NovoCure: forging its own (fast) path in oncology

NovoCure, part of our Bionics strategy, surged ~50% yesterday after an independent data panel suggested to fast-track clinical trial for its lung cancer treatment candidate.

Bottom line

The new recommended protocol could accelerate trial completion by more than a year. The company’s disruptive Tumor Treating Field (TTF) therapy is one step closer to become the fourth treatment modality for lung cancer patients, strengthening our views on NovoCure’s opportunities and game changing technology.

What happened

NovoCure provided an update on Phase 3 pivotal LUNAR trial for Non-Small Cell Lung Carcinoma (NSCLC) following a review of the interim results from 210 patients by an independent Data Monitoring Committee (DMC).

The study showed no systemic toxicity and the DMC recommended shortening the follow-up (12 months vs. the previously established 18 months) as well as reducing the sample population to 276 patients (vs. the initial target of 534). Novocure has notified the Food and Drug Administration (FDA) to incorporate the adjustments.

The study's primary endpoint is evaluating if TTF therapy's addition to checkpoint inhibitors or docetaxel, two NSCLC treatments, improves overall survival.

TTF Therapy: the fourth cancer treatment modality

NovoCure holds the monopoly of a rapidly emerging technology called Tumor Treating Field (TTF) therapy, a fourth cancer modality treatment with few side effects. TTF therapy turns an electric field to a specific frequency to prevent cellular division that causes cancer to grow.

In both our 2021 Outlook and 2021 Top Picks we already mentioned how the LUNAR interim analysis is an essential milestone for NovoCure. NSCLC is the most common type of lung cancer (200,000 new cases in the U.S. annually), with a five-year survival rate of around 20%. Currently, the golden standard of treatment for hard-to-treat cancers requires a combination of surgery, radiation, and pharmacological therapies, depending on the disease’s stage.

In the past, TTF therapy has gained approval to treat glioblastoma, newly diagnosed glioblastoma and mesothelioma, aggressive forms of brain and lung cancers. These three indications alone have recently allowed the company to hit profitability and positive cash flow, driving a top-line 5Y CAGR of around 70%.

The company is currently conducting several studies to validate the approach in other forms of solid cancer. If successful, they may expand the total addressable market by many folds.

Our takeaway

The announcement puts the company a step closer to have another commercially available treatment as it may accelerate the TTF therapy's approval for NSCLC by more than one year (initially scheduled for 2023). The news also bodes well for NovoCure's partners Merck and Zai Lab. Last year Merck partnered with NovoCure to study Keytruda combined with TTF therapy as first-line therapy in advanced NSCLC. Zai Lab has licensed China rights to all the TTF therapy applications.

Additionally to the very positive news, NovoCure has multiple catalysts on the horizon, supporting the company's momentum:

  • Data from phase 2 pilot HEPANOVA study for advanced liver cancer – Q2 2021
  • Interim analysis of phase 3 INNOVATE-3 study in recurrent ovarian cancer – Q3 2021
  • Interim analysis of phase 3 LUNAR study in NSCLC – Q4 2021

We believe that TTF therapy addresses cancer indications with highly unmet needs. The approach continues to be validated by clinical data as highlighted by the DMC recommendations. It is very likely to drive acceptance and payer coverage in the right direction – benefiting Novocure, the de-facto monopolist in this space.



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