The stock market remained volatile on Thursday, with investors reacting negatively to signs that the economy might be too strong for the Federal Reserve to slow the pace of its interest rate increases. After having been slightly higher earlier in the morning, the Nasdaq Composite (^IXIC 0.10%) opened lower by about 1%.
The overall gloom for the Nasdaq wasn't enough to stifle excitement from the biotechnology sector. Indeed, good news in the fight against cancer helped send shares of Novocure (NVCR 2.36%) and Zai Lab (ZLAB 3.57%) sharply higher on Thursday morning, and shareholders are pleased with the chances of a key candidate treatment making a difference in the lives of cancer patients.
A big win for Novocure
The movements in the stock prices of Novocure and Zai Lab reflected just how big a deal the latest news was. Novocure jumped 58%, while Zai Lab's stock enjoyed a 40% gain.
Novocure has been conducting a study of its Tumor Treating Fields therapy in treatment of patients with stage 4 non-small cell lung cancer, and the results announced Thursday morning were positive. The study met its primary endpoint of demonstrating a statistically significant and clinically meaningful improvement in overall cancer survival compared to standard therapies alone. Among those conventional therapies were immune checkpoint inhibitors, the oncological drug docetaxel, and platinum-based chemotherapy.
Novocure executive chair William Doyle expressed how big an achievement the study showed. Prior to the study, it had been six years since the last phase 3 clinical trial that had shown significant improvements in survival rates for late-stage non-small cell lung cancer patients who hadn't responded to chemotherapy alone. Novocure now hopes that Tumor Treating Fields therapy can extend survival not just in non-small cell lung cancer but for other forms of cancer as well.
To follow up, Novocure expects to file a premarket approval application with the U.S. Food and Drug Administration in the second half of this year. At the same time, it will seek the CE mark in the European Union.
Zai is on the team
Zai Lab also stands to participate in the success of Tumor Treating Fields. Under a strategic collaboration agreement that began in 2018, Novocure agreed to give Zai an exclusive license agreement for Tumor Treating Fields technology in the greater China region, including not only the mainland, but also Hong Kong, Macao, and Taiwan.
At the time, one benefit of the collaboration was to open up the Chinese market for use of the therapy in the roughly 45,000 patients diagnosed with glioblastoma annually. However, the collaboration also contemplated looking to add further indications for the Tumor Treating Fields, including pancreatic, ovarian, and gastric cancer. Since the agreement, Novocure and Zai have worked together extensively, including some trials run specifically on patients in China.
Still room to run
Even with today's gains in Novocure and Zai Lab stock, however, some investors aren't yet ready to celebrate. Novocure's rise takes the stock to its best levels over the past year, but the share price remains down more than 50% from its mid-2021 highs. The story for Zai Lab is even more extreme, as the gains still leave the Chinese biopharmaceutical stock down more than 70% from where it was a year and a half ago.
Nevertheless, the potential for Tumor Treating Fields to treat a wider range of cancer indications is good news for millions of patients worldwide. As further studies continue, investors will have their eyes on Novocure and Zai Lab in hopes of seeing additional success.
