Shares of Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), a clinical-stage biotech developing novel cancer immunotherapies, fell 10.2% on Monday. After a weekend to think it over, investors don't seem so thrilled about a recent secondary offering.
According to Iovance, last week the Food and Drug Administration said the company doesn't need to run a big expensive controlled study to support an application for its lead candidate, lifileucel, a novel cellular therapy based on tumor-infiltrating lymphocyte technology. Instead, the company will simply add a new cohort of melanoma patients to an ongoing phase 2 study.
Once drugmakers have solid phase 2 results in hand, it's standard practice to meet with regulators to chart a path forward. It's important to bear in mind that these meetings are not subject to disclosure. In fact, the FDA can't even warn the public when companies mislead investors about the details discussed. That's why investors were a bit surprised to see Iovance stock jump, following a dilutive secondary share offering that was inspired by the end-of-phase-2 meeting results.
Since Iovance hasn't spoken since it raised an impressive $220 million last Friday, it looks like investors had second thoughts today.
Iovance intends to use the proceeds of last Friday's offering to fund ongoing studies with lifileucel, plus two new phase 2 trials with LN-145 as a potential treatment for soft-tissue sarcoma, osteosarcoma, and ovarian cancer.
The company lost $57 million in the first half of 2018, and running more studies will probably accelerate the losses. It recently raised $220 million, in addition to a cash balance that stood at $276 million at the end of June; this gives Iovance plenty of time to produce encouraging data before management needs to ask for another handout.