Iovance Biotherapeutics (NASDAQ: IOVA) is going to finish the week strong on the stock market if its Thursday performance is any indication. Investors boosted the company's share price by almost 8%, following the initiation of coverage by an analyst who's bullish on its future. With that rise, Iovance easily eclipsed the S&P 500 index's 0.2% increase.

Vast potential with melanoma drug

The analyst launching his Iovance coverage was UBS' (NYSE: UBS) David Dai. He tagged the commercial-stage biotech with a buy recommendation at a price target of $17 per share. That suggests potential upside of nearly 61% on the stock's current level.

According to reports, Dai's optimism is based largely on Iovance's latest commercialized product, advanced melanoma treatment Amtagvi. In his view, the drug has solid potential for use combating second-line and beyond melanoma.

In fact, the analyst believes his peers are currently underestimating that potential. In his model, Amtagvi is quickly on pace to earn $121 million in sales this year. The present analyst consensus is only $114 million. Dai sees no major hindrances to the production of the drug so far, and believes patient demand will be robust.

More up its sleeve

Amtagvi is a sophisticated medication that essentially reengineers a patient's tumor-infiltrating lymphocytes (TILs), immune cells that can target and eliminate cancer cells. The drug, which was approved by the U.S. Food and Drug Administration (FDA), is tricky to manufacture, hence Dai's observation about Iovance's apparently smooth road to production so far.

Given all that, it seems the company has unquestionable potential with its melanoma treatment. It's also actively developing other cancer treatments, so we shouldn't be surprised to see similar products successfully earning FDA nods eventually.

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