NVCR - Earnings call transcript Q1 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Novocure First Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Ashley Cordova, Vice President of Finance and Investor Relations. begin. Please

Ashley Cordova

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

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

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

William Doyle

morning, And good Ashley. you, everyone. Thank

proprietary opportunity. oncology potential. investment call and I growing quick typical, of a company, platform Novocure Novocure's commercial a a is upside start business is today's global significant technology, with As will with a summary

articulated long-term strategy have for building We a value. clearly

adoption First, of the of driving we commercial GBM. Optune treatment are for

to in affected fields to therapy preclinical frequencies Fields is of Fields growth Tumor die. disrupt uses and causing pipeline electric to Tumor range Second, tumor of help specific which tumor and in believe consistent tuned can shown that has clinical our date, Fields effect. a Treating inhibiting anti-mitotic work a work solid cancer to cell Treating cells we all cancer clinical cell cancers advancing a patients. our division, In we are Tumor Treating

five-year fit cancer newly-diagnosed and GBM, pharmacology. and of promising believe pancreatic cell treatment unprecedented modalities cancer, We results in time pilot cancer data mesothelioma survival side-by-side lung have other lines. the data We in Tumor therapy II with cancer in ovarian different XX Phase that Fields radiation and preclinical will Treating in surgery, cancer,

pipeline needs. indications to five continue advance high tumor clinical in with solid unmet our We

We in metastases have Phase cancer. III pivotal cancer, lung brain lung trials cell pancreatic cancer cell non-small and open in non-small from in

We Phase open III are to planning in fourth cancer trial in XXXX. later pivotal a ovarian

GBM. for and we XXXX use the the impact HEPANOVA pilot received approval. brain for for We application NCCN the announce analysis In year. look is improvements trial liver globally outside pursue real FDA conference. these Comprehensive the late Mesothelioma this The [ph] Network of can March, The We additional the with exemption or in of recognized I reported the community sharing demonstrated detailed of a National and pleased clinical clinically Novocure that medical later Cancer first all approval lung GBM. in cancer indication many to opportunities larger upcoming an to we positive to its market updated survival week. results in the efficacy at device very guidelines STELLER forward am the than humanitarian will submit in comprised FDA II are indications which planning for in Treating which our oncology and practice system Tumor therapy. the field exceeded STELLAR for that they X pilot meaningful glioblastoma after use and electric high each supporting and This consensus in of cancers study XA designation therapy Novocure of sorafenib. the trial temozolomide Phase newly is in of also alternating II overall free results prior for radiation recommendation combination our evidence of uniform maximal results to results resection mesothelioma there treatment progression times nervous last include as from a for advanced STELLAR Device cancer. is Use therapy topline an topline plan central Category Tumor the of pleural safe Category Humanitarian patient are outcomes survival. interim upgrade Phase trial endpoints believe Fields completion from to make These level reflects a for treatment we and mesothelioma in with will combination with a We in diagnosed Fields that Treating a diagnosed newly

more that Asaf them. are to progress upgraded how who X will We the validation soon now currently commercial our from too an should field is to will the us NCCN adoption, is the we the to and Optune GBM brings extremely over that, quarter. benefit are understand panel NCCN NCCN by recommendation. support patients important during our review pleased it help the with treatment uniform on believe benefit With listing the heard from that to to While Category the hand first the reach guidelines call there clinical we have patients can and are many visible I and of upgrade impact therapy

Asaf?

Asaf Danziger

Thanks, Bill.

written the patient versus XXXX. more increase with Optune increase of represents and with pleased quarter U.S. estimated on QX XXXX commercial for a rate We in XX% QX. Optune. quarter prior active note, in are markets. our This an than ended XX% were We year-over-year. penetration more the Germany, XXXX momentum Of the XX% on is treatment prescriptions largest patients than our during XX% a in in and two This

specialties and all driven strong continue thirds both U.S. across our Newly of performance GBM approximately by was prescriber’s diagnosed and represent Growth volume. Germany. in prescription consistent to two total the

were prior key of prescriptions XXXX at the We SNO had reach we and able presence to versus neuro-oncologists versus in quarter believe this our quarter in prescribers. In our and belief first of XXXX, first the on confidence increased presented and at XX% segment. XX% data volume TTField many we therapy grew XXXX. the significant quarter customer November SNO a Our

also standard-of-care data We publication to ongoing capstone the believe EF-XX journal marketing our in with event coupled for in JAMA, served newly as our field the data. the momentum the events has unprecedented drive diagnosed publication that of quarter. year The EF-XX December appears These prescribers XXXX belief confidently Optune hear GBM. for communication are we we the five Anecdotally, survival from and efforts discussing increased helped most given publication as commercial a peer-reviewed sales the In The level in and reduced have hear a awareness field. broader the JAMA with and the of saw and and community. also pushback prestigious increased in the in XXXX, [indiscernible] a confidence data discussion launched our patients the of [ph] the medical in in of to Japan. Optune appears we we peers have QX it now

into the progress a I in in began expansion growth to support our graphical opportunity XX represent to and the our tangible prescriptions As arrangement through patient in in financials. XXXX, national received the reimbursement we process. example services patients drive contracting of Japan on hospitals. markets. Japan we hospitals review [indiscernible] This contractual with a in the Wilco quarter, turn XX we Notably therapy Optune these reminder, business, end. initial With at call to will under through December additional distribute with GBM quarter that, provide the

Wilco Groenhuysen

you, morning, Thank everyone. And Asaf. good

cash XX% year-over-year and worth launch month representing Our was of XX XXXX, in revenue first benefit under quarter revenue growth XXX, we the revenues recognition efforts growing and January X of initial increased to and million, from prior million, $XX.X that as adoption XXXX XXXX. sequential required versus States representing standards we Japan. the reported accounting the United $XX.X Optune revenues the Revenue have If transition. $XXX new quarter had accrual It driven in first Germany one-time our included ASC is quarter XXX quarter of million. revenues the X% we adopted by XXXX standard, reported revenues FASB. approaching ASC recognition first fourth would were noting, by trailing growth our Effective

XX% for full of that $XX.X of As XX% revenue An $X.X would million in total as in progressed or these year future in was that part last revenues [ph] plan million timelines largely in net a the to adjustment sheet revenue earnings absorption recognized gross balance We as opening million mix reimbursement defined driven by believe cumulative Net which profit was for or This XXXX. policies. the been claims the gross we we quarter the under additional our of by on approximate million. quarter the $X U.S. the the new will Gross same $X.X an for billings net of outside approval recognized in a of recover booked of $XX.X transition, will for was and year ASC $X.X million of billings have compared standard first impact XX% percentage implementation XX% retained quarter first XXXX. of XXX. of revenues be approximately to of toward by deductibles a year the the under revenues patient fall year. quarters throughout in trends million of quarter

efficiency with a and We in reduce and quarters. to as initiatives profit of expect cost revenues future scale revenues of percentage have ongoing net gross will improve efforts the

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

$XX.X business see same and results operating were our we $XX.X an continue leverage the million the in of year. Driving remains these compared for to the million expenses efforts. SG&A commercial Our to for period ongoing last quarter focus

impact grew SG&A expenses increased year-over-year. XX% non-cash revenues excluding compensation based share the of XX%. by While

XXXX, same XXXX million operating loss compared from quarter per reduction investments year. versus million burn operating same last for the to of loss period cash in business. $XX.X year. $XX million quarter the cash a increased increase business $XX.X loss XXXX of the across first in XXXX. loss last share operations first profit was $X.XX share to million $XX.X million $XX.X first an gross or of a more Net million period for in the was used Net The continues per quarter fund GBM $XX first than of $X.XX for to the the net or Our was for of of quarter our compared

quarter of would like the our and sales core momentum to the to publication in drive growth and in the equivalents cash in our short a million reiterate the short financial marketing employee Optune driven strategy. XXXX. and investments. first presence our final and launched continued for annual the in March bonuses, milestone first The XXXX million demonstrating to position we $XXX.X During of how At $XXX.X during had We flexibility ongoing markets. I cash JAMA saw million equivalents EF-XX execute payment in we through cash paid quarter. total strong We well in Technion. SNO believe efforts. made term expansion December geographic are cash and $XXX.X $X.X provides November term pleased we XX stability opportunity as the We in final as by million of commercial Japan additional data as progress investments XXXX, at we balance on cash, and with strong our

alternating Category electric Additionally for include NCCN a diagnosed glioblastoma. newly with guidelines updated were recommendation therapy temozolomide field X to as

for we Device positive Humanitarian business significant a pilot reported technology, from is trial Phase upside Exemption now a application mesothelioma Novocure a our STELLAR commercial a topline growing proprietary FDA and global to approval. plan II to results week, oncology and with company last potential. the submit Just in platform

on We clear priorities. are focused two

our Optune positioned fronts. advancing open Fields Tumor both that, of we help cancers to call for range questions. treat a Reading to pipeline I'll on are to where clinical try solid adoption commercial we patients. well execute think can of the Operator? First, [ph] tumor and With believe second, We

Operator

come will Larry question Wells first the Biegelsen line The of Fargo. Instructions] from [Operator you. Thank of

Your open. is line

Adam Maeder

from reached for Maeder for study questions. data Adam you with Thanks in Do STELLAR have to want the announced final interim and in analysis than the data study there? the not that Overall you the week Larry. the It's final better I that efficacy share start interim mesothelioma. can has what survival analysis. was guys. Last endpoints. Hi, you in all taking the in

William Doyle

question Yeah. good over Adam, that turn morning. to Kirson. Eilon We'll

Eilon Kirson

Hi, Adam. Thanks for a lot question. the

into know, free reach the now not you both as and as interim the we can said progression we've - interim that would and you median, certain So see are that. extrapolate the [ph] beyond you numbers, the definitely we currently of what I that analysis. survival seen way analysis median they the we're reached exceeded survival overall the you tell didn't had but results The

we're result definitely they the so And meaningful PFS. pleased demonstrated improvements with both OS in and very clinically and

Adam Maeder

you the launch launch pending. Medicare then then meso of then time think about approved, with just And Okay. the maybe I do separately, quick SG&A [ph] review with Once how file can spend with can is quickly is indication. you fee indication? how you reimbursement service street how ups, two quickly for meso And still think XX days. that. And for the Thanks the should HDE one new the typically follow know incremental FDA.

CMS? with So just the latest Thanks. wondering what with the discussions is

William Doyle

planning to That file in a the team answer submit HDE XXXX. just the to the the FDA pleural then we We're do direction ready take this we fully data use allow designation year, in second have us for half is The I'll to expect pre-submission two. baked, of mesothelioma remind have we and to So to of humanitarian received with the which application. first a go meeting an allows plan Adam, moment HDE other okay. those you, and XXXX. And three in device to and of the the

it to a the respond day okay. said, does you As review have application, to time XX

timelines get that think So sort think exactly be, I response for will what you say [indiscernible] we guidance cannot can we FDA but - of the I that

Adam Maeder

just And on launch incremental new color SG&A with spend indication? of the any Okay. the

Wilco Groenhuysen

Yes.

is this Bill. Adam, So

the finalizing exact but right launch that, assuming We as are plan Eilon on have developing now scrubbing XXXX. spend, we are said, also any full now SG&A file. so right to prepare – just We're we're guidance data in don't launch and and we our

Adam Maeder

then couple Okay, - together so questions just lastly just of a on threw Medicare thanks. And the I there, reimbursement?

Wilco Groenhuysen

Yes.

continue with know they billing discussions focused code our Medicare, frustrating feels don't reaching timeline. we that tangible and to Medicare and They're So want to Optune. engage extremely making a resolution. pricing frustrating progress I to know discussions it's imagine the have defined well. real with you, in again, and correctly. billing active ensure CMS We constructive. on as pricing it it's all towards us now a have respect that to been we're calculate But CMS. for to can The right as you we And if that appropriately

Adam Maeder

Thanks very much.

Operator

come you. The Thank Yang next Difei question will from of Mizuho.

Your line is open.

Difei Yang

Thanks for question. my Hi, good taking morning.

you a a we for bit gross So just that the would you're front. gross initiative on a be to couple are goods have on trying on initiated then more the improve And bit – that I net to net, stable quarter? Then in maybe to on – side. follow on able of give changed to a mesothelioma. different is up What more and has show QX little the us little sold. financial color Wilco, cost color this

Wilco Groenhuysen

morning. happy the to be Okay. financial answer questions. Good I'd

with with to gross slightly the net quarter, you've the start the was as seen to to to our - net, in gross XX%. over So start

U.S in We first cost in yes, in mode. XX% also of When we’re passed calendar much you showed we’re plan, such seen geographically. full first script which tend patients deductibles to as expect years. for Certain expanding quarter. things We goods – year, the growth as to see debt you've we year. to a in kick substantial XXXX We've we’ve you to off go in with as active pretty the prior earnings growth, the approximately sold, tend for be the as other full the happened call not do in quarter, quarters, the mentioned

immediately deliver expanded needs those sometimes and So have to always costs to are that. growth slightly absorbed not infrastructure you realize be then the and

to operating as year. a of our we leverage the decrease our revenues And in the to well in call, COGS SG&A percentage said as expect So in as throughout expenses, we are as both we COGS. committed our

Difei Yang

Okay. value color. very mesothelioma, then the on Thank [ph] you impressive. was congrats for that And

quick a just question So on reimbursement.

as you you here GBM see you the do as payers? discussion away, get by maybe will the we'll quick the expect sitting the reimbursement take adoption has long So once GBM cleared think or approval

Wilco Groenhuysen

fact think decades know, a answer or fact done prep will do precisely. You constituencies, now terms the work of preclinical in I indication question we’ve in that and so KOL, what research to second TTField that know, of is you peer-reviewed GBM, were started and volume of that all publications on when that's the we of be impossible we educating literally this were. GBM the literally payers in

been is work done. that of All

results patients. on we'll that and focus I to the know, the trial a expect to will shorter inevitably So do data be conversation. able that you be And benefit

Difei Yang

Okay. have foresee additional or Bill. trials strategy, ex-U.S. mesothelioma And enough do you can you data Thank before you, file? final do ex-US on file you to question

William Doyle

So, I’ll that… answer

Wilco Groenhuysen

you. Great. Thank

William Doyle

So also we're don't other an is have currently enough evaluating at geographies. moment. assessment But be for good this will it data geographies, the enough good believe FDA, that in the different other for if do approval we pathways so we

Difei Yang

Okay. Thank you question. for Thanks. taking my

Operator

next Deutsche The Esther the Bank. is Rajavelu you. line of of Thank question from

open. line Your is

Esther Rajavelu

provide LUNAR Hi, III I of be That seeing trends there. helpful. in the Can you and trends for for some Thank you you're Gilbert. if interim know, and am initial in timing the have trial? my would discuss enrollment PANOVA in Gregg any And you taking clarity METIS calling readouts? I questions. trials on he two. can on

William Doyle

address Asaf, can Maybe that.

Asaf Danziger

Yeah.

So, thank questions. you for the

trials discussing for not the recruitment enrollment. We are

in for However, we PANOVA XXXX. patient in LUNAR still in and XXXX last anticipate

Esther Rajavelu

Thank you. And then my second question…

Asaf Danziger

Go ahead. Yeah.

Esther Rajavelu

METIS? on then And Sorry.

Asaf Danziger

on have know, no analysis planned METIS. interim So on METIS you we

of plan. So last also is in protocol part XXXX the of will patient the and this - be

Esther Rajavelu

and Japan saw in place? reimbursement on initial the you U.S. without seeing where was you trends can launched if compare EU question in the and second in trends Okay. to maybe you uptake And then that the my you're

Asaf Danziger

This yeah. that. a thank So, you question, is great for

So and that difference was market the and start which you and Japan last different is, tell other - a we Japan main that actually game launched all other I we week we a reimbursement, I the can totally national is in to have I between comparing think – geographies.

you know, So give will I backlog. you the

start with had We the you to know, reimbursement. before - U.S. will in launch we

different Japan is contract model challenge. So hospitals. basically in totally we the business its and different. hospitals challenge The are building the We

know, very the the believe I And you progress we're and were we very in with in and now first happy I'm So with in results so far. right quarter. launch happy the mode Japan

Esther Rajavelu

one on up So follow I that. have

So billing the rate being you’re given see markets send you experienced different do directly, that other in the hospital device you patients? what fill than to where you've the

Asaf Danziger

now So right seeing early say about anything I to talk too is any - it rate, so we're right it fill now. not cannot about

Esther Rajavelu

Okay. you. Thank

Operator

The question next [Operator JPMorgan. of Cory Instructions] Kasimov is from

is line open. Your

Cory Kasimov

Hey. for the I have it review the day it XX is for guys. questions. exemption my a Good taking there begins? some or question. on a first earlier the I of FDA first then following start that morning, clock application accept time window and couple the does file mesothelioma, for application you And guess HUD for Thanks to the up from

Eilon Kirson

I'll take that one. This is Eilon, Cory.

So accept starts well, you actually time they time it it. the – from the

know, cover they moment letter when XX-XX clock starts. and you that's [indiscernible] the So their the get

Cory Kasimov

your what I that's I you JAMA up year kind I developments is to the maybe how But, facilitate guys on back to consistent then Category I'm are get on? between your impacted end this? And guidelines there the also recent by have extent frustrated the mean, on forth negotiations data, X where going therapy some now right. the you have the the and it. All of do curious these follow five and of can more now, publication, this some time Okay. all know And to Medicare asked about updated the wanted reimbursement,

William Doyle

Yeah.

morning. of all, So is Cory, This Bill. first good

a of You're of I think the that no is we're or the absolutely that course, Again, constructive but there the validate were now help there upgrade engaged. discussions. of I the but this timeline, we seeing - dialogue you think certainly that's standard drumbeat care wish discussions. steady NCCN the that positive our we're I and that right, think achievements data what with helping And were timeline, a question wish particularly the know, you were there's reason

Cory Kasimov

can and now single that terms be in more a for wonder are the final going how be Okay. you're of point should I pending, prepared trial is randomized to to where And details expect and to maybe study to we your a liver going cancer is I question any sorafenib? mentioned you you big comfortable or with have starting start study on this going the if arm give in is remarks the you in plans then with this - that's

Eilon Kirson

Cory, I'll that answer its Eilon.

it III theoretically do before the we systems also over both establish now go will place. So tolerability the which fact, need when parts different the time of with to with Phase agencies. we starting it's our gets is into requirement pilot you are treating Maybe this regulatory our know, know safety by go study, in that and for we requirement into still you but body, in down,

we start so with launch definitely It's single study. sorafenib. And relatively pilot with going are a study to small

Cory Kasimov

great. Thanks my taking questions. for Okay,

Operator

further Thank back closing are call you. time. queue over for I'd like There turn Bill in at Doyle the Mr. to remark. this to questions no

William Doyle

in to great team prescription much. than We reiterate quarter-over-quarter active and to that was for their very - you XXXX And want accelerate thank an trends. Novocure. interest great want everyone for extremely with just on of commercial course, what thank thank more saw I therapy, our quarter. So momentum I and patients

also know, an know, you approaching that was month with have player established Japanese you launch. XXX revenue the that Now global oncology certainly underlined XX in trailing million we of we're and

multiples presents mentioned. other cements clearly you which to tangible the STELLAR very step the know, that of As the is the opportunity. we've variety the care I to bringing tumors as of paves mentioned it's And a the to path there in one to guidelines on maybe of step, question Each the hard Category - GBM. to way GBM results, is I in TTFields of upgrade answer opportunity of think us first standard solid NCCN first the of treat X, Cory's the

for So I I for your want their performance And thank the excellent our quarter. during want again, interest. team to you to thank

Operator

you. Thank and conference. gentlemen, concludes Ladies this today's

You disconnect. have good Everyone may now day.

NovoCure Limited (NVCR) 26 Apr 182018 Q1 Earnings call transcript