Release Date: July 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NovoCure Ltd (NVCR, Financial) reported a record number of 3,963 active patients on therapy, the highest since commencing commercial operations.
- The French GBM launch continues to be a significant growth driver, contributing $14 million in net revenue this quarter.
- Real-world evidence from trials like TIGER and analyses by Dr. Mrugala and Dr. Kumthekar support the efficacy and safety of TTFields therapy.
- The company is making significant progress towards the approval and launch of Optune Lua for metastatic non-small cell lung cancer, with regulatory submissions filed in major markets.
- NovoCure Ltd (NVCR) generated $150 million in Q2 net revenue, an increase of 19% year over year, and achieved positive adjusted EBITDA of $1 million.
Negative Points
- The new MDR process in Europe has lengthened timelines for regulatory approvals, delaying the expected CE Mark approval to the second half of 2024.
- The company experienced a net loss of $33 million or $0.31 per share for the second quarter.
- There are concerns about the sustainability of the sequential improvement in the US active patient number, which improved for the first time in a year.
- The $8 million benefit in Q2 net revenues from prior period claims and a private payer in the UK is not expected to recur, impacting future revenue projections.
- Enrollment in the KEYNOTE B36 trial has been slow, raising concerns about the pace of enrollment for the LUNAR-2 trial.
Q & A Highlights
Q: Can you give us an update on the LUNAR regulatory process in Germany and the US? You mentioned a new process in Europe, I believe. Could you give us additional color on that front? And finally, could you just confirm your current thinking on timelines in both Europe and the US? Thank you.
A: Sure, Jonathan. Good morning. This is Bill. So as we stated in the prepared remarks, our expectations with respect to approvals in Europe and the US have not changed. The FDA timeline also remains unchanged. And importantly, in the US, we still believe there will not be a panel. We have not received any indication, as we mentioned, in the 100-day meeting that we had or subsequently that the PMA will go to panel. In Europe, it's not a new process for us. It's a new process for Europe called the MDR process that has, to some degree, lengthened the timing from submission to approval for everyone in the medical device space. Initially, we had projected an approval in the first half. We're actively interacting, again, as we mentioned, with our notified body, and we now expect that to occur in the second half. So that's the only change.
Q: The US active patient number improved sequentially for the first time in a year. Can you talk about the sustainability of this type of improvement? How do you build upon that going forward?
A: Hi, Jason. This is Frank. Thank you for the question. Appreciate the note on the commercial performance. Yes, we are -- first, just looking globally before I come to the US, we're really pleased that we've now approached 4,000 patients on therapy worldwide, and that is a high watermark for us. With respect to the US, what we have been able to do is to return the active patients to sequential growth from year-end, as you noted. And as a reminder, at the end of last year, we did realign our organization so that our teams have a focus -- our commercial teams have a focus not just on driving demand as measured through prescriptions coming in, but really have a comprehensive plan to then convert prescriptions to starts and then ensure that the patients can stay on therapy to enjoy the full benefit of the therapy. So I think what you've seen in the numbers the last two quarters is our ability to tighten up operations and to really ensure that we do maximize the value of each prescription coming through and maximize the benefit to the patient.
Q: Can you tell us what France sales were in the first quarter and talk about how we should think of its contribution in the back half?
A: In the first quarter, France was about $10.5 million, and you saw that second quarter, $14 million. It's always a nice milestone when you cross into being a material market. So France will be broken out from here on. And again, congratulations to the entire French team for that. It's really an awesome milestone. But so we do continue to see growth there and our growth will moderate as that market matures, but it is approaching a German life-sized market now, and we expect to continue to perform as we move forward.
Q: What are you guys hearing from clinicians about the METIS trial? How do they see Tumor Treating Fields fitting into the treatment paradigm?
A: Yeah, Larry, this is Frank. Thank you for the question. What I can say is that we unveiled the data from METIS at ASCO in June. And we really saw across the board strong interest in understanding the data. I think I'd also just shared the anecdote that at ASCO this year, we saw just broader awareness of Tumor Treating Fields across all of the indications where we've released data. And I think really seeing that strong interest both from the radiation oncology attendees, but also from the medical oncology attendees -- a strong interest, really focused on the fact that the delay in time to progression is a clinically meaningful endpoint in terms of helping patients with brain met. So I'm really pleased with what we saw at ASCO this year. And we're encouraged to move forward with clinicians to help these patients.
Q: Can you maybe a high-level contrast, like you've had several trials -- GBM, metastatic brain cancer, NSCLC. When you look at pancreatic cancer, is there anything different about this disease state when you compare versus the others?
A: Sure. So Vijay, it's Bill. As we've noted in the past, Tumor Treating Fields provides the best opportunity to extend survival when it's used early in the patient journey. In many cancer types -- and this was true in non-small cell lung cancer just because of the way that the field has evolved and we need to start our trial in later lines when the patients are sicker. In the case of PANOVA-3, that trial was designed as a first-line trial. So number one, that is positive with respect to Tumor Treating Fields therapy. Secondly, we know that we are a regional local therapy and that we -- and we saw this in the phase 2 PANOVA data that when we can treat the full extent of the disease -- and that means diagnosing it earlier when it has only spread locally -- we have the best outcomes. And again, in this trial, PANOVA-3, this trial was in the about 50% of the patients who receive a pancreatic cancer diagnosis who have locally advanced therapy. So because it's first line and because it's in the locally advanced population, we think the trial is -- was well designed. And if we had designed it today, we would have designed it with the same design. So we're all really looking forward to reporting out the results later this year.
Q: Can you provide an update on the KEYNOTE B36 study? Is there anything that you've seen in that study so far in the patients you've enrolled that kind of gives you more confidence in LUNAR-2?
A: As I said before, B36 and LUNAR-2 are 2 completely different trials. And that does not, in any way, change the confidence I have in LUNAR-2.
Q: What kind of other countries are you looking at, which you think could be similar in size to like the France and Germany markets so far?
A: With respect to new markets, we have commented before that up next on the horizon, we are working in both Italy and Spain, which are -- in each country, it's a region-by-region approach to gaining reimbursement with hospitals and payers, and we're making progress in both markets. And we think of Italy and Spain together as being our next potential France in terms of a market.
Q: With the multi-tranche financing, are you now more likely to meet the 2025 convert using cash now? Can you be more specific on the planned uses of the financing beyond the convert?
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
