NVCR stock fell 37% after a failed ovarian cancer treatment

Novocor (nvcr) said on Monday that electricity-based cancer treatment had failed to make a difference for ovarian cancer patients. NVCR stock fell on the news.

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In today’s stock market, Novocure shares collapsed by 37.5%, ending the day at 18.61.

The company tested the oncology technology in combination with chemotherapy on a group of patients who did not respond well to a particular type of chemotherapy. The Novocure platform uses a body-worn pad that emits fields of electricity into the body. The goal is to stop the rapid division of cancer cells.

But in the Novocure study, patients who received the combination lived an average of 12.2 months, compared to 11.9 months for patients who received chemotherapy alone. Novocure enrolled patients who had received up to five previous treatments. The company says its technology can show benefit in healthy patients who have only had one prior treatment.

NVCR stock opened at its lowest level in nearly six years.

NVCR Stock: Is the platform’s story over?

Wedbush analyst David Nierengarten cut his price target for NVCR stock to 23 from 46. He maintained his Neutral rating on the stock.

Novocure’s oncology technology, called Optune, is approved to treat patients with a type of brain cancer called glioblastoma. But Nierengarten doesn’t expect Novocure to be able to expand its platform to many other types of cancer.

“Because there are no meaningful expansion opportunities for[uses]beyond glioblastoma, which we believe is quite saturated, we don’t see a way for the oncology fields to grow above low single digits in the near term.” He said in a note to clients.

Evercore ISI analyst Vijay Kumar was more forgiving of Novocure’s failure. In a note to clients, he said investors will likely focus on seeing the Novocure method as a way to treat individual cancers versus a platform for all cancers.

But this greatly reduces the valuation of NVCR shares. That means a market cap of $1.1 billion to $2.2 billion versus the stock closing at about $3.2 billion on Friday.

Follow Allison Gatlin on X, the platform formerly known as Twitter @IBD_AGatlin.

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