Iovance Biotherapeutics (NASDAQ: IOVA) has been making waves in the biotech industry, with its shares soaring over 40% year-to-date. The recent approval of its cell therapy for unresectable or metastatic melanoma by the FDA has investors and analysts excited about the company’s future prospects.
With ongoing trials for other types of cancers, including cervical, head and neck, and non-small cell lung cancer, Iovance could potentially have more approved treatments in its portfolio within the next five years. However, the success rates of cancer drugs in clinical trials are notoriously low, so investors should proceed with caution.
Despite the recent approval, Iovance is still deeply unprofitable, reporting a net loss of $116.4 million in its most recent earnings release. The company’s high research and development costs, coupled with significant cash burn, pose challenges for its path to profitability.
Analysts project that the approved treatment could generate $846 million in revenue by 2029, potentially making it a blockbuster drug. However, Iovance may need to do multiple stock offerings in the next five years to support its high cash burn rate.
While the future looks promising for Iovance, with the potential for another approved treatment and improved financials, investors may want to wait for a clearer path to profitability before investing in the stock. At its current valuation of $3 billion, there may already be too much optimism priced into the stock.