What happened

Shares of Novocure (NASDAQ:NVCR) were sinking 9.2% as of 3:30 p.m. on Tuesday. The oncology therapy company didn't announce any news, so why did the stock fall on a day when the overall market soared? The most likely reason is that some investors decided to lock in profits after Novocure's year-to-date gain of nearly 60% as of the market close on Monday.

So what

Profit-taking after big gains isn't unusual. That's especially the case with relatively small healthcare stocks like Novocure that are still in their early stages of growth. But these are the kinds of stocks that often become much bigger winners for investors who patiently hold on to their positions rather than selling prematurely.

Two doctors looking at brain scans

Image source: Getty Images.

Novocure continues to deliver strong revenue growth. In October, the company reported third-quarter sales of nearly $133 million, up 44% year over year and 14% quarter over quarter. This performance was especially impressive considering the challenges presented by the COVID-19 pandemic.

The company's Tumor Treating Fields therapy, which uses electrical fields to disrupt cancer cell division, is currently approved by the Food and Drug Administration for three indications: two for brain cancer and another for mesothelioma. Novocure has pivotal clinical studies in progress for four other cancer indications.

Now what

Novocure has several potential catalysts on the way. It expects to report data from a phase 2 study targeting advanced liver cancer in the first quarter of 2021. The company also anticipates announcing results from several other studies next year, including a phase 2 study targeting gastric cancer and interim results from late-stage studies targeting non-small cell lung cancer, pancreatic cancer, and recurrent ovarian cancer.

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