Iovance Stock Has Been Hammered. Is This the Buying Opportunity Aggressive Investors Have Been Waiting For?
Key Points
Iovance Biotherapeutics has surged over the past year, but the stock is down by nearly 80% over the past five years.
Past issues with dilution and disappointment may be clearing up, given recent sales growth and the company's current cash position.
While still a high-risk play, there's much in Iovance's corner that may make it one of the more interesting opportunities right now among early-stage biotech stocks.
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Iovance Biotherapeutics (NASDAQ: IOVA) is not for the faint of heart. While shares in this biotech company are up 50% year to date and over 125% over the past 12 months, the stock has experienced high volatility in the past.
In fact, Iovance is down nearly 80% over the past five years. Results and updates may be better than feared now, but disappointment could still arise. While risk is high, certain factors at play may make Iovance one of the biotech stocks worth a closer look.
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The bull case for Iovance Biotherapeutics
Iovance focuses on developing tumor-infiltrating lymphocytes (TILs) for cancer treatment. The company has reached the commercialization stage, with melanoma treatment Amtagvi as its flagship drug. Previously, Iovance's management has suggested that Amtagvi could eventually become a blockbuster drug, with peak annual sales exceeding $1 billion.
However, it's taken significant time and capital to bring this drug to market. To sustain itself, Iovance has often tapped into dilutive sales of newly issued stock. While promising figures have helped spark a comeback for Iovance, shares took a brief dive earlier this month after the company reported a revenue miss. Iovance reported $71 million in sales, while sell-side analysts expected around $75.6 million.While not fully back in favor yet, there are substantive reasons why the risk/reward proposition with stock is in one's favor.
What makes this risky biotech stock stand out
Although first-quarter results fell short of expectations, the company did report 45% year-over-year sales growth. Management's latest guidance updates suggest 30% to 40% revenue growth for the full year . High sales growth could persist, especially as Iovance advances its TIL therapy pipeline for other cancer types.
With $319 million in cash on hand, management believes this is enough to fund operations through 2028, suggesting a low risk of near-term shareholder dilution. If Iovance can continue to ramp up Amtagvi sales while advancing its clinical trials, shares could keep retesting prior price levels.
Keep in mind Iovance's high risk, but consider it one of the stronger plays in this space right now.
Should you buy stock in Iovance Biotherapeutics right now?
Before you buy stock in Iovance Biotherapeutics, consider this:
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Thomas Niel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Iovance Biotherapeutics. The Motley Fool has a disclosure policy.
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