3 reasons to buy Iovance Biotherapeutics stock like there’s no tomorrow

Now is a great time to build a position in Iovance Biotherapeutics (IOVA -1.28%) with the aim of holding onto its shares for the next few years. Between the recent launch of its breakthrough cell therapy, strong progress in building out its network of clinics, and a financial situation that looks well suited to its substantial near-term needs, this is as well-positioned a biotech as stocks in this very risky category tend to be. become

Let’s take a look at the top three reasons why it’s worth buying like there’s no tomorrow.

1. The infrastructure for growth is coming together quickly

Iovance’s first cell therapy product, Amtagvi, is a bit complicated to manufacture and administer. Amtagvi treats melanoma using the patient’s tumor-infiltrating lymphocyte (TIL) cells.

As the name suggests, TILs are natural cells of the immune system that manage to get inside solid tumors, where the tumor’s defense mechanisms are less effective and where the potent anti-tumor chemical secretions of TILs are highly effective . But without outside help from Iovance’s manufacturing techniques, TILs are very few in number, which severely limits their ability to simply heal the patient without outside intervention.

Iovance’s approach requires a little more than a month to grow a few of a patient’s TILs into a powerful army that’s ready to (fingers crossed) defeat a tumor. In addition, an authorized specialist treatment center (ATC) is required to take a sample of the patient’s tumor to isolate the TILs, to put the patient through a week-long pre-treatment preparation regimen, and then finally infuse a fresh legion of TILs to deliver the dose. from Amtagvi.

Without enough of these ATCs positioned near major population centers, the company’s addressable market is much smaller because fewer patients would be willing or able to travel to receive treatment. So it’s good news for the stock that by the end of 2024, Iovance anticipates operating 70 ATCs in the US. That should mean about 90% of eligible patients will be within 200 miles of a center.

Additionally, per management, approximately 75% of Amtagvi patients receive coverage from private insurance, typically within approximately three weeks of initiating the trial.

This means that the company very quickly puts together the clinical and financial infrastructure that patients need to be treated. This is a reason to buy the stock because earnings growth will continue to increase. By the end of fiscal 2025, management expects revenue of up to $475 million. In the second quarter of this year, it reported just $31 million.

2. The pipeline implies many opportunities in the future

Iovance is not stopping research and development (R&D) of Amtagvi simply because it has obtained regulatory approval for an indication.

Technically, the therapy is currently only approved to treat melanoma in patients who have already been treated with an anti-PD-1 drug, a different and more common treatment modality. In other words, it is not considered to be a first-line treatment, which limits the size of its addressable market.

To remedy this, the biotech is currently in phase 3 clinical trials investigating whether Amtagvi is effective for melanoma when given as a combination with a drug of this type. If these trials are successful, it would make the therapy eligible for first-line administration, massively boosting the market and providing yet another important reason to buy the stock.

There are also other very positive implications of achieving frontline status. Because Amtagvi is made from the patient’s living cells, being a first-line therapy means the cancer has less time to progress. With less time for the disease to progress and cause harm, the patient’s TILs are on average healthier and more energetic. This makes their Iovance-made offspring even more vigorous, thus increasing the chances of treatment success.

With higher-quality starting material, it might also be possible for the biotech to spend less on production costs because it likely takes much longer to grow enough TILs to make a dose of Amtagvi when they are lose weight at the beginning of the process.

3. His record looks good

The final reason to buy Iovance stock like there’s no tomorrow is that it has a solid balance sheet, which is essential for a biotech company to survive in the period before significant revenue. In Q2, Iovance reported having $449.6 million in cash, equivalents, investments and restricted cash.

Management believes that should be enough cash to last through early 2026. At the same time, it reported just over $70 million in long-term debt and capital lease obligations. It shouldn’t be a problem to pay once your Amtagvi income grows.

Additionally, as Amtagvi’s rollout ramps up, the biotech likely won’t have trouble borrowing money if it needs more funds for its planned ATC production and build. Shareholders likely won’t have to take the dilutive hit from more shares being issued as a result.