Iovance Biotherapeutics Inc (NASDAQ:IOVA) dropped 44% on May 9 after its Q1 2025 earnings report missed expectations across the board. The stock traded as much as 52% lower during the day.
Revenue came in at $49 million. Wall Street was expecting $82 million. The company also posted a loss of 36 cents per share, far worse than the projected 24-cent loss. That gap set off alarm bells for investors, especially after the company blamed a one-month production slowdown for the revenue shortfall.
But there’s more to unpack.
#Production Problems Triggered the Selloff
Iovance originally said the shortfall was linked to routine maintenance at its Philadelphia plant. That didn’t sound serious at first. But the full story came later.
The maintenance cut the company’s production capacity in half for about a month in December 2024. That disruption reduced the number of doses available for Amtagvi, its lead cancer therapy. Less supply meant fewer sales, and that hit Q1 revenue harder than investors were expecting.
If the company was aware of the impact and didn’t disclose it sooner, that could raise serious questions. After the earnings miss, analysts cut their targets. Goldman Sachs lowered its forecast from $16 to $8. Barclays moved its target from $5 to $4.
#Legal Trouble Could Be Just Starting
Several law firms have already launched investigations into potential securities law violations. They’re looking at whether Iovance misled investors about the plant maintenance and the expected hit to production and revenue.
This matters. If lawsuits move forward, investor confidence could take another hit. Legal action also creates more uncertainty around the stock. When you factor in the timing of the earnings miss and the production disclosure, this could drag on for a while.
#Stock Rebound on May 12
After the sharp decline on May 9, Iovance Biotherapeutics' stock rebounded by 10.3% on Monday, May 12. The bounce may reflect investor bets on a short-term overreaction, especially with production back online and management projecting a stronger Q2.
#Impact of Executive Order on Pharma Stocks
On the same day, the pharmaceutical sector experienced volatility following President Donald Trump's signing of an executive order aimed at reducing U.S. prescription drug prices. The order mandates that drug prices in the U.S. align with the lowest prices paid by other developed nations, a policy known as "most favored nation" pricing. While this move initially caused concern among investors, leading to a sell-off in some pharmaceutical stocks, the market partially recovered as analysts expressed skepticism about the order's immediate enforceability and potential legal challenges.
#Why This Is Important For Retail Investors
Volatility is likely to stay high. A 50% intraday move isn’t normal, and it suggests the market is having trouble pricing the stock.
Production recovery is critical. The company needs to show it can consistently deliver Amtagvi to meet demand. Watch for updates on manufacturing capacity and delivery timelines
Legal developments could move the stock. If class action lawsuits gain traction, they could trigger more selling or cause management changes.
Next earnings report will matter more than usual. Investors will want to see whether sales rebound in Q2 or if the disruption continues to weigh on performance.
#About The Company
Iovance Biotherapeutics focuses on cancer cell therapy using TILs, or tumor-infiltrating lymphocytes. Its main product, Amtagvi, is designed to treat advanced melanoma by enhancing the body’s immune response to tumors. The product was approved by the FDA and began commercial rollout, but delays in manufacturing have slowed momentum.
#Competitive Landscape
Iovance isn’t the only player in the TIL space. It’s up against companies like Gilead Sciences, Inc (NASDAQ:GILD) and Bristol-Myers Squibb Co (NYSE:BMY), both with strong R&D pipelines and larger manufacturing infrastructure. If Iovance can’t scale production, it could lose ground quickly.
#Near-Term Catalysts And Risks
The near-term outlook for Iovance primarily revolves around its ability to stabilize production and meet market demand for Amtagvi. Risks are prevalent, particularly concerning ongoing investigations and the operational impacts of past maintenance. Investors will need to track these developments closely as they could serve as either catalysts or barriers to the company’s recovery.
#Trading IOVA Stock
If you’re trading IOVA stock, expect price swings to continue. That can offer opportunity, but it also adds risk. For long-term investors, the stock might look cheap after the drop, but it’s not just about the price.
Ask yourself:
Can Iovance restore trust and deliver on its pipeline?
Will production stabilize fast enough to support revenue growth?
How much legal risk is priced into the stock today?
Until the company clears up these issues, stay cautious. Let the next few quarters tell you whether the fundamentals are improving. If you’re building a position, staggered entry points might help manage risk.