What happened
Shares of Iovance Biotherapeutics (IOVA +1.58%) are down 53% as of 12:24 p.m. ET Friday, according to data from S&P Global Market Intelligence, following the release of disappointing results from a pivotal melanoma drug trial released Thursday evening.
So what
It's potentially a bit confusing. Iovance had already reported solid results for melanoma treatment Lifileucel in the middle of last year, ultimately finding a response rate of 36%. That was for a different subset of patients, however. This follow-on study of cancer patients with advanced melanoma who had shown improvement after previously receiving and responding to anti-PD-1/L1 therapies isn't as encouraging, with an objective response rate of only 29%.
In simpler terms, the drug may not work quite as well as it initially seemed it would.
Image source: Getty Images.
It should be noted, however, that the latter set of trial participants began their care with a "higher baseline disease burden in comparison to patients in Cohort 2" whom investors are using to make the comparison. Given the additional challenges at the onset, Iovance Biotherapeutics' management feels strongly enough about the newly posted results to proceed with plans to file a Biologics License Application with the FDA in August.
Now what
The apparent waning efficacy of Lifileucel is a concern, to be sure, though not necessarily one that merits Iovance's stock being cut in half. Lifileucel is proving effective for certain cancer patients. And while the drug features prominently in its pipeline, it's not the entirety of that pipeline, which currently features more than a dozen other trials.
But Iovance still isn't a name inherently worth owning for all investors. Biotech and biopharma companies are risky and difficult to evaluate, particularly when they're not yet producing any revenue...which Iovance Biotherapeutics isn't. So it's not a great pick for most investors at any price.
If it's a stock and story you've had your eye on for a while, though -- and if you understand the science and competitive potential of Lifileucel and the company's other R&D efforts -- the scope of this sell-off may be a bit too extreme for some speculators to pass up.
