Iovance Biotherapeutics (IOVA +2.15%) didn't quite end the stock trading week on a high note. The company's shares were dinged by almost 6% that day, due largely to an analyst's recommendation downgrade. This occurred on a generally positive day for equities, as the S&P 500 index managed to land in the black with a 0.7% rise.
A bearish adjustment
Well before market open, UBS pundit David Dai flipped the switch on his Iovance recommendation, changing it to neutral from his previous buy. Compounding that significantly, he drastically lowered his price target to $2 per share from $17.
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Dai's latest take on the biotech company comes after the analyst -- and the rest of the investing world -- had slightly over a week to digest the company's latest quarterly earnings.
According to reports, Dai pointed out in his update that sales of advanced melanoma drug Amtagvi, far and away Iovance's most leading product, were below expectations. This implies a slower ramp-up of its commercialization, which is concerning given the product's importance. He also expressed concern about higher drop-out rates for the drug. To him, this implies flaws in patient selection.
NASDAQ: IOVA
Key Data Points
Reasons to be cautious
While I think Iovance has impressive science behind it and Amtagvi still has significant potential, there are aspects of the company's business that should have investors worried. As Dai wrote, that ramp-up feels rather slow, and the company's notable revenue guidance cut in that earnings report is also cause for concern. I wouldn't be bullish on this stock right now.
