Why Iovance stock fell 18% today

Iovance Biotherapeutics (IOVA -18.62%) The stock fell as much as 18% today after first quarter numbers were released Thursday evening. The selling clearly suggests that investors didn’t like everything they heard. But the merciless response to the news appears to have overlooked important details about the report.

Unrelated quarterly reports

Iovance Biotherapeutics did $715,000 worth of business in the three months ended March, losing $113 million (or $0.42 per share) in the process. Losses were somewhat in line with estimates, but revenue fell short of analysts’ average sales expectations.

But what’s confusing is that last quarter’s numbers are largely irrelevant. For all intents and purposes, the company’s business has only begun in the ongoing quarter.

Iovance Biotherapeutics has been developing and refining tumor-infiltrating lymphocyte (TIL) science over the past several years. Lymphocytes are the body’s naturally occurring means of fighting disease, including cancer. But sometimes our immune system needs a little help.

The science of Iovance now provides that help. The flagship drug, called Amtagvi, was first approved in February of this year as a means of treating certain forms of advanced melanoma.

However, pharmaceutical companies cannot begin mass production the day after receiving approval for a new drug. Even when fully ready, it may take time to ramp up production and get new treatment options into the hands of caregivers. And for Iovance Biotherapeutics, it may take longer than usual. That’s because each Amtagvi treatment is tailored to the patient using it.

Last quarter’s earnings did not reflect this business. But next quarter will start. More than 100 patients have enrolled in this treatment since it was first approved.

So where did last quarter’s profits come from? It reflects the sales of Proleukin, which Iovance acquired in early 2023. This drug improves response to some immunotherapy drugs, including Amtagvi.

Proleukin itself was never intended to be a major profit center for Iovance, making it difficult for analysts to forecast sales in any given quarter. The first quarter of this year was no exception.

Buy Iovance Biotherapeutics Stock on This Dip

Friday’s setback is certainly painful for shareholders. But ultimately, this is a buying opportunity for interested newcomers.

See, Amtagvi isn’t just a promising drug. This is the first tumor-infiltrating lymphocyte therapy to receive regulatory approval. I don’t think it will be the last though. Iovance has nearly 20 other TIL trials underway for other forms of cancer. Analysts at GlobalData believe Amtagi alone will generate annual revenue of about $1 billion by 2030.

Given this outlook, Iovance Biotherapeutics’ stock price will likely bounce back from today’s slump sooner rather than later. If you’re jumping in, make sure you’re comfortable with extreme volatility.