Iovance Biotherapeutics (IOVA +3.31%), a small-cap biotech company, has an innovative approach to treating cancer that relies on harnessing patients' cancer-fighting capabilities. Though the company has encountered some success, including a crucial regulatory approval coming down last year, that hasn't been enough to seduce investors. Iovance's shares are down by 71% in the past five years.
Can the company turn things around and perform much better through the end of the decade? Let's find out.
Amtagvi will make progress
First, a little more detail on Iovance's approach. The company seeks to develop therapies that enhance patients' cancer-fighting cells, specifically tumor-infiltrating lymphocytes (TILs). Iovance collects these cells from a patient and uses them to manufacture treatments before reinserting them back into the patient. That's the procedure behind the company's Amtagvi, a medicine for advanced melanoma that was approved in February 2024.
NASDAQ: IOVA
Key Data Points
One issue with Iovance's treatments is that they take a while to manufacture and administer -- 34 days in the case of Amtagvi -- and they can only be produced in specialized centers. This factor will affect Iovance Biotherapeutics' progress in the next five years. The company is currently seeking approval for Amtagvi in advanced melanoma in several other countries, including Canada, the European Union, the U.K., Australia, and Switzerland.
By 2030, Iovance will likely have earned the green light in these regions and will have made significant progress in activating the specialized centers where Amtagvi has to be manufactured, as well as actually treating patients. In the third quarter, Iovance's revenue was $58.6 million. Not particularly impressive, but as of the end of that period, it had treated just 146 patients.
Iovance sees the potential to treat 20,000 annually in the U.S., and many more in the other territories where it expects to earn approval for Amtagvi. Considering Iovance's top-line guidance for 2025 of between $450 million and $475 million, the company's total revenue should be in the neighborhood of $1 billion by the end of the decade thanks to Amtagvi progress.
We can count on the pipeline, too
Amtagvi is also undergoing clinical trials across a range of new potential indications. Iovance could earn label expansions for its leading medicine in the next several years. One particularly exciting market the company is targeting is non-small cell lung cancer (NSCLC). Lung cancer is the leading cause of cancer death in the world, and about 87% of these patients suffer from the NSCLC variety. Iovance is targeting U.S. approval by 2027 for Amtagvi to treat NSCLC.
The medicine is also targeting cervical cancer and endometrial cancer. Further, Iovance has other candidates that should make progress through the end of the decade. Once the company establishes a network of qualified treatment centers for Amtagvi, which it should have completed by 2030, launching other medicines of the same type will be at least a bit easier and faster.
Is Iovance Biotherapeutics a buy?
Iovance's revenue should grow at a decent clip in the next few years, but that might not be enough to help the company turn things around -- and that's for at least two reasons. First, since administering its therapies is challenging and expensive, Iovance will have trouble seeing green on the bottom line even as its revenue grows. The 34 days it takes to manufacture Amtagvi lengthens the timing of the payment from patients (or third-party payers).
If Amtagvi were an oral pill that patients could take from home, its sales would grow faster, all else being equal. Second, while the company might make significant pipeline progress, it could also encounter many setbacks that might sink its share price, especially if Amtagvi fails to earn regulatory approval in other countries or in treating NSCLC. Smaller biotech companies can quickly lose significant market value if their leading candidates encounter such roadblocks.
All that considered, Iovance Biotherapeutics is on the riskier side, but it could have significant upside potential if everything goes according to plan. Investors comfortable with high risk and volatility might consider initiating a small position in the stock. For everyone else, however, there are better options on the market.
