Why Iovance Biotherapeutics Stock Triumphed on Thursday

Iovance Biotherapeutics (NASDAQ: IOVA) is going to finish the week strong on the stock market if its Thursday performance is any indication. Investors boosted the company's share price by almost 8%, following the initiation of coverage by an analyst who's bullish on its future. With that rise, Iovance easily eclipsed the S&P 500 index's 0.2% increase.

Vast potential with melanoma drug

The analyst launching his Iovance coverage was UBS' (NYSE: UBS) David Dai. He tagged the commercial-stage biotech with a buy recommendation at a price target of $17 per share. That suggests potential upside of nearly 61% on the stock's current level.

According to reports, Dai's optimism is based largely on Iovance's latest commercialized product, advanced melanoma treatment Amtagvi. In his view, the drug has solid potential for use combating second-line and beyond melanoma.

In fact, the analyst believes his peers are currently underestimating that potential. In his model, Amtagvi is quickly on pace to earn $121 million in sales this year. The present analyst consensus is only $114 million. Dai sees no major hindrances to the production of the drug so far, and believes patient demand will be robust.

More up its sleeve

Amtagvi is a sophisticated medication that essentially reengineers a patient's tumor-infiltrating lymphocytes (TILs), immune cells that can target and eliminate cancer cells. The drug, which was approved by the U.S. Food and Drug Administration (FDA), is tricky to manufacture, hence Dai's observation about Iovance's apparently smooth road to production so far.

Given all that, it seems the company has unquestionable potential with its melanoma treatment. It's also actively developing other cancer treatments, so we shouldn't be surprised to see similar products successfully earning FDA nods eventually.

Should you invest $1,000 in Iovance Biotherapeutics right now?

Before you buy stock in Iovance Biotherapeutics, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Iovance Biotherapeutics wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $855,238!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of October 21, 2024

Eric Volkman 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.