Iovance Biotherapeutics (IOVA 0.87%) has reached a major turning point in its story as a company. Later this month, the U.S. Food and Drug Administration (FDA) is set to issue a decision on what could become the company's first commercialized product developed in house. Regulators are reviewing lifileucel for advanced melanoma, the most dangerous form of skin cancer.
In spite of this upcoming -- and potentially positive -- catalyst, Iovance stock has been in the doldrums for quite some time. In fact, the shares have lost more than 80% over the past three years. Now, though, with a possible new revenue source on the horizon, is Iovance a buy? Let's find out.
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Iovance's technology
So, let's talk a bit about Iovance's technology and this close-to-market lead product candidate. Iovance is developing therapies that harness the power of the body's own ability to attack cancer cells. Tumor infiltrating lymphocytes (TIL) generally put up a good fight, but when cancer prevails, they need a helping hand.
This is when Iovance steps in. The company's process involves collecting TIL, reinvigorating them, and then returning them to the patient. Iovance uses this technology throughout its pipeline, with seven clinical trials ongoing and five tumor types being targeted in these studies. About 91% of all cancer cases involve solid tumors, so the market opportunity is huge -- as long as Iovance's TIL therapy candidates perform well in clinical trials.
This brings us to lifileucel. This therapy could stand out from current options, and eventually even become a game changer, because it's designed as a one-time treatment and is a form of personalized medicine, relying on an individual's own cells. Pharma and biotech companies have made the idea of personalized medicine a research priority in recent years, as it offers a precision that traditional medicines don't.
Iovance has worked to make a potential launch of lifileucel successful. The company has helped establish authorized treatment centers and expects 50 to be ready within three months of an approval. Iovance already is working with these locations on important issues such as patient access and reimbursements, and thanks to these efforts, the company expects rapid uptake of the treatment.
More than 5,000 patients could be affected
The company's cell therapy center has been manufacturing these therapies for its clinical trial patients, and it currently has the capacity to support production for more than 2,000 patients annually -- but Iovance has the space to increase this to more than 5,000 patients.
All of this sounds very positive, but Iovance also is facing a challenge at the moment regarding another potential product. Regulators put a clinical hold on the company's TIL trial for non-small lung cancer back in December following the death of a participant. The death may have been linked to the heavy preconditioning process patients must undergo before receiving the actual treatment, the company said.
It's important to keep in mind that patients in this trial -- who have a poor prognosis and limited treatment options -- are in extremely fragile condition. It's too early to predict what the FDA will decide, and possibilities are many -- from a continuation of the trial as it stands to a move that would greatly reduce the revenue potential of the treatment or even halt development.
Though this isn't good news, it's part of the drug discovery path, and most pharma and biotech companies do face this sort of situation along the way. This means it's also a risk to accept if you decide to invest in these companies. Generally, though, when a company has several candidates in the pipeline, one setback won't interfere with the long-term picture.
Is Iovance a buy?
Now let's get back to our question: Before the FDA decision on lifileucel, is Iovance a buy?
As I've pointed out, the company could have a major positive catalyst ahead -- a potential approval of this TIL therapy and the revenue that would follow. But the company also faces some uncertainties. A positive regulatory decision isn't guaranteed. And we still don't know what will happen next with the company's lung cancer candidate, currently on hold.
Depending on regulatory decisions ahead, the stock could soar or plummet. That said, there's reason to be optimistic about Iovance's potential over the long term, thanks to positive clinical trial data and the fact that it's studying TIL in several tumor types. So there are many possibilities for revenue down the road.
All of this means that Iovance could make a solid long-term buy today -- but not for everyone. Cautious investors would be better off waiting on the sidelines, but investors who don't mind a bit of risk should consider picking up shares of this innovative biotech stock at this key moment.
