Have had company in town so have not posted but have been watching this huge sell-off. In thinking about what is driving this, I really think it comes down to communication. Before I retired, I had worked with several C-suite execs and, when we were pulling together presentations for S&P or Investor groups, the best ones always said "What story are we looking to tell" and then we would build the presentation based on the message we wanted to send. If you do not do that, analysts will create their own story and it will almost certainly be worse than the message you are trying to send.
Specific to Iovance, I was trying to create a patient pipeline to see where the 160+ patients fell and what would be the attrition rate at each step. In doing so, I started to find a lot of unanswered questions and to how much of the 160+ would actually generate revenue. Specifically:
1) Screening - how is this defined and what is the drop out criterial? Outside of label (heart, pulmonary, renal issues) is for sure, but anything else. I think the "not melanoma" actually generated more questions here even though I suspect it was an oddity that they pointed out. I do have a question to IR to define criteria for sceening vs enrolled, but having waited a week, radio silence, which does not help.
2) Enrolled
a) Insurance - drop out rates due to insurance denial (in policy and Medicare/Medicaid should be low but what about single case agreements).
b) Surgery - inability to get appropriate biopsy or selected tumor site is dead - should be low due to screening, but not sure
c) Manufacturing - ability to extract get sufficient TIL from sample - 10% was given but does this include any of the above
d) QA step - TIL cells did not multiply to appropriate volume - assume this was include in the 10% but again, not sure. Again, sent request to IR and nothing.
e) Health status - how many patients have health deterioration during the overall process which generates a failure and is this included in the 10%?
Then you have the differing timelines:
1) Screening - 1 week for referral, travel, consultation and doctor/patient decision? May depend on distance to Cancer Center.
2) Insurance Authorization - 3-4 days where policy agreement exists and Medicare/Medicaid??? and 3-4 weeks for SCAs?
3) Surgery - 3-4 days (but may also depend on travel/distance
4) Manufacturing and Assay QA - 22 days and 12 days respectively
5) Scheduling infusion - 2 days to 2 weeks?
The more I break this down, I can see where analysts may be including a pretty high attrition rate. I understand why Iovance does not want to provide guidance since there is a lot of unknowns in projecting the future, but they really should be disclosing known facts (patients in each phase and drop out rates if they are known to Iovance and if not, say so). Fred saying "I cannot give that number because then you would get revenue" was probably the wrong answer. There are still unknowns but analysts will come up with their own answer anyway so unless the number is "bad" or you really need to put context around it (i.e. full patient journey timeline), not giving it raises doubts.
In going thru this step process, I can see where analysts could be concerned about the attrition rate and thus revenue. On top of that, the timeline is longer as people were thinking (myself included) as everyone was focused on the 34 days, but you have screening, surgery, insurance authorization and scheduling infusion delays as well. The problem in this space is that it is not just pushing revenue into the next quarter but if the patient deteriorates during that time, it could be a complete loss of revenue.
I just hope they start disclosing more facts because if they do not, people will make up their own facts and will almost be certainly worse than reality.... in this case, silence is NOT golden.
AI
