As the rising star of cell therapy biotechnologists, Iovance Biotherapeutics (IOVA 3.76%) it’s a hot stock that’s getting a lot of attention, and for good reason. Iovance’s unique medicine is already selling like hotcakes, and there is reason to believe that much more growth is on the way.
Let’s take a look at why this stock is worth buying today and never looking back.
Today, Iovance has a trio of bullish drivers are the legs of the stock market’s investment thesis.
A rapidly growing market
First, Iovance’s first cell therapy to be approved for sale, Amtagvi, is quickly finding its home in the market. This year, management estimates that sales of the therapy will bring in at least $160 million in revenue, with the sum of 2025 totaling at least $450 million. So investors who buy the shares soon will, in theory, be exposed to a tripling of the top line in the near term, which is bullish.
In practice, the biotech is taking the necessary actions to achieve that ambitious goal by next year. Amtagvi is intended to treat patients who have advanced melanoma and who have already been treated with a common immunotherapy drug called pembrolizumab.
By management, its total addressable market is therefore approximately between 20,000 and 30,000 patients per year. The service of those patients will require the expansion of the company’s network of authorized treatment centers (ATC). It is targeting a total of 70 ATCs in the United States before the end of the year, and progress is on track.
Expansion of manufacturing capacity
Another major initiative is to expand the company’s manufacturing capacity for Amtagvi. Its current plans call for the expansion of one of its current facilities to be able to generate doses for about 5,000 patients a year in the next few years, but it is also building a network of contract manufacturers so that it can eventually treat an additional 15,000 patients for each year. year.
If these efforts are successful, it will support Iovance’s margins by controlling its cost of goods sold (COGS). It could also be feasible to license its facilities to produce cell therapies for other biopharmaceutical companies, if it demonstrates exceptional competence in cell manufacturing.
So the odds that Iovance will do well on its revenue estimates are decidedly favorable, and there’s a clear path for organic growth to continue after it hits.
A possible expansion of the indications
Finally, with a bit more research and development (R&D) work in the form of clinical trials testing Amtagvi in different oncological contexts, and in combination with pembrolizumab instead of just after a course of treatment, management thinks it could one day treat as many. like 70,000 patients with advanced melanoma worldwide. That would expand its total addressable market by more than double, and likely require more manufacturing investment. However, this is another bullish catalyst that is hard to ignore.
The most important clinical trial is a study that is in phase 3 now, investigating whether Amtagvi can be administered with pembrolizumab as first-line treatment. Being a front-line treatment leads to faster adoption of the therapy, rewarding shareholders in the process.
The long run could be even better
Next year, Iovance will synchronize with regulators in Australia and Switzerland to see if they are willing to approve Amtagvi. It should also hear back from regulators in Canada, the UK and the EU in the same period, making for three potential catalysts and more revenue down the line.
While it’s true that there will be some lingering long-term execution risks related to its cell manufacturing platform, the unique nature of its therapy means it will likely retain the ability to raise additional capital by taking out loans or issuing more actions of their therapy. stock. It probably needs to do that before it becomes profitable at some point in the next few years.
However, as more and more patients around the world access Amtagvi, this company will have plenty of room to continue growing. Given Iovance’s strong start to the therapy’s commercialization, this stock is worth buying.
Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Iovance Biotherapeutics. The Motley Fool has a disclosure policy.