Investing in small biotech companies that make sufficient progress in regulatory approval and commercialization can potentially yield substantial returns over the long term. However, on the flip side, such companies also carry considerable risk. Picking the right drugmaker could make you rich, while choosing the wrong one could ruin your wealth. Which category does Iovance Biotherapeutics (IOVA) fall into? Let’s examine whether buying shares of this company could make you wealthier.
Over the past three years, Iovance Biotherapeutics’ stock performance has significantly lagged behind the overall stock market. At first glance, this is puzzling. In 2024, the company’s late-stage melanoma treatment, Amtagvi, received approval, and its sales have been growing steadily since. In the latest fiscal year, Iovance Biotherapeutics’ sales, primarily driven by Amtagvi, reached $263.5 million, an increase of nearly 61% from the previous fiscal year.
Furthermore, Amtagvi is the first approved therapy of its kind for patients with advanced melanoma and is gradually expanding its global presence. The drug was approved in Canada last year, and it may receive approvals from several European countries and Australia in the coming years. Given its strong performance to date, it is not difficult to see Amtagvi achieving annual sales exceeding $1 billion by 2030 (or even earlier), which would be a significant accomplishment for a small biotech company. This does not yet account for Iovance Biotherapeutics’ efforts to seek label expansion for Amtagvi. A few weeks ago, the company announced positive early results from a pivotal clinical trial of lifileucel (the generic name for Amtagvi) in patients with advanced soft tissue sarcoma, a rare type of cancer. Iovance Biotherapeutics believes this represents a meaningful market opportunity, with over 8,000 patients diagnosed annually in the United States and Europe alone. Label expansion into advanced sarcoma and other indications currently being pursued could help boost the drug’s sales over the next five years.
Despite Amtagvi’s current momentum, Iovance Biotherapeutics, like all drugmakers (especially small ones), faces the risk of its stock price plunging overnight due to clinical or regulatory setbacks. Beyond that, investors should also consider that the tumor-infiltrating lymphocyte (TIL) therapy developed by Iovance Biotherapeutics involves a complex administration process. TIL therapy requires collecting cells from the patient’s body for preparation, followed by chemotherapy before reinfusing the cells back into the patient. This typically must be performed at authorized specialized treatment centers, and the manufacturing process for Amtagvi takes approximately 34 days.
For Iovance, the best-case scenario involves launching Amtagvi for melanoma in new markets, securing label expansions, and achieving sustained sales growth over the next decade. If Amtagvi can capture a meaningful share of a large market such as non-small cell lung cancer, Iovance’s stock could soar on the back of strong financial performance.
For investors who can tolerate high risk and are optimistic about its long-term potential, if Iovance Biotherapeutics can successfully overcome the challenges mentioned above, its stock could deliver remarkable performance over the next decade. However, as a matter of caution, it is essential to fully assess the risks and volatility before investing.
