NovoCure Limited (NASDAQ:NVCR) Q4 2024 Earnings Conference Call February 27, 2025 8:00 AM ET Company Participants Ingrid Goldberg - Investor Relations Bill Doyle - Chairman Ashley Cordova - Chief Executive Officer Christoph Brackmann - Chief Financial Officer Frank Leonard - Executive Vice President & President, NovoCure Oncology Nicolas Leupin - Chief Medical Officer Conference Call Participants Jonathan Chang - Leerink Partners Jason Bednar - Piper Sandler Lei Huang - Wells Fargo Vijay Kumar - Evercore IS ...

Confidential © 2024 Novocu © 2025 re GmbH Novocure GmbH 1 © 2025 Novocure GmbH 2 GROW GBM LAUNCH LUNG DELIVER PIPELINE • •• © 2025 Novocu r e GmbH GmbH 3 ••• •• • © 2025 Novocure GmbH GmbH 4 | ✓ | | | | --- | --- | --- | | ✓ | ✓ | | | ✓ | ✓ | | | ✓ | ✓ | ✓ | | ✓ | ✓ | ✓ | | ✓ | ✓ | ✓ | | ✓ | • | • | | • | | | © 2025 Novocu r e GmbH 5 © 2025 Novocure GmbH 6 | U.S. DOLLARS IN MILLIONS | | Q4 2024 | | Q4 2023 | | FY 2024 | | FY 2023 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Net revenues | ഗ | ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________________________________________________ FORM 10-K ______________________________________________________________________ For the fiscal year ended December 31, 2024 or (Mark One) ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Nu ...

Core Viewpoint - The market anticipates NovoCure (NVCR) to report a year-over-year increase in earnings driven by higher revenues for the quarter ending December 2024, with actual results being crucial for stock price movement [1][2]. Financial Expectations - NovoCure is expected to report a quarterly loss of $0.34 per share, reflecting a year-over-year change of +24.4% [3]. - Revenue projections stand at $161.3 million, indicating a 20.6% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 2.03% lower in the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for NovoCure is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -27.91% [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive or negative reading indicates the likely deviation of actual earnings from consensus estimates, with a strong predictive power for positive readings [6][7]. - Stocks with a positive Earnings ESP and a Zacks Rank of 1, 2, or 3 have historically produced positive surprises nearly 70% of the time [8]. Historical Performance - NovoCure has beaten consensus EPS estimates in the last four quarters, with a notable surprise of +17.65% in the last reported quarter [12][13]. Industry Comparison - Fate Therapeutics (FATE), another player in the biomedical sector, is expected to report an EPS of $0.44 for the same quarter, with a year-over-year change of +2.2% and revenues expected to decline by 24.4% [17]. - Fate Therapeutics has seen a 0.2% increase in its consensus EPS estimate over the last 30 days, but its Earnings ESP stands at 3.82% combined with a Zacks Rank of 4, making predictions of an earnings beat challenging [18].

Financial Performance - Preliminary full year 2024 net revenues were $605.2 million, a 19% increase compared to the prior year[3] - Fourth quarter net revenues totaled $161.3 million, reflecting a 21% increase year-over-year[3] - The U.S., Germany, France, and Japan contributed $107.2 million, $17.7 million, $16.0 million, and $8.5 million to fourth quarter revenues, respectively[3] Patient and Treatment Updates - As of December 31, 2024, there were 4,126 total active patients on TTFields therapy globally[7] - 1,520 Optune Gio prescriptions were received in the fourth quarter, consistent with the same period in 2023[7] - As of December 31, 2024, there were 20 active NSCLC patients on Optune Lua[7] Regulatory Approvals and Designations - Optune Lua was approved by the FDA for the treatment of metastatic non-small cell lung cancer on October 15, 2024[7] - The FDA granted Breakthrough Device designation for TTFields therapy for brain metastases from non-small cell lung cancer in October 2024[7] Financial Position - Cash, cash equivalents, and short-term investments were $959.9 million as of December 31, 2024[7] Clinical Trials - Novocure plans to submit full data from the Phase 3 PANOVA-3 clinical trial for pancreatic cancer at an upcoming medical congress[13]

Core Insights - The life science industry has introduced a promising treatment for pancreatic cancer, potentially increasing long-term survival rates for patients [1] - Novocure and Zai Lab reported successful results from the Panova-3 study, indicating that their electric field-generating devices can enhance survival odds for pancreatic cancer patients [2] - Novocure's stock has surged 112% in 2024, driven by positive results in pancreatic cancer and the approval of its Optune Lua device for lung cancer treatment [3] Company Developments - Novocure's devices utilize electric fields to interfere with cell division, slowing tumor growth rather than destroying it [4] - The FDA approved Optune Lua for advanced-stage non-small cell lung cancer, although the trial results for chemotherapy patients were not statistically significant [5] - The Panova-3 trial involved 571 patients and showed that those receiving tumor-treating fields had a 33% higher chance of surviving 24 months compared to those receiving standard chemotherapy [6][7] Financial Performance - Novocure reported a 22% year-over-year revenue increase to $155.1 million, with an estimated revenue of $151,000 per patient annually [8] - The company is expected to see a significant increase in patient numbers, with around 67,000 new pancreatic cancer diagnoses anticipated in 2025, compared to 15,000 for glioblastoma [9] - The addressable patient population could increase approximately 18-fold if Novocure's devices gain regulatory approvals outside the U.S. [10][11] Market Position - Novocure's market capitalization is around $3.3 billion, which may be undervalued given its new lung cancer therapy and high pricing power [12] - The company is expanding its focus from glioblastoma to include lung and pancreatic cancer, reporting positive adjusted EBITDA but still facing GAAP losses [13] - While Novocure's stock presents risks, a successful launch of Optune Lua could lead to substantial profits that the market may not currently anticipate [14]

Group 1 - The article discusses the investment opportunities in the healthcare sector, particularly focusing on innovative companies developing breakthrough therapies and pharmaceuticals [1]. - The leader of the investing group Compounding Healthcare emphasizes the importance of catalysts for potential acquisitions in the biotech industry [1]. - The group offers several features including model healthcare portfolios, a weekly newsletter, and a daily watchlist for investors [1]. Group 2 - The analyst has a beneficial long position in the shares of NVCR, indicating confidence in the company's future performance [2]. - The article is based on the author's own opinions and does not involve compensation from any company mentioned [2]. - There is no business relationship between the author and any company whose stock is discussed, ensuring an unbiased perspective [2].

Core Insights - Novocure (NASDAQ: NVCR) is making significant progress in advancing its pipeline with its electric TTFields therapy aimed at treating various types of solid tumors [2] Company Overview - Novocure is focused on developing its electric TTFields therapy, which is designed to assist in the treatment of patients with solid tumors [2] Market Position - The company has recently announced positive developments regarding its pipeline, indicating a strong trajectory in its research and development efforts [2]

Core Insights - NovoCure Ltd and Zai Lab Limited announced positive topline data from the Phase 3 PANOVA-3 trial, showing significant improvement in median overall survival for patients with unresectable, locally advanced pancreatic adenocarcinoma treated with Tumor-Treating Fields (TTFields) therapy alongside gemcitabine and nab-paclitaxel [1][2] Group 1: Trial Results - The pivotal trial met its primary endpoint, demonstrating a statistically significant improvement in median overall survival (mOS) of 16.20 months for the TTFields therapy group compared to 14.16 months for the control group, resulting in a 2.0-month improvement (hazard ratio=0.819; P=0.039) [2] - The survival rate benefit for patients treated with TTFields therapy increased over time, with a 13% improvement in overall survival rate at 12 months and a 33% improvement at 24 months [3] Group 2: Safety and Regulatory Plans - TTFields therapy was well-tolerated, with safety consistent with prior clinical studies [3] - NovoCure plans to file for regulatory approval in the U.S., EU, Japan, and other key markets, while Zai Lab plans to file for regulatory approval in China [3] Group 3: Future Trials - NovoCure is continuing to follow patients in its Phase 2 PANOVA-4 trial, which is exploring the use of TTFields therapy in combination with atezolizumab, gemcitabine, and nab-paclitaxel for metastatic pancreatic cancer, with data anticipated in 2026 [4] Group 4: Market Reaction - Following the announcement, NVCR stock increased by 31%, reaching $26.26 [5]

Financial Performance - Q3 net revenues were $155 million, an increase of 22% year-over-year, driven by active patient growth and improved approval rates in the U.S. [27] - Gross margin improved to 77% from 75% in Q3 2023, attributed to higher net revenue per patient and strong performance in France [28] - SG&A expenses were $100 million, consistent with Q3 2023, while R&D expenses decreased by 3% to $52 million [29] - The net loss for the quarter was $31 million, or $0.28 per share, with adjusted EBITDA of $2 million, marking the second consecutive quarter of positive adjusted EBITDA [30] Business Lines and Key Metrics - The company reported a record 4,113 active patients on therapy, marking a 13% year-over-year growth [19] - The launch of Optune Lua for non-small cell lung cancer is underway, with the first prescriptions received shortly after FDA approval [11][23] - The clinical pipeline includes ongoing trials such as PANOVA-3 and PANOVA-4, with significant engagement from the pancreatic cancer community [21][25] Market Data and Key Metrics - The company is preparing for launches in Germany and Japan, with ongoing discussions for regulatory approvals [12] - The FDA granted breakthrough device designation for tumor-treating field therapy for brain metastases from non-small cell lung cancer, expediting the review process [23] Company Strategy and Industry Competition - The company aims to grow its GBM business, successfully launch lung cancer therapies, and deliver on its clinical pipeline [55][77] - The management transition is expected to maintain focus on aggressive cancer treatment, with Ashley Cordova taking over as CEO [16][55] Management Commentary on Operating Environment and Future Outlook - Management expressed optimism about the launch of Optune Lua and the potential for significant patient impact [7][11] - The company is focused on improving patient conversion and persistence, which are critical for long-term growth [19][45] Other Important Information - The company announced executive leadership changes, including the retirement of CEO Asaf Danziger and the appointment of Ashley Cordova as the new CEO [14][16] - The company is committed to maintaining a patient-centric mission and ensuring the financial structure supports growth [33][55] Q&A Session Summary Question: What are the expectations for revenue per patient for Optune Lua and treatment duration? - The pricing per patient is expected to align with Optune Lua pricing, with an average treatment duration of four to five months [38] Question: Can you provide insights on the ramp-up of uptake for lung cancer treatment? - The company anticipates a gradual ramp-up, focusing on engaging the right physicians and patients [44][46] Question: What is the expected timeline for reimbursement coverage for lung cancer? - The company expects the reimbursement process to take one to two years, starting with private payers before moving to Medicare [49][72] Question: How will the management transition affect company strategy? - The core strategy remains focused on aggressive cancer treatment, with continued emphasis on growing the GBM business and launching lung therapies [55][56]