Novocure said Monday its electrical-based cancer treatment failed to make a difference for ovarian cancer patients. NVCR stock plummeted on the news.
On today's stock market, Novocure shares crashed 37.5%, ending the day at 18.61.
The company tested its tumor-treating technology along with chemotherapy in a pool of patients who didn't originally respond well to a specific type of chemo. Novocure's platform uses a body-worn pad that emits fields of electricity into the body. The aim is to interrupt the rapid division of cancer cells.
But in Novocure's study patients who received the combination lived for a median of 12.2 months vs. 11.9 months for patients given chemo alone. Novocure enrolled patients who received up to five prior treatments. The company says its technology could show a benefit in healthier patients who'd received just one prior treatment.
NVCR stock opened at its lowest point in almost six years.
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Wedbush analyst David Nierengarten slashed his price target on NVCR stock to 23 from 46. He kept his neutral rating on shares.
Novocure's tumor-treatment technology, dubbed Optune, received approval to treat patients with a form of brain cancer called glioblastoma. But Nierengarten doesn't see expect Novocure to be able to expand its platform to many other cancers.
"Given the lack of meaningful expansion opportunities to (uses) outside of glioblastoma, which we believe is fully saturated, we do not see a way for tumor-treating fields to grow above low-single-digits in the near-term," he said in a note to clients.
Evercore ISI analyst Vijay Kumar was more forgiving of Novocure's flop. It's likely investors will pivot to seeing Novocure's method as a means of treating individual cancers vs. a platform for all cancer, he said in a note to clients.
But that does cut down significantly on the valuation behind NVCR stock. This implies a market cap of $1.1 billion to $2.2 billion vs. the stock's close at about $3.2 billion on Friday.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
