Novocure (NASDAQ:NVCR) has been on a tremendous run -- up 17 times over the last five years -- leaving many investors thinking that they missed the boat. But in investing, winners keep on winning. Recent news in the lung cancer treatment area for Novocure's Optune, a wearable cancer treatment platform that creates a low-intensity electric field called Tumor Treating Fields, has investors excited.

Currently, Optune is approved for glioblastoma multiforme. The treatment can extend survival from diagnosis to 25 months (up from 16 months). Optune was also recently approved for mesothelioma, and seems to have positive data in store for investors from its evaluation as a treatment for stage 4 non-small-cell lung cancer (NSCLC), which caused the stock to pop over 40% this week. And the company is just getting started.

Two male doctors inspect a patient's brain scan.

Image source: Getty Images

Novocure is on its own playing field

This week, Novocure gave an update regarding its phase 3 pivotal LUNAR trial of Tumor Treating Fields in stage 4 NSCLC after receiving platinum therapy. After a routine review of the company's study by an independent data monitoring committee, the company was informed that the trial would be wrapped up earlier than expected.

The committee also went on to say that to continue the trial is likely unnecessary, and that it's possibly unethical for patients to be randomized to the control arm. If we read between the lines, this implies a significant and obvious benefit for patients in the Optune therapy arm. Even better, the primary endpoint of the trial is overall survival, meaning that patients are living longer with Optune -- that spells wins all around.

Just how big is this potential market? Novocure estimates there are 180,000 NSCLC patients currently in the U.S. If we use the average cost of Optune for glioblastoma as a rough starting point (about $21,000 a month), that is a total addressable market of over $3.5 billion per month in the U.S. alone for the treatment of NSCLC.

But will it sell?

The company has demonstrated impressive revenue growth, going from $82.9 million in FY 2016 to $494.4 million in FY 2020 (representing 41% growth over FY 2019). Not only that, but with 38% market penetration for glioblastoma multiforme in the U.S. (and 33% in the EU and 30% in Japan), oncologists are already familiar with the treatment.

While Optune is already approved to treat glioblastoma multiforme, it is also in phase 3 trials for the treatment of cancer that originated from lung cancer but spread to the brain (also known as brain metastasis). Novocure expects results from this phase 3 trial in 2022. Since many oncologists are already familiar with Optune for their glioblastoma patients, that familiarity may allow for more rapid uptake of Optune for this particular patient population. That could increase Novocure's addressable market from about 14,000 patients for the glioblastoma market by an additional 80,000 patients for the brain metastatic disease market.

Novocure also expects data from a pancreatic cancer trial and ovarian cancer trial to bear results in 2023. There are another potential 75,000 patients combined for these two indications. Between the pancreatic, ovarian, and brain metastasis markets, the three markets combined represent a $3 billion-per-month opportunity.

All tuned up for future growth

Novocure has gone up against some of the most aggressive forms of cancer, and won. With its current price-to-sales (P/S) ratio of 38, Novocure may seem expensive compared to growing biotech counterparts like Seagen (NASDAQ:SGEN) with a P/S ratio of 12, DexCom (NASDAQ:DXCM) with a P/S ratio of 20, or Sarepta Therapeutics (NASDAQ:SRPT) with a P/S ratio of 11. However, Novocure has a mind-boggling high total addressable market well within reach. Its long-term growth potential makes the stock still look like a deal for healthcare investors.

 
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.