The FDA just gave Iovance's cervical cancer treatment a "breakthrough therapy" designation
The drugmaker Iovance Biotherapeutics Inc (NASDAQ:IOVA) is seeing a pop after the Food and Drug Administration (FDA) gave a "breakthrough therapy" designation to the company's cervical cancer treatment, LN-145. The FDA nod, which has the shares trading 6.1% higher at $17.65, came after the close Wednesday. Now, IOVA shares are eyeing their highest close in nine months.
Late last week, the shares enjoyed a massive bull gap, after reporting updates from its cancer drug trials at the American Society of Clinical Oncology (ASCO) meeting. The 36.1% jump marked IOVA's best day since 2016 and has it closing a bear gap the equity suffered all the way back in early September. What's more, in the past seven days the shares have only ended one day in the red, and just pushed past their year-over-year breakeven level -- now nearly 7% north of the level.
Analysts are resoundingly optimistic on the stock, with nine "strong buy" ratings on the table. This is echoed in the consensus 12-month target price too, which sits all the way up at $27.50 -- a roughly 55% premium to current levels.
While shorts have been jumping ship, short interest is down 7.9% during the last reporting period, there's still plenty of room for a short squeeze. Currently, the 9.8 million shares sold short represents a whopping 13.7% of the stock's available float and would take over two weeks to cover all these pessimistic positions, at IOVA's average pace of trading.
Plus, short-term option players have rarely been less call-heavy in the past 12 months. IOVA's Schaeffer's put/call open interest ratio (SOIR) of 0.62 sits higher than all but one reading from the past year -- with a large portion of open interest added at the weekly 6/21 15-strike put and call during the past 10 days of trading.