NVCR - Novocure Reports Third Quarter 2022 Financial Results

October, 27 2022 07:09 AM NovoCure Limited

Quarterly net revenues of $131 million with $52 million invested in research & development initiatives

Entering a transformational period with multiple pivotal trial readouts anticipated in coming quarters

Novocure (NASDAQ: NVCR) today reported financial results for the quarter ended September 30, 2022. 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).

“In the third quarter, we showed consistent execution in service of our mission to extend survival in some of the most aggressive forms of cancer,” said William Doyle, Novocure’s Executive Chairman. “We are diligently working to reach additional patients in our current markets, expand into new markets, enhance our products and treat patients in new indications throughout the body. We are investing aggressively to prepare Novocure for the future and are eager to treat many more patients in the coming years.”

“Novocure is approaching a period that should be transformational for our company and patients,” said Asaf Danziger, Novocure’s Chief Executive Officer. “January marks the beginning of a two-year period of multiple data releases from our pivotal studies exploring the use of TTFields in a variety of solid tumor cancers and combinations. These data catalysts could enable us to treat tens of thousands more patients in the future, and we look forward to sharing these results with physicians, patients, and the investor community in the coming quarters.”

Financial updates for the third quarter ended September 30, 2022:

Total net revenues for the quarter were $131.0 million, a decrease of 2% compared to the same period in 2021.
- The United States, EMEA and Japan contributed $102.7 million, $14.3 million, and $7.9 million in quarterly net revenues, respectively.
- Net revenues were impacted by the volume of cash collections from aged claims in the U.S., the ongoing impact of German coverage updates and foreign exchange pressure.
- Revenue in Greater China from Novocure’s partnership with Zai Lab totaled $6.2 million.
Gross margin for the quarter was 77%.
Research, development and clinical studies expenses for the quarter were $52.0 million, an increase of 8% from the same period in 2021.
Sales and marketing expenses for the quarter were $41.4 million, an increase of 27% compared to the same period in 2021. This reflects increased investments in early commercial and market access capabilities.
General and administrative expenses for the quarter were $32.5 million, an increase of 4% compared to the same period in 2021.
Net loss for the quarter was $26.6 million with loss per share of $0.25.
Adjusted EBITDA* for the quarter was $4.4 million.
Cash, cash equivalents and short-term investments were $970.3 million as of September 30, 2022.

Operational updates for the third quarter ended September 30, 2022:

As of September 30, 2022, there were 3,420 active patients on therapy. Active patients from North America, EMEA and Japan contributed 2,181, 885 and 354 active patients, respectively.
1,389 prescriptions were received in the quarter. Prescriptions from North America, EMEA and Japan contributed 978, 332 and 79 prescriptions, respectively.

Quarterly updates and achievements:

Today, we are announcing preliminary data from the phase 2 EF-33 pilot study evaluating the safety and efficacy of high density arrays in 25 patients with recurrent glioblastoma (GBM). Among those who used Optune ^® as directed for at least one month, median progression-free survival was 4.5 months compared to 2.2 months in the historical control, Novocure’s pivotal EF-11 study. Further, notwithstanding the increased TTFields intensity, EF-33 patients reported no TTFields-related toxicity.
Our phase 3 pivotal METIS study for the treatment of brain metastases from non-small cell lung cancer (NSCLC) continues to enroll well, and we have visibility to final patient enrollment; however, we now expect to complete enrollment in the first quarter of 2023 versus the fourth quarter of 2022. This will begin the final patient’s 12-month follow-up period, and we anticipate top-line data in the first quarter of 2024.
In September 2022, we announced the creation of our U.S. CNS (central nervous system) Cancers Franchise, intended to strengthen focus on growth in our U.S. GBM business by streamlining decision-making and improving coordination.

Anticipated clinical milestones:

Top-line readout from phase 3 pivotal LUNAR study in NSCLC cancer (Q1 2023)
Data from phase 3 pivotal INNOVATE-3 study in recurrent ovarian cancer (2023)
Data from phase 3 pivotal METIS study in brain metastases (2024)
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 third quarter 2022 financial results at 8 a.m. EDT today, Thursday, October 27, 2022. Analysts and investors can participate in the conference call by using the following registration link , and dial-in details will be provided.

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 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 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, 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 September 30,

Nine months ended September 30,

Year ended December 31,



2022



2021



2022



2021



2021



Unaudited

Unaudited

Audited
Net revenues

$
130,998


$
133,606


$
409,411


$
401,818


$
535,031

Cost of revenues


29,749



30,206



85,979



85,190



114,877

Gross profit


101,249



103,400



323,432



316,628



420,154












Operating costs and expenses:










Research, development and clinical studies


51,956



48,141



151,265



144,372



201,303

Sales and marketing


41,395



32,580



124,029



98,075



137,057

General and administrative


32,509



31,231



94,683



95,116



126,127

Total operating costs and expenses


125,860



111,952



369,977



337,563



464,487












Operating income (loss)


(24,611
)


(8,552
)


(46,545
)


(20,935
)


(44,333
)
Financial expenses (income), net


(1,194
)


1,981



2,743



5,567



7,742












Income (loss) before income taxes


(23,417
)


(10,533
)


(49,288
)


(26,502
)


(52,075
)
Income taxes


3,159



2,591



5,943



5,391



6,276

Net income (loss)

$
(26,576
)

$
(13,124
)

$
(55,231
)

$
(31,893
)

$
(58,351
)











Basic net income (loss) per ordinary share

$
(0.25
)

$
(0.13
)

$
(0.53
)

$
(0.31
)

$
(0.56
)
Weighted average number of ordinary shares used in computing basic net income (loss) per share


104,884,583



103,731,147



104,552,803



103,281,380



103,433,274

Diluted net income (loss) per ordinary share

$
(0.25
)

$
(0.13
)

$
(0.53
)

$
(0.31
)

$
(0.56
)
Weighted average number of ordinary shares used in computing diluted net income (loss) per share


104,884,583



103,731,147



104,552,803



103,281,380



103,433,274

Consolidated Balance Sheets USD in thousands (except share data)







September 30, 2022

December 31, 2021


Unaudited

Audited
ASSETS




CURRENT ASSETS:




Cash and cash equivalents

$
243,805

$
208,802
Short-term investments


726,515


728,898
Restricted cash


231


807
Trade receivables, net


87,552


93,567
Receivables and prepaid expenses


17,478


17,025
Inventories


26,792


24,427
Total current assets


1,102,373


1,073,526
LONG-TERM ASSETS:




Property and equipment, net


29,745


22,693
Field equipment, net


11,985


12,923
Right-of-use assets


19,405


18,267
Other long-term assets


10,707


12,086
Total long-term assets


71,842


65,969
TOTAL ASSETS

$
1,174,215

$
1,139,495

Consolidated Balance Sheets USD in thousands (except share data)







September 30, 2022

December 31, 2021


Unaudited

Audited
LIABILITIES AND SHAREHOLDERS' EQUITY




CURRENT LIABILITIES:




Trade payables

$
77,026


$
72,600

Other payables, lease liabilities and accrued expenses


64,050



70,002

Total current liabilities


141,076



142,602

LONG-TERM LIABILITIES:




Long-term debt, net


564,677



562,216

Deferred revenue


3,924



6,477

Long-term leases


14,827



12,997

Employee benefit liabilities


4,088



4,543

Other long-term liabilities


222



166

Total long-term liabilities


587,738



586,399

TOTAL LIABILITIES


728,814



729,001






COMMITMENTS AND CONTINGENCIES









SHAREHOLDERS' EQUITY:




Share capital -




Ordinary shares no par value, unlimited shares authorized; issued and outstanding: 104,942,941 shares and 103,971,263 shares at September 30, 2022 (unaudited) and December 31, 2021, respectively


—



—

Additional paid-in capital


1,188,864



1,099,589

Accumulated other comprehensive income (loss)


(2,306
)


(3,169
)
Retained earnings (accumulated deficit)


(741,157
)


(685,926
)
TOTAL SHAREHOLDERS' EQUITY


445,401



410,494

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$
1,174,215


$
1,139,495

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







Three months ended September 30,

Nine months ended September 30,



2022



2021


% Change


2022



2021


% Change
Net income (loss)

$
(26,576
)

$
(13,124
)

102
%

$
(55,231
)

$
(31,893
)

73
%
Add: Income tax


3,159



2,591


22
%


5,943



5,391


10
%
Add: Financial expenses (income), net


(1,194
)


1,981


(160
) %


2,743



5,567


(51
) %
Add: Depreciation and amortization


2,659



2,734


(3
) %


7,924



7,584


4
%
EBITDA

$
(21,952
)

$
(5,818
)

277
%

$
(38,621
)

$
(13,351
)

189
%
Add: Share-based compensation


26,305



25,758


2
%


77,173



72,502


6
%
Adjusted EBITDA

$
4,353


$
19,940


(78
) %

$
38,552


$
59,151


(35
) %

View source version on businesswire.com: https://www.businesswire.com/news/home/20221027005570/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