NovoCure Limited (NVCR) 27 Jul 232023 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the NovoCure Q2 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Goldberg. conference like speaker to now Ingrid today, would hand over the your I ahead. go Please

Good morning, the also team you our Cordova. quarter available with everyone. Other Thank and Executive on CEO, XXXX NovoCure's to our Q&A. our our for performance. the second Asaf review members Danziger; call I'm CFO, Bill of are on Chairman, phone and morning for this Doyle; joining Ashley us leadership executive

found accompanying Quarterly this website earnings For on your be Investor under our novocure.com can page reference Reports. our on slides www. release Relations

Before a you those call from we during results start, will I our conference materially involve would differ projected like in actual to this and could that remind these include of do not except statements. statements to forward-looking forward-looking statements risks beyond from as discussions law. uncertainties, are required described are any of our intend We in and and our filings. by statements, time-time some which update publicly SEC control number These

important to metric amortization attributable our Where material depreciation, business, of taxes, appropriate, interest, we will adjusted We earnings before EBITDA a non-GAAP financial adjusted believe EBITDA, removes specifically structure, the to share-based measure as compensation. impact our and to evaluate financial and best of measures non-cash by tax earnings rate reflects and business. our it capital items; the an generated is value refer

are in be X-K press Investor our also included measures page the release, and financial materials GAAP the with our filed Form Relations to SEC in from website. slides non-GAAP our of today. Reconciliations accessed of can earnings These

line the will remarks questions. prepared our Following we your open today, for

Bill call the now Chairman, will turn to over our I Doyle. Executive

morning. good Thank you. Ingrid and

forms our the through extend some efforts of of development founding, have commercialization our on Treating Fields. is survival At and with commercial NovoCure patients glioblastoma. most mission Tumor to of cancer, focused treating our Since the in aggressive

data from the [indiscernible]. the quarter X Phase with our transformational of trial beginning period beyond first moved of brain NovoCure the as second we presentation randomized a marked The for

unmet trial to quarter. and a our Treating American took In with On Clinical Tumor we Ticiana the begin call, Fields by Leal clinical today's commercial towards LUNAR upcoming will performance with of other of step LUNAR therapy trial. and results Annual cancer. Phase Emory in high financial June, we catalysts the the meaningful the a followed X patients Meeting, a discussion clinical in Oncology Society At lung need of of of University presented the bringing Dr. review

survival the TTFields Stage LUNAR exhibiting standard-of-care its together cancer studied trial treatment following lung LUNAR of to months of platinum compared cell X.X X therapy improvement overall three months to metastatic alone. therapy TTFields failure. non-small treated statistically use The achieved significant primary improvement with The with for The therapy increased a endpoint the without XX.X clinically was survival in systemic toxicity. meaningful therapies and met treatment trial for patients from standard-of-care with standard-of-care months

to overall a with compares treated to inhibitors overall immune In key treated immune primary the patients XX.X endpoint endpoint, met for also month for demonstrating LUNAR addition its with patients inhibitors. checkpoint and XX.X median months TTFields survival meeting alone. survival secondary survival This checkpoint

was collected was want balanced received enrolled we've enrollees expected the Globally, questions and LUNAR regarding expected with XX% with expression. wild-type the measured TPS of LUNAR and the I the cohorts directly expression. four highlight the patients and expression investors data TPS consistent wild-type was LUNAR cohorts and trial most balanced across for and In was in to from address was results. U.S., was XX% frequent consistent across for of

Underlying measured PD regardless the Kaplan-Meier survival status. are potency LX scores data curves locations patients of Kaplan-Meier TPS scores. for curves the nearly The with the to without TPS of measured identical

and survival progression-free and oncology. Overall is observed number this gold is endpoint the survival difference the regarding from generally the in difference studying We've standard checkpoint not of questions uncommon is also with fielded survival. immune results in in line trial considered leading inhibitors setting. trials in the the This in overall inhibitor between a size immune effect checkpoint

Finally, I applicability to LUNAR would clinical like of address the the results.

One of exciting of evolving career most and one's rewarding lives aspects the of the dedicating is improvements outcomes of witnessing with to cancer patients and standards extending the care.

an cell have non-small the effective cancer. toxicity need for seen in of lung with therapeutic treatment cancer option non-small inhibitors, in a patients cell for there few shift There metastatic immune second the lung While options low X Stage first-line differentiated treatment second-line remains for treatment immense checkpoint to line. are we unmet

Stage trials The years immune most X moved trials X to X second-line a of other was years there X when overall lung cell been needle pembrolizumab Since trial LUNAR meaningfully recent further. in meaningful the evaluating the show first over meaningful checkpoint clinical have of the is survival in several none Phase of cancer. over non-small in but these clinical survival extension treatment ago inhibitors, breakthrough efficacy have clinically introduced. then, occurred

and We thoracic provide LUNAR of patients outcome believe systemic adding in need materially oncologists are of extend study with a option the much and will pleased for needed the without toxicity. TTFields the survival therapies clinical overall that new treatment

cancer. of of current TTFields standards place confident Stage lung are a X has the and non-small cell for therapy care future treatment We second-line in

been pleased to LUNAR regulatory our the that have CE LUNAR team recently high study accepted Mark. publication. results and to the are We Further, submission for now are completed we impact announce awaiting a journal

consistent primary cancer. Our for to with treatment standard non-small next of Stage finalize together therapies the a of cell lung the later FDA TTFields PMA trial. step second-line this plan X We our is endpoint year. label pursue submission to with

additional aspects as in-and-out TPS score. These patterns of which LUNAR presented and ASCO, are patient of further many analysis, include at progression trial. function the results survival supplement we conducting field To the key usage analyzes will a will elucidate of and

approved. opportunities best TTFields leverage when once Additional the trial with our physicians ARM to evaluating therapy insights will further data key

We expect to year-end. present these analysis before

for will randomized foundation trials the trial lung TTFields large clinical from cancer. serve the non-small as the in studying next cell Insights gained LUNAR

in As in will next lines our of therapy announced new use earlier regime. of TTFields therapeutic the concomitant at and ASCO, trials explore

would like preparing Phase use for which metastatic chemotherapy I to TTFields with cell with X first-line and cancer. of and The are LUNAR LUNAR Specifically, for the concomitant patients lung initiation. X will approved platinum-based IDE non-small X the study currently pembrolizumab trial, the FDA for we sites highlight

trial forward updates in follow-up Primary to be X we a LUNAR important after overall an the The to XX-month XXX providing will patients lung a survival enrolled. be in our therapy next cancer quarters we bring with global endpoints as patients is coming LUNAR in step X designed trial progression-free last period look the Treating patient work need. survival. Fields and randomized program Tumor enroll and to will to

With in turn our will quarter. the as second over commercial well that the to call Asaf I as performance discuss updates to clinical other

Bill. you, Thank

to lives. LUNAR decade like confidence thousands data patients' in effort overall Bill's investigators enthusiasm and to impact the the LUNAR from have The would I ASCO, of team. The of nearly NovoCure trial underline the and a results. are of the culmination potential presented at data survival

everything patients who in We those our benefit. to reach are can to power eager do

we'll out of X As and months. is Phase next XX enrolled the X are over the LUNAR first a read trials fully that reminder,

ovarian INNOVATE-X with Phase Later INNOVATE-X X client from The weekly use this we platinum to will TTFields resistant and trial expect top of by exploring followed paclitaxel cancer. be trial quarter summer, release presentation line brain Phase results of cancer. metastases INNOVATE-X the the of the we first the release from this the treating later In line year. METIS expect X full data the non-small of to lung from cell XXXX, top results

as completion. in concerns from to PANOVA-X of last results And week, the and the interim We XXXX. we'll trials continue safety we evaluate its follow anticipate advanced treating cancers with cleared has needs. futility Phase Each TTFields X locally cancer unmet PANOVA-X designed successfully no or to pancreatic with patients these analysis substantial second announced top in therapy half is to of line trial

We in the these quarters. results from coming trials sharing look forward to the

trials, design to its execute of more commercial launch our on next important we potential. our business wave has never and As for been clinical it

GBM business financial invest continued the development provides and Our in efforts. to aggressively our strength research

period the continue efforts This we restructuring. of solid across execution as key see organizational markets, quarter of XXXX and commercial global another our to fruits was our

our crucial is our markets leading in to success. penetration long-term Increasing

in quarter we X,XXX achieved second a the row, record For a globally. with prescriptions number new of

in of strong another quarter the prescriptions saw now written U.S. are the X% the with in first period. also compared year-to-date up We XXXX. XXX U.S. prescriptions to half

of EMEA We a XXX new quarter strong also QX. record in prescriptions a with delivered in

of the in Optune France. our this key One quarter's successful was launch strength of drivers to

and in in As began of a reimbursement year, national reminder our we received this France commercial launch. March

EMEA the believe encouraged very physician a in serve other therapy. blueprint and strong We continue launch can We TTFields are to activities interest markets. France in for ramp major by as in the France we

Germany. also see quarter had in recovering with in Germany active strong It's therapy and We a rewarding on as on active track count to the patient expected. XXX German patients

increase to been to and for have The positive. In arrays next and using now our continues addition penetration Austria feedback of be continues arrays new and to Patients in earnest. markets. generation rollout enter efforts our several Sweden, new in the months

months. [loans] steps quarter, arrays experienced track arrays we are experience. have release new on therapy Consistent for have comfortable are new the arrays informing the positive fewer Germany the last a The in next and more patients collected new data coming in with we provide to

our anchor markets. of large first The

the year. we to a half are US, PMA this In on in file second supplement track of the

our to TTFields therapy to get of all we have soon are new patients them possible. improve meaningfully potential the as to globally as Our eager the and arrays experience

second to I like patients. fronts, financial our and importantly has I your dedication been exciting NovoCure mission we and this would quarter the but turn thank quarter results, would many colleagues. most our on challenging to Before know my to like an applaud I to

the With discuss Ashley turn quarter. that, will our performance in I to financial to

Thank you, Asaf.

quarter themes consistent through from the of Many June. the have first remained

to are positive growth GBM patients indications business, We in with continue and the and $XXX clinical launches our of active infrastructure ahead therapy. in to trials multiple see our potential quarter net of in future progressing, working we We early in revenues pipeline million our X,XXX the are ended is period expanding generated indications. solidify new our on

the to QX the U.S. quarter approval year-over-year previously the take catch quarter prescription a of as continued benefited another first of in year, million variations the the last headwinds in QX in revenue We from of we quarter well as growth. year, we denied two from million net compared notable in to benefit claims $XX or due with positive momentum of in did appealed saw rates. XXXX, $X as collections

continue quarter Germany, watermark high through a year-end. year In and expected reimbursement ended to and active to last and expect the and with negotiations on We payer XXX recovery rate. finalized therapy, we patients the this patients continue see we active recovery were

catch-up due The second a to million of market. $X are meeting approval variations criteria the rates quarter include in did patients Germany benefit revenue in coverage more of as

to mentioned strong earlier, France. a in As start are off we

by the made We in patient and are access We launch, blueprint especially new engagement and very and including launches provide strong flow the investments physician encouraged infrastructure pre-launch for commercial function, the a future from prescription pre-commercial market believe markets. Paris.

Given the half and second the year. we collection to to expect timing reimbursement contribute cycle spreads in of process this beginning revenue

per As in a transition. net to per impact cycle for month the France it the reminder, reimbursement during EMEA several take rate active full which revenue reach will quarters will in collection our patient

for was margin quarter the XX%. second Gross

populations preparation million indications revenues of to and Our the $X future. new due spending geographies in incremental cost to and patient new near in capacity increased patient expand treating larger of support

gross efficiencies our be remain we increase array time. term. to and product Such impacted launch cost the the in opportunities enhancements the optimization within near supply of While by margins to focused ongoing chain expect we and on scale new expect as over

quarter million. expenses the SG&A second were for $XX

markets, As reach well opportunity key new patients the on ensure solidifying ahead multiple can as we new to focused we are indications potential meet functions opportunity to the look in to as presented. we

there IT sales the supply our growth expanding as will areas. efforts marketing and teams chain our in spending while includes and and aforementioned be increased This as well

function step cancer. to increase launch not cell should lung we a are expect closer in non-small to until see material You a commercial

backfill for in coming costs development pipeline and will were Phase X we we as clinical X $XX X Phase shared our trials as the and Research trials current new have quarter. the quarter million the with Phase previously clinical conclude,

received trials of approval recently we first new The U.S. is LUNAR-X the from FDA. exemption which the for trial investigational device these

clinical X development trials to Phase look we We in And trials new approval, forward on as expect invest X continue growth moderate R&D we launch. to more later of updating you cost, in in development. stages design product and With this Phase various regulatory and as multiple year.

as Cash investments totaled June XXXX. short-term of $XXX and million XX,

was and $XX per million. share for EBITDA or quarter million negative loss $X.XX $XX adjusted was net Our first the

of preparation the to treat GBM. as in a transformation indications are opportunity that the multiple times are patients period we We and eye of in size

We meet are investing our optimizing upcoming launch with ensure force opportunities. to XX.XX are strategically we to

commercial of All investments and sustainable our GBM. business these are in strengthening supported by

highlighting been the and in I'd back like with than of writing by Canada, very began year, Joel has trouble one Joel to users Last lose close Optune more guitar sensitivity his fingers. remembering first today was years. Joel XX acoustics Quebec, playing guitar. performing in in for and form to our started having

an with diagnosed Following was glioblastoma. MRI Joel

of treatment earlier. guitar. was Health November, just After told he a Optune oncologists In within approved of Joel in get Canada are reminder Optune receiving most cancer successful forms and the about him Joel, the like patients we constant surgery of doing Joel's playing aggressive using which a what continue back two they radiation began why extend are the had Joel weeks some recently to weeks like opportunity to to survival love. here of People

to that questions. With will back the turn I for operator it

Sandler. Jason you. question Bednar of Piper And comes [Operator Thank Please our Instructions] proceed. first from

insensitive interim study. challenge longer market And is sites different. point the you're Phase morning. but any there the from maybe enrollment with why Wanted competitive study X so, thinking mean ran in you your pace start be questions enrollment to Good to one reached then Can that patient never target all, don't at whether past even a Can of of for And recruiting multi-partner in as it after the lung about LUNAR-X the really trials. a of was that seen cancer Thanks into was an with other for the just Hi. how LUNAR be we talk on you a NovoCure follow-up address the taking trials LUNAR-X maybe about I here? number several can here. follow-up and is with years at there. analysis original large

your During [indiscernible] arrays using new high enrollment again then or and after this is intensity this study? but in

thank would you studies. I LUNAR-X about This question. that like remind Jason, Great. everybody, Pritesh, the for to is

explore in study will Tumor cell So pembrolizumab randomized this next our metastatic Fields global setting first-line cancer is setting. non-small lung that Treating the concomitantly first-line with

an Tumor line setting. checkpoint Treating an is Fields inhibitor shown study, now the because this work And along important with in we have second that immune

look therapy algorithm, patients. to So, as typical treatment earlier to have to able in the development a would the go impact we be bring would broader on

to And as in that you XXX And period. XX-month commonly today is heard the survival in the on learned things of prepared is lung today immune to care we're remarks, setting this patients study we one most care cancer is enroll standard designed standard follow-up checkpoint over pembrolizumab that that these the add help is extend and that to of inhibitor the and looking to patients. of used the

hopes site to up and help we'll the in and sites help at now you We're our will understand get enrolling. – trial running we the looking So, opens right up. as first

study keep we - there how updated you first patient the on on forward. progresses on and The will

Okay.

Can to the using there is Sorry, maybe those. high your intensity any study, you an at point just some interim arrays? also say it's of whether analysis in and whether new

thank you me that. Yes, reminding for about

innovation patients So we're with the on and the for patients. new arrays. are There analysis. not on GBM. remind array new I'll interim arrays interim for today analysis other torso plan. working an the you abdomen on that is And And the

mentioned yet our might hear And factors could. or there guess then I margin arrays that guess, I France quarter was to I you for patients gross other that if yet in be than model markets. think The I that and like Ashley. that lower are gross be it the have then Canada may And right. not influencing the you're older patients. understood. new paid But other treating margin generation. in or trying maybe Okay, reconcile you maybe margin I'm the getting below those you're I

for Yes bit thank if yes look everything is you that to ran at you but in short little The this detail. the answer Jason, more down, a question. we

rate, and per patient. I steady. per a not at actual COGS say is would you margin active gross look cost at Our unit the stable if

year-over-year, look at to If most what have revenues. margin at look you the you impacted net the

the margin the future beginning So that out saw of claims took the we benefit to were line, through number. of as the ready made And that of patient ensure of year the saw some you this at for additionally, in aged geographies indications. new increased investments we for to you potential top we flow then support and the impact

but both where that need that expect has year-over-year. be, it quarter at now we stabilized, margins and the investment did would I to So affect in we're

look get enhancement pressure with to as that on It supply we ahead, efficiencies we as to we and product say some time I committed that introduce chain. quickly be margin, may we a possible, as the optimize we rolled are you kind that is takes have time. new there we out certainly period manufacturing as the As working is and signaling there of will to pressure these But arrays scale. slight getting optimize little any while a slight arrays new downward are of of just bit over would and

mentioned into They Okay. margin. don't. fall patient hit those investments SG&A? And support will those gross you

They our patient do. Much support COGS. into of flows our

back go in queue. Thank I'll great. Okay, you.

Bodnar Thank Please question next Wainwright. question. moment comes proceed. H.C. for you. our One Emily from next our of And

planning And checkpoint the new am with you study Do the Thanks the planning questions. you. risk Thank see for study with LUNAR that setting design studies initiate Hi, good any LUNAR that on other FDA prior timelines to LUNAR and any TTFields plans the morning. you you from with wait those. I you're are to post-chemo-IO. in potentially to to curious that results approval inhibitors second-line setting. discuss for for taking - that wanting also to the can see the evaluate in

Thanks question. regulatory start expect So, it about back primary with trials. question, simple the for this is will then described I any answer randomized But LUNAR the Emily. it don't with to Bill. FDA. was a the Good large hit morning, will the trial. Again Pritesh We to endpoint, turn you its the issues no. other the is I like issue talk

endpoint. consistent the We that hit cohorts and seeking all that ITT. the that with have primary well we And is will a we stated be balanced label were

And so, as we don't expect you described. trials any waiting additional for for requirement

And to the build close that Bill. what LUNAR the next would trials a cell the with you, of opportunity non-small and to in evidence we really continuing important set is expand I that us regards thank get on label is cancer with expect to this Yes, lung to for setting.

talked we Treating exploring first-line Fields X, trial cell is non-small lung So cancer LUNAR with which with that, pembrolizumab. already metastatic about Tumor again a

Treating therapy the chemo-radiation second so patients we non-small metastatic in initiate, with that settings, in inhibitor checkpoint with we even The with IO setting, first-line is non-small here we're looking the ensure have in the that that Tumor move earlier for an Tumor cell the Fields following cancer cell Fields second-line can a setting. to really Again, our and patients locally to Treating cancer. and see lung those to immune strategy data the lung bigger advanced impact is benefit

additional started everyone add, just distant way lines the in pembrolizumab studies moved is that where earlier to I'll lines. is I typically conducted then with these And over in would the time remind progress and cancers? and is consistent this the this made

So strategic is typical we're the pathway in same industry. following that the

All right.

to plans this to want all initiate confirm, are year? these Just

Yes.

because trials getting possible and and to getting the and are as these So readouts. I as data say looking running patients, would to up forward enrolling we soon

regulatory were quarter IDE a FDA and step when here, to the predict We for this will in the Yes, hesitant there's LUNAR the to announce very IDE. pleased we're always provide always X.

important a So very have may not us step that that's for emphasized. been

Okay. Thank you.

ISI. Vijay for our proceed. our of next And question Thank comes One moment Please Evercore you. next question. Kumar from

on this Vijay. for is Kevin Hi,

reclassification you to performance to call Canada of and talk or on a into this prescriptions markets in did do with factors one France can performance Was quarter? you driver, treatment markets. be would Just patients quarter. the the this anything Can other active it have the key helpful. on Any other Thanks.

is can this I that question. Ashley, take and Kevin,

the that with you a would then, were in maintained momentum we strong we in was continued recovery steady It positive as noted, pleased say solid momentum GBM. with I globe, a launch and around U.S., noted, a As Germany, quarter. in the very in saw France. the

France was growth driver in a markets. So of the key our international

we Treating of which Tumor XX-Q, Fields morning. did our did by in interest in we strong see prescriptions significant those see but a physician The France. can region, early in this publish You breakout

to not collection France of timeline to contributing we cycle. contribute that second the half It yet to to year to revenue. reimbursement will is given begin expect I revenue in note and would this the

The to market about to again to I think I of question last our a transition but continued to highlight important you would year your say the momentum the the able our model largest that most very answered we is would be our maintained from again pleased in other like franchise and see U.S. there. because the strength markets, were U.S. asked I back and the

perspective? And have patients sized an all from Canada prescriptions of at you active

is but of reimbursement we Yes, not of we're the what are make will driver still all you're that Canada. seeing a the associated market, as on course say material those in doing I yet, analysis because investments pending we

you. Thank

would closing for now I turn Bill the to back like remarks. you. conference Thank to Doyle

So, everyone support on thank you NovoCure. and the interest your in for continued phone

period Phase kicked a the expansion the and data. X year entered of transformation have of trial this earlier presentation We off LUNAR that with successful

data readouts Over trials, X great we three readouts we Phase treat will with need. the to in more months, have from all making difficult cancers next for six data of X unmet XX a trials which total have Phase will

look reality forward throughout treating the Thanks patients again. a of additional possibility to on and of The our you updating thousands year. becoming progress is we

conference now call. today's concludes This may you for disconnect. Thank you participating and