NVCR - Earnings call transcript Q2 2018

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Operator

Good day, ladies and gentlemen. And welcome to the NovoCure second 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 be given at that time. [Operator Instructions].

conference recorded. today's reminder, a may be As I to Ms. like to call over turn the would now

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

Ashley Cordova

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

during are results call and described in statements the those forward-looking some statement start, as statements. differ in of including could beyond required statements include of conference remind control, and except we filings. SEC Before would discussions by publicly like our time will actual risks from I to any from a We do forward-looking which uncertainties, number These to these update our intend those uncertainties materially involve to projected law. our and you risks that time

XX-Q, are today, XXXX remarks over available Following our ended turn months Doyle. in of the three to will questions. With now our press we line both the that, financials the which this XX, morning. call will for our will and prepared we remind open I for that released months our I in everyone and Bill June earlier release six

William Doyle

everyone. morning, good and Ashley, you, Thank

clinical programs. continued continued commercial progress strong second The on for momentum with was Optune XXXX quarter and development key of

priorities. to we into quarter, clear I'd delve about long-term We're two focused frame for the building we the details value. shareholder Before how on think execution like

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

pipeline. But highlight in Medicare. over we want results. submitted local help before to commercial believe This morning, request with of cancers, update tumor-treating to of a discussions I'm will financial Second, discuss clinical solid XXXX. LCD, highlight Asaf patients. will quarter coverage quarter hand our Eilon recent Asaf, that, determination, the we're range and XX, tumor can in the Wilco fields advancing second will we on pipeline on pleased MACs the to After the the progress our during in provide which our a to announce Medicare or I I status an June call progress DME

is a during keep a in with June MACs made file taken followed it a Centers methodology our The be significant by it that to whether intend state decision developed reconsideration recognize generate progress for for MACs this believe that newly-covered the current fee Medicare DME will that products submission. will CMS amount. June schedule of coverage the reflects final announcement Medicare an make it acceptable pricing the multiyear should Services Medicaid make price and when establishing the will policy or Medicare for commercially decision a for the XX We pricing dialogue new Our the decision days restrictive. program. as information within methodology earlier this to and The account XX less LCD and commercial into will fee-for-service

to share the for an timing is and quarter. material NovoCure will process. is the but guess best throughout Optune review government, predict secure revise This outcome, to follow learn decide coverage six MACs hand development months the the then the to will LCD With would receive to continue coverage favorable we it with LCD. could normal always a Assuming the take we revise US as difficult to is I the we Medicare that, Asaf estimate to desired now our for MAC It updates once local they more approximately payment to the determination, that the decision process. and call timeline our over

Asaf Danziger

progress Bill. We for XX% quarter record $XX.X contributors quarter clinical you, continued momentum In the from development key two Thank and were the from the quarter second revenue of on delivered quarter of continued quarterly demonstrated revenue NovoCure second programs. There million, XX% XXXX and to Optune XXXX, up XXXX. second first commercial main growth.

X% data. than and to second growth the end There patients quarter First, was QX on presentation X,XXX first quarter, XX% since the of from therapy XXXX year the patient active were the increase quarter XXXX. patients. of active quarter we of the consecutive more our from initial XXth at continued XX up

efforts, to active of total sign active awareness data, compliance in and GBM patients that than updated increased per newly-diagnosed in and were for increasing supported physician guideline. both positive five-year Second, our and newly-diagnosed increase The in with improve our and for revenue This part of written revenue we newly-diagnosed patients XX%, the growth in ongoing continue are growth NCCN and patient prescriptions We GBM. consistent More believe trend by nearly of Optune. XXX the gross-to-net a marketing reimbursement patients average GBM. prescriptions, is in our growth reflects confidence further spread. net for survival the prescriptions with belief QX

XX% revenue. rate contributing therapy we success penetration second in the over penetration XX of the where across markets. growth launch average million we at We with six reflects had of Second our quarter, quarter also XX% estimate patients on quarter in active these an Globally, markets, net XX% on globe $X turn the the have our Japan currently who more early end in US, are from driving I that, benefit Japan. approximately now the to will Germany over than Optune and focus. are With adoption Eilon. many ongoing an patients across treatment, and in there is XX% call can in was We GBM believe

Eilon Kirson

update I progress update last program, clinical highlight our you, will Asaf. an since made Today, development mesothelioma. including Thank the on in

solid standard all the hope indications, unmet we are incremental of pipeline believe Across current We indications needs. the our clinical standard combination continue in with with advance fields adding without to advance five studying care tumor solid of We to care tumor-treating with the toxicity. opportunities in high cancers. our as significance often early-stage we earning drive applicable in tumor-treating of do is how the our therapy. with fields internally fields quarterly in don't platform they and tumor tumor-treating programs about think calls, preclinical development a but a multiple We broadly highlight

Beyond an GBM and in under data we have the preclinical two additional lines development, in cell first-in-human tumor concept five or proof indications XX currently of data an types. additional and

weekly patients cancer The develop INNOVATE Trial will partnership The and brain lung establish cancer. pancreatic with (ENGOT) European have recurrent our between open INNOVATE Phase trial sixth We and tumor-treating be to will deepen to cell and continues cancer. enrolling platinum-resistant and utility. open III in cancer. Gynaecological leading the with promote cancer groups study with in pivotal with cancer, cancer new ENGOT and of for the a lung III research inform fields facilitate our XXX non-small NovoCure pivotal we X collaboration study from preclinical potential in combination ovarian In of later fields at ovarian to intend and pipeline, areas X understanding current European Phase cell trial trials tumor-treating clinical non-small in in ovarian paclitaxel X clinical centers. year. tumor-treating in Oncological fields fields INNOVATE patients will metastases to for this Network should tumor-treating the trial Our

response enrollment of this tumor-treating prospective rate at to we II The Phase The to will trial from the patients you the positive overall in rate sample HEPANOVA with pilot trial reported our in fields later and with recently the know, ability fields trial treated response overall results first sorafenib size also based anticipate opened was year. We detect This from study combination response topline tumor-treating XX% overall in with HEPANOVA rate advanced on calculated mesothelioma, single-arm an liver STELLAR in a patients our endpoint. X.X% with cancer. patient April. controls. primary Transitioning XX study as to historical compared is

Lung lung hosted of community late Conference We XXth The September. World the we fields by overall the detailed cisplatin with in are and the treated pleased at saw survival. the in tumor-treating clinically study sharing and as to cancer IASLC pemetrexed presentation results carboplatin progression-free for extremely improvements in STELLAR forward results meaningful and data survival or combination Toronto in on has been with accepted the patients with with look Cancer

on our treatment the we for calls, received pleural humanitarian in fields device of the later device tumor-treating year. of As use humanitarian and prior this noted the we use to exemption XXXX FDA designation submit approval mesothelioma a for for application to plan

STELLAR pre-submission a key peer-reviewed publication to to and Publication drafted of requested meeting to a with our payers journal will launch submitted package have the data is will strengthen We in parallel, the lung dialogue tumor-treating now group. ability of an a driver XXXX. our for generate I submission the with review believe In results. being is FDA awareness to post the the fields over call in we of manuscript and to later have Wilco informational mesothelioma. it turn financial our

Wilco Groenhuysen

this prior revenues you, position. growing second $XXX million, for of versus the the second the financial more the $XX.X quarter. year-over-year Total We XX-month XX% million. Thank represents for growing call a us for trailing morning. thanks joining in on Eilon. and strong XX% ended This And quarter quarter than everyone revenues was

in reflects billings patient. our patients revenues quarter, claims. on our spreads per expectations quarter-over-quarter Net million both in and as by growth the and active gross-to-net for a percentage patient exceeded $X gross quarter consensus in above were improving XX% second mix line revenue full consensus improving continued than The the approval reflect with rates improvement case-by-case more Second in a revenues active year. and net

the of and quarter an rate gross the in upwards. As XX% a XX% half $XX.X profit the reflecting approval million, exceeded the Gross individual trend margin. in to example, continues year Germany, was claims for in first

patients continue in quarters R&D our III the pivotal $XX.X expenses to income to increase trials. down anticipated statement, Moving expenses we continue will million. Phase to as our that increased in enroll R&D We future

were $XX.X expenses million, SG&A share-based $X.X compensation. million Our including non-cash

XX%. we our leverage of commercial grew these an revenue year-over-year results growth Driving exceeded in continue see to and only ongoing business SG&A remains While the year-over-year operating expenses efforts. XX%, by focus

Cash $X.XX and commercial execute XXXX reiterate $X.X PP&E. $X.X used to We used exercises like option $XX.X the on in how strong cash million the made Our in loss in our financial global proprietary to stability million excited existing clinical million operations to progress employee cash in both fund continue the in flow significant upside and future. additional oncology NovoCure with continuing as with activities, and Net with business activities company loss was or second Net with us and related the proceeds commercial purchase pipeline. and from cash growing flexibility was ended we share. in is per with are I $XXX our our the pleased quarter investments and commercial $X.X million saw was a during operating investments from million, share second includes technology, for $XX.X was believe an our potential. the quarter a activities quarter quarter. would We financing provides principally strategies. continued momentum plan. investing position million about and to we our core a are business platform

focused are clear two We on priorities.

clinical second, on the First, With cancers. to I'll well-positioned our Operator? driving advancing questions. call execute are solid both commercial to tumor of a believe open adoption treat We range of to Optune; we and fronts. that, pipeline

Operator

Instructions]. comes Evercore ISI. the line [Operator And you. Thank Kumar with of question Vijay from first our

open. Your line is

Vijay Kumar

on here. guys. Hey, Congrats nice a quarter

incremental this CMS this why us and that the going that's clarity drugs? I clarification, language, national versus a clarifications. So, you any on which be average and give out? route You we a not the benchmarking to with CMS some commercial maybe Is positive. think, and going a off was helpful? to maybe of Maybe LCD of can it's thought One, language would a look commercial, And like coverage? percentage I'll around the off at couple or play start

William Doyle

we recognize basically are Good pricing CMS of So, starts consider with positive. methodology do it morning, XX Vijay. the will developed that current How June very commercial new it this pricing. first And you? all, a announcement be that to

would as think, universal CMS base we coverage. pay private And basis essentially their on I central be call have for us that, pay the of everyone the fact, was in issue that the calculation. with knows, private

novel NovoCure good the a technology. also their adoption of and several real the to announcements think, that CMS So, makes DME in think, that I and CMS I new shows, fix fact one states issues healthcare explicitly in by it's of allow in that, in area innovators This all to more commitment technology general. reimbursement rapid for for that is device was good medical policy

again, us, very positive. NovoCure two-step for with This it's to a process So, for respect results Optune. in

the expect This, first LCD the As we is take to reconsideration. days. stated, XX we

you including is the positive, listing, has result the we taken was, the assuming supports advanced for fix that has I that the come that, all a creating all plagued start intent a historically in NCCN of publications reconsideration six remarks, And which would use development all is Optune an the fix all that again, of a And have novel as various up overall Medicare fix, DME. months. that problem but the in the X this with This the not data that prepared think, all along, We problem GBM. that was then LCD address Category process to will DME. NovoCure will specific Medicare's process stated LCD know, historically JAMA the of

Vijay Kumar

versus much the LCD paying NCCN, are still uncertainties CMS, CMS deal, the done or now we is should for assign actually a this around pretty on there therapy? Just

William Doyle

US I done with the deal. a I it Well, never government, think were. it's wish

this positive think very I a step. is

again, done think, But, in explicit fact, done in sphere I positive. don't deal. I the all in we the I fact a a say very the again, take commercial they think the to is account are can ever commercial announcement pricing, we government well-positioned that that think it the are until, with deal it's would

Vijay Kumar

but Fair And maybe on. Germany, a would is guys. with that be just on one the EMEA Street comments helpful. I moves any volumes like number a that focused was little something question – volumes. Looks happened on the enough. like you, what Thank And on bit, know quite maybe script script this

William Doyle

ask on me let So, the Asaf volumes. to comment

Asaf Danziger

Yeah, the sure. Thank question. you for

our newly-diagnosed. thing adoptions. indications important with we our GBM is So, then indication is the the main goal basically start to years for we increase with for came of And in couple and the a last most are the will these And who more – recurring can to can patients the on patients make patients sure treatment patients. who that treatment. benefit of are from patients the These be newly-diagnosed the longer stay the and

basically, can happy what And payment Germany. and to for So, from treatment recurrent – all actually longer we this that. we're in is can also what this on We, basically, see the seen bill to really in and newly-diagnosed. our get more we've that shift stay markets see, for it's patient patients

William Doyle

and underline, focused where quarter. positive to it's the in that So, growth regard newly extremely in Vijay, just diagnosed during really the trends we're we've seen

Vijay Kumar

Thank you, guys.

Operator

Thank you.

next question from Wells with Larry Our comes Biegelsen Fargo.

Your line is open.

Adam Maeder

for the Thanks instead pursue a was Hi, reimbursement I past? on I to in and And then, reconsideration guys. had decision for to LCD rejected the taking NCD. questions. the It's Adam just the an and on it Why Larry. Maeder follow-up follow-up. want of

William Doyle

Sure.

LCD So, is faster that NCD. an first an all, of

give So, to that's answer we simplest can the the that question.

Adam Maeder

how looking the level we questions, more should just taking And on US, of X Thanks recent the benefit the And of trends, we of don't then, NCCN year? thanks. Rx trend ahead, guys. March? rest for at from then, for the end the about the Okay, script in see why guidelines a think

Asaf Danziger

this NCCN will that the sure we of So, mentioned see so something the will it next and XXX make In before, the be newly-diagnosed, our us. general, be of if guidance, will we impact – is believe from quarters. as will for that start I I couple it's script say ideally ideal that in again, goal to to

guidance to will So, move a believe and effort this adoption, that patient and with believe with trend that we newly-diagnosed to increase we NCCN to really with the our continue. continued

Adam Maeder

look we as color any ahead? And Okay.

William Doyle

We is see levers for This in. continued jumping Bill growth.

with with, have more We again, healthy, newly see We for we is of for a the focus patients than prescriptions see QX. They're GBM. diagnosed that in newly-diagnosed increasing growth the growth belief. believe bucket We newly-diagnosed patients and not this physician sign positive. their said, believe patients We on steady therapy. therapy. confidence They're that's on on their XXX Asaf that. As a prescription putting putting

you and with the a confidence on our been physicians that. is As focus discussed putting that at patients time we've diagnosis of sign create of has to know, clearly

to helping we elaborated for quarters, type of the new to for fact think develop In with as to a on strongly surgery, that therefore, this set different not is oncologists. GBM. requires something therapy continue physician. like skills for that the they I physicians participate past discussed, need have the these radiation, in Optune patient a chair. It's also therapy to and, newly-diagnosed doctor recommend patient, skills or We work, we infusion of an a home is a in does putting them at to that seeing that. the We're a This has

we're that meaning a by clinician. also XX% that all per the setting, second Again, in this treating awareness that continue. to GBM more a the will oncologists And in is believe of are radiation we continuing medical community. treated clinicians more And and fewer there approximately so, that focus. is diffuse community This And drive this setting. oncologists are patients

to continue community. and and to levers term, in we the the continue trends near are And drive we've of continue the awareness that drive the So, these in drive recommendation to that physician strength confidence will the seen. think,

Adam Maeder

again. Thanks

Operator

Thank you.

Our next with Gregg Bank. question comes from Deutsche Gilbert

Your open. is line

Gregg Gilbert

to would to it use we morning. should quarters a I that net continued Good like the here? net look improvements you gross by few. for at gross seem from – we sustainable. say a Wilco, or driven are see in a things If first, have that's future the Thanks. quarter, good improvements couple to sounds level

Wilco Groenhuysen

is the when we expected you of a out continuation first I quarter. of in quarter second to think the came quarter what see what second we in the happen

some these at case-by-case States think improving. rate in getting collection German approval efforts. in an The example. our is well. United seen better the We've it's improvement We're I as market

quarter and continue to solid getting first is think to over for full the expect improvement XX% that we point I year. the a So,

Gregg Gilbert

and Switching GBM? talk of has assume as would opportunity, been if great. the over you Okay, you in treat for segment? about is Medicare you to fair And it coverage what group for then, patient the proportion by case is to mesothelioma can free patients that that don't Medicare secure those

Wilco Groenhuysen

a that's think say little bit I early about. to anything

of US, HDE now terms eligible look on Medicare. be and would approval the our right In the probably get of patient you plan. patients focusing the on XX% only and when the application incidence launch about We're at finalizing we're population,

We just do we're in We developments we're Bill these not until discussions on. discussions. with on CMS outlining So, is are was probably that emphasize will that things want resolved. to very that the mesothelioma working on CMS pleased engage GBM

Gregg Gilbert

Okay, great.

for you ongoing perhaps know with that I Eilon, studies? cetera, III But Phase slide going the on can enrollment update least et anecdotally, your is the Lastly, readouts, us, at on is how timelines Thanks. on your unchanged.

Eilon Kirson

Sure. do Glad that. to

know, So, exact don't as enrollment. update you we on

little We the meeting are more on, bit operationally, patient But have in fully trial releases we're can a – we give I think the that last on released. data color for now open. for projected are track we that point METIS, biggest by trial. basically, I and is

across United the the of So, all States. sites the are in sites with world majority of our the open,

is indication, for does we basically is of to just So, completed more across direction. the and important enrollment do all oncologists okay, think one this more oncologists, radiation I in And – screening of is that strategic focusing radiation our on on It' METIS educate also enrollment on aspect a us tumor-treating which And of because really imperative us actually actually, that okay, METIS patient of focus sites. step it's a population we're for trial-specific trial. physicians. than the fields.

and to in late on in we're XXXX So, in track as I last said, XXXX. data patient

number cancer we're stage our the for sites, LUNAR, of For trial, increasing still okay. of in cell lung non-small

And site United working than the support right and States IRB more now. sites and the startup. have We of very across to hard different approval processes the all XX we're Canada aspects

of trial, really still trial. our XX more that most the currently stages of interest cancer, have open requests the early is okay? for at opening that's time. Interestingly, sites our X, of very fact major In all LUNAR than emphasis in we stress in the moment So, fact, PANOVA centers. seeing We will entertain from and a investigators, opening clinical including we okay? can sites, ramp, pancreatic have the on I lot sites academic we're we're pancreatic

I So, we're there there think it. and enthusiasm acting upon now the is

Gregg Gilbert

Thanks for update. the

Operator

you. Thank

from comes question the of next JP Morgan. Our Kasimov with line Cory

Your line is open.

Shawn Fu

Congrats This the questions. on on taking guys. my quarter for Hey, is thanks and Shawn for Corey.

Medicare in in conversations is in for in especially you of guess, used that that's will if Optune just for of leverage US I'm conversations groundwork to that of I event approved So, ex-US, both forward your can sort wondering and be be of mesothelioma, conversations ongoing in your able being indications? current the payers, terms the to the already with there's reimbursement? laid other subsequent some sort bring the

William Doyle

again, said, as Wilco think Yeah, early this little specifics is Bill. talk mesothelioma. to I it's And, in a

preclinical I However, very with established we the for and in now was GBM. it different a be question correct. will was a very of expect of different the well beyond I start GBM. a started that basic certainly absolutely the will inference we in When we it explanation, that GBM, are with physics, is therapy. reimbursements often place and very tumor-treating a with the a think conversation lot than course, started, place I your fields conversation think approvals that lot is of and what about It conversation included

Shawn Fu

can little bit then, cancer maybe talk the And about program. the genesis you a liver of Great.

confidence. so this why wondering indication we And maybe, specifically. Just you that what far gives seen have

William Doyle

bit talk little you in can work a liver. Eilon, about

Eilon Kirson

Yeah, I'm that. to do happy

one first the Tumor-treating So, platform or basics. types. set It's – work mechanism mechanisms a different should that they're of in technology. back go definitely basic multiple solid of let's all, are to tumor one fields

that has goes beginning just simulation optimizations jump well. much. date liver share trial, treat preclinical talk studies on intensities it and as don't But the usually also preclinical to at It's with into preclinically, in is we strong into preclinical good, type translate our and of can prepared liver field There really too program, cancer All – this we've the shown that distribution which level can of good. safety have parameters to in And in And, torso and we and are, systemic and to results we from have lot success. clinical existing we perform don't we clinic. alluded our that had trials of with don't we've different There's from our I about treatment of remarks very tried which cancer a any course, we a evidence work are clinical to based cancer preclinical shown the liver, chemotherapies. course, based toxicities the on additive date trial. data on achieve that The our the set we the within HEPANOVA no pilot data. that

where feel And state confident improved very of patient local, control disease into the disease lead so, to moving regional can outcomes. we another

Shawn Fu

Perfect. Thanks, guys.

Operator

Instructions]. [Operator you. Thank

from of Mizuho Securities. question Difei Yang line the Our with next comes

Your line is open.

Difei Yang

for morning. good And taking thanks questions. my Hi,

So, from perspective. quick really just research a one

cancer? that And that asking Now cell lung the read-throughs? lung. reason you about you mesothelioma, that potential probability The for how to have success on non-small are I'm of you is do think positive related any readouts do both see

William Doyle

Eilon?

Eilon Kirson

Yeah, sure.

First our that of mesothelioma, the certain the encouraging very necessarily of is within always the in all, level we understand, something a confidence physicians us get. actually fields And of give they on distribution but don't body. which

no reach matter the fields and electric the cavity it disease chest, with there. penetrate okay, chest So, the can where is do entire

few a non-small which We showed advanced and promising data efficacy cell fields cell lung tumor-treating non-small from in of tolerability, lung cancer cancer XX-patient years which actually pilot lung back, in cancer. very have was safety a study, published

promising So, actually give the confidence. lot I mesothelioma together and confidence of think us the does that, physicians gives a it with data,

study, And preclinically, potentially cell I lung lungs, to the a non-small applied and which results think therapy the we to be can are potential in those is be we specifically, study. treat it LUNAR used be fields should cancer study such into taxanes as doing therapies, we're can tumor-treating the which the cancer do combine this when move positive. study, the to other lung clinical trying synergy see with utility immunotherapies,

Difei Yang

then, thoughts. just your Okay, the I thank quick you And CMS a for have process. on sharing question

many So, additionally, Bill, us that same for right would Optune are LCD you now? devices XX-day how think And decision? update of the in you category roughly,

William Doyle

I decision to in advanced the would and patient I be again, used but XX, the June on Optune, Again, by process are the the to the that devices the that's respect for XX-day can and, so an – idea, setting. category, benchmark. that don't LCD With confirm again, in we like honest, other that really the which have are are quite therapies home things it cover submitted

think, more you on modern traditionally, medicines that, to there look, things issue had An if Optune. not category. that like equipped bottles the group in was has this this the things I just with CMS oxygen that like is and they focused and were are like walkers, deal

determination by the been chief administrator why was for So, we've a it last pricing data all a we the we LTD seen the reason the that a process. in this was issue to solve there problem. very are methodology. with her and happy multiyear progress presented. real part We the not was of were particularly, this It And was lieutenants until had a And that's submit fundamental given that with we to year, And finally the all willing advancements about have But statement and that we submitted. very thought case made. why the again, good determination, a CMS.

Difei Yang

the additional color. for Thanks Okay.

Operator

I this to further time. showing Mr. now call like Thank would you. at closing back And questions Doyle remarks. for to the I'm Bill no turn

William Doyle

everyone So, their interest want thank to I in NovoCure. for

to pipeline. both growing the our the clinical the opportunity with NovoCure I thank made want progress and, that during making we've pleased in was that management GBM this think And extremely of terms worldwide. I and do business we're take in to of refining the quarter, all course, employees of progress the

we're clinical the really can new company running incredible the And thank plus global trials, them. business is to a company growing preclinical want you doing a imagine, and requires that a from that's of III number work team. As Phase a dedication that relatively incredible I

we'll So, everyone, take you see next care, quarter. and

Operator

program. today's participating gentlemen, conclude does conference. the for and thank you Ladies in This

day. You a may great all disconnect. Everyone, have

NovoCure Limited (NVCR) 26 Jul 182018 Q2 Earnings call transcript