NovoCure Limited (NVCR) 10-Q 31 Oct 19 2019 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 30, 2019	Oct. 23, 2019
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
Document Transition Report	false
Entity File Number	001-37565
Entity Registrant Name	NovoCure Limited
Entity Incorporation, State or Country Code	Y9
Entity Tax Identification Number	98-1057807
Entity Address, Address Line One	No. 4 The Forum
Entity Address, Address Line Two	Grenville Street
Entity Address, City or Town	St. Helier
Entity Address, Country	JE
Entity Address, Postal Zip Code	JE2 4UF
City Area Code	44 (0) 15
Local Phone Number	3475 6700
Title of 12(b) Security	Ordinary Shares, no par value
Trading Symbol	NVCR
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		98,968,534
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001645113
Current Fiscal Year End Date	--12-31

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
CURRENT ASSETS:
Cash and cash equivalents	$ 208,034	$ 140,622
Short-term investments	104,565	105,256
Restricted cash	2,134	2,134
Trade receivables	49,904	36,523
Receivables and prepaid expenses	17,917	14,279
Inventories	24,388	22,555
Total current assets	406,942	321,369
LONG-TERM ASSETS:
Property and equipment, net	8,425	8,442
Field equipment, net	8,139	6,924
Right-of-use assets, net	14,635	0
Other long-term assets	5,717	3,058
Total long-term assets	36,916	18,424
TOTAL ASSETS	443,858	339,793
CURRENT LIABILITIES:
Trade payables	31,998	26,708
Other payables, lease liabilities and accrued expenses	48,407	37,852
Total current liabilities	80,405	64,560
LONG-TERM LIABILITIES:
Long-term loan, net of discount and issuance costs	149,384	149,268
Deferred revenue	8,341	9,929
Employee benefits	3,701	2,683
Long-term leases	11,367	0
Other long-term liabilities	295	1,094
Total long-term liabilities	173,088	162,974
TOTAL LIABILITIES	253,493	227,534
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Ordinary shares no par value, unlimited shares authorized; issued and outstanding: 98,948,935 shares and 93,254,185 shares at September 30, 2019 (unaudited) and December 31, 2018, respectively	0	0
Additional paid-in capital	848,151	757,314
Accumulated other comprehensive income (loss)	(2,641)	(1,400)
Retained earnings (accumulated deficit)	(655,145)	(643,655)
TOTAL SHAREHOLDERS' EQUITY	190,365	112,259
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 443,858	$ 339,793

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares	Sep. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Common stock, shares issued	98,948,935	93,254,185
Common stock, shares outstanding	98,948,935	93,254,185

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Income Statement [Abstract]
Net revenues	$ 92,062	$ 64,756	$ 252,084	$ 178,395	$ 248,069
Cost of revenues	22,900	18,949	63,820	57,020	80,048
Gross profit	69,162	45,807	188,264	121,375	168,021
Operating costs and expenses:
Research, development and clinical trials	18,766	13,074	55,262	35,540	50,574
Sales and marketing	23,830	19,124	69,871	56,455	77,663
General and administrative	22,711	18,855	64,198	54,388	73,456
Total operating costs and expenses	65,307	51,053	189,331	146,383	201,693
Operating income (loss)	3,855	(5,246)	(1,067)	(25,008)	(33,672)
Financial expenses (income), net	2,555	2,397	6,165	10,110	12,270
Income (loss) before income taxes	1,300	(7,643)	(7,232)	(35,118)	(45,942)
Income taxes	(630)	4,051	4,258	12,810	17,617
Net income (loss)	$ 1,930	$ (11,694)	$ (11,490)	$ (47,928)	$ (63,559)
Basic net income (loss) per ordinary share (in usd per share)	$ 0.02	$ (0.13)	$ (0.12)	$ (0.52)	$ (0.69)
Weighted average number of ordinary shares used in computing basic net income (loss) per share (in shares)	98,485,519	92,911,375	96,551,041	91,409,619	91,828,043
Diluted net income (loss) per ordinary share (in usd per share)	$ 0.02	$ (0.13)	$ (0.12)	$ (0.52)	$ (0.69)
Weighted average number of ordinary shares used in computing diluted net income (loss) per share (in shares)	107,604,578	92,911,375	96,551,041	91,409,619	91,828,043

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 1,930	$ (11,694)	$ (11,490)	$ (47,928)	$ (63,559)
Other comprehensive income (loss), net of tax:
Change in foreign currency translation adjustments	(216)	(2)	(430)	19	27
Pension benefit plan	(68)	147	(811)	197	(84)
Total comprehensive income (loss)	$ 1,646	$ (11,549)	$ (12,731)	$ (47,712)	$ (63,616)

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands		Total	Ordinary shares	Additional paid-in capital	Accumulated other comprehensive loss	Retained earnings (accumulated deficit)
Beginning balance at Dec. 31, 2017		$ 113,564		$ 697,165	$ (1,343)	$ (582,258)
Beginning balance (in shares) at Dec. 31, 2017			89,478,032
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation to employees		8,520		8,520
Exercise of options and warrants and vested RSUs		2,581		2,581
Exercise of options and warrants and vested RSUs (in shares)			920,869
Cumulative effect adjustment on retained earnings	[1]	2,162				2,162
Other comprehensive income (loss), net of tax benefit		15			15
Net income (loss)		(20,724)				(20,724)
Ending balance at Mar. 31, 2018		106,118		708,266	(1,328)	(600,820)
Ending balance (in shares) at Mar. 31, 2018			90,398,901
Beginning balance at Dec. 31, 2017		113,564		697,165	(1,343)	(582,258)
Beginning balance (in shares) at Dec. 31, 2017			89,478,032
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)		(47,928)
Ending balance at Sep. 30, 2018		114,936		744,087	(1,127)	(628,024)
Ending balance (in shares) at Sep. 30, 2018			93,007,844
Beginning balance at Dec. 31, 2017		113,564		697,165	(1,343)	(582,258)
Beginning balance (in shares) at Dec. 31, 2017			89,478,032
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)		(63,559)
Ending balance at Dec. 31, 2018		112,259		757,314	(1,400)	(643,655)
Ending balance (in shares) at Dec. 31, 2018			93,254,185
Beginning balance at Mar. 31, 2018		106,118		708,266	(1,328)	(600,820)
Beginning balance (in shares) at Mar. 31, 2018			90,398,901
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation to employees		10,206		10,206
Proceeds from issuance of shares		938		938
Proceeds from issuance of shares (in shares)			54,386
Exercise of options and warrants and vested RSUs		10,274		10,274
Exercise of options and warrants and vested RSUs (in shares)			2,049,986
Other comprehensive income (loss), net of tax benefit		55			55
Net income (loss)		(15,510)				(15,510)
Ending balance at Jun. 30, 2018		112,081		729,684	(1,273)	(616,330)
Ending balance (in shares) at Jun. 30, 2018			92,503,273
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation to employees		10,479		10,479
Exercise of options and warrants and vested RSUs		3,924		3,924
Exercise of options and warrants and vested RSUs (in shares)			504,571
Other comprehensive income (loss), net of tax benefit		146			146
Net income (loss)		(11,694)				(11,694)
Ending balance at Sep. 30, 2018		114,936		744,087	(1,127)	(628,024)
Ending balance (in shares) at Sep. 30, 2018			93,007,844
Beginning balance at Dec. 31, 2018		112,259		757,314	(1,400)	(643,655)
Beginning balance (in shares) at Dec. 31, 2018			93,254,185
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation to employees		9,649		9,649
Exercise of options and warrants and vested RSUs		16,978		16,978
Exercise of options and warrants and vested RSUs (in shares)			2,438,612
Other comprehensive income (loss), net of tax benefit		(342)			(342)
Net income (loss)		(12,150)				(12,150)
Ending balance at Mar. 31, 2019		126,394		783,941	(1,742)	(655,805)
Ending balance (in shares) at Mar. 31, 2019			95,692,797
Beginning balance at Dec. 31, 2018		112,259		757,314	(1,400)	(643,655)
Beginning balance (in shares) at Dec. 31, 2018			93,254,185
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)		(11,490)
Ending balance at Sep. 30, 2019		190,365		848,151	(2,641)	(655,145)
Ending balance (in shares) at Sep. 30, 2019			98,948,935
Beginning balance at Mar. 31, 2019		126,394		783,941	(1,742)	(655,805)
Beginning balance (in shares) at Mar. 31, 2019			95,692,797
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation to employees		13,732		13,732
Proceeds from issuance of shares		1,208		1,208
Proceeds from issuance of shares (in shares)			43,421
Exercise of options and warrants and vested RSUs		19,457		19,457
Exercise of options and warrants and vested RSUs (in shares)			2,122,658
Other comprehensive income (loss), net of tax benefit		(615)			(615)
Net income (loss)		(1,270)				(1,270)
Ending balance at Jun. 30, 2019		158,906		818,338	(2,357)	(657,075)
Ending balance (in shares) at Jun. 30, 2019			97,858,876
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation to employees		14,338		14,338
Exercise of options and warrants and vested RSUs		15,475		15,475
Exercise of options and warrants and vested RSUs (in shares)			1,090,059
Other comprehensive income (loss), net of tax benefit		(284)			(284)
Net income (loss)		1,930				1,930
Ending balance at Sep. 30, 2019		$ 190,365		$ 848,151	$ (2,641)	$ (655,145)
Ending balance (in shares) at Sep. 30, 2019			98,948,935
[1]	Resulting from the adoption of ASC 606.

CONSOLIDATED STATEMENTS OF CH_2

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018
Statement of Stockholders' Equity [Abstract]
Other comprehensive income (loss), tax	$ (11)	$ (69)	$ (11)	$ (11)	$ (3)	$ (5)

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Cash flows from operating activities:
Net income (loss)	$ 1,930	$ (11,694)	$ (11,490)	$ (47,928)	$ (63,559)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	1,932	2,311	5,993	6,801	9,006
Asset write-downs and impairment of field equipment	78	178	239	320	407
Amortization of discount (premium)	(547)	(555)	(1,712)	1,502	1,022
Share-based compensation to employees	14,338	10,479	37,719	29,205	39,846
Decrease (increase) in accounts receivables	(9,986)	3,577	(17,020)	(4,805)	(10,325)
Decrease (increase) in inventories	1,067	(1,735)	(1,832)	385	(529)
Increase (decrease) in accounts payable and accrued expenses	6,433	2,839	10,902	(2,760)	13,713
Decrease (increase) in other long-term assets	1,069	155	1,151	(743)	(949)
Increase (decrease) in other long-term liabilities	(1,407)	83	(4,292)	(656)	9,503
Net cash provided by (used in) operating activities	14,907	5,638	19,658	(18,679)	(1,865)
Cash flows from investing activities:
Purchase of property, equipment and field equipment	(2,708)	(1,353)	(7,430)	(4,918)	(6,711)
Proceeds from maturity of short-term investments	105,000	45,000	315,661	150,000	255,000
Purchase of short-term investments	(104,466)	(44,652)	(313,142)	(148,786)	(253,782)
Net cash provided by (used in) investing activities	(2,174)	(1,005)	(4,911)	(3,704)	(5,493)
Cash flows from financing activities:
Proceeds from issuance of shares, net	0	0	1,208	938	1,835
Proceeds from long-term loan, net	0	0	0	149,150	149,150
Repayment of long-term loan	(7)	(22)	(23)	(100,063)	(100,084)
Exercise of options and warrants	15,475	3,924	51,910	16,779	18,468
Net cash provided by (used in) financing activities	15,468	3,902	53,095	66,804	69,369
Effect of foreign currency translation	(216)	(2)	(430)	19	27
Increase (decrease) in cash, cash equivalents and restricted cash	27,985	8,533	67,412	44,440	62,038
Cash, cash equivalents and restricted cash at the beginning of the period	182,183	116,625	142,756	80,718	80,718
Cash, cash equivalents and restricted cash at the end of the period	210,168	125,158	210,168	125,158	142,756
Cash paid during the period for:
Income taxes	3,040	4,145	10,431	16,159	20,350
Interest	3,453	3,454	10,247	9,879	13,334
Non-cash activities in accordance with of ASC-842:
Right-of-use assets obtained in exchange for lease obligations	$ 1,062	$ 0	$ 18,335	$ 0	$ 0

Organization and Basis of Prese

Organization and Basis of Presentation	9 Months Ended
	Sep. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Basis of Presentation	ORGANIZATION AND BASIS OF PRESENTATION Organization . NovoCure Limited (including its consolidated subsidiaries, the “Company”) was incorporated in the Bailiwick of Jersey and is principally engaged in the development, manufacture and commercialization of Tumor Treating Fields delivery systems, including Optune and NovoTTF-100L, for the treatment of solid tumors. The Company has received regulatory approval from the U.S. Food and Drug Administration (“FDA”) under the Premarket Approval pathway and regulatory approvals and clearances in certain other countries for Optune to treat adult patients with GBM. The Company also has received FDA approval under the Humanitarian Device Exemption pathway to market NovoTTF-100L for unresectable, locally advanced or metastatic MPM in combination with standard chemotherapies. Financial statement preparation . The accompanying consolidated financial statements include the accounts of the Company and intercompany accounts and transactions have been eliminated. In the opinion of the Company’s management, the consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation for the periods presented. The preparation of these consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. These consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (the “2018 10-K”) filed with the Securities and Exchange Commission on February 28, 2019. The significant accounting policies applied in the audited annual consolidated financial statements of the Company as disclosed in the 2018 10-K are applied consistently in these unaudited interim consolidated financial statements, except as noted below: Recently Adopted Accounting Pronouncements. In 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”, which amends the existing standards for lease accounting, requiring lessees to recognize most leases on their balance sheets. The new standard establishes a right-of-use model that requires a lessee to recognize a right-of-use asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating. The standard is effective for interim and annual reporting periods beginning after December 15, 2018. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach. In July 2018, the FASB issued ASU No. 2018-11, “Targeted Improvements - Leases (Topic 842)” (together with ASU 2016-02, “ASC 842”). This update provides an additional (and optional) transition method to adopt the new leases standard. Under this method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, the prior comparative period’s financials will remain the same as those previously presented. The Company adopted the new standard as of January 1, 2019 and it has also elected to adopt the package of practical expedients permitted in ASC 842. ASC 842 provides lessors with a practical expedient, by class of underlying asset, not to separate non-lease components from the associated lease component and, instead, to account for those components as a single component if the non-lease components otherwise would be accounted for under the new revenue guidance (Topic 606). Our product supply agreements include the right to use the device (lease component), the supply obligation of disposable transducer arrays and technical support for the term of treatment (non-lease component). As the non-lease component(s) associated with the lease component is the predominant component of the combined component, the Company accounts for the combined component in accordance with Topic 606. The consolidated financial statements for the three and nine months ended September 30, 2019 are presented under the new standard, while comparative year and other periods presented are not adjusted and continue to be reported in accordance with Topic 840, Leases.

Cash, Cash Equivalents and Shor

Cash, Cash Equivalents and Short-Term Investments	9 Months Ended
	Sep. 30, 2019
Cash, Cash Equivalents, and Short-term Investments [Abstract]
Cash, Cash Equivalents and Short-Term investments	CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS Cash equivalents include items almost as liquid as cash, such as certificates of deposit and time deposits with maturity periods of three months or less when purchased. September 30, December 31, Unaudited Audited Cash $ 5,851 $ 9,197 Money market funds 202,183 131,425 Total cash and cash equivalents $ 208,034 $ 140,622 The Company invests in marketable U.S. Treasury Bills (“T-bills”) that are classified as held-to-maturity securities. The amortized cost and recorded basis of the T-bills are presented as short-term investments. September 30, December 31, Unaudited Audited Short-term investments $ 104,565 $ 105,256 Quoted market prices were applied to determine the fair value of cash equivalents and short-term investments, therefore they are categorized as Level 1 in accordance with ASC 820, “Fair Value Measurements and Disclosures.” The estimated fair value of the Company’s short-term investments as of September 30, 2019 and December 31, 2018 was $104,613 and $105,266, respectively.

Inventories

Inventories	9 Months Ended
	Sep. 30, 2019
Inventory Disclosure [Abstract]
Inventories	INVENTORIES Inventories are stated at the lower of cost or net realizable value. The weighted average methodology is applied to determine cost. As of September 30, 2019 and December 31, 2018, the Company’s inventories were composed of: September 30, December 31, Unaudited Audited Raw materials $ 3,077 $ 870 Work in progress 9,860 8,667 Finished products 11,451 13,018 Total $ 24,388 $ 22,555

Commitments Rights of Use and C

Commitments Rights of Use and Contingent Liabilities	9 Months Ended
	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Commitments, Rights of Use and Contingent Liabilities	COMMITMENTS, RIGHTS OF USE AND CONTINGENT LIABILITIES Operating Leases and Rights of Use. The facilities of the Company are leased under various operating lease agreements for periods, including options for extensions, ending no later than 2029. The Company also leases motor vehicles under various operating leases, which expire on various dates, the latest of which is in 2022. Under ASC 842, all leases with durations greater than 12 months, including non-cancelable operating leases, are now recognized on the balance sheet. The aggregated present value of lease agreements, net of deferred rent, is recorded as a long-term asset titled right-of-use assets. The corresponding lease liabilities are split between other payables and long-term lease liabilities. Upon implementation of ASC 842, effective January 1, 2019, the Company recorded an increase in right-of-use assets obtained in exchange for lease obligations of $15,733 on our opening balance sheet. Lease and rental payments for the nine months ended September 30, 2019, totaled $3,799. Future minimum lease payments under non-cancelable operating leases as of September 30, 2019, are as follows: September 30, Unaudited Future minimum lease payments: 2019 (remainder of the year) $ 1,146 2020 4,519 2021 4,193 2022 3,130 2023 1,933 Thereafter 3,651 Total future minimum lease payments $ 18,572 Less imputed interest (2,956) Net present value of future minimum lease payments $ 15,616 Presented as of September 30, 2019: Short-term lease liabilities $ 4,249 Long-term lease liabilities 11,367 Net present value of future minimum lease payments $ 15,616 Weighted average of remaining operating lease term 4.85 Weighted average of operating lease discount rate 7.51% Pledged deposits and bank guarantees. As of September 30, 2019 and December 31, 2018, the Company pledged bank deposits of $1,325 and $1,143, respectively, to cover bank guarantees in respect of its leases of operating facilities and obtained bank guarantees for the fulfillment of the Company’s lease and other contractual commitments of $1,491 and $1,299, respectively .

Share Capital

Share Capital	9 Months Ended
	Sep. 30, 2019
Share-based Compensation, Allocation and Classification in Financial Statements [Abstract]
Share Capital	SHARE CAPITAL In September 2015, the Company adopted the 2015 Omnibus Incentive Plan (the “2015 Plan”). Under the 2015 Plan, the Company can issue various types of equity compensation awards such as share options, restricted shares, performance shares, restricted stock units (“RSUs”), performance units, long-term cash awards and other share-based awards. Options granted under the 2015 Plan generally have a four three A summary of the status of the Company’s option plans as of September 30, 2019 and changes during the period then ended is presented below: Nine months ended September 30, 2019 Unaudited Number Weighted Outstanding at beginning of year 14,438,215 $ 13.56 Granted 1,496,161 49.43 Exercised (4,914,918) 10.55 Forfeited and canceled (144,403) 19.91 Outstanding as of September 30, 2019 10,875,055 $ 19.77 Exercisable options 3,444,478 $ 14.61 For the nine months, ended September 30, 2019, options to purchase 4,914,918 ordinary shares were exercised, resulting in the issuance of 4,914,918 ordinary shares. A summary of the status of the Company’s RSUs as of September 30, 2019 and changes during the period then ended is presented below: Nine months ended September 30, 2019 Unaudited Number Weighted Unvested at beginning of year 1,613,197 14.04 Granted 597,583 50.71 Vested (736,411) 13.36 Forfeited and cancelled (24,356) 34.32 Unvested as of September 30, 2019 1,450,013 29.16 In September 2015, the Company adopted an employee share purchase plan (“ESPP”) to encourage and enable eligible employees to acquire ownership of the Company’s ordinary shares purchased through accumulated payroll deductions on an after-tax basis. In the United States, the ESPP is intended to be an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code and the provisions of the ESPP are construed in a manner consistent with the requirements of such section. As of September 30, 2019, 3,078,989 ordinary shares were available to be purchased by eligible employees under the ESPP and 390,614 shares had been issued under the ESPP. The fair value of share-based awards was estimated using the Black-Scholes model for all equity grants. For market condition awards, the Company also applied the Monte-Carlo simulation model. We assessed fair value using the following underlying assumptions: Nine months ended September 30, Year ended December 31, 2019 2018 Unaudited Audited Stock Option Plans Expected term (years) 5.50-6.50 5.50-6.25 5.50-6.25 Expected volatility 55%-61% 52%-55% 52%-55% Risk-free interest rate 1.90%-2.40% 2.70%-2.89% 2.70%-2.99% Dividend yield 0.00 % 0.00 % 0.00 % ESPP Expected term (years) 0.50 0.50 0.50 Expected volatility 44%-62% 45%-53% 45%-53% Risk-free interest rate 2.10%-2.51% 1.61%-2.14% 1.61%-2.14% Dividend yield 0.00 % 0.00 % 0.00 % The total non-cash share-based compensation expense related to all of the Company’s equity-based awards recognized for the three and nine months ended September 30, 2019 and 2018 and the year ended December 31, 2018 was: Three months ended September 30, Nine months ended September 30, Year ended December 31, 2019 2018 2019 2018 Unaudited Unaudited Audited Cost of revenues $ 605 $ 464 $ 1,626 $ 891 $ 1,261 Research, development and clinical trials 2,202 1,223 5,203 3,415 4,709 Sales and marketing 3,368 1,979 8,585 5,309 7,393 General and administrative 8,163 6,813 22,305 19,590 26,483 Total share-based compensation expense $ 14,338 $ 10,479 $ 37,719 $ 29,205 $ 39,846

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2019
Earnings Per Share [Abstract]
Earnings Per Share	EARNINGS PER SHARE Basic net income (loss) per share is computed based on the weighted average number of ordinary shares outstanding during each period. Diluted net income per share is computed based on the weighted average number of ordinary shares outstanding during the period, plus potential dilutive shares considered outstanding during the period, in accordance with ASC 260-10, as determined under the treasury stock method. Basic and diluted net loss per ordinary share was the same for each period presented, except for the three months ended September 30, 2019, as the inclusion of all potential dilutive shares (deriving from options, RSUs and the ESPP) outstanding would be anti-dilutive. The calculation of diluted earnings per share includes the weighted average of potentially dilutive securities, which consists of ordinary shares underlying outstanding share options, RSUs and the ESPP. The effect of these dilutive securities under the treasury stock method was approximately 9,119,059 shares for the three months ended September 30, 2019. The Company excluded 57,782 share options from the computation of dilutive net income per share for the three months ended September 30, 2019 because including them would had have an anti-dilutive effect.

Supplemental Information

Supplemental Information	9 Months Ended
	Sep. 30, 2019
Geographic Areas, Long-Lived Assets [Abstract]
Supplemental Information	SUPPLEMENTAL INFORMATION The Company operates in a single reportable segment. The following table presents long-lived assets by location: September 30, December 31, Unaudited Audited United States $ 8,170 $ 8,289 Switzerland 3,695 2,513 Israel 2,393 2,236 Germany 778 1,054 Others 1,528 1,274 Total $ 16,564 $ 15,366 The Company’s revenues by geographic region, based on the customer’s location, are summarized as follows: Three months ended September 30, Nine months ended September 30, Year ended December 31, 2019 2018 2019 2018 Unaudited Unaudited Audited United States $ 61,399 $ 44,469 $ 166,937 $ 124,206 $ 168,414 EMEA (*) 24,482 18,295 69,507 50,692 72,485 Japan 4,779 1,992 12,334 3,497 6,351 Greater China (1) 1,402 — 3,306 — 819 Total $ 92,062 $ 64,756 $ 252,084 $ 178,395 $ 248,069 (*) including Germany $ 21,688 $ 17,536 $ 64,065 $ 48,545 $ 67,849 (1) Reflects revenue recognized in accordance with a License and Collaboration Agreement between us and Zai Lab (Shanghai) Co., Ltd. (“Zai”), dated September 10, 2018, pursuant to which Zai is commercializing Optune in China, Hong Kong, Macau and Taiwan (referred to in this table as “Greater China”). For additional information, see Note 12 to the Consolidated Financial Statements in our 2018 10-K.

Organization and Basis of Pre_2

Organization and Basis of Presentation (Policies)	9 Months Ended
	Sep. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements. In 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”, which amends the existing standards for lease accounting, requiring lessees to recognize most leases on their balance sheets. The new standard establishes a right-of-use model that requires a lessee to recognize a right-of-use asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating. The standard is effective for interim and annual reporting periods beginning after December 15, 2018. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach. In July 2018, the FASB issued ASU No. 2018-11, “Targeted Improvements - Leases (Topic 842)” (together with ASU 2016-02, “ASC 842”). This update provides an additional (and optional) transition method to adopt the new leases standard. Under this method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, the prior comparative period’s financials will remain the same as those previously presented. The Company adopted the new standard as of January 1, 2019 and it has also elected to adopt the package of practical expedients permitted in ASC 842. ASC 842 provides lessors with a practical expedient, by class of underlying asset, not to separate non-lease components from the associated lease component and, instead, to account for those components as a single component if the non-lease components otherwise would be accounted for under the new revenue guidance (Topic 606). Our product supply agreements include the right to use the device (lease component), the supply obligation of disposable transducer arrays and technical support for the term of treatment (non-lease component). As the non-lease component(s) associated with the lease component is the predominant component of the combined component, the Company accounts for the combined component in accordance with Topic 606. The consolidated financial statements for the three and nine months ended September 30, 2019 are presented under the new standard, while comparative year and other periods presented are not adjusted and continue to be reported in accordance with Topic 840, Leases.

Cash, Cash Equivalents and Sh_2

Cash, Cash Equivalents and Short-Term Investments (Tables)	9 Months Ended
	Sep. 30, 2019
Cash, Cash Equivalents, and Short-term Investments [Abstract]
Summary of Cash and Cash Equivalents	Cash equivalents include items almost as liquid as cash, such as certificates of deposit and time deposits with maturity periods of three months or less when purchased. September 30, December 31, Unaudited Audited Cash $ 5,851 $ 9,197 Money market funds 202,183 131,425 Total cash and cash equivalents $ 208,034 $ 140,622
Summary of Amortized Cost and Recorded Basis of T-bills in Short-Term Investments	The Company invests in marketable U.S. Treasury Bills (“T-bills”) that are classified as held-to-maturity securities. The amortized cost and recorded basis of the T-bills are presented as short-term investments. September 30, December 31, Unaudited Audited Short-term investments $ 104,565 $ 105,256

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2019
Inventory Disclosure [Abstract]
Schedule of Inventories	Inventories are stated at the lower of cost or net realizable value. The weighted average methodology is applied to determine cost. As of September 30, 2019 and December 31, 2018, the Company’s inventories were composed of: September 30, December 31, Unaudited Audited Raw materials $ 3,077 $ 870 Work in progress 9,860 8,667 Finished products 11,451 13,018 Total $ 24,388 $ 22,555

Commitments Rights of Use and_2

Commitments Rights of Use and Contingent Liabilities (Tables)	9 Months Ended
	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Schedule of Future Minimum Lease Payments under Non-Cancelable Operating Lease	Future minimum lease payments under non-cancelable operating leases as of September 30, 2019, are as follows: September 30, Unaudited Future minimum lease payments: 2019 (remainder of the year) $ 1,146 2020 4,519 2021 4,193 2022 3,130 2023 1,933 Thereafter 3,651 Total future minimum lease payments $ 18,572 Less imputed interest (2,956) Net present value of future minimum lease payments $ 15,616 Presented as of September 30, 2019: Short-term lease liabilities $ 4,249 Long-term lease liabilities 11,367 Net present value of future minimum lease payments $ 15,616 Weighted average of remaining operating lease term 4.85 Weighted average of operating lease discount rate 7.51%

Share Capital (Tables)

Share Capital (Tables)	9 Months Ended
	Sep. 30, 2019
Share-based Compensation, Allocation and Classification in Financial Statements [Abstract]
Schedule of Stock Option Plans	A summary of the status of the Company’s option plans as of September 30, 2019 and changes during the period then ended is presented below: Nine months ended September 30, 2019 Unaudited Number Weighted Outstanding at beginning of year 14,438,215 $ 13.56 Granted 1,496,161 49.43 Exercised (4,914,918) 10.55 Forfeited and canceled (144,403) 19.91 Outstanding as of September 30, 2019 10,875,055 $ 19.77 Exercisable options 3,444,478 $ 14.61
Schedule of RSU's	A summary of the status of the Company’s RSUs as of September 30, 2019 and changes during the period then ended is presented below: Nine months ended September 30, 2019 Unaudited Number Weighted Unvested at beginning of year 1,613,197 14.04 Granted 597,583 50.71 Vested (736,411) 13.36 Forfeited and cancelled (24,356) 34.32 Unvested as of September 30, 2019 1,450,013 29.16
Schedule of Fair Value Assumptions Used for All Equity Based Awards Estimated Using Black-Scholes Option Pricing Model	The fair value of share-based awards was estimated using the Black-Scholes model for all equity grants. For market condition awards, the Company also applied the Monte-Carlo simulation model. We assessed fair value using the following underlying assumptions: Nine months ended September 30, Year ended December 31, 2019 2018 Unaudited Audited Stock Option Plans Expected term (years) 5.50-6.50 5.50-6.25 5.50-6.25 Expected volatility 55%-61% 52%-55% 52%-55% Risk-free interest rate 1.90%-2.40% 2.70%-2.89% 2.70%-2.99% Dividend yield 0.00 % 0.00 % 0.00 % ESPP Expected term (years) 0.50 0.50 0.50 Expected volatility 44%-62% 45%-53% 45%-53% Risk-free interest rate 2.10%-2.51% 1.61%-2.14% 1.61%-2.14% Dividend yield 0.00 % 0.00 % 0.00 %
Schedule of Non-cash Share-based Compensation Expense Related to Company's Equity-Based Awards	The total non-cash share-based compensation expense related to all of the Company’s equity-based awards recognized for the three and nine months ended September 30, 2019 and 2018 and the year ended December 31, 2018 was: Three months ended September 30, Nine months ended September 30, Year ended December 31, 2019 2018 2019 2018 Unaudited Unaudited Audited Cost of revenues $ 605 $ 464 $ 1,626 $ 891 $ 1,261 Research, development and clinical trials 2,202 1,223 5,203 3,415 4,709 Sales and marketing 3,368 1,979 8,585 5,309 7,393 General and administrative 8,163 6,813 22,305 19,590 26,483 Total share-based compensation expense $ 14,338 $ 10,479 $ 37,719 $ 29,205 $ 39,846

Supplemental Information (Table

Supplemental Information (Tables)	9 Months Ended
	Sep. 30, 2019
Geographic Areas, Long-Lived Assets [Abstract]
Schedule of Long-Lived Assets by Location	The following table presents long-lived assets by location: September 30, December 31, Unaudited Audited United States $ 8,170 $ 8,289 Switzerland 3,695 2,513 Israel 2,393 2,236 Germany 778 1,054 Others 1,528 1,274 Total $ 16,564 $ 15,366
Schedule of Revenues by Geographic Region	The Company’s revenues by geographic region, based on the customer’s location, are summarized as follows: Three months ended September 30, Nine months ended September 30, Year ended December 31, 2019 2018 2019 2018 Unaudited Unaudited Audited United States $ 61,399 $ 44,469 $ 166,937 $ 124,206 $ 168,414 EMEA (*) 24,482 18,295 69,507 50,692 72,485 Japan 4,779 1,992 12,334 3,497 6,351 Greater China (1) 1,402 — 3,306 — 819 Total $ 92,062 $ 64,756 $ 252,084 $ 178,395 $ 248,069 (*) including Germany $ 21,688 $ 17,536 $ 64,065 $ 48,545 $ 67,849 (1) Reflects revenue recognized in accordance with a License and Collaboration Agreement between us and Zai Lab (Shanghai) Co., Ltd. (“Zai”), dated September 10, 2018, pursuant to which Zai is commercializing Optune in China, Hong Kong, Macau and Taiwan (referred to in this table as “Greater China”). For additional information, see Note 12 to the Consolidated Financial Statements in our 2018 10-K.

Cash, Cash Equivalents and Sh_3

Cash, Cash Equivalents and Short-Term Investments - Summary of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Cash, Cash Equivalents, and Short-term Investments [Abstract]
Cash	$ 5,851	$ 9,197
Money market funds	202,183	131,425
Total cash and cash equivalents	$ 208,034	$ 140,622

Cash, Cash Equivalents and Sh_4

Cash, Cash Equivalents and Short-Term Investments - Summary of Amortized Cost And Recorded Basis of T-bills in Short Term Investments (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Cash, Cash Equivalents, and Short-term Investments [Abstract]
Short-term investments	$ 104,565	$ 105,256

Cash, Cash Equivalents and Sh_5

Cash, Cash Equivalents and Short-Term Investments - Additional Information (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Cash, Cash Equivalents, and Short-term Investments [Abstract]
Estimated fair value of short-term investments	$ 104,613	$ 105,266

Inventories - Schedule of Inven

Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Raw materials	$ 3,077	$ 870
Work in progress	9,860	8,667
Finished products	11,451	13,018
Total	$ 24,388	$ 22,555

Commitments, Rights of Use and

Commitments, Rights of Use and Contingent Liabilities - Additional Information (Details) - USD ($) $ in Thousands	Jan. 01, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Increase in right-of-use assets obtained in exchange for lease obligations	$ 15,733	$ 1,062	$ 0	$ 18,335	$ 0	$ 0
Lease and rental payments				3,799
Operating lease and other contractual commitments		1,491		1,491		1,299
Pledged bank deposits		$ 1,325		$ 1,325		$ 1,143

Commitments, Rights of Use an_2

Commitments, Rights of Use and Contingent Liabilities - Schedule of Future Minimum Lease Payments under Non-Cancelable Operating Lease (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Future minimum lease payments:
2019 (remainder of the year)	$ 1,146
2020	4,519
2021	4,193
2022	3,130
2023	1,933
Thereafter	3,651
Total future minimum lease payments	18,572
Less imputed interest	(2,956)
Net present value of future minimum lease payments	15,616
Short-term lease liabilities	4,249
Long-term lease liabilities	11,367	$ 0
Net present value of future minimum lease payments	$ 15,616
Weighted average of remaining operating lease term (in years)	4 years 10 months 6 days
Weighted average of operating lease discount rate (in percentage)	7.51%

Share Capital - Additional Info

Share Capital - Additional Information (Details)	9 Months Ended
	Sep. 30, 2019shares
Share Capital [Line Items]
Options exercised (in shares)	4,914,918
Ordinary shares issued upon option exercise (in shares)	4,914,918
ESPP
Share Capital [Line Items]
Ordinary shares available for grants (in shares)	3,078,989
Shares issued under plan (in shares)	390,614
2015 Plan
Share Capital [Line Items]
Ordinary shares available for grants (in shares)	11,915,754
2015 Plan | Option
Share Capital [Line Items]
Stock awards granted, vesting period (years)	4 years
Stock awards granted, expiration period (years)	10 years
2015 Plan | RSUs
Share Capital [Line Items]
Stock awards granted, vesting period (years)	3 years

Share Capital - Schedule of Sto

Share Capital - Schedule of Stock Option Plan (Details)	9 Months Ended
	Sep. 30, 2019$ / sharesshares
Number of options
Number of options, beginning outstanding (in shares) | shares	14,438,215
Number of options, granted (in shares) | shares	1,496,161
Number of options, exercised (in shares) | shares	(4,914,918)
Number of options, forfeited and canceled (in shares) | shares	(144,403)
Number of options, ending outstanding (in shares) | shares	10,875,055
Number of options, exercisable options (in shares) | shares	3,444,478
Weighted average exercise price
Weighted average exercise price, beginning outstanding (in usd per share) | $ / shares	$ 13.56
Weighted average exercise price, granted (in usd per share) | $ / shares	49.43
Weighted average exercise price, exercised (in usd per share) | $ / shares	10.55
Weighted average exercise price, forfeited and canceled (in usd per share) | $ / shares	19.91
Weighted average exercise price, ending outstanding (in usd per share) | $ / shares	19.77
Weighted average exercise price, exercisable options (in usd per share) | $ / shares	$ 14.61

Share Capital - Schedule of RSU

Share Capital - Schedule of RSU's (Details) - RSUs	9 Months Ended
	Sep. 30, 2019$ / sharesshares
Number of RSUs
Number of RSUs, beginning unvested (in shares) | shares	1,613,197
Number of RSUs, granted (in shares) | shares	597,583
Number of RSUs, vested (in shares) | shares	(736,411)
Number of RSUs, forfeited and cancelled (in shares) | shares	(24,356)
Number of RSUs, ending unvested (in shares) | shares	1,450,013
Weighted average grant date fair value price
Weighted average grant date fair value price, beginning unvested (in usd per share) | $ / shares	$ 14.04
Weighted average grant date fair value price, granted (in usd per share) | $ / shares	50.71
Weighted average grant date fair value price, vested (in usd per share) | $ / shares	13.36
Weighted average grant date fair value price, forfeited and cancelled (in usd per share) | $ / shares	34.32
Weighted average grant date fair value price, ending unvested (in usd per share) | $ / shares	$ 29.16

Share Capital - Schedule of Fai

Share Capital - Schedule of Fair Value Assumptions Used Only for Equity Based Awards Estimated Using Black-Scholes Option Pricing Model (Details)	9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Stock Option Plans
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility, minimum	55.00%	52.00%	52.00%
Expected volatility, maximum	61.00%	55.00%	55.00%
Risk-free interest rate, minimum	1.90%	2.70%	2.70%
Risk-free interest rate, maximum	2.40%	2.89%	2.99%
Dividend yield	0.00%	0.00%	0.00%
Stock Option Plans | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (years)	5 years 6 months	5 years 6 months	5 years 6 months
Stock Option Plans | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (years)	6 years 6 months	6 years 3 months	6 years 3 months
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (years)	6 months	6 months	6 months
Expected volatility, minimum	44.00%	45.00%	45.00%
Expected volatility, maximum	62.00%	53.00%	53.00%
Risk-free interest rate, minimum	2.10%	1.61%	1.61%
Risk-free interest rate, maximum	2.51%	2.14%	2.14%
Dividend yield	0.00%	0.00%	0.00%

Share Capital - Schedule of Non

Share Capital - Schedule of Non-cash Share-Based Compensation Expenses Related to Company's Equity-Based Awards (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	$ 14,338	$ 10,479	$ 37,719	$ 29,205	$ 39,846
Cost of revenues
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	605	464	1,626	891	1,261
Research, development and clinical trials
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	2,202	1,223	5,203	3,415	4,709
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	3,368	1,979	8,585	5,309	7,393
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	$ 8,163	$ 6,813	$ 22,305	$ 19,590	$ 26,483

Earnings Per Share (Details) -

Earnings Per Share (Details) - Additional Information (Details)	3 Months Ended
	Sep. 30, 2019shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Effect of dilutive shares (in shares)	9,119,059
Stock Option Plans
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive share options (in shares)	57,782

Supplemental Information - Sche

Supplemental Information - Schedule of Long-Lived Assets by Location (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 16,564	$ 15,366
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	8,170	8,289
Switzerland
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	3,695	2,513
Israel
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	2,393	2,236
Germany
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	778	1,054
Others
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 1,528	$ 1,274

Supplemental Information - Sc_2

Supplemental Information - Schedule of Revenues by Geographic Region (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	$ 92,062	$ 64,756	$ 252,084	$ 178,395	$ 248,069
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	61,399	44,469	166,937	124,206	168,414
EMEA
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	24,482	18,295	69,507	50,692	72,485
Japan
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	4,779	1,992	12,334	3,497	6,351
Greater China
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	1,402	0	3,306	0	819
Germany
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenues	$ 21,688	$ 17,536	$ 64,065	$ 48,545	$ 67,849