NVCR - Earnings call transcript Q3 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen. And welcome to Novocure's third quarter 2017 conference call. At this time, all participants are in a listen-only mode.

Following management's prepared remarks, we will host a question-and-answer session and our instructions will be given at that time. [Operator Instructions] As a reminder, today's conference call is being recorded. pleasure the my Ms. over now is to conference turn to It

Cordova, and begin. Finance President Relations. Ashley of may Investor Vice Ma'am, you

Ashley Cordova

the Good Development, can Wilco www.novocure.com, performance. you Novocure's morning, on Doyle; and our Research our thank and us Danziger; the Bill Eilon our for on be everyone. by on review our Chief of Asaf to slides Officer CFO, Executive in for Chairman, today third Kirson. quarter Head and joined presented our third I'm website, joining viewed our clicking XXXX CEO, located page. today Groenhuysen; by quarter financial And link XXXX The Investor results, Relations section Events Science

risks and statement, our and uncertainties, described to this forward-looking of in a we required which our will to include are risks publicly from results not call actual these beyond some law. including discussion involve during from Before by of would statements. as you I in forward-looking start, those SEC results conference any do filings. number differ and like could materially update time to intend statements projected These We that uncertainties except time remind our those control,

September Bill that, XX-Q, remarks and this earlier I XXXX We everyone release session. ended call which move I three are With will that the press and will available of hand our our our brief first XX, will over make the to were some nine-months morning. to prepared and remind then on will a question-and-answer both Doyle. financials now released for

William Doyle

we of everyone. the progress strategic morning, our quarter Ashley. calls, in And Thank Consistent our with context good during prior objectives. core the review you, will quarterly

of focused Optune we're for glioblastoma. of the commercial adoption treatment driving First, on

call. later delivering But And will morning's update pipeline. dedicated a provide Second, first Asaf to commercial and pipeline driving I'll commercial business in we review activities clinical are committed to advancing quarter. in shareholder to the long-term value. operating our our leverage finally, this our we're ask I during

Asaf?

Asaf Danziger

QX XXXX. $XX.X XXX% growth. of single-digit our revenues QX year-over-year at XXXX ninth million versus reported represents Novocure in consecutive quarter revenue of This

prescription volume. XX% XX% We in share Germany. US in of diagnosed than volume diagnosed We prescription XX% growth the and estimate at this and of of from the newly XXXX, We market in end treatment our from towards increase should of our QX prescription representing III XX% our GBM growth global move patient This an our QX saw a future the of XX% newly favorable data together the in initial largest patients XXXX markets, active in marks QX growth diagnosed quarter the continues the our allow have be commercial XXXX. representing total shift XXXX. of GBM pivotal of X,XXX Germany we end with outpace in in newly QX XXth active Phase mix prescription XXXX. presentation in in Notably, active on The US quarters. EF-XX patient of end active our XX% since was XXXX, QX more November and believe to QX GBM to trial consecutive

and GBM. sales of confidence treatment on for Optune Our the to prescriber efforts focus marketing in building continue

the treatment our than survival increase Optune is diagnosed presentation. oncologists radiation trial will five-year at We EF-XX in presence example, September, well a and ASTRO received our appeared of from oral engage to our eager team was commercial had with life the and for the presentation in to believe in during newly median the to Optune EF-XX survival ten they we more For our significant and how the we patients could GBM. and gain data updated to first survival feature with GBM. quality QX, five-year Also, include from marketing in materials understand access to data years trial. an

For was demonstrated for in rate plus plus survival five-year for newly plus status, consecutive status GBM. temozolomide survival Optune or and patients of five-year extent that diagnosed Optune consistently five The survival resonate regardless our age, of Optune temozolomide with result demonstrated of XX% temozolomide were alone. performance reception, [indiscernible] rate superior temozolomide superior versus analyzed, of believe message survival will all sustained gender. years, overall X% patients. for unprecedented prescribers We

back target team now our in to review data five-year With field turn to Our the the are I prescribers. messaging progress the R&D. call sales to will that, in bed

William Doyle

Thank you, Asaf.

our Fields. understanding during to our meaningful third the our led Tumor in have to progress addition commercial In Treating of R&D in advances quarter, continued investments

multiple a Our at served support preclinical therapies. will presented provide with that trial ASTRO field investigating therapy Optune and Treating may tumor-treating efficacy the prior temozolomide to in the the enhance using described radiation for GBM of and proposed the design their or alternative data complement The of These as diagnosed using trial therapy GBA a effect exert for GBA temozolomide. the scientific and starting benefits Treating of focuses Fields for with radiation strategies on basis anticancer radiation other concurrent Tumor data Fields, clinical newly treatment the Germany. of examine how studying initiation of maintenance Preclinical the research development Tumor decisions for DNA-damaging Optune pathways which the through agents. other rationale

pivotal to continue for ongoing recruit trials. clinical two On III Phase we front, the patients

LUNAR cell our to amend supplement updates, the the patient of metastases FDA IDE trial designed non-small September Our based infratentorial population. supporting with cell brain by enrollment the an for layout brain In METIS expanding lung patients protocol XXXX, enrollment on information now the trial scientific a accelerate treat specialized lung metastases new trial, our protocol array cancer. to approved non-small the for in allows pace eligible tumors. for and METIS other in Among to of infratentorial cancer the

collect continue data ongoing in our trial, also patients Phase in II We to on STELLAR mesothelioma. a

data in STELLAR March in XXXX. we months With As minimum a the anticipate our mid-XXXX. trial last we a XX of enrolled reminder, in topline patient follow-up,

we directly Pending feedback. in front, test plan pilot Europe in the colored successful September, device application supplement full the This completion arrays our engineering colored initiated with of arrays patient we a transducer PMA Europe. tan a in in FDA plan and from a of improvement pilot rollout tan in to United the test, is a file On transducer stemming the States.

ways research our will is also in to over hand financials. research our of electric tissues or We field to the three efficacy the to delivery Fields. at Tumor highlighted that, presentations XXXX. call understand dose distribution increase ongoing July on With IEEE Treating by in review oral optimizing I This Conference Wilco the critical possible to during

Wilco Groenhuysen

morning, And everyone. Bill. you, Thank good

referenced up net million period from for quarter to net quarter last $XX.X to grew third that in billings third XX% the an quarter $XX.X percentage second third rate revenues XXX% as the Sequentially, transition XXXX. Our driven fourth of million of in claims the of of second for gross quarter quarter net were XX% percentage approval the year. the compared improved for growth increase XX%. In from revenues benefit quarter. Germany, the XX% to revenues the payers our with increase from the benefit will XX% revenues and collections in we EMEA, billings came the by a to portion principally Germany. our improvement Revenue active the of for quarter, estimate revenue from of one-time Net revenue, active cash XXXX, in an German the to from was an previously without driven as accrual-based net accrual-based gross acceleration be the of our by third revenues German a United in the benefit approximately balance from a the in patients, a in from and transition States. one-time a collections United States, patients same in

States, Switzerland dialogues in and Japan. the constructive government United in engaged Germany, the are We payers with

The billings as revenues as resulting future million of initiatives improvement improved and a last We trigger or revenues net a margin drive XX% discussions of of ongoing net decision the any revenues cost billings was would percentage our gross to next same and be driven with expect quarter scale. from net the gross for claims. profit of to or that quarter the was by reduce positive compared revenues percentage net efforts in $XX $XX.X of both the year. significant reimbursement by to improved a efficiency Gross million XX% these for in likely revenue

income the million III $XX.X R&D to our expenses the will period compared increase for as trials. enroll pivotal million XXXX in of down quarter were Phase year. statement, patients Moving third We $X.X quarters in last we for R&D to same expenses the continue future that anticipate

indications. realize to committed our of pipeline clinical solid are and our multiple across and the full to advance funding We activities technology development value tumor research

XXX% business commercial same of the Our for has $XX.X of continue year. strategic the only in to Driving efforts. revenue third core operating of were these In we growth to results XXXX a the and for delivered year-over-year expenses in compared growth, ours $XX.X quarter the leverage year-over-year our SG&A million expenses. XXth in period SG&A we last been with objective the quarter see XXXX, million

to million loss for important XXXX period was to share or million the compensation per year. same XXXX million operating million or Net net It's $XX.X $X.XX an the $X.X per period compared loss same XXXX third $X.X operating employees. loss $X.XX in year. compared the $XX.X of Our was quarter for share-based $XX.X share operating a for of quarter quarter last to loss includes the third loss that million third to last note

Our Cash infrastructure we for third from At equivalents investments. resulted million, ongoing first $XXX.X in has our cash, million the XXXX, in flow history. was our XXXX total had equivalents cash million of existing positive balance with in operations in cash burn. September $X.X focus operations significant in and investments short-term $XX.X reduction in on of quarter short-term leveraging cash and XX, flow in cash $XXX.X cash year-over-year from quarter million a and the

a been GBM our It quarter business that quarter history XXXX profitability. first fund to anticipated pipeline, expenses in with two marked since our in contribution years the The our public third initial SG&A path the of exceeded key commercial beginning milestone has offering. to the margin also our

net We with the have revenues the more than third a in $XX million quarter transformed of to company of in from quarterly quarter $X a net company quarterly million in with XXXX XXXX. in revenues third

where cancer, III GBM. for We diagnosed GBM an we Treating and trials pivotal with results newly presented During Phase pancreatic approval received mesothelioma and and reported of opened Fields pilot Phase patients cancer cell Optune newly lung trial cell brain treatment non-small in in diagnosed from temozolomide five-year of cancer. our Investing non-small unprecedented ovarian in anti-mitotic future, data demonstrated these lung plus Optune consistently II for Tumor in two two cancer the years, survival we effect. metastases

patients the is made are at more has Optune entire we Fields the in the value proud years last overall every up first and from realize our focused benefit may who and to are the to Tumor While increase clinical we of than in bringing we for newly median team solid promise over full two treatment as wake still our shows a we to to day many variety with tumors GBM extremely advancing XX committed on progress years, our we of of are survival it. beginning our glioblastoma pipeline the technology. Treating believe Optune of journey. diagnosed

delivering I'll Operator? from shareholder With to open on and focused execution management questions. of that, from the a and we're objectives our Finally, and of call our both commercial value expenses disciplined the clinical long-term resources.

Operator

our Thank Wedbush. from come of you, And with sir. Tao question Please Levy [Operator the will line proceed. first Instructions]

Tao Levy

Yeah, morning. hi. Good

William Doyle

clarifications. of Good couple morning, Tao. a Maybe

benefit can right? accounting mainly you received? Wilco, the accrual assume that's quantify Germany, I accounting, sort in of First, you one-time from the that from the

Wilco Groenhuysen

was in It Germany. Tao. morning, Good mainly

As would've revenue quarter, net gross our of without the percentage a was mentioned, – revenues it net been to I billings overall about approximately gross XX%. XX% which in as

benefit So, it's $X accrual-based quarter switch in some that Germany. I rec rev in third from estimate million to the

Tao Levy

But And Got Is going we benefit, fair? positive that positive being flow forward. congratulations one-time this out on right? cash assume shouldn't cash of Novocure that continued So, operations. flow from you. includes

Wilco Groenhuysen

collected. receivable No, I think don't [indiscernible] it to accounts goes accrual includes basically The that.

reflection of our to So, a collection. the is flow improve more ability cash

Tao Levy

positive? flow terms of we should cash you in go-forward And assume basis, a remain

Wilco Groenhuysen

That how we that. guidance, And you know Tao. feel would be about

Tao Levy

– All And one last then, right.

Wilco Groenhuysen

story for you interrupt XXX%, the SG&A you of when leverage I I And second by a by XX%. you one management revenue explained in last remarks, grow story. prepared and we can it cash flow as at to capital grew our over If look our in [indiscernible], working the improvement year, is

If comp, you non-cash essentially take was share-based it out flat.

of the quality that leverage, sustainable. the So, is flow improvement cash

Tao Levy

news then, And on by Perfect. any have reimbursement, would have Thanks. lastly, thought that I front? Japan heard you would now. something

Asaf Danziger

new negotiation with there no is continue the It's news. Thank you. news no MJW Basically, Asaf. as [ph] there and we is

Tao Levy

Okay, thank you.

Operator

Thank you.

Our next question will Gregg of of Gilbert Please the line come from Bank. Deutsche proceed.

Gregg Gilbert

a I morning. have Good few.

a of favorite with describe of And Bill the one you viewing on not you're as reimbursement. CMS this, an discussions? Can my start still tenor I'll I when, questions on First, those hope, if.

William Doyle

Again, So, we CMS a previous calls, as that's doesn't in unfortunately, have clock. correct. said

So, us population, matter over can't not to continued showed in market, those made discussions. subgroup yes predict I we've the a presentation that the it's believe progress factors ratio of hazard of But we no. I of the of where, a very the XX difficult predict in positively And, time time, and affecting the the all the the matter increase are it's adoption any of data commercial or of five-year again, of for the lowest data, of in fact, while in when. all presentation in the terms sub-group

Gregg Gilbert

this about of compare versus different regions in the stuck are they it what sort group than Is you would in how reimbursement? of other terms on? thinking countries different And

William Doyle

Every region different. is

very Some specific, have defined processes.

is the of process which but different the I country by the paid ultimately almost is in completely think through the appreciation jurisdictions, data all is for country. therapy similar

Gregg Gilbert

Got it.

suspect In comment anything your you stage could on your the can for frame competitive us on that you that you GBM landscape could have development your for there? eye combination used with out affect late you GBM, in can other be of of are things, that terms think terms of that thinking in competitiveness I product? late-stage the that's in other of approaches but Optune

William Doyle

this say few to topic. words Eilon on a ask I'll Yeah.

Eilon Kirson

Okay.

you much. So, very thank

standard therapies, Tumor checkpoint always very And continue new together everything of combinations best We any pre-clinically shown combinations, GBM. look with data they effect tested rumors comment evaluate that has out comes nice on what we've always different emerging may We in come inhibitors Treating chemotherapies. to We actually out. don't to-date with at or to Fields. the be try

basis And comes that case, Treating any for any treatment so, believe the in new we Fields which can Tumor serve as out.

Gregg Gilbert

Maybe follow-up. one last

you clinical go one studies to of we collaboration itself GBM? you degree to own the before talking do setting what or extra that Optune Optune or external of kind are involve trials bit. to or wait strategy have trials in about outside about validate later-stage companies to To by Sorry Thanks. – of talking outside sort have for you of your in GBM in other

Eilon Kirson

clinical the Well, combinations, where starting about Marizomib multiple is companies level with a level. trial we're [indiscernible] preclinical to released talking We various marizomib. basically that to which at again, to-date, new both doing and with and a And arm be and our the is they're Tumor preclinical our a backbone all an Tumor data, for serve Fields trials Fields therapies. good can data very all marizomib. future testing Treating Treating data based going clinical

Gregg Gilbert

Thanks.

Operator

you. [Operator Thank Instructions].

Fargo. of will Our line Lei next proceed. Please question from Huang Wells with come the

Lei Huang

$XX the talk thanks Good million was one-time we calling O-US million a benefit Lei just And from Can morning. O-US Was in It's quarter. Larry my revenue for Germany? in almost So, minute? for the Biegelsen. for $X question. about taking

Wilco Groenhuysen

that's Wilco. was million Lei. the correct. This to German Good $X is related switch. Yes, morning,

Lei Huang

Okay.

Wilco Groenhuysen

an This not million. is exact $X Approximately Approximately. number.

Lei Huang

fair Okay, enough.

and a a lot benefit, to was modest. even approximately versus out So, increase the driving revenue growth a take patient in – be the was that more growth healthy – we $X if one-time pretty that patient more prescription terms versus growth? more it little revenue growth million growth active prescription of robust and What's quarter-over-quarter growth still volume

Wilco Groenhuysen

Yeah.

of first So, bringing it for up. thanks all,

it as time, And in all history. – flow the patient in to leads emphasize Germany. Europe. million, XXX function leading very patient revenue active count. exclude one growth patient in net with, substantial active I accrual quarter, This switch our substantial States, to I We've of we've flat, patients revenue largely quarter quarter had cash is one-time more it over from that positive think to said And the still you even that substantial the if the quarter $X during active growth SG&A more essentially call, than first significant United if shown growth in leverage. a like out to bump the you the in I'd growth, active

Lei Huang

Thanks. in great. or Optune O-US? the release. press the centers can Okay, of I a then, and center give slides training number training see in US you And – didn't

Wilco Groenhuysen

the And be We XXX we in States, XXX sites. centers In XXX as upon have you have to training preparing reimbursement. Europe, we're United almost certified also precise. approximately know, for Japan

We have Japan. about certified XXX sites in

Lei Huang

are reimbursement hear Got year-end? you I that something more, it. if ask one And could how just confident on on before Japan, you can

Asaf Danziger

As I still old under mentioned we're will before, we our have that year. the assumption, assumption, this the was reimbursement working which

Lei Huang

Okay, all Thank you. right.

Operator

you. Thank

Cory come will line proceed. question next of from with Please the Kasimov Our JPMorgan.

Shawn Fu

This for question quarter. the taking for Thanks the congrats guys. on Cory. Hey, and Shawn is on

me. Just of a couple quick ones for

us are you and know Germany European at might what and which So, the EU in can remind you I near in to the other very you Austria in. you're looking term? of least. get which currently first, kind But into be it's other markets markets ones currently other

Asaf Danziger

So, thank your you questions. for

in and mainly couple And Austrian with Germany. already future. we're ago, not now, Israel, a have to In have any right weeks announced other approach of are near and And we're we the national other contract coverage we the Switzerland, So, countries government. in we countries a already planning Austria, Austria.

Shawn Fu

helpful. Okay, that's

including readout? the I patients So, the in change about this thinking does push regardless, you all? at But, frame believe the for forward terms it talked that Does expanding patient time clearly. had hear that METIS your I the that – of sorry, all trail, was regarding population. it at it infratentorial by didn't

Eilon Kirson

push to any the for time timeline the assuming We Eilon. okay? line, the going same is Well, think This We're thanks way. this question. still don't is in

Shawn Fu

the GBM? and patients the Can quick And patient current great. tumor-naïve then more tumor-refractory mix one you in one. between share just maybe Okay, patients

William Doyle

Yes.

on it based the therapy disease. think way patient the is that during course their the of their we So, starts when about

So, patients. we have buckets of two

those who patients. we We patients. benefit start We've diagnosed later after groups in are And more. the have shown then our both who and recurrent start benefit, those progressed, have have after patients the earlier patients therapy. the We call disease, while the of newly will patients their data they start course radiation patients who in that

newly quarter, one till diagnosed newly so, for an were of the wait than is of diagnosed. of were encourage prescribers historically. approximately that to prescriptions it's XX% In recurrent. that towards earlier to to this been and we've continues course And And XX% in objectives from a that rather shift disease mix And where prescribe our recurrent. we've for describe our increase

Shawn Fu

Okay, perfect. Thanks much, guys. so

Operator

you. Thank

Our next question with will Please from Securities. line come of Mizuho the Yang proceed. Difei

Difei Yang

my Good taking questions. morning. for Thanks

couple. a Just

First a there to the gap, the way is the compliance there of you difference is If rate? on all, certainly compliance bridge patients between to patients any gap versus do see German American a rate? improve

Asaf Danziger

pretty So, don't similar. any we the – difference. question is are They see

Difei Yang

you. for are think earlier. And about cetera, generation benefits thank then, you frame et next talked Okay, improvement, for us I the key patients? technology, patients' Bill from perspective? What Could technology the it

William Doyle

Sure.

take believe will the to improve compliance it efforts First comply. of well. and we also technology, both continue ongoing patients again, to make for because, that we back, easier by for to you patients as efficacy improving we convenience have step ultimately, engineering improve want all, And easier if one we to from perspective a

of reducing device. the gen talked which biggest increasing cetera, about was X was think, a battery noise, patients, life, it's rollout to-date, size, very significantly weight, us. I the device, the our for major So, we've to change of et improvement important The

now significant We improve generator. the for to continue arrays. field our attention to the further to But opportunities turned we've look

arrays are white the flesh one, we've of the tone day the consistently who arrays, with – things have Band-Aid And for heard color therapy, from to our consistently have a details for little that surgical of less transducer sort bright patients of you color. been of the not and make familiar conspicuous. or asked One those more a

Europe. is It's a and pilot of And we USA. in And the successful assume so, in conclusion the that US. piloted PMA that being in then product rollout the supplement now

we'll signoff, other there's opportunities So, the a as we we whole it the get that at of the the on focused connectivity ways of From when there, the than arrays. to the as improve have hydrogels out are to originally host to hydrogel We're ways file. to more We're designed roll in soon We're adhesive. at arrays. And There we US. available looking comfortable. arrays make the device. of the looking more improving modern further

would tan whole of So, time a host the first over I arrays. see But the expect additional be would the to improvements. of rollout

Difei Yang

Okay, the question final Then from accrual-based transition my accounting. cash to thank you. on

Are we where on down? XX% XX% So, level? the down, high are we very

Wilco Groenhuysen

I think so.

where we the revenues net quarter, as mentioned First that XX%. billings second substantial was gross a from of XX% percentage all, it was in quarter improvement of the

I benefit recommend. XX%. If out that's that one-time to you take a it's would of accrual, switching essentially what And

gross Looking national our revenues we time out, go as percentage, they by of a triggered net out it as also with the decisions reimbursement and talked percentage percentage up – which better That's of as at that net a that just billings. those the modeling will development gross percentage the and revenues modeling probably of be revenue decisions are over of if about, favorable. way will that

Difei Yang

for thank Well, you. quarter. Okay, a great congratulations

Wilco Groenhuysen

you. you. Thank Thank

Operator

Ladies and session gentlemen, today. Thank this our concludes for question-and-answer you.

Chairman, over Mr. it's Bill for Doyle, the some a now, remarks. to to Sir? Executive comments conference turn So, closing pleasure back

William Doyle

for everyone you in call. thank participating So, QX our

progress nicely want gone the globally. our I progress our I of that's into years. Wilco It's take effort, to the to summarized amount the team been And two hard over work think just growth described. this opportunity and thank Wilco last incredible that an

as Wilco do, at we the work to and patients the and it. have got do we've lot help team forward, Looking more just to a we're to also beginning said,

thank So, all. you

Operator

This today's on all a day. Ladies wonderful program disconnect. gentlemen, the does for if conference. thank may participation have you Everybody, we conclude and your

NovoCure Limited (NVCR) 26 Oct 172017 Q3 Earnings call transcript