JMP Thinks NovoCure Could Double

• Novocure Ltd NVCR shares have surged 10 percent since October 10, while remaining meaningfully below the high end of their 52-week range of $15.01 - $30.89.
• JMP Securities’ Michael G. King initiated coverage of the company with an Outperform rating and a price target of $43.
• With Optune having received approval in the US, Europe and Japan, the company faces solid opportunities, King said.

Analyst Michael King believes that there are solid opportunities in tumor treating fields [TTFields], which is a new treatment modality in oncology. “The company has a unique business model with its first approved product, Optune, representing a hybrid between a device and a therapeutic.”

Optune has received approval in the US, Europe and Japan, and Novocure has proceeds from its recent IPO. Both these position the company to penetrate a large market opportunity in glioblastoma, or GBM. The opportunity for GBM alone could be worth more than $2.5 billion, King mentioned.

In the report JMP Securities noted, “With no similar therapeutic technologies in existence, or on the horizon, and demonstrated efficacy in combination with the current standard of care, we believe TTFields will become part of the new reference standard.”

Novocure has started delivering “solid clinical data, regulatory approvals, and early real-world experience,” and has already crossed numerous hurdles that earlier-stage companies typically face.

Apart from its recent FDA approval in newly diagnosed GBM, the company has 5 completed or ongoing Phase II trials and 9 completed preclinical studies. King added that the company has a proven mechanism of action and a robust pipeline of Phase II as well as pre-clinical studies. Additional indications could boost growth in coming years.