No investor likes it when one of their stocks is hit with a recommendation downgrade from an analyst. That was the dynamic behind Iovance Biotherapeutics' (NASDAQ: IOVA) more than 2% decline in value on Monday. A onetime Iovance bull has considerably cooled on the stock, and this triggered a bit of a sell-off for the biotech.
Biotech blues
Well before market open today, Piper Sandler's Joseph Catanzaro reduced his recommendation on Iovance to neutral from the preceding overweight (buy, in other words). In doing so, he cut his price target nearly in half, slicing it to $10 per share from the former $19.
In his research note detailing the change, Catanzaro cited field research on the biotech's first commercialized drug, Amtagvi. He found that, "Despite a solid number of patients 'enrolled,' initial metrics point to a slow launch, with just [roughly] 10-15% of 'enrolled' patients having been infused with commercial Amtagvi in the full first quarter since approval."
Amtagvi is the reason many investors remain bullish on Iovance. It is the company's first product approved by the Food and Drug Administration (FDA). The innovative treatment targets melanoma.
Manufacturing delays could ding the fundamentals
Because it's so widespread, cancer as a broad category is a hot area for development and commercialization now. That's why hopes are high for Iovance and Amtagvi.
But in Catanzaro's view, the company might initially struggle to produce sufficient quantities of its recently introduced drug. He wrote that early indications suggest there have been longer-than-anticipated wait times for manufacturing slots. These struggles will negatively affect its current-quarter and full-year 2024 performance, according to him.
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 $692,784!*
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. TheStock Advisorservice has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of July 29, 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.
