Quarterly net revenues of $133.5 million, presenting 15% growth
versus the second quarter of 2020 with 79% gross margin
Invested record $50 million in research and development
initiatives across brain, thoracic and abdominal programs
Novocure (NASDAQ: NVCR) today reported financial results for the
quarter ended June 30, 2021, highlighting commercial strength and
strategic investment across clinical, product development and
commercial initiatives intended to fuel future growth. 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). TTFields
are electric fields that disrupt cancer cell division.
Second quarter 2021 highlights include:
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
% Change
2021
2020
% Change
Financial, in millions
Net revenues
$
133.5
$
115.9
15
%
$
268.2
$
217.8
23
%
Gross Profit
$
104.9
$
90.5
16
%
$
213.2
$
167.8
27
%
Net income (loss)
$
(14.6)
$
1.7
(959)
%
$
(18.8)
$
5.6
(436)
%
Adjusted EBITDA(1)
$
18.1
$
28.0
(36)
%
$
39.2
$
43.1
(9)
%
Non-financial
Active patients at period end(2)
3,487
3,278
6
%
3,487
3,278
6
%
Prescriptions received in period(3)
1,450
1,422
2
%
2,852
2,831
1
%
(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.
“We delivered another quarter of strong performance, generating
$134 million in net revenues with a 79% gross margin,” said Asaf
Danziger, Novocure’s Chief Executive Officer. “The performance of
our core GBM business continues to provide our company with the
financial resources to aggressively pursue multiple potential
growth initiatives. We believe these investments in commercial,
clinical and engineering capabilities will enable organizational
readiness as we strive to extend patient survival in multiple solid
tumor cancers through our Tumor Treating Fields platform.”
“Looking to the future, our pipeline is primed for growth,”
continued William Doyle, Novocure’s Executive Chairman. “We reached
several notable milestones since our last earnings report,
including FDA approval of our IDE supplement for the phase 3
pivotal LUNAR trial in non-small cell lung cancer (NSCLC),
presentation of final data from our phase 2 pilot HEPANOVA study in
advanced liver cancer, and we are actively seeking to enroll
patients in our phase 2 pilot KEYNOTE-B36 trial in NSCLC. I am
proud of our team’s performance this quarter and look to continue
our track record of execution in the second half of the year.”
Second quarter 2021 financial update
For the quarter ended June 30, 2021, net revenues were $133.5
million, representing 15% growth compared to the second quarter
2020.
- In the United States, net revenues totaled $87.1 million in the
quarter ended June 30, 2021, representing 7% growth compared to the
same period in 2020.
- In Germany and other EMEA markets, net revenues totaled $32.7
million in the quarter ended June 30, 2021, representing 29% growth
compared to the same period in 2020.
- In Japan, net revenues totaled $8.8 million in the quarter
ended June 30, 2021, representing 22% growth compared to the same
period in 2020.
- In Greater China, net revenues totaled $4.9 million in the
quarter ended June 30, 2021, representing 130% growth compared to
the same period in 2020.
For the three months ended June 30, 2021, the increase in net
revenues from the second quarter of 2020 resulted primarily from an
increase of 209 active patients in our currently active markets, a
sustained improvement in the net revenues booked per active
patient, and the launch of Optune® in China.
We recorded $8.2 million in revenues from Medicare
fee-for-service beneficiaries in the second quarter 2021, a
decrease of 24% from the $10.8 million recognized in the same
period in 2020. The decrease in revenue from Medicare does not
reflect a reduction in active Medicare patients or a decrease in
the contribution we ultimately expect from Medicare beneficiaries,
but instead reflects the impact from an extended appeal timeline
for certain claims billed after established coverage. In the second
quarter of 2021, we did not record a material amount of incremental
net revenue 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 June 30, 2021 was
$28.6 million compared to $25.5 million for the same period in
2020, representing an increase of 12%. The increase in cost of
revenues was primarily due to the cost of shipping transducer
arrays to a higher volume of commercial patients and increasing
shipments of equipment to Zai Lab. 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. Gross margin was 79% for
the three months ended June 30, 2021 compared to 78% for the three
months ended June 30, 2020.
Research, development and clinical trials expenses for the three
months ended June 30, 2021 were $50.3 million compared to $29.9
million for the same period in 2020, representing an increase of
68%. This was primarily due to an increase in clinical trial and
personnel expenses for our phase 3 pivotal, post-marketing and
label expansion trials, an increase in development and personnel
expenses to support our product development programs, and increased
investments in preclinical research and the expansion of our
medical affairs activities.
Sales and marketing expenses for the three months ended June 30,
2021 were $34.1 million compared to $28.5 million for the same
period in 2020, representing an increase of 20%. This was primarily
due to an increase in personnel and professional services costs as
we continue to enhance our commercial capabilities in anticipation
of potential future approvals in new indications. Accordingly, we
are investing heavily in our market access capabilities in order to
evaluate opportunities, identify optimal access pathways and
successfully gain reimbursement in new geographies.
General and administrative expenses for the three months ended
June 30, 2021 were $32.8 million compared to $25.4 million for the
same period in 2020, representing an increase of 29%. This was
primarily due to an increase in personnel costs and professional
services.
Net loss for the three months ended June 30, 2021 was $14.6
million compared to net income of $1.7 million for the same period
in 2020.
At June 30, 2021, we had $899.0 million in cash, cash
equivalents and short-term investments, an increase of $56.5
million compared to $842.6 million at December 31, 2020. The
increase in our cash, cash equivalents and short-term investments
was primarily due to the cash flow from operations and the exercise
of options.
Second quarter 2021 operating statistics
There were 3,487 active patients at June 30, 2021, representing
6% growth compared to June 30, 2020, and 1% growth compared to
March 31, 2021.
- In the United States, there were 2,206 active patients at June
30, 2021, representing 3% growth compared to June 30, 2020.
- In Germany and other EMEA markets, there were 990 active
patients at June 30, 2021, representing 10% growth compared to June
30, 2020.
- In Japan, there were 291 active patients at June 30, 2021,
representing 24% growth compared to June 30, 2020.
Additionally, 1,450 prescriptions were received in the quarter
ended June 30, 2021, representing a 2% increase compared to the
same period in 2020, and a 3% increase compared to the quarter
ended March 31, 2021. We believe the prolonged disruption caused by
COVID-19 is resulting in increased volatility across global health
care systems, such as fluctuations in patient volumes and changes
in patterns of care in certain regions, which had some impact on
our business in the second quarter.
- In the United States, 967 prescriptions were received in the
quarter ended June 30, 2021, representing no change compared to the
same period in 2020.
- In Germany and other EMEA markets, 375 prescriptions were
received in the quarter ended June 30, 2021, representing 2% growth
compared to the same period in 2020.
- In Japan, 108 prescriptions were received in the quarter ended
June 30, 2021, representing 27% growth compared to the same period
in 2020.
Second quarter 2021 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 $18.1 million for the three months ended
June 30, 2021, a decrease of $10.0 million, or 36%, from $28.0
million for the three months ended June 30, 2020. We are encouraged
by our stable financial performance in light of our aggressive
investments in growth initiatives. While our Adjusted EBITDA for
the six month period ended June 30, 2021 was approximately $4
million lower compared to the same period in 2020, we have invested
an incremental $61 million in research & development, sales
& marketing, and other operational activities to maximize
future growth opportunities.
Recent clinical milestones
In April 2021, we announced that an independent data monitoring
committee (DMC) informed us that the pre-specified interim analysis
for the phase 3 pivotal LUNAR trial for the treatment of NSCLC was
accelerated given the length of accrual and the number of events
observed. The interim analysis included data from 210 patients
accrued through February 2021. After review of the interim
analysis, the DMC concluded that the LUNAR trial should continue
with no evidence of increased systemic toxicity. The DMC went on to
comment that the continued accrual to 534 patients as proposed in
the original protocol, given the current rate of accrual and the
interim data presented, is likely unnecessary and possibly
unethical for patients randomized to control. For this reason, the
DMC recommended an adjustment of accrual to approximately 276
patients with a 12-month follow-up following the enrollment of the
last patient. The DMC believes this amended protocol will provide
adequate data regarding toxicity and efficacy, providing sufficient
overall power, as well as potentially providing important
information regarding efficacy within treatment subgroups. In May
2021, the FDA approved an investigational device exemption (IDE)
supplement incorporating the recommended protocol changes and we
now expect final data in 2022.
In April 2021, the FDA approved our IDE application to initiate
the KEYNOTE B36 phase 2 pilot trial to study TTFields with
pembrolizumab in first-line NSCLC through our clinical
collaboration with MSD (a tradename of Merck & Co.). KEYNOTE
B36 currently has five clinical trial sites actively evaluating
patients for enrollment.
In May 2021, we entered into a clinical trial collaboration with
GT Medical Technologies, Inc., to develop TTFields together with GT
Medical Technologies’ GammaTile Surgically Targeted Radiation
Therapy for the treatment of recurrent GBM, expanding our research
in the treatment of GBM. We plan to conduct a phase 2 pilot study
to test the safety and effectiveness of neo-adjuvant TTFields
followed by resection, GammaTile Therapy, and adjuvant TTFields for
recurrent GBM. This clinical trial collaboration presents an
important opportunity to study the radio-sensitizing effect of
TTFields in solid cancer tumors with other treatment
modalities.
In July 2021, we announced the final results of our phase 2
pilot HEPANOVA trial investigating TTFields together with
sorafenib, a kinase inhibitor, in 27 patients with advanced liver
cancer. Historical control data showed an objective response rate
of 4.5% and disease control rate of 43% for patients treated with
sorafenib alone. In 21 evaluable patients, HEPANOVA showed a 9.5%
objective response rate and 76% disease control rate, as well as
5.8 months of progression free survival. These results are even
more encouraging when considering the poor prognosis of the study
population. Over half of the patients in HEPANOVA were categorized
as Child-Turcotte-Pugh Class B compared to 5% in the historical
control, indicating significant liver functional compromise. Of the
patients who received at least 12 weeks of therapy (n=11), the
disease control rate reached 91% with an objective response rate of
18%. These data demonstrate that TTFields have the potential to
extend survival in advanced liver cancer. Our team, along with
trial investigators, are actively designing a phase 3 pivotal trial
that contemplates TTFields therapy together with the current
standard of care, including immunotherapy, and have engaged the FDA
regarding the use of TTFields in advanced liver cancer.
The enrollment timelines for our METIS trial are reliant on
clinical site expansion in regions that continue to be materially
delayed as clinical sites devote significant resources to the
COVID-19 global pandemic. Our clinical affairs teams are focused on
accelerating enrollment at existing clinical sites, but our efforts
are challenged by a heavy reliance on virtual engagement and, as a
result, we now anticipate a two-quarter delay in last patient
enrollment for METIS, with final data in 2023. It is estimated that
between 20% and 40% of patients with NSCLC develop brain
metastases. Together with LUNAR and KEYNOTE B36, the METIS data
represent an important opportunity to demonstrate the efficacy of
TTFields at multiple stages of lung cancer.
Anticipated clinical milestones
- Interim analysis of phase 3 pivotal INNOVATE-3 trial in
recurrent ovarian cancer (Q3 2021)
- 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)
- Data from phase 2 pilot EF-33 trial with high-intensity arrays
in recurrent glioblastoma (2022)
- Final data from phase 3 pivotal LUNAR trial in NSCLC
(2022)
- Data from phase 3 pivotal METIS trial in brain metastases
(2023)
- Final data from phase 3 pivotal INNOVATE-3 trial in recurrent
ovarian 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
second quarter 2021 financial results at 8 a.m. EDT today,
Thursday, July 29, 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
1926805.
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 (TTFields). TTFields are electric fields that
disrupt cancer cell division. Novocure’s commercialized products
are approved for the treatment of adult patients with glioblastoma
and malignant pleural mesothelioma. Novocure has ongoing or
completed clinical trials 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, 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 us, follow
@Novocure on LinkedIn and Twitter.
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 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 June
30,
Six months ended June
30,
Year ended December
31,
2021
2020
2021
2020
2020
Unaudited
Unaudited
Audited
Net revenues
$
133,517
$
115,925
$
268,212
$
217,753
$
494,366
Cost of revenues
28,599
25,474
54,984
49,970
106,501
Gross profit
104,918
90,451
213,228
167,783
387,865
Operating costs and expenses:
Research, development and clinical
trials
50,315
29,918
96,231
55,190
132,010
Sales and marketing
34,138
28,461
65,495
57,294
118,017
General and administrative
32,760
25,404
63,885
52,012
107,437
Total operating costs and expenses
117,213
83,783
225,611
164,496
357,464
Operating income (loss)
(12,295)
6,668
(12,383)
3,287
30,401
Financial expenses (income), net
940
2,617
3,586
5,049
12,299
Income (loss) before income taxes
(13,235)
4,051
(15,969)
(1,762)
18,102
Income taxes
1,406
2,396
2,800
(7,369)
(1,706)
Net income (loss)
$
(14,641)
$
1,655
$
(18,769)
$
5,607
$
19,808
Basic net income (loss) per ordinary
share
$
(0.14)
$
0.02
$
(0.18)
$
0.06
$
0.20
Weighted average number of ordinary shares
used in computing basic net income (loss) per share
103,484,866
100,718,893
103,061,557
100,298,230
100,930,866
Diluted net income (loss) per ordinary
share
$
(0.14)
$
0.02
$
(0.18)
$
0.05
$
0.18
Weighted average number of ordinary shares
used in computing diluted net income (loss) per share
103,484,866
107,647,802
103,061,557
107,897,907
108,877,648
Consolidated Balance Sheets USD in thousands (except
share data)
June 30, 2021
December 31, 2020
Unaudited
Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
349,124
$
234,674
Short-term investments
549,907
607,902
Restricted cash
11,463
11,499
Trade receivables, net
90,436
96,699
Receivables and prepaid expenses
17,946
21,245
Inventories
26,690
27,422
Total current assets
1,045,566
999,441
LONG-TERM ASSETS:
Property and equipment, net
11,857
11,395
Field equipment, net
12,042
11,230
Right-of-use assets
16,964
19,009
Other long-term assets
10,630
10,908
Total long-term assets
51,493
52,542
TOTAL ASSETS
$
1,097,059
$
1,051,983
Consolidated Balance Sheets USD in thousands (except
share data)
June 30, 2021
December 31, 2020
Unaudited
Audited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables
$
56,785
$
53,647
Other payables, lease liabilities and
accrued expenses
59,421
59,965
Total current liabilities
116,206
113,612
LONG-TERM LIABILITIES:
Long-term debt, net
560,562
429,905
Deferred revenue
8,352
12,139
Long-term leases
11,944
14,293
Employee benefits
2,553
5,171
Other long-term liabilities
173
337
Total long-term liabilities
583,584
461,845
TOTAL LIABILITIES
699,790
575,457
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Share capital -
Ordinary shares no par value, unlimited
shares authorized; issued and outstanding: 103,641,238 shares and
102,334,276 shares at June 30, 2021 (unaudited) and December 31,
2020, respectively
—
—
Additional paid-in capital
1,044,732
1,111,435
Accumulated other comprehensive income
(loss)
(1,119)
(3,832)
Retained earnings (accumulated
deficit)
(646,344)
(631,077)
TOTAL SHAREHOLDERS' EQUITY
397,269
476,526
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY
$
1,097,059
$
1,051,983
Non-U.S. GAAP financial measures reconciliation USD in
thousands
Three months ended June
30,
Six months ended June
30,
2021
2020
% Change
2021
2020
% Change
Net income (loss)
$
(14,641)
$
1,655
(985)
%
$
(18,769)
$
5,607
(435)
%
Add: Income tax
1,406
2,396
(41)
%
2,800
(7,369)
(138)
%
Add: Financial income (expenses), net
940
2,617
(64)
%
3,586
5,049
(29)
%
Add: Depreciation and amortization
2,480
2,601
(5)
%
4,850
4,489
8
%
EBITDA
$
(9,815)
$
9,269
(206)
%
$
(7,533)
$
7,776
(197)
%
Add: Share-based compensation
27,881
18,770
49
%
46,744
35,327
32
%
Adjusted EBITDA
$
18,066
$
28,039
(36)
%
$
39,211
$
43,103
(9)
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210729005357/en/
Investors: Ingrid Goldberg investorinfo@novocure.com
610-723-7427
Media: media@novocure.com 610-723-7428
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