What happened
Shares of Novocure (NASDAQ: NVCR) are down 25.9% so far this week as of the market close on Thursday, according to data provided by S&P Global Market Intelligence, as the company announced a discouraging update on the phase 3 INNOVATE-3 clinical trial evaluating the ability of its key Tumor Treating Fields (TTFields) therapy in treating platinum-resistant ovarian cancer.
To be sure, the entirety of this week's decline came on Monday after Novocure's press release hit the wires.
So what
Novocure's TTFields technology has already received approval to treat patients with a form of brain cancer called glioblastoma. But on Monday, Novocure said that the phase 3 trial of TTFields, together with paclitaxel in patients with platinum-resistant ovarian cancer, did not meet its primary endpoint of overall survival at the final analysis. Patients who were randomized to receive TTFields therapy plus paclitaxel saw a median overall survival of 12.2 months, versus 11.9 months in patients treated with only paclitaxel -- a statistically insignificant difference.
"The INNOVATE-3 clinical trial set out to harness the unique mechanisms of Tumor Treating Fields to extend survival in platinum-resistant ovarian cancer," stated Novocure executive chairman William Doyle. "While today's update is disappointing, we are encouraged by the signal identified from the exploratory analysis, which suggests the potential for a clinical benefit with TTFields therapy is initiated early in a patient's treatment journey."
Doyle added that Novocure is "deeply grateful" to the patients who participated, their loved ones, and the trial investigators.
Now what
The investigators of the clinical trial insisted they will continue research with TTFields, especially considering there are limited treatment options for this particularly aggressive cancer.
However, multiple Wall Street analysts have already weighed in regarding the leading cancer stock's disappointment.
Wedbush analyst David Nierengarten, for one, reduced his per-share price target on Novocure stock to $23 from $46 on Monday (shares currently trade just above $22 as of this writing), noting his firm does "not see a way for Tumor-Treating Fields to grow above low-single-digits in the near term."
Meanwhile, Evercore ISI's Vijay Kumar suggested Novocure's TTFields treatment will likely be viewed as a way to treat individual cancers, rather than as a platform targeting all cancer. As such, Kumar reduced his firm's estimated value of Novocure to a market capitalization ranging from $1.1 billion to $2.2 billion -- well below the roughly $2.35 billion market cap it commands as of this writing even after this week's drop.
That's not to say Novocure is a broken business. But with the potential for its TTFields therapy significantly constrained, it's no surprise to see the stock trading near a six-year low.
10 stocks we like better than NovoCure
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and NovoCure wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of August 28, 2023
Steve Symington has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends NovoCure. The Motley Fool has a disclosure policy.
