| SEGMENT INFORMATION |
NOTE 10. 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. Beginning in the third quarter of 2025, the Company began separately presenting depreciation and amortization expense on the condensed consolidated statement of operations as well as in its internal reporting to the CODM. As a result, the Company has recast prior period amounts to align with the information that is used by the CODM. 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 and six months ended June 30, 2026 and 2025. | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | June 30, | | June 30, | (in thousands) | | 2026 | | 2025 | | 2026 | | 2025 | Net sales | | $ | 99,313 | | $ | 59,952 | | $ | 170,743 | | $ | 109,276 | | | | | | | | | | | | | | Cost of sales | | | | | | | | | | | | | Cost of goods sold (excluding depreciation and amortization) (a) | | $ | 39,809 | | $ | 45,503 | | $ | 78,637 | | $ | 84,471 | Stock-based compensation | | | 1,536 | | | 2,149 | | | 2,555 | | | 4,569 | Royalties | | | 2,250 | | | 1,229 | | | 4,901 | | | 2,555 | Total cost of sales | | $ | 43,595 | | $ | 48,881 | | $ | 86,093 | | $ | 91,595 | | | | | | | | | | | | | | Expenses | | | | | | | | | | | | | Research and development | | $ | 53,773 | | $ | 71,569 | | $ | 111,143 | | $ | 137,619 | General and administrative | | | 18,617 | | | 19,668 | | | 37,317 | | | 39,524 | Sales and marketing | | | 15,536 | | | 11,472 | | | 30,652 | | | 24,830 | Depreciation and amortization | | | 9,500 | | | 9,350 | | | 18,039 | | | 17,415 | Other segment items (b) | | | 5,607 | | | 10,670 | | | 13,859 | | | 26,114 | Total expenses | | $ | 103,033 | | $ | 122,729 | | $ | 211,010 | | $ | 245,502 | | | | | | | | | | | | | | Net loss | | $ | (47,315) | | $ | (111,658) | | $ | (126,360) | | $ | (227,821) |
| | a) | Cost of goods sold represents inventory and period costs related to overhead, manufacturing costs of Amtagvi®, and reserves associated with excess and obsolete inventory, 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. For patients that can be administered Amtagvi® as part of a clinical trial in an expanded or early access program, or single-patient investigational new drug submission, 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) | 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 (excluding stock-based compensation included in cost of sales), interest income, other income and expenses, and income tax benefits. |
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