Iovance Biotherapeutics: Is a Reversal Taking Shape?

Iovance US4622601007

After a punishing year, shares of Iovance Biotherapeutics are exhibiting notable strength. The biotech stock, posting a weekly gain of 12.7%, is attempting to break a prolonged downward trajectory. This rebound appears fueled by a confluence of factors: fresh equity analysis, substantial short interest, and renewed optimism across the biotechnology sector.

The current recovery coincides with a resurgence in merger and acquisition sentiment within biotech. The recent announcement that BioMarin will acquire Amicus Therapeutics for $4.8 billion has reignited hopes for further consolidation among mid-sized firms. This environment is forcing investors to re-evaluate undervalued companies with commercialized products, such as Iovance and its TIL therapy, Amtagvi.

Despite the positive weekly and monthly trend, the long-term picture remains difficult. Since the start of 2025, the equity has declined 68.2%, and over the past five years, it has lost 95% of its value. The company continues to burn cash, reporting a negative free cash flow of $368 million over the last twelve months. Furthermore, a complex regulatory landscape, including new pricing agreements from major pharmaceutical companies, is creating sector-wide uncertainty for healthcare stocks.

A Significant Valuation Gap and Short-Squeeze Conditions

Iovance's recent price action seems to stem from a mix of value investing themes and a tense technical setup. A valuation report from Simply Wall St. dated December 21 indicates the stock is trading at an approximate 91.2% discount to its fair value. Their discounted cash flow model points to an intrinsic value of $28.06 per share—far above the current trading range between $2.48 and $2.67. The price-to-sales ratio of 3.93x also sits well below the industry average of 12.12x.

Simultaneously, short interest has reached record levels. As of November 28, 118.9 million shares were sold short, an increase of over 3.2 million shares. The "days to cover" ratio, which measures how long it would take to close all short positions, now stands at 11.83 days. This setup leaves the stock vulnerable to a short squeeze if the positive momentum continues.

On the corporate front, Iovance recently signaled operational continuity by announcing stock option programs for new employees.

Outlook Points to Continued Volatility

The immediate question is whether the stock can maintain momentum above the $2.50 support level. The extreme short positioning suggests high volatility is likely in the final trading sessions of the year. A sustained upward move could force short sellers to cover their positions, potentially accelerating the recovery.

While analyst price targets average between $8 and $11—significantly above current levels—most maintain "Hold" ratings due to execution risks. Financial projections suggest the company will not generate positive free cash flow until well into the next decade. From a technical perspective, the next critical markers are support at $2.17 and resistance near $2.80. A decisive breakout from this range could signal the beginning of a more sustainable base formation.