Shares of pre-revenue biopharma Iovance Biotherapeutics (NASDAQ:IOVA) rose nearly 30% today after the company announced preliminary results from two phase 2 trials evaluating one of its lead drug candidates as a potential treatment for head and neck and cervical cancers.
Management also took advantage of the soaring stock price to announce a share offering that will provide gross proceeds of $172.5 million if all options are exercised. While the offering could add 15 million shares to the number outstanding -- and result in 40% total dilution since the end of 2016 -- Wall Street seemed to be shaking off any concerns of dilution. Were the data really that promising?
As of 12:45 p.m. EST on Thursday, the stock had settled to a 27% gain.
Iovance Biotherapeutics released preliminary data for LN-145, a tumor-infiltrating lymphocyte (TIL), which is a type of immune cell that attacks tumors. The manufacturing and clinical processes for TILs are similar to those utilized by chimeric antigen receptor T-cell (CAR-T) immunotherapies, in which the target immune cells are extracted from a patient's body, grown up in the lab, and then readministered in higher number and potency.
Given Wall Street's recent hysteria over everything and anything considered an immunotherapy, it was a good week for Iovance Biotherapeutics to cash in. So, what about those data?
The preliminary data released for LN-145 concerned two phase 2 trials, one evaluating head and neck cancers, the other evaluating a type of cervical cancer. The drug candidate was shown to produce a confirmed partial response in three of eight (38%) evaluable patients with a certain type of head and neck cancer, and in one of two (50%) evaluable patients with a specific type of cervical cancer.
Let's unpack that. First, it's very difficult to draw any conclusions about the drug's efficacy or safety from just eight and two patients, respectively. That makes it seem a little ridiculous to provide any update at all, but such is the life for a pre-revenue biopharma.
Second, even forgetting the small patient populations, 38% and 50% partial response rates, respectively, don't seem so great on the surface. But it's all relative. The 10 patients evaluated to date had all received prior treatments and still had recurring cancers. The most advanced treatments for similar cancers are anti-PD-1 therapies, which themselves sport an overall response rate of 13% to 16% in head and neck cancers. So if the percentages (partial response rate and overall response rate are not exactly apples-to-apples, but...) hold throughout the development of LN-145, then Iovance Biotherapeutics and its TIL approach could prove valuable.
It's way too early to begin anointing Iovance Biotherapeutics the undisputed king of immunotherapy. The data released are for a small group of patients -- which will only expand to 47 total once the phase 2 trial in head and neck cancer is in the books -- and are incomplete. They hint at a promising future, but there's a long and expensive road ahead. At least the company has over $200 million in cash to develop its pipeline.