When Will Iovance Biotherapeutics Inc (NASDAQ:IOVA) Become Profitable?

Iovance Biotherapeutics Inc’s (NASDAQ:IOVA): Iovance Biotherapeutics, Inc., a clinical-stage biotechnology company, focuses on developing and commercializing cancer immunotherapy products to harness the power of a patient’s immune system to eradicate cancer cells. The company’s loss has recently broadened since it announced a -US$92.06m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$97.89m, moving it further away from breakeven. The most pressing concern for investors is IOVA’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for IOVA.

View out our latest analysis for Iovance Biotherapeutics

According to the industry analysts covering IOVA, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$15.46m in 2022. Therefore, IOVA is expected to breakeven roughly a couple of months from now! In order to meet this breakeven date, I calculated the rate at which IOVA must grow year-on-year. It turns out an average annual growth rate of 24.02% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, IOVA may become profitable much later than analysts predict.

NasdaqGM:IOVA Past Future Earnings June 22nd 18
NasdaqGM:IOVA Past Future Earnings June 22nd 18

I’m not going to go through company-specific developments for IOVA given that this is a high-level summary, though, bear in mind that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing I’d like to point out is that IOVA has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which usually has a high level of debt relative to its equity. This means that IOVA has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on IOVA, so if you are interested in understanding the company at a deeper level, take a look at IOVA’s company page on Simply Wall St. I’ve also put together a list of important factors you should further examine:

  1. Valuation: What is IOVA worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether IOVA is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Iovance Biotherapeutics’s board and the CEO’s back ground.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.