Shares of Iovance Biotherapeutics (NASDAQ:IOVA) jumped over 51% last month, according to data provided by S&P Global Market Intelligence. While investors were dealing with the broader market sell-off over coronavirus fears, Bloomberg reported that the development-stage biopharma was engaged in takeover talks. That was all investors needed to run into the stock.
In fact, the pharma stock has proven surprisingly resilient throughout the current market correction. Investors have grown increasingly worried about global economic disruption since the end of February, but shares of Iovance Biotherapeutics have gained 57% since the beginning of February -- and that includes a drop of more than 10% on March 9.
Although investors shouldn't get too carried away with speculation, the existence of talks with potential buyers isn't too surprising. Many established pharma companies have signaled their willingness to gobble up promising assets in gene and cellular therapies. Iovance Biotherapeutics is one of the few companies in the nascent space with robust clinical data in hand.
The company's two lead drug candidates have performed well in clinical trials. Lifileucel is poised to become one of the most effective treatment options for advanced melanoma, while LN-145 is positioned to earn the same title in advanced cervical cancer. Management provided a recap of the latest clinical results on the full-year 2019 earnings conference call.
This is a tricky situation for investors to navigate. The stock market is in a correction. Shares of Iovance Biotherapeutics have increased due mostly to speculation (albeit well-founded speculation). While the long-term potential of the company's pipeline exists independently of an acquisition, the stock could give up recent gains if a buyout falls through. The best thing to do is maintain a long-term mindset.