Can This Beaten-Down Crypto Asset Stage a Spectacular Comeback?

CRYPTO'S COMEBACK KIDS: Battered digital assets eye redemption arc as market sentiment shifts

The Bottom Feeders' Dilemma

Traders swarm around wounded tokens like vultures circling prey—some see blood in the water, others spot bargain basement prices. These assets got hammered during the last market correction, down 60-80% from their all-time highs. Now whispers of recovery swirl through crypto Twitter and Telegram channels.

The Rebound Recipe

Three factors could spark revival: renewed institutional interest, protocol upgrades going live, or that classic crypto catalyst—pure, unadulterated FOMO. Projects with actual utility and development activity tend to bounce hardest. The rest? Just dead cats pretending to bounce.

Finance's Funny Business

Wall Street analysts would call this 'bottom fishing'—crypto traders just call it Tuesday. Because nothing says sophisticated investing like hoping your trash coin outperforms the S&P 500 while drinking coffee at 3 AM.

The Amtagvi problem

At first glance, Iovance appears fairly valued. Its market cap is $832 million, while it expects to bring in between $250 million and $300 million in revenue this year. Assuming it will generate $300 million over the next 12 months, and using the company's market cap of $832 million, we arrive at a forward price-to-sales ratio of around 2.8, which is reasonable for a small-cap, unprofitable biotech company.

How reasonable is this sales forecast? Very, considering Amtagvi just earned approval in Canada as well. Even in the U.S. alone, the medicine still has plenty of room to grow, considering it was only launched last year, and there are 8,000 patients who die every year from melanoma in the country. Even though they aren't all eligible for Amtagvi, the medicine has recently surpassed the mark of 100 patients treated per quarter. There's certainly more room for growth for the therapy, given its progress over the past and its recent approval in Canada.

Image source: Getty Images.

Despite Iovance's prospects with Amtagvi, though, the company's shares remain southbound. One major problem with the therapy is that it's complex to administer: Amtagvi is manufactured from patients' own tumor-infiltrating lymphocytes (TILs, a type of cell that can recognize, attack, and kill cancer cells). The manufacturing process for the medicine typically takes 34 days. Even with strong revenue prospects, the market may be worried that Amtagvi's economics will make it challenging for the company to become profitable.

It's also worth noting that earlier this year, Iovance revised its guidance due to an error in estimating the timing of activating authorized treatment centers (ATCs) where Amtagvi is administered. Similar challenges could continue plaguing the company for the foreseeable future.

Iovance's prospects look bleak

Iovance Biotherapeutics has more potential catalysts on the way. First, Amtagvi could earn approval in even more countries. Beyond the U.S. and Canada, the company is also seeking to launch its crown jewel in the U.K. and Australia. That WOULD expand Amtagvi's addressable market.

Second, the medicine could also receive some label expansions. Amtagvi is being investigated in clinical trials across several other forms of cancer, including cervical, endometrial, and non-small cell lung cancer, among others. These new indications could be significant.

Iovance is already establishing a network of ATCs for Amtagvi. Once the medicine can be prescribed for additional uses, it will be easier and less expensive for the company to ramp up commercialization efforts across new indications. That could lead to strong revenue growth while keeping the company's expenses in check, thereby boosting the bottom line.

But is that enough for Iovance's shares to bounce back? A lot would have to go right for the company to execute this plan near-flawlessly. And if it encounters further setbacks -- such as regulatory or clinical roadblocks, or downward guidance revisions -- the stock will likely plunge.

For what it's worth, Wall Street thinks Iovance Biotherapeutics is currently undervalued relative to its prospects. Analysts' average price target of $9.10 (according to Yahoo! Finance) implies an upside of about 295% from its current levels. Iovance's shares could soar if everything goes right for the company.

However, there's significant risk associated with the stock, enough that only those with a large appetite for volatility should consider initiating a position in the biotech today. I think the company is unlikely to bounce back, but if it does, it could deliver outstanding returns along the way.