Novocure Plummets 20.35%—What’s Fueling the Sudden Sell-Off?

Summary
• Q2 net revenues rose 6% to $158.8M but Adjusted EBITDA fell to -$9.9M
• RSI hit oversold territory at 28.8, signaling potential short-term exhaustion
• Intraday range of $13.05–$16.50 highlights extreme volatility

Novocure’s stock imploded in real-time trading, sinking 20.35% to $13.15 as investors reacted to Q2 earnings. The selloff accelerated amid a bearish technical setup and regulatory uncertainty ahead of FDA submissions. With $358.6M in turnover, the stock now teeters near its 52-week low of $13.05, raising questions about sustainability of its business model and clinical pipeline.

Q2 Net Loss and Negative EBITDA Spark Investor Panic
Novocure’s Q2 report revealed a $40.1M net loss and Adjusted EBITDA of -$9.9M, exacerbated by 17% higher G&A expenses and 2% R&D cost growth. The 74% gross margin (vs. 77% prior year) reflected higher costs from HFE transducer arrays, NSCLC launch challenges, and tariffs. Despite 6% revenue growth to $158.8M, the company’s -10.7x dynamic P/E and cash burn of $40.1M in Q2 triggered immediate profit-taking. Short-term traders also capitalized on the RSI (28.8) hitting oversold levels, amplifying the downward spiral.

Bearish Plays: NVCR20250815P13 and NVCR20250919P14
• 200-day average: 20.21 (above) • RSI: 37.5 (oversold) • MACD: -0.34 (bearish divergence) • Bollinger Bands: 15.72–18.71 (support near $13.05) • 30D MA: 17.27 (bearish crossover with price)

The stock is trading below all major moving averages with a bearish MACD histogram. Key support lies at $13.05 (52W low), with resistance at $17.21 (30D MA). For aggressive bearish plays, the top two options are:

• NVCR20250815P13: Put option with 47.2% IV, 21.65% leverage, delta -0.47, theta -0.0005, gamma 0.2585, turnover 7,424. High gamma ensures sensitivity to price drops; moderate IV suggests reasonable premium.
• NVCR20250919P14: Put option with 45.3% IV, 8.72% leverage, delta -0.61, theta -0.0006, gamma 0.1634, turnover 2,327. Strong delta for directional bets; high IV reflects volatility expectations.

Payoff analysis (5% downside to $12.49): NVCR20250815P13 yields $0.51 (K=13), NVCR20250919P14 yields $1.51 (K=14). Prioritize NVCR20250815P13 for shorter-dated exposure. If $13.05 breaks, NVCR20250815P13 offers maximum leverage.

Backtest Novocure Stock Performance
After an intraday plunge of at least 20%, the performance of NVCR has historically shown mixed results. The backtest data indicates that while the 3-day win rate and 10-day win rate are slightly above 45%, the returns over the short term are negative, with a maximum return of only -0.12% over 30 days. This suggests that following a significant intraday decline, NVCR tends to remain in a weak position, with limited upside potential in the short term.

Now or Never: Position for a Potential Rebound or Reckoning
The selloff has pushed NVCR near its 52W low, but the bearish fundamentals (negative EBITDA, cash burn) and technical indicators (oversold RSI, bearish MACD) suggest further downside risks. Aggressive traders should watch $13.05 support and $17.21 (30D MA) for a potential bounce. Sector leader Bristol-Myers Squibb (BMY) fell 0.12% today, signaling broader biotech caution. For a tactical pivot, NVCR20250815P13 offers high gamma exposure if the stock tests $13.05. Long-term holders should await clarity on Q3 FDA submissions for pancreatic cancer and H2 2025 PMA for NSCLC brain metastases.