| SEGMENT INFORMATION |
NOTE 11. SEGMENT INFORMATION The Company operates in one segment, focusing on innovating, developing, and commercializing therapies using its autologous TIL cell therapies for patients with solid tumor cancers. The Company is executing the U.S. launch of Amtagvi®, the first product within its autologous TIL cell therapy platform, while also marketing and distributing its Proleukin® product used in the Amtagvi® treatment regimen. The Company’s Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer, who uses net loss as measurement of segment loss and monitors results against budget to evaluate and assess performance of the Company and resource allocation within the Company. The measure of segment assets is reported on the balance sheet as total consolidated assets. The table below highlights the Company’s revenue, expenses and net loss for the segment and is reconciled to net loss on a consolidated basis for the three months ended March 31, 2025 and 2024. | | | | | | | | | Three Months Ended | | | March 31, | (in thousands) | | 2025 | | 2024 | Net sales | | $ | 49,324 | | $ | 715 | | | | | | | | Direct cost of goods sold (a) | | $ | 42,975 | | $ | 2,330 | Acquisition related cost of sales (b) | | $ | 5,440 | | $ | 4,931 | Royalties | | $ | 1,326 | | $ | — | | | | | | | | Total cost of sales | | $ | 49,741 | | $ | 7,261 | | | | | | | | Expenses | | | | | | | | | | | | | | Research and development | | $ | 64,488 | | $ | 70,288 | General and administrative | | $ | 22,250 | | $ | 17,962 | Sales and marketing | | $ | 11,097 | | $ | 5,154 | Other segment items (c) | | $ | 17,911 | | $ | 13,027 | | | | | | | | Total expenses | | $ | 115,746 | | $ | 106,431 | | | | | | | | Net loss | | $ | (116,163) | | $ | (112,976) |
| | a) | Direct cost of goods sold represents inventory and period costs related to overhead and manufacturing costs of Amtagvi® as well as costs associated with the purchases and sales of Proleukin®. Also included are manufacturing and period costs incurred for Amtagvi® that do not meet specifications or a patient is unable to receive the infusion (i.e., scrap) unless they can be administered as part of a clinical trial in an expanded or early access program, or single-patient IND, in which cases related costs are recorded as research and development expenses based on the fact the Company receives clinical data related to these infusions. This category is provided to the CODM on a quarterly basis in comparison to that of previous quarters for review as these costs are controllable costs that indicate operating performance of the Company. | b) | Acquisition related cost of sales represents amortization expenses for the developed technology intangible assets and the milestone payment recorded as part of the acquisition of Proleukin® and the fair value step-up of acquired Proleukin® inventory which is recognized as the acquired inventory units are sold. This category is provided to the CODM on a quarterly basis as costs in this category are often reviewed separately in evaluating the performance of the Company because these costs are fixed and uncontrollable costs in nature, and do not affect cashflows of the Company. | c) | Other segment items include costs that are not considered significant expense segments nor reviewed by the CODM on a regular basis. Such amount includes stock-based compensation expenses, interest income, other income and expenses, and income tax benefits. |
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