NVCR - NovoCure upgraded at Wedbush citing balanced risk-reward setup

2023-06-07 08:38:13 ET

NovoCure Limited ( NASDAQ: NVCR ) eked out a ~3% gain in the pre-market Wednesday as Wedbush upgraded the medical device maker to Neutral from Underperform, citing a favorable risk-reward setup following a ~43% slump in the previous session.

Reviewing Phase 3 data for the company’s cancer treatment, Tumor Treating Fields that led to the selloff, the analyst David Nierengarten argued that the device with immune checkpoint inhibitors (ICI) led to a greater, statistically significant improvement in overall survival (OS).

However, the study involving patients with non-small cell lung cancer didn’t reach the endpoint of overall survival for TTFields plus chemotherapy docetaxel versus docetaxel alone, Nierengarten added.

“We also do not see broad adoption of TTF in NSCLC patients that are being treated with chemotherapy given the marginal benefits demonstrated,” he wrote.

Arguing that 2% and 58% of patients in TTFields + ICI and TTFields + docetaxel arms had prior ICI therapy, respectively, the analyst sees limited use of the treatment in NSCLC where the current standard of care involves ICIs in a first-line setting.

However, Nierengarten points out that NovoCure ( NVCR ) shares have approached its valuation for the company’s glioblastoma franchise for FDA-approved TTFields devices. “We see more limited downside on negative clinical news and believe the risk/reward at these levels is more balanced,” the analyst explained.

However, Wedbush lowered the price target on NVCR to $46 from $53 per share to reflect a lower market share for TTFields as a second-line therapy in NSCLC and add its value as a first-line option for NSCLC.

More on NovoCure

• Why did NovoCure stock crash today? TTFields data
• NovoCure: Misunderstood Lung Cancer Data Creates Enormous Buy Opportunity

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