Today, I present to you, fellow regards, Iovance Biotherapeutics ($IOVA). Am a long-time lurker of many subs, and this is my first time posting a DD so be nice please:
**TLDR:** IOVA is an exciting biotech company that develops tumor-infiltrating lymphocyte (TIL) therapies to treat cancer, and it has the potential to be a multi-bagger in the next year or so. There is very limited downside risks after dropping 45% following Q1 earnings, and 96.2% from ATH given the quality of their assets + 0 debt.
**Reasons:**
1. The stock is priced like it is about to collapse: The company has a 574 million market cap, 360 million cash, 0 debt, 1 manufacturing facility, and the only FDA approved TIL therapy (helps treat patients with very advanced melanoma). The company trades at a <1 price to book, which is ridiculously cheap.
2. There is rapid growth projected in 2025 and 2026 due to EU expansion, acceleration of Amtagvi roll-out, various pipelines... coming soon. Q1 problems (maintenance and slower ATC provision) are temporary and management has said infusions have normalized in Q2 already.
3. European expansion - this is expected to be this year. A look at Iovance's Linkedin shows that they are already heavily recruiting in Europe, which is a sign that approval is going well. They are also heavily recruiting in general, which is always a bullish sign.
https://preview.redd.it/g8i5be5zzr1f1.png?width=1306&format=png&auto=webp&s=fba7a251707bc9317b7107570ed0a88424fc2445
4. The core therapy is very advanced - one of the few that aim to provide individualized, durable care to solid tumors, and is used by treatment centers ranging from Stanford Healthcare, NYU/Columbia Irving Medical Center, UCLA Hospital... It seems to be highly regarded in the medical community and it seems cool as fuck - potential applications are endless.
https://preview.redd.it/9wqudzvdzr1f1.png?width=1860&format=png&auto=webp&s=24c12eb494ff7d79ed70f0aae1f5193b58aa8d0b
5. They currently charge 500k+ USD per patient, but this is covered by insurance for the majority of Americans (250 million+ covered for this). It provides a 32% objective response rate (tumor shrinking, with 4% having their tumor disappear completely) for patients with melanoma who have already tried other treatments.
https://preview.redd.it/3v6rtngr0s1f1.png?width=1898&format=png&auto=webp&s=a86d37c44b78c68d6b8e1681e361b1772edb3dd0
6. If drug roll-out is successful, management expects \~1.5 billion in annual revenue at 70% gross margins - so will almost certainly multi-bag. This is around 30,000 patients per year globally.
7. They have a very robust pipeline of clinical trials. If they can prove that the drug works for NSCLC or that it is helpful for frontline melanoma, then the total addressable market expansion will be massive. This is on top of the 30,000 market size that they have already projected for the FDA approved treatment.
https://preview.redd.it/ojqlpv3bzr1f1.png?width=1796&format=png&auto=webp&s=bfdcf28638d4b33c3e889c16d7575b7ebedb929f
8. If drug roll-out is unsuccessful, downside is limited by assets + buyout potential. As discussed before, price to book is below 1. There is 0 debt, and cash makes up \~60% of market cap. TIL therapy is highly interesting as a potential cure for all types of cancers, and there are likely many large pharmaceutical companies that may be interested in acquiring the patents/tech.
9. CEO Dr. Fred Vogt bought 25k shares last week on the open market for the first time. Management is not that great at communicating, but company fundamentals are strong and this is a sign of faith.
https://preview.redd.it/faixn1a8zr1f1.png?width=1862&format=png&auto=webp&s=7b04b84e99359cf2fd5b462c70a17ee1ca6e5a90
10. Management dropping guidance after realizing it takes a bit longer for treatment centers to bring in patients sucks only if you bought before they dropped it (and the stock tanks 45%). Now, with a far more conservative guidance, management has far more room to outperform. In Q2, guidance should be easily met given what management said in the earnings call.
**Upcoming Catalysts:**
1. ASCO 2025 conference, where will discuss results of a few clinical trials + host round table with experts.
2. Q2 Earnings where treatment results should normalize.
3. European expansion should be announced in the next few months.
**Positions:** 238 thousand shares at $1.73 average price.
https://preview.redd.it/5ykwiwsp5s1f1.jpg?width=1179&format=pjpg&auto=webp&s=fe762876d9bb0057ec2ef9d78da9a5b6609b8f8c
**Conclusion:**
$IOVA is very cheaply priced, is a leader in one of the most exciting technologies in healthcare, and has an FDA approved life-saving drug. **Price target: 10$.**
Let me know your thoughts. I think stock was quite risky a few weeks ago (and more so a few years ago) - now I believe risk-reward one of the most attractive out there. This is not financial advice. Pray for me.
**Edit 1:** There are a number of class action lawsuits because the stock dropped 45% after Q1 earnings due to management lowering guidance + manufacturing maintenance impacting revenue. If you look at the earnings calls for the past few quarters, there was indeed poor communication + too much optimism, but it is hard to argue that this is fraud - especially given the fact that management is just rolling out the drug, and there is a significant degree of uncertainty. Furthermore, infusions are bouncing back and there is strong demand. The stock dropping 45% is not good for previous shareholders, but it is very good for new buyers.
**Edit 2:** I am not a bag-holder, I just recently entered the stock. One notable bag holder is billionaire biotech investor Wayne Rothbaum (who sits on the board) though!
**Edit 3:** Outdated info but short interest is \~27% of float with 9 days to cover. Institutional ownership is 83.18%.
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