What happened

In response to the reported fourth-quarter and full-year results, shares of NovoCure (NVCR -2.32%), a high-growth medical device company that is focused on cancer, fell as much as 12% in early-morning trading on Thursday. The stock eventually recovered and was down about 2% as of 3:05 p.m. EST.

So what

Investors got a sneak peek at the company's fourth-quarter results in mid-January, so Wall Street already had a good idea of what the company's numbers looked like.

Here are the rest of the details from the period:

  • Revenue grew 42% to $99.2 million. That outpaced the $97.9 million that Wall Street was expecting.
  • Gross profit grew 60% thanks to margin expansion.
  • Net income was $4.3 million, or $0.04 per share. That was higher than the $0.02 that market watchers were predicting.
  • Active patients grew 22% to 2,909.
  • Prescriptions received grew 5% to 1,380.

The full-year numbers looked good, too:

  • Revenue jumped 42% to $351.2 million.
  • Net loss plunged from $63.6 million in 2018 to just $7.2 million, or $0.07 per share, in 2019. 
Businessman looking at pile of money with magnifying glass

Image source: Getty Images.

Novocure's CEO Asaf Danziger was thrilled with the company's yearly performance:

In 2019, we generated $351 million in net revenues and added over $80 million in cash on hand to our balance sheet. The financial strength derived from our existing indications allows us to fund significant investments in clinical and product innovation to advance our proprietary cancer therapy platform. Our focus on strengthening our foundation and executing our strategic plan to deliver value to our patients, employees, and shareholders is unwavering.

Despite the company posting better-than-expected results, shares still temporarily dropped. Given the lack of bad news in the earnings report, it's likely that Novocure's stock was simply sold off with the rest of the market today.

Now what

Novocure's executive chairman Bill Doyle talked up the company's ongoing clinical trials and product innovations that promise to substantially expand its addressable market:

In 20 years of preclinical research across a wide variety of tumor cell lines and cancer models, Tumor Treating Fields has demonstrated a consistent anti-mitotic effect. We are enrolling patients in six clinical programs, including four randomized, phase 3 pivotal trials, and are very optimistic about the potential application of Tumor Treating Fields beyond our currently approved indications. Also, new research is pointing the way to further improving the efficacy of the Tumor Treating Fields platform, and we are advancing multiple product development programs to this end. We are excited about the potential to significantly improve patient outcomes as we work to extend survival in some of the most aggressive forms of cancer.

Overall, this was a good report. If you were bullish on Novocure yesterday, I see no reason to change your tune today.