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On Friday, Stifel analysts adjusted their outlook on Iovanance Biotherapeutics (NASDAQ:IOVA) shares, reducing the price target to $18 from the previous $21 while maintaining a Buy rating on the stock. The adjustment comes as the company’s shares, currently trading at $4.14, have declined nearly 70% over the past year. According to InvestingPro data, the stock is now trading near its 52-week low, suggesting potential value for investors willing to weather the current market sentiment.
The analysts noted that Iovanance’s total product revenue was at the higher end of their guidance. However, sales of Amtagvi, one of their key products, did not meet expectations. This shortfall has raised concerns about whether Iovanance can achieve its 2025 revenue targets. While InvestingPro analysis shows strong revenue growth potential with a forecast of 135% for FY2024, the company’s weak gross profit margin of 8.85% and rapid cash burn rate present challenges. The analysts believe that the current stock valuation reflects expectations for Amtagvi sales to peak at less than $500 million, which falls short of the blockbuster status.
Despite market skepticism, Iovanance management has reaffirmed their guidance for 2025. They have indicated that the anticipated acceleration in sales could partly be driven by the ramp-up of Advanced Therapy Centers (ATCs), with 36% of them yet to contribute to revenue. The Stifel analysts concur that the risk of missing the 2025 targets has increased but also recognize potential growth opportunities for Amtagvi.
The analysts anticipate that as ATCs expand their capacity and with the introduction of Amtagvi in the European market, the product could potentially reach around $1 billion in sales. They also see a viable path for Iovanance to achieve profitability, even if the 2025 guidance is not met, as the company continues to expand its operations and product reach.
In other recent news, Iovance Biotherapeutics reported its fourth-quarter earnings, revealing a net loss of $0.26 per share, slightly better than the projected loss of $0.27. However, the company’s revenue of $73.7 million fell short of the expected $77.3 million, despite beating estimates in the previous quarter with total revenues of $73.7 million, surpassing forecasts from both Piper Sandler and consensus estimates. Revenue from Iovance’s key product, EmTagvi, was $48.7 million, falling short of the anticipated $52 million and $54 million from Piper Sandler and consensus estimates, respectively. The full-year revenue for 2024 reached $164.1 million, with EmTagvi and Prolukin contributing significantly. Despite the revenue miss, Iovance maintains a strong cash position of $422 million as of February 26, 2025. Piper Sandler recently adjusted its price target for Iovance to $6.00, down from $7.50, while maintaining a Neutral rating. The firm expressed skepticism regarding Iovance’s fiscal year 2025 revenue guidance of $450-475 million, estimating a lower figure of $403 million.
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