Quarterly net revenues of $144.0 million, representing 45
percent growth versus the fourth quarter 2019 and 9 percent growth
versus the third quarter 2020
Quarterly net income of $4.9 million with $0.05 in earnings per
share
Novocure (NASDAQ: NVCR) today reported financial results for the
quarter and full year ended December 31, 2020, highlighting revenue
growth and financial strength as well as the advancement of the
company’s clinical and product development programs. 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.
Fourth quarter 2020 highlights
include:
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2020
2019
% Change
2020
2019
% Change
Financial, in millions
Net revenues
$
144.0
$
99.2
45
%
$
494.4
$
351.3
41
%
Gross Profit
$
115.8
$
74.4
56
%
$
387.9
$
262.7
48
%
Net income (loss)
$
4.9
$
4.3
15
%
$
19.8
$
(7.2)
(374)
%
Adjusted EBITDA(1)
$
34.8
$
17.3
101
%
$
115.3
$
60.0
92
%
Non-financial
Active patients at period end(2)
3,411
2,909
17
%
3,411
2,909
17
%
Prescriptions received in period(3)
1,411
1,380
2
%
5,613
5,371
5
%
(1) Adjusted EBITDA is a non-U.S. GAAP measurement of earnings
before interest, taxes, depreciation, amortization and share-based
compensation.
(2) An “active patient” is a patient who is receiving treatment
under a commercial prescription order as of the measurement date,
including patients who may be on a temporary break from treatment
and who plan to resume treatment in less than 60 days.
(3) A “prescription received” is a commercial order for Optune
or Optune Lua that is received from a physician certified to treat
patients for a patient not previously on Optune or Optune Lua.
Orders to renew or extend treatment are not included in this
total.
“Our track record of execution continued throughout 2020 with
notable progress made in advancing our three overarching
priorities: to drive commercial adoption; to carry out our clinical
trial programs; and to deliver product innovations to optimize
Tumor Treating Fields therapy,” said William Doyle, Novocure’s
Executive Chairman. “Despite the complexities posed by the COVID-19
pandemic, we generated nearly $500 million in net revenues and $20
million in net income in 2020. Our financial strength positions us
well to invest strategically in science and technology to unleash
the potential of the Tumor Treating Fields platform.”
“As proud as we are of treating more than 18,000 patients
to-date, we remain focused on extending the reach of Tumor Treating
Fields therapy to many more cancer patients,” added Asaf Danziger,
Novocure’s Chief Executive Officer. “With multiple clinical trials
expected to read out over the next few years, we believe we are
just beginning to unlock our potential to impact oncology.
Acceptance of our therapy continues to build within the global
oncology community, which reinforces our commitment to our mission
to extend survival in some of the most aggressive forms of
cancer.”
Fourth quarter 2020 financial update
For the quarter ended December 31, 2020, net revenues were
$144.0 million, representing 45% growth compared to the fourth
quarter 2019.
- In the United States, net revenues totaled $97.7 million in the
quarter ended December 31, 2020, representing 48% growth compared
to the same period in 2019.
- In Germany and other EMEA markets, net revenues totaled $33.8
million in the quarter ended December 31, 2020, representing 31%
growth compared to the same period in 2019.
- In Japan, net revenues totaled $7.9 million in the quarter
ended December 31, 2020, representing 42% growth compared to the
same period in 2019.
- In Greater China, net revenues totaled $4.5 million in the
quarter ended December 31, 2020, representing 132% growth compared
to the same period in 2019.
For the three months ended December 31, 2020, the increases
primarily resulted from an increase of 502 active patients in our
active markets and an increase in the net revenues per active
patient per month. The increase in net revenues per active patient
per month primarily was driven by improving reimbursement approval
rates in the U.S.
In the fourth quarter 2020, we recorded $9 million in revenues
from Medicare fee-for-service beneficiaries billed under the
coverage policy effective on September 1, 2019. We have gained a
good understanding of how to ensure timely processing of Medicare
claims and have sufficient experience to recognize approximately
two-thirds of the expected contribution from Medicare
beneficiaries. In the fourth quarter of 2020, we also recognized
approximately $11 million in incremental net revenues compared to
the first half of 2020 resulting from the successful appeal of
previously denied claims for Medicare fee-for-service beneficiaries
billed prior to established coverage.
Cost of revenues for the three months ended December 31, 2020
was $28.1 million compared to $24.8 million for the same period in
2019, representing an increase of 14%. The increase in cost of
revenues primarily was due to the cost of shipping arrays to a
higher volume of commercial patients. Gross margin was 80% for the
three months ended December 31, 2020 compared to 75% for the three
months ended December 31, 2019. Gross margin continues to benefit
from ongoing efficiency initiatives and increasing scale. Gross
margin is also improved with revenue resulting from the successful
appeal of previously denied claims for Medicare fee-for-service
beneficiaries and tempered by product sales to Zai.
Research, development and clinical trials expenses for the three
months ended December 31, 2020 were $44.0 million compared to $23.7
million for the same period in 2019, representing an increase of
85%. The increase primarily was due to increased investments in
clinical trials and clinical administration personnel to advance
and broaden our clinical development programs, preclinical and
basic research to better understand the optimal use of Tumor
Treating Fields, product development intended to optimize the
delivery of Tumor Treating Fields therapy, and expanded medical
affairs efforts to educate the clinical community.
We expect growth in our research and development to continue
into 2021 as we work to advance our pipeline programs and increase
acceptance of Tumor Treating Fields within the global oncology
community. We balance our investments in research and development
with our organizational capacity to effectively execute our
strategic initiatives.
Sales and marketing expenses for the three months ended December
31, 2020 were $31.4 million compared to $26.8 million for the same
period in 2019, representing an increase of 17%. This primarily was
due to an increase in personnel and professional services costs to
support our growing commercial business and reimbursement efforts
and an increase in marketing expenses related to the launch of
Optune Lua for MPM.
General and administrative expenses for the three months ended
December 31, 2020 were $28.4 million compared to $23.7 million for
the same period in 2019, representing an increase of 19%. This
primarily was due to an increase in personnel costs, insurance
premiums and professional services.
Net income for the three months ended December 31, 2020 was $4.9
million compared to net income of $4.3 million for the same period
in 2019.
At December 31, 2020, we had $842.6 million in cash and cash
equivalents and short-term investments, an increase of $516.5
million compared to $326.1 million at December 31, 2019. The
increase in our cash, cash equivalents and short-term investments
primarily was due to convertible notes issued, net cash provided by
operating activities and the exercise of options.
Fourth quarter 2020 operating statistics
There were 3,411 active patients at December 31, 2020,
representing 17% growth compared to December 31, 2019, and 1%
growth compared to September 30, 2020.
- In the United States, there were 2,193 active patients at
December 31, 2020, representing 12% growth compared to December 31,
2019.
- In Germany and other EMEA markets, there were 953 active
patients at December 31, 2020, representing 25% growth compared to
December 31, 2019.
- In Japan, there were 265 active patients at December 31, 2020,
representing 38% growth compared to December 31, 2019.
Additionally, 1,411 prescriptions were received in the quarter
ended December 31, 2020, representing 2% growth compared to the
same period in 2019, and a 3% increase compared to the quarter
ended September 30, 2020. In the quarter ended December 31, 2020,
1,160 Optune prescriptions were written for patients with newly
diagnosed glioblastoma.
- In the United States, 962 prescriptions were received in the
quarter ended December 31, 2020, representing a 4% decrease
compared to the same period in 2019.
- In Germany and other EMEA markets, 349 prescriptions were
received in the quarter ended December 31, 2020, representing 22%
growth compared to the same period in 2019.
- In Japan, 100 prescriptions were received in the quarter ended
December 31, 2020, representing 8% growth compared to the same
period in 2019.
Fourth quarter 2020 non-U.S. GAAP measures
We also 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.
Adjusted EBITDA was $34.8 million for the three months ended
December 31, 2020, an increase of $17.5 million, or 101%, from
$17.3 million for the three months ended December 31, 2019. This
improvement in fundamental financial performance was driven by net
revenue growth coupled with an ongoing commitment to disciplined
management of expenses.
Anticipated clinical milestones
- Final data from phase 2 pilot HEPANOVA trial in advanced liver
cancer (Q2 2021)
- Interim analysis of phase 3 pivotal INNOVATE-3 trial in
recurrent ovarian cancer (Q3 2021)
- Interim analysis of phase 3 pivotal LUNAR trial in non-small
cell lung cancer (Q4 2021)
- Final data from phase 2 pilot EF-31 trial in gastric cancer
(2022)
- Interim analysis of phase 3 pivotal PANOVA-3 trial in locally
advanced pancreatic cancer (2022)
- Final data from phase 3 pivotal METIS trial in brain metastases
(2022)
- Final data from phase 2 pilot EF-33 trial with high-intensity
arrays in recurrent glioblastoma (2022)
- Final data from phase 3 pivotal INNOVATE-3 trial in recurrent
ovarian cancer (2023)
- Final data from phase 3 pivotal LUNAR trial in non-small cell
lung cancer (2023)
- Final data from phase 3 pivotal PANOVA-3 trial in locally
advanced pancreatic cancer (2023)
Conference call details
Novocure will host a conference call and webcast to discuss
fourth quarter and full year 2020 financial results at 8 a.m. EST
today, Thursday, February 25, 2021. 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 3965899.
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 in the U.S. for the treatment of adult patients
with malignant pleural mesothelioma. Novocure has ongoing or
completed clinical trials investigating Tumor Treating Fields in
brain metastases, non-small cell lung cancer, pancreatic cancer,
ovarian cancer, liver cancer, gastric cancer and glioblastoma.
Headquartered in Jersey, Novocure has U.S. operations in
Portsmouth, New Hampshire, Malvern, Pennsylvania and New York City.
Additionally, the company has offices in Germany, Switzerland,
Japan and Israel. For additional information about the company,
please visit www.novocure.com or follow us at
www.twitter.com/novocure.
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 25, 2021, 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,
2020
2019
2020
2019
Net revenues
$
143,953
$
99,234
$
494,366
$
351,318
Cost of revenues
28,136
24,786
106,501
88,606
Gross profit
115,817
74,448
387,865
262,712
Operating costs and expenses:
Research, development and clinical
trials
44,002
23,741
132,010
79,003
Sales and marketing
31,359
26,804
118,017
96,675
General and administrative
28,364
23,751
107,437
87,948
Total operating costs and expenses
103,725
74,296
357,464
263,626
Operating income (loss)
12,092
152
30,401
(914)
Financial expenses (income), net
3,267
1,744
12,299
7,910
Income (loss) before income tax
8,825
(1,592)
18,102
(8,824)
Income tax
3,908
(5,852)
(1,706)
(1,594)
Net income (loss)
$
4,917
$
4,260
$
19,808
$
(7,230)
Basic net income (loss) per ordinary
share
$
0.05
$
0.04
$
0.20
$
(0.07)
Weighted average number of ordinary shares
used in computing basic net income (loss) per share
101,945,085
99,226,445
100,930,866
97,237,549
Diluted net income (loss) per ordinary
share
$
0.04
$
0.04
$
0.18
$
(0.07)
Weighted average number of ordinary shares
used in computing diluted net income (loss) per share
110,604,714
107,911,519
108,877,648
97,237,549
Consolidated Balance Sheets
USD in thousands (except share data)
December 31,
2020
2019
Assets
Current assets:
Cash and cash equivalents
$
234,674
$
177,321
Short-term investments
607,902
148,769
Restricted cash
11,499
2,095
Trade receivables, net
96,699
58,859
Receivables and prepaid expenses
21,245
29,202
Inventories
27,422
23,701
Total current assets
999,441
439,947
Long-term assets:
Property and equipment, net
11,395
9,342
Field equipment, net
11,230
7,684
Right-of-use assets, net
19,009
17,571
Other long-term assets
10,908
4,904
Total long-term assets
52,542
39,501
Total assets
$
1,051,983
$
479,448
Consolidated Balance Sheets
USD in thousands (except share data)
December 31,
2020
2019
Liabilities and shareholders’
equity
Current liabilities:
Trade payables
$
53,647
$
36,925
Other payables and accrued expenses
59,965
49,386
Total current liabilities
113,612
86,311
Long-term liabilities:
Long-term loan, net of discount and
issuance costs
429,905
149,424
Deferred revenues
12,139
7,807
Employee benefit liabilities
5,171
3,754
Long term leases
14,293
14,140
Other long-term liabilities
337
222
Total long-term liabilities
461,845
175,347
Total liabilities
575,457
261,658
Commitments and contingencies
Shareholders’ equity:
Share capital -
Ordinary shares - No par value, Unlimited
shares authorized; Issued and outstanding: 102,334,276 shares and
99,528,435 shares at December 31, 2020 and December 31, 2019
respectively;
—
—
Additional paid-in capital
1,111,435
871,442
Accumulated other comprehensive loss
(3,832)
(2,767)
Accumulated deficit
(631,077)
(650,885)
Total shareholders’ equity
476,526
217,790
Total liabilities and shareholders’
equity
$
1,051,983
$
479,448
Non-U.S. GAAP financial measures
reconciliation
USD in thousands
Three months ended December
31,
Twelve months ended December
31,
2020
2019
% Change
2020
2019
% Change
Net income (loss)
$
4,917
$
4,260
15
%
$
19,808
$
(7,230)
(374)
%
Add: Income tax
3,908
(5,852)
(167)
%
(1,706)
(1,594)
7
%
Add: Financial expenses (income), net
3,267
1,744
87
%
12,299
7,910
55
%
Add: Depreciation and amortization
2,473
2,467
—
%
9,150
8,460
8
%
EBITDA
$
14,565
$
2,619
456
%
$
39,551
$
7,546
424
%
Add: Share-based compensation
20,273
14,699
38
%
75,721
52,416
44
%
Adjusted EBITDA
$
34,838
$
17,318
101
%
$
115,272
$
59,962
92
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210225005326/en/
Investors: Gabrielle Fernandes gfernandes@novocure.com
603-206-7047
Media: Jaclyn Stahl jstahl@novocure.com 212-767-7516
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