-stage biopharmaceutical company, to develop TIL therapies that have been genetically edited, including a PD-1 inactivated product that we refer to as IOV-4001. Financial terms of the license include annual license payments and development, regulatory and sales milestone payments from us to Cellectis, as well as royalty payments based on net sales of TALEN® modified TIL products.

Novartis Pharma AG

License Agreement

In January 2020, we obtained a license from Novartis, to develop and commercialize an antibody cytokine engrafted protein, which we refer to as IOV-3001. Under the agreement, we have paid an upfront payment to Novartis and may pay future milestones related to initiation of patient dosing in various phases of clinical development for IOV-3001 and approval of the product in the U.S., the European Union, or EU, and Japan. Novartis is also entitled to low-to-mid single digit percentage royalties from commercial sales of the product.

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Regulatory Designations

The FDA has granted ODD for lifileucel in the U.S. to treat malignant melanoma stages IIB-IV and for the treatment of cervical cancer with a tumor size of greater than 2 cm in diameter; Fast Track and RMAT designations for lifileucel to treat advanced metastatic melanoma; Fast Track and Breakthrough Therapy Designations, or BTD, for lifileucel to treat metastatic cervical cancer; and Fast Track designation for lifileucel in combination with pembrolizumab for the treatment of ICI naïve metastatic melanoma.

Orphan Drug Designations

During 2015, we received ODD for lifileucel in the U.S. to treat malignant melanoma stages IIB-IV, and in 2018, we received an ODD for lifileucel for the treatment of cervical cancer with a tumor size of greater than 2 cm in diameter. If approved, an ODD provides seven years of market exclusivity in the U.S., subject to certain limited exceptions. However, an ODD does not convey any advantage in, or shorten the duration of, the regulatory review or approval process. The benefits and limitations of ODD are described in more under the Government Regulations section in this Annual Report on Form 10-K.

Fast Track Designations

In August 2017, we announced that the FDA had granted Fast Track designation for lifileucel for the treatment of advanced metastatic melanoma. In February 2019, we announced that the FDA had granted Fast Track designation for lifileucel in the treatment of metastatic cervical cancer. Additionally, in November 2021, we announced that the FDA granted Fast Track designation for lifileucel in combination with pembrolizumab for the treatment of ICI-naïve metastatic melanoma. The FDA’s Fast Track process is designed to facilitate the development and expedite the review of drugs that treat serious conditions and fill an unmet medical need. Fast Track designation allows more frequent meetings and communications with the FDA to discuss the drug’s development plans and review process. The Fast Track designation also allows for the possibility for rolling review of a BLA by FDA, where the FDA may consider beginning review portions of a marketing application before the full submission is complete, and also potential eligibility if certain criteria are met for accelerated approval.

Regenerative Medicine Advanced Therapy Designation

In October 2018, we announced that the FDA had granted RMAT designation for lifileucel for the treatment of patients with metastatic melanoma. The RMAT designation is based on data provided to the FDA from our C-144-01 trial. RMAT designation is granted for regenerative medicine drugs and allows for increased access to FDA during development. Under this designation, surrogate endpoints can be used to receive approval for a product, accelerated approval may be granted, and a rolling review of a BLA may be permitted by FDA.

Breakthrough Therapy Designation

In May 2019, we announced that the FDA had granted BTD for lifileucel for the treatment of patients with metastatic cervical cancer. The BTD was granted based on data provided to the FDA from our C-145-04 clinical trial. Under a BTD, the FDA may take actions that help expedite the development and review of the application for a product candidate, including seeking to provide timely advice and interactive communications to the sponsor with intensive guidance during development, to help the sponsor design and conduct a more efficient development program. Product candidates with BTD may be suitable for alternative clinical trial designs when scientifically appropriate, which may result in smaller clinical trials or more efficient clinical trials that require less time to complete. BTD also allows the sponsor to submit portions of the BLA on an ongoing basis for rolling review. In addition, BTD status allows for the potential to request priority review of our BLA at the time of BLA submission if supported by clinical data. The clinical evidence needed to support breakthrough designation is preliminary, and the FDA has authority to rescind a BTD if a product candidate no longer meets the qualifying criteria.

Competition

The biotechnology and pharmaceutical industries put significant resources into developing novel and proprietary therapies for the treatment of cancer. We compete with multiple entities who have developed and are developing immuno-oncology therapies, including large and specialty pharmaceutical and biotechnology companies, academic research institutions and governmental agencies and public and private research institutions, as well as companies developing novel targeted therapies for cancer. Universities and public and private research institutions in the U.S. and Europe are also potential competitors. For example, a Phase 3 M14TIL clinical

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trial comparing TIL to standard ipilimumab in patients with metastatic melanoma is currently being conducted in Europe by the Netherlands Cancer Institute, the Copenhagen University Hospital at Herlev, and the University of Manchester. Results from the M14TIL clinical trial were presented at the European Society for Medical Oncology Congress in September 2022 and published in the New England Journal of Medicine in December 2022, as described in the Historical Clinical Results with Other TIL Therapies in Metastatic Melanoma section of this Annual Report on Form 10-K. While these universities and public and private research institutions primarily have educational objectives, they may develop proprietary technologies that lead to other FDA-approved therapies or that secure patent protection that we may need for the development of our technologies and products.

Due to the promising clinical therapeutic effect of competitor therapies in clinical exploratory trials, we anticipate substantial direct competition from other organizations developing advanced T-cell therapies targeting patients who have received prior anti-PD-1/-L1 therapies. In particular, we expect to compete with other new therapies for our lead indications developed by companies such as Agenus, BeyondSpring, Bristol-Myers Squibb, Merck, Nektar Therapeutics, Checkmate Pharmaceuticals, Daiichi Sankyo, Eisai, Exelixis, Moderna, Mirati Therapeutics, OncoSec Medical, Replimune, Regeneron Pharmaceuticals, Seagen, and Genmab. We also may compete with other TIL therapies in development by companies such as Instil Bio, Achilles Therapeutics, KSQ Therapeutics, Obsidian Therapeutics, Immatics, TILT Biotherapeutics, WindMIL Therapeutics, GRIT Biotechnology, Lyell Immunopharma, Cellular Biomedicine Group, and others. We also may compete with therapies based on genetically engineered T-cell receptors rendered reactive against tumor-associated antigens prior to their administration to patients, as well as TIL therapies that are designed to be specific to neoantigens, including products developed by Adaptimmune Therapeutics, Alaunos Therapeutics, Intima Bioscience, Marker Therapeutics, Turnstone Biologics, Neogene and others. To date, these technologies have been primarily applicable to hematologic malignancies, but their application in solid tumor indications may create competition with us. We may also face competition from immunotherapy treatments offered by companies such as Amgen, AstraZeneca, Bristol-Myers Squibb, Merck, Pfizer, Regeneron Pharmaceuticals, Roche, and BioNTech. We may also face competition from novel IL-2 treatments in development by Alkermes, Werewolf, Nektar Therapeutics, Merck, Sanofi, Neoleukin Therapeutics and others. Many of these companies and our other current and potential competitors have substantially greater research and development capabilities and financial, scientific, regulatory, manufacturing, marketing, sales, human resources, and experience than we do. Many of our competitors have several therapeutic products that have already been developed, approved and successfully commercialized, or are in the process of obtaining regulatory approval for their therapeutic products in the U.S. and internationally. Our competitors may obtain regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in competitors establishing a strong market position before we are able to enter the market.

Our lead product candidate lifileucel is a TIL therapy for the treatment of advanced melanoma and advanced cervical cancer. Currently, there are numerous companies that are developing various alternate treatments for melanoma and cervical cancer, including patients that have progressed after prior treatment with checkpoint inhibitors and chemotherapy. Accordingly, lifileucel faces significant competition in the melanoma and cervical cancer treatment space from multiple companies. Even if we obtain regulatory approval for lifileucel, the availability and price of our competitors’ products could limit the demand and the price we are able to charge for our therapies.

Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated among a smaller number of our competitors. Early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These parties compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

Our commercial success may depend in part on our ability to obtain and maintain patent and other proprietary protection for commercially important technology, inventions and know-how related to our business; defend and enforce our patents; preserve the confidentiality of our trade secrets; and operate without infringing the valid enforceable patents and proprietary rights of third parties. Our ability to stop third parties from making, using, selling, offering to sell or importing our products may depend on the extent to which we have rights under valid and enforceable patents or trade secrets that cover these activities. With respect to both licensed and company-owned intellectual property, we cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents that may be granted to us in the future will be commercially useful in protecting our commercial products and methods of manufacturing the same. We may rely, in some circumstances, on trade secrets to protect our technology. However, trade secrets can be difficult to protect.

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We seek to protect our proprietary technology and processes, in part, by entering into confidentiality agreements with our employees, consultants, scientific advisors and contractors. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems. While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our consultants, contractors or collaborators use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

Government Regulations

The FDA and other regulatory authorities at federal, state, and local levels, as well as in foreign countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring, and post-approval reporting of biologics such as those we are developing. We, along with our third-party contractors, will be required to navigate the various preclinical, clinical and commercial approval and post-approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval or licensure of our product candidates. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local, and foreign statutes and regulations require the expenditure of substantial time and financial resources.

Biologic products are regulated by the FDA under a combination of the federal Food, Drug, and Cosmetic Act, or FDCA, and Public Health Services Act, or PHSA, and the FDA’s implementing regulations. Failure to comply with regulatory requirements may result in significant regulatory actions. Such actions may include refusal to approve pending applications, license suspension or revocation, withdrawal of an approval, imposition of a clinical hold or termination of clinical trials, warning letters, untitled letters, modification of promotional materials or labeling, provision of corrective information, imposition of post-market requirements including the need for additional testing, imposition of distribution or other restrictions under a Risk Evaluation and Mitigation Strategy, or REMS, product recalls, product seizures or detentions, refusal to allow imports or exports, total or partial suspension of production or distribution, FDA debarment, injunctions, fines, consent decrees, corporate integrity agreements, debarment from receiving government contracts and new orders under existing contracts, exclusion from participation in federal and state healthcare programs, restitution, disgorgement, or civil or criminal penalties, including fines and imprisonment, and adverse publicity, among other adverse consequences.

The process required by the FDA before biologic product candidates may be marketed in the U.S. generally involves the following:

● satisfactory completion of an FDA Advisory Committee review, if applicable;

The testing and approval process requires substantial time, effort and financial resources, and we cannot be certain that any approvals for our product candidates will be granted on a timely basis, if at all. Prior to beginning the first clinical trial with a new

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product candidate, we must submit an IND to the FDA. An IND is a request for authorization from the FDA to administer an investigational new drug product to humans. The central focus of an IND submission is on the general investigational plan and the protocol(s) for clinical trials. The IND also includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology, and pharmacodynamic characteristics of the product; chemistry, manufacturing, and controls information; and any available human data or literature to support the use of the investigational product. An IND must become effective before human clinical trials may begin. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within that initial 30-day time period, raises concerns or questions about the proposed clinical trial. In such a case, the IND may be placed on clinical hold and the IND sponsor, and the FDA must resolve any outstanding concerns or questions before the clinical trial can begin. Clinical holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns or non-compliance. Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial.

Human immunotherapy products are a new category of therapeutics. Because this is a relatively new and expanding area of novel therapeutic interventions, there can be no assurance as to the length of the clinical trial period, the number of patients the FDA will require to be enrolled in the clinical trials in order to establish the safety, efficacy, purity and potency of immunotherapy products, or that the data generated in these clinical trials will be acceptable to the FDA to support marketing approval.

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with cGCPs, which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated, and a statistical analysis plan. A separate submission to the existing IND must be made for each successive clinical trial conducted during product development and for any subsequent protocol amendments. Investigators must also provide certain information to the clinical trial sponsors to allow the sponsors to make certain financial disclosures to the FDA.

Furthermore, an independent IRB for each site proposing to conduct the clinical trial or centrally must review and approve the plan for any clinical trial, its informed consent documentation and processes, and any subject communications, before the clinical trial begins at that site, and upon amendment of the clinical trial protocol, and must monitor the clinical trial until completed. An IRB considers, among other things, whether the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits and whether the planned human subject protections are adequate. Informed consent must be received from each clinical trial subject prior to participation in a clinical trial. Progress reports detailing the results of the clinical trials must also be submitted at least annually to the FDA and the IRB and more frequently if serious adverse events or other significant safety information is found.

Regulatory authorities, the IRB, or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk, that the clinical trial is not being conducted in accordance with regulatory or IRB requirements, or that the clinical trial is unlikely to meet its stated objectives. Sponsors may also discontinue studies or development programs for many reasons, including changing business objectives. Some studies also include oversight by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board, or DSMB, which provides recommendations and assessments for whether or not a clinical trial should move forward at designated check points based on access to certain data from the clinical trial. Following a review by a DSMB, the clinical trial may be halted if there is an unacceptable safety risk for subjects or on other grounds, such as failure to demonstrate efficacy. There are also requirements governing the reporting of ongoing clinical trials and clinical trial results to public registries. For instance, we are required to register certain clinical trials and post the results of certain completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within specified timeframes, and also to certify to FDA our compliance with these requirements when we make FDA submissions. Failure to make required ClinicalTrials.gov submissions, submitting false or misleading information to ClinicalTrials.gov, or making false certifications to FDA could result in enforcement actions, including civil money penalties and adverse publicity.

For purposes of BLA approval, human clinical trials are typically conducted in three sequential phases that may overlap. Although these are the typical phases for progression, and characteristics of the phases of a clinical development program, certain expedited programs allow for variations that could support a marketing application based on surrogate endpoints, intermediate clinical endpoints, or single-arm as opposed to comparative or placebo-controlled studies.

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Additional types of data may also help to support a BLA, such as real-world evidence and patient experience data. Phase 1, Phase 2 and Phase 3, and Phase 4 testing, if applicable, may not be completed successfully within a specified period, if at all, and there can be no assurance that the data collected will support FDA approval or licensure of the product. Concurrent with clinical trials, companies may complete additional animal studies and develop additional information about the biological characteristics of the product candidate and must finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, must develop methods for testing the identity, strength, quality and purity of the final product, or for biologics, the safety, purity and potency. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life and manufacturing processes must be validated.

The manufacture of investigational biologics for the conduct of human clinical trials is subject to cGMP requirements. Investigational biologics and active ingredients imported into the U.S. are also subject to regulation by the FDA relating to their labeling and distribution. Further, the export of investigational products outside of the U.S. is subject to regulatory requirements of the importing country as well as U.S. export requirements under the FDCA. Additional U.S. and foreign laws and regulations may also be applicable to the handling, import, export, and transportation of biological materials, including tissue samples.

During the development of a new therapeutic, a sponsor may be able to request a Special Protocol Assessment, or SPA, the purpose of which is to reach an agreement with the FDA on the Phase 3 clinical trial protocol design and analysis that will form the primary basis of product approval and an efficacy claim, as well as preclinical carcinogenicity trials and stability studies. An SPA may only be modified with the agreement of the FDA and the clinical trial sponsor, or if the director of the FDA reviewing division determines that a substantial scientific issue essential to determining the safety or efficacy of the product was identified after the testing began. An SPA is intended to provide assurance that, in the case of clinical trials, if the agreed upon clinical trial protocol is followed, the clinical trial endpoints are achieved, and there is a favorable risk-benefit profile, the data may serve as the primary basis for an efficacy claim in support of a BLA. However, SPA agreements are not a guarantee of approval of a product candidate or any permissible claims about the product candidate. In particular, SPAs are not binding on the FDA if, among other reasons, previously unrecognized public health concerns arise during the performance of the clinical trial, other new scientific concerns regarding the product candidate’s safety or efficacy arise, or if the sponsoring company fails to comply with the agreed upon clinical trial protocol.

In addition, under the Pediatric Research Equity Act, or PREA, a BLA or supplement to a BLA for a new active ingredient, indication, dosage form, dosage regimen, or route of administration, must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. Also, under the FDA Reauthorization Act of 2017, beginning in 2020, sponsors submitting applications for product candidates intended for the treatment of adult cancer which are directed at molecular targets that the FDA determines to be substantially relevant to the growth or progression of pediatric cancer must submit, with the application, reports from molecularly targeted pediatric cancer investigations designed to yield clinically meaningful pediatric clinical trial data, using appropriate formulations, to inform potential pediatric labeling. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements. Orphan products are also exempt from PREA requirements.

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The FDA also may require submission of REMS, to ensure that the benefits of the biologic outweigh the risks. The REMS plan could include medication guides, physician communication plans, and elements to assure safe use, such as restricted distribution methods, patient registries, or other risk minimization tools. An assessment of the REMS must also be conducted at set intervals. Following product approval, a REMS may also be required by the FDA if new safety information is discovered, and the FDA determines that a REMS is necessary to ensure that the benefits of the biologic outweigh the risks.

BLA Submission and Review by the FDA

Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, nonclinical studies and clinical trials are submitted to the FDA as part of a BLA requesting approval to market the product for one or more indications. The BLA must include all relevant data available from pertinent preclinical and clinical studies, including negative or ambiguous results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls, and proposed labeling, among other things. Data can come from company-sponsored clinical studies intended to test the safety and effectiveness of a use of the product, or from a number of alternative sources, including studies initiated by investigators. The submission of a BLA requires payment of a substantial user fee to the FDA, under the Prescription Drug User Fee Act, and the sponsor of an approved BLA is also subject to annual program fees. These fees are typically increased annually. A waiver of user fees may be obtained under certain limited circumstances.

Once a BLA has been submitted, the FDA has sixty days to determine whether it will accept the application for filing. The FDA accepts applications for filing if it determines that the application is substantially complete to permit a substantive review. The FDA may request additional information rather than accept a BLA for filing. In this event, the application must be resubmitted with the additional information. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review.

The FDA’s goal is to review the application within ten months after it accepts the application for filing, or, if the application relates to a serious or life-threatening indication and, if approved, the product would provide a significant improvement in safety and efficacy, six months after the FDA accepts the application for filing, which is referred to as Priority Review. The review process is often significantly extended if the FDA requests additional information or clarification. The FDA reviews a BLA to determine, among other things, whether a product is safe, pure and potent and the facility in which it is manufactured, processed, packed, or held meets standards designed to assure the product’s continued safety, purity and potency. There are numerous FDA personnel assigned to review different aspects of a BLA, and uncertainties can be presented by their ability to exercise judgment and discretion during the review process. The development and provision of additional data and information requested by FDA during review of a BLA may be time consuming and expensive.

The FDA may convene an advisory committee to provide clinical insight on application review questions. Before approving a novel biologic, the FDA must either refer that biologic to an external advisory committee or provide in an action letter, a summary of the reasons why the FDA did not refer the product candidate to an advisory committee. An advisory committee is typically a panel that includes clinicians and other experts, which review, evaluate, and make a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Before approving a BLA, the FDA will typically inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent commercial production of the product within required specifications. Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to ensure compliance with cGCP.

If the FDA determines that the application, manufacturing process or manufacturing facilities are not acceptable, it will outline the deficiencies in the submission and often will request additional testing, clinical trials, application modifications, or information in a complete response letter, or CRL. A CRL indicates that the review cycle for the application is complete, and that the application is not ready for approval. If a CRL is issued, the applicant may either: resubmit the BLA, addressing all the deficiencies identified in the letter; withdraw the application; or request an opportunity for a hearing. Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than an applicant interprets the same data.

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If the FDA finds that a BLA is approvable, the FDA may issue an approval letter. An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications. However, even if the FDA approves a product, it may limit the approved indications for use of the product, require that contraindications, warnings, or precautions be included in the product labeling, including a boxed warning, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a product’s safety and efficacy after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms under a REMS which can materially affect the potential market and profitability of the product. The FDA may also not approve label statements that are necessary for successful commercialization and marketing.

If compliance with the pre-and post-marketing regulatory standards are not maintained or if problems occur after the product reaches the marketplace, the FDA may also withdraw the product approval. Further, should new safety information arise, additional testing, product labeling, or FDA notification may be required.

A sponsor may seek approval of its product candidate under programs designed to accelerate the FDA’s review and approval of new drugs and biological products that meet certain criteria. Specifically, new drugs and biological products are eligible for Fast Track designation if they are intended to treat a serious or life-threatening condition and demonstrate the potential to address unmet medical needs for the condition. For a Fast Track designation, the FDA may consider sections of the BLA for review on a rolling basis before the complete application is submitted if relevant criteria are met. Fast Track-designated products are also eligible for more frequent FDA interactions. A Fast Track-designated product candidate may also qualify for Priority Review, under which the FDA sets the target date for FDA action on the BLA at six months after the FDA accepts the application for filing. Priority Review is granted when there is evidence that the proposed product would be a significant improvement in the safety or effectiveness of the treatment, diagnosis, or prevention of a serious condition. If criteria are not met for Priority Review, the application is subject to the standard FDA review period of 10 months after the FDA accepts the application for filing. Priority Review designation does not change the scientific/medical standard for approval or the quality of evidence necessary to support approval.

Under the Accelerated Approval Program, the FDA may approve a BLA on the basis of either a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. To qualify for Accelerated Approval, the product must be intended to treat a serious condition and must generally provide a meaningful advantage over available therapies. Post-marketing studies or completion of ongoing studies after marketing approval are required to verify the biologic’s clinical benefit in relationship to the surrogate endpoint or ultimate outcome in relationship to the clinical benefit. If this clinical trial is not conducted, if it fails to verify the benefit, if other evidence demonstrates that the product is not safe, pure or potent, or if the applicant disseminates false or misleading promotional material, the FDA may withdraw approval of the application on an expedited basis. Sponsors of products under the Accelerated Approval Pathway must further submit promotional materials to the FDA before dissemination.

In addition, the Food and Drug Administration Safety and Innovation Act, or FDASIA, which was enacted and signed into law in 2012, established the new BTD. A sponsor may seek FDA designation of its product candidate as a Breakthrough Therapy if the product candidate is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the therapy may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. Sponsors may request the FDA to designate a Breakthrough Therapy at the time of or any time after the submission of an IND, but ideally before an end-of-Phase 2 meeting with the FDA. If the FDA designates a Breakthrough Therapy, it may take actions appropriate to expedite the development and review of the application, which may include holding meetings with the sponsor and the review team throughout the development of the therapy; providing timely advice to, and interactive communication with, the sponsor regarding the development of the drug to ensure that the development program to gather the nonclinical and clinical data necessary for approval is as efficient as practicable; involving senior managers and experienced review staff, as appropriate, in a collaborative, cross-disciplinary review; assigning a cross-disciplinary project lead for the FDA review team to facilitate an efficient review of the development program and to serve as a scientific liaison between the review team and the sponsor; and considering alternative clinical trial designs when scientifically appropriate, which may result in smaller clinical trials or more efficient clinical trials that require less time to complete and may minimize the number of patients exposed to a potentially less efficacious treatment. BTD also allows the sponsor to file sections of the BLA for review on a rolling basis.

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Through the 21st Century Cures Act, or Cures Act, Congress also established another expedited program, called a RMAT designation. The Cures Act directs the FDA to facilitate an efficient development program for and expedite review of RMATs. To qualify for this program, the product must be a cell therapy, therapeutic tissue engineering product, human cell and tissue product, or a combination of such products, and not a product solely regulated as a human cell and tissue product. The product must be intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition, and preliminary clinical evidence must indicate that the product has the potential to address an unmet need for such disease or condition. Advantages of the RMAT designation include all the benefits of the Fast Track and breakthrough therapy designation programs, including early interactions with the FDA. These early interactions may be used to discuss potential surrogate or intermediate endpoints to support accelerated approval.

Orphan Drugs

Under the Orphan Drug Act, the FDA may grant ODD to a drug or biologic intended to treat a rare disease or condition, defined as a disease or condition with a patient population of fewer than 200,000 individuals in the U.S., or a patient population greater than 200,000 individuals in the U.S. and when there is no reasonable expectation that the cost of developing and making available the drug or biologic in the U.S. will be recovered from sales in the U.S. for that drug or biologic. Additionally, sponsors must present a plausible hypothesis for clinical superiority to obtain ODD if there is a product already approved by the FDA that is intended for the same indication and that is considered by the FDA to be the same product as the already approved product. This hypothesis for clinical superiority must be demonstrated to obtain orphan exclusivity. ODD must be requested before submitting a BLA. After the FDA grants ODD, the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA.

If a product that has ODD subsequently receives the first FDA approval for a particular active ingredient for the disease for which it has such designation, the product is entitled to orphan product exclusivity, a seven-year period of marketing exclusivity, which means that the FDA may not approve any other applications, including a full BLA, to market the same biologic, as sameness is defined in the FDA’s regulations, for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or if the FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated. Orphan drug exclusivity does not prevent the FDA from approving a different drug or biologic for the same disease or condition, or the same drug or biologic for a different disease or condition. Among the other benefits of ODD are tax credits for certain research, opportunities for certain research grant funding, and a waiver of the BLA application fees. The tax credit, however, was recently limited through Congress’s tax reform efforts. Despite these benefits, the ODD does not convey any advantage in, or shorten the duration of, the regulatory review or approval process.

A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation. In addition, orphan drug exclusive marketing rights in the U.S. may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition. The FDA may also approve a product deemed to be the same as an approved orphan product for the same orphan indication, despite periods of exclusivity, if the new product is demonstrated to be clinically superior to the former product.

We plan to seek ODD for some or all of our other product candidates in specific orphan indications in which there is a medically plausible basis for the use of such products.

Market and Data Exclusivity and Biosimilars

While under the Biologics Price Competition and Innovation Act of 2009, or BPCIA, the FDA may eventually license products, as further described below, that are biosimilar to any of our product candidates that are approved, our products may receive periods of regulatory exclusivity, separately from orphan drug exclusivity for those products with ODDs, providing additional protection from certain forms of competition. For instance, our products may receive 12 years of reference product exclusivity that begins running at the time of first licensure. During this 12-year time period, the period of marketing exclusivity, the FDA may not make an approval of a biosimilar product effective. In addition, the FDA may not accept a biosimilar application until after four years from the date of first licensure, the period of data exclusivity. However, certain changes and supplements to an approved BLA, and subsequent applications filed by the same sponsor, manufacturer, licensor, predecessor in interest, or other related entity do not qualify for the exclusivity period. The PHSA also includes provisions governing patent litigation over patents that are directed to the reference products. The biosimilar product sponsor and reference product sponsor may, but are not required to, exchange certain patent and product information for the purpose of negotiating and determining the scope of patent litigation, including the patents to be asserted and

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challenged. Based on the outcome of negotiations surrounding the exchanged information, the reference product sponsor may bring a patent infringement suit and injunction proceedings against the biosimilar product sponsor. The biosimilar applicant may also be able to bring an action for declaratory judgment concerning the patent under certain circumstances.

The BPCIA created an abbreviated approval pathway for biological products shown to be highly similar to or interchangeable with an FDA-licensed reference biological product. Accordingly, if we receive FDA licensure, we may face competition from biosimilar products. Biosimilarity sufficient to reference a prior FDA-approved product requires a high similarity to the reference product notwithstanding minor differences in clinically inactive components, and no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency. Biosimilarity must be shown through analytical studies, animal studies, and at least one clinical trial, absent a waiver by the FDA. There must be no difference between the reference product and a biosimilar in conditions of use, route of administration, dosage form, and strength. Further, a biosimilar product may be deemed interchangeable with a prior approved product if it meets the higher hurdle of demonstrating that it can be expected to produce the same clinical results as the reference product and, for products administered multiple times, the biologic and the reference biologic may be switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.

Pediatric Exclusivity and Patent Term Extension

Pediatric exclusivity is another type of non-patent marketing exclusivity in the U.S. and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity. Under the Best Pharmaceuticals for Children Act, a six-month exclusivity may be granted if a sponsor submits pediatric data that fairly responds to a written request from the FDA for such data. The FDA may issue such a written request on its own initiative or at the request of the sponsor. The data do not need to show the product to be effective in the pediatric population studied; rather, if the clinical trial is deemed to fairly respond to the FDA’s request, the additional protection is granted. If reports of requested pediatric studies are submitted to and accepted by the FDA, whatever regulatory periods of exclusivity that already cover the product are extended by six months. Pediatric exclusivity is thus an “add-on” exclusivity and is unique in this regard among the various regulatory exclusivities provided by FDA. The FDA can also require pediatric studies of a drug submitted in a new drug application if the FDA determines that the product is likely to be used in a substantial number of pediatric patients, or if the product would provide a meaningful benefit in the pediatric population over existing treatments. This requirement may be waived in certain circumstances, for example, where the indication does not occur or is not highly prevent in the pediatric population.

If approved, biologics may also be eligible for periods of U.S. patent term restoration. If granted, patent term restoration extends the patent life of a single unexpired patent that has not previously been extended, for a maximum of five years. The total patent life of the product with the extension also cannot exceed fourteen years from the product’s approval date. Subject to the prior limitations, the period of the extension is calculated by adding half of the time from the effective date of an IND to the initial submission of a marketing application, and all the time between the submission of the marketing application and its approval. This period may also be reduced by any time that the applicant did not act with due diligence. Whether any of our product candidates will be eligible for patent term restoration is currently unknown. Even if any of our product candidates are found to be eligible for patent term protection, the applicable authorities may subsequently determine that we are not eligible for such restoration periods.

Post-Approval Requirements

Any products for which we receive FDA approvals are subject to continuing regulation by the FDA, including, among other things, record-keeping requirements, reporting of adverse experiences with the product and deviations, annual reporting and monitoring and providing the FDA with updated safety and efficacy information, product sampling and distribution requirements, certain electronic records and signature requirements, fulfilling post-marketing clinical trial and REMS commitments, and complying with FDA promotion and advertising requirements, which include, among other things, standards for direct-to-consumer advertising, restrictions on promoting products for uses or in patient populations that are not described in the product’s approved uses or otherwise consistent with the FDA-approved product labeling (known as “off-label use”), limitations on industry-sponsored scientific and educational activities, rules regarding communication of health care economic information regarding biopharmaceutical products to payors and formularies, and requirements for promotional activities involving the internet. Although physicians may prescribe legally available products for off-label use, if they deem such use to be appropriate in their professional medical judgment, manufacturers may not market or promote such off-label uses. In the past several years, certain court decisions have impacted FDA’s enforcement activity regarding off-label promotion in light of First Amendment considerations; however, there are still significant risks in this area, in part due to the potential for False Claims Act exposure.

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In addition, quality control and manufacturing procedures must continue to conform to applicable manufacturing requirements after approval to ensure the long-term stability of the product. cGMP regulations require among other things, quality control and quality assurance as well as the corresponding maintenance of records and documentation and the obligation to investigate and correct any deviations from cGMP. Manufacturers and other entities involved in the manufacture and distribution of approved products are required to register their establishments and list their products with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP and other applicable laws. Accordingly, manufacturers must continue to expend time, money, and effort in the areas of production and quality control to maintain cGMP compliance. Discovery of problems with a product after approval may result in restrictions on a product, manufacturer, or holder of an approved BLA, including, among other things, withdrawal of approval, recall or withdrawal of the product from the market. In addition, changes to the manufacturing process are strictly regulated, and depending on the significance of the change, may require prior FDA approval or notification before being implemented. Other types of changes to the approved product, such as adding new indications and claims to the product labeling, are also subject to further FDA review and approval.

Commercial products must meet the requirements of the Drug Supply Chain Security Act, or DSCSA, which imposes obligations on manufacturers of prescription biopharmaceutical products for commercial distribution, regulating the distribution of the products at the federal level, and sets certain standards for federal or state registration and compliance of entities in the supply chain, including manufacturers and repackagers, wholesale distributors, third-party logistics providers, and dispensers. The DSCSA preempts previously enacted state laws and the pedigree requirements of the Prescription Drug Marketing Act, or PDMA. Trading partners within the drug supply chain must now ensure certain product tracing requirements are met that they are doing business with other authorized trading partners; and they are required to exchange transaction information, transaction history, and transaction statements. Product identifier information, an aspect of the product tracing scheme, is required. The DSCSA requirements, development of standards, and the system for product tracing have been and will continue to be phased in over a period of years, with the FDA indicating that it would permit certain exemptions and exclusions, and exercise enforcement discretion on certain aspects of the law due to the COVID-19 pandemic, although this situation may continue to evolve. The distribution of product samples continues to be regulated under the PDMA, and some states also impose regulations on drug sample distribution.

As previously mentioned, the FDA may also require Phase 4 testing and surveillance to monitor the effects of an approved product. Discovery of previously unknown problems with a product or the failure to comply with applicable FDA requirements can have negative consequences, including adverse publicity, judicial or administrative enforcement, warning letters from the FDA, mandated corrective advertising or communications with doctors, and civil or criminal penalties, among others. Newly discovered or developed safety or effectiveness data may require changes to a product’s approved labeling, including the addition of new warnings and contraindications, and may require the implementation of other risk management measures. Also, new government requirements, including those resulting from new legislation, may be established, or the FDA’s policies may change, which could delay or prevent regulatory approval of our products under development.

Additional Biologic Requirements

To help reduce the increased risk of the introduction of adventitious agents, the PHSA emphasizes the importance of manufacturing controls for products whose attributes cannot be precisely defined. The PHSA also provides authority to the FDA to immediately suspend licenses in situations where there exists a danger to public health, to prepare or procure products in the event of shortages and critical public health needs, and to authorize the creation and enforcement of regulations to prevent the introduction or spread of communicable diseases in the U.S. and between states.

After a BLA is approved, the product may also be subject to official lot release as a condition of approval. As part of the manufacturing process, the manufacturer is required to perform certain tests on each lot of the product before it is released for distribution. If the product is subject to official release by the FDA, the manufacturer submits samples of each lot of product to the FDA, together with a release protocol showing the results of all the manufacturer's tests performed on the lot. The FDA may also perform certain confirmatory tests on lots of some products before releasing the lots for distribution by the manufacturer.

In addition, the FDA conducts laboratory research related to the regulatory standards on the safety, purity, potency, and effectiveness of biological products. After approval of biologics, manufacturers must address any safety issues that arise, are subject to recalls or a halt in manufacturing, and are subject to periodic inspection after approval.

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Other Healthcare Laws and Compliance Requirements

Our sales, promotion, medical education and other activities following product approval will be subject to regulation by numerous regulatory and law enforcement authorities in the U.S., and in addition to the FDA, these entities may include the Federal Trade Commission, the Department of Justice, the Centers for Medicare & Medicaid Services, other divisions of the Department of Health and Human Services and state and local governments. Our promotional and scientific/educational programs must comply with the federal Anti-Kickback Statute, or AKS, the Foreign Corrupt Practices Act, or FCPA, the False Claims Act, or FCA, the Veterans Health Care Act, physician payment transparency laws, privacy laws, security laws, and additional state laws similar to the foregoing.

The federal AKS prohibits, among other things, any person or entity, from knowingly and willfully offering, paying, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for purchasing, leasing, ordering or arranging for the purchase, lease or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs, in whole or in part. The term remuneration has been interpreted broadly to include anything of value. The federal AKS has been interpreted broadly to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers, and formulary managers on the other. The term "remuneration" includes kickbacks, bribes or rebates and also has been broadly interpreted to include anything of value, including, for example, gifts, discounts, waivers of payment, ownership interest and providing anything at less than its fair market value. Additionally, the intent standard under the federal AKS provides that a person or entity need not have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. In addition, a claim including items or services resulting from a violation of the federal AKS constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act. There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution or other regulatory sanctions. The exceptions and safe harbors are drawn narrowly and practices that involve remuneration that may be alleged to be intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor. Failure to meet all the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the AKS. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all its facts and circumstances. Our practices may not in all cases meet all the criteria for protection under a statutory exception or regulatory safe harbor. The safe harbors are subject to change through legislative and regulatory action, and we may decide to adjust our business practices or be subject to heightened scrutiny as a result.

The civil monetary penalties statute imposes penalties against any person or entity who, among other things, is determined to have presented or caused to be presented a claim for payment, or approval to a federal healthcare program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.

The FCA imposes liability on persons who, among other things, knowingly present or cause to be presented false or fraudulent claims for payment to, or approval by the federal government knowingly making or using, or causing to be made or used a false statement or record material to a claim to the federal government, or avoiding, decreasing or concealing an obligation to pay money to the federal government. A claim includes "any request or demand" for money or property presented directly or indirectly to the federal government. The civil FCA has been or can be used to assert liability on the basis of kickbacks and other improper referrals, improperly reported government pricing metrics such as Best Price and Average Manufacturer Price, improper promotion of uses not expressly approved by the FDA in a drug’s label, false statements associated with government grants, and allegations of misrepresentations with respect to services rendered, as well as claims for payment that are inaccurate or fraudulent, that are for services not provided as claimed, or for services that are not medically necessary. FCA claims may be based on noncompliance with regulatory requirements under an implied certification theory if material to the government’s decision to buy or pay for a drug. Intent to deceive is not required to establish liability under the civil FCA. Civil FCA liability may also be imposed for Medicare or Medicaid overpayments caused by understated rebate amounts that are not refunded within 60 days of discovering the overpayment, even if the overpayment was not caused by a false or fraudulent act. Actions under the FCA may be brought by the government or as a qui tam action by a private individual in the name of the government. If the government intervenes in a qui tam action, and prevails, the qui tam plaintiff will share in the proceeds from damages and fines or settlement funds. If the government declines to intervene, the qui tam plaintiff may pursue the case alone. Violations of the FCA can result in significant monetary penalties and treble damages. The government may further prosecute conduct under the criminal FCA, which prohibits the making or presenting of a claim to the government knowing the claim to be false, fictitious or fraudulent. Unlike the civil FCA, conviction requires proof of intent to submit a false claim. In addition, federal AKS violations (which may be alleged based on certain marketing practices, including allegations of off-label promotion) implicate the FCA.

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The compliance and enforcement landscape, and related risk, is informed by government litigation and settlement precedent, Advisory Opinions, and Special Fraud Alerts. Our approach to compliance may evolve over time in light of these types of developments.

Additionally, the FCPA, and similar worldwide anti-bribery laws, generally prohibit companies and their intermediaries from making, offering or authorizing improper payments or other items of value, directly or indirectly, to foreign officials, political parties, or candidates for the purpose of obtaining or retaining business. The FCPA also obligates companies whose securities are listed in the U.S. to comply with accounting provisions requiring us to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations. Activities that violate the FCPA, even if they occur wholly outside the U.S., can result in criminal and civil fines, imprisonment, disgorgement, oversight, and debarment from securing government contracts. We cannot assure you that our internal control policies and procedures will protect us from reckless or negligent acts committed by our employees, future distributors, partners, collaborators or agents. Violations of these laws, or allegations of such violations, could result in fines, penalties or prosecution and have a negative impact on our business, results of operations and reputation.

Payment or reimbursement of prescription drugs by Medicaid or Medicare requires manufacturers of the drugs to submit pricing information to the Centers for Medicare & Medicaid Services, or CMS. The Medicaid Drug Rebate statute requires manufacturers to calculate and report price points, which are used to determine Medicaid rebate payments shared between the states and the federal government and Medicaid payment rates for the drug. For drugs paid under Medicare Part B, manufacturers must also calculate and report their Average Sales Price or ASP, which is used to determine the Medicare Part B payment rate for the drug. Drugs that are approved under a BLA or a New Drug Application, or NDA, including 505(b)(2) drugs, are subject to an additional inflation penalty which can substantially increase rebate payments. In addition, for BLA and NDA drugs, the Veterans Health Care Act, or VHCA, requires manufacturers to calculate and report to the Veterans Administration, or VA, a different price called the Non‐Federal Average Manufacturing Price, which is used to determine the maximum price that can be charged to certain federal agencies, referred to as the Federal Ceiling Price, or FCP. Like the Medicaid rebate amount, the FCP includes an inflation penalty. A Department of Defense regulation requires manufacturers to provide this discount on drugs dispensed by retail pharmacies when paid by the TRICARE Program. All these price reporting requirements create risk of submitting false information to the government, and potential FCA liability.

The VHCA also requires manufacturers of covered drugs participating in the Medicaid program to enter into Federal Supply Schedule contracts with the VA through which their covered drugs must be sold to certain federal agencies at FCP and to report pricing information. This necessitates compliance with applicable federal procurement laws and regulations and subjects us to contractual remedies as well as administrative, civil, and criminal sanctions. In addition, the VHCA requires manufacturers participating in Medicaid to agree to provide different mandatory discounts to certain Public Health Service grantees and other safety net hospitals and clinics.

The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil penalties prohibits, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud or to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of whether the payor is public or private third-party, knowingly and willfully embezzling or stealing from a health care benefit program, willfully obstructing a criminal investigation of a health care offense, and knowingly and willfully falsifying, concealing, or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items, or services relating to healthcare matters. A person or entity does not need to have actual knowledge of the statute, or the specific intent to violate it, to have committed a violation.

We may also be subject to data privacy and security laws and regulation by both the federal government and the states in which we conduct our business. HIPAA, as amended by the Health Information Technology and Clinical Health Act, or HITECH, and their respective implementing regulations, including the final omnibus rule published on January 25, 2013, imposes specific requirements relating to the privacy, security and transmission of individually identifiable health information held by covered entities and their business associates. While we would not be a “covered entity” under HIPAA, it is possible that we may enter into a service or business arrangement that would cause us to serve as a “business associates,” defined as a person or entity that performs certain functions or activities that involve the use or disclosure of protected health information in connection with providing a service for or on behalf of, or provide services to, a covered entity. HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil

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actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions. In addition, state laws govern the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect. The Department of Health and Human Services Office of Civil Rights, or the OCR, has increased its focus on compliance and continues to train state attorneys general for enforcement purposes.

Even for entities that are not deemed “covered entities” or “business associates” under HIPAA, according to the U.S. Federal Trade Commission, or the FTC, failing to take appropriate steps to keep consumers’ personal information secure constitutes unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, or the FTCA, 15 USC § 45(a). The FTC expects a company's data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. Medical data is considered sensitive data that merits stronger safeguards. The FTC's guidance for appropriately securing consumers' personal information is similar to what is required by the HIPAA Security Rule.

In addition to the laws discussed above, we may see more stringent state and federal privacy legislation in 2021 and beyond, as the increased cyber-attacks during the pandemic have heightened attention data privacy and security in the U.S. and other jurisdictions. We cannot predict where new legislation might arise, the scope of such legislation, or the potential impact to our business and operations.

Payments made to physicians and other healthcare providers, and other financial interests, have been the subject of a range of federal and state laws. The federal physician payment transparency requirements, sometimes referred to as the Physician Payments Sunshine Act, or the Sunshine Act, was created under the ACA. The Sunshine Act, among other things, imposes reporting requirements on drug manufacturers for payments or other transfers of value made by them to physicians and teaching hospitals, as well as ownership and investment interests held by physicians, other healthcare providers, and their immediate family members. Failure to submit required information may result in civil monetary penalties of up to an aggregate of $150,000 per year and up to an additional aggregate of $1 million per year for “knowing failures,” for all payments, transfers of value or ownership or investment interests that are not timely, accurately and completely reported in an annual submission. The Sunshine Act was amended requiring applicable manufacturers, in 2021, to begin tracking payments and transfers of value to physician assistants, nurse practitioners, and other mid-level HCPs as well as physicians, with reporting relative to these mid-level practitioners first due in 2022. Additionally, certain states also mandate implementation of commercial compliance programs, impose restrictions on drug manufacturer marketing practices and/or require the tracking and reporting of gifts, compensation and other remuneration to physicians and other HCPs.

Analogous state laws and regulations, such as state anti-kickback and false claims laws, and other state laws addressing the pharmaceutical and healthcare industries, which may apply to items or services reimbursed by any third-party payor, including commercial insurers, and in some cases may apply regardless of payor, i.e., even if reimbursement is not available. Some state laws require pharmaceutical companies to comply with the pharmaceutical industry's voluntary compliance guidelines, known as the PhRMA Code, and the relevant compliance program guidance promulgated by the federal government in addition to requiring drug manufacturers to report pricing and marketing information, including, among other things, information related to gifts, payments, or other remuneration to physicians and other healthcare providers or marketing expenditures, state and local laws that require the registration of pharmaceutical sales representatives, and state laws governing the privacy and security of health information and the use of prescriber-identifiable data in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. For example, California enacted the California Consumer Privacy Act, or CCPA, which went into effect on January 1, 2020, andwas recently amended and expanded by the California Privacy Rights Act, or CPRA, passed on November 3, 2020. While the majority of the CPRA’s substantive provisions will not take effect until January 1, 2023, the CPRA’s expansion of the “Right to Know” impacts personal information collected on or after January 1, 2022. Companies must still comply with the CCPA during the ramp up period before CPRA goes into effect. The CCPA and CPRA, among other things, create new data privacy obligations for covered companies and provide new privacy rights to California residents, including the right to opt out of certain disclosures of their information. The CCPA also created a private right of action with statutory damages for certain data breaches, thereby potentially increasing risks associated with a data breach. It remains unclear what, if any, additional modifications will be made to the CPRA by the California legislature or how it will be interpreted. Therefore, the effects of the CCPA and CPRA are significant and will likely require us to modify our data processing practices and may cause us to incur substantial costs and expenses to comply.

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To the extent that any of our products are sold in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti‐fraud and abuse laws, and implementation of corporate compliance programs and reporting of payments or transfers of value to HCPs.

Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available under such laws, it is possible that certain business activities could be subject to challenge under one or more of such laws. The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations. Federal and state enforcement bodies have recently increased their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry. Ensuring that business arrangements with third parties comply with applicable healthcare laws, as well as responding to possible investigations by government authorities, can be time- and resource-consuming and can divert management's attention from the business.

If our operations are found to be in violation of any of such health regulatory laws described above or any other governmental laws and regulations that apply to us, we may be subject to penalties, including, without limitation, civil, administrative, and criminal penalties, damages, fines, disgorgement, the curtailment or restructuring of our operations, exclusion from participation in federal and state healthcare programs and individual imprisonment, injunctions, private qui tam actions brought by individual whistleblowers in the name of the government, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, any of which could adversely affect our ability to operate our business and our financial results.

Coverage and Reimbursement

Sales of pharmaceutical products depend significantly on the availability of third-party coverage and reimbursement. Third-party payors include Medicare, Medicaid, and other government programs at the federal and state level, managed care providers, private health insurers and other organizations. Third party payors decide which drugs they will pay for on behalf of their beneficiaries and establish reimbursement levels for health care. Although we currently believe that third-party payors will provide coverage and reimbursement for our product candidates, if approved, these third-party payors are increasingly challenging the price and examining the cost-effectiveness of medical products and services, with a recent focus on prioritization of “equivalent,” less expensive alternatives when available. In addition, significant uncertainty exists as to the reimbursement status of newly approved healthcare products. We may need to conduct expensive clinical trials to demonstrate the comparative cost-effectiveness of our products. The product candidates that we develop may not be considered cost-effective. It is time-consuming and expensive for us to seek coverage and reimbursement from third-party payors. Moreover, a payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved, especially for product candidates such as ours, which are used in the inpatient setting, usually resulting in no separate reimbursement for pharmaceuticals. There are additional pressures on pricing as a result of other, peripheral policies impacting reimbursement across both government and private payors. Non-health specific policies may impart downstream impacts on private insurance reimbursement decision-making. In consideration of these numerous factors, reimbursement may not be available or sufficient to allow us to sell our products on a competitive and profitable basis.

Medicare is a federally funded program managed by CMS through local contractors that administer coverage and reimbursement for certain healthcare items and services furnished to the elderly and disabled. Medicare Part A covers inpatient hospitalization and Medicare Part B covers outpatient medical services. Medicare coverage of drugs and biological products and payment rates to providers are established by federal law and regulations. Medicaid is an insurance program for certain categories of low-income patients who are otherwise uninsured and is both federally and state funded and managed by each state. The federal government sets general guidelines for Medicaid and requires rebates on outpatient drugs and biological products, including those administered by physicians if the cost is billed separately. Each state creates specific regulations that govern its individual program, including supplemental rebate programs that prioritize coverage for drugs on the state Preferred Drug List. Government laws and regulations also establish price controls on prescription drugs purchased by government agencies that provide health care and certain federally funded hospital outpatient departments and clinics. In the U.S., private health insurers and other third-party payors often provide reimbursement for products and services based on the level at which the government provides reimbursement through the Medicare or Medicaid programs for such products and services. These restrictions and limitations influence the purchase of healthcare services and products. In addition, government programs like Medicaid include substantial penalties for increasing commercial prices over the rate of inflation which can affect realization and return on investment. Further, some stakeholders have recently questioned whether the market price of prescription drugs may be inflated by virtue of the built-in cost imparted by the government rebate model, often negotiated indirectly in exchange for a coverage determination or formulary placement where relevant.

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In the U.S., the European Union, and other potentially significant markets for our product candidates, government authorities and private third-party payors are increasingly attempting to limit or regulate the price of medical products and services, particularly for new and innovative products and therapies, which often has resulted in average selling prices lower than they would otherwise be. Manufacturers frequently must rebate a portion of the prescription price to the third‐party payors as a condition of coverage, which can greatly reduce realization on the sale. Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy, and are developing increasingly sophisticated methods of controlling healthcare costs. They may limit coverage to specific drug products on an approved list, or formulary, which might not include all the FDA-approved drug products for a particular indication, or they may control costs, particularly for new expensive therapies, by requiring prior authorization or imposing other restrictions before covering certain products, or they may condition payment based on achieving performance metrics. Legislative proposals to reform healthcare or reduce costs under government programs may result in lower reimbursement for our product candidates or exclusion of our product candidates from coverage.

IOVA US Equity

IOVA · 10-K · period ended 2022-12-31

Item 1. Business

IOVA US Equity☆

IOVA · 10-K · period ended 2022-12-31

Item 1. Business

IOVA US Equity