Shares of Iovance Biotherapeutics (IOVA -5.25%) are down about 75% from a high-water mark they set last December. Up and down Wall Street, investment bank analysts tasked with following the commercial-stage cancer drug developer are arguing about whether it's fallen too far or not far enough.
Over at Chardan Capital, Geulah Livshits reiterated a buy rating and a $25 price target on July 23. From the stock's price of $3.05 on the morning of July 28, Livshits' estimate implies a gain of about 720% in about a year.
Not every investment bank is as enthusiastic about Iovance as Chardan Capital, but expectations are still extremely high. When the market opened on July 28, the consensus price target on the stock was $10 per share.
The average price target for Iovance Biotherapeutics implies a 228% gain, but those gains are a long way from guaranteed. Let's weigh this company's strengths against some challenges it's facing to see if it's a good stock to buy now.
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Why some on Wall Street are bullish for Iovance Biotherapeutics stock
In February 2024, the Food and Drug Administration approved Amtagvi, Iovance's first product. It's a cell-based treatment for folks with advanced melanoma. Following a tumor biopsy, immune cells called tumor-infiltrating lymphocytes are separated out and expanded. Once reinfused, they go to work attacking tumors.
Standard care for melanoma involves PD-1 blocking antibodies such as Merck's Keytruda and other targeted treatments. When standard care fails, though, there is a dearth of options. In the trial leading to its approval, treatment with Amtagvi shrank tumors for 31.5% of patients, all of whom had progressed after receiving a PD-1 blocking therapy.
Since its approval, Iovance has been able to evaluate 41 patients who received the therapy, and 20 of them have smaller tumors or no tumors at all. The response rate improved to 60.9% among patients who had received just one or two previous lines of treatment.
Why Iovance has attracted downgrades
On July 15, analysts at Goldman Sachs downgraded the stock to sell and reduced the bank's price target to $1 per share. In a nutshell, the bank is concerned about a slower-than-expected Amtagvi launch.
Amtagvi's commercial launch has three challenges to overcome. Perhaps least significant is the fact that the FDA approved it based on tumor shrinkage, not an overall survival benefit that would take much longer to evaluate.
The Amtagvi launch is also hindered by Iovance's relatively small sales team. The company finished 2024 with just 838 employees, 670 of whom are in research, development, and manufacturing.
The biggest headwind for Amtagvi is its complicated administration. This isn't a bottle of pills a pharmacist refills every month. It's a bag of live immune cells to be infused once. To give the new cells a chance to find a home in the patient's bone marrow, treatment centers must first deplete their immune system with a week-long chemotherapy regimen.
Add these three headwinds up, and what you get is a lack of sales. In the first quarter of 2025, Amtagvi sales reached $43.6 million. That's not terrible, but it doesn't look like this is going to become a huge blockbuster with several billion dollars in annual sales as previously expected.
A buy on the dip?
Iovance's stock price is off its 52-week lows, and at recent prices it sports a $1.05 billion market cap. That's a relatively low valuation for an independent drugmaker with a new product performing as well as Amtagvi. Management expects to report between $250 million and $300 million in sales this year. Biotech stocks tend to trade at mid-to-high single-digit multiples of trailing 12-month sales.
If it turns out Goldman Sachs was wrong, and management maintains its previous revenue estimate, the stock could soar. While Iovance seems underappreciated, it's probably best to wait for second-quarter results, which are expected on Aug. 7.
This June, Iovance's chief financial officer announced his resignation. Start-up drugmakers switching CFOs to better support a first product launch isn't unusual, but it usually occurs at the beginning of the launch. A CFO resignation a little over a year into an initial drug launch is the sort of announcement you'd expect from a drugmaker about to issue a disappointing sales guidance revision.
While there could be heaps of upside if Amtagvi sales reach Wall Street expectations, it's probably best to play wait-and-see until after the second-quarter report drops.
