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Why NovoCure Stock Is Sinking This Week

By Keith Speights – Oct 28, 2021 at 4:29PM

Key Points

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Investors weren't happy with the company's Q3 update.

What happened

Shares of NovoCure (NVCR -0.92%) were sinking 15.5% this week as of the market close on Thursday, according to data from S&P Global Market Intelligence. The decline stemmed primarily from the company's disappointing third-quarter update.

NovoCure reported net revenue in the third quarter of $133.6 million, up only 1% year over year. The average analysts' estimate was for Q3 revenue of $141.2 million. The company posted a net loss in the third quarter of $13.1 million, or $0.13 per share. This reflected significant deterioration from net income of $9.3 million, or $0.09 per share, in the prior-year period. It also missed the consensus estimate of a net loss of $0.07 per share.

A scientist looking through a microscope.

Image source: Getty Images.

So what

One weaker-than-expected quarter isn't necessarily a cause for concern. However, NovoCure has underwhelmed for several consecutive quarters. Unsurprisingly, the healthcare stock is down more than 40% year to date.

There is some good news for NovoCure, though. Sales for the company's Tumor Treating Fields product, which uses electrical pulses to prevent cancer cells from dividing, are growing in international markets. The company also announced on Thursday that the last patient had been enrolled in its pivotal late-stage study targeting recurrent ovarian cancer.

Now what

NovoCure also has several potential catalysts on the way. The most important of those catalysts is the announcement of final data from a late-stage study targeting non-small cell lung cancer expected in 2022. NovoCure also plans to report data from two phase 2 studies targeting gastric cancer and recurrent glioblastoma next year.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Novocure. The Motley Fool has a disclosure policy.

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