Shares of Iovance Biotherapeutics (IOVA 6.93%) have been on a roller-coaster ride over the past few days. That's likely because investors don't know what to make of press releases that don't quite jibe with a big disclosure the company recently made regarding CEO Maria Fardis.
On May 18, Fardis notified the company she would be resigning "to pursue other opportunities." That's a little hard to swallow because the company recently reported highly successful clinical trial results.
Why Iovance Biotherapeutics stock fell
Iovance hasn't elaborated on the other opportunities Fardis will pursue, but they probably don't involve drug development. And on the same day we learned of her departure, we also learned that Iovance's upcoming new drug application for lifileucel will be delayed until the first half of 2022.
The lifileucel program will be delayed because the FDA recently made a second request for additional data regarding potency assays, which are a series of tests that prove the company can consistently manufacture the product in question. This was always going to be tough because each patient's batch of lifileucel is made from cells harvested from that patient's own tumor.
Iovance stock has been extra volatile because it looks like the company's management team isn't up to the challenge it's facing. Those who follow the company had been expecting an application for lifileucel to reach the FDA in 2020, but in October, the FDA made its first request for additional data regarding potency assays. Apparently, the company's response did not satisfy the regulator.
Putting together an application package for the FDA is a daunting task, but Iovance has collected more than enough capital from investors over the years to hire experts who can do the job without committing a series of unforced errors. That context suggests that Fardis was forced out of her position by a disappointed board of directors.
Why the stock bounced back the next day
Iovance Biotherapeutics is a clinical-stage company now, but it probably shouldn't be. The company's lead candidate, lifileucel, has already produced sufficient evidence of efficacy as a treatment for advanced-stage melanoma. In addition to impressive response rate data as a monotherapy that excited investors in 2019, combining lifileucel with an already-approved immunotherapy looks extremely promising. On May 19, Iovance stock rebounded after the company revealed data from a study in which lifileucel was administered to advanced-stage melanoma patients in combination with Merck's (MRK 2.35%) immunotherapy Keytruda. The combination shrank tumors for 86% of participants.
Keytruda is one of several PD-1 inhibitors that help immune systems fight cancer by limiting tumor cells' ability to block the immune system from attacking them. These treatments can be highly effective, but they don't work as often as we'd like them to. On its own, Keytruda only shrinks tumors for around one-third of treatment-naive melanoma patients who try it. Based on the data so far, it appears that adding lifileucel to the treatment regimen could more than double that response rate.
Still not enough?
While it looks like Fardis is being forced out by Iovance's board of directors, there's also a chance she's jumping from a ship that outside investors don't realize is sinking. Iovance Biotherapeutics has produced impressive results with its personalized cell-based approach, but simpler cancer treatments could make Iovance's lead candidate obsolete before investors can realize a return.
For example, Bristol Myers Squibb (BMY 1.49%) recently announced success with an anti-LAG-3 antibody called relatlimab. This isn't a cell-based treatment, but it might solve some of the same problems lifileucel addresses without lifileucel's extra-complicated manufacturing process.
Bristol Myers Squibb said that combining relatlimab with Opdivo, the company's PD-1 inhibitor, significantly reduced melanoma patients' risk of disease progression compared to treatment with Opdivo on its own. A majority of patients treated with relatlimab plus Opdivo went 10.1 months or longer without their cancer worsening compared to just 4.6 months for those given Opdovo monotherapy.
Time to buy?
Biotech investors do best when they think long term, but the road ahead of Iovance Biotherapeutics is extremely hazy. It's probably best to look for better biotech stocks while this company's story unfolds.