Novocure Reports Fourth Quarter and Full Year 2021 Financial Results and Provides Company Update
Full year 2021 net revenues of $535 million, an increase of 8% year-over-year
Invested record $201 million in 2021 in research and development initiatives intended to advance Tumor Treating Fields science and technology
St. Helier, Jersey – Novocure (NASDAQ: NVCR) today reported financial results for the fourth quarter and full year ended December 31, 2021. 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 (“TTFields”).
“We founded Novocure to exploit the novel observation that electric fields can be harnessed to disrupt cancer cell division,” said William Doyle, Novocure’s Executive Chairman. “More than two decades later, we continue to build our knowledge and capabilities to optimize the Tumor Treating Fields therapy platform and to bring Tumor Treating Fields therapy to cancer patients. Last year, we generated over half a billion dollars in net revenues and invested two hundred million dollars in R&D. With multiple pivotal clinical studies set to read out in the coming 24 months, we are nearing a key inflection point for cancer patients and our business.”
Financial updates for the full year and fourth quarter ended December 31, 2021:
•Total net revenues for the year were $535.0 million, an increase of 8% year-over-year.
•Total net revenues for the quarter were $133.2 million. The company did not recognize material revenue from its Medicare backlog in the quarter. This compares to $11 million received from the successful appeal of previously denied Medicare claims in the fourth quarter of 2020.
•The United States, EMEA and Japan contributed $92.0 million, $26.5 million, and $8.8 million in quarterly net revenues, respectively. Revenue in Greater China from Novocure’s partnership with Zai Lab totaled $5.8 million.
•Gross margin for the quarter was 78%.
•Research, development and clinical studies expenses for the quarter were $56.9 million.
•Sales and marketing expenses for the quarter were $39.0 million.
•General and administrative expenses for the quarter were $31.0 million.
•Net loss for the quarter was $26.5 million with loss per share of $0.25.
•Adjusted EBITDA* for the quarter was $1.7 million.
•Cash, cash equivalents and short-term investments were $937.7 million as of December 31, 2021.
Operational updates for the fourth quarter ended December 31, 2021:
•As of December 31, 2021, there were 3,587 active patients on therapy, an increase of 5% year-over-year. Active patients from North America, EMEA and Japan contributed 2,272, 1,008 and 307 active patients, respectively.
•1,430 prescriptions were received in the quarter, an increase of 1% year-over-year. Prescriptions from North America, EMEA and Japan contributed 966, 349 and 115 prescriptions, respectively.
•In November, we announced the last patient had been enrolled in our phase 3 pivotal LUNAR study for the treatment of non-small cell lung cancer (“NSCLC”). Patients will be followed for 12 months with top-line data expected by year-end 2022.
•In November, Dr. David Tran , Chief of the Division of Neuro-Oncology at the McKnight Brain Institute at the University of Florida, released updated data from the phase 2 pilot 2-THE-TOP study testing the safety and efficacy of TTFields together with pembrolizmuab and temozolomide for the treatment of adult patients with newly diagnosed glioblastoma (“GBM”). In patients with greater than 9 months of follow-up, median progression-free survival was at least 11.2 months compared to 6.7 months from Novocure’s pivotal EF-14 study, in which patients received TTFields and temozolomide, and 4.0 months from the control arm of EF-14, where patients received temozolomide alone.
•In December, we announced the acquisition and construction of an office building in downtown Portsmouth, New Hampshire. The property will provide space for our growing employee base and house a world-class training and development center.
•The company expects to achieve active patient growth between 2% to 5% in 2022, in-line with the growth rate experienced in the fourth quarter of 2021. Longer term, the company continues to expect further adoption in its core GBM business.
Anticipated clinical milestones:
•Data from phase 2 pilot EF-31 study in gastric cancer (2022)
•Data from phase 2 pilot EF-33 study with high-intensity arrays in recurrent GBM (2022)
•Last patient enrollment in phase 3 pivotal METIS study in brain metastases (2022)
•Data from phase 3 pivotal LUNAR study in NSCLC (2022)
•Last patient enrollment in phase 3 pivotal PANOVA-3 study in locally advanced pancreatic cancer (2023)
•Data from phase 3 pivotal INNOVATE-3 study in recurrent ovarian cancer (2023)
•Data from phase 3 pivotal METIS study in brain metastases (2023)
•Data from phase 3 pivotal PANOVA-3 study in locally advanced pancreatic cancer (2024)
Conference call details
Novocure will host a conference call and webcast to discuss fourth quarter and full year 2021 financial results at 8 a.m. EST today, Thursday, February 24, 2022. 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 8879093.
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.
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. Novocure’s commercialized products are approved in certain countries for the treatment of adult patients with glioblastoma and malignant pleural mesothelioma. Novocure has ongoing or completed clinical studies investigating Tumor Treating Fields in brain metastases, gastric cancer, glioblastoma, liver cancer, non-small cell lung cancer, pancreatic cancer and ovarian cancer.
Headquartered in Jersey, and with a growing global footprint, Novocure has regional operating centers in Root, Switzerland, Portsmouth, New Hampshire and Tokyo, as well as a research center in Haifa, Israel. For additional information about the company, please visit Novocure.com and follow @Novocure on LinkedIn and Twitter.
*Non-GAAP Financial Measurements
We 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 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.
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 study 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, environmental, regulatory and political conditions as well as issues arising from the COVID-19 pandemic and other more specific risks and uncertainties facing Novocure such as those set forth in its Annual Report on Form 10-K filed on February 24, 2022, as amended to date, 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|
|Twelve months ended December 31,|
|Net revenues||$||133,213 ||$||143,953 ||$||535,031 ||$||494,366 |
|Cost of revenues||29,687 ||28,136 ||114,877 ||106,501 |
|Gross profit||103,526 ||115,817 ||420,154 ||387,865 |
|Operating costs and expenses:|
|Research, development and clinical studies||56,931 ||44,002 ||201,303 ||132,010 |
|Sales and marketing||38,982 ||31,359 ||137,057 ||118,017 |
|General and administrative||31,011 ||28,364 ||126,127 ||107,437 |
|Total operating costs and expenses||126,925 ||103,725 ||464,488 ||357,464 |
|Operating income (loss)||(23,398)||12,092 ||(44,333)||30,401 |
|Financial expenses (income), net||2,175 ||3,267 ||7,742 ||12,299 |
|Income (loss) before income tax||(25,573)||8,825 ||(52,075)||18,102 |
|Income tax||885 ||3,908 ||6,276 ||(1,706)|
|Net income (loss)||$||(26,458)||$||4,917 ||$||(58,351)||$||19,808 |
|Basic net income (loss) per ordinary share||$||(0.25)||$||0.05 ||$||(0.56)||$||0.20 |
|Weighted average number of ordinary shares used in computing basic net income (loss) per share||103,884,288 ||101,945,085 ||103,433,274 ||100,930,866 |
|Diluted net income (loss) per ordinary share||$||(0.25)||$||0.04 ||$||(0.56)||$||0.18 |
|Weighted average number of ordinary shares used in computing diluted net income (loss) per share||103,884,288 ||110,604,714 ||103,433,274 ||108,877,648 |
Consolidated Balance Sheets
USD in thousands (except share data)
|Cash and cash equivalents||$||208,802 ||$||234,674 |
|Short-term investments||728,898 ||607,902 |
|Restricted cash||807 ||11,499 |
|Trade receivables, net||93,567 ||96,699 |
|Receivables and prepaid expenses||17,025 ||21,245 |
|Inventories||24,427 ||27,422 |
|Total current assets||1,073,526 ||999,441 |
|Property and equipment, net||22,693 ||11,395 |
|Field equipment, net||12,923 ||11,230 |
|Right-of-use assets, net||18,267 ||19,009 |
|Other long-term assets||12,086 ||10,908 |
|Total long-term assets||65,969 ||52,542 |
|Total assets||$||1,139,495 ||$||1,051,983 |
Consolidated Balance Sheets
USD in thousands (except share data)
|Liabilities and shareholders’ equity|
|Trade payables||$||72,600 ||$||53,647 |
|Other payables and accrued expenses||70,002 ||59,965 |
|Total current liabilities||142,602 ||113,612 |
|Long-term loan, net of discount and issuance costs||562,216 ||429,905 |
|Deferred revenues||6,477 ||12,139 |
|Employee benefit liabilities||4,543 ||5,171 |
|Long term leases||12,997 ||14,293 |
|Other long-term liabilities||166 ||337 |
|Total long-term liabilities||586,399 ||461,845 |
|Total liabilities||729,001 ||575,457 |
|Commitments and contingencies|
|Share capital -|
|Ordinary shares - No par value, Unlimited shares authorized; Issued and outstanding: 103,971,263 shares and 102,334,276 shares at December 31, 2021 and December 31, 2020 respectively;||— ||— |
|Additional paid-in capital||1,099,589 ||1,111,435 |
|Accumulated other comprehensive loss||(3,169)||(3,832)|
|Total shareholders’ equity||410,494 ||476,526 |
|Total liabilities and shareholders’ equity||$||1,139,495 ||$||1,051,983 |
Non-U.S. GAAP financial measures reconciliation
USD in thousands
|Three months ended December 31,||Twelve months ended December 31,|
|2021||2020||% Change||2021||2020||% Change|
|Net income (loss)||$||(26,458)||$||4,917 ||(638)||%||$||(58,351)||$||19,808 ||(395)||%|
|Add: Income tax||885 ||3,908 ||(77)||%||$||6,276 ||$||(1,706)||(468)||%|
|Add: Financial expenses (income), net||2,175 ||3,267 ||(33)||%||$||7,742 ||$||12,299 ||(37)||%|
|Add: Depreciation and amortization||2,667 ||2,473 ||8 ||%||$||10,251 ||$||9,150 ||12 ||%|
|EBITDA||$||(20,731)||$||14,565 ||(242)||%||$||(34,082)||$||39,551 ||(186)||%|
|Add: Share-based compensation||22,398 ||20,273 ||10 ||%||$||94,900 ||$||75,721 ||25 ||%|
|Adjusted EBITDA||$||1,667 ||$||34,838 ||(95)||%||$||60,818 ||$||115,272 ||(47)||%|