This biotech stock could yield 33% upside ahead of cancer trial data, Wells Fargo says
Wells Fargo expects upcoming results from Novocure's LUNAR trial to be a catalyst for the stock. Novocure shares were gaining 3.5% on the back of the Wells Fargo upgrade, which lifted the stock's rating to overweight from equal weight. Analyst Larry Biegelsen also set a new price target of $104 per share, which represents 33% upside from Monday's closing price of $78.38. So far this year, shares of Novocure have gained about 10%. The data on the phase 3 trial is due to be presented at the American Society of Clinical Oncology's annual meeting on June 6. The LUNAR trial studied the efficacy of combining tumor treating fields, which target tumors with electrical frequencies, with more traditional therapies, including immunotherapies, to treat non-small cell lung cancer. NVCR YTD mountain Novocure stock could yield as much as 33% upside ahead of cancer treatment study data, Wells Fargo says. "We believe LUNAR will show relatively balanced PDL-1 status and missing data will not significantly affect data interpretation, paving the way for bigger opportunity in 1L [non-small cell lung cancer]," Biegelsen wrote in a research note. PDL-1 refers to proteins in the human body that work as a stopgap to regulate the immune system's response. PDL-1 can be monitored to see how well a treatment is working. According to Biegelsen, the possibility for Novocure's tumor treating fields to be used for 1L NSCLC would add to the number of patients that could use the company's treatment. "In this analysis, 1L NSCLC contributes $0 to the downside and $43/share in the upside scenarios (60% PoS), the latter assuming a 2030 launch with 40% peak penetration," he said. The analyst also said that even though some data may be missing from Novocure's presentation of the LUNAR trial due to advancements in NSCLC treatments, the company's findings aren't likely to be adversely effected. "We believe NVCR was able to go back to collect some but not all of the data," he said. "Our sense from NVCR is that some missing data is to be expected (as for most trials) but not to the level that it will affect interpretation of the data." — CNBC's Michael Bloom contributed to this report.
Source: CNBC
