Shares in oncology company NovoCure Ltd. tumbled in their trading debut Friday, the latest example of investors' lack of appetite for biotechnology shares.

NovoCure shares opened at $20.16, below their initial public offering price of $22 and valuing the company at about $1.67 billion. The company initially hoped to offer shares at $26 to $29 a piece but had cut that guidance to $23 to $24 amid growing pressure on biotech stocks.

The stock, trading under the ticker "NVCR" on the Nasdaq, recently moved at $19.30. The decline came amid a broader market downturn, sparked by a disappointing employment report earlier Friday morning.

NovoCure, founded 15 years ago by Dr. Yoram Palti in his basement lab, is primarily concerned with using electrical fields as noninvasive cancer treatments and uses tumor-treating fields to disrupt cell division.

NovoCure has one drug approved by the Federal Drug Administration, a treatment for recurrent glioblastoma brain cancer. A treatment for newly-diagnosed glioblastoma is in late-stage trials, and the company has about 15 other cancer drugs in development.

To receive the treatment, a glioblastoma brain cancer patient wears a portable electric field generator in the form of a bag strapped onto the back. NovoCure said the therapy, designed to be worn continuously, allows patients to go about their daily activities.

In the most recent year, NovoCure reported a loss of $80.7 million, or $6.46 a share. Revenue grew 49% from a year earlier to $15.5 million.

The company is based in Jersey Isle, one of the Channel Islands, but has U.S. operations based out of New Hampshire.

The IPO comes as the biotechnology sector remains under pressure Friday. An index of biotech stocks that trade on the Nasdaq slipped 0.4% in morning trading, adding to the 17% loss the basket has seen over the past three months.

Many biotech stocks have no earnings or revenue, requiring investor patience as companies test treatments and seek approval. At the same time, soaring drug prices have commanded increasing political attention that has given some investors pause. Still, the sector has long been an investor favorite thanks to the prospect of blockbuster drugs.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

 

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(END) Dow Jones Newswires

October 02, 2015 11:35 ET (15:35 GMT)

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