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Iovance (IOVA) Bulls Position for Base Breakout

by | Oct 4, 2021

Iovance (IOVA) interesting small-cap bio that has seen elevated options interest the last two sessions with the October $25 puts sold and the November $25/$35 call spread bought to open. Open interest is over 5,000X now at the strikes. IOVA has been a relative laggard in 2021 but nearing a narrow base breakout above $27 with a gap to run back to $31-$32. A strong breakout above that node has little resistance back to $40-$45. The $3.82B company trades 5.8X cash. IOVA is developing commercial strategies around tumor-infiltrating lymphocytes (TILs) being developed for a variety of solid tumors. The company has pivotal programs in metastatic melanoma and advanced cervical cancers. They are also working on head and neck squamous cell carcinoma, or HNSCC, and non-small cell lung cancer, or NSCLC, as well as in other solid tumor oncology indications through collaborations. Goldman noted that it views TILs as the next major drug class in I-O, with Iovance as one of the leaders in the class. IOVA sees significant potential in TILs with 90% of all cancer cases solid tumors and 1.6M new cases each year. Analysts have an average target for shares of $39 with a Street High $51. HCW positive in June noting that lung cancer data should improve with time. The early data highlight TIL efficacy and the analyst points out that metastatic non-small cell lung cancer is a high incidence cancer with an unmet medical need and a paucity of available treatment options. A closer look at the kinetics of the responders suggests the full tumor response has yet be reached. JMP upgrading to Buy in June with a $32 PT. The firm cites data showcasing updated results of lifileucel in advanced melanoma as well as initial data on a combination therapy of lifileucel with pembrolizumab. In addition, the interim CEO has convinced us that one of the new assays to be submitted to the agency should clear the path for a successful application filing in the first half of 2022. Short interest is 10.8%. Hedge fund ownership rose 10% last quarter. Armistice Capital a buyer of 3.35M shares.