Here’s why everyone is talking about Iovance Biotherapeutics
Shares Iovance Biotherapeutics (NASDAQ: IOVA) have been on a roller coaster ride over the past few days. That’s probably because investors aren’t sure what to do with press releases that don’t quite line up with a big disclosure the company recently made about CEO Maria Fardis.
On May 18, Fardis informed the company that it would quit “to pursue other opportunities”. It’s a little hard to swallow as the company recently reported some very successful clinical trial results.
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Why the share of Iovance Biotherapeutics fell
Iovance did not specify what other opportunities Fardis will pursue, but they likely do not involve drug development. And the same day we learned of his departure, we also learned that Iovance’s next new drug application for lifileucel would be delayed until the first half of 2022.
The lifileucel program will be delayed because the FDA recently made a second request for additional data regarding activity assays, which are a series of tests that prove that the company can consistently manufacture the product in question. This was always going to be difficult as each patient’s batch of lifileucel is made from cells harvested from that patient’s own tumor.
Iovance stock has been extremely volatile as it appears the company’s management team is not up to the challenge they face. Those who follow the company expected that an application for lifileucel would reach the FDA in 2020, but in October, the FDA made its first request for additional data regarding activity dosages. Apparently, the company’s response did not satisfy the regulator.
Preparing an application for the FDA is a daunting task, but Iovance has raised more than enough capital from investors over the years to hire experts who can get the job done without making a series of unforced errors. This background suggests that Fardis was forced to step down by a disappointed board of directors.
Why the stock rebounded the next day
Iovance Biotherapeutics is currently a clinical stage company, but it probably shouldn’t be. The company’s lead candidate, lifileucel, has already produced sufficient evidence of its effectiveness as a treatment for advanced melanoma. In addition to impressive monotherapy response rate data enthusiastic investors in 2019, combining lifileucel with already approved immunotherapy looks extremely promising. On May 19, Iovance’s stock rebounded after the company revealed data from a study in which lifileucel was given to patients with advanced melanoma in combination with Merckof (NYSE: MRK) Keytruda immunotherapy. The combination reduced tumors for 86% of the participants.
Keytruda is one of several PD-1 inhibitors that help the immune system fight cancer by limiting the ability of tumor cells to prevent the immune system from attacking them. These treatments can be very effective, but they don’t work as often as we would like. On its own, Keytruda only shrinks tumors for about a third of treatment-naïve melanoma patients who try it. Based on the data to date, it appears that adding lifileucel to the regimen could more than double this response rate.
Still not enough?
While it looks like Fardis is being kicked out by Iovance’s board, there’s also a chance she’s jumping out of a ship that outside investors don’t realize she’s sinking. Iovance Biotherapeutics has delivered impressive results with its personalized cellular approach, but simpler cancer treatments could render Iovance’s lead candidate obsolete before investors can make a comeback.
For example, Bristol Myers Squibb (NYSE: BMY) recently reported success with an anti-LAG-3 antibody called relatlimab. It is not a cell-based treatment, but it could solve some of the same problems that lifileucel addresses without the extra-complicated manufacturing process of lifileucel.
Bristol Myers Squibb said that combining relatlimab with Opdivo, the company’s PD-1 inhibitor, significantly reduced the risk of disease progression in melanoma patients compared to treatment with Opdivo alone. The majority of patients treated with relatlimab plus Opdivo went 10.1 months or more without their cancer getting worse, compared to only 4.6 months for those who received Opdovo as monotherapy.
Is it time to buy?
Biotech investors are most successful when they think long term, but the way forward for Iovance Biotherapeutics is extremely blurred. It is probably best to search best biotechnology stocks while the story of this business unfolds.
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