What happened
Quarterly earnings aren't providing much of a cure for Novocure (NVCR +0.42%). The company, which concentrates on novel cancer-fighting solutions, saw its stock dive by almost 10% on Thursday following the publication of its latest set of results.
So what
In Q2, Novocure took in $133.5 million in revenue, 15% higher than in the same quarter last year. On the bottom line, however, it flipped to a loss of $14.6 million ($0.14) from the $1.7 million net profit of Q2 2020.
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Unfortunately, prognosticators tracking Novocure stock were modeling nearly $141.9 million in revenue and a per-share net profit of $0.01.
The top-line improvements were due largely to sales increases in key company geographies. Greater China was a particularly lively market for Novocure, even though it remains relatively small. Sales to the country more than doubled to hit $4.9 million for the quarter. In the Europe, Middle East, and Africa super region, that increase was 29% to almost $33 million.
A 68% rise in research and development spending, meanwhile, was a key factor in that unexpected dive into the red on the bottom line.
Now what
No investor likes a surprise plunge into negative numbers, hence Novocure's Thursday swoon. Yet the healthcare company, whose devices utilize a type of electric field to disrupt the division of cancer cells, should publish the results of mid- and late-stage clinical trials for a raft of cancer-treatment solutions between Q3 of 2021 and throughout next year. If successful, any one of these could easily send the stock northwards again.
