IOVANCE BIOTHERAPEUTICS, INC. (IOVA) Business

Item 1.          Business

Overview

We are a commercial-stage biopharmaceutical company pioneering a transformational approach to treating cancer. Our mission is to be the global leader in innovating, developing, and delivering tumor infiltrating lymphocyte, or TIL, cell therapies for patients with solid tumor cancers. TIL cell therapies harness the individual immune system’s ability to recognize and destroy diverse cancer cells that are unique to each patient. These individualized therapies are manufactured using centralized, scalable, and proprietary manufacturing processes which rejuvenate and multiply each patient’s polyclonal T cells into the billions.

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Iovance was founded to build upon the promise of TIL cell therapy initially developed at academic research centers, including the National Cancer Institute, or the NCI. Our multi-center trials, scalable manufacturing, regulatory approvals and commercial infrastructure have transformed TIL cell therapy from a research product available to only a small number of patients, into a commercially viable treatment that is accessible for thousands of cancer patients.

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Our two commercial products include Amtagvi® (lifileucel) and Proleukin® (aldesleukin), an interleukin-2, or IL-2, product used in the Amtagvi® treatment regimen and other applications.

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Amtagvi® is the first one-time, individualized T cell therapy for a solid tumor cancer and for the treatment of adult patients with previously treated advanced, or unresectable or metastatic melanoma. Amtagvi® is administered as part of a treatment regimen that includes lymphodepletion and a short course of Proleukin®.

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Globally, Amtagvi® has the potential to address more than 30,000 previously treated advanced melanoma patients annually. Amtagvi® is approved in the U.S. and Canada, and we plan to launch into additional markets with a high prevalence of advanced melanoma. Potential approvals are pending in the United Kingdom, or UK, and Australia in the first half of 2026 and Switzerland in 2027. In the European Union, or EU, we withdrew our initial marketing authorization application, or MAA, in July 2025. We are working with the European Medicines Agency, or EMA, to resubmit a centralized MAA in 2026.

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Our development pipeline consists of TIL cell therapies and next generation approaches in additional solid tumor cancers, including one-time TIL monotherapies for previously treated patients and TIL cell therapy combined with standard of care in earlier treatment settings. We are conducting two ongoing registrational trials in frontline advanced melanoma and previously treated advanced non-small cell lung cancer, or NSCLC. We plan to commence a registrational trial in previously treated advanced undifferentiated pleomorphic sarcoma, or UPS, and dedifferentiated liposarcoma, or DDLPS, in the second quarter of 2026 and engage with the FDA on a path to expedited approval.

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Corporate Strategy

A global leader in innovating, developing, and delivering TIL cell therapy

Our mission is to be the global leader in innovating, developing, and delivering TIL cell therapy. Our vision is to pioneer this transformational approach to cure solid tumor cancers. We are committed to continuous innovation to develop TIL cell therapies and optimize TIL treatment regimens that may extend and improve life for patients with cancer.

Our top priority is to drive commercial success of Amtagvi® for previously treated advanced melanoma across four primary areas:

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U.S. Commercial Launch of the First TIL Cell Therapy in Advanced Melanoma

Amtagvi®

Amtagvi® (lifileucel) is the first one-time, individualized T cell therapy approved for a solid tumor cancer and for the treatment of adult patients with previously treated advanced melanoma. Amtagvi® returns billions of individualized patient T cells back to the body to fight cancer and is administered as part of a treatment regimen.

Amtagvi® is indicated for the treatment of adult patients with advanced melanoma previously treated with a PD-1 blocking antibody, and if BRAF V600 mutation positive, a BRAF inhibitor with or without a MEK inhibitor. The U.S. accelerated approval of Amtagvi® is based on safety and efficacy results from the C-144-01 global, multicenter clinical trial. A global, randomized Phase 3 confirmatory trial, TILVANCE-301, is investigating Amtagvi® in combination with pembrolizumab in frontline advanced melanoma. The Amtagvi® treatment regimen, that includes lymphodepletion and a short course of Proleukin® (aldesleukin), is available through a continuously growing network of ATCs. In the final five-year analysis from the C-144-01 trial published in the Journal of Clinical Oncology and presented at ASCO in May, 2025, Amtagvi® demonstrated unprecedented durability in previously treated advanced melanoma patients with 31.4% objective response rate, or ORR, median duration of response, or mDOR, of 36.5 months, median overall survival, or OS, of 13.9 months and five-year OS of 19.7%.

Initial data for Amtagvi in the commercial setting reinforce the published clinical data. In February 2026, data from the first real-world, retrospective study of Amtagvi were presented at the 2026 Tandem Meetings of the American Society for Transplantation and Cellular Therapy and the Center for International Blood and Marrow Transplant Research. Among 41 evaluable patients treated per Amtagvi® U.S. prescribing information, the physician-assessed ORR was 44% and the disease control rate was 73%. Response rates with Amtagvi® were higher in third-line or earlier patients. The ORR was 52% following two or fewer prior lines of therapy compared to an ORR of 33% after three or more prior lines of therapy.

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Amtagvi® has multiple growth drivers, including:

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Proleukin®

We sell Proleukin® (aldesleukin), an interleukin-2, or IL-2, product to three main distributors in the U.S., distributors outside the U.S., and numerous third-party clients across the three revenue channels: 1) use in the Amtagvi® treatment regimen, or other approved oncology uses, or the primary channel, 2) use in the manufacturing process for Amtagvi® and other cell therapies and 3) use in clinical and research settings. Proleukin® is approved in the U.S., and licensed in multiple international markets, for treatment of adults with metastatic renal cell carcinoma and/or metastatic melanoma.

In May 2023, we acquired the worldwide rights to Proleukin® from Clinigen Holdings Limited, Clinigen Healthcare Limited, and Clinigen, Inc., which we refer to collectively as Clinigen.

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Scalable TIL manufacturing for commercial and clinical demand

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The Iovance Cell Therapy Center, or iCTC, in Philadelphia, Pennsylvania is the first FDA-approved facility to manufacture commercial TIL cell therapy. We also believe that the iCTC is the only current Good Manufacturing Practice, or cGMP, facility with a centralized, scalable TIL manufacturing process. To date, more than 1,500 patients have been treated with commercial and investigational TIL cell therapies manufactured using Iovance processes. Facilitated by its proximity to multiple airports, the iCTC covers logistics and delivery of TIL cell therapies to treatment centers in North America, Europe, and Asia Pacific.

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We have historically relied on our own manufacturing capabilities, together with other third parties, for the manufacturing and processing of commercial and investigational TIL cell therapy products. The iCTC currently supplies the vast majority of commercial Amtagvi® and clinical lifileucel with additional capacity previously supplemented by a contract manufacturer.

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The iCTC has the potential capacity to supply TIL cell therapies for more than 5,000 cancer patients annually. To utilize our internal manufacturing suites at greater scale, improve gross margin and reduce operating expenses, we are transitioning all manufacturing activities for Amtagvi® and lifileucel to the iCTC. Our contract manufacturer concluded production of Amtagvi® and lifileucel and our agreement terminated in the first quarter of 2026. This internal manufacturing strategy aligns with our ongoing initiatives to manage and reduce long-term product manufacturing costs. We will have full control of manufacturing capacity and product quality, supply and delivery logistics, cost efficiencies and process improvements, such as automation and next generation approaches that may further streamline timelines and costs. Certain clinical trials for our next-generation investigational TIL cell therapies will continue to be supported by contract manufacturing organizations, or CMOs. Details of related agreements are provided in the Research, Development, Manufacturing and License Agreements in this Annual Report on Form 10-K.

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TIL Cell Therapy Platforms for Advanced, or Metastatic or Unresectable, Solid Tumor Cancers

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Our T cell-based immunotherapy technology platform of TIL cell therapies leverages patient-specific cells to recognize and attack diverse cancer cells that are unique to each patient. We believe this approach is the emerging backbone for immuno-oncology approaches to treat solid tumor cancers.

We have investigated TIL cell therapy in global, multicenter Iovance-sponsored clinical trials in various treatment settings in advanced melanoma, NSCLC, cervical cancer, endometrial cancer, and head and neck squamous cell carcinoma, or HNSCC. Through ongoing academic collaborations, as well as government and other partners, we are investigating additional solid tumor types and treatment settings. We have provided prior or ongoing support for investigator-sponsored clinical trials in soft tissue sarcoma, osteosarcoma, pancreatic and colorectal cancer, platinum resistant ovarian cancer, anaplastic thyroid cancer, and triple negative breast cancer.

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Applying our expertise in TIL cell therapy, our next-generation technology platforms are designed to optimize outcomes with TIL cell therapy across three key initiatives: genetic modifications, potency, and new treatment regimens using an improved IL-2.

Intellectual Property

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We have established a leading intellectual property portfolio developed internally and licensed from third parties. We currently own more than 330 granted or allowed U.S. and international patents and patent applications pertaining to Amtagvi® and other TIL-related technologies that are expected to provide Amtagvi® with exclusivity into 2042. More than 90 U.S. patents are related to TIL cell therapy, including patents directed to compositions and methods of treatment in a broad range of cancers. Pending patent applications and granted patents cover the fields of TIL cell therapy, genetically edited TIL cell therapy, selected TIL cell therapy, small core or biopsy TIL cell therapy, fresh or frozen tumor digest-derived TIL cell therapy, TIL and ICI combination therapy, marrow infiltrating lymphocytes, or MIL therapy, and peripheral blood lymphocyte, or 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.

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Iovance-Sponsored Clinical Trials

Combination Therapy with Lifileucel for Frontline Advanced Melanoma

We estimate a global addressable market of more than 70,000 frontline advanced melanoma patients per year. Despite current treatment options, more than 50% of patients treated for frontline advanced melanoma experience disease progression within 12 months.

Our strategy in frontline advanced melanoma is to study the combined response rates and durability of lifileucel with pembrolizumab. As of May 2024, lifileucel in combination with immune checkpoint inhibitor, or ICI therapy in IOV-COM-202 Cohort 1A demonstrated a 65% ORR, including a 30% complete response rate, by RECIST 1.1, and 65% progression-free survival, or PFS, at months 6 and 12. The median PFS and mDOR were not reached at 21.7 months of median follow-up. The treatment-emergent adverse event, or TEAE, profile was consistent with the underlying advanced disease, pembrolizumab, lymphodepletion and IL-2. The safety profile is differentiated from ICI combination therapies, with late AEs that were consistent with pembrolizumab monotherapy.

Following the U.S. accelerated approval of Amtagvi® in previously treated advanced melanoma, our confirmatory trial, TILVANCE-301, is designed to support a registrational path for lifileucel in combination with pembrolizumab in frontline advanced, or unresectable or metastatic, melanoma as well as to support full U.S. approval for Amtagvi® in post-anti-PD-1 advanced melanoma. We reached agreement with the FDA on the TILVANCE-301 clinical trial design. TILVANCE-301 is a Phase 3 multicenter, open-label, clinical trial that will randomize approximately 670 patients with frontline advanced melanoma in patients who are naive to therapy for metastatic disease. The trial was designed with the FDA and EMA input to assess contribution of components for lifileucel and pembrolizumab compared with pembrolizumab alone, with dual primary endpoints of ORR and progression free survival, or PFS, by blinded independent review committee.

Lifileucel for Previously Treated Advanced Melanoma

We continue to investigate lifileucel in previously treated advanced melanoma patients in the clinical setting, primarily outside the U.S. in markets where we are seeking additional approvals. IOV-MEL 202 is a single-arm, multicenter Phase 2 trial to investigate lifileucel in patients previously treated with anti-PD-1 therapy and includes second-line lifileucel therapy in BRAF positive patients without prior BRAF/MEK inhibitor therapy.

Lifileucel for Advanced, or Metastatic or Unresectable NSCLC

We estimate an addressable market in our initial target indication of previously treated nonsquamous, or NSQ, metastatic NSCLC, or mNSCLC, without ALK, ROS or epidermal growth factor receptor, or EGFR, mutations of more than 315,000 patients per year in global target markets, including 50,000 U.S. patients. Following initial treatment with immune checkpoint inhibitor, or ICI, and chemotherapy, previously treated with standard of care chemo-immunotherapy have a poor prognosis, limited treatment options

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with limited durability, and a real-world overall survival of less than six months. In this treatment setting, standard-of-care docetaxel monotherapy recently showed an ORR of 12.8%, without any complete responses, an mDOR of 5.6 months and OS of 12.3 months.

We are investigating lifileucel as a monotherapy and in combination with approved therapies to treat mNSCLC in multiple patient populations and treatment settings with defined unmet need. We believe the results from Iovance clinical trials support the potential benefit of one-time TIL cell therapy in previously treated patients with NSQ mNSCLC, as well as lifileucel in combination with ICIs in frontline advanced melanoma, including the opportunity for more durable responses.

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IOV-LUN-202 Registrational Trial

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One-time treatment with lifileucel has demonstrated a potentially best-in-class clinical profile in IOV-LUN-202 in previously treated NSQ mNSCLC. IOV-LUN-202 is a single-arm, registrational, global phase 2 trial investigating one-time lifileucel monotherapy in mNSCLC patients previously treated with an ICI and chemotherapy and without EGFR, ROS proto-oncogene receptor tyrosine kinase 1, or ROS1, anaplastic lymphoma kinase, or ALK actionable genetic mutations. In the two registrational patient cohorts, the programmed death-ligand 1, or PD-L1, tumor proportion score, or TPS, at the start of frontline therapy was less than one percent or unknown in Cohort 1 patients and greater than or equal to one percent in Cohort 2 patients. We plan to enroll a total of approximately 80 NSQ NSCLC patients into registrational Cohorts 1 and 2 to support a supplemental biologics license application, or sBLA, to the U.S. FDA for accelerated approval.

In November 2025, updated preliminary data in 39 evaluable patients demonstrated an ORR by RECIST v1.1 of 25.6%, a disease control rate of 71.8%, and mDOR was not reached after a median follow up of 25.4 months. The safety profile was consistent with the underlying disease, non-myeloablative lymphodepletion, or “LD”, and interleukin-2, or IL-2. The U.S. FDA placed a partial clinical hold on the IOV-LUN-202 trial from the fourth quarter of 2023 into the first quarter of 2024. All subsequent patients were enrolled to receive a reduced LD regimen that has resulted in a reduction of median post-IL-2 hospitalization days by more than half and lower incidence and shorter time to resolution of cytopenias compared with the standard LD regimen.

IOV-COM-202 Trial in Previously Treated and Frontline NSCLC

The IOV-COM-202 basket trial in solid tumors evaluated lifileucel in previously treated mNSCLC patients in Cohort 3B and lifileucel in combination with pembrolizumab in frontline mNSCLC patients in Cohort 3A. Clinical results for Cohort 3B were published in Cancer Discovery and further support the opportunity for lifileucel in mNSCLC, with an ORR of 21.4% by RECIST v1.1 after two or more lines of therapy with ICI and chemotherapy. As of November 2024, preliminary results from Cohort 1A demonstrated a confirmed ORR of 64.3% and mDOR was not reached at a median study follow up of 26.5 months in 14 patients with EGFR wild type NSCLC who had not received prior immunotherapy, including ICIs.

Endometrial Cancer

The Phase 2 IOV-END-201 trial is investigating lifileucel in patients with advanced endometrial cancer patients previously treated with ICI and chemotherapy, a setting with no approved therapies. We continue to follow the currently enrolled patients and plan to provide an update following review of the initial dataset.

Soft Tissue Sarcomas

In February 2026, we announced that we plan to commence a single arm registrational trial in previously treated advanced undifferentiated pleomorphic sarcoma and dedifferentiated liposarcoma in the second quarter of 2026.

Next Generation Clinical Programs

IOV-3001 for the TIL Treatment Regimen

Dose escalation is underway in a Phase 1/2 clinical trial to investigate IOV-3001, a second-generation, modified interleukin-2 analog, for use in the TIL treatment regimen. This recombinant fusion protein is designed to enhance TIL survival and cellular proliferation. Preclinical studies of IOV-3001 demonstrated the potential for improved safety, convenience of less frequent dosing and strong effector T cell expansion.

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IOV-4001 for Advanced Melanoma and NSCLC

We have a worldwide exclusive license from Cellectis to certain TALEN® technology to develop genetically edited and potentially more potent TIL cell therapies. Our lead program, IOV-4001, utilizes TALEN® to inactivate the gene coding for PD-1, restoring the ability of TIL cells to fight cancer. The Phase 2 efficacy extension of a first-in-human clinical trial is investigating IOV-4001 in previously treated advanced melanoma or NSCLC.

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IOV-5001 for Solid Tumors

IOV-5001 is genetically engineered to induce IL-12 expression to remodel the tumor microenvironment, or TME, into an immunosupportive state to enhance efficacy. Tethered IL-12 is also expected to optimize safety. An Investigational New Drug (IND) submission is planned in first half of 2026 to investigate IOV-5001 in a Phase 1/2 basket trial in solid tumors with large patient populations and significant unmet medical need.

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Completed Clinical Trials

Manufacturing Processes

Iovance has built upon the promise of TIL cell therapy at academic centers. Our multicenter trials and centralized manufacturing processes have transformed TIL cell therapy into a scalable, commercially viable treatment to serve sizeable patient populations with solid tumor cancers.

Gen 2

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Our proprietary, centralized, and scalable Gen 2 technology introduced manufacturing and logistical efficiencies aimed at optimizing treatment, streamlining distribution processes, and delivering a cryopreserved final product. Gen 2 is the manufacturing process used for commercial Amtagvi® and ongoing clinical trials of lifileucel. We are committed to continuously improving and streamlining the processes for TIL cell therapy manufacturing and tumor sample collection.

Following a surgical biopsy to collect a patient’s tumor tissue, TIL cells are processed at our centralized manufacturing facility, the Iovance Cell Therapy Center, or iCTC. The TIL cells are multiplied into the billions during two growth phases: pre-rapid expansion, or slow growth, for the first 11 days and rapid expansion from days 11-22. Milestones include day 11, when cells transfer to a larger bioreactor with feeder cells; day 16, when TIL cells are harvested, counted, and incubated in multiple bioreactors; and day 22, when TIL cells undergo cryopreservation and placement in final product bags. The product undergoes analytical and quality testing before it is released and shipped to the patient’s authorized treatment center.

Research, Development, Manufacturing, and License Agreements for TIL Cell Therapy

Minaris Advanced Therapies

Manufacturing and Services Agreements

In November 2016, we entered manufacturing services agreements, or MSAs, with WuXi Advanced Therapies, Inc., and its parent company WuXi Apptec, Co. Ltd (collectively, “WuXi”). Upon the acquisition of WuXi Advanced Therapies by Minaris Advanced Therapies (“Minaris”) in May 2025, we replaced WuXi with Minaris as the party of the MSAs. Through the MSAs, Minaris

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supplemented our internal capacity for Amtagvi® and clinical lifileucel. Following the transition of all Amtagvi /lifileucel manufacturing to our internal facility, the MSA terminated in the first quarter of 2026. We do not utilize Minaris for the manufacture of our next-generation therapies.

National Institutes of Health, or NIH, and the National Cancer Institute, or NCI

Cooperative Research and Development Agreement

We have a Cooperative Research and Development Agreement, or CRADA, with the NCI for the development of adoptive cell immunotherapies in multiple solid tumor types, including bladder, lung, and triple-negative breast cancers; Human Papilloma Virus, or HPV, associated cancers and a broad range of epithelial cancers.

In August 2011, we signed a five-year CRADA for the development of products that included unmodified TIL as a stand-alone therapy or in combination, improved methods for the generation and selection of TIL cell therapy with anti-tumor reactivity, and strategies for more potent TILs. Since then, the CRADA has been amended to extend the term and to include new indications and the use of certain inhibitors or other reagents in TIL expansion cultures.

In July 2024, a fourth amendment to the CRADA extended its term to August 2029 and included collaboration on development of enhanced tumor reactive TIL products in common epithelial cancers. We are required to make quarterly payments to NCI to support research activities. To the extent we license patent rights, 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 cGMP conditions, suitable for use in clinical trials. We or the NCI may unilaterally terminate the CRADA with prior written notice at least 60 days.

Patent License Agreements Related to TIL Cell Therapies

We entered into a patent license agreement, or the Patent License Agreement, with the NIH in 2011. The Patent License Agreement was amended multiple times to include exclusive, co- and non-exclusive licenses to certain NIH technologies relating to autologous TIL adoptive cell therapy.

Pursuant to the Patent License Agreement, as amended, we are required to pay royalties and milestone payments. Royalties are based on a percentage of less than one to mid-single digits of net sales, depending on certain events, in jurisdictions where patent rights exist. Previous and anticipated potential future milestone payments range from several hundred thousand dollars to the mid-single-digit millions of dollars in conjunction with development, regulatory approvals, or the first U.S. and foreign commercial sales of any of our product candidates covered by the Patent License Agreement, as amended. The term of the Patent License Agreement, as amended, continues until the expiry of the last-to-expire licensed patent rights and contains standard termination provisions.

Cellectis S.A.

Research Collaboration and Exclusive Worldwide License Agreement

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

Novartis Pharma AG

License Agreement

In January 2020, we obtained a license from Novartis Pharma AG, or Novartis, to develop and commercialize an antibody cytokine engrafted protein, designated as IOV-3001. Under the agreement, we have paid an upfront payment to Novartis. We may pay future milestones related to clinical development and approval of IOV-3001, as well as low-to-mid single digit percentage royalties from commercial sales, in the U.S., the European Union, and Japan.

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In May 2023, upon our acquisition of worldwide rights to Proleukin®, or the Acquisition, from Clinigen we inherited two historical asset purchase agreements with Novartis AG, Novartis Pharma AG and Novartis Vaccines and Diagnostics, Inc. Pursuant to a master cell bank license and working cell bank transfer agreement and a license agreement, we may be required to make future milestone payments based on net sales, as defined in the relevant underlying agreements, in the U.S. and the rest of world.

Boehringer Ingelheim Biopharmaceuticals GmbH

In May 2023, as part of the Acquisition from Clinigen, we inherited a manufacturing and supply agreement with Boehringer Ingelheim Biopharmaceuticals GmbH, to carry out the processing, manufacturing, and supply of Proleukin® in unlabeled vials through October 2025. Automatic renewals are for a two-year period unless terminated. In September 2025, the agreement was amended and extended, pursuant to which we must purchase a minimum number of vials each calendar year through December 31, 2028.

TIL Cell Therapy Landscape in Solid Tumors

Immune System and Cancer Surveillance

The immune system recognizes danger signals and responds to threats at a cellular level. T cells, or T lymphocytes, are the most significant cellular components of the adaptive immune response. T cells are distinguished from other white blood cells by T cell receptors that contribute to tumor surveillance. T cells are involved in sensing and killing infected or cancerous cells, as well activating other cells in an immune response.

Challenges for Cancer Immunotherapy

According to SEER, solid tumor cancers represent more than 90 percent of all cancers diagnosed in the U.S. annually. Cancer can grow and spread when T cells with cancer-specific receptors are absent, low in quantity and quality, or rendered inactive by suppressive mechanisms. Effective treatment of solid tumors is challenging for several reasons, including: (i) intratumoral heterogeneity, (ii) 1% overlap of shared tumor neoantigens across patients; (iii) lack of clarity on critical mutations or neoantigens, (iv) the immune system’s ability to evade treatments that target a single mutation (v) suppression of immune response by the tumor and tumor microenvironment and (vi) deleterious effect of certain treatments on T cells.

Advancing Immuno-Oncology with Our Iovance TIL Technology Platform:

Iovance TIL Technology Platform: the Backbone of IO Therapy in Solid Tumors

We believe that Our TIL technology platform of individualized polyclonal cell therapies represents a significant advancement in the treatment of solid tumor cancers. Unlike cell therapies that act on a single or small number of shared antigen targets common to certain tumors, TIL is an individualized, polyclonal T cell therapy designed to target a variety of patient-specific neoantigens. This approach of polyclonal TIL cells to reengage the immune system is the basis for our first FDA-approved product and potentially applicable to many solid tumor cancers in multi-billion-dollar markets. Infused TIL can potentially infiltrate the tumor to eliminate cancer cells, further proliferate, and overcome several mechanisms of tumor escape.

Our initial strategy is to address patients with previously treated solid tumor cancers.

For earlier intervention, we are investigating our TIL cell therapy to target and attack cancer cells in combination with immune checkpoint inhibitors, or ICIs, to break down barriers to mount an immune response.

Competition

Our portfolio includes our commercial products Amtagvi® and Proleukin® as well as our pipeline of investigational TIL cell therapies. The biotechnology and pharmaceutical industries put significant resources into developing novel and proprietary cancer therapies. 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. Even with the regulatory approval for Amtagvi®, the availability and price of our competitors’ products could limit the demand and

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the price we are able to charge for our therapies. 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.

We anticipate competition from several entities, as well as universities and research institutions, with current or emerging novel cancer therapies with promising clinical efficacy within immuno-oncology, novel IL-2 products and/or in our commercial and pipeline target indications. These organizations include multiple entities within immuno-oncology, including large and specialty pharmaceutical and biotechnology companies across the following areas.

Universities and research institutions with proprietary technologies may secure approvals or patent protection that we may need for our technologies and products. The Netherlands Cancer Institute, the Copenhagen University Hospital at Herlev, and the University of Manchester ran a Phase 3 M14TIL clinical trial comparing TIL to standard ipilimumab in patients with metastatic melanoma in Europe and published results in the New England Journal of Medicine in December 2022.

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, including through collaborative arrangements with large and established companies. These companies 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 that are similar to those that we have developed or that we use for, or that are 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.

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 require these individuals, organizations, and systems to take steps to abide by the terms and conditions of the confidentiality agreements, confidentiality may be breached, or our data may be improperly used or disclosed, and we may not have adequate remedies for any breach or improper use or disclosure. 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.

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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 2025.

We have established a leading intellectual property portfolio developed internally and licensed from third parties. We currently own more than 90 U.S. patents related to TIL cell 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; 11,141,434;11,141,438; 11,168,303; 11,168,304; 11,179,419; 11,202,803; 11,202,804; 11,220,670; 11,241,456; 11,254,913; 11,266,694; 11,273,180; 11,273,181; 11,291,687; 11,293,009; 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; 11,384,337; 11,401,507; 11,433,097; 11,517,592; 11,529,372; 11,541,077; 11,631,483; 11,713,446; 11,819,517; 11,857,573; 11,865,140; 11,866,688; 11,939,596; 11,969,444; 11,975,028; 11,981,921; 11,998,568; 12,023,355; 12,024,718; 12,031,157; 12,104,172; 12,121,541; 12,159,700; 12,170,134; 12,188,048; 12,194,061; 12,226,434; 12,226,522; 12,230,378; 12,230,379; 12,233,075; 12,280,140; 12,343,380 ; 12,485,145; and 12,495,791. More than 50 of these patents are related to our Gen 2 TIL manufacturing processes and have terms that we anticipate will extend to October 2037 or 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, marrow-infiltrating lymphocytes, or MIL, and peripheral blood lymphocyte, or 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 cell therapy and manufacturing; stable and transient genetically-modified TIL cell therapies, including genetic knockouts of immune checkpoints; cytokine-tethered TIL cell therapies; methods of using immune checkpoint inhibitor, or ICIs, in combination with TIL cell therapies; TIL selection technologies; and methods of treating patient subpopulations.

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.

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

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 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 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

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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 the 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 the 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.

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. Concurrently 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, 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.

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In December 2022, with the passage of Food and Drug Omnibus Reform Act, Congress required sponsors to develop and submit a diversity action plan for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product. These plans are meant to encourage the enrollment of more diverse patient populations in late-stage clinical trials of FDA-regulated products. Specifically, diversity action plans must include the sponsor’s goals for enrollment, the underlying rationale for those goals, and an explanation of how the sponsor intends to meet them. In terms of the compliance deadline, the requirement to submit a diversity action plan applies to clinical studies for which enrollment begins 180 days after the final guidance is published, which was originally anticipated to occur in June 2025. In January 2025, the draft guidance was removed from the FDA website, and reuploaded by court order, which has contributed to uncertainty regarding final timing and implementation.

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.

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 Approval and Post-Approval Requirements

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 PDUFA, 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

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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. Whether the FDA convenes an advisory committee depends on various factors, such as scientific and safety issued identified during review. 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. The industry typically refers to this as the FDA approval of the manufacturing facility. 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.

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,

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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 Breakthrough Therapy Designation, or 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.

Through the 21st Century Cures Act, or Cures Act, Congress also established another expedited program, called a Regenerative Medicine Advanced Therapy, or 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.

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

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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.

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 including, most recently, through policies establishing an additional stabilization period to support implementation of interoperable electronic tracing at the package level, and the FDA’s enforcement approach 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.

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 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

We have received ODD for lifileucel in the U.S. to treat malignant melanoma stages IIB-IV in 2015 and to treat cervical cancer with a tumor size of greater than 2 cm in diameter in 2018. If approved, an ODD provides seven years of market exclusivity in the U.S., 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, 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 detail under the Government Regulations section in this Annual Report on Form 10-K.

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Fast Track Designations

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. The FDA granted Fast Track designation, or FTD, for lifileucel for the treatment of advanced metastatic melanoma and cervical cancers in 2017 and 2019, respectively, as well as lifileucel in combination with pembrolizumab for the treatment of ICI-naïve metastatic melanoma in 2021. The FDA also granted fast track designation for lifileucel for the treatment of adults with metastatic NSQ NSCLC that has progressed on or after chemo- and anti-PD-1 therapies and at least one line of FDA-approved targeted therapy, if indicated, for actionable tumor mutations excluding ALK, ROS1 and EGFR. 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 the FDA, where the FDA may consider beginning to 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

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

Breakthrough Therapy Designation

Under a BTD, the FDA may take actions that help expedite the development and review of a product candidate application, 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. The FDA granted BTD for lifileucel for the treatment metastatic cervical cancer in 2019, based on data provided to the agency from our C-145-04 clinical trial. Product candidates with BTD may be suitable for alternative clinical trial designs, which may result in smaller or more efficient clinical trials. BTD also allows the sponsor to submit portions of the BLA for rolling review. In addition, BTD status allows for the potential priority review at the time of BLA submission if supported by clinical data. The BTD is supported by preliminary clinical evidence, and the FDA may rescind a BTD if a product candidate no longer meets the qualifying criteria.

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.

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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 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 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.

Patent Term Extension

If approved, biologics may also be eligible for periods of U.S. patent term extension. If granted, patent term extension restores 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 extension 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.

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

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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.

Other Healthcare Laws and Compliance Requirements

Our business activities, including but not limited to, research, sales, promotion, marketing, distribution, medical education, sponsorships, relationships with prescribers and other referral sources are subject to regulation by numerous federal, state, and local regulatory and law enforcement authorities in the U.S., and in addition to the FDA, these authorities may include the Federal Trade Commission, or the FTC; the Department of Justice; various divisions of the U.S. Department of Health and Human Services, or HHS, including the Centers for Medicare & Medicaid Services, or CMS, the Office of the Inspector General, or OIG, and the Health Resources and Services Administration, or HRSA; and state and local governments. These activities, including our promotional and scientific/educational programs, must comply with laws and regulations such as the federal Anti-Kickback Statute, or AKS; the civil monetary penalties statute, or the CMP Law; the Foreign Corrupt Practices Act, or the FCPA; the False Claims Act, or the FCA; the Veterans Health Care Act, or the VHCA; physician payment transparency laws; privacy and security laws; and other federal, state, and local laws similar to the foregoing. Our business activities must comply with numerous healthcare laws, including but not limited to, anti-kickback and false claims laws and regulations as well as data privacy and security laws and regulations, which are described below.

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, furnishing, ordering, or arranging for or recommending the purchase, lease, furnishing, or order of any item or service reimbursable under Medicare, Medicaid, or other federal healthcare programs, in whole or in part. The AKS has been interpreted broadly to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers, formulary managers, and beneficiaries on the other. The term “remuneration” has been interpreted broadly to include anything of value, including kickbacks, bribes, or rebates, gifts, discounts, waivers of payment, ownership interest, and providing anything at less than its fair market value. Additionally, the intent standard under the 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 AKS constitutes a false or fraudulent claim for purposes of the federal civil FCA. 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 such arrangement’s 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 exceptions and safe harbors are subject to change through legislative and regulatory action, are also subject to changes in interpretation and application by government agencies and courts, and we may decide to adjust our business practices from time to time.

The CMP Law establishes substantial monetary penalties that may be assessed against any person or entity, such as a pharmaceutical manufacturer, that engages in activities including, among others: (1) knowingly presenting, or causing to be presented, a claim for services not provided as claimed or that is otherwise false or fraudulent in any way; (2) arranging for or contracting with an individual or entity that is excluded from participation in federal healthcare programs to provide items or services reimbursable by a federal healthcare program; (3) violations of the AKS; or (4) failing to report and return a known overpayment.

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The FCA prohibits any person or entity from, among other things, knowingly presenting or causing to be presented false or fraudulent claims for payment to, or approval by the government, knowingly making, using, or causing to be made or used a false statement or record material to a claim to the government, or avoiding, decreasing, or concealing an obligation to pay money to the government. A claim includes “any request or demand” for money or property presented directly or indirectly to the government. The civil FCA has been or might 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 might 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 by a private individual in the name of the government, called “qui tam” actions. If the government intervenes in a qui tam action and prevails in the lawsuit, 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, subject to governmental review and certain approvals. Qui tam complaints are filed under seal, and the cases may progress for a number of years before a complaint is unsealed and a manufacturer becomes aware of its existence. FCA lawsuits against pharmaceutical companies have increased significantly in volume and breadth in recent years, leading to several substantial civil and criminal settlements, focusing on activities such as certain sales practices and promoting off-label drug uses. 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) might implicate the FCA.

The compliance and enforcement landscape, and related risk, is informed by government regulatory, enforcement, and other activities, such as 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 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 drugs. 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 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 through prescription rebates on drugs dispensed by retail pharmacies when paid by the TRICARE Program. These price reporting requirements create a 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

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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 under the 340B Drug Pricing Program and report the ceiling price to HRSA within HHS. Manufacturers can be audited by HRSA and be subjected to civil monetary penalties for knowingly and intentionally overcharging covered entities for drugs.

The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, imposes criminal and civil penalties and 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, 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 for Economic and Clinical Health Act, or the HITECH Act, and their respective implementing regulations, including as such regulations were amended by the final omnibus rule published on January 25, 2013, and subsequent rulemaking, 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. The HITECH Act 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 actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions. In addition, other federal and state laws may govern the privacy and security of health and other information in certain circumstances and may 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, state attorneys general, and other regulators have increased their focus on compliance and enforcement.

Even for entities that are not deemed “covered entities” or “business associates” under HIPAA, according to 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 under the 340B Drug Pricing Program and report the ceiling price to HRSA within HHS. Manufacturers can be audited by HRSA and be subjected to civil monetary penalties for knowingly and intentionally overcharging covered entities for drugs.

In addition to the laws discussed above, we may see more stringent state and federal privacy legislation in coming years, as a continued increase in cyber-attacks have heightened attention to 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, other HCPs, their family members, 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 Patient Protection and Affordable Care Act, or the ACA, and implemented as the Open Payments Program. The Sunshine Act, among other things, imposes reporting requirements on drug manufacturers and certain others 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 HCPs, 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 requires applicable manufacturers to track payments and transfers of

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value to physicians, physician assistants, nurse practitioners, and other mid-level HCPs. 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 Pharmaceutical Research and Manufacturers of America 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 HCPs 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, the California Consumer Privacy Act, or CCPA, which went into effect on January 1, 2020, and was subsequently amended and expanded by the California Privacy Rights Act, or CPRA, taking full effect as of January 1, 2023, including the CPRA’s expansion of the “Right to Know” that impacts personal information collected on or after January 1, 2022. 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. Additional modifications may continue to be made to the CCPA and CPRA by the California legislature and their interpretation by regulators may continue to evolve. Since the passage of the CCPA, certain other states have passed similar laws that may also have similar impacts on our data processing practices and incurred costs. Some of these state laws or amendments to these laws are continuing to take effect, and we cannot predict if states will subsequently amend those laws, if other states will pass similar laws, or the costs and expenses that we will incur to comply with such laws. Therefore, the effects of these state data protection laws 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.

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 among pharmaceutical companies, HCPs, and patients, 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, even if investigators ultimately find that no violation has occurred.

If our operations are found to be in violation of any of such health regulatory laws or regulations described above or any other governmental laws or regulations that apply to us, we may be subject to penalties or other enforcement actions, 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, 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.

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.

Coverage and Reimbursement

Sales of pharmaceutical products depend significantly on the availability and adequacy of coverage and reimbursement by third-party payors such as Medicare, Medicaid, and other government programs at the federal and state level, managed care entities, private health insurers, and pharmacy benefit managers, or PBMs. Third-party payors decide the extent to which they will cover or reimburse for drugs on behalf of their beneficiaries and members and might not provide any coverage or reimbursement for a drug. Third-party payors are increasingly challenging the price and examining the cost-effectiveness of medical products and services.

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Reimbursement for newly approved healthcare products present significant uncertainty and may require expensive clinical trials to demonstrate the comparative cost-effectiveness of our products, and our products and product candidates might not be considered cost-effective. Seeking coverage and reimbursement from third-party payors can be time consuming and expensive. 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 products and product candidates such as ours, which are used in the inpatient setting, usually resulting in no separate reimbursement for pharmaceuticals. Additional pressures on pricing as a result of other, peripheral policies may impact 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.

In the case of government health care programs, coverage and reimbursement may vary from program to program, including Medicare, Medicaid, and Tricare. Medicare is a federally funded program managed by CMS through local contractors that administer coverage and reimbursement for certain healthcare items and services for people over 65 years of age or older and certain people with disabilities, even if under age 65. Medicaid is a jointly federally and state funded insurance program managed by the applicable state for certain categories of individuals that may vary from state to state, including low-income people, families and children, pregnant people, and people with certain disabilities. Coverage for prescription drugs under these programs is subject to and limited by strict rules and conditions, including price controls. In the U.S., private health insurers and other third-party payors may base their reimbursement for prescription drugs based on the level at which government healthcare programs provide reimbursement for such drugs. These restrictions and limitations influence the purchase of drugs. 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.

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003, or the MMA, established the Medicare Part D program to provide a voluntary prescription drug benefit to Medicare beneficiaries. Under Part D, Medicare beneficiaries may enroll in prescription drug plans offered by private entities that provide coverage of outpatient prescription drugs. While all Medicare drug plans must give at least a standard level of coverage set by Medicare, Part D plan sponsors are not required to pay for all covered Part D drugs, and each Part D plan can develop its own drug formulary that identifies which drugs it will cover and at what tier or level. Despite this flexibility, Part D prescription drug formularies must include drugs within each therapeutic category and class of covered Part D drugs, though not necessarily all the drugs in each category or class and with some exceptions for certain classes of drugs. Any formulary used by a Part D prescription drug plan must be developed and reviewed by a pharmacy and therapeutic committee. Government payment for some of the costs of prescription drugs may increase demand for drugs for which we obtain marketing approval. Any negotiated prices for any of our products covered by a Part D prescription drug plan may be lower than the prices we might obtain from other payers.

A manufacturer must participate in a federal program known as the 340B drug pricing program by entering into various programs for federal funds to be available to pay for the manufacturer’s drugs under Medicaid. The 340B program requires a participating manufacturer to charge certain federally funded clinics and safety net hospitals no more than an established discounted price for its covered outpatient drugs, per a formula defined by statute to determine the discounted price, which is based on the AMP and the unit rebate amount as calculated under the Medicaid Drug Rebate Program, discussed further below. Manufacturers must report pricing information to CMS for HRSA on a quarterly basis. HRSA has also issued regulations relating to the calculation of the ceiling price as well as imposition of civil monetary penalties for each instance of knowingly and intentionally overcharging a 340B covered entity

The Inflation Reduction Act of 2022, or IRA, established substantial changes to the Medicare program with certain drug pricing reforms and a Medicare Part D benefit redesign. For example, the IRA includes measures intended to lower the cost of prescription drugs and related healthcare reforms, such as limits on price increases and subjecting an escalating number of drugs to annual price negotiations with CMS. Specifically, the IRA authorizes and directs HHS to set drug price caps for certain high-cost Medicare Part B and Part D qualified drugs, subject to an exclusion for certain orphan drugs, with negotiated pricing for limited drugs taking effect in 2026 with a second-year list being announced for 2027. The IRA authorizes HHS to penalize pharmaceutical manufacturers that increase the price of certain Medicare Part B and Part D drugs faster than the rate of inflation. Effective in 2025, the IRA also created significant changes to the Medicare Part D benefit design by capping Part D beneficiaries' annual out-of-pocket spending. The impact of the IRA on the broader pharmaceutical industry remains to be seen. Certain legal challenges from pharmaceutical manufacturers and others in the industry continue, including challenges to the constitutionality and administrative implementation of the IRA’s drug price negotiation provisions. We cannot predict whether the IRA, in whole or in part, will be overturned, repealed, replaced, or amended.

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In the U.S., Europe, and other potentially significant markets for our products and 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 products and product candidates or exclusion of our products and product candidates from coverage.

Achieving favorable CMS coverage and reimbursement is usually a significant gating issue for successful introduction of a new product because Medicare and Medicaid can represent a sizeable share of the market and because private payors often rely on the lead of the governmental payors in rendering coverage and reimbursement determinations. Further, the increased emphasis on managed healthcare in the U.S. and on country and regional pricing and reimbursement controls in Europe will likely put additional pressure on product pricing, reimbursement, and utilization, which may adversely affect our future product sales and results of operations. These pressures can arise from rules and practices of managed care entities, competition within therapeutic classes, availability of generic equivalents, judicial decisions and governmental laws and regulations related to Medicare, Medicaid, and healthcare reform, pharmaceutical coverage and reimbursement policies, and pricing in general. Patients who are prescribed treatments for their conditions and providers performing the prescribed services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Sales of our products and product candidates will therefore depend substantially, both domestically and abroad, on the extent to which the costs of our products will be paid by health maintenance, managed care, pharmacy benefit, and similar healthcare management organizations, or reimbursed by government health administration authorities, such as Medicare and Medicaid, private health insurers, and other third-party payors.

As a result of the above, we may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs required to obtain FDA approvals. Our products and product candidates may not be considered medically necessary or cost-effective. A payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Adequate third-party reimbursement may not be available to ensure acceptance and use of our products and product candidates or enable us to maintain price levels sufficient to realize an appropriate return on our investment in drug development. Legislative and regulatory proposals to reform healthcare or reduce costs under government insurance programs may result in lower reimbursement for our products and product candidates or exclusion of our products and product candidates from coverage. The cost containment measures that healthcare payors and providers are instituting and any healthcare reform could significantly reduce our revenues from the sale of products and any approved product candidates. We cannot provide any assurances that we will be able to obtain and maintain third-party coverage or adequate reimbursement for our products and product candidates in whole or in part.

PBMs, rebates and pricing transparency are key areas of legislative and regulatory focus and there may be changes in the regulatory landscape that could have a significant impact on the pharmaceutical supply chain and drug pricing more generally, which could affect our business operations and prospects in unknown and material ways.

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In addition, other legislative and regulatory changes have been proposed and adopted since the Affordable Care Act, or ACA, was enacted. These changes include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, starting in 2013, which will remain in effect through 2032 unless additional Congressional action is taken. In January 2013, the American Taxpayer Relief Act of 2012, which, among other things, further reduced Medicare payments to several providers, including hospitals and cancer treatment centers, increased the statute of limitations period for the government to recover overpayments to providers from three to five years. In 2017, CMS promulgated a rule reducing Medicare Part B reimbursement to hospitals for drugs purchased under the 340B program by 30%. Following an adverse U.S. Supreme Court decision, however, CMS subsequently modified its policies to restore certain payments owed to hospitals and to restore the reimbursement to the full, applicable rate going forward.

In recent years, there federal government, state governments, regulators, and third-party payors have implemented and continue to propose changes to control costs of healthcare, including pharmaceutical drugs.

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Since the ACA was enacted, there have been amendments and additional laws and regulations, such as the IRA. These changes include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, starting in 2013, which will remain in effect through 2032 unless additional Congressional action is taken. Additionally, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, effective January 1, 2024. Current and future health care reform proposals could limit the prices we are able to charge for our products or the amounts of reimbursement available for our products. Individual states in the United States have also become increasingly active in implementing regulations designed to control pharmaceutical product reimbursement within state healthcare programs and payers, including price or patient reimbursement constraints, rebates and other price concessions, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and other purchasing approaches. Future laws may result in additional reductions in third-party payer reimbursement, which could have a material adverse effect on customers for our products and product candidates, if approved, and, accordingly, our financial operations.

Any reduction in reimbursement from Medicare or other government-funded programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our drugs.

The cost of pharmaceuticals continues to generate substantial governmental and third-party payor interest and states have begun to take action to increase transparency in drug pricing through mandatory reporting requirements. We expect that the pharmaceutical industry will experience pricing pressures due to the trend toward managed healthcare, the increasing influence of managed care organizations, and additional legislative proposals. Our results of operations could be adversely affected by current and future healthcare reforms. While we cannot predict whether any proposed cost-containment measures will be adopted or otherwise implemented in the future, the announcement or adoption of these proposals could have a material adverse effect on our ability to obtain adequate prices for our products and product candidates and operate profitably.

Foreign Regulation

In addition to regulations in the U.S., we will be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our products to the extent we choose to develop or sell any products outside of the U.S. The approval process varies from country to country, and the time may be longer or shorter than that required to obtain FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing, and reimbursement vary greatly from country to country.

In the EU and the UK, both regulatory clearances by the national competent authority and a favorable ethics committee opinion are required prior to the commencement of a clinical trial. In the EU/European Economic Area, or EEA, Regulation (EU) 536/2014 on clinical trials, or CTR, requires the sponsor to submit a single clinical trial application, or CTA, through the Clinical Trials Information System, or the CTIS, an online portal to streamline the authorization process. While under the previously applicable Directive 2001/20/EC, or CTD, sponsors had to request separate approvals in each EU/EEA member state, the CTIS is a single-entry point that allows sponsors to apply for authorization to run a clinical trial in up to 30 EU/EEA countries. The CTIS authorization procedure is composed of two parts: (i) member states jointly cooperate during the Part I assessment of the applicable CTA and (ii) during Part II, the applicable CTA is assessed by each member state individually. All ongoing clinical trials in the EU/EEA were required to transition to the CTIS by January 30, 2025. This date marked the end of a three-year transition period that began when the CTR became applicable. Following the UK's departure from the EU, the CTR does not apply in the UK with the applicable rules currently being based largely on those set out in the CTD as have been implemented nationally via the Medicines for Human Use (Clinical Trials) Regulation 2004, as amended. However, new UK legislation was laid before Parliament in December 2024 which will update the existing regulations, and which aims to provide a more efficient, streamlined, and adaptable regulatory framework for clinical trials. Once made into law, the new legislation will come into force following a 12-month implementation period to ensure readiness.

Under the EU regulatory systems, in addition to using national authorization procedures (leading to a marketing authorization only valid in the relevant EU/EEA member state), an MAA may be submitted under the (i) centralized authorization procedure, (ii) mutual recognition procedure, or (iii) decentralized procedure. The centralized procedure provides for the grant of a single marketing authorization valid across all EU/EAA member states. This procedure is mandatory for certain medicines, optional for others, and not available for the rest. For example, the centralized authorization procedure is compulsory for medicines produced by certain biotechnological processes. Because our products are produced in that way, we would be subject to the centralized authorization

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procedure. Under the centralized procedure, pharmaceutical companies submit a single MAA to the European Medicines Agency, or the EMA. The application is reviewed by the Committee for Medicinal Products for Human Use, which issues a scientific opinion. The EMA then forwards this scientific opinion to the European Commission, which is responsible for deciding whether to grant the marketing authorization. Once granted by the European Commission, a centralized marketing authorization is valid in all EU member states, as well as the EEA countries. By law, a company can only start to market a medicine once it has received a marketing authorization.

Employees and Human Capital Management

As of December 31, 2025, we had 975 employees, 775 of whom were engaged in research and development, and commercial manufacturing activities, and 200 of whom were engaged in general and administrative support activities. None of our employees are subject to a collective bargaining agreement. Our employees are highly skilled, and many hold advanced degrees. Most of our employees have experience with the development of cell therapies. We consider our relationship with our employees to be good. We provide our employees with competitive salaries and bonuses, opportunities for equity ownership, mentoring, and development programs that enable continued learning and growth, career opportunities, and a robust employment package that promotes well-being across all aspects of their lives. In addition to salaries, these programs include potential annual discretionary bonuses, stock awards, Employee Stock Purchase Plan, a 401(k) plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, and flexible work schedules, among other benefits. We may take further actions, in compliance with all appropriate government regulations, that we determine to be in the best interest of our employees.

Available Information

We maintain a website at www.iovance.com and make available there, free of charge, our periodic reports filed with the U.S. Securities and Exchange Commission, or SEC, as soon as is reasonably practicable after filing. The SEC maintains a website at http:/www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers such as us that file electronically with the SEC.

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