Novocure Reports Fourth Quarter and Full Year 2019 Financial Results and Provides Company Update
Quarterly net revenues of $99.2 million, representing 42 percent growth versus the fourth quarter 2018 and 8 percent growth versus the third quarter 2019
Second quarter of positive net income with $0.04 in earnings per share
Four phase 3 pivotal clinical trials ongoing creating the potential for substantial market expansion
ST. HELIER, Jersey–(BUSINESS WIRE)–Novocure (NASDAQ: NVCR) today reported financial results for the quarter and year ended December 31, 2019, highlighting continued commercial execution, strengthening financial performance and clinical and product development programs intended to unlock future value. Novocure is a global oncology company working to extend survival in some of the most aggressive forms of cancer by developing and commercializing its innovative therapy, Tumor Treating Fields.
|
Fourth quarter and full year 2019 highlights include: |
|||||||||||||||||||||
|
|
Three months ended December 31, |
|
Twelve months ended December 31, |
||||||||||||||||||
|
|
2019 |
|
2018 |
|
% Change |
|
2019 |
|
2018 |
|
% Change |
||||||||||
|
Financial, in millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net revenues |
$ |
99.2 |
|
$ |
69.7 |
|
42% |
|
$ |
351.3 |
|
$ |
248.1 |
|
42% |
|
|||||
|
Gross profit |
$ |
74.4 |
|
$ |
46.6 |
|
60% |
|
$ |
262.7 |
|
$ |
168.0 |
|
56% |
|
|||||
|
Net income (loss) |
$ |
4.3 |
|
$ |
(15.6 |
) |
– |
|
$ |
(7.2 |
) |
$ |
(63.6 |
) |
– |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Cash, cash equivalents and short-term investments at end of period |
$ |
326.1 |
|
$ |
245.9 |
|
33% |
|
$ |
326.1 |
|
$ |
245.9 |
|
33% |
|
|||||
|
Non-financial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Active patients at period end(1) |
|
2,909 |
|
|
2,383 |
|
22% |
|
|
2,909 |
|
|
2,383 |
|
22% |
|
|||||
|
Prescriptions received in period(2) |
|
1,380 |
|
|
1,315 |
|
5% |
|
|
5,371 |
|
|
5,060 |
|
6% |
|
|||||
|
(1) An “active patient” is a patient who is receiving treatment under a commercial prescription order as of the measurement date, including patients who may be on a temporary break from treatment and who plan to resume treatment in less than 60 days. (2) A “prescription received” is a commercial order for Optune or NovoTTF-100L that is received from a physician certified to treat patients for a patient not previously on Optune or NovoTTF-100L. Orders to renew or extend treatment are not included in this total. |
|||||||||||||||||||||
“We start 2020 with substantial momentum from an exceptional 2019,” said Asaf Danziger, Novocure’s Chief Executive Officer, “In 2019, we generated $351 million in net revenues and added over $80 million in cash on hand to our balance sheet. The financial strength derived from our existing indications allows us to fund significant investments in clinical and product innovation to advance our proprietary cancer therapy platform. Our focus on strengthening our foundation and executing our strategic plan to deliver value to our patients, employees, and shareholders is unwavering.”
“In 20 years of preclinical research across a wide variety of tumor cell lines and cancer models, Tumor Treating Fields has demonstrated a consistent anti-mitotic effect. We are enrolling patients in six clinical programs, including four randomized, phase 3 pivotal trials, and are very optimistic about the potential application of Tumor Treating Fields beyond our currently approved indications,” continued William Doyle, Novocure’s Executive Chairman. “Also, new research is pointing the way to further improving the efficacy of the Tumor Treating Fields platform, and we are advancing multiple product development programs to this end. We are excited about the potential to significantly improve patient outcomes as we work to extend survival in some of the most aggressive forms of cancer.”
Fourth quarter 2019 operating statistics and financial update
For the quarter ended December 31, 2019, net revenues were $99.2 million, representing 42% growth compared to the fourth quarter 2018.
- In the United States, net revenues totaled $65.9 million in the quarter ended December 31, 2019, representing 49% growth compared to the same period in 2018.
- In Germany and other EMEA markets, net revenues totaled $25.8 million in the quarter ended December 31, 2019, representing 14% growth compared to the same period in 2018.
- In Japan, net revenues totaled $5.6 million in the quarter ended December 31, 2019, representing 95% growth compared to the same period in 2018.
- In Greater China, net revenues totaled $1.9 million in the quarter ended December 31, 2019, representing 138% growth compared to the same period in 2018.
There were 2,909 active patients at December 31, 2019, representing 22% growth compared to December 31, 2018, and six percent growth compared to September 30, 2019.
- In the United States, there were 1,952 active patients at December 31, 2019, representing 19% growth compared to December 31, 2018.
- In Germany and other EMEA markets, there were 765 active patients at December 31, 2019, representing 17% growth compared to December 31, 2018.
- In Japan, there were 192 active patients at December 31, 2019, representing 109% growth compared to December 31, 2018.
Additionally, 1,380 prescriptions were received in the quarter ended December 31, 2019, representing five percent growth compared to the same period in 2018, and five percent growth compared to the quarter ended September 30, 2019. In the quarter ended December 31, 2019, 1,079 Optune prescriptions were written for patients with newly diagnosed glioblastoma.
- In the United States, 1,002 prescriptions were received in the quarter ended December 31, 2019, representing six percent growth compared to the same period in 2018.
- In Germany and other EMEA markets, 285 prescriptions were received in the quarter ended December 31, 2019, representing an 11% decrease compared to the same period in 2018.
- In Japan, 93 prescriptions were received in the quarter ended December 31, 2019, representing 79% growth compared to the same period in 2018.
For the three months ended December 31, 2019, cost of revenues was $24.8 million compared to $23.0 million for the same period in 2018, representing an increase of 8%. The increase was primarily due to the cost of shipping transducer arrays to a higher volume of commercial patients. Gross margin was 75% for the three months ended December 31, 2019 and 67% for the three months ended December 31, 2018.
Research, development and clinical trials expenses for the three months ended December 31, 2019, were $23.7 million compared to $15.0 million for the same period in 2018, representing an increase of 58%. This was primarily due to an increase in clinical development expenses driven by our ongoing phase 3 pivotal trials and an increase in costs associated with product development and medical affairs.
Sales and marketing expenses for the three months ended December 31, 2019, were $26.8 million compared to $21.2 million for the same period in 2018, representing an increase of 26%. This was primarily due to increased marketing expenses related to the launch of NovoTTF-100L and an increase in personnel costs to support our growing commercial business.
General and administrative expenses for the three months ended December 31, 2019 were $23.8 million compared to $19.1 million for the same period in 2018, representing an increase of 25%. This was primarily due to an increase in personnel costs and an increase in professional services.
Net income for the three months ended December 31, 2019, was $4.3 million compared to net loss of $15.6 million for the same period in 2018.
At December 31, 2019, we had $177.3 million in cash and cash equivalents and $148.8 million in short-term investments, for a total balance of $326.1 million in cash, cash equivalents and short-term investments. This represents an increase of $13.5 million in cash and investments since September 30, 2019.
Fourth quarter 2019 non-U.S. GAAP measures
We also measure our performance based upon a non-U.S. GAAP measurement of earnings before interest, taxes, depreciation, amortization and shared-based compensation (“Adjusted EBITDA”). We believe Adjusted EBITDA is useful to investors in evaluating our operating performance because it helps investors evaluate and compare the results of our operations from period to period by removing the impact of earnings attributable to our capital structure, tax rate and material non-cash items, specifically share-based compensation.
Adjusted EBITDA increased by $13.1 million, or 314%, to $17.3 million for the three months ended December 31, 2019 from $4.2 million for the three months ended December 31, 2018. This improvement in fundamental financial performance was driven by top-line growth and disciplined execution.
Anticipated clinical milestones
- Interim analysis of phase 3 pivotal LUNAR trial in non-small cell lung cancer (H2 2020)
- Data from phase 2 pilot HEPANOVA trial in advanced liver cancer (2021)
- Data from phase 3 pivotal METIS trial in brain metastases (2021)
- Interim analysis of phase 3 pivotal PANOVA-3 trial in locally advanced pancreatic cancer (2021)
- Final data from phase 3 pivotal LUNAR trial in non-small cell lung cancer (2022)
- Interim analysis of phase 3 pivotal INNOVATE-3 trial in recurrent ovarian cancer (2022)
- Final data from phase 3 pivotal PANOVA-3 trial in locally advanced pancreatic cancer (2022)
- Final data from phase 3 pivotal INNOVATE-3 trial in recurrent ovarian cancer (2024)
Conference call details
Novocure will host a conference call and webcast to discuss fourth quarter and full year 2019 financial results at 8 a.m. EST today, Thursday, February 27, 2020. Analysts and investors can participate in the conference call by dialing 855-442-6895 for domestic callers and 509-960-9037 for international callers, using the conference ID 1769503.
The webcast, earnings slides presented during the webcast and the corporate presentation can be accessed live from the Investor Relations page of Novocure’s website, www.novocure.com/investor-relations, and will be available for at least 14 days following the call. Novocure has used, and intends to continue to use, its investor relations website, as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
About Novocure
Novocure is a global oncology company working to extend survival in some of the most aggressive forms of cancer through the development and commercialization of its innovative therapy, Tumor Treating Fields. Tumor Treating Fields is a cancer therapy that uses electric fields tuned to specific frequencies to disrupt solid tumor cancer cell division. Novocure’s commercialized products are approved in certain countries for the treatment of adult patients with glioblastoma and in the U.S. for the treatment of adult patients with malignant pleural mesothelioma. Novocure has ongoing or completed clinical trials investigating Tumor Treating Fields in brain metastases, non-small cell lung cancer, pancreatic cancer, ovarian cancer, liver cancer and gastric cancer.
Headquartered in Jersey, Novocure has U.S. operations in Portsmouth, New Hampshire, Malvern, Pennsylvania and New York City. Additionally, the company has offices in Germany, Switzerland, Japan and Israel. For additional information about the company, please visit www.novocure.com or follow us at www.twitter.com/novocure.
Forward-Looking Statements
In addition to historical facts or statements of current condition, this press release may contain forward-looking statements. Forward-looking statements provide Novocure’s current expectations or forecasts of future events. These may include statements regarding anticipated scientific progress on its research programs, clinical trial progress, development of potential products, interpretation of clinical results, prospects for regulatory approval, manufacturing development and capabilities, market prospects for its products, coverage, collections from third-party payers and other statements regarding matters that are not historical facts. You may identify some of these forward-looking statements by the use of words in the statements such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” or other words and terms of similar meaning. Novocure’s performance and financial results could differ materially from those reflected in these forward-looking statements due to general financial, economic, regulatory and political conditions as well as more specific risks and uncertainties facing Novocure such as those set forth in its Report on Form 10-K filed on February 27, 2020, with the U.S. Securities and Exchange Commission. Given these risks and uncertainties, any or all of these forward-looking statements may prove to be incorrect. Therefore, you should not rely on any such factors or forward-looking statements. Furthermore, Novocure does not intend to update publicly any forward-looking statement, except as required by law. Any forward-looking statements herein speak only as of the date hereof. The Private Securities Litigation Reform Act of 1995 permits this discussion.
|
Consolidated Statements of Operations USD in thousands (except share and per share data) |
||||||||||||||||||
|
|
|
Three months ended December 31, |
|
Twelve months ended December 31, |
||||||||||||||
|
|
|
2019 |
2018 |
|
2019 |
|
2018 |
|||||||||||
|
Net revenues |
|
$ |
99,234 |
$ |
69,674 |
|
$ |
351,318 |
|
$ |
248,069 |
|||||||
|
Cost of revenues |
|
|
24,786 |
|
23,028 |
|
|
88,606 |
|
|
80,048 |
|||||||
|
Gross profit |
|
|
74,448 |
|
46,646 |
|
|
262,712 |
|
|
168,021 |
|||||||
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|||||||||||
|
Research, development and clinical trials |
|
|
23,741 |
|
15,034 |
|
|
79,003 |
|
|
50,574 |
|||||||
|
Sales and marketing |
|
|
26,804 |
|
21,208 |
|
|
96,675 |
|
|
77,663 |
|||||||
|
General and administrative |
|
|
23,751 |
|
19,068 |
|
|
87,948 |
|
|
73,456 |
|||||||
|
Total operating costs and expenses |
|
|
74,296 |
|
55,310 |
|
|
263,626 |
|
|
201,693 |
|||||||
|
Operating income (loss) |
|
|
152 |
|
(8,664) |
|
|
(914) |
|
|
(33,672) |
|||||||
|
Financial expenses (income), net |
|
|
1,744 |
|
2,160 |
|
|
7,910 |
|
|
12,270 |
|||||||
|
Income (loss) before income tax |
|
|
(1,592) |
|
(10,824) |
|
|
(8,824) |
|
|
(45,942) |
|||||||
|
Income tax |
|
|
(5,852) |
|
4,807 |
|
|
(1,594) |
|
|
17,617 |
|||||||
|
Net income (loss) |
|
$ |
4,260 |
$ |
(15,631) |
|
$ |
(7,230) |
|
$ |
(63,559) |
|||||||
|
|
|
|
|
|
|
|
|
|||||||||||
|
Basic net income (loss) per ordinary share |
|
$ |
0.04 |
$ |
(0.17) |
|
$ |
(0.07) |
|
$ |
(0.69) |
|||||||
|
|
|
|
|
|
|
|
|
|||||||||||
|
Weighted average number of ordinary shares |
|
|
99,226,445 |
|
93,083,298 |
|
|
97,237,549 |
|
|
91,828,043 |
|||||||
|
Diluted net income (loss) per ordinary share |
|
$ |
0.04 |
$ |
(0.17) |
|
$ |
(0.07) |
|
$ |
(0.69) |
|||||||
|
Weighted average number of ordinary shares |
|
|
107,911,519 |
|
93,083,298 |
|
|
97,237,549 |
|
|
91,828,043 |
|||||||
|
Consolidated Balance Sheets USD in thousands (except share data) |
|||||||
|
|
Year ended December 31, |
||||||
|
|
2019 |
|
2018 |
||||
|
Assets |
|
|
|
||||
|
Current assets: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
177,321 |
|
|
$ |
140,622 |
|
|
Short-term investments |
148,769 |
|
|
105,256 |
|
||
|
Restricted cash |
2,095 |
|
|
2,134 |
|
||
|
Trade receivables, net |
58,859 |
|
|
36,523 |
|
||
|
Receivables and prepaid expenses |
29,202 |
|
|
14,279 |
|
||
|
Inventories |
23,701 |
|
|
22,555 |
|
||
|
Total current assets |
439,947 |
|
|
321,369 |
|
||
|
Long-term assets: |
|
|
|
||||
|
Property and equipment, net |
9,342 |
|
|
8,442 |
|
||
|
Field equipment, net |
7,684 |
|
|
6,924 |
|
||
|
Right-of-use assets, net |
17,571 |
|
|
— |
|
||
|
Other long-term assets |
4,904 |
|
|
3,058 |
|
||
|
Total long-term assets |
39,501 |
|
|
18,424 |
|
||
|
Total assets |
$ |
479,448 |
|
|
$ |
339,793 |
|
|
|
Year ended December 31, |
||||||
|
|
2019 |
|
2018 |
||||
|
Liabilities and shareholders’ equity |
|
|
|
||||
|
Current liabilities: |
|
|
|
||||
|
Trade payables |
$ |
36,925 |
|
|
$ |
26,708 |
|
|
Other payables and accrued expenses |
49,386 |
|
|
37,852 |
|
||
|
Total current liabilities |
86,311 |
|
|
64,560 |
|
||
|
Long-term liabilities: |
|
|
|
||||
|
Long-term loan, net of discount and issuance costs |
149,424 |
|
|
149,268 |
|
||
|
Deferred revenues |
7,807 |
|
|
9,929 |
|
||
|
Long term leases |
14,140 |
|
|
— |
|
||
|
Employee benefit liabilities |
3,754 |
|
|
2,683 |
|
||
|
Other long-term liabilities |
222 |
|
|
1,094 |
|
||
|
Total long-term liabilities |
175,347 |
|
|
162,974 |
|
||
|
Total liabilities |
261,658 |
|
|
227,534 |
|
||
|
Commitments and contingencies |
|
|
|
||||
|
Shareholders’ equity: |
|
|
|
||||
|
Share capital – |
|
|
|
||||
|
Ordinary shares – No par value, Unlimited shares authorized; Issued and |
— |
|
|
— |
|
||
|
Additional paid-in capital |
871,442 |
|
|
757,314 |
|
||
|
Accumulated other comprehensive loss |
(2,767) |
|
|
(1,400) |
|
||
|
Accumulated deficit |
(650,885) |
|
|
(643,655) |
|
||
|
Total shareholders’ equity |
217,790 |
|
|
112,259 |
|
||
|
Total liabilities and shareholders’ equity |
$ |
479,448 |
|
|
$ |
339,793 |
|
|
Non-U.S. GAAP financial measures reconciliation USD in thousands |
|||||||||
|
|
|
Three months ended December 31, |
|||||||
|
Adjusted EBITDA |
|
2019 |
|
2018 |
|||||
|
Net income (loss) |
|
$ |
|
4,260 |
|
$ |
|
(15,631) |
|
|
Add: Income tax |
|
$ |
|
(5,852) |
|
$ |
|
4,807 |
|
|
Add: Financial income (expenses), net |
|
$ |
|
1,744 |
|
$ |
|
2,160 |
|
|
Add: Depreciation and amortization |
|
$ |
|
2,467 |
|
$ |
|
2,205 |
|
|
EBITDA |
|
$ |
|
2,619 |
|
$ |
|
(6,459) |
|
|
Add: Share-based compensation |
|
$ |
|
14,699 |
|
$ |
|
10,640 |
|
|
Adjusted EBITDA |
|
$ |
|
17,318 |
|
$ |
|
4,181 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20200227005417/en/
Media and Investor Contact:
Ashley Cordova
acordova@novocure.com
212-767-7558
Source: Novocure
