Novocure Reports First Quarter 2019 Financial Results and Provides Company Update

Quarterly net revenues of $73.3 million, representing 41 percent
growth versus the first quarter 2018 and 5 percent growth versus the
fourth quarter 2018

Mesothelioma humanitarian device exemption application under FDA
review

Enrollment ongoing in four phase 3 pivotal trials, creating a
significant market expansion opportunity in some of the most aggressive
forms of cancer

ST. HELIER, Jersey–(BUSINESS WIRE)–lt;a href="https://twitter.com/search?q=%24NVCR&src=ctag" target="_blank"gt;$NVCRlt;/agt;–Novocure (NASDAQ: NVCR) today reported financial results for the quarter
ended March 31, 2019, highlighting continued revenue growth, an
advancing clinical pipeline and a strong cash position. 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.

First quarter 2019 highlights include:

				Three months ended March 31,
					2019					2018				% Change
Non-financial
Active patients at period end(1)					2,631					2,009				31	%
Prescriptions received in period(2)					1,310					1,258				4	%
Financial, in million
Net revenues				$	73.3				$	52.1				41	%
Net loss				$	(12.2	)			$	(20.7	)			-41	%
Cash and cash equivalents at the end of period				$	152.1				$	111.6				36	%
Short-term investments at the end of period				$	104.5				$	104.7				–

(1)			An “active patient” is a patient who is on Optune 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.
(2)			A “prescription received” is a commercial order for Optune that is received from a physician certified to treat patients with Optune for a patient not previously on Optune. Orders to renew or extend treatment are not included in this total.

“With more than 2,600 patients on Optune as of March 31, 2019, we
delivered another quarter of strong financial performance. We posted
$73.3 million in net revenues in the first quarter 2019 with
year-over-year revenue growth of 41 percent,” said Asaf Danziger,
Novocure’s Chief Executive Officer. “We also strengthened our balance
sheet, adding more than $10 million in cash, cash equivalents and
short-term investments in the first quarter. We continued to fund our
increased investments in clinical trials and Optune technology
improvements with cash flow from the GBM business.”

“Our clinical pipeline continues to advance. Our HDE application for
malignant pleural mesothelioma is under review at the FDA and, with the
first patient enrolled in our INNOVATE-3 trial in March, enrollment is
now ongoing in four phase 3 pivotal trials, creating a significant
market expansion opportunity,” added William Doyle, Novocure’s Executive
Chairman. “We believe we are at an important inflection point,
transitioning to cash generation while expanding globally, driving
clinical trials and investing in technology improvements as we work to
extend survival in some of the most aggressive forms of cancer.”

First quarter 2019 operating statistics and financial update

There were 2,631 active patients on Optune at March 31, 2019,
representing 31 percent growth versus March 31, 2018, and 10 percent
growth versus December 31, 2018. The increase in active patients was
driven primarily by prescription growth in EMEA and Japan and the
ongoing benefit from continued growth in prescriptions for patients with
newly diagnosed GBM globally.

• In the United States, there were 1,778 active patients on Optune at
  March 31, 2019, representing 23 percent growth versus March 31, 2018.
• In Germany and other EMEA markets, there were 735 active patients on
  Optune at March 31, 2019, representing 35 percent growth versus March
  31, 2018.
• In Japan, there were 118 active patients on Optune at March 31, 2019,
  representing 490 percent growth versus March 31, 2018.

Additionally, 1,310 prescriptions were received in the three months
ended March 31, 2019, representing four percent growth compared to the
same period in 2018, and flat versus the three months ended December 31,
2018.

• In the United States, 925 prescriptions were received in the three
  months ended March 31, 2019, representing a two percent decline
  compared to the same period in 2018.
• In Germany and other EMEA markets, 330 prescriptions were received in
  the three months ended March 31, 2019, representing 17 percent growth
  compared to the same period in 2018.
• In Japan, 55 prescriptions were received in the three months ended
  March 31, 2019, representing 83 percent growth compared to the same
  period in 2018.

For the three months ended March 31, 2019, net revenues were $73.3
million, representing 41 percent growth versus the same period in 2018.
Revenue growth was primarily driven by an increase of 622 active
patients in our currently active markets, representing 31 percent
growth, and an increase in net revenues per active patient. The increase
in net revenues per active patient was primarily driven by improving
reimbursement approval rates in Germany and by growth in Austria and
Japan.

For the three months ended March 31, 2019, cost of revenues was $19.8
million compared to $18.2 million for the same period in 2018,
representing an increase of 9 percent. The increase in cost of revenues
was primarily due to the cost of shipping transducer arrays to a higher
volume of active patients. Gross margin was 73% for the three months
ended March 31, 2019 compared to 65% for the three months ended March
31, 2018.

Research, development and clinical trials expenses for the three months
ended March 31, 2019, were $17.0 million compared to $11.1 million for
the same period in 2018, representing an increase of 53 percent. This
was primarily due to an increase in clinical trial and personnel
expenses for our INNOVATE-3, LUNAR, METIS and PANOVA-3 trials and an
increase in costs associated with medical affairs, regulatory and
engineering.

Sales and marketing expenses for the three months ended March 31, 2019,
were $22.3 million compared to $18.1 million for the same period in
2018, representing an increase of 23 percent. This was primarily due to
increased marketing expenses and increased personnel costs associated
with a larger sales force globally.

General and administrative expenses for the three months ended March 31,
2019, were $20.2 million compared to $17.3 million for the same period
in 2018, representing an increase of 17 percent. This was primarily due
to an increase in personnel costs and an increase in professional
services.

Personnel costs for the three months ended March 31, 2019, included $9.7
million in non-cash share-based compensation expenses, comprised of $0.4
million in cost of revenues; $1.2 million in research, development and
clinical trials; $2.0 million in sales and marketing; and $6.1 million
in general and administrative expenses. Total non-cash share-based
compensation expenses for the first quarter 2018 were $8.5 million.

Net loss for the three months ended March 31, 2019, was $12.2 million,
or $0.13 per share, compared to net loss of $20.7 million for the same
period in 2018, or $0.23 per share, representing an improvement of 41
percent.

At March 31, 2019, we had $152.1 million in cash and cash equivalents
and $104.5 million in short-term investments, for a total balance of
$256.6 million in cash, cash equivalents and short-term investments.

Anticipated clinical and regulatory milestones

• FDA approval for unresectable malignant pleural mesothelioma (2019)
• Zai Lab initiation of phase 2 pilot trial in gastric cancer (2019)
• Data from phase 2 pilot HEPANOVA trial in advanced liver cancer (2020)
• Interim analysis of phase 3 pivotal LUNAR trial in non-small cell lung
  cancer (2020)
• Data from phase 3 pivotal METIS trial in brain metastases (2021)
• Interim analysis of phase 3 pivotal PANOVA-3 trial in locally advanced
  pancreatic cancer (2021)
• Final data from phase 3 pivotal LUNAR trial in non-small cell lung
  cancer (2021)
• Interim analysis of phase 3 pivotal INNOVATE-3 trial in recurrent
  ovarian cancer (2022)
• Final data from phase 3 pivotal PANOVA-3 trial in locally advanced
  pancreatic cancer (2022)
• Final data from phase 3 pivotal INNOVATE-3 trial in recurrent ovarian
  cancer (2024)

Conference call details

Novocure will host a conference call and webcast
to discuss first quarter 2018 financial results today, Thursday, May 2,
2019, at 8 a.m. EDT. 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 8956998.

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.

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,
Tumor Treating Fields. Tumor Treating Fields is a cancer therapy that
uses electric fields tuned to specific frequencies to disrupt solid
tumor cancer cell division. Novocure’s commercialized product is
approved for the treatment of adult patients with glioblastoma. Novocure
has ongoing or completed clinical trials investigating Tumor Treating
Fields in mesothelioma, brain metastases, non-small cell lung cancer,
pancreatic cancer, ovarian cancer and liver 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 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,
regulatory and political conditions as well as more specific risks and
uncertainties facing Novocure such as those set forth in its Annual
Report on Form 10-K filed on February 28, 2019, 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 March 31,								Year ended December 31,
				2019				2018				2018
				Unaudited								Audited
Net revenues				$	73,309			$	52,125			$	248,069
Cost of revenues					19,814				18,238				80,048
Gross profit					53,495				33,887				168,021
Operating costs and expenses:
Research, development and clinical trials					17,042				11,104				50,574
Sales and marketing					22,333				18,135				77,663
General and administrative					20,238				17,325				73,456
Total operating costs and expenses					59,613				46,564				201,693
Operating loss					(6,118	)			(12,677	)			(33,672	)
Financial expenses, net					2,371				4,853				12,270
Loss before income taxes					(8,489	)			(17,530	)			(45,942	)
Income taxes					3,661				3,194				17,617
Net loss				$	(12,150	)		$	(20,724	)		$	(63,559	)
Basic and diluted net loss per ordinary share				$	(0.13	)		$	(0.23	)		$	(0.69	)
Weighted average number of ordinary shares used in computing basic and diluted net loss per share					94,811,282				89,985,612				91,828,043

Consolidated Balance Sheets
USD in thousands (except share data)
				March 31,				December 31,
				2019				2018
				Unaudited				Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents				$	152,067			$	140,622
Short-term investments					104,535				105,256
Restricted cash					2,094				2,134
Trade receivables					39,220				36,523
Receivables and prepaid expenses					13,619				14,279
Inventories					24,138				22,555
Total current assets					335,673				321,369
LONG-TERM ASSETS:
Property and equipment, net					8,421				8,442
Field equipment, net					7,266				6,924
Right-of-use assets, net					13,920				–
Other long-term assets					4,975				3,058
Total long-term assets					34,582				18,424
TOTAL ASSETS				$	370,255			$	339,793

Consolidated Balance Sheets
USD in thousands (except share data)
		March 31,					December 31,
		2019					2018
		Unaudited					Audited
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade payables		$	29,943				$	26,708
Other payables, lease liabilities and accrued expenses			41,005					37,852
Total current liabilities			70,948					64,560
LONG-TERM LIABILITIES:
Long-term loan, net of discount and issuance costs			149,305					149,268
Deferred revenue			9,407					9,929
Employee benefit liabilities			2,823					2,683
Long-term lease liabilities			11,015					–
Other long-term liabilities			363					1,094
Total long-term liabilities			172,913					162,974
TOTAL LIABILITIES			243,861					227,534
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Share capital –
Ordinary shares no par value, unlimited shares authorized; issued and outstanding: 95,692,797 shares and 93,254,185 shares at March 31, 2019 (unaudited) and December 31, 2018, respectively			–					–
Additional paid-in capital			783,941					757,314
Accumulated other comprehensive loss			(1,742	)				(1,400	)
Accumulated deficit			(655,805	)				(643,655	)
Total shareholders’ equity			126,394					112,259
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	370,255				$	339,793

Contacts

Media and Investor Contact:
Ashley Cordova
[email protected]
212-767-7558