NVCR - NovoCure defended at H.C. Wainwright despite earnings led selloff

H.C. Wainwright reaffirmed the Buy rating on oncology-focused medical equipment maker NovoCure Limited ( NASDAQ: NVCR ) on Thursday despite a loss of ~16% of its value early this week after pre-announcing lower-than-expected Q4 financials.

The maker of the Optune brand of cancer treatments reported $128.4M in net revenue for Q4 2022 on Monday, which fell short of $128.9M in the consensus.

However, H.C. Wainwright analyst Emily Bodnar notes a sequential improvement of active patients in Q3, which suggests “a turnaround in patient volumes.”

Additionally, the U.S. revenue has continued to decline due to aged Medicare claims which the NovoCure ( NVCR ) management previously cited as a headwind for 2022 and into 2023. Meanwhile, revenue from Germany has rebounded after changes to the protocol for reimbursement that hurt 2022 sales.

However, H.C. Wainwright lowers its 2023 revenue estimate for the company due to slower growth recovery in the U.S. and trims NovoCure ( NVCR ) price target to $135 from $140 per share. Yet, the analyst cites the company’s plans to launch more advanced flex arrays as a potential tailwind for sales growth in 2023.

Potentially stock-moving two key Phase 3 data readouts await NovoCure ( NVCR ) later this year, Seeking Alpha contributor BioSci Capital Partners pointed out several days ago.

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