NovoCure Ltd

Previous wording

We are a global oncology company with a proprietary platform technology called Tumor Treating Fields ("TTFields"), which are electric fields that exert physical forces to kill cancer cells via a variety of mechanisms. Our key priorities are to drive commercial adoption of Optune Gio® and Optune Lua®, our commercial TTFields therapy devices, and to advance clinical and product development programs intended to extend overall survival in some of the most aggressive forms of cancer.

Current wording

We are a global oncology company with a proprietary platform technology called Tumor Treating Fields ("TTFields"), which are electric fields that exert physical forces to kill cancer cells via a variety of mechanisms. Our key priorities are to drive commercial adoption of Optune Gio® and Optune Lua®, our commercial TTFields therapy devices, and to advance clinical and product development programs intended to extend overall survival in some of the most aggressive forms of cancer. Our therapy is delivered through a medical device and we continue to advance our Products with the intention to extend survival and maintain quality of life for patients.

Previous wording

Optune Gio is approved by the U.S. Food and Drug Administration ("FDA") under the Premarket Approval ("PMA") pathway for the treatment of adult patients with newly diagnosed glioblastoma ("GBM") together with temozolomide, a chemotherapy drug, and for adult patients with GBM following confirmed recurrence after chemotherapy as monotherapy treatment. We also have a CE certificate to market Optune Gio for the treatment of GBM in the European Union ("EU"), as well as approval or local registration in the United Kingdom ("UK"), Japan, Canada and certain other countries. Optune Lua is approved by the FDA under the PMA pathway for the treatment of adult patients with metastatic non-small cell lung cancer ("NSCLC") concurrent with PD-1/PD-L1 inhibitors or docetaxel following progression on or after a platinum-based regimen and under the Humanitarian Device Exemption ("HDE") pathway to treat malignant pleural mesothelioma and pleural mesothelioma (together, "MPM") together with standard chemotherapies. We have also received CE certification in the EU and approval or local registration to market Optune Lua in certain other countries for the treatment of MPM. We market Optune Gio and Optune Lua in multiple countries around the globe with the majority of our revenues coming from the use of Optune Gio in the U.S., Germany, France and Japan. We are actively evaluating opportunities to expand our international footprint.

Current wording

Optune Gio is approved by the U.S. Food and Drug Administration ("FDA") under the Premarket Approval ("PMA") pathway for the treatment of adult patients with newly diagnosed glioblastoma ("GBM") together with temozolomide, a chemotherapy drug, and for adult patients with GBM following confirmed recurrence after chemotherapy as monotherapy treatment. We also have a CE certificate to market Optune Gio for the treatment of GBM in the European Union ("EU"), as well as approval or local registration in the United Kingdom ("UK"), Japan, Canada and certain other countries. Optune Lua is approved by the FDA under the PMA pathway for the treatment of adult patients with metastatic non-small cell lung cancer ("NSCLC") concurrent with PD-1/PD-L1 inhibitors or docetaxel following progression on or after a platinum-based regimen. Optune Lua is also approved under the Humanitarian Device Exemption ("HDE") pathway for the treatment of adult patients with malignant pleural mesothelioma or pleural mesothelioma (together, "MPM") together with standard chemotherapies. We have also received CE certification in the EU and approval or local registration to market Optune Lua in certain other countries for the treatment of MPM. We have also received CE certification for the use of Optune Lua for the treatment of adult patients with metastatic NSCLC concurrently with immune checkpoint inhibitors or docetaxel who have progressed on or after a platinum-based regimen. We have initiated the local registration requirements for Optune Lua for NSCLC in Germany and are preparing for launch.

Previous wording

In June 2024, we presented positive results from the phase 3 METIS trial, evaluating the use of TTFields therapy and supportive care for the treatment of patients with 1-10 brain metastases from NSCLC following stereotactic radiosurgery (“METIS”) at the 2024 American Society of Clinical Oncology (ASCO) annual meeting. The METIS trial met its primary endpoint, demonstrating a statistically significant improvement in time to intracranial progression for adult patients treated with TTFields therapy and supportive care compared to patients treated with supportive care alone. Patients treated with TTFields therapy and supportive care exhibited a median time to intracranial progression of 21.9 months compared to 11.3 months in patients treated with supportive care alone for brain metastasis (n=298; hazard ratio=0.67; P=0.016). These data are expected to serve as the basis for regulatory submissions. In October 2024, the FDA granted Breakthrough Device designation for the use of our NovoTTF-200M device and supportive care for the treatment brain metastases from NSCLC as used in the METIS protocol. The designation offers us an opportunity to interact with FDA experts throughout the premarket review phase and allows for prioritized review of regulatory submissions.

Current wording

In June 2024, we presented results from the Phase 3 METIS clinical trial evaluating the use of TTFields therapy and best supportive care for the treatment of adult patients with 1-10 brain metastases from NSCLC following stereotactic radiosurgery ("METIS"). The METIS trial met its primary endpoint, demonstrating a statistically significant improvement in time to intracranial progression for patients treated with TTFields therapy and supportive care compared to patients treated with supportive care alone.

Previous wording

We believe the physical mechanisms of action behind TTFields therapy may be broadly applicable to solid tumor cancers. We are focusing our research and development activities in areas of greatest anticipated value creation. This includes NSCLC, brain cancers, and pancreatic cancer.

Current wording

We believe the physical mechanisms of action behind TTFields therapy may be broadly applicable to solid tumor cancers. We have several ongoing clinical trials which further explore the use of TTFields therapy in these solid tumor cancers, including the Phase 3 TRIDENT and KEYNOTE D58 trials in GBM, Phase 3 LUNAR-2 and Phase 2 LUNAR-4 trials in NSCLC, and Phase 2 PANOVA-4 trial in pancreatic cancer. We anticipate expanding our clinical pipeline over time to study the safety and efficacy of TTFields therapy for additional solid tumor indications and for use together with other cancer treatment modalities.

Previous wording

We anticipate expanding our clinical pipeline over time to study the safety and efficacy of TTFields therapy for additional solid tumor indications and combinations with other cancer treatment modalities.The table below presents the current status of the ongoing clinical trials in our pipeline and anticipated timing of data.

Current wording

The table below presents the current status of the ongoing clinical trials in our pipeline and anticipated timing of data.

Previous wording

In 2018, we granted Zai Lab (Shanghai) Co., Ltd. ("Zai") a license to commercialize our Products in China, Hong Kong, Macau and Taiwan ("Greater China") under a License and Collaboration Agreement (the "Zai Agreement"). The Zai Agreement also establishes a development partnership intended to accelerate the development of TTFields therapy in multiple solid tumor cancer indications. For additional information, see Note 13 to the 2023 10-K.

Current wording

In 2018, we granted Zai Lab (Shanghai) Co., Ltd. ("Zai") a license to commercialize our Products in China, Hong Kong, Macau and Taiwan ("Greater China") under a License and Collaboration Agreement (the "Zai Agreement"). The Zai Agreement also establishes a development partnership intended to accelerate the development of TTFields therapy in multiple solid tumor cancer indications. For additional information, see Note 13 to the Consolidated Financial Statements.

Previous wording

We view our operations and manage our business in one operating segment. For the three and nine months ended September 30, 2024, our net revenues were $155.1 million and $444.0 million, respectively. Our net loss for the three and nine months ended September 30, 2024 was $30.6 million and $102.7 million, respectively. As of September 30, 2024, we had an accumulated deficit of $1,088.2 million.

Current wording

We view our operations and manage our business in one operating segment. For the three months ended March 31, 2025, our net revenues were $155.0 million. Our net loss for the three months ended March 31, 2025 was $34.3 million. As of March 31, 2025, we had an accumulated deficit of $1,188.4 million.

Previous wording

Net revenues. Our revenues are primarily derived from patients using our Products in our active markets. We charge for treatment with our Products on a monthly basis. Our potential net revenues per patient are determined by our ability to secure payment, the monthly fee we collect and the number of months that the patient remains on therapy.

Current wording

Net revenues. Our revenues are primarily derived from patients using our Products in our active markets. We charge for treatment with our Products on a monthly basis. Our potential net revenues per patient are determined by our ability to secure payment, the monthly fee we collect and the number of months that the patient remains on therapy. In the case of a new indication launch such as Optune Lua, it can take time for us to generate the claims history needed for a reasonable estimate of collections that will enable us to recognize revenues upon billing without waiting for a final collection of the claim. Until that time, our revenue from NSCLC claims will be recognized in the period of cash collection.

Previous wording

We also receive revenues pursuant to the Zai Agreement. For additional information regarding the Zai Agreement, see Note 13 to the Consolidated Financial Statements in our 2023 10-K.

Current wording

We also recognize revenues pursuant to the Zai Agreement. For additional information regarding the Zai Agreement, see Note 13 to the annual Consolidated Financial Statements in our 2024 10-K.

Previous wording

The following discussion provides an analysis of our results of operations and reasons for material changes therein for the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023. The tables contained in this section report U.S. dollars in thousands (except share, patient, and prescription data). The following table sets forth our consolidated statements of operations data:

Current wording

The following discussion provides an analysis of our results of operations and reasons for material changes therein for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The tables contained in this section report U.S. dollars in thousands (except share, patient, and prescription data). The following table sets forth our consolidated statements of operations data:

Previous wording

Three and nine months ended September 30, 2024 compared to three and nine months ended September 30, 2023

Current wording

Three months ended March 31, 2025 compared to three months ended March 31, 2024

Previous wording

Excluding sales to Zai, cost of revenues per active patient per month was $2,713 for the three months ended September 30, 2024, an increase of 4% from $2,599 for the same period in 2023, primarily due to an increase in costs related to the rollout of our new arrays. Cost of revenues per active patient is calculated by dividing the cost of revenues for the quarter less equipment sales to Zai for the quarter by the average of the active patients at the end of the prior quarter and the ending active patients in the current quarter. This quarterly figure is then divided by three to estimate the monthly cost of revenues per active patient. Sales to Zai are deducted because they are sold at cost and in anticipation of future royalties from Zai, and Zai patient counts are not included in our active patient population. Product sales to Zai totaled $2.5 million and $8.4 million for the three and nine months ended September 30, 2024 compared to $4.0 million and $10.3 million for the three and nine months ended September 30, 2023.

Current wording

Excluding sales to Zai, cost of revenues per active patient per month was $2,794 for the three months ended March 31, 2025, an increase of 3% from $2,715 for the same period in 2024, primarily due to higher average array costs driven by the new array roll-out and the NSCLC launch. Cost of revenues per active patient is calculated by dividing the cost of revenues for the quarter less equipment sales to Zai for the quarter by the average of the active patients at the end of the prior quarter and the ending active patients in the current quarter. This quarterly figure is then divided by three to estimate the monthly cost of revenues per active patient. Sales to Zai are deducted because they are sold at cost and in anticipation of future royalties from Zai, and Zai patient counts are not included in our active patient population. Cost of products sold to Zai totaled $3.3 million for the three months ended March 31, 2025 compared to $2.7 million for the three months ended March 31, 2024.

Previous wording

Gross margin was 77% for the three months ended September 30, 2024 compared to 75% for the three months ended September 30, 2023. The improvement in gross margin is due to the increase in net revenue per patient primarily attributed to our improved approval rates in the US and successful launch in France. We expect that our gross margins will be impacted by current and future product enhancements, such as the launch of our new arrays in the U.S. and our launch in NSCLC. We continue to focus on opportunities to increase efficiencies and scale within our supply chain. This includes evaluating new materials, manufacturers, and processes that could lead to lower costs.

Current wording

Gross margin was 75% for the three months ended March 31, 2025 compared to 76% for the three months ended March 31, 2024. The reduction in gross margin is due to the aforementioned cost of revenue increase and the completion of the Zai up front license and milestone fees recognition. We expect that our gross margins will continue to be impacted by current and future product enhancements, such as the launch of our new arrays in the U.S. and our launch in NSCLC, as well as by the changing tariff landscape. We continue to focus on opportunities to increase efficiencies and scale within our supply chain. This includes evaluating new materials, manufacturers, and processes that could lead to lower costs.

Previous wording

Research, development and clinical study expenses. Research, development and clinical study expenses decreased 3% to $51.9 million for the three months ended September 30, 2024 from $53.6 million for the same period in 2023. For the three and nine months ended September 30, 2024, the change was primarily due to a decrease in personnel expenses. Total research and development expenses can fluctuate quarter-to-quarter dependent upon the amount of clinical research organization services delivered, clinical materials procured and the number of trials actively underway within a given quarter.

Current wording

Research, development and clinical study expenses. Research, development and clinical study expenses increased 4% to $53.8 million for the three months ended March 31, 2025 from $51.6 million for the same period in 2024. For the three months ended March 31, 2025, the change was primarily due to a $2.5 million increase in direct clinical trial expenses related to the ramp up of the LUNAR-2, LUNAR-4, and KEYNOTE D58 trials. Total research and development expenses can fluctuate quarter-to-quarter dependent upon the amount of clinical research organization services delivered, clinical materials procured and the number of trials actively underway within a given quarter.

Previous wording

General and administrative expenses. General and administrative expenses decreased 4% to $40.1 million for the three-month period ended September 30, 2024 from $41.9 million for the same period in 2023. For the three and nine months ended September 30, 2024, these changes were primarily due to lower personnel and professional service expenses.

Current wording

General and administrative expenses. General and administrative expenses increased 13% to $44.8 million for the three-month period ended March 31, 2025 from $39.5 million for the same period in 2024. For the three months ended March 31, 2025, these changes were primarily due to a $2.3 million one-time expense to retire a production line related to supply chain optimization efforts and higher personnel and professional service expenses to support the NSCLC launch and preparations for potential future indications.

Previous wording

Adjusted EBITDA increased by $30.8 million to $1.7 million for the three months ended September 30, 2024 from $(29.1) million for the same period in 2023. This increase was primarily driven by revenue growth from improved approval rates in the U.S. and a successful launch in France. The revenue increase drove a $24.5 million increase in gross profit. Actions taken during the November 2023 restructuring and a heightened focus on operational efficiencies reduced total operating expenses, excluding share-based compensation, by $6.3 million year-over-year. We intend to take actions that prioritize growth and maintain financial health and flexibility as we position our company for future profitability.

Current wording

Adjusted EBITDA decreased by 8% to $(5.0) million for the three months ended March 31, 2025 from $(4.6) million for the same period in 2024. For three months ended March 31, 2025, the change in adjusted EBITDA was primarily driven by revenue growth from increasing active patients and reimbursement improvements globally. The revenue increase drove a $11.7 million increase in gross profit. The gross profit increase was offset by increased operating expenses, primarily due to our launch in NSCLC and ramp up of clinical trials. We intend to take actions that prioritize growth and maintain financial health and flexibility as we position our company for future profitability.

Previous wording

We have incurred significant losses and cumulative negative cash flows from operations since our founding in 2000. As of September 30, 2024, we had an accumulated deficit of $1,088.2 million. To date, we have primarily financed our operations through the issuance and sale of equity and the proceeds from long-term loans.

Current wording

We have incurred significant losses and cumulative negative cash flows from operations since our founding in 2000. As of March 31, 2025, we had an accumulated deficit of $1,188.4 million. To date, we have primarily financed our operations through the exercise of options, issuance and sale of equity and the proceeds from long-term loans.

Previous wording

At September 30, 2024, we had $959.9 million in cash, cash equivalents and short-term investments, an increase of $49.3 million compared to $910.6 million at December 31, 2023, primarily as a result of the $100 million draw down of the first tranche of our senior secured credit facility in May 2024 (see "Senior Secured Term Loan Credit Facility" below), offset by net cash used in operations and used in investing activities. We believe our cash, cash equivalents and short-term investments as of September 30, 2024 are sufficient for our operations for at least the next 12 months based on our existing business plan and our ability to control the timing of significant expense commitments. We expect that our operating expenses will continue to increase over the next several years and may outpace our gross profit as we prepare to expand into additional indications beyond GBM. As a result, we may need to raise additional capital to fund our operations.

Current wording

At March 31, 2025, we had $929.1 million in cash, cash equivalents and short-term investments, a decrease of $30.7 million compared to $959.9 million at December 31, 2024, primarily caused by by net cash used in operations and used in investing activities. We believe our cash, cash equivalents and short-term investments as of March 31, 2025 are sufficient for our operations for at least the next 12 months based on our existing business plan and our ability to control the timing of significant expense commitments. We expect that our operating expenses will continue to increase over the next several years and may outpace our gross profit as we prepare to expand into additional indications beyond CNS and Lung. As a result, we may need to raise additional capital to fund our operations.

Previous wording

Operating activities. Net cash used in or provided by operating activities represents our net income (loss) for the periods presented, share-based compensation and depreciation and amortization. Operating cash flows are also impacted by changes in working capital.

Current wording

Operating activities. Net cash used in or provided by operating activities represents our net income (loss) for the periods presented, share-based compensation and depreciation and amortization. Operating cash flows are also impacted by changes in working capital as a result of collections from trade receivables and payments of accounts payables.

Previous wording

Net cash used in operating activities decreased by $35.9 million from $58.8 million net cash used in operating activities for the nine months ended September 30, 2023 to $22.9 million net cash used in operating activities for the nine months ended September 30, 2024. This was a result of a $57.3 million reduction in net loss, offset by a $22.9 million increase in working capital primarily driven by a $33.1 million increase in accounts receivable and a $7.4 million decrease of inventories, a decrease of $6.0 million in cash to non-cash based expenses primarily consisting of shared-based compensation, and a decrease of $4.4 million in other long term assets and an increase of $2.8 million in other long-term liabilities.

Current wording

Net cash used in operating activities increased by $4.1 million from $31.6 million net cash used in operating activities for the three months ended March 31, 2024 to $35.7 million net cash used in operating activities for the three months ended March 31, 2025. This was a result of a $4.4 million reduction in net loss, offset by an $8.0 million decrease in expenses consisting of $4.5 million of shared-based compensation and $3.9 million of accrued interest, a $2.8 million increase in working capital primarily driven by a $5.3 million increase in accounts receivable offset by an $1.8 million increase in accounts payable and accrued expenses, and a decrease of $1.4 million in other long term assets and an increase of $0.6 million in other long-term liabilities.

Previous wording

Net cash used in investing activities was $118.0 million for the nine months ended September 30, 2024, compared to $85.6 million provided by investing activities for the nine months ended September 30, 2023. The $118.0 million net cash used in investing activities for the nine months ended September 30, 2024 was primarily attributable to $84.1 million of the net purchase of short term investments and the purchase of $33.9 million of property and equipment. The $85.6 million net cash provided by investing activities for the nine months ended September 30, 2023 was primarily attributable to $105.9 million of net proceeds from maturity of short term investments and by the purchase of $20.3 million of property and equipment.

Current wording

Net cash used in investing activities was $6.5 million for the three months ended March 31, 2025, compared to $246.2 million provided by investing activities for the three months ended March 31, 2024. The $6.5 million net cash used in investing activities for the three months ended March 31, 2025 was primarily attributable to $4.1 million of net proceeds of short term investments and the purchase of $10.6 million of property and equipment. The $246.2 million net cash provided by investing activities for the three months ended March 31, 2024 was primarily attributable to $258.0 million of net proceeds from maturity of short term investments and by the purchase of $11.8 million of property and equipment.

Previous wording

Financing activities. Net cash provided by financing activities was $87.6 million for the nine months ended September 30, 2024, as compared to $13.9 million provided by financing activities for the nine months ended September 30, 2023, primarily attributable to $96.9 million of net proceeds from the first tranche of our senior secured credit facility offset by $12.9 million used to partially repay Notes, In addition, the net cash provided by financing activities for the nine months ended September 30, 2024 and September 30, 2023 included proceeds from the exercise of options under the Company's share option plan.

Current wording

Financing activities. Net cash provided by financing activities was $5.2 million for the three months ended March 31, 2025, as compared to $0.2 million provided by financing activities for the three months ended March 31, 2024, attributable to the exercise of options under the Company's share option plan.