2023-12-27 08:36:23 ET
Iovance Biotherapeutics (NASDAQ: IOVA) stock price suffered a harsh reversal on Wednesday after the company suffered a major setback. The stock, which has been in a strong uptrend, crashed by more than 30% in the pre-market session. It fell to a low of $6.50, which was much lower than Tuesday’s close of $9.
FDA and Iovance clinical trial
The Iovance stock price plunged after the Food and Drug Administration (FDA) placed a clinical hold on its IOV-LUN-202 trial. The agency did that after reporting a fatal event related to the non-myeloablative lymphodepletion pre-conditioning regiment.
As a result, the company will pause enrolment and the LN-145 TIL treatment regimen for patients during this hold. It will also continue monitoring the patients who have received the drug for any negative side effects. In a statement, the Chief Medical Officer at Iovance said :
“Iovance remains dedicated to addressing a significant unmet medical need for patients with advanced NSCLC, who have poor prognosis following disease progression and limited treatment options. We will work with the FDA to safely resume enrollment in the IOV-LUN-202 trial as soon as possible.â€
The hold is a major issue for Iovance, which is creating Tumor-Infiltrating Lymphocytes (TIL). TIL is a naturally occurring product that fight cancer. They are on constant surveillance to recognize, attack, and kill cancer cells.
FDA holds are relatively common and are meant to prevent adverse impacts on patients during trial. In some cases, the hold is usually abandoned, especially if the patient had other underlying issues.
Some analysts are optimistic that the FDA will end the hold and approve the drug over time. If this happens, it could be a positive move for the company because of the substantial market size of melanoma.
Iovance is also in a pole position in the TIL industry, with its solution being ahead of key companies like Instil Bio, Achilles Therapeutics, Obsidian Therapeutics, and Lyell Immunopharma.
Is IOVA stock a good buy?
Therefore, the question is whether Iovance Biotherapeutics is a good investment at the current price. In my last article on the company, I warned that IOVA’s risk/reward was highly unfavourable. An FDA hold or rejection is one of the biggest risks that I wrote about in that article.
Turning to the daily chart, the stock suffered a strong reversal after hitting a key resistance at $9.05. This was a crucial price that was also its highest point in May this year. It is not uncommon for a stock to retreat sharply after hitting a key resistance.
Therefore, I still believe that investing in Iovance at the current level is a high-risk situation. In it, you can make a strong return if the FDA lifts the hold and approves the therapy. Alternatively, you can make substantial losses if the whole program is scrapped.
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