What happened

Shares of Iovance Biotherapeutics (IOVA 5.26%) gained 40.1% last month, according to numbers from S&P Global Market Intelligence. The move, largely driven by an update on a key clinical trial, reverses a downtrend that had been underway since February.

So what

Iovance Biotherapeutics may be one of the most promising names in the field of immuno-oncology, but that didn't prevent the stock from losing 70% of its value between February's high and May's low.

A concerning fourth-quarter update kicked off the cascade of selling that ended (ironically enough) in May, when Iovance's CEO Maria Fardis resigned following word that the prospective approval of its tumor-fighting candidate Lifileucel had been delayed...again. In this particular case, however, the stock's plunge in response to the news also flushed out the last of the prospective sellers, priming shares for a rebound.

A person in a business suit plots a rising chart of range bars on a digital screen.

Image source: Getty Images.

That much-needed rebound catalyst materialized on June 4, when the company posted updated efficacy data for the beleaguered drug as a treatment for a targeted segment of melanoma patients. Specifically, for advanced melanoma patients who are immune checkpoint inhibitor (ICI)-naive, the combination of Lifileucel and pembrolizumab demonstrates an overall response rate of 86%, and a complete response rate of 43%.

In simpler terms, delayed or not, the drug holds promise that the market seems to have lost sight of earlier in the year.

Now what

Biotech stocks are already difficult enough to trade. Pre-revenue biotech names like Iovance Biotherapeutics are even trickier to handle. Drama like unexpected CEO exits and approval delays makes such matters even more complicated.

Eventually, though, the risk-adjusted value of a company's pipeline -- its complete pipeline -- is reflected in the stock's price. That's what's starting to happen now for Iovance shares.

The stock soared for the better part of 2020, but perhaps sensing something wasn't quite right early this year, traders sold shares for most of 2021 to date; Fardis' resignation served as something of a capitulation. Now the actual potential of Lifileucel as a melanoma treatment is coming back into focus, along with the company's eight other trials and five other therapies in development. The market likes what it sees.

Better still, with shares well below February's high (near $53 per share) as well as under the consensus target of $40.31, there's lots of room for the stock to continue making bullish progress directly from its current price of around $25 per share.