Analyst Emily Bodnar of H.C. Wainwright maintained a Hold rating on NovoCure (NVCR – Research Report), with a price target of $21.00.
Geoff Meacham has given his Hold rating due to a combination of factors surrounding NovoCure’s financial performance and market opportunities. The preliminary revenue data for the fourth quarter of 2023 showed a 5% quarterly increase, suggesting a positive trend in NovoCure’s growth dynamics, particularly in the U.S. market. This improvement appears driven by a stabilization in the fundamental drivers of value for the company’s Optune system, along with a cessation of previous headwinds. Additionally, a slight uptick in prescriptions during this period further supports the notion of a recovering U.S. market. Despite these positive signs, the full-year revenue for 2023 reflected a 5.3% decrease compared to 2022, indicating that while recent growth is encouraging, it does not yet fully offset past declines.
Moreover, the company’s international expansion and the pending U.S. launch of Optune Gio—a next-generation product already in use in Europe—could further bolster long-term sales. The submission of a supplemental PMA for Optune Gio implies potential future growth in the U.S. market once approval is granted, expected in the second half of 2024. Concurrently, NovoCure’s efforts in the glioblastoma (GBM) market are anticipated to yield modest sales growth. In addition, the submission of a PMA for a second-line treatment in non-small cell lung cancer (NSCLC) aligns with previous guidance, with expected approvals in the U.S. and EU, which could unlock additional revenue streams, although material revenue from NSCLC is not forecasted for 2024. These factors collectively contribute to the Hold rating, signaling a cautious optimism with recognition of the company’s potential balanced against the near-term challenges it faces.
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NovoCure (NVCR) Company Description:
NovoCure Ltd. develops treatment for tumors. Its platform is called the Tumor Treating Field which used electric fields tuned to specific frequencies to disrupt solid tumor cancer cell division. The company was founded by Yoram Palti in 2000 and is headquartered in St. Helier, Jersey.
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