ImmunityBio's Revenue Surge Masks Persistent Losses and Financial Risks

What happened

ImmunityBio announced preliminary net product revenue of $113 million for 2025, a 700% year-over-year increase driven by its lead immunotherapy ANKTIVA, marking continued commercial momentum. Quarterly revenue for Q4 2025 was $38.3 million, up 20% sequentially from $31.8 million, though this growth rate has moderated from prior periods. However, this revenue surge is from a low base and does not offset the company's structural losses, with a net loss of $289.5 million in the first nine months of 2025 and a $3.7 billion accumulated deficit. The capital structure remains burdensome, featuring a $505 million related-party convertible note and costly revenue-interest financing that necessitate further dilutive equity raises. Regulatory overhangs, including prior CRLs and competition from established drugs like Keytruda, add significant uncertainty to the path to profitability.

Implication

The revenue increase validates early demand for ANKTIVA but is insufficient to cover the company's high operating expenses and cash burn, which averaged ~$70-100 million quarterly in 2025. Sustained acceleration toward projected $900 million sales by 2028 is needed to justify the ~$2.2 billion market cap, but intense competition and execution risks make this uncertain. Further dilutive financings are inevitable given the negative free cash flow and upcoming obligations, likely pressuring shareholder value through increased share count. Regulatory milestones, such as EMA approval and FDA guidance on papillary NMIBC, remain critical de-risking events that could sway the investment case. Until funding stability and regulatory clarity are achieved, the stock remains a high-risk, binary bet dependent on single-asset success without a margin of safety.

Thesis delta

The preliminary revenue data confirms accelerating commercial adoption of ANKTIVA, potentially supporting more optimistic sales projections. However, it does not materially alter the investment thesis, as structural losses, dilution, and regulatory risks persist, keeping the 'WAIT' stance unchanged pending further de-risking.