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Novocure Reports First Quarter 2023 Financial Results

Data from phase 3 LUNAR clinical trial in non-small cell lung cancer to be presented June 6th at ASCO Annual Meeting

Enrollment of phase 3 METIS clinical trial completed, the fourth phase 3 clinical trial to complete enrollment in last 18 months

Novocure (NASDAQ: NVCR) today reported financial results for the quarter ended March 31, 2023. Novocure is a global oncology company working to extend survival in some of the most aggressive forms of cancer by developing and commercializing its innovative therapy, Tumor Treating Fields (TTFields).

“The first quarter was another period of solid progress for Novocure,” said Asaf Danziger, Novocure’s Chief Executive Officer. “We received the most prescriptions in our history in the U.S., earned reimbursement for Optune in France and launched our next generation arrays in Sweden. We look forward to a promising 2023 and the opportunity to reach many more patients who can benefit from the use of Tumor Treating Fields therapy.”

“We are pleased to share the presentation of data from our phase 3 LUNAR clinical trial next month at the American Society of Clinical Oncology annual meeting in Chicago,” said William Doyle, Novocure’s Executive Chairman. “LUNAR is the first phase 3 clinical trial completed utilizing TTFields outside the brain and together with immunotherapy. LUNAR is also the first of four phase 3 clinical trials set to readout by the end of 2024. This marks the beginning of Novocure’s next chapter, with the potential to help tens of thousands of patients diagnosed with deadly cancers in the coming years.”

Financial updates for the first quarter ended March 31, 2023:

  • Total net revenues for the quarter were $122.2 million, a decrease of 11% compared to the same period in 2022.
    • The United States, Germany and Japan contributed $85.2 million, $15.1 million and $8.7 million in quarterly net revenues, respectively, with our other active markets contributing $7.9 million.
    • Revenue in Greater China from Novocure’s partnership with Zai Lab totaled $5.3 million.
  • Gross margin for the quarter was 76%.
  • Research, development and clinical studies expenses for the quarter were $59.7 million, an increase of 41% from the same period in 2022. This primarily reflects increased clinical trial and personnel costs associated with the PANOVA-3 and METIS clinical trials. Total clinical trial expenses can fluctuate quarter-to-quarter dependent upon the amount of clinical research organization services delivered, clinical materials procured and number of trials actively underway.
  • Sales and marketing expenses for the quarter were $51.2 million, an increase of 35% compared to the same period in 2022. This reflects increased investments associated with geographic expansion and pre-launch activities intended to increase awareness of TTFields in anticipation of future approvals in new indications.
  • General and administrative expenses for the quarter were $41.9 million, an increase of 37% compared to the same period in 2022. This reflects increased personnel costs to support larger patient populations, new geographic launches, supply chain expansion and information technology enhancements.
  • Net loss for the quarter was $53.1 million with loss per share of $0.50.
  • Adjusted EBITDA* for the quarter was $(18.4) million.
  • Cash, cash equivalents and short-term investments were $958.0 million as of March 31, 2023.

Operational updates for the first quarter ended March 31, 2023:

  • 1,496 prescriptions were received in the quarter, an increase of 8% compared to the same period in 2022. Prescriptions from the United States, Germany and Japan contributed 1,051, 208 and 72 prescriptions, respectively, with the remaining 165 prescriptions received in our other active markets.
  • As of March 31, 2023, there were 3,467 active patients on therapy. Active patients from the United States, Germany and Japan contributed 2,168, 477 and 382 active patients, respectively, with the remaining 440 active patients contributed by our other active markets.

Quarterly updates and achievements:

  • In April, we announced the results of the phase 3 LUNAR clinical trial in non-small cell lung cancer (NSCLC) will be presented for the first time at the 2023 American Society of Clinical Oncology Annual Meeting in Chicago on Tuesday, June 6 at 11:09 a.m. CDT in Hall D1. Novocure will host an investor event at 2:00 p.m. CDT on June 6 featuring leading thoracic oncologists, investigators and Novocure leadership. A live webcast of the event will be available on the investor relations page of www.novocure.com. For more information or to request in-person attendance, please contact investor relations (investorinfo@novocure.com).
  • In March, we announced the reimbursement and availability of Optune together with temozolomide for the treatment of adult patients with newly diagnosed glioblastoma in France.
  • In March, we announced the final patient enrolled in the phase 3 METIS clinical trial evaluating the efficacy of TTFields therapy following stereotactic radiosurgery for the treatment of patients with brain metastases from NSCLC. Following the completion of enrollment, patients will be followed for a 12-month period, with top-line data anticipated in the first quarter of 2024.
  • In March, we announced the election of Kristin Stafford to the Board of Directors. Ms. Stafford serves as Senior Vice President, Chief Accounting Officer for Royalty Pharma plc.
  • In February, we announced the final patient enrolled in the phase 3 PANOVA-3 clinical trial in locally advanced pancreatic cancer. Following the completion of enrollment, patients will be followed for an 18-month period, with final data anticipated in the second half of 2024.
  • In February, we announced the election of Dr. Allyson J. Ocean, M.D., to the Boards of Directors. Dr. Ocean serves as a medical oncologist and Associate Professor of Clinical Medical at Weill Cornell Medicine.

Anticipated clinical milestones:

  • Data from phase 3 LUNAR clinical trial in NSCLC (ASCO Annual Meeting, June 6, 2023)
  • Data from phase 3 INNOVATE-3 clinical trial in recurrent ovarian cancer (2H 2023)
  • Top-line data from phase 3 METIS clinical trial in brain metastases (Q1 2024)
  • Data from phase 3 PANOVA-3 clinical trial in locally advanced pancreatic cancer (2H 2024)

Conference call details

Novocure will host a conference call and webcast to discuss first quarter 2023 financial results at 8:00 a.m. EDT today, Thursday, May 4, 2023. To access the conference call by phone, use the following conference call registration link and dial-in details will be provided. To access the webcast, use the following webcast registration link.

The webcast, earnings slides presented during the webcast and the corporate presentation can be accessed live from the Investor Relations page of Novocure’s website, www.novocure.com/investor-relations, and will be available for at least 14 days following the call. Novocure has used, and intends to continue to use, its investor relations website, as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

About Novocure

Novocure is a global oncology company working to extend survival in some of the most aggressive forms of cancer through the development and commercialization of its innovative therapy, Tumor Treating Fields. Novocure’s commercialized products are approved in certain countries for the treatment of adult patients with glioblastoma, malignant pleural mesothelioma and pleural mesothelioma. Novocure has ongoing or completed clinical trials investigating Tumor Treating Fields in brain metastases, gastric cancer, glioblastoma, liver cancer, non-small cell lung cancer, pancreatic cancer and ovarian cancer.

Headquartered in Root, Switzerland and with a growing global footprint, Novocure has regional operating centers in Portsmouth, New Hampshire and Tokyo, as well as a research center in Haifa, Israel. For additional information about the company, please visit Novocure.com and follow @Novocure on LinkedIn and Twitter.

*Non-GAAP Financial Measurements

We measure our performance based upon a non-U.S. GAAP measurement of earnings before interest, taxes, depreciation, amortization and shared-based compensation ("Adjusted EBITDA"). We believe Adjusted EBITDA is useful to investors in evaluating our operating performance because it helps investors compare the results of our operations from period to period by removing the impact of earnings attributable to our capital structure, tax rate and material non-cash items, specifically share-based compensation.

Forward-Looking Statements

In addition to historical facts or statements of current condition, this press release may contain forward-looking statements. Forward-looking statements provide Novocure’s current expectations or forecasts of future events. These may include statements regarding anticipated scientific progress on its research programs, clinical trial progress, development of potential products, interpretation of clinical results, prospects for regulatory approval, manufacturing development and capabilities, market prospects for its products, coverage, collections from third-party payers and other statements regarding matters that are not historical facts. You may identify some of these forward-looking statements by the use of words in the statements such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” or other words and terms of similar meaning. Novocure’s performance and financial results could differ materially from those reflected in these forward-looking statements due to general financial, economic, environmental, regulatory and political conditions as well as issues arising from the COVID-19 pandemic and other more specific risks and uncertainties facing Novocure such as those set forth in its Annual Report on Form 10-K filed on February 23, 2023, and subsequent filings with the U.S. Securities and Exchange Commission. Given these risks and uncertainties, any or all of these forward-looking statements may prove to be incorrect. Therefore, you should not rely on any such factors or forward-looking statements. Furthermore, Novocure does not intend to update publicly any forward-looking statement, except as required by law. Any forward-looking statements herein speak only as of the date hereof. The Private Securities Litigation Reform Act of 1995 permits this discussion.

Consolidated Statements of Operations

USD in thousands (except share and per share data)

 

 

Three months ended March 31,

 

Year ended

December 31,

 

 

 

2023

 

 

 

2022

 

 

 

2022

 

 

 

Unaudited

 

Audited

Net revenues

 

$

122,182

 

 

$

137,547

 

 

$

537,840

 

Cost of revenues

 

 

29,614

 

 

 

27,727

 

 

 

114,867

 

Gross profit

 

 

92,568

 

 

 

109,820

 

 

 

422,973

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

Research, development and clinical studies

 

 

59,704

 

 

 

42,234

 

 

 

206,085

 

Sales and marketing

 

 

51,169

 

 

 

37,884

 

 

 

173,658

 

General and administrative

 

 

41,944

 

 

 

30,508

 

 

 

132,753

 

Total operating costs and expenses

 

 

152,817

 

 

 

110,626

 

 

 

512,496

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

(60,249

)

 

 

(806

)

 

 

(89,523

)

Financial income (expenses), net

 

 

9,169

 

 

 

(1,709

)

 

 

7,677

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

(51,080

)

 

 

(2,515

)

 

 

(81,846

)

Income taxes

 

 

1,981

 

 

 

2,132

 

 

 

10,688

 

Net income (loss)

 

$

(53,061

)

 

$

(4,647

)

 

$

(92,534

)

 

 

 

 

 

 

 

Basic net income (loss) per ordinary share

 

$

(0.50

)

 

$

(0.04

)

 

$

(0.88

)

Weighted average number of ordinary shares used in

computing basic net income (loss) per share

 

 

105,667,072

 

 

 

104,186,120

 

 

 

104,660,476

 

Diluted net income (loss) per ordinary share

 

$

(0.50

)

 

$

(0.04

)

 

$

(0.88

)

Weighted average number of ordinary shares used in

computing diluted net income (loss) per share

 

 

105,667,072

 

 

 

104,186,120

 

 

 

104,660,476

 

Consolidated Balance Sheets

USD in thousands (except share data)

 

 

March 31,

2023

 

December 31,

2022

 

 

 

Unaudited

 

Audited

 

ASSETS

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

Cash and cash equivalents

 

$

185,963

 

$

115,326

 

Short-term investments

 

 

772,072

 

 

854,099

 

Restricted cash

 

 

676

 

 

508

 

Trade receivables, net

 

 

74,830

 

 

86,261

 

Receivables and prepaid expenses

 

 

23,730

 

 

25,959

 

Inventories

 

 

31,723

 

 

29,376

 

Total current assets

 

 

1,088,994

 

 

1,111,529

 

LONG-TERM ASSETS:

 

 

 

 

 

Property and equipment, net

 

 

36,454

 

 

32,678

 

Field equipment, net

 

 

12,216

 

 

12,684

 

Right-of-use assets

 

 

25,529

 

 

23,596

 

Other long-term assets

 

 

11,147

 

 

11,161

 

Total long-term assets

 

 

85,346

 

 

80,119

 

TOTAL ASSETS

 

$

1,174,340

 

$

1,191,648

 

 

 

 

 

 

 

Consolidated Balance Sheets

USD in thousands (except share data)

 

March 31,

2023

 

December 31,

2022

 

Unaudited

 

Audited

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

CURRENT LIABILITIES:

 

 

 

Trade payables

$

81,469

 

 

$

85,197

 

Other payables, lease liabilities and accrued expenses

 

67,306

 

 

 

73,580

 

Total current liabilities

 

148,775

 

 

 

158,777

 

LONG-TERM LIABILITIES:

 

 

 

Long-term debt, net

 

566,324

 

 

 

565,509

 

Deferred revenues

 

1,843

 

 

 

2,878

 

Long-term leases

 

19,973

 

 

 

18,762

 

Employee benefit liabilities

 

5,143

 

 

 

4,404

 

Other long-term liabilities

 

136

 

 

 

148

 

Total long-term liabilities

 

593,419

 

 

 

591,701

 

TOTAL LIABILITIES

 

742,194

 

 

 

750,478

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY:

 

 

 

Share capital -

 

 

 

Ordinary shares no par value, unlimited shares authorized; issued and outstanding:

106,187,162 shares and 105,049,411 shares at March 31, 2023 (unaudited) and December 31, 2022, respectively

 

 

 

 

 

Additional paid-in capital

 

1,266,358

 

 

 

1,222,063

 

Accumulated other comprehensive income (loss)

 

(2,691

)

 

 

(2,433

)

Retained earnings (accumulated deficit)

 

(831,521

)

 

 

(778,460

)

TOTAL SHAREHOLDERS' EQUITY

 

432,146

 

 

 

441,170

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

1,174,340

 

 

$

1,191,648

 

Non-U.S. GAAP financial measures reconciliation

USD in thousands

 

 

Three months ended March 31,

 

 

2023

 

2022

 

% Change

Net income (loss)

 

$

(53,061)

 

$

(4,647)

 

1,042%

Add: Income tax

 

 

1,981

 

 

2,132

 

(7)%

Add: Financial expenses (income), net

 

 

(9,169)

 

 

1,709

 

(636)%

Add: Depreciation and amortization

 

 

2,722

 

 

2,610

 

4%

EBITDA

 

$

(57,527)

 

$

1,804

 

(3,289)%

Add: Share-based compensation

 

 

39,084

 

 

25,045

 

56%

Adjusted EBITDA

 

$

(18,443)

 

$

26,849

 

(169)%

 

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