NVCR - Earnings call transcript Q3 2018

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Operator

Good day, ladies and gentlemen. And welcome to the NovoCure Third Quarter 2018 Earnings 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] As a reminder, this conference call may be recorded. to President conference Relations. of like Cordova, to now Vice Senior Finance would turn over the Ashley I and Investor

may begin. You

Ashley Cordova

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

risks and statements 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 discussions involve during from Before by of, would statements. as you I in forward-looking start, those SEC statements, 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,

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

Bill Doyle

in countries continued with around in the And progress programs. consecutive XXXX. therapy our diagnosed initial The in of quarters more solid morning, presentation has on adoption was the good GBM GBM. GBM, our and exited driving EFXX the by established grown million diagnosed to revenue active commercial the commercial for Optune. development number remain QX, and patients Optune momentum XXXX XX globe. Ashley, we on than newly in another you, supported newly committed quarter quarter We've clinical data reported and $XX.X with for NovoCure growth six for of QX, patients was of revenue treatment X,XXX We tangible since in of operations Thank everyone.

This Macau quarter, the to I a with Lab tumor-treating Zai and our tumor priorities strategic tumor-treating and we is biopharmaceutical throughout company is with shares a Shanghai-based development and accelerate Lab. the The am Taiwan, with aligned fields solid China, Zai need. our in commercialize collaboration the particularly establishes in grants forward passion treatments I Zai innovative beyond pleased GBM. for working The to intended indications partnership Kong, to Zai Optune a look announced options license Hong available Lab agreement patients collaboration collaboration with bringing in to of that fields to Lab patients make the world, Zai and to indications. develop development to multiple team.

at tumor-treating differentiates NovoCure commercial the development. brain. indications, for GBM, most approval tumor our or our a submitted closer FDA growing the one believe of of solid mesothelioma, brings us malignant of fields first application pipeline, other business in humanitarian a potential pipeline our stage of in in recently progress device of We to outside believe exemption and the specifically variety Speaking, our pleural of from HDE combination we indication companies clinical which the to we step in

of review to to the Before with I hand want Asaf, I status discussions Medicare. call our the

the the Medicare CMS DME policy all in a you or regions. will single and in request June MACs As XXXX, determination, policy, DME Per joint submitted Medicare we DME LCD, reconsideration a issue know, applicable local X coverage MACs. to

from the hand which or LCD resulting period, on now developed for We Manual. implementation MACs accepted that, to the for CMS MACs Asaf. the the changes the timeline, language guidance fee take The proposed the Medicare. of previously allow XX GBM reflects will new reconsideration, commitment leadership's and LCD. XX-day establishing they a Processing plan to announced the Century a to for have notice that final newly call LCD our it the Under coverage, comment they XXXX, to when by covered Act. The In Contractor for DME the DME is LCD Medicare the policy and proposed October, filed reconsideration Claims LCD finalized that have but considered reflects modernize how believe provided newly diagnosed DME CMS be be I'll reimbursed confirmed MACs Committee, newly recognize are adequate XXst and for the The LCD commercial to DME they products to new CAC, covered process, to a reconsideration decisions process not will newly Cures revised assemble during new process and in confirmed the Our prior pricing will newly diagnosed Medicare that Optune the the publish have Advisory of information period, will calendar effect to comment the CAC has days DME pricing, govern to CMS methodology to that the least this LCD With follow for the plans by set steps diagnosed plan final publishing are following current follow a updated MACs DME be a a following at October schedule. and fees public GBM. subject will specific published. for GBM, how the for publication requests to provider a diligently The over Medicare confirmed LCD treatment working announcement of Optune. LCD take also community. final

Asaf Danziger

in for Germany, Bill. and GBM you, that patients strong believe the primarily Japan. U.S. the for neurosurgeons of radiation are We believe are TTFields Germany to likely We of a more receipt recommendation. radiation grow oncologists Optune diagnosed upon the patients very Thank quarter, that use choose GBM. physician and partners Prescriptions from driven by confident to for newly in third in continue with prescriptions oncologists and

As patient unprecedented who several survival expansion reduces live These initiated years its considering in Optune. patients Facebook Optune our connects five of houses Optune, patient diagnosed experience in of to focused initiatives a data include result, open drive awareness markets, body an events, GBM. with programs have newly Optune, and have caregivers that we program and directly local and

and campaign in with for in launched both Life patients nearly resonate diagnosed also marketing to life of U.S. new [indiscernible] campaign survival way physicians. play. We intended This and in the on long-term a highlights quality benefits Optune’s patients a GBM Put August

We quarter, GBM are equally the pipeline. for focused income and driving on the contributed the third adoption committed business Optune GBM to to our by in generated In operating of investments research treatment development. advancing of and are

which business Eilon, believe, value We established activity. in NovoCure's potential. platform, significant there and research to turn in combined commercial an our highlight will is significant With pipeline over with I call progress to development that, continue to the

Eilon Kirson

you, Thank Asaf.

effect. tested, solid destruct know, to single uses tumor-treating action all of you tumor consistent cell we had As have cell opportunities to tumor-treating lungs multiple all tune provides mechanism fields cancers. fields has cancer In a tumor in electric specific This division. fields frequencies

lung be research other not tumor potentially cumulative cell no has cell agents, fields. certain cancer, pivotal we metastases found in with to non-small our proven have parent We tumor-treating pancreatic to to, cancer from tumor-treating have brain observed dose non-small synergistic enrolling to additive fields three lung does line of yet date, In with that clinical not III opened or a our In in cancer. anti-cancer toxicity. in limiting Phase and pipeline, respond trials all cell and

control and The We fields, in a ovarian In pleural Phase carboplatin also No cancer and cisplatin alone. September, overall of standard significant received standard cancer related in XX.X care care of a median reported. treated adverse months received or liver XX.X extension in who pivotal tumor-treating presented patients final STELLAR events serious with data a median historical registration chemotherapy, in device fields demonstrated experienced trial to trial compared who of II of Phase in plus have opened patients our later historical pilot this among to data tumor-treating a pemetrexed with months to were chemotherapy III overall of we the Malignant planned mesothelioma open STELLAR survival patients results fourth survival compared trial control. year. mesothelioma.

brings torso and held a pre-submission submitted the of we the quarter, our which application, closer FDA, to we us have we our our treatment via pathway. on the In calls, in allowing use the Use prior we of malignant received for HDE noted FDA Device meeting group for one step for the As indication. CDRH mesothelioma potential approval lung HDE Designation third the recently tumor-treating believe fields Humanitarian XXXX, pleural first of with

Center, This we our analysis as research We Previously EF-XX recent the platform multiple and technology. to of develop that which and have fields on presented most disciplines. ASTRO a plans tumor-treating our post-talk both seen of patient across increased and significant benefits. growth West that of informs predicted more pivotal III was intensity with demonstrated in look compliance. fields believe demonstrated we significant associated on delivered has where week, to data publications engineering independent clinical presented number awareness increasing the power in At in led Optune time to survival improved further abstracts survival, data field of tumor-treating years, our bed earlier density of Ballo, analysis a trial, which from tumor radiation Phase driver. higher this density EF-XX the the electric oncologist at overall Matt Cancer Power Dr.

in defined at therapy to tumor-treating we believe turn of the patient dose types and results. cancers, bed in of tumor to more way now be we For evidences of things the tumor to therapy fields to this I a therapy. With seem to many look the vision when of density and can delivered tumor-treating the as these to further both the realization I potential the fields, progress upon will the applicable years of has insulin now has dose time manner. fields Wilco review believe the improve be call a Similar tumor-treating potential supported financial our the outcomes. broadly over towards delivered sought as that, of radiation power forward the on generated, solid applicable that calls. sharing as same to factor findings, future Based over

Wilco Groenhuysen

on us the for ended and the joining quarter financial position. for call you, Thank thanks We strong third Elion, morning. in this a everyone

year-over-year, Institute of for in rate quarter-over-quarter. a German This reimbursement Germany gross-to-net Committee, Optune methods of This Third timeline growth growth evaluation by improvements previously both of anticipated for $XXX XXXX, revenues XXXe GBE, Improvements additional Health approval than decision ongoing by $XX.X for through September in the million by it case-by-case is acceleration quarter X% the the Efficiency or of that the regular increase GBM and evidence Germany, data. an in and diagnosed was diagnosed strength Quality newly We EF-XX diagnosed in were primarily start for newly growing Joint trial. the XX-month trailing develop speaks for GBM with need In to patient announced will through in revenue approaching more basis claims clinical million. proportion national Federal spreads is to to patients believe Care. rates this individual driven gross-to-net Sequential from and claims. XX%. the an In net evaluate revenues Optune without the secure for were a GBM a spreads. IQWiG, This pathway. the on through in resulting active approval XX% process our increase to represents claims newly and driven reimbursement German now

to advance the continue efficiency in we Germany. as in improvements and to payers spreads individual a million, for in XX% Gross quarter through basis reimbursement expansion. the reflecting both margin. build contributed have Ongoing process a gross-to-net profit review was national gross $XX.X initiatives We margin

we statement, expenses research development increase continued $XX.X in million investments income be the with the in R&D in to down quarter. Moving and

R&D expenses next or data advancing ongoing With quarters. we three potential have increase pipeline, three final readouts an within for Phase will III the future the anticipate continue pivotal We in to multiple interim clinical years. a trials that creating

to including $XX in results compensation. continue were an our million million, the leverage operating efforts. ongoing see remains $X.X share-based expenses we our Driving focus, in commercial of SG&A business Our non-cash and

income business to development. $X.XX quarter the loss third Net with by in loss share. $XX.X and investments operating Our quarter was million million the was operating for GBM XXXX contributing research or per $X.X generated

cash operations equivalents with more related quarter $X.X from flow with the million $X.X cash, used cash million net positive of with have increase quarter that We execute We investing the cash core advancing We and provides strategies. and versus tumor an from an in $XXX and than cancer extended as have upside $X a to significant investments proprietary third pipeline we solid net third company in of NovoCure in activities, runway midcap indications. believe in platform cash flexibility the with short-term the PP&E. NovoCure million million ended is principally second investments, business stability commercial established potential global a we financial quarter. our oncology and an multiple

two clear on focused are We priorities.

second First, driving of commercial Optune; our range solid pipeline of treat clinical advancing tumor and adoption cancers. to a

continue to We open to positioned we Operator? are the execute With questions. fronts. I'll both call well believe to on that,

Operator

[Operator comes Evercore from Vijay question ISI. you. Instructions] Our of Thank first Kumar

line Your is now open.

Vijay Kumar

for thanks taking my question. guys, Hey

a been numbers challenging relates not in big numbers in Bill, question are environment maybe So where environment. picture with stocks where sleep It's this the are. line really growth for

fringe mostly GBM something happened primary understand of quite with changing? how I diagnosed? I there newly about scripts driver. bit. or should a right radiation Is maybe the strip because oncology is mentioned forward? run Was frame So going thinking we this the number something know you be recommend help being that context that And

Bill Doyle

morning, questions. your Good very much for thanks and Vijay,

comments with we on. start any I'll add So can

growth benefit. very provide real this our again, the progress strategy-focus focus Optune in programs. in patients scripts, key for of commercial both courses respect around in can developments to With So a of that with our to our solid the to well the quarter clinical as NovoCure all long-term world areas, was as

continued most growth where the growth that prescribers, from neuro-oncologists first. benefit oncologists, And therapy. in and in that pardon, think, a benefits GBM. a at the are of power presented the used as ASTRO all saw in -- however, These that also also, therapy they're detailed effect with impressive respect find, aligned have community This the very oncologists survival are the using data partners most that is data, radiation overall course, survivals. on is understand diagnosed patients clear that area. Our GBM. of radiation where, density We the They this of absolutely longer just respect the We radiation focus clinicians and power to reflects I dealing with respect oncology to confidence company neurosurgeons specifically it fit increases. to it. increases, kind overall It's with therapy, because we the natural continued because duration on is data, the are that that to With radiation of of was density with. newly the oncologists

oncologists groups prescriber radiation important, long-term, but the of all are with So I think, respect natural partners fields. are tumor-treating to the

Vijay Kumar

need That's helpful. a obviously And reimbursement both deciding CMS German right. with to Maybe without go quarter to a updates. touch just couple I one with of Government positives the topics, have the in was those for trial. you process ahead want the clinical of the on

six timeline rates or that be we And Like within German So, And we XXX%? next months when up about -- or relative this update. are what’s on should the how we forward, second thinking now reimbursement is this the is -- being CMS process? to Germany, up reimbursement -- can LCD trending to when XX% how expect takes when months? pull XX

I think process Century that mentioned, the it’s you they following Cures a are Act. new XXst

you have say CSE You committee. the

is Washington So I in Assessment had because Tech recently. think involved you the State committee, who CSE

flows those into any how CMS. So of I all really not sure around am comments

CMS be around side, helpful. I Your positive think, trends comfort on reimbursement would being the that

Bill Doyle

a questions. So lot Vijay, that’s of

it try let down. So me and break

the clinical clinical not NovoCure. Germany, positive GDA believe communicated to the developments I’ll they So determined do EF-XX and fact news data, result it the We start that the Germany the that CMS of very required. are and us no we the in both with simply that it's for of is I think that and additional evidence strength additional view, require evidence. that

again, we don’t strong know governmental any process accelerate we That two believe this a timing years. to while are, So, process, the does said EF-XX that three and of it’s result precise data. the of the think, by I we

And for reimbursement of number news to the the We’re to think continue to believe for here will That prescriptions also here that further. we sales rise. NovoCure, to takeaway a on has are With dramatically increase XX% respect a But and governmental our Medicare, diagnosed number is I Germany. continued newly is increased accelerated confidence news coverage. fronts in good timeline for that now Optune GBM, good of receiving different NovoCure. therapy to that we work approximately this in for

us, conversation, and think leadership therapy to the reimburse in they of they comments, and that to modernizing where list of novel As it's this that result DME CMS is category our that my to clear some I the way our make as is in degree, way decisions that I falls. a committed a stated of

very And so future is I this to think, be indications, all going for good.

is. now be is feedback we we've already good, is don’t will always there be the But calls from is what Cures more said, the do know viewed. NovoCure of that to analysis Act, I a GBM, more a know be therapy precisely these developed. this of there we expect of anything most and we don't think is transparent this very One that to much pharmacoeconomic -- positive this data Washington process process. CAC, important going this this and and with feel we who process and a we In but you represented things And the result is how Optune on -- defined be before called think the that will is the XXst to to immunity. believe don’t now include we mentioned has I before, on the will Century

direct don't timing, this the have and Optune CMS. proceeding the is the from And is the on process. while with And that exact they're process. deliberately have we we do result a focused of commitment conversation there Now also, we

Operator

Thank you.

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

open. is line Your now

Difei Yang

a Just couple.

very Bill, U.S., we you patients of growth Or do we part growth? mid-cycle in getting are you so the growth? if still high GBM kind where the the for on on So the we're think level you the growth think think Are curve? about flat of do to

Bill Doyle

Yes.

as for So we We guide. question. a Again, very thanks important think, that knows, I do, don't that question. the is everyone

we the number still That XX% more I This far And active to don't I is patients and We are for the we're oncology. difficult we U.S. believe to the of That's who education compete. sort I choppy believe oncologists, of U.S., coalitions. in new predict there said, of are The as and think said don't where relatively we in that it progress benefit. will the mentioned education neurosurgoens that patients. the again a of it's particularly reason small we've at near to timing, indicated not in a this neuro-oncologists, think, GBM. path be making therapy ultimately be that And predict today and that timing always the we is and earlier, the is and in approximately a -- personally guide in national penetration us to that Japan, will real the many Germany radiation think said here, radiation to is partners with our our I the this. of can requires easy markets we're remarks and XX%

Difei Yang

by these changed be fields, down up the the then, for or physicians? power color. are electrical to density you parameters in And or that Thank can turning down Yes. --

Bill Doyle

an and the the much. to excellent leading locations place by planning on patient, power very question. performing bed. tumor to different you an thank Today, the physicians the density arrays procedure, the in of actually optimization That's delivered dose, So head, of the the patients' dose a in can,

act here. And something yes, actually upon. the effort is joint So can it's physician actually this

of delivered by with that So time. then if density which help better patient survival aspects, those increasing more And support by to the optimize optimizing overall with the we hopefully in to the the can data both outcomes. in can good on is leads remain better the tumor compliance the physician And have by the discussed compliance, and patients, the effort outcomes, power therapy best they the dose past patients for And lead to the bed. in educating correlated that set.

Operator

Thank you.

Our Fargo. of Larry next the of Wells question comes Biegelsen line from

open. Your now line is

Larry Biegelsen

perceiving on again, the couple based telling questions like So, the which by of data, on prescription a people look U.S., it’s to prescription number. the are

color heard to So quarter you’re new I in greater what remarks. drive But by the Even color on third from on diagnosed Bill, programs can over drive quarter. you’re you a was doing slightly greater little pretty similar what adoption? of to give preferred us some newly prepared more it your prescriptions, It’s to adoption. second XXX. metric more doing

follow I So adoption? doing ups. you greater what are a had to couple drive

Bill Doyle

Sure. I'll specifically comment this. to on let Asaf

Asaf Danziger

thank to wanted just the for I much So, you very question.

as that we previous indication in time-to-time. choppy prescription, I something can and be that Bill it's about talking that, calls, mentioned think small from mentioned, the and also

on this is -- benefit more, now, on The therapy. last important And which a important come of thing. GBM, Right our can can that our the four thing stay business this which of diagnosed This years, is XXX% from a treated recurrent is that also basically population. looking was patient in and if to we more I’m the driving have we start is patient time scripts longer XX% patients. newly the

-- total continue on fact diagnosed the the about And few good very patients do from feel to we patients campaign. we to that newly will treatment. that marketing launch basically a we So increase now

I still -- to think remain the will and comfortable patients The fundamental are we we business these business. in also is that our is see believe start grow physician -- we see continue And that [indiscernible]. And all-in-all, our the unchanged. we first But working. we that in campaigns like to start and one side, that, that see we the we to are

Larry Biegelsen

for And At XXXX. us out we then, to to still XXXX? decision Thank of CMS? Medicare figure assumptions the be XXXX? how of can that trying How it’s process a possible much public? reimbursement Some in going have to have much Bill, some how on in And model point, you. this is positive we’re

product for for investment just what’s then plan you be give Thanks going to Are on taking for force away there plan the the drive is the lastly, for questions. the rollout? the to in sales What’s adoption? mesothelioma, And going to needed reimbursement? the free? and So an

Bill Doyle

Yes.

the Larry. CMS, Asaf on part I’ll will thanks, and the question take respect So with the then to rollout. first mesothelioma answer

is it’s I that the think, process we XXXX. complete that, extremely answer simple possible in the So

As I deliberate and CMS us. this this. said, told to anything are hasn't promise have to real that to at is top specifically pile, us, act But the of attention with they they going

can imagine You that that this its possible timing is absolutely and in on the something with that happens focused them, XXXX. we're answer is direct

Asaf Danziger

to mesothelioma, And we method. start that let’s we’re same the plan and feel use have [indiscernible], you explaining of to end regarding from GBM, the comfortable method used so, to very that your we question, with we in give

to to for before that will not not regarding we we’ll anything finalize believed we’re planning are -- general, the CMS, engage launch in that CMS I’ll, unit right but only we and regarding now business that. need the with build However, GBM. our news building huge plans

Operator

[Operator instructions] from of comes question JPMorgan. Our next Kasimov of Cory the line

line open. is Your

Unidentified Analyst

for guys, Hey Cory, is taking thanks my for Matthew this question. and on

on Just given patients, give and of the only color potential some to quickly. if like timing recruiting to for it on patients tend you the able HEPANOVA data? react are front I these clinical wondering trial, us am wondering XX that you’re the pretty looks

Bill Doyle

to anticipate thank in for in. okay. do is not first our The that. patient HEPANOVA yet this pilot do have much first So, patient We our very We enrollment. opened year, you trial for

when XX trial. the announce course, it's XX this happens. yes, on -- of about it will, since And We patients it's

We’re year looking to – about two or probably a will it enroll. take

that’s you expect next reasonable. So in can year, of think, like I end patient very

Unidentified Analyst

like for see? any on far like as Great. to you’d indication And threshold -- then this internal as what

Bill Doyle

the question? sorry. I repeat you am Can

Unidentified Analyst

Any in threshold pilot would study or as you as like big to market? see any bar far that this initial

Bill Doyle

target That’s improve a This our actually And fields. a hepatocellular the first tumor-treatment be to always is it’s study. with carcinoma always pilot we’re first time safety, It's question. study, okay. good small treating a going to The – patients is Okay. okay.

not also Although different our to and to always look throughout data first. that you slightly cause different different need we the any And we do systemic expect populations. It's fields state population see a use is tumor-treating that’s properly to patients of than toxicity, has that other to of all need consistent clinical color at date, feasible. that disease these Each type therapy diseases. of

should issues reach And of okay. not the of power do any be to these But larger target. and expecting that’s there. can expect I what benefit our I in to we’re be then mean think [indiscernible] studies, see result all primary we we the serve very type this really studies. and actually do is these patients usually get what able larger

Operator

you. I Doyle, time. this And questions Bill over I'd back at the closing hand am Mr. no further Thank call remarks. for showing any to to like

Bill Doyle

in China solid quarter performance. take MACs our I the NovoCure therapy team So, first another typically call. of think this to of and excellent for of all, the the our I'd our is increase clinics regulatory community, but for our We to and China. progress both bring advance future accelerate pipeline. the for in clinical enough large partnership as thank, want to you group can't strategic to thank I to -- important for like to our thank also need reimbursement newly to patient Chinese the markets thank everyone the with on and growth for Lab Medicare. you diagnosed the our prescriptions of the And and extremely I that to drive number I’d the group, to Zai like continued serve. we for our in group, I the leverage execution GBM do, the very DME the

the of that's Medicare is first receive team for reach was of submitting this for FDA extraordinary, for the and pleural for that this II Phase to for an is think tangible work the HPE FDA. submissions in that do open made treating, goal we reimbursement time process period application and amount is to clinical Malignant of mesothelioma. the it appropriate to our time also I incredible to really the those that patients which really cancer This regulatory we're to in to liver discussed. us, is And have and important for all who to the the trial have you

fundamentals For to assure want everyone our thesis investors, investment of the changed. our that I aren't

We our have in trial additional drive ovarian to includes world. three to soon open That the on for world. resources and extraordinary commercial contributing raise. do that fourth finance be our GBM capital the open That business with pipeline. around we Phase balance can III the pipeline trials around continue the R&D to effort And in is cancer, again, supporting that the we without assuring to requiring an this sheet team, our business

solid forward progress. great reporting progress. look to another So future And you. we Thank quarter,

Operator

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

disconnect. great all may a day. You have Everyone

NovoCure Limited (NVCR) 25 Oct 182018 Q3 Earnings call transcript