Shares of Iovance Biotherapeutics (IOVA 0.87%) were crashing 22.4% lower as of 11:17 a.m. ET on Wednesday. The steep decline came after the company announced that the U.S. Food and Drug Administration (FDA) has placed a clinical hold on the IOV-LUN-202 clinical trial evaluating experimental therapy LN-145 TIL in treating non-small-cell lung cancer (NSCLC).
The FDA's clinical hold was put into effect following a patient death in the IOV-LUN-202 study. Iovance said in a press release that the fatality was "potentially related to the non-myeloablative lymphodepletion pre-conditioning regimen" of the clinical trial.
What will Iovance do now?
Iovance stated that it is pausing enrollment of new patients in the IOV-LUN-202 study while the FDA's clinical hold remains in effect. The company will, however, continue to administer LN-145 TIL to patients already in the study who have undergone tumor resection but with "additional precautions and risk mitigations." It will also closely monitor patients who were previously treated with the experimental therapy.
Is Iovance stock a buy on the sell-off?
An FDA clinical hold would be even more devastating for many clinical-stage biotech stocks. However, LN-145 TIL isn't Iovance's lead candidate. The company awaits an FDA approval decision on lifileucel in treating advanced melanoma with a PDUFA date of Feb. 24, 2024. The setback for LN-145 TIL shouldn't affect this decision.
Iovance could be an attractive stock to buy on the sell-off for aggressive investors. If approved, lifileucel could generate peak annual sales of nearly $900 million. This potential makes Iovance's valuation look pretty good with the company's market cap now at $1.7 billion.
Risk-averse investors, however, will probably want to avoid Iovance. There are other stocks to consider buying that are much less volatile.
