1 Stock Worth Buying Near Its 52-Week Low, According to Wall Street

Iovance Biotherapeutics (NASDAQ: IOVA) is a biotech company with an innovative approach to developing cancer medicines. Though the company reached a significant milestone last year -- with regulatory approval of a key therapy -- its shares have significantly lagged the market.

The stock is down by 74% over the trailing-12-month period and, at under $4 per share, is barely above its 52-week low. Still, Wall Street analysts are bullish on Iovance. Their lowest price target is $6, the highest is $32, and the average is $19.54, according to Yahoo! Finance.

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Do Iovance's prospects justify these projections? Here's what investors need to know about this small-cap biotech company.

Looking at Amtagvi's potential

Iovance Biotherapeutics develops therapies that harness the power of tumor-infiltrating lymphocytes (TILs), immune cells that can target and destroy cancer cells. Iovance's TIL-based treatments are made from the patient's cells through a proprietary procedure. The company's Amtagvi, a medicine for melanoma that earned approval from the U.S. Food and Drug Administration (FDA) last year, takes 34 days to manufacture.

Amtagvi became the first therapy of its kind to notch an indication to treat a solid tumor, demonstrating Iovance's innovative capabilities. The patient-specific treatment does face some issues, though, including the 34 days it takes to make. Complicating matters even more, Amtagvi is administered in specialized treatment centers. This expensive and lengthy process makes it challenging to roll out the product to enough patients to generate significant sales while keeping costs down.

Still, Iovance is making progress. Last year, it reported $164.1 million in revenue (the amount it had in 2023 was not meaningful). It's only begun to scratch the surface of the 20,000 patients with melanoma eligible for Amtagvi in the U.S. And the company is seeking to earn approval for the medicine in more countries: It could get the nod in the U.K., the European Union, and Canada in 2025, and still get regulators on board in other countries next year.

There is a massive market here: Iovance estimates 325,000 annual cases of melanoma worldwide. If the company makes significant headway in its addressable market, Iovance's sales will continue moving in the right direction.

What's the verdict?

Many investors worry that Iovance Biotherapeutics will have trouble becoming profitable, due to the expensive and lengthy TIL manufacturing process. That's one of the reasons the stock continues to lag the market, and it is a legitimate concern. It's also essential to factor in potential regulatory setbacks for Amtagvi.

Even taking all this into account, Iovance looks like a bargain at current levels. The top $32 price target seems too high, but the company could have significant upside for several reasons.

First, though the FDA's approving Amtagvi doesn't guarantee that parallel agencies in other countries will do the same, it makes it more likely. So there's an excellent chance that approvals will roll in through the next two years, significantly expanding its patient population in the process.

Second, and relatedly, Amtagvi's sales momentum should remain strong. Iovance predicts 2025 product revenue will be between $450 million and $475 million, almost all of which will come from Amtagvi. This medicine could be a blockbuster within the next two years.

Third, Iovance could earn important label expansions down the line. Its pipeline features more than a dozen programs, many of which are clinical trials for Amtagvi across a range of potential indications. One promising area the company is targeting is non-small cell lung cancer, one of the leading causes of cancer death worldwide. Positive data readouts in the next few years could be significant catalysts for Iovance.

Lastly, the biotech predicts it will keep its cash burn under $300 million for 2025, well below its target range for product revenue for the year.

The company already improved its bottom line in 2024 -- it recorded a net loss per share of $1.28, compared to $1.89 in 2023. On that front, Iovance Biotherapeutics should move in the right direction again this year.

True, there are significant clinical and regulatory risks to consider that could sink the stock price, so it's not a good idea to go all in. But at current levels, risk-tolerant investors should seriously consider initiating small positions in this biotech stock.

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Prosper Junior Bakiny 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.