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Why Novocure Shares Jumped 10.5% Today

What happened

Novocure (NASDAQ: NVCR) is presenting new data at the 39th Annual International Conference of the IEEE Engineering in Medicine and Biology Society (EMBS) this week, and that helped spark a 10.5% rally in its shares today.

So what

Novocure markets Optune, a device worn by patients with rare forms of brain cancer to disrupt cancer cell division. 

IMAGE SOURCE: GETTY IMAGES.

Optune has been on the market for use in advanced glioblastoma since 2011; however, doctors are increasingly prescribing it after trials showed that adding Optune to standard chemotherapy in newly diagnosed glioblastoma patients helped them live an average of nearly three months longer than they would with chemotherapy alone. 

The FDA approved Optune for use in this expanded indication in 2015, and in Q1 2017, an 18% year-over-year increase in Optune prescriptions resulted in a 167% increase in first-quarter revenue to $34.9 million.

Now what

Investors will find out Novocure's second-quarter financials on July 27. At that point, management may provide additional insight into its progress toward evaluating Optune in other cancer indications, including mesothelioma, pancreatic cancer, and non-small-cell lung cancer. Results from the mesothelioma trial are expected in 2018, and enrollment in a phase 3 pancreatic cancer trial is slated for this year.

The company has a novel approach to treating cancer, and the ability to secure approvals someday in much larger addressable markets could make this company a top stock. Of course, there's no guarantee that trials will pan out, so investors should be cautious. Nevertheless, management believes it can turn a profit solely on Optune's existing market, and that fact, plus the potential to expand Optune's use, makes this an intriguing stock to watch. 

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Todd Campbell has no position in any stocks mentioned. His clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.