Novocure stock surged to its 50-day line on Wednesday after the company's medtech device nearly doubled the length of time patients with brain tumors lived before worsening.
The company's technology is a wearable device that uses electrical signals — dubbed tumor-treating fields — to interrupt the cell division that's characteristic of cancer. Novocure tested the device in patients with lung cancer that had spread to their brains.
Patients who wore Novocure's device lived for 21.9 months before their brain tumors worsened, compared to 11.3 months for patients who received supportive care alone. Supportive care included steroids, anti-epileptic drugs, blood thinners, nausea control and pain meds.
But analysts were split on the results. Patients who wore Novocure's device didn't show statistically significant improvements on secondary measures. That included overall survival and how long it took before patients experienced cognitive decline.
"One would have thought that delay in disease progression would translate to neuro-cognitive benefit," Evercore ISI analyst Vijay Kumar said in a report. "The lack of any benefit will be debated."
But on today's stock market, Novocure stock surged 12% to 14.64. Shares are now trading alongside their 50-day moving average, reversing a downtrend that began earlier this month, MarketSurge.com shows.
Novocure Stock: Analysts Split On Opportunity
Overall, the results were in line with expectations, Wedbush analyst David Nierengarten said. But he kept his neutral rating and 21 price target on Novocure stock.
"We remain skeptical about the incremental commercial opportunity given the poor expected survival in this patient population and the duration of treatment seen in this study," he said in a client report. "Currently, we model (tumor-treating fields) capturing a small share of the U.S. and ex-U.S. markets, with a treatment duration of four months."
Similarly, Evercore's Kumar noted it took Novocure about seven years to enroll roughly 270 patients in the study. This long enrollment period suggests the company struggled to find patients. Further, patients must wear the device for about 18 hours a day.
"Therapy burden is something that needs to be considered," he said.
Leerink Partners analyst Jonathan Chang is more bullish, however. He raised his price target on Novocure stock to 34 from 28, and maintained his outperform rating on shares. Chang sees a 75% chance the Food and Drug Administration approves Novocure's device for this use.
"We believe the results today, particularly the greater than 10-month improvement on the primary (goal of the study), are supportive of (tumor-treating fields) providing real benefit in this population," he said in a note.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
