After the company posted upbeat second-quarter results, shares of NovoCure (NASDAQ:NVCR), a medical device company focused on oncology, rose as much as 10% in afternoon trading on Thursday. Shares were up about 9% as of 2:55 p.m. EDT.
Here are the headline numbers from the second quarter:
- Revenue grew 41% to $86.7 million, far ahead of the $80.2 million that Wall Street was expecting.
- The net loss fell considerably to $1.3 million, or $0.01 per share, much lower than the $0.07 net loss that was expected.
- The number of active patients grew 26% to 2,726.
- Revenue growth outpaced active patient growth because of improved reimbursement rates, and management says the elevated reimbursement rates are sustainable.
- Gross margin expanded 800 basis points to 76%.
- Research and development costs grew by 71%. The big jump is attributable to four phase 3 trials currently underway.
- NovoCure received its third Food and Drug Administration approval during the period, to launch NovoTTF-100L, an approved treatment for mesothelioma.
- The cash balance at quarter-end was $285 million.
Bill Doyle, NovoCure's executive chairman, also shared some good news on Medicare reimbursement: "Last week, Medicare released a final local coverage determination and fee schedule amount which provides coverage and pricing of Optune for newly diagnosed [glioblastoma], effective Sept. 1, 2019. In response to public comments, the final coverage criteria eliminated or revised many of the restrictions originally proposed."
Given the strong quarterly results and upbeat news, it's easy to figure out why shares are surging today.
It's hard to find any weakness in this report. Reimbursement is improving, revenue is growing quickly, margins are rising, and profitability might be around the corner. The pipeline also continues to move forward and holds a tremendous amount of promise for investors.
All in all, this bull sees plenty of reasons to remain excited about where this fast-growing company is heading.