Key Takeaways
- Novocure shares fell 5% today, even though third-quarter revenue rose 16% to $193.4 million and the company raised its 2026 guidance.
- The problem is Optune Pax, its pancreatic cancer device, which brought in $3.7 million as Revolution Medicines’ newly approved daraxonrasib takes up oncologists’ time.
- The rest of the business is in better shape, with adjusted EBITDA turning positive.
- The FDA’s decision on Optune Mya for brain metastases, due by year-end, is the next big test.
Novocure (NVCR) beat on third-quarter revenue and raised its 2026 guidance this morning, and the stock still sank 5%.
Blame the pancreatic cancer launch. On the company’s call, CEO Frank Leonard said U.S. momentum for Optune Pax had slowed “due to the introduction of daraxonrasib,” the pill from Revolution Medicines (RVMD) that the FDA approved on Aug. 26. He added that “our ability to access practices to detail Optune Pax is significantly limited at this time.”
The rest of the quarter was strong
Revenue has climbed for most of the past two years.
The third quarter’s record $193.4 million tops them all, though $4.4 million of it was a one-time benefit.
Adjusted EBITDA swung to a positive $15.7 million, and management raised its 2026 revenue guidance to $736 million-$743 million, from $710 million-$725 million. Optune Gio, for brain cancer, ended the quarter with 4,729 active patients, up 11%.
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Pax hits a wall
Optune Pax’s $3.7 million was about 2% of the quarter’s revenue.
Leonard noted that the two have different approved uses: Pax goes with chemotherapy in locally advanced pancreatic cancer, and daraxonrasib treats metastatic patients who’ve already had treatment. But they’re the same oncologists, and right now the new drug has their attention.
Revolution Medicines reports Nov. 4, its first quarter with daraxonrasib on the market. It had sent the drug to physicians for more than 2,000 patients through its expanded access program by early August, and Phase 3 trials are testing it earlier in the disease. If it moves there, how much room is left for Pax?
The sell-off looks overdone
Investors were already paying far less than usual for Novocure’s sales before today.
At the last close, the stock traded at 2.2x forward sales, against a five-year average of 6.9x. At today’s price, it’s even lower. And Novocure has $463.5 million of cash and short-term investments, against about $196 million of debt. It still lost $10.4 million in the quarter, though.
My take: Pax will likely be a smaller business than hoped for a while, but the rest of Novocure is growing and finally making money on an adjusted basis. At these prices, investors are marking down far more than one launch.
Of course, a lot rides on Optune Mya, for brain metastases from lung cancer. Management expects the FDA’s decision by year-end, with a potential launch in early 2027.
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