Why ImmunityBio Stock Dropped 15% After Earnings Despite 53% Sales Growth. Is IBRX Now a Buy?
Key PointsImmunityBio's quarterly product sales rose 53% from a year earlier, but they slipped from the prior quarter and missed Wall Street's estimate.
ImmunityBio's stock price dropped 15% on Monday despite a 53% increase in sales for its bladder-cancer immunotherapy ANKTIVA in the third quarter. The company reported that ANKTIVA sales rose to $48.7 million, but total revenue was down from the previous quarter and both revenue and losses came in below analysts' estimates. Research and development costs increased significantly to $71.5 million, leading to a loss of $97.9 million for the quarter.
The main factor behind the stock's decline is the approval of ANKTIVA for patients new to BCG treatment, which could expand its market. However, the company's cash reserves could only last over four quarters at the current pace, and it needs additional funding to continue as a going concern. ImmunityBio's share count has risen by about 5% due to stock sales, causing dilution.
The company's reliance on a single drug, the need for external funding, and its dependence on founder and Executive Chairman Patrick Soon-Shiong's backing make it a high-risk investment. Investors should closely monitor the FDA's decision and the company's quarterly sales growth before making any investment decisions.
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