What happened
Shares of Novocure (NVCR 1.96%) were trading 8.3% lower as of 10:55 a.m. ET on Thursday after the company announced organizational changes that were made, in its words, to "prepare for future growth."
Novocure said in a press release that Pritesh Shah, currently the chief commercial officer, will move into the new role of chief growth officer. Chief Medical Officer Ely Benaim is leaving the company. Uri Weinberg will move from chief science officer to a new role as chief innovation officer. Moshe Giladi, who currently serves as senior vice president of preclinical research, will take Weinberg's place as chief scientific officer.
So what
Why would the healthcare stock fall so much on these organizational changes? Benaim's exit as chief medical officer could cause the most questions. The press release stated that his departure followed "a review of Novocure's future needs." Senior Vice President and Head of Global Medical Affairs Piet Hinoul will serve as interim head of medical as Novocure conducts a search for a new chief medical officer.
However, there aren't any obvious reasons to be concerned about Benaim leaving the company. Thursday morning's share price drop probably reflects investors' unease about the prospects for Novocure's Tumor Treating Fields (TTFields) in non-small cell lung cancer (NSCLC) as much as it does anything else. Evercore ISI analyst Vijay Kumar sparked a sell-off in the stock over the last few days by raising questions about Novocure's NSCLC study design.
Now what
Novocure CEO Asaf Danziger said that the company believes that the positive update from its late-stage NSCLC study "marks the beginning of a transformational period for Novocure." The next big step for the company will be to reveal the full data from that study at an upcoming medical conference. Novocure plans to file for regulatory approvals of TTFields in treating NSCLC in the second half of this year.
