3 Opportunities and 1 Risk for Iovance Biotherapeutics Stock

There are few opportunities in investing and life that do not involve risk. Just as if you try hard, there is rarely a cloud without hope. In that respect, Iovance Biotherapeutics (IOVA 5.76%) is a biotech company full of upcoming opportunities for investors, but it’s also still in the process of navigating significant risks that could cause major disruption.

If that doesn’t sound scary to you, it might be worth considering investing in. So, to get you started thinking about this stock, let’s look at three potential upsides and one potential pitfall.

1. Approval of the first treatment is getting closer

Iovance’s biggest near-term opportunity is that its advanced melanoma treatment, Lipoleucel, will have a chance to win regulatory approval from the Food and Drug Administration (FDA) on or before February 24. We will stay ahead of regulators in the EU and Canada.

If all goes according to plan, the company could become quite profitable before 2025. Wall Street analysts calculate that the company could bring in up to $426 million in revenue this year, although the average analyst estimate is much lower. A total of $152 million. Given that Iovance doesn’t have a drug on the market or generate much revenue from collaborations, it’s likely that first-time revenue growth will be quite beneficial for shareholders.

2. Other candidates are lagging behind on key programs.

Lifileucel is being studied not only for the treatment of melanoma. It’s not the only late-stage program in Iovance’s pipeline, either.

Lipileucel is also being studied in phase 3 clinical trials for cervical cancer and non-small cell lung cancer (NSCLC) and as a combination treatment with active ingredients for melanoma. MerckAbout Keytruda. The global market for melanoma treatments is expected to be worth more than $12 billion by 2028, according to a report by Research and Markets. And at that point, Iovance could potentially have four approved indications and a combination therapy approved for marketing.

The success of the first entrant will undoubtedly dramatically increase the chances of subsequent entries being accepted. Because the candidates leverage the same technology and are manufactured and managed in the same way. But unless there’s a wipeout in final-stage testing (and that might happen), the business looks set to have favorable times ahead.

3. The platform can provide a long life cycle for each commercialized program.

Importantly, the biotech is pursuing clinical trials for a variety of niches within cancer treatment, which is a long-term opportunity in itself.

This means that some of the late-stage programs are aimed at patients with treatment-resistant cancer, while others are aimed at first-line use as part of the initial regimen of anti-cancer treatments patients receive after diagnosis. The advantage of this approach is that each new approval expands that market by reaching the largest number of patients possible.

Moreover, the company’s pipeline strategy supports expanding indications to increase revenue once a drug enters the market. Simply put, Iovance has been planning for years to squeeze every drop of profit out of its research and development (R&D) funds, and now it’s time to start reaping the fruits of its ongoing efforts.

One risk: clinical holds could resolve with the worst possible outcome.

Despite the three opportunities outlined above, Iovance currently faces significant risks. On December 27, the FDA said it had instituted a clinical hold on clinical trials for a program called LN-145, following the death of a patient in the trial five days earlier.

The patient’s death was not initially due to side effects of the treatment itself. The working theory is that it is caused by the intended effect of conditioning therapy that the patient must undergo prior to treatment to prepare the system for treatment. Because the conditioning process involves depleting the patient’s white blood cells, it can be particularly dangerous for people who already have a serious illness.

The risk is that the FDA will require biotech companies to make some major changes to their treatment protocols. In a way that potentially makes the treatment less effective or difficult to administer to vulnerable subgroups of patients. This would require changes to be made throughout Iovance’s cell therapy pipeline, which would have detrimental effects on multiple programs that require the same conditioning process. It is also unlikely that regulators will halt clinical trials entirely.

Investors should not rush to sell stocks at this time. While the odds of the hold being lifted in the coming months are favorable to the company, it’s clear that regulators will be particularly wary of safety concerns when evaluating LN-145 for approval after Phase 3 trials conclude. In the long run, the very difficult lessons learned from this incident may help reassure investors and patients that such tragedies will never happen again.