EX-99.1 2 nvcr-ex991_6.htm EX-99.1 (FY2018 Q4 2018 EARNINGS RELEASE) nvcr-ex991_6.htm

Exhibit 99.1

 

Novocure Reports Fourth Quarter and Full Year 2018 Financial Results and Provides Company Update

 

Quarterly net revenues of $69.7 million, representing 30 percent growth versus the fourth quarter 2017 and 8 percent growth versus the third quarter 2018

 

Full year 2018 net revenues of $248.1 million, representing annual growth of 40 percent compared to 2017

 

Three additional phase 3 clinical trials ongoing studying the use of Optune in brain metastases, non-small-cell lung cancer and pancreatic cancer

 

St. Helier, Jersey – Novocure (NASDAQ: NVCR) today reported financial results for the quarter and year ended December 31, 2018, highlighting continued revenue growth, anticipated clinical and regulatory milestones 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.

 

Fourth quarter and full year 2018 highlights include:

 

 

Three months ended

December 31,

 

Year ended

December 31,

 

 

2018

 

 

2017

 

% Change

 

 

2018

 

 

2017

 

%

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-financial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active patients at period end(1)

 

2,383

 

 

1,834

 

30%

 

 

2,383

 

 

1,834

 

30%

Prescriptions received in period(2)

 

1,315

 

 

1,090

 

21%

 

 

5,060

 

 

4,119

 

23%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial, in millions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

$

69.7

 

$

53.7

 

30%

 

$

248.1

 

$

177.0

 

40%

Net income (loss)

$

(15.6

)

$

(10.9

)

43%

 

$

(63.6

)

$

(61.7

)

3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at the end of period

$

140.6

 

$

78.6

 

 

 

 

 

 

 

 

 

 

Short-term investments at the end

of period

$

105.3

 

$

104.7

 

 

 

 

 

 

 

 

 

 

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

$

245.9

 

$

183.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


(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.

 

“2018 was an extremely productive year for Novocure,” said William Doyle, Novocure’s Executive Chairman. “Highlights included annual revenue growth of 40 percent, the presentation of our STELLAR data in mesothelioma, the first patient enrollment in our PANOVA-3 phase 3 trial for pancreatic cancer and our collaboration agreement with Zai Labs in China. We continued to grow our glioblastoma business globally and invested more than $50 million in research and development in 2018.”

 

“At Novocure, we are working to extend survival in some of the most aggressive forms of cancer by developing and commercializing Tumor Treating Fields,” continued Mr. Doyle. “With 2018 revenues approaching $250 million, four indications in our late stage pipeline and significant cash on hand, we believe we enter 2019 well-positioned to deliver both continued near-term growth and significant long-term value.”

 

Fourth quarter 2018 operating statistics and financial update

There were 2,383 active patients on Optune at December 31, 2018, representing 30 percent growth compared to December 31, 2017, and 6 percent growth compared to September 30, 2018. The increase in active patients was driven by increased commercial adoption and by continued growth in prescriptions for patients with newly diagnosed GBM, who typically have a longer duration of treatment with Optune.

 

 

In the United States, there were 1,637 active patients on Optune at December 31, 2018, representing 24 percent growth compared to December 31, 2017.

 

In Germany and other EMEA markets, there were 654 active patients on Optune at December 31, 2018, representing 28 percent growth compared to December 31, 2017.

 

In Japan, there were 92 active patients on Optune at December 31, 2018, representing significant growth in the first year with reimbursement approval for Optune in Japan.

 

There were 1,315 prescriptions received in the quarter ended December 31, 2018, representing 21 percent growth compared to the same period in 2017, and 6 percent growth compared to the quarter ended September 30, 2018. Prescriptions for newly diagnosed GBM continued to grow, with approximately 950 Optune prescriptions in the fourth quarter written for patients with newly diagnosed GBM.

 


 

In the United States, 941 prescriptions were received in the quarter ended December 31, 2018, representing 16 percent growth compared to the same period in 2017.

 

In Germany and other EMEA markets, 322 prescriptions were received in the quarter ended December 31, 2018, representing 15 percent growth compared to the same period in 2017.

 

In Japan, 52 prescriptions were received in the quarter ended December 31, 2018, representing significant growth in the first year with reimbursement approval for Optune in Japan.

 

For the three months ended December 31, 2018, net revenues were $69.7 million, representing 30 percent growth versus the same period in 2017 and 8 percent growth versus the three months ended September 30, 2018. This growth was primarily driven by an increase in active patients.

 

For the three months ended December 31, 2018, cost of revenues was $23.0 million compared to $15.6 million for the same period in 2017, representing an increase of 47 percent. The increase was primarily driven by the cost of shipping transducer arrays to a higher volume of commercial patients and a one-time increase of $2.7 million in non-recoverable indirect taxes.

 

Research, development and clinical trials expenses for the three months ended December 31, 2018, were $15.0 million compared to $10.0 million for the same period in 2017, representing an increase of 50 percent. This was primarily due to an increase in clinical trial and personnel expenses for our METIS, LUNAR, and PANOVA-3 trials and an increase in personnel costs associated with regulatory and medical affairs.

 

Sales and marketing expenses for the three months ended December 31, 2018, were $21.2 million compared to $16.0 million for the same period in 2017, representing an increase of 32 percent. This was primarily due to increased marketing expenses, increases in personnel costs associated with a larger sales force globally and increased share-based compensation expense.

 

General and administrative expenses for the three months ended December 31, 2018, were $19.1 million compared to $16.5 million for the same period in 2017, representing an increase of 16 percent. This was primarily due to an increase in share-based compensation and an increase in professional services.

 

Personnel costs for the three months ended December 31, 2018, included $10.6 million in non-cash share-based compensation expenses, comprised of $0.4 million in cost of


revenues; $1.3 million in research, development and clinical trials; $2.1 million in sales and marketing; and $6.9 million in general and administrative expenses. Total non-cash share-based compensation expenses for the fourth quarter 2017 were $6.4 million.

 

Net loss for the three months ended December 31, 2018, was $15.6 million compared to net loss of $10.9 million for the same period in 2017.

 

At December 31, 2018, we had $140.6 million in cash and cash equivalents and $105.3 million in short-term investments, for a total balance of $245.9 million in cash, cash equivalents and short-term investments. This represents an increase of $18.2 million in cash and investments since September 30, 2018.

 

Anticipated clinical and regulatory milestones

 

FDA approval for unresectable malignant pleural mesothelioma (2019)

 

Initiation of phase 3 pivotal trial in recurrent ovarian cancer (2019)

 

Zai Labs 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)

 

Conference call details

Novocure will host a conference call and webcast to discuss fourth quarter and full year 2018 financial results today, Thursday, Feb. 28, 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 3956899.

 

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.

 

Contractor advisory committee meeting details

The durable medical equipment Medicare administrative contractors (DME MACs) plan to host a contractor advisory committee on March 6, 2019 from 9 a.m. to 4 p.m. EDT to


discuss the scientific evidence underlying Novocure’s local coverage decision reconsideration request.

 

The meeting agenda is available on the DME MAC web sites. Morning and afternoon sessions of the contractor advisory committee meeting can be viewed live on the Centers for Medicare and Medicaid Services YouTube channel. A recording of the meeting will also be posted on the DME MAC web sites following the meeting.

 

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, development of potential products, interpretation of clinical results, prospects for regulatory approval, manufacturing development and capabilities, market prospects for its products, 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 December 31,

 

 

Twelve months ended December 31,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

Unaudited

 

 

Audited

 

Net revenues

 

$

69,674

 

 

$

53,661

 

 

$

248,069

 

 

$

177,026

 

Cost of revenues

 

 

23,028

 

 

 

15,640

 

 

 

80,048

 

 

 

55,609

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

46,646

 

 

 

38,021

 

 

 

168,021

 

 

 

121,417

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research, development and clinical trials

 

 

15,034

 

 

 

10,048

 

 

 

50,574

 

 

 

38,103

 

Sales and marketing

 

 

21,208

 

 

 

16,025

 

 

 

77,663

 

 

 

63,528

 

General and administrative

 

 

19,068

 

 

 

16,454

 

 

 

73,456

 

 

 

59,114

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating costs and expenses

 

 

55,310

 

 

 

42,527

 

 

 

201,693

 

 

 

160,745

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

(8,664

)

 

 

(4,506

)

 

 

(33,672

)

 

 

(39,328

)

Financial expenses (income), net

 

 

2,160

 

 

 

2,384

 

 

 

12,270

 

 

 

9,169

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

(10,824

)

 

 

(6,890

)

 

 

(45,942

)

 

 

(48,497

)

Income taxes

 

 

4,807

 

 

 

4,055

 

 

 

17,617

 

 

 

13,165

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(15,631

)

 

$

(10,945

)

 

$

(63,559

)

 

$

(61,662

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net income (loss) per ordinary share

 

$

(0.17

)

 

$

(0.12

)

 

$

(0.69

)

 

$

(0.70

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

93,083,298

 

 

 

89,389,364

 

 

 

91,828,043

 

 

 

88,546,719

 

 



Consolidated Balance Sheets

USD in thousands (except share data)

 

 

 

December 31,

 

 

December 31,

 

 

 

2018

 

 

2017

 

 

 

Audited

 

 

Audited

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

140,622

 

 

$

78,592

 

Short-term investments

 

 

105,256

 

 

 

104,719

 

Restricted cash

 

 

2,134

 

 

 

2,126

 

Trade receivables

 

 

36,523

 

 

 

29,567

 

Receivables and prepaid expenses

 

 

14,279

 

 

 

8,105

 

Inventories

 

 

22,555

 

 

 

22,025

 

Total current assets

 

 

321,369

 

 

 

245,134

 

 

 

 

 

 

 

 

 

 

LONG-TERM ASSETS:

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

8,442

 

 

 

9,031

 

Field equipment, net

 

 

6,924

 

 

 

9,036

 

Severance pay fund

 

 

113

 

 

 

111

 

Other long-term assets

 

 

2,945

 

 

 

1,986

 

Total long-term assets

 

 

18,424

 

 

 

20,164

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

339,793

 

 

$

265,298

 

 


 

 

December 31,

 

 

December 31,

 

 

2018

 

 

2017

 

 

 

Audited

 

 

Audited

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Trade payables

 

$

26,708

 

 

$

17,206

 

Other payables and accrued expenses

 

 

37,852

 

 

 

32,996

 

Total current liabilities

 

 

64,560

 

 

 

50,202

 

 

 

 

 

 

 

 

 

 

LONG-TERM LIABILITIES:

 

 

 

 

 

 

 

 

Long-term loan, net of discount and issuance costs

 

 

149,268

 

 

 

97,342

 

Employee benefit liabilities

 

 

2,683

 

 

 

2,453

 

Deferred Revenues

 

 

9,929

 

 

 

-

 

Other long-term liabilities

 

 

1,094

 

 

 

1,737

 

Total long-term liabilities

 

 

162,974

 

 

 

101,532

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

227,534

 

 

 

151,734

 

 

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY:

 

 

 

 

 

 

 

 

Share capital -

 

 

 

 

 

 

 

 

Ordinary shares no par value, unlimited shares authorized; issued and outstanding: 93,254,185 shares and 89,478,032 shares at December 31, 2018  and December 31, 2017, respectively

 

 

-

 

 

 

-

 

Additional paid-in capital

 

 

757,314

 

 

 

697,165

 

Accumulated other comprehensive income (loss)

 

 

(1,400

)

 

 

(1,343

)

Retained earnings (accumulated deficit)

 

 

(643,655

)

 

 

(582,258

)

Total shareholders' equity

 

 

112,259

 

 

 

113,564

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 

$

339,793

 

 

$

265,298

 

 

 

Media and Investor Contact:

Ashley Cordova

acordova@novocure.com

212-767-7558