Shares of Iovance Biotherapeutics (NASDAQ:IOVA) fell as much as 15.7% today after the company announced a proposed public offering of common stock. The development-stage biopharma is looking to raise up to $575 million in gross proceeds. Although pricing has yet to be announced, an offering of that magnitude would lead to a roughly 15% increase in the number of shares outstanding.
News of the proposed stock offering was coupled with the release of new clinical data for lifileucel in advanced melanoma. In the C-144-01 study, the first 68 patients in cohort 4 achieved an overall response rate (ORR) of 32.4% at a median follow-up of 5.3 months. In cohort 2, the median duration of response (how long patients maintain a response without relapse or death) had not been reached at 18.7 months of follow up. The ORR in cohort 2 was 36.4%.
Of course, investors are widely expecting lifileucel to earn regulatory approval in the near future, which helps to explain why the encouraging data didn't offset concerns of significant dilution from the stock offering. As of 12:42 p.m. EDT, the pharma stock had settled to a 13.7% loss.
Iovance Biotherapeutics is developing a pipeline of cell therapies taking aim at cancers. The lead drug candidates are tumor infiltrating lymphocytes (TILs), although earlier-stage assets now include peripheral-blood lymphocytes (PBLs) and an interleukin-2 analog. The company is widely expected to earn regulatory approval for lifileucel in advanced melanoma and LN-145 in advanced cervical cancer.
In recent months, rumors swirled that the biopharma had been approached for a potential buyout, but today's public offering of common stock suggests Iovance Biotherapeutics is preparing to make the transition to commercial-stage operations without a sale. That could be another factor weighing on shares today.
Investors with a long-term mindset might not mind the stock offering, although it will result in a significant amount of dilution. The business ended March with $240 million in cash, cash equivalents, and short-term investments. Adding another $575 million in gross proceeds from the public stock offering would allow Iovance Biotherapeutics to hit the ground running with potential drug launches and invest in early stage assets.