NVCR - Novocure Reports Fourth Quarter and Full Year 2021 Financial Results and Provides Company Update

February, 24 2022 07:00 AM NovoCure Limited

Full year 2021 net revenues of $535 million, an increase of 8% year-over-year

Invested record $201 million in 2021 in research and development initiatives intended to advance Tumor Treating Fields science and technology

Novocure (NASDAQ: NVCR) today reported financial results for the fourth quarter and full year ended December 31, 2021. 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”).

“We founded Novocure to exploit the novel observation that electric fields can be harnessed to disrupt cancer cell division,” said William Doyle, Novocure’s Executive Chairman. “More than two decades later, we continue to build our knowledge and capabilities to optimize the Tumor Treating Fields therapy platform and to bring Tumor Treating Fields therapy to cancer patients. Last year, we generated over half a billion dollars in net revenues and invested two hundred million dollars in R&D. With multiple pivotal clinical studies set to read out in the coming 24 months, we are nearing a key inflection point for cancer patients and our business.”

Financial updates for the full year and fourth quarter ended December 31, 2021:

Total net revenues for the year were $535.0 million, an increase of 8% year-over-year.
Total net revenues for the quarter were $133.2 million. The company did not recognize material revenue from its Medicare backlog in the quarter. This compares to $11 million received from the successful appeal of previously denied Medicare claims in the fourth quarter of 2020.
The United States, EMEA and Japan contributed $92.0 million, $26.5 million, and $8.8 million in quarterly net revenues, respectively. Revenue in Greater China from Novocure’s partnership with Zai Lab totaled $5.8 million.
Gross margin for the quarter was 78%.
Research, development and clinical studies expenses for the quarter were $56.9 million.
Sales and marketing expenses for the quarter were $39.0 million.
General and administrative expenses for the quarter were $31.0 million.
Net loss for the quarter was $26.5 million with loss per share of $0.25.
Adjusted EBITDA* for the quarter was $1.7 million.
Cash, cash equivalents and short-term investments were $937.7 million as of December 31, 2021.

Operational updates for the fourth quarter ended December 31, 2021:

As of December 31, 2021, there were 3,587 active patients on therapy, an increase of 5% year-over-year. Active patients from North America, EMEA and Japan contributed 2,272, 1,008 and 307 active patients, respectively.
1,430 prescriptions were received in the quarter, an increase of 1% year-over-year. Prescriptions from North America, EMEA and Japan contributed 966, 349 and 115 prescriptions, respectively.

Quarterly achievements:

In November, we announced the last patient had been enrolled in our phase 3 pivotal LUNAR study for the treatment of non-small cell lung cancer (“NSCLC”). Patients will be followed for 12 months, with top-line data expected by year-end 2022.
In November, Dr. David Tran, Chief of the Division of Neuro-Oncology at the McKnight Brain Institute at the University of Florida, released updated data from the phase 2 pilot 2-THE-TOP study testing the safety and efficacy of TTFields together with pembrolizmuab and temozolomide for the treatment of adult patients with newly diagnosed glioblastoma (“GBM”). In patients with greater than 9 months of follow-up, median progression-free survival was at least 11.2 months compared to 6.7 months from Novocure’s pivotal EF-14 study, in which patients received TTFields and temozolomide, and 4.0 months from the control arm of EF-14, where patients received temozolomide alone.
In December, we announced the acquisition and construction of an office building in downtown Portsmouth, New Hampshire. The property will provide space for our growing employee base and house a world-class training and development center.

2022 Outlook:

The company expects to achieve active patient growth between 2% to 5% in 2022, in-line with the growth rate experienced in the fourth quarter of 2021. Longer term, the company continues to expect further adoption in its core GBM business.

Anticipated clinical milestones:

Data from phase 2 pilot EF-31 study in gastric cancer (2022)
Data from phase 2 pilot EF-33 study with high-intensity arrays in recurrent GBM (2022)
Last patient enrollment in phase 3 pivotal METIS study in brain metastases (2022)
Data from phase 3 pivotal LUNAR study in NSCLC (2022)
Last patient enrollment in phase 3 pivotal PANOVA-3 study in locally advanced pancreatic cancer (2023)
Data from phase 3 pivotal INNOVATE-3 study in recurrent ovarian cancer (2023)
Data from phase 3 pivotal METIS study in brain metastases (2023)
Data from phase 3 pivotal PANOVA-3 study in locally advanced pancreatic cancer (2024)

Conference call details

Novocure will host a conference call and webcast to discuss fourth quarter and full year 2021 financial results at 8 a.m. EST today, Thursday, February 24, 2022. Analysts and investors can participate in the conference call by dialing 855-442-6895 for domestic callers and 509-960-9037 for international callers, using the conference ID 8879093.

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 and malignant pleural mesothelioma. Novocure has ongoing or completed clinical studies investigating Tumor Treating Fields in brain metastases, gastric cancer, glioblastoma, liver cancer, non-small cell lung cancer, pancreatic cancer and ovarian cancer.

Headquartered in Jersey, and with a growing global footprint, Novocure has regional operating centers in Root, Switzerland, 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 study 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 24, 2022, as amended to date, 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 December 31,

Twelve months ended December 31,


2021

2020

2021

2020
Net revenues

$
133,213


$
143,953

$
535,031


$
494,366

Cost of revenues


29,687



28,136


114,877



106,501

Gross profit


103,526



115,817


420,154



387,865










Operating costs and expenses:








Research, development and clinical studies


56,931



44,002


201,303



132,010

Sales and marketing


38,982



31,359


137,057



118,017

General and administrative


31,011



28,364


126,127



107,437

Total operating costs and expenses


126,925



103,725


464,488



357,464













Operating income (loss)


(23,398
)


12,092


(44,333
)


30,401

Financial expenses (income), net


2,175



3,267


7,742



12,299













Income (loss) before income tax


(25,573
)


8,825


(52,075
)


18,102

Income tax


885



3,908


6,276



(1,706
)
Net income (loss)

$
(26,458
)

$
4,917

$
(58,351
)

$
19,808













Basic net income (loss) per ordinary share

$
(0.25
)

$
0.05

$
(0.56
)

$
0.20

Weighted average number of ordinary shares used in computing basic net income (loss) per share


103,884,288



101,945,085


103,433,274



100,930,866










Diluted net income (loss) per ordinary share

$
(0.25
)

$
0.04

$
(0.56
)

$
0.18

Weighted average number of ordinary shares used in computing diluted net income (loss) per share


103,884,288



110,604,714


103,433,274



108,877,648

Consolidated Balance Sheets
USD in thousands (except share data)





December 31,


2021

2020
Assets




Current assets:




Cash and cash equivalents

$
208,802


$
234,674

Short-term investments


728,898



607,902

Restricted cash


807



11,499

Trade receivables, net


93,567



96,699

Receivables and prepaid expenses


17,025



21,245

Inventories


24,427



27,422

Total current assets


1,073,526



999,441

Long-term assets:




Property and equipment, net


22,693



11,395

Field equipment, net


12,923



11,230

Right-of-use assets, net


18,267



19,009

Other long-term assets


12,086



10,908

Total long-term assets


65,969



52,542

Total assets

$
1,139,495


$
1,051,983




Consolidated Balance Sheets
USD in thousands (except share data)





December 31,


2021

2020
Liabilities and shareholders’ equity




Current liabilities:




Trade payables

$
72,600


$
53,647

Other payables and accrued expenses


70,002



59,965

Total current liabilities


142,602



113,612

Long-term liabilities:




Long-term loan, net of discount and issuance costs


562,216



429,905

Deferred revenues


6,477



12,139

Employee benefit liabilities


4,543



5,171

Long term leases


12,997



14,293

Other long-term liabilities


166



337

Total long-term liabilities


586,399



461,845

Total liabilities


729,001



575,457

Commitments and contingencies




Shareholders’ equity:




Share capital -




Ordinary shares - No par value, Unlimited shares authorized; Issued and outstanding: 103,971,263 shares and 102,334,276 shares at December 31, 2021 and December 31, 2020 respectively;


—



—

Additional paid-in capital


1,099,589



1,111,435

Accumulated other comprehensive loss


(3,169
)


(3,832
)
Accumulated deficit


(685,926
)


(631,077
)
Total shareholders’ equity


410,494



476,526

Total liabilities and shareholders’ equity

$
1,139,495


$
1,051,983

Non-U.S. GAAP financial measures reconciliation
USD in thousands







Three months ended December 31,

Twelve months ended December 31,


2021

2020

% Change

2021

2020

% Change
Net income (loss)

$
(26,458
)

$
4,917

(638
) %

$
(58,351
)

$
19,808


(395
) %
Add: Income tax


885



3,908

(77
) %

$
6,276


$
(1,706
)

(468
) %
Add: Financial expenses (income), net


2,175



3,267

(33
) %

$
7,742


$
12,299


(37
) %
Add: Depreciation and amortization


2,667



2,473

8
%

$
10,251


$
9,150


12
%
EBITDA

$
(20,731
)

$
14,565

(242
) %

$
(34,082
)

$
39,551


(186
) %
Add: Share-based compensation


22,398



20,273

10
%

$
94,900


$
75,721


25
%
Adjusted EBITDA

$
1,667


$
34,838

(95
) %

$
60,818


$
115,272


(47
) %

View source version on businesswire.com: https://www.businesswire.com/news/home/20220224005204/en/

Investors:
Ingrid Goldberg
investorinfo@novocure.com
610-723-7427

Media:
Leigh Labrie
media@novocure.com
610-723-7428

Company Name:	NovoCure Limited
Stock Symbol:	NVCR
Market:	NASDAQ
Website:	novocure.com