ST. HELIER, Jersey--(BUSINESS WIRE)--
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, |
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|
2020 |
|
2019 |
% Change |
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Financial, in millions |
|
|
|
|
|
|
|
|
|||||||||||
Net revenues |
$ |
101.8 |
|
$ |
73.3 |
|
39 |
% |
|
||||||||||
Gross profit |
$ |
77.3 |
|
$ |
53.5 |
|
45 |
% |
|
||||||||||
Net income (loss) |
$ |
4.0 |
|
$ |
(12.2 |
) |
- |
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|
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Cash, cash equivalents and short-term investments at end of period |
$ |
331.3 |
|
$ |
256.6 |
|
29 |
% |
|
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Non-financial |
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Active patients at end of period(1) |
3,095 |
2,631 |
18 |
% |
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Prescriptions received in period(2) |
|
1,409 |
|
1,310 |
8 |
% |
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| (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.
- In the United States, net revenues totaled $69.3 million in the quarter ended March 31, 2020, representing 49% growth compared to the same period in 2019.
- In Germany and other EMEA markets, net revenues totaled $24.5 million in the quarter ended March 31, 2020, representing 9% growth compared to the same period in 2019.
- In Japan, net revenues totaled $6.5 million in the quarter ended March 31, 2020, representing 91% growth compared to the same period in 2019.
- In Greater China, net revenues totaled $1.6 million in the quarter ended March 31, 2020, representing 101% growth compared to the same period in 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.
- In the United States, there were 2,023 active patients at March 31, 2020, representing 14% growth compared to March 31, 2019.
- In Germany and other EMEA markets, there were 850 active patients at March 31, 2020, representing 16% growth compared to March 31, 2019.
- In Japan, there were 222 active patients at March 31, 2020, representing 88% growth compared to March 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.
- In the United States, 986 prescriptions were received in the quarter ended March 31, 2020, representing seven percent growth compared to the same period in 2019.
- In Germany and other EMEA markets, 329 prescriptions were received in the quarter ended March 31, 2020, representing no change compared to the same period in 2019.
- In Japan, 94 prescriptions were received in the quarter ended March 31, 2020, representing 71% growth compared to the same period in 2019.
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
- Data from phase 2 pilot HEPANOVA trial in advanced liver cancer (2021)
- Data from phase 2 pilot EF-31 trial in gastric cancer (2021)
- Interim analysis of phase 3 pivotal LUNAR trial in non-small cell lung cancer (2021)
- Interim analysis of phase 3 pivotal PANOVA-3 trial in locally advanced pancreatic cancer (2021)
- Interim analysis of phase 3 pivotal INNOVATE-3 trial in recurrent ovarian cancer (2021)
- Data from phase 3 pivotal METIS trial in brain metastases (2022)
- 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)
- Final data from phase 3 pivotal INNOVATE-3 trial in recurrent ovarian cancer (2023)
Conference call details
Novocure will host a conference call and 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, , and will be available for at least 14 days following the call. Novocure has used, and intends to continue to use, its , 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 or follow us at .
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) |
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|
Three months ended March 31, |
|
Year ended
|
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|
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 |
|
|
|||
|
|
|
|
|
|
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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,
|
|
December 31,
|
|||
|
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
|
||||||||
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 |
|
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