With shares of Iovance Biotherapeutics (IOVA 0.87%) soaring by 175% in the last three months, Wells Fargo analyst Yanan Zhu thinks they could still go as much as 47% higher. In fact, on Feb. 20, the analyst raised his price target for the stock from $17 to $22. Yanan wasn't alone in making a bullish call, either; Goldman Sachs analyst Andrea Tan also hiked her price target significantly, as did several others.
The reason for the spate of price target hikes is doubtlessly the company's recent victory delivered by the Food and Drug Administration (FDA). On Feb. 16, regulators granted an accelerated approval for Iovance's lead candidate, a cell therapy for advanced melanoma called Amtagvi.
Bullish catalysts abound for Iovance
Now, the biotech will commercialize its first medicine, generating sales for the first time. Per the consensus estimate by analysts, in 2024 it's expected to bring in roughly $152 million in revenue. Gaining market share will doubtlessly help to propel its share price upward.
Iovance is also investigating in a late-stage clinical trial whether Amtagvi is useful in treating cervical cancer. If that trial is a success, expect the business to seek an expanded indication as soon as it can, and expect the stock to soar even further.
Iovance's profitability remains an open question
Regardless of the positive assessments by analysts, there is still (at least) one risk of investing in Iovance. As Amtagvi must be administered by authorized treatment centers and manufactured in a specialized facility, there will be major overhead costs associated with the drug's rollout. It's plausible that it will take a long time for the biotech to become profitable, and it's possible, though unlikely, that it won't ever make more money than it spends.
