Some investors see a striking similarity between lottery tickets and biotech stocks. In most cases, buying lottery tickets ends up being a waste of money. So does investing in most biotech stocks. But just as one lucky lottery ticket can provide game-changing wealth, so can the right biotech stock.
Iovance Biotherapeutics (IOVA 0.26%) just might be the right kind of biotech stock. The company has already achieved success. Could it even be a millionaire-maker?
Iovance's opportunity
To appreciate Iovance's opportunity, we need to first gain a basic understanding of the company's primary scientific focus. Iovance is a leader in developing tumor-infiltrating lymphocyte (TIL) therapies. TILs are immune cells that attack tumor cells. Their big challenge, though, is that they often can't recognize the cancerous cells as an enemy and are rendered ineffective.
Iovance collects a sample from a patient's tumor. It then isolates the TILs and amplifies them in an off-site facility. Billions of these reinvigorated TILs are then infused back into the patient's body, where they target, attack, and kill cancer cells.
This process is similar to what's used with CAR-T therapies that treat blood cancers. However, roughly 91% of cancers are solid tumors. Iovance's TIL therapies should have a much larger market potential than CAR-T therapies such as Gilead Sciences' Yescarta and Tecartus, which generated combined sales of $2 billion last year.
Iovance's Amtagvi is the first TIL therapy approved by the U.S. Food and Drug Administration (FDA). Its first approved indication is for advanced melanoma. Amtagvi is off to a great start after its FDA approval in February 2024, raking in sales of $164 million last year.
Melanoma is just a start, though. Iovance is evaluating Amtagvi in clinical studies targeting cervical cancer, non-small cell lung cancer, endometrial cancer, and head and neck squamous cell carcinoma. The company has also teamed up with Merck to test Amtagvi in combination with blockbuster immunotherapy Keytruda in treating multiple types of tumors.
Some drawbacks
TIL therapy offers tremendous promise in treating solid tumors. While other drugmakers are also focused on the space, Iovance is in the catbird seat. However, there are some drawbacks to investing in Iovance right now.
For one thing, the stock hasn't been a big winner for investors so far. Iovance's share price has plunged more than 90% over the last five years.
NASDAQ: IOVA
Key Data Points
Iovance also remains unprofitable. The company posted a net loss of $78.6 million in the fourth quarter of 2024, and $372.2 million for the full year. It expects to burn through less than $300 million in cash in 2025 -- an improvement, but still not great.
On the positive side, Iovance's cash stockpile totals $422 million. The bad news, though, is that the company expects this amount to fund operations only into the second half of 2026. Iovance may have to issue additional shares to raise capital, a move that would dilute its existing shares.
Iovance also faces the risk of its clinical trials being unsuccessful. Just because Amtagvi works well with melanoma doesn't guarantee that it will be as effective with other types of cancer. And any pipeline setback would likely cause Iovance's share price to plunge.
A millionaire-maker?
So could Iovance Biotherapeutics be a millionaire-maker? I think the best answer is...maybe.
Iovance should have a lot of room to run if Amtagvi is successful in treating other solid tumors. The company's pipeline also features other promising programs in early-stage clinical trials. However, Iovance will need everything to go its way to even have a chance at achieving the level of returns needed to be a millionaire-maker.
The company's market cap currently hovers around $1 billion. For an initial investment of $10,000 in the stock to grow to $1 million would require Iovance's market cap to soar to $100 billion -- 100 times its current value. Is this kind of growth possible? Sure, but it's not probable. Still, I think Iovance Biotherapeutics could be a winner for aggressive investors over the long run, even if it doesn't make them millionaires.
