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Forget Eli Lilly. Buy This Magnificent Biotech Stock Instead


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As great of an investment as Eli Lilly (NYSE: LLY) is during the age of Zepbound, its newest and hottest weight-loss drug, there are many other magnificent opportunities out there right now, and it’d be a disservice to your portfolio to ignore them entirely.

Take Iovance Biotherapeutics (NASDAQ: IOVA), for example. Its shares are up by 110% over the last 12 months, and if you can adopt a long-term mindset, the party could be just getting started. Here’s why it’s worth thinking about buying.

This stock has catalysts aplenty

Iovance’s golden goose will soon be its freshly launched cell therapy, Amtagvi, for advanced or unresectable melanoma. It’s the only medicine with approval from the Food and Drug Administration (FDA) for advanced melanoma, so its chances of finding a home in the market are very favorable.

The treatment is also under investigation in late-stage clinical trials for its applicability in treating cervical cancer. Eventually, it’ll be examined to see if it could be useful as a first line of treatment instead of being confined to second-line usage.

For now, Iovance will start to stake out as much market share as it can with Amtagvi. If the average estimate of the analysts on Wall Street are right, Iovance could bring in around $160 million in sales this year, with well over twice that sum slated for 2025. Realizing that quick pace of revenue growth over the coming quarters would power its stock upward.

The company is also hard at work developing a smattering of other mid-to-late-stage candidates for non-small cell lung cancer (NSCLC), and head and neck squamous cell carcinoma (HNSCC). Its ultimate goal is to compete vigorously in the market for treating solid tumors, which affect 1.8 million people in the U.S. each year. That ambition will take at least a few years to play out, assuming that its clinical trials proceed swimmingly.

On deck for the rest of 2024 is the company’s international regulatory submissions, which could well be accepted within the year. Overall, the picture for the stock is very positive. But this year is not guaranteed to be all positive catalysts, as there’s a bit of a challenge that Iovance will be tested against.

Profitability may be a concern

Iovance could have one drag on its ability to perform for its shareholders. In short, manufacturing and administering Amtagvi is going to be quite expensive. Patients need to have a biopsy of their tumor at an authorized treatment center (ATC). (There are plans to spin up locations to reach a total of 50 ATCs in the U.S. within the coming months.)

The sample from the biopsy is then shipped to a central manufacturing site where a specific type of the patient’s immune cells present in the tumor — the tumor-infiltrating lymphocytes (TILs) — are isolated. After isolation, the biotech stimulates the TILs to grow into a large and uniform population of cells. Then, the finished therapy product is shipped back to be infused into the patient, who hopefully becomes much healthier than before.

The process sounds complicated because it is complicated. And complicated biotech processes are expensive as a rule, even before taking into account the need to administer the drug product at specialized locations with additional overhead costs. Iovance has floated charging as much as $515,000 per dose to make the math work. If it can get insurers to cover most or all of that cost, and it probably will, it won’t be a barrier to adoption of the therapy, but if it can’t, all bets are off.

It could take a few years for Iovance to become profitable. Even if it takes longer than expected, investors could still make out like bandits in the meantime. Just be aware that if you buy this stock today and the Amtagvi rollout looks to be even more expensive than anticipated, there is a risk of getting your shares diluted by new share issuance to raise capital.

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

Before you buy stock in Iovance Biotherapeutics, consider this:

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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.

Forget Eli Lilly. Buy This Magnificent Biotech Stock Instead was originally published by The Motley Fool

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