Novocure (NVCR) said on Tuesday that it was informed that the pre-specified interim analysis for the LUNAR trial would be accelerated given the length of accrual and the number of events observed to date, with the data monitoring committee also recommending a reduced sample size of approximately 276 patients with 12 months follow-up. While several Wall Street analysts upped their price targets on the stock following what they viewed as positive news, Wedbush analyst David Nierengarten has downgraded Novocure to a Sell-equivalent rating as he thinks the study is likely not showing a statistical benefit and an alternative reason for the DMC's commentary would be a reluctance to require patients forgo alternative therapies.
LUNAR UPDATE: Zai Lab (ZLAB) and Novocure provided on Tuesday an update regarding the phase 3 pivotal LUNAR trial of Tumor Treating Fields in stage 4 non-small cell lung cancer, or NSCLC, following platinum failure. Following a routine review of the study by an independent data monitoring committee, or DMC, Novocure was informed that the pre-specified interim analysis for the LUNAR trial would be accelerated given the length of accrual and the number of events observed, to date. The interim analysis included data from 210 patients accrued to the LUNAR trial through February 2021.
After review of the interim analysis report, the DMC concluded that the LUNAR trial should continue with no evidence of increased systemic toxicity. The DMC also stated that it is likely unnecessary and possibly unethical for patients randomized to the control arm to continue accrual to 534 patients with 18 months follow-up. The DMC recommended a reduced sample size of approximately 276 patients with 12 months follow-up which it believes will provide sufficient overall power for both primary and secondary endpoints. The DMC recommended no other changes to the design of the trial. Novocure remains blinded to all data.
The primary endpoint of the LUNAR trial is superior overall survival when patients are treated with TTFields plus immune checkpoint inhibitors or docetaxel versus immune checkpoint inhibitors or docetaxel alone. The final analysis will also include an analysis of overall survival in the immune checkpoint inhibitor and docetaxel treatment subgroups.
'CLEAR POSITIVE' FOR NOVOCURE: Commenting on the LUNAR update, Piper Sandler analyst Jason Bednar told investors that he views the news as a "clear positive" for Novocure as it represents the "next best outcome to the trial being stopped early for success." Bednar believes the update also serves to reinforce the broad applicability of TTFields in treating solid cancerous tumors. He kept an Overweight rating on Novocure with a $225 price target.
Meanwhile, Northland analyst Jason Wittes raised the firm's price target on Novocure to $250 from $200 and maintained an Outperform rating on the shares after the company announced that the independent DMC for the Phase 3 pivotal LUNAR trial of Optune in stage 4 non-small cell lung cancer following platinum failure has recommended accelerating the trial. "Basically, the DMC is projecting LUNAR will meet its endpoints and with less patients and less follow up," he contended.
Mizuho analyst Difei Yang also raised her price target on Novocure to $242 from $175, while keeping a Buy rating. The analyst sees the news as supportive of Optune meeting the primary and secondary endpoints at the final trial analysis. Non-small cell lung cancer represents the largest indication for Novocure and further reinforces the applicability of Optune across a broad range of cancers, Yang told investors in a research note.
Also bullish on the news, Wells Fargo analyst Lawrence Biegelsen raised the firm's price target on Novocure to $215 from $135 to reflect increased optimism in the company's overall pipeline outlook. The analyst now assumes that all four of Novocure's Phase 3 studies -METIS, LUNAR, PANOVA-3, INNOVATE-3 - will complete in 2022 with U.S. commercial launches in 2023, or about a year earlier than previously expected. Nonetheless, he kept an Equal Weight rating on the shares.
SELL NOVOCURE: Meanwhile, Wedbush analyst David Nierengarten downgraded Novocure to Underperform from Neutral with a price target of $154, down from $159, following the announcement that the data monitoring committee for the LUNAR study in second-line non-small cell lung cancer patients recommended that the company reduce both enrollment to 276 patients from 534 and follow up time to 12 months from 18 months after a study review. The analyst highlighted that "intriguingly," the DMC also stated that it was "likely unnecessary" and "possibly unethical" for the control arm to continue accrual to the previous levels and duration. While Nierengarten acknowledged that this appears to be positive news, he believes the study is likely not showing a statistical benefit and an alternative reason for the DMC's commentary would be a reluctance to require patients forgo alternative, third-line therapies.
PRICE ACTION: In late morning trading, shares of Novocure have dropped about 6% to $185.32. The stock had jumped about 50% on Tuesday.
"Street Fight" is The Fly's recurring series of exclusive stories that highlight a stock or sector that is in focus amid divergent views from Wall Street analysts.
