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Here's Why NovoCure Stock Is Up Big Today

By Brian Feroldi - Updated Jan 16, 2020 at 3:52PM

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Optimism continues to rise for the innovative medical-device maker.

What happened

Shares of NovoCure (NVCR -1.72%), a medical device company focused on treating tumors, were up about 10% as of 3:20 p.m. EST on Thursday. There doesn't appear to be any company-specific news that can justify the move today. But NovoCure shared some bullish news with investors earlier in the week.

So what

The company released preliminary fourth-quarter and full-year 2020 results at the J.P. Morgan Healthcare Conference on Monday, and the numbers looked good:

  • Fourth-quarter 2019 revenue is expected to be about $99.2 million. That represents growth of 42% and is nicely above the $95.7 million that Wall Street was expecting. 
  • Full-year 2019 revenue grew 42% to $351.3 million. 
  • The number of active patients grew 22% to 2,909.
  • Prescriptions received during the quarter grew 5% to 1,380.
  • Cash balance at year-end was $326 million. 
Man with money in his hands

Image source: Getty Images.

Traders appear to be feeling good about the company's prospects today and are bidding up the share price in response.

Now what

The strong growth in revenue is encouraging and is likely to continue into 2020 since NovoCure only recently gained reimbursement from Medicare. That bodes well for the company's chances of making 2020 another profitable year for investors.

One potential negative for investors to watch is that prescription growth has slowed considerably and just landed at 5%. If that trend continues, then it could eventually act as a drag on growth. 

But it might not matter all that much since NovoCure's pipeline is so promising. If all goes well, the company could gain regulatory approval to treat brain metastases, lung cancer, pancreatic cancer, and ovarian cancer within the next five years. Success in any of those indications would drastically increase the company's total addressable market opportunity. That's a big reason this bull thinks that this is a great growth stock for investors to get to know.

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