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NovoCure Stock Rose after Positive Results from Clinical Trial

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Stock performance

On September 6, NovoCure (NVCR) stock rose 5.3% to reach $45.40 compared to the previous day’s close of $43.10. Also, on September 6, NovoCure hit its 52-week high of $46.73. Its closing price for the day represents ~182% growth from its 52-week low of $16.10 on October 13, 2017.

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Reason for stock price rise

On September 6, NovoCure announced the final results of its phase two STELLAR registration trial. Mesothelioma patients receiving tumor treating fields and standard of care chemotherapy demonstrated significant extension in their median OS (overall survival) compared to patients who received standard of care chemotherapy as per historical control data. In the STELLAR trial, mesothelioma patients on tumor treating fields and standard of care chemotherapy showed a median OS of 18.2 months, while historical control patients who received standard of care chemotherapy had a median overall survival of 12.1 months. In the STELLAR trial, secondary endpoints as well demonstrated improvement compared to historical control.

In tumor treating fields, cancer treatment electric fields are tuned to certain frequencies to disrupt cell division, which in turn inhibits tumor growth and causes the gradual death of cancer cells. In 2017, the FDA granted HUD (humanitarian use device) designation to tumor treating fields. Novocure plans to submit a HDE (humanitarian device exemption) application by the end of this year to the FDA.

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Analysts’ recommendations

Of the six analysts tracking NovoCure in September 2018, two of them recommended a “strong buy,” while three analysts recommended a “buy” rating. One analyst recommended a “hold” in September 2018. On September 6, NovoCure had a consensus 12-month target price of $45.8, which is a ~0.88% return on investment over the next 12 months.

Peers’ ratings

In September 2018, all of the seven analysts tracking Array Biopharma (ARRY) recommended “buys.” Of the five analysts tracking Corcept Therapeutics (CORT), ~40% of them recommended “buys.”

On September 6, 2018, Array Biopharma had a consensus 12-month target price of $23.57, which represents a ~62.66% return on investment over the next 12 months.

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