Back to top

Image: Bigstock

Iovance (IOVA) to Buy Clinigen's Cancer Drug, Stock Up 11.6%

Read MoreHide Full Article

Shares of Iovance Biotherapeutics (IOVA - Free Report) were up 11.6% on Jan 24 after management announced multiple business, clinical, and regulatory updates.

Iovance announced that it has entered into an in-licensing agreement with U.K.-based Clinigen Limited for the latter’s interleukin-2 (IL-2) product, Proleukin (aldesleukin). Per the terms of the agreement, the company will acquire worldwide rights to this drug. In return, Clinigen will get an upfront payment of £166.7 million. In addition, Iovance will also be entitled to pay a milestone payment of £41.7 million to Iovance when the latter’s lead candidate, lifileucel, receives the first approval in advanced melanoma indication. Clinigen will also be eligible to receive double-digit royalties on global Proleukin sales.

Currently, Proleukin is approved by the FDA for treating two cancer indications in adults – metastatic renal cell carcinoma (mRCC) and metastatic melanoma. The transaction with Clinigen is expected to close by the end of this quarter. Share price most likely rose on this news as the transaction will allow Iovance to record revenues from Proleukin product sales. The Proleukin acquisition will also allow Iovance to secure Clinigen’s IL-2 supply chain for clinical and future commercial tumor-infiltrating lymphocyte (TIL) therapy.

Shares of Iovance have declined 52.5% compared with the industry’s 7.3% fall.

Zacks Investment Research
Image Source: Zacks Investment Research

Management plans to fund this acquisition with an existing cash balance of $477.0 million as of Jan 20, 2023. Apart from this, the company also has secured a line of credit of up to $100.0 million. Iovance expects that these proceeds will fund the Proleukin purchase as well as its operating plan well into 2024.

Apart from the above acquisition, Iovance also announced that it remains on track to complete the rolling biologics license application (BLA) submission for its TIL therapy lifileucel in advanced melanoma indication by first-quarter 2023.

Management also announced that it had reached an agreement with the FDA on the scope of the phase III TILVANCE-301 study, which will evaluate the combination of lifileucel and Merck’s (MRK - Free Report) PD-L1 inhibitor Keytruda (pembrolizumab) against Keytruda monotherapy in frontline metastatic melanoma. This late-stage study, which will start later this year, will also serve as a confirmatory study for the above BLA. Iovance has already evaluated the combination of lifileucel and Merck’s Keytruda for the given indication in a cohort of the phase II IOV-COM-202 study. Data from the cohort demonstrated an overall response rate (ORR) of 67%.

The company also reported positive data from cohort 3A of the IOV-COM-202 study, which evaluated lifileucel plus Merck’s Keytruda in anti-PD-1 naïve metastatic non-small cell lung cancer (NSCLC). Data from this cohort demonstrated an ORR of 47%. Management plans to discuss these results with the FDA later this year to start a registrational study for lifileucel in this indication.

A multi-center study, IOV-COM-202 is composed of seven cohorts evaluating Iovance’s TIL therapies in multiple settings and for several indications, as a monotherapy and in combination with Merck’s Keytruda or Bristol-Myers’ (BMY - Free Report) Opdivo/Yervoy.

Opdivo and Yervoy are two of the many blockbuster drugs marketed by Bristol Myers. Both drugs are key top-line drivers for Bristol Myers. In the first nine months of 2022, Bristol Myers generated $6.0 billion from Opdivo sales and recorded $1.6 billion as product revenues from Yervoy.

 

Zacks Rank & Stock to Consider

Iovance currently carries a Zacks Rank #2 (Buy). Another #2 ranked stock in the overall healthcare sector is Eton Pharmaceuticals (ETON - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past 30 days, estimates for Eton Pharmaceuticals’ 2022 loss per share have narrowed from 44 cents to 38 cents. During the same period, the earnings estimates per share for 2023 have risen from 1 cent to 6 cents. Shares of ETON have risen by 2.0% in the past year.

Earnings of Eton Pharmaceuticals missed estimates in three of the last four quarters while beating the mark on one occasion, witnessing a negative earnings surprise of 115.63%, on average. In the last reported quarter, Eton Pharmaceuticals’earnings beat estimates by 20.00%.

Published in