Iovance Biotherapeutics (IOVA)

We’ll start with a company in the medical research field, Iovance Biotherapeutics. This firm focuses on an innovative approach to cancer treatment, using tumor infiltrating lymphocyte techniques to attack malignancies. Put shortly, in layman’s terms, the company is developing a method of using the patient’s own immune system to attack tumors, through immune cells (lymphocytes) which naturally enter and attack cancerous growths.

Iovance’s pipeline is both active and varied, with an even half-dozen drug candidates at various stages of the clinical trials progress, and two of the candidates have multiple trials underway simultaneously against different cancers, as monotherapies and in combination with established drugs.

However, the stock plummeted over 50% in a single day late last month after the company published clinical data from cohort 4 of its pivotal trial on its leading drug candidate lifileucal. The study is evaluating the drug as a treatment for advanced melanoma. The current data release showed a 29% objective response rate in patients, while an earlier cohort in the same study showed a 36% objective response rate. Investors were put off by the lower success rate recorded in cohort 4, and that was reflected in the stock’s price.

At the same time, management remains optimistic, notes that lifileucal is meeting the study goals, and reiterates that the company still plans to proceed with the Biologics License Application process with the FDA in August of this year.

A look at the insider trading shows the extent of management’s optimism. There has been a spate of insider buying in recent days, and one of those trades stands out in particular. Wayne Rothbaum, of Iovance’s Board of Directors, placed a major purchase last week, spending $6.59 million to buy up 1 million shares of IOVA.

JMP analyst Reni Benjamin is also bullish on this stock, and lays out a clear case for buying in, as the potential gains clearly outweigh the risks.

“With the positive feedback from the FDA regarding the potency assay matrix, positive results in frontline melanoma in combination with pembro as well as second-line as a monotherapy, a BLA submission expected in 3Q22, continued advancement of solid tumor trials, including combination studies with checkpoint inhibitors in early-stage disease, and a strong cash position of $516.0MM, we believe Iovance represents a unique investment opportunity and would be buyers of shares,” Benjamin opined.

Benjamin put his money where his mouth is, with a $25 price target on the stock suggesting a robust 232% upside for the next 12 months. Unsurprisingly, Benjamin rates the shares an Outperform (i.e. Buy).

Overall, Wall Street hasn’t downshifted on this stock, as indicated by the 11 recent analyst reviews and their 10 to 1 breakdown favoring Buys over Holds. The stock is selling for $7.53 and the average price target stands at $26.22, implying a 248% one-year upside potential.