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Novocure Q1 net revenues $101.8 million, 39% up

BusinessWire

Novocure has posted quarterly net revenues of $101.8 million, representing 39 percent growth versus the first quarter of 2019 and 3 percent growth versus the fourth quarter of 2019.

ST. HELIER, Jersey–(BUSINESS WIRE)–$NVCR–Novocure (NASDAQ: NVCR) today reported financial results for the quarter ended March 31, 2020, highlighting revenue growth and financial strength, clinical pipeline developments and the company’s response to COVID-19. 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.

First quarter 2020 highlights include:

Three months ended

March 31,

2020

2019

% Change

Financial, in millions

Net revenues

$

101.8

$

73.3

39

%

Gross profit

$

77.3

$

53.5

45

%

Net income (loss)

$

4.0

$

(12.2

)

–

Cash, cash equivalents and short-term investments at end of period

$

331.3

$

256.6

29

%

Non-financial

Active patients at end of period(1)

3,095

2,631

18

%

Prescriptions received in period(2)

1,409

1,310

8

%
(1)

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.
(2)

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.

“The need to treat patients with aggressive cancers does not lessen with COVID-19,” said William Doyle, Novocure’s Executive Chairman. “We remain confident in the role Tumor Treating Fields can play across oncology, in the resiliency of our direct-to-patient business model, and in the long-term potential of our business.”

“We are focused on our mission and continue to advance our commercial and development priorities,” added Asaf Danziger, Novocure’s Chief Executive Officer. “With more than 3,000 patients on therapy at March 31, 2020, we delivered another strong quarter of financial performance. We ended the first quarter with $102 million in net revenues, $4 million in net income and $331 million cash on hand. Our financial strength allows us to continue investing in innovation, and we believe we are well positioned to navigate the substantial uncertainty affecting our industry.”

First quarter 2020 operating statistics and financial update

For the quarter ended March 31, 2020, net revenues were $101.8 million, representing 39% growth compared to the first quarter 2019.

There were 3,095 active patients at March 31, 2020, representing 18% growth compared to March 31, 2019, and six percent growth compared to December 31, 2019.

Additionally, 1,409 prescriptions were received in the quarter ended March 31, 2020, representing eight percent growth compared to the same period in 2019, and two percent growth compared to the quarter ended December 31, 2019. In the quarter ended March 31, 2020, 1,120 Optune prescriptions were written for patients with newly diagnosed glioblastoma.

For the three months ended March 31, 2020, cost of revenues was $24.5 million compared to $19.8 million for the same period in 2019, representing an increase of 24%. The increase was primarily due to the cost of shipping transducer arrays to a higher volume of commercial patients. Gross margin was 76% for the three months ended March 31, 2020 and 73% for the three months ended March 31, 2019.

Research, development and clinical trials expenses for the three months ended March 31, 2020, were $25.3 million compared to $17.0 million for the same period in 2019, representing an increase of 48%. This was primarily due to an increase in clinical trial and personnel expenses for our phase 3 pivotal and phase 4 post-marketing trials and an increase in costs associated with medical affairs, basic research and engineering.

Sales and marketing expenses for the three months ended March 31, 2020, were $28.8 million compared to $22.3 million for the same period in 2019, representing an increase of 29%. This was primarily due to increased marketing expenses related to the launch of Optune Lua and an increase in personnel costs to support our growing commercial business.

General and administrative expenses for the three months ended March 31, 2020 were $26.6 million compared to $20.2 million for the same period in 2019, representing an increase of 31%. This was primarily due to an increase in personnel costs and an increase in professional services.

Net income for the three months ended March 31, 2020, was $4.0 million compared to a net loss of $12.2 million for the same period in 2019.

At March 31, 2020, we had $181.9 million in cash and cash equivalents and $149.3 million in short-term investments, for a total balance of $331.3 million in cash, cash equivalents and short-term investments. This represents an increase of $5.2 million in cash and investments since December 31, 2019.

First 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 increased by $9.6 million, or 176%, to $15.1 million for the three months ended March 31, 2020 from $5.5 million for the three months ended March 31, 2019. This improvement in fundamental financial performance was driven by top-line growth and disciplined execution.

Anticipated clinical milestones

Conference call details

Novocure will host a conference call and webcast to discuss first quarter 2020 financial results at 8 a.m. EDT today, Thursday, April 30, 2020. 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 4193569.

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 and gastric 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 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 27, 2020 and its Quarterly Report on Form 10-Q filed on April 30, 2020 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,

2020

2019

2019

Unaudited

Audited

Net revenues

$

101,828

$

73,309

$

351,318

Cost of revenues

24,496

19,814

88,606

Gross profit

77,332

53,495

262,712

Operating costs and expenses:

Research, development and clinical trials

25,271

17,042

79,003

Sales and marketing

28,834

22,333

96,675

General and administrative

26,608

20,238

87,948

Total operating costs and expenses

80,713

59,613

263,626

Operating income (loss)

(3,381

)

(6,118

)

(914

)

Financial expenses (income), net

2,432

2,371

7,910

Income (loss) before income taxes

(5,813

)

(8,489

)

(8,824

)

Income taxes

(9,765

)

3,661

(1,594

)

Net income (loss)

$

3,952

$

(12,150

)

$

(7,230

)

Basic net income (loss) per ordinary share

$

0.04

$

(0.13

)

$

(0.07

)

Weighted average number of ordinary shares used in computing basic net income (loss) per share

99,877,567

94,811,282

97,237,549

Diluted net income (loss) per ordinary share

$

0.04

$

(0.13

)

$

(0.07

)

Weighted average number of ordinary shares used in computing diluted net income (loss) per share

108,100,623

94,811,282

97,237,549

Consolidated Balance Sheets

USD in thousands (except share data)

March 31,
2020

December 31,

2019

Unaudited

Audited

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

181,919

$

177,321

Short-term investments

149,349

148,769

Restricted cash

786

2,095

Trade receivables

65,139

58,859

Receivables and prepaid expenses

42,483

29,202

Inventories

22,502

23,701

Total current assets

462,178

439,947

LONG-TERM ASSETS:

Property and equipment, net

9,778

9,342

Field equipment, net

8,467

7,684

Right-of-use assets, net

17,201

17,571

Other long-term assets

4,824

4,904

Total long-term assets

40,270

39,501

TOTAL ASSETS

$

502,448

$

479,448

Consolidated Balance Sheets

USD in thousands (except share data)

March 31,

December 31,

2020

2019

Unaudited

Audited

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Trade payables

$

40,408

$

36,925

Other payables, lease liabilities and accrued expenses

43,795

49,386

Total current liabilities

84,203

86,311

LONG-TERM LIABILITIES:

Long-term loan, net of discount and issuance costs

149,465

149,424

Deferred revenue

8,772

7,807

Long-term leases

13,274

14,140

Employee benefits

4,519

3,754

Other long-term liabilities

267

222

Total long-term liabilities

176,297

175,347

TOTAL LIABILITIES

260,500

261,658

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS’ EQUITY:

Share capital –

Ordinary shares no par value, unlimited shares authorized; issued and outstanding: 100,362,973 shares and 99,528,435 shares at March 31, 2020 (unaudited) and December 31, 2019, respectively

–

–

Additional paid-in capital

892,510

871,442

Accumulated other comprehensive income (loss)

(3,629

)

(2,767

)

Retained earnings (accumulated deficit)

(646,933

)

(650,885

)

Total shareholders’ equity

241,948

217,790

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

502,448

$

479,448

Non-U.S. GAAP financial measures reconciliation

USD in thousands

Three months ended

March 31,

Adjusted EBITDA

2020

2019

Net income (loss)

$

3,952

$

(12,150

)

Add: Income tax

$

(9,765

)

$

3,661

Add: Financial expenses (income), net

$

2,432

$

2,371

Add: Depreciation and amortization

$

1,888

$

1,929

EBITDA

$

(1,493

)

$

(4,189

)

Add: Share-based compensation

$

16,557

$

9,649

Adjusted EBITDA

$

15,064

$

5,460

Contacts

Media and Investor Contact:
Ashley Cordova

acordova@novocure.com
212-767-7558

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