Q2 2021 Novocure Ltd Earnings Call

Good day, ladies and gentlemen, thank you for standing by and welcome to the Novocure second quarter 2021 earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation.

Unknown Executive: Ladies and gentlemen, thank you for standing by. Welcome to the Novocure Second Quarter 2021 Earnings Conference Call.

Unknown Executive: At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question...

And there will be a question and answer session to ask a question. During this session you will need to press star 1 on your telephone. Please be advised today's conference may be recorded if you require any further assistance. Please press Star then zero I would now like to hand, the conference over to 1 of your speakers today Ingrid Goldberg. Please go ahead.

Unknown Executive: And during this session, you will need to press star one on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star then zero. I would now like to hand the conference over to one of your speakers today, Ingrid Goldberg. Please go ahead.

Unknown Executive: I would now like to hand the conference over to one of your speakers today, Ingrid Goldberg. Please go ahead.

Yeah.

Ingrid Goldberg: Good morning, everyone, and thank you for joining us to review Novocure's second quarter 2021. I'm joined on the phone by our Executive Chairman, Bill Doyle, our CEO, Asaf Danziger, and our CFO, Ashley Cordova. Other members of our executive leadership are also on the call and available for Q&A.

Good morning, everyone and thank you for joining us to review <unk> second quarter 2021 performance.

I'm joined on the phone by our executive Chairman Bill Doyle, our CEO Asaf Danziger and our.

Our CFO Ashley Cordova.

Other members of our executive leadership are also on the call and available for Q&A.

Ingrid Goldberg: The slides presented today can be viewed on our website, www.novacure.com, by clicking on the link for the second quarter 2021 financial results located in the events section on our investor relations page. Before we start, I would like to remind everyone that our discussions during this conference call will include forward-looking statements, and actual results could differ materially from those projected in these statements. These statements involve a number of risks and uncertainties, some of which are beyond our control, including those risks and uncertainties described from time to time in our SEC filings.

The slides presented today can be viewed on our website www dot and Novocure dot com by clicking on the link from the second quarter 2021 financial results located and the events section on our Investor Relations page.

We start I would like to remind everyone that our discussions during this conference call will include forward looking statements and actual results could differ materially from those projected and these statements.

These statements involve a number of risks and uncertainties some of which are beyond our control and putting those risks and uncertainties described from time to time and our SEC filings, we do not intend to update.

Ingrid Goldberg: We do not intend to update publicly any forward-looking statements, except as required by law. Following our prepared remarks today, we will open the line for your questions. Financials for the three and six months ended June 30, 2021, are available in our press release and in our 10Q, both of which we released earlier this morning. Where appropriate, we refer to non-GAAP financial measures to evaluate our business.

Publicly any forward looking statement, except as required by law.

Following our prepared remarks today, we will open the line for your questions and Nash.

<unk> for the 3 and 6 months ended June 30th 2021 are available on our press release and and our 10-Q, both of which released and we released earlier this morning.

Where appropriate.

Appropriate we will refer to non-GAAP financial measures to evaluate our business.

Ingrid Goldberg: Reconciliations of non-GAAP financial measures to GAAP financial measures are also included in our press release, in the appendix of the supplemental slides accompanying this presentation, and in our Form 8K filed with the SEC today. These materials can also be accessed from our investor relations page on our website. With that, I will now turn the call over to Bill Doyle.

Reconciliations of non-GAAP financial measures to GAAP financial measures are also included in our press release and the appendix of the supplemental slides accompanying this presentation and in our form 8-K filed with the SEC today.

These materials can also be accessed from our investor.

Relations page of our website.

With that I will now turn the call over to Bill Doyle.

William F. Doyle: Thank you, Ingrid, and good morning, everyone. At Novocure, we are singularly focused on our mission to extend survival in some of the most aggressive forms of cancer through the development and commercialization of our platform therapy tumor treating field. This corridor serves as another proof point that our commercial GBM business is providing the financial strength to aggressively invest in innovation to fuel the future growth of our company. In the second quarter, we generated $134 million in net revenues, representing 15% growth year-over-year.

Thank you Andrea and good morning, everyone.

And have Novocure, we are singularly focused on our mission to extend survival and some of the most aggressive forms of cancer through the development and commercialization of our platform therapy tumor treating.

And <unk> fields.

This quarter serves as another proof point that our commercial GBM business is providing the financial strength to aggressively invest and innovation to fuel the future growth of our company.

And the second quarter, we generated $134 million and net revenues representing 15%.

Rent growth year over year, we have treated more than 20000 patients to date, we have 4 phase III pivotal trials multiple ongoing and planned phase II pilot trials over 180, oncology patents issued and pending worldwide and nearly $900 million and.

William F. Doyle: We have treated more than 20,000 patients to date. We have four phase three pivotal trials, multiple ongoing and planned phase two pilot trials, over 180 oncology patents issued and pending worldwide, and nearly $900 million in cash on hand. Operational and financial strength provides Novocure the flexibility to pursue growth initiatives across the organization.

Cash on hand.

Operational and financial strength provides novocure the flexibility to pursue growth initiatives across the organization.

William F. Doyle: We believe our investments in commercial, clinical, and product development capabilities are instrumental to ensure organizational readiness as we strive to unlock the long-term value of the tumor-treating fields platform. In today's call, we will first discuss the established position and multiple levers for expansion of our core GBM business. We will then turn to our recent clinical development progress, specifically within our thoracic and abdominal programs, and finally, we will address the financial power and flexibility afforded by the consistency and sustainability of our business.

We believe our investments and commercial clinical and product development capabilities are instrumental to ensure organizational readiness as we strive to unlock the long term.

Term value of the tumor treating fields platform.

And today's call, we will first discuss the established position and multiple levers for expansion of our core <unk> business. We will then turn to our recent clinical development progress specifically within our thoracic and abdominal programs and.

We will address the financial power and flexibility afforded by the consistency and sustainability of our business.

I will begin with our global phase 4 trials and trial in newly diagnosed GBM.

William F. Doyle: I will begin with our Global Phase IV Trident Trial in newly diagnosed GBM. Trident is designed to test the benefit of moving tumor-treating field therapy earlier in the GBM treatment paradigm. Today, GBM patients typically follow the protocol established by our successful EF-14 clinical trial, where Maximal Bulking Surgery is followed by Chemoradiation.

Tried and is designed to test the benefit of moving tumor treating fields therapy.

Find earlier and the GBM treatment paradigm.

Today GBM patients typically follow the protocol established by our successful E F 14 clinical trial.

Maximal and bulking surgery is followed by chemo radiation.

William F. Doyle: After chemoradiation, tumor-treating fields therapy is initiated concomitantly with chemotherapy. Trident builds on preclinical research that showed tumor-treating fields increased sensitivity to radiation therapy and inhibited DNA Damage Repair. The randomized TRIDENT trial compares initiating tumor-treating fields with chemoradiation versus initiating tumor-treating fields with chemotherapy following chemoradiation. Trident's objective is to extend survival by increasing the impact of chemoradiation and provide evidence of the benefit of initiating tumor-treating fields earlier in the patient's treatment journey.

After chemo radiation tumor treating field therapies.

And initiated concomitant with chemotherapy.

Tried and builds on preclinical research that showed tumor treating fields increased sensitivity to radiation therapy and.

And inhibiting DNA damage repair.

And the randomized tried and trial compares initiating tumor treating fields with chemo radiation.

Zynga versus initiating tumor treating fields with chemo therapy, following chemo radiation and <unk>.

And this objective is to extend survival by increasing the impact of chemo radiation and provide evidence of the benefit of initiating tumor treating fields earlier and the patients treatment journey.

William F. Doyle: Trident is one of the largest GBM clinical studies initiated in our industry to date and underlines our commitment to the GBM community, our focus on increased engagement with research institutions, and our determination to further explore the optimal application of tumor-treating fields. As of the end of the second quarter, we had 45 actively recruiting sites across the United States and EMEA.

Tried and is 1 of the largest GBM clinical studies initiated and our industry to date.

And underlines our commitment to the GBM community our focus on increased engagement with research institutions and our determination to further explore the optimal application of tumor treating fields platform.

As of.

Aviation and the second quarter, we had 45 actively recruiting sites across the United States and EMEA.

William F. Doyle: This quarter, we are also announcing an update to the Optune label for the treatment of GBM to include our EF-19 post-approval trial data. The EF-19 data confirm the effectiveness and safety of Optune as monotherapy in recurrent GBM in a real-world setting, and the label update strengthens Optune's clinical profile in GBM. Continuing to explore new opportunities within GBM, this quarter, we launched a clinical collaboration with GT Medical Technologies to study the combination of tumor-treating fields and GT Medical's Gamma-Tile Brachytherapy.

This quarter, we are also announcing and update to the opportune label for the treatment of GBM to include our E. F 19 post approval trial data.

At the end of 19 data confirm the effectiveness and safety of opportune as monotherapy and recurrent GBM and a real world setting and the label update strengthens up tunes clinical profile and GBM.

Continuing to explore new opportunities within GBM this quarter, we launched.

Our clinical collaboration with GT medical technologies to study the combination of tumor treating fields and GT medical gamma title breakthrough therapy.

William F. Doyle: We plan to conduct a Phase 2 pilot study in patients with recurrent GBM to test the safety and effectiveness of neoadjuvant tumor-treating fields, followed by resection and implantation of GT Medical's gametile brachytherapy and Adjuvant Tumor Treating Field. The opportunity here is two-fold.

We plan to conduct a phase II pilot study and patients with recurrent GBM to test the safety and effectiveness of neo adjuvant tumor treating fields followed.

Followed by resection, and implementation of GT medical gamma titled Breakthrough therapy and.

And adjuvant tumor treating fields.

The opportunity here is twofold first this trial design will provide an opportunity to further study the radio sensitizing effect of tumor treating fields and solid tumor cancers.

William F. Doyle: First, this trial design will provide an opportunity to further study the radiosensitizing effect of tumor-treating fields in solid tumor cancer. Second, this is an opportunity to further engage with oncologists at leading academic centers regarding the potential efficacy of tumor-treating fields together with other cancer therapies. In addition to our efforts to expand the eligible patient population through ongoing clinical research in GBM, we view the opportunity for geographic expansion as a key driver of future growth.

Second this is an opportunity to further engage with oncologists at leading academic centers regarding the potential efficacy of tumor treating fields together with other cancer therapies.

In addition to our efforts to expand the eligible patient population through ongoing clinical research and GBM we've.

We view the opportunity for geographic expansion is a key driver of future growth.

William F. Doyle: We continue to strategically invest to enhance our market access capability. We believe these investments will enable us to successfully target optimal markets for opportunities, identify the most appropriate access pathways, and successfully garner reimbursement in a timely manner. We have continued to negotiate with French health authorities to obtain national reimbursement there.

We continue to strategically invest to enhance our market access capabilities. We believe these investments will enable us to successfully target optimal markets for option identify.

Identify the most appropriate access pathways and succeed.

Essentially garner reimbursement and a timely manner.

We've continued to negotiate with French health authorities to obtain national reimbursement. There. This month, we received a positive assessment of opportune, earning and a S. A 3 rating and.

William F. Doyle: This month, we received a positive assessment of Optum, earning an ASA3 rating. An ASA 3 rating enables our team to move forward in the reimbursement negotiation process with the ultimate goal of achieving national reimbursement. Beyond France, we are actively evaluating numerous additional markets across Europe and the Asia-Pacific region where Optum can be made available to more patients. We believe there remains a multitude of opportunities to expand the use of options in the treatment of GBM.

And ASC 3 rate and enables our team to move forward.

Forward and the reimbursement negotiation process with the ultimate goal of achieving national reimbursement in France.

B on France, we are actively evaluating numerous additional markets across Europe, and the Asia Pacific regions were option can be made available to more patients.

We believe.

There remains a multitude of opportunities to expand the use of October from the treatment of GBM.

William F. Doyle: We will continue to evaluate label expansion, new clinical combinations, collaborations, and new geographic expansion opportunities in service of our patient-forward mission to extend survival in some of the most aggressive forms of cancer. I will now turn the call over to Asaf to discuss our recent clinical updates. Thank you, Bill.

We will continue to evaluate label expansion and new clinical combination.

Collaborations and new geographic expansion opportunities and service of our patient forward mission to extend survival and some.

The most aggressive forms of cancer.

I will now turn the call over to <unk> to discuss our recent clinical updates.

Thank you Bill we reported multiple clinical and product development updates in the second quarter as we continue to explore the broad applicability of TT fields in solid tumor.

Asaf Danziger: We reported multiple clinical and product development updates in the second quarter as we continue to explore the broad applicability of TT fields in solid tumor cancers. Our pipeline is primed for growth as we move to expand our clinical footprint in non-small cell lung cancer, initiate a phase three trial in advanced liver cancer, and continue our ongoing efforts to optimize our therapy through product innovation. Following the April interim analysis of our Phase III Pivotal Lunar Trial in non-small-cell lung cancer, the Independent Data Monitoring Committee recommended trial protocol amendments.

And so our pipeline is primed for growth as we move to expand our clinical footprint in non small cell lung cancer initiate a phase III trial in advanced liver cancer and continue our ongoing efforts to optimize our therapy through product innovation.

Following the April.

Okay analysis of our phase III people with the lunar trial in non small cell lung cancer. The independent data monitoring Committee recommended trial protocol amendments.

Asaf Danziger: These recommendations included a meaningful adjustment of patient accrual to 276 with a 12-month follow-up from the prior 534 patients with 18-month follow-up. Following the committee's recommendations, we filed an investigational device exemption supplement with the FDA, which was approved in May.

Is it commendations included a meaningful adjustment of patient accrual to 276 with a 12 month follow up from the prior.

<unk> 534 patients with 18 months follow up following the committee's recommendation, we filed an investigational device exemption supplement with the FDA, which was approved and me. We are now pushing forward with enrollment under the Amendment protocol and we anticipate final patient enrollment in the fourth.

Asaf Danziger: We are now pushing forward with enrollment under the amendment protocol, and we anticipate final patient enrollment in the fourth quarter of 2021 and final data in 2020. We have now opened sites and are actively seeking to involve patients in our Phase II pilot Keynote B36 trial in non-small cell lung cancer. Keynote B36 is a notable study for Novocure as it is designed to study TT fields together with Merck's Keytruda as a first-line therapy in stage 3 non-small cell lung cancer. It provides an opportunity to expand our study of TT fields to an earlier stage of non-small cell lung cancer with a leader in the oncology field.

Interim until 2021 and final data in 2020.2.

We have now opened sites and are actively seeking to enroll patients in our phase II pilot cannot be 36 trial in non small cell lung cancer cannot be 36 is a notable study for novocure.

And as it is designed to study TT fields together with Merck's Keytruda as a first line therapy in stage III non small cell lung cancer cannot be 36 provides an opportunity to expand our study of TD phase 2 and earlier stage of non small cell lung cancer with a leader and oncology.

<unk> field cannot be 36 is also an important expansion of our clinical study of TT fields together with immunotherapy, which has shown promise in the laboratory and and early clinical results.

Asaf Danziger: Keynote B36 is also an important expansion of our clinical study of TT fields together with immunotherapy, which has shown promise in the laboratory and in early clinical results. We are also updating our anticipated timing for our Phase III Pivotal Metis Study in Brain Metastases from Non-Small Cell Lung Cancer. The enrollment timelines for the METIS trial are reliant on clinical site expansion in regions that continue to be materially delayed as clinical sites devote significant resources to the COVID-19 global pandemic.

Yeah.

We are also updating our anticipated timing for our phase III pivotal <unk> study in.

And brain metastases from non small cell lung cancer.

The enrollment and timelines for the Metis trial are reliant on clinical site expansion in regions that continues to be materially delayed as clinical sites devote significant resources to the COVID-19 global pandemic, our clinical affairs.

Asaf Danziger: Our clinical affairs teams are focused on accelerating enrollment at existing clinical sites, but our efforts are challenged by a heavy reliance on virtual engagement, and as a result, we now anticipate a two-quarter delay in last patient enrollment for METIS, with final data in 2023. It is estimated that between 20 to 40 percent of patients with non-small cell lung cancer develop brain metastasis, and together with Lunar, the METIS data represents an important opportunity to demonstrate the efficacy of TT fields at multiple stages in the lung cancer patient journey.

Collagen and are focused on accelerating enrollment at existing clinical size, but our air force are challenged by a heavy reliance on virtual engagement and as a result, we now anticipate a 2 quarter delay in last patient enrollment format. These with final data in 2020.3 it.

First day made it that between 20% to 40% of patients with non small cell lung cancer developed brain metastases and together with Luna day met this data represents an important opportunity to demonstrate the efficacy of <unk> at multiple stages in the lung cancer patient journey.

Asaf Danziger: Turning to our abdominal program, advanced hepatocellular cancer is another indication where we are continuing our studies of ttFILS plus immunotherapy. Earlier this month, we presented the Phase II pilot data from the HEPANOVA trial at the ESMO-GI Congress. As a reminder, HEPANOVA was designed to study the safety and efficacy of titifils together with sorafenib in patients with advanced liver cancer.

Turning to our abdominal program advance and path to sell on cancer is another indication, where we are continuing our studies of TT fields plus immunotherapy Elliot.

Earlier this month represented the phase II pilot up on Nova trial data at the ESMO Gi Congress.

As a reminder, hip and novel.

And is as time to study the safety and efficacy of TT fields together with Sorafenib in patients with advanced liver cancer.

Asaf Danziger: We are encouraged by the EPINOVA results. Historical control data shows an objective response rate of 4.5% and disease control rate of 43% for patients treated with sorafonib alone. In 21 available patients, HEPANOVA showed a 9.5% objective response rate and 76% disease control rate, as well as 5.8 months of progression-free survival. We believe these results are even more encouraging when considering the poor prognosis of the study population. Over 50% of the patients in Epanova were categorized as child-proof class B, and this indicates greater impairment of liver function compared to class A patients. In the historical control, only 5% of patients were identified as class B.

We are encouraged by their per Nova results historical control data shows objective response rate of 4.5 per cent and disease control rate of 43%.

These are patients treated with Sorafenib alone.

In 'twenty, 1 available patients upon oversold, and 95% objective response rate and 76% disease control rate as well as FIFO and 8 months of progression free survival.

We believe these results are even more encouraging when.

And when considering the poor prognosis of the study population.

Over 50% of the patients in a per novo are categorized has childproof class b. This indicates greater impairment of liver function and compared to going on to top class a peso per person and the historical control only 5% of patients.

And were identified as class B.

Research has shown that the benefit of TT fields Antimitotic effect is a function of exposure to the therapy and maximum benefit is achieved with continued use over many months.

Asaf Danziger: Research has shown that the benefit of tt-fields anti-methotic effect is a function of exposure to the therapy, and maximum benefit is achieved with continued use over many months. This was a challenge for Epanova given the poor prognosis of the patients enrolled. A median treatment duration of only 10 weeks was achieved. For the 11 patients who received at least 12 weeks of therapy, the disease control rate reached 91%, with an objective response rate of 18%. These data suggest that TT FIELDS therapy has the potential to extend survival in advanced liver cancer.

This was a challenge for a per Nova given the poor prognosis of the patients enrolled.

And median treatment duration of only 10 weeks was achieved for the 11 patients who received at least 12 weeks of therapy. The disease control rate reached 91% with objective response rate of 18%.

These data suggest the TT fields therapy has the potential to extend survival in advanced.

And so cancel our team along with trial investigators are actively designing a phase III pivotal trial that contemplates TT field therapy together with the current standard of care, including immunotherapy and have engaged the FDA regarding the use of TT fields in advanced liver cancer.

Looking ahead to the third quarter, we anticipate the last patient enrollment and interim analysis for our phase III pivotal innovate 3 trial in recurrent ovarian cancer innovate 3 is designed to study TT fields together with Nab paclitaxel in patients suffering from recurrent of volume.

Asaf Danziger: Our team, along with trial investigators, is actively designing a phase 3 pivotal trial that contemplates TT FIELDS therapy together with the current standard of care, including immunotherapy, and have engaged the FDA regarding the use of TT FIELDS in advanced liver cancer. Looking ahead to the third quarter, we anticipate the last patient enrollment and interim analysis for our Phase III Pivotal INNOVATE III trial in recurrent ovarian cancer. INNOVATE III is designed to study TT fields together with NAPA-Kitaxel in patients suffering from recurrent ovarian cancer following platinum failure.

Cancer following platinum failure, together with our partners and gold and the G. O G Foundation, we have seen strong investigator interest in innovate 3 since its launch in early 'twenty and 19 following the last patient enrollment the trial protocol calls for an 18 month follow up period.

We anticipate final data from the innovate 3 trial in 2020.3.

Asaf Danziger: Together with our partners, NGOT, and the GOG Foundation, we have seen strong investigator interest in INNOVATE III since its launch in early 2019. After the last patient enrollment, the trial protocol calls for an 18-month follow-up period. We anticipate final data from the INNOVATE III trial in 2023. Our product development initiatives also represent an important opportunity for Novocure to optimize the benefits patients receive from TT Fields therapy. Array design is paramount to that effort.

Our product development initiatives also represent an important opportunity for novocure to optimize the benefit patients receive from TT fields therapy.

Array design is paramount to debt.

We recently launched a usability study of new more flexible arrays in multiple clinical sites in Europe. The new arrays are designed to improve skin adhesion increased degree of motion and potentially reduce skin irritation, while enabling greater ease of use.

For patients. This is a bad day study is an important step forward in our ongoing efforts to optimize our therapeutic delivery systems as we aim to improve the time on therapy and benefit to our patients.

Asaf Danziger: We recently launched a usability study of new, more flexible arrays in multiple clinical sites in Europe. The new arrays are designed to improve skin adhesion, increase the degree of motion, and potentially reduce skin irritation, while enabling greater ease of use for our patients. This usability study is an important step forward in our ongoing efforts to optimize our therapeutic delivery systems as we aim to improve the time on therapy and benefit to our patients.

I want to take this opportunity to thank my Novocure colleagues.

For the ongoing dedication to our patients forward mission to those of you listening to the call today I'm inspired by your hard work and enthusiasm and want to thank you for your passion and purpose as we look to achieve our goals.

With that I will pass the call over to Ashley to discuss our.

And the updates for the second quarter.

Asaf Danziger: I want to take this opportunity to thank my Novocure colleagues for their ongoing dedication to our patient-forward mission. To those of you listening to the call today, I am inspired by your hard work and enthusiasm and want to thank you for your passion and purpose as we look to achieve our goals. With that, I will pass the call over to Ashley to discuss our financial updates for the second quarter. Thank you, Asaf.

Thank you I stop.

Never care ended the second quarter on 'twenty, 'twenty, 1 and a strong financial position.

Our G D and business generated $134 million and net revenues and the quarter.

Presenting a 15% year.

Financing year increase.

The drivers of revenue growth for 3 fault.

First we had 3480 sat and act in patients at the end of June and increase of 6% from the same period and 2020.

Ashley Cordova: Novocure ended the second quarter of 2021 in a strong financial position. Our GBM business generated $134 million in net revenues in the quarter, representing a 15% year-over-year increase. The drivers of revenue growth were threefold. First, we had 3,487 active patients at the end of June, an increase of 6% from the same period in 2020. Second, we improved our average reimbursement price by more than $400 per patient per month versus the same period last year. Finally, we reaped benefits from the successful launch of Optune in China by our partners IWASP.

Second we improved our average reimbursement price by more than 4.

Year over your dollars per patient per month versus the same period last year.

Finally, we reaped benefits from the successful launch of opportune in China by our partner XI lab.

Notably we grew active patients despite challenging prescription trends and key markets driven by the prolonged impact of.

419 on patient volume and our heavy reliance on virtual customer engagement.

We are focused on optimizing all available levers for growth, specifically market penetration and duration of therapy and reimbursement rates with the ultimate goal to deliver durable revenue growth over time.

We recorded $8.2 million and revenues from Medicare fee for service beneficiaries, and the quarter versus $10.8 million and the second quarter 2020.

Ashley Cordova: Notably, we grew active patients despite challenging prescription trends in key markets driven by the prolonged impact of COVID-19 on patient volumes and our heavy reliance on virtual customer engagement. We are focused on optimizing all available levers for growth, specifically market penetration, duration of therapy, and reimbursement rates, with the ultimate goal to deliver durable revenue growth over time. We recorded $8.2 million in revenues from Medicare Fee-for-Service beneficiaries in the quarter versus $10.8 million in the second quarter of 2020.

The decrease in revenue from Medicare does not reflect a reduction and active patients on.

Or a decrease and the contribution we ultimately.

Covid and expect for Medicare beneficiaries, but instead reflects the impact of and extended appeal time line for certain claims.

Our gross profit and the second quarter of 2021 was $105 million and increase of 16% from the second quarter of 2020 with a growth.

And for the quarter of 79 per cent.

Ashley Cordova: The decrease in revenue from Medicare does not reflect a reduction in active patients or a decrease in the contribution we ultimately expect for Medicare beneficiaries but instead reflects the impact of an extended appeal time line for certain claims.

We continue to focus on opportunities to increase efficiencies and scale within our supply chain.

We are evaluating new materials manufacturers and processes that could lead to lower cost.

1 example of this is our focus on reducing the cost per array.

Year over year, we have seen a 7% improvement and cost per array.

Ashley Cordova: Our growth profit in the second quarter of 2021 was $105 million, an increase of 16% from the second quarter of 2020, with a growth margin for the quarter of 79%. We continue to focus on opportunities to increase efficiencies and scale within our supply chain. We are evaluating new materials, manufacturers, and processes that could lead to lower costs. One example of this is our focus on reducing the cost per array. Year over year, we have seen a 7% improvement in cost per array. Our capital allocation priorities remain consistent as we focus on investing strategically to maximize the future growth potential of our therapy. SG&A expenses in the quarter were $67 million, an increase of 24% from Q2.

Our capital allocation priorities remain consistent as we focus on investing strategically to maximize the future growth potential of our therapy.

SG&A expenses and the quarter were $67 million.

Growth Maryse <unk> 24 per cent from Q2, 2020.

This increase reflects our ongoing commitment to disciplined spending to support growth initiatives. We are actively building out our commercial capabilities and other organizational readiness efforts and anticipation of potential future approvals and new indications.

And internally, we are investing heavily and our market access capabilities and are there to evaluate opportunities identifying optimal access pathways and successfully gain reimbursement and new geographies.

We invested a record $15 million and research and development activities in Q.

Q2, 2021 and.

Notable increase of 68 per cent from the prior year.

And this multifaceted investment was driven by increases and preclinical research and the expansion and medical affair Affairs activities clinical trial and personnel expenses for our phase III pivotal post marketing and labor.

Ashley Cordova: This increase reflects our ongoing commitment to discipline spending to support growth initiatives. We are actively building out our commercial capabilities and other organizational readiness efforts in anticipation of potential future approvals and new indications. Additionally, we are investing heavily in our market access capabilities in order to evaluate opportunities, identify optimal access pathways, and successfully gain reimbursement in new geographies. We invested a record $50 million in research and development activities in Q2 2021, a notable increase of 68% from the prior year.

Extension trials.

And development and personnel expenses to support our product development programs.

Our net loss for the second quarter was $15 million equating to a loss of 14 cents per share.

This was driven primarily by a $33 million a year over year.

Year increase and our operating expenses.

Our focus remains on optimizing investments and future growth before and near term profitability.

Beyond earnings per share. We also evaluate operating performance based on adjusted EBITDA and <unk>.

Ashley Cordova: This multifaceted investment was driven by increases in preclinical research and the expansion of medical affairs activities, clinical trial, and personnel expenses for our Phase 3 Pivotal Post-Marketing and Label Expansion Trial, and Development and Personnel Expenses to support our product development program. Our net loss for the second quarter was $15 million, equating to a loss of $0.14 per share.

Non-GAAP measure of earnings before interest taxes.

Depreciation and amortization and share based compensation.

We believe this is an important metric as it removes the impact of earnings attributable to our capital structure tax rate and material non cash items, specifically share based compensation and at best reflects the financial value generated by our business.

Ashley Cordova: This was driven primarily by a $33 million year-over-year increase in our operating expenses. Our focus remains on optimizing investments and future growth before near-term profitability. Beyond earnings per share, we also evaluate operating performance based on adjusted EBITDA, a non-GAAP measure of earnings before interest, taxes, depreciation, amortization, and share-based compensation. We believe this is an important metric as it removes the impact of earnings attributable to our capital structure, tax rate, and material non-cash items, specifically share-based compensation, and it best reflects the financial value generated by our business. In the second quarter of 2021, our adjusted EBITDA was $18 million.

And the second.

2021, our adjusted EBITDA was $18 million.

We are especially encouraged by our stable financial performance in light of our aggressive investments and growth initiatives and the prolonged effects of the Covid pandemic.

While our year to date adjusted EBITDA is approximately $4 million lower than.

The first half of 2020, we haven't invested an incremental $61 million and research and development sales and marketing and other operational activities to maximize future growth opportunities.

We ended the quarter with nearly $900 million and cash on hand or.

Our cash position.

And quarter flexibility and strength needed for continued investment across multiple functional areas without sacrificing potential opportunities that would otherwise be left on pursuit.

Ashley Cordova: We are especially encouraged by our stable financial performance in light of our aggressive investments in growth initiatives and the prolonged effects of the COVID pandemic. While our year-to-date adjusted EBITDA is approximately $4 million lower than the first half of 2020, we have invested an incremental $61 million in research and development, sales and marketing, and other operational activities to maximize future growth opportunities. We ended the quarter with nearly $900 million in cash on hand.

This includes consistent investment and research and development institutional readiness and initiatives and anticipation of potential.

And from future approvals and new indications and.

And geographic expansion.

Before I hand, the call back to the operator for questions I would like to thank you all for your time and continued interest and Novocure.

We are proud of our team's performance this quarter and look to continue our track.

And of execution and the second half of the year.

The fundamental prospects of our business are strong and we remain confident and our strategy our team's ability to execute and the long term potential of the tumor treating fields platform to maximize shareholder value as we strive to extend survival and some of the most aggressive.

Ashley Cordova: Our cash position provides the flexibility and strength needed for continued investment across multiple functional areas without sacrificing potential opportunities that would otherwise be left unexploited. This includes consistent investment in research and development, institutional readiness initiatives in anticipation of potential future approvals and new indications, and geographic expansion. Before I hand the call back to the operator for questions, I would like to thank you all for your time and continued interest in Novocure. We are proud of our team's performance this quarter and look to continue our track record of execution in the second half of the year.

Aggressive forms of solid tumor cancers.

With that I will turn the call back over to the operator for Q&A.

Yes.

Thank you as a reminder, if you have a question. Please press Star then 1 on your Touchtone telephone to withdraw your question. Please press the pound key.

Our first question comes from the line of.

Jason Kantor with Piper Sandler Your line is open. Please go ahead.

Thanks, Good morning, everyone.

Wanted to start with the update on matters and you referenced and a 2 quarter delay that's tied to challenges and patient recruitment and the current environment.

Unknown Executive: The fundamental prospects of our business are strong, and we remain confident in our strategy, our team's ability to execute, and the long-term potential of the tumor treating field platform to maximize shareholder value as we strive to extend survival in some of the most aggressive forms of solid tumor cancer. With that, I will turn the call back over to the operator for Q&A. Thank you. As a reminder, if you have a question, please press star then 1 on your touchtone telephone. To withdraw your question, please press the pound key. Our first question comes in line with Jason Bandar and Piper Sandler. Your line is open.

And I appreciate that you're not changing the time on to any other studies, but hoping.

And you can help us understand what's maybe unique about the meta study your brain Mets patients, that's leading to the enrollment delays for medicine, but has an impact on your other studies.

Yes, Hi, Jason This is bill.

You know I'll remind you and everyone that when we initiate the trial.

We.

Have a recruitment estimate and we project a final patient and that.

And that recruitment pace can be affected by.

A lot of different things and competition from other trials.

Movement of clinicians from from 1.

Center to another.

Sometimes there's something and the protocol debt.

We didn't quite understand that may restrict patients from enrolling more than than was anticipated during the initial design.

Jason M. Bednar: Please go ahead. Thanks. Good morning, everyone.

William F. Doyle: I wanted to start with the update on MEDIS, referencing a two-quarter delay that's tied to challenges in patient recruitment in the current environment. And I appreciate that you're not changing the timeline for any other studies, but hoping you can help us understand what's maybe unique about the MEDIS study or BrainMEDS patients that's leading to the enrollment delays for MEDIS but isn't impacting your other studies. Yeah, hi. Hi Jason. It's Bill.

And we make adjustments over time.

But particularly.

And the number of centers to to hit the targets.

As the trials progress.

Those.

Estimates.

Come much.

Firmer right, we see the pace.

And we are able to turn estimates into projections.

So medicines nearing the end we have the clinical trial footprint in place we understand.

William F. Doyle: You know, I'll remind you and everyone that when we initiate a trial, we have a recruitment estimate, and we project a final patient in. That recruitment pace can be affected by a lot of different things, competition from other trials, movement of clinicians from one center to another, sometimes there's something in the protocol that we didn't quite understand that may restrict patients from enrolling more than was anticipated during the initial design. And we make adjustments over time, but particularly in the number of centers to hit the target. As the trials progress, those estimates become much firmer, right? We see the pace.

The patients that.

The patients per month that we can expect.

We were unable.

As we've discussed to.

Spanned the footprint and therefore with the current footprint, we now expect.

And can project a 2 quarter delay each 1 of these trials however is quite different.

The 2 other trials that are also nearing the end R.

Our lunar trial, and our trial in ovarian cancer innovate and because those trials are nearing the and again our estimates are our projections and we don't see any reason.

Based on the current footprints and the current rates to change those.

And.

Those.

And projections for the and so it's it's almost as simple as that and I hope that provides a little bit of clarity Jason.

William F. Doyle: And we are able to turn estimates into projections. So, MEDIS is nearing the end. We have the clinical trial footprint in place. We understand the number of patients per month that we can expect. We were unable, as we've discussed, to expand the footprint, and therefore, with the current footprint, we now expect and can project a two-quarter delay.

Yeah, Yeah. It does.

Maybe if I shift over and talk about some of your studies are your data that came out during the quarter on App and Nova.

And you know.

Question that I received from investors. After the results were made available was and why the trial design included such sick patients and I know.

William F. Doyle: Each one of these trials, however, is quite different. The two other trials that are also nearing completion are our lunar trial and our trial in ovarian cancer, Inovate. And because those trials are nearing the end, again, our estimates are projections, and we don't see any reason, based on the current footprints and the current rates, to change those. Those projections for the end So it's almost as simple as that. I hope that provides a little bit of clarity. Yeah, yeah, it does.

That's in part why you run these phase 2 studies, but it feels like this could have been and avoidable issue. So I guess the question and there is why the original inclusion of patients that would potentially not be able.

To receive full therapy or the full 12 weeks of therapy, and then relatedly when can we expect to see the trial protocol on the phase III study that you're preparing.

Yes, let me start and then I'll I'm going to.

Turn it over to Corey for some more detail, but remember why do we do face and trial.

Trial.

First and foremost we do them to establish the safety of.

William F. Doyle: Maybe I should shift over and talk about some of your studies or your data that came out here during the quarter on HEPAnova. You know, a common question that I received from investors after the results were made available was why the trial design included such sick patients. And I know that's in part why you run these phase two studies, but it feels like this could have been an avoidable issue. So I guess the question here is why the original inclusion of patients that would potentially not be able to receive full therapy for the full 12 weeks of therapy? And then relatedly, when can we expect to see the trial protocol for the phase three study that you're preparing? Thanks.

Tumor treating fields, plus whatever combination therapy in the <unk>.

Target region.

And that regard of course helped Nova was.

And <unk> plus.

The second reason that we do the trials is too.

Look for and these remember our small open label trials are to look for.

Signals.

Efficacy because they are open label, we look and because they are small numbers, we can look in great detail on each.

Each patient.

The exposure to the therapy, we can look at their response.

And the durability of disease control and remember we are paid based on.

Disease control and then we can discuss.

William F. Doyle: Yeah, let me start and then I'm going to turn it over to Uri for some more detail. But remember, why do we do phase two trials? First and foremost, we do them to establish the safety of tumor treating fields, plus whatever combination therapy in the Target. In that regard, of course, HEPNOVA was an A+.

Results with our investigators to determine whether.

Or not there is excitement.

About <unk>.

Moving forward.

You've said disappointment and on.

The avoidable error for us and I understand and financial community.

William F. Doyle: The second reason that we do the trials is to look for signals of efficacy. Because they're open label and because they're small numbers, we can look in great detail at each patient, the exposure to the therapy, we can look at their response, the durability of disease control, and remember, we're paid based on disease control. And then we can discuss those results with our investigators to determine whether or not there's excitement about moving forward. You know, you've said disappointment and unavoidable error. For us, and I understand in the financial community, there is that sentiment.

And there is that sentiment there is not that kind of it <unk>.

Inside novocure or.

With our investigators we view this as absolutely Green light.

To move forward to phase III with the current standard of care and maybe maybe with that as an underlying worrying maybe you can give a little more.

Color on on <unk> and the path forward.

Thank you Bill and I will start.

Start by reiterating what and Bill and I mentioned and say that.

The purpose of the study was to get results, which could serve as an efficacy signal for the design of it.

Future large and randomized study and liver cancer and let's be very clear, we're talking about up on Nova which.

<unk>, a small 27 patient single arm study not a registrational study of course, when we design our studies, we always try to do.

William F. Doyle: There is not that sentiment inside Novocure or with our investigators. We do this as absolutely a green light to move forward to phase three with the current standard of care. Maybe with that as an underline, Uri, maybe you could give a little more color on HEPTA-NOVA and the path forward. Thank you, Bill.

As inclusive as possible to patients with unmet need and those patients with a child Pugh class B for example, certainly have these.

Very clear unmet need unfortunately, its very difficult to predict how many such patients will be and actually enrolled in our study and what the proportion will be but given the actual numerical results of these small cohorts with very poor prognosis and therefore low.

Uri Weinberg: I will start by reiterating what Bill mentioned and say that the purpose of the ETHANOVA study was to get results that could serve as an efficacy signal for the design of a future large and randomized study in liver cancer. And let's be very clear; we are talking about TEPANOVA, which was a small 27-patient single-arm study, not a registrational study, of course. When we design our study, we always try to be as inclusive as possible to patients with unmet needs.

Was the Zurich and therapy, we are naturally very encouraged and we feel that this provides us with what we needed to demonstrate safety and preliminary efficacy signal in this area and debt.

We are.

Certainly prepared to continue our work with the investigators.

Uri Weinberg: And those patients with a child cue class B, for example, certainly have this very clear unmet need. Unfortunately, it's very difficult to predict how many such patients will actually be enrolled in a study and what the proportion will be.

And with our teams for the design of a phase III study in and hepatic cell carcinoma, including to the current standard of care.

Jason you asked about timing.

Just a note we are.

Uri Weinberg: But given the actual numerical results of these small cohorts with very poor prognosis and therefore low exposure to therapy, we are naturally very encouraged. We feel that it provides us with what we need to demonstrate safety and preliminary efficacy signals in this area. And we are certainly prepared to continue our work with investigators and with our teams for the design of a phase 3 pivotal study in hepatocellular carcinoma, including the current standard of care.

And our investigators are actively.

Engage with the FDA now so we've progressed too.

Discussions of the protocol with the FDA.

And as soon as those discussions are.

<unk> concluded then we will have more to say about the phase III protocol.

Okay and are you willing to.

<unk>.

Thirdly assets, maybe before year end or early next year any kind of windows you can put around that.

Again, we're dealing with the FCA.

Hard to project, but again, the fact that we're engaged with the FDA I think give some sense of the.

Uri Weinberg: Jason, you asked about timing, you know, just a note: we are, and our investigators are actively engaged with the FDA now, so we've progressed to discussions of the protocol with the FDA. And as soon as those discussions are concluded, then we'll have more to say about the Phase 3 protocol. Okay, are you willing to venture a guess as to maybe before year end or early next year, any kind of windows you can put around that?

The progression and I will.

And the 1 thing I will underline that the trial will not be a trial.

Tumor treating fields plus sorafenib.

Trial will be a trial of tumor treating fields plus the current standard of care.

1 thing I'll mention here, we believe that the current standard of care, which includes immunotherapy.

Plus bevacizumab has actually moved.

William F. Doyle: Again, when dealing with the FDA, it's hard to project, but again, the fact that we're engaged with the FDA, I think, you know, gives some sense of the progression. And I will underline one thing: the trial will not be a trial of tumor-treating fields plus seracinib. The trial will be a trial of tumor-treating fields plus the current standard of care. You know, one thing I'll mention here: we believe that the current standard of care, which includes immunotherapy plus Bevacizumab, has actually moved further in our corner. You know, seracinib is a kinase inhibitor. We see tumor-treating fields working additively with seracinib, but we're seeing all this promising data now of tumor-treating fields in immunotherapy.

Further and our corner.

<unk> is a kinase inhibitor.

And we see tumor treating fields.

Working additives admittedly.

And with Sorafenib, but we're seeing all of this promising data on now.

Tumor treating fields and immunotherapy.

It's clearly the direction that we're headed for the phase III.

Alright very helpful. Thank you.

Thank you and our next question comes from the line of corn and CASM off with J P. Morgan. Your line is open. Please go ahead.

Great.

Good morning, guys. Thanks for taking the questions.

I have 2 for you as well 1 is a follow up on the madis update this morning.

For lunar that accrual delay prompted the earlier than expected interim efficacy look debt. The DMC just took during the routine safety check. So just curious is it possible.

William F. Doyle: So that's clearly the direction that we're headed for phase three. Very helpful. Thank you.

And that the DMC takes an early look at med as well like they did with winter given the somewhat prolonged timelines.

Unknown Executive: Thank you. And our next question comes from the line of Corey Kazimoff with J.P. Morgan. Your line is open. Please go ahead.

Thanks, Corey good morning.

Again, each 1 of these clinical trials.

Corey Langer: Great. Good morning, guys. Thanks for taking the questions. I have two for you as well.

Theres, certainly commonalities and and they're also differences.

On.

Net.

It.

And 1 of the trial and.

William F. Doyle: One is a follow-up on the MEDIS update this morning. For Lunar, that accrual delay prompted the earlier-than-expected interim efficacy look that the DMC just took during the routine safety check. So just curious, is it possible that the DMC takes an early look at MEDIS as well, like they did with Lunar given the somewhat prolonged timeline? Thanks, Corey. Good morning.

In fact, the only 1 that does not have an interim analysis.

So while the DMC for the trial does.

Meat and.

Book.

At.

The safety on their periodic meetings.

No.

Pre specified interim and that so so it's not going to happen.

Okay and then the other question I have is around lunar and and I might be weighted reading way too much into this but when you first announced the interim and proposed protocol changes.

William F. Doyle: Again, each one of these clinical trials, you know, there are certainly commonalities, and there are also differences. Metis is one of the trials, in fact, the only one that does not have an enormous analysis. So while the DMC for the trial does meet and looks at safety at their periodic meetings, there were no pre-specified interim amendments, so it's not going to happen. Okay. And then the other question I have is around LUNAR, and I might be reading way too much into this, but when you first announced the interim and proposed protocol changes, you said the study would provide sufficient overall power for both primary and secondary endpoints.

You said the study will provide sufficient overall power for both primary and secondary.

And points and now the language around and saying there will provide sufficient overall power as well as potentially providing important information regarding efficacy what the treatment subgroups. So I guess I'm wondering if this is an actual change and language or expectations or if I am just in factory and way too much into the nuances around words.

And I ask given the obviously.

Obviously interest that there is and this study from from investors and from physicians.

Yeah, I appreciate the interest and but it's the latter there is no change and expectation.

And the company now of course, we're blinded to the data and we are.

William F. Doyle: And now the language around it says it will provide sufficient overall power as well as potentially provide important information regarding advocacy within treatment subgroups. So I guess I'm wondering if this is an actual change in language or expectations, or if I am just in fact reading way too much into the nuances around words. I ask given the obvious interest that there is in this study from investors and from physicians. Yeah, I appreciate the interest.

Relying on the on the interpretation.

The DSA, but that is I would not view that I'd say.

Change and message from the company.

Okay got it thanks, a lot Bill appreciate you taking the questions.

Thank you and our next question comes from the line and Jessie Zheng with Mizuho Securities. Your line is open. Please go ahead.

Okay, and good morning, and thanks for taking our questions. So a question with regards to how should we think about disease control relative to potentially reverse the tumor which is measured by O. R. R.

William F. Doyle: But it's the latter. There's no change in expectations within the company. Now, of course, we're blinded to the data, and we're relying on the interpretation of the DMC. But I would not view that as a change in message from the company. Okay, got it. Thanks a lot, Bill. Appreciate you taking the time.

And because based off a non small cell lung cancer and liver cancer data.

Though we have seen so far here.

And here's a T T assets.

Yeah.

How should we think about.

William F. Doyle: Thank you. And our next question comes from the line of Dissy Yang with Mizzou Health Securities. Your line is open. Please go ahead.

And when we have here.

T T F a race.

That and then.

Okay.

Thanks.

Hey, good morning, I'm going to let Ori start and then.

Dissy Yang: Hi, good morning, and thanks for taking our questions. So a question with regard to how we should think about disease control relative to potentially reverse the tumor, which is measured by ORR, because based on the non-small cell lung cancer and liver cancer data we have seen so far, it appears TTF does a better job in disease control. In light of this, how should we think about it? When we have the high-intensity PTF array, would that dynamically change?

And we'll continue the discussion around debt disease control and the other parameters or and can you provide some commentary.

And of course and thank you.

So I would start by mentioning.

<unk> debt.

This controle rates includes both the objective response rate or partial response proportion of those patients, but also debt patients who experienced stable disease.

He says very important correlation with clinical outcomes and multiple different.

William F. Doyle: Thank you, Faye. Good morning. I'm going to let Uri start and then, you know, we'll continue the discussion around disease control and the other parameters. Uri, can you provide some commentary?

Debt cancers and <unk>.

And demonstrates the ability and also a therapeutic agent or a device and our case to maintain control over their disease.

Uri Weinberg: course. Thank you. So I would start by mentioning that disease control rates include both the objective response rate or the partial response proportion of patients, but also the patients who experience the stable disease. This has a very important correlation with clinical outcomes in multiple different cancers as it demonstrates the ability of a therapeutic agent or a device in our case to maintain control over the disease across a prolonged period of time and when we compare the disease control rate of 76% that was reported in the EPINOVA study to the about 40-43% disease control rate reported in previous historical controls, it's definitely a very encouraging signal that the addition of a tumor-treating field was able to control the disease better.

Growth.

And prolonged periods of time, and when we compare the disease control rate of 76%.

And that's.

And that's what's reported in the EFT and Nova study 2 that about 40%, 43% disease control rate reported in previous historical controls it said definitely very encouraging.

And that said the addition of tumor treating fields was able.

Able to control the disease better but that is not the only evidence of debt outcome. Because we have also seen and expansion of the median progression free survival 258 months, and and media and time to progression of 8.9 months, which.

Uri Weinberg: But that is not the only evidence of that outcome, because we have also seen an expansion of the median progression-free survival to 5.8 months and a median time to progression of 8.9 months, which also serves as a very promising signal and I remind everybody that we are comparing a single-arm study to historical controls, but nevertheless, every single such result supports our excitement and the investigators' enthusiasm towards the continuation of exploring the role of PP fields and their effic So we anticipate that, similar to other malignancies such as glioblastoma where we have seen the expansion of progression-free survival correlating with overall survival, we expect, and we hypothesize that we will see this also in hepatocellular carcinoma, and that will be the subject of the upcoming phase 3 study.

Also serve as a very promising a stigma and I remind everybody that we are comparing a single arm study to historical controls, but nevertheless.

Every single such result supports.

Sure.

This meant and and <unk>.

First the Gators enthusiasm.

Words are continuation of exploring the role of TT fields and its efficacy and this debt.

And malignancy, so we anticipate that similar to other malignancies, such as global Stormer, where we have seen the expansion of progression free survival correlating.

2 with overall survival.

And we expect and we hypothesize that we will see this also in deposits total our carcinoma and that will be the subject of the upcoming phase III study.

Uri Weinberg: And I'll just add, from a business perspective, recall that in our business model, we charge per month for therapy. So again, from a business perspective, you can think of it, we're essentially paid by disease control, and so it's an important metric as we consider various investments as well. And, you know, one thing as an aside, because we have discussed capnova a couple of times, and again, we acknowledge that while we and the investigators were very excited about it, I think there was disappointment, at least in some quarters, in the financial community.

And and I'll, just add from a business perspective recall that our.

Our business model.

And we charge per month on therapy.

And.

Again from a business perspective, you can think of it we're essentially paid by disease control.

And so it's an important metric because we consider.

Various and investments as well and.

1 thing is an aside because we have discussed happened over a couple of times and again, we acknowledge that while we and the investigators who are very excited.

And I think there was disappointment at least and some quarters and the.

And the financial community.

Uri Weinberg: Some of that was, you know... Well, self-inflicted, but a point I want to make, these data in HEPA-NOVA are actually more encouraging than the data that we looked at all those years ago in our phase twos in GBM. So just as a reference point, and it's, you know, again, it underlines our reasoned commitment to a phase 3 program in this cancer with this huge unmet need.

And that was.

But self inflicted but.

Point I want to make these data and they happened off on.

And more encouraging.

And the data that we looked at all those years ago, and our phase II and GBM. So just as a reference point.

And it's again and underlines our.

Reasoned.

Commitment to a phase 3 program and this and this cancer with this huge unmet need.

William F. Doyle: Thank you, Bill, for that. I'll just have a follow-up question on the financial side. It looks like for the GBM business, market penetration in the EU is higher than in the US. Just wanted to see from your perspective if that's the case, and if that's the case, would you help us to understand what might be some of the contributing factors?

Thank you bill for that I'll just have 1.

A follow up question on the financing.

Aside and it looks like for the G. B M business market penetration you is higher than you <expletive> and just want you to see from your perspective, if that's the case and if that's the case and would you help us to understand what might be some off the contributing factors.

Unknown Executive: Sure. So I'm going to go.

Sure So I'm gonna ask.

Unknown Executive: Sure, so I'm going to ask Pritesh and Ashley to talk about market penetration and the financial ramifications. Thank you, Bill. Ashley, I can start, and then you can pick up.

And Ashley to talk about the market penetration and the financial ramifications.

Ah. Thank you Bill actually I can start and then you can pick up so thank you for the question I think when we look at our G. B M business 1 of the things that we're proud of is that we build a stable and sustainable business that now is allowing us the financial strength to make all the.

Pritesh Shah: So thank you for the question. I think when we look at our GBM business, one of the things that we're proud of is that we built a stable and sustainable business that is now allowing us the financial strength to make all the investments that you've heard about in our opening remarks, as well as some of the questions that have come in. When we think about where we go with GBM, we know that there are many more eligible patients that can receive Optune, and that's one of the benefits of our product profile.

Investments that you've heard about and are opening remarks as well as some of the questions that have come in and when we think about where we go with the G. B M. We know that there are many more eligible patients that can receive opportune and that's 1 of the benefits of our product profile and our singular focus now is to ensure.

Pritesh Shah: And our singular focus now is to ensure that we increase the acceptance of Optune across the global community. And here, we're specifically working towards increasing our engagement and increasing our ability to work closer with academic centers. We know that many patients flow into these academic centers, both in the US and across the globe. And a lot of our efforts, specific initiatives, such as these clinical collaborations that you heard about today, are focused on working together with that academic community as partners to think about how we can then further expand and build upon what we've been able to do in GBM. We're still changing minds on the new modality. We're still educating. We're still allowing the academic physician base to come together and partner with us.

And that we increase the acceptance of opportune across the global community and here, where specifically working towards increasing our engagement and increasing our ability to work closer with academic centers, we know that many patients flow in these academic centers, both and the U S and across the <unk>.

<unk> and a lot of our efforts specific initiatives such as these clinical collaborations that you heard about today are focused on working together with that academic community as partners to think about how we can then further expand and build upon what we've been able to do and GBM. So when we look at our market pen.

Duration, where in the U S where around 40%. If you look at the rest of the world, It's catching up right and in Japan, and and Europe were getting closer to that 40% Mark and our goal is going to be to continue the education that we're doing and the space, we're still changing minds on the new modality, we're still.

Pritesh Shah: And we believe that these opportunities will help us get closer and closer to where we think our clinical profile should yield, which is many more eligible patients to be treated with Optune. In addition to that, I will end with the work that we're doing on expanding our footprint. So today we're in a number of active markets, and our efforts now allow us to expand the potential to bring TT fields and Optune into other markets.

Educating we're still allowing the academic.

Physician based on to come together and partner with US and we believe that these opportunities will help us get closer and closer to where we think our clinical profiles should yield which is many more eligible patients to be treated with opportune.

In addition to that I will and with work that we're doing on expanding our footprint. So today, we are in a number of active markets and our efforts now allow us to expand the potential to bring TT fields and opt tune into other markets and more specifically and more tangibly. The work we're doing.

Pritesh Shah: And more specifically and more tangibly, the work we're doing in France is yielding positive opportunities here, and we expect to be in the marketplace sometime next year. Ashley, I'll turn it over to you for any further comments.

And and France is yielding positive opportunities here and we expect to be in the marketplace. Some time next year actually I'll turn it over to you for any further comments and.

Ashley Cordova: No, I think you summarized it well. Thank you for taking our questions. Thank you. And our next question comes from the line of Vijay Kumar with Evercore ISI. Your line is open. Please go ahead.

No I think you summarize day Wow.

Thank you for taking out packets.

Thank you and our next question cash on the line.

Marvelous Evercore ISI. Your line is open and please go ahead.

Vijay Kumar: Hey guys, thanks for taking my question. I had my first one on lung cancer trials. On the lunar interim, I guess the sample size was cut given the pace of approval and the number of events. I guess that makes sense.

Hey, guys. Thanks for taking my question.

My first 1 on the lung cancer trials.

On on on the lunar income I guess.

The sample size was cut on a given the pace of a cool.

And the number of events.

I guess that makes sense I was curious why.

William F. Doyle: I was curious why the DMC [inaudible] Good morning, Vijay. I'm going to talk quite a bit about this. I'm going to turn it over to Uri again to talk specifically about the DMC and the shortening of the protocol. Uri, can you give some more color on where we stand with Lunar? As a reminder, the DMC recommended lowering the overall patient accrual number to 276 and shortening the follow-up period following the enrollment of the last patient in the study to 12 months. And the DNC did give rationale for their recommendation, and they stated it very clearly.

Did the D M C.

Give any any reasoning or language around lie to follow up here and was and and also scored and from 18 to 12 months and sticking onto lung cancer and I think on the chemo trial.

When is the flow space and expected to enroll and the call any any timeline on.

When the trial is expected to complete it.

Okay. Good morning, B J I'm gonna.

Quite a bit about this I'm gonna turn it over and get worry again to to talk specifically about the DMC and the shortening of the protocol or can you give some more color on and.

And.

And so as a reminder of the D. M C recommended lowering the overall and patience. It grew on number 2 and 276 and 2 the short and the photo op that erodes follow the enrollment of the last patient and and just starting to 12 months and.

And the D N C D DS Irish on that for their recommendation and the state and the very clearly they said that it is and I believe that it will be unnecessary and possibly unethical for patients randomized to the control on to keep the original design and.

Uri Weinberg: They said that it is likely that it will be unnecessary and possibly unethical for patients randomized to the control arm to keep the original design as it has been until that point in time. However, naturally, we don't have visibility to the data and to the results, so we cannot comment on this simply because we are blinded to it. But naturally, and I'm sure you all share this sense of great encouragement by this statement, beyond that, and we have discussed this multiple times, we cannot say more simply because we have no visibility into the study results. And with respect to the question regarding the

It has been on that point in time.

Naturally we don't have visibility to uhm, a the data and to the results and that's what we cannot day comment on D. Simply because we are blinded T E.

But naturally and I'm sure you Oh share these and and a sense sofa and a great encouragement by the statement and beyond the dentist and we have discussed this and multiple times and say, we cannot day sable simply because and we have no visibility to the study results.

And with respect that would've been west regarding this.

I was I was just gonna jump in on the.

William F. Doyle: I was just going to jump in on Keynote B36. Keynote B36 is another important cornerstone of our non-small cell lung cancer program, of course, along with Lunar, which is in, is a second line therapy. Keynote is in the first line.

You know it'd be 36.

Cannot be 36 is another important cornerstone of our non small cell lung cancer program force, along with loader, which is in.

Is a stage second law suits and <unk>.

And light therapy keynote is and.

And first slowly.

William F. Doyle: And, of course, we're partnering with Merck to undertake that study. You asked about the timing, so the centers are screening patients, and we'll announce when the first patient is enrolled. But we're delighted with the enthusiasm in, and again, back to a theme that was mentioned in the academic community, for using tumor treating fields with Keytruda. The sites that are participating are among the best respected cancer centers in the world. And we'll announce the first patient as soon as the screening is successful. Okay, thanks, Bill.

And of course, we're partnering with with Merck to undertake that study.

You ask with respect to the timing so the centers are screening and we'll announce what on the first patient is enrolled but we're delighted with the enthusiasm N and again back to a theme as I mentioned in the academic community for using tumor true.

And and feels with Keytruda. The site that are participating are among the best respected cancer centers and the world and we'll announce the first patient.

So the screening and successful.

Gotcha, Thanks, Bill and maybe 1 for asking here and revenues and 15 per cent and 2.2 and.

William F. Doyle: And maybe one for Ashley here on revenues, you know, 15% in Q2. If I just contrast that with the recent trends here, Ashley, you guys have grown revenues 40%. As a given, you know, what's going on with the pandemic, trends, script volumes, and accupations.

If I if I, just contrast that with that.

And since you're asking me you guys have grown revenues 40 per cent.

In a given you know what's going on with the pandemic trends and the script volumes and applications.

Is it possible that you know back have they could see a further slow some slowing down of fries and what is it right exactly exactly.

Vijay Kumar: Is it possible that in the back half, we could see a further slowing down of revenues? What is the right revenue trajectory for Novocure, given... The trends we're seeing here in the company, you know, 20% top line grower, 30% top line grower. I'm curious how you look at the GDM opportunity. Yeah, no. I appreciate the question, Vijay.

From <unk> given the.

The <unk> is the company.

You know 20 per cent topline go on about 30 per cent hotline I'm curious how do you look at the a T P M opportunity.

And now I appreciate the question D. J I think you've heard us message, just consistent and sustainable and is stable G V and business and I think that's important we clearly see multiple leveraged our growth cash hit on many of those earlier and his comments, whether it's the underpenetration that academic centers or new market.

Ashley Cordova: I think, you know, you've heard us message this consistent, sustainable, and stable GBM business. And I think that's important. We clearly see multiple levers for growth. Kesh hit on many of those earlier in his comments, whether it's the underpenetration of academic centers or new market expansion, but you know, those elements of growth will take time. I think in our core active markets now, we have to acknowledge that we're five plus years post launch, and there, you know, remain many more patients that can benefit from our therapy, but it is a maturing growth curve, right?

Spansion, but those those that 1 and cigarettes will take time I think in our core active markets. Now we we have to acknowledge that were 5 plus years post lunch and there remains many more patients that can benefit from our therapy, but it is a mature and growth curve right I think fundamentally what I would highlight is that we're still seeing and proving that red.

Ashley Cordova: I think, fundamentally, what I would highlight is that we are still seeing improving net revenues per active patient; we are still focused on driving, you know, penetration around the globe. But I do think it's fair to expect some moderation of that growth in our core active markets now, as we work to continue to engage the active academic centers and bring additional markets on in the medium. And sorry, just a follow-up to that, Ashley, given where we are in the evolution of the GBM market, should we now look only at the base business, right, leaving the pipeline aside?

<unk> practice and patience, we are still focused on driving penetration and <unk> around the globe, but I do think it's fair to X X and moderation of that growth in our and our core aftermarkets now as we work to continue to engage tactics and academic centers and bring additional markets on and and the medium term.

And besides you just a follow up to that actually about given where we are and the evolution of 5 G and your market.

Should we now look at just the base business, where I can even the pipeline so I.

Ashley Cordova: Should this business now, like comps start mattering, so when I look at your back half comps last year, obviously CMS was a big contributor, comps get harder, is that a factor when we're modeling the back half here? I mean, there's still certainly growth in this business. I will say that. We do believe there remain multiple levers for growth here. So I think, You know, you do have to remove the impact of the CMS for reasons that we've talked about a lot in the past, but I think that base business remains. Consistent, durable, sustainable, and I think there still remains leverage.

Uhm.

Should this business now like Comstock migraines and when I looked at your back half comps last year, obviously C. M. S was a big contributor comps get harder is that a factor when remodeling the back half year.

I mean, there's still certainly growth and this business I will say that we do believe there there remains multiple levers for growth here. So I think you know you do have to remove the impact of the C. And asked me for reasons that we've talked about much and had have but I think that day that base business remains.

Consistent durable sustainable and I think they're still remain 5 hours for Greg.

Alright, thanks, guys.

Ashley Cordova: Thank you. And our next question comes from the line of Greg Fraser with Truist Securities. Your line is open. Please go ahead.

Thank you and our next question comes on on a line of Great Frasier Vitra Securities. Your line is open and please go ahead.

Good morning folks thanks for taking the questions.

Gregory Daniel Fraser: Good morning, folks. Thanks for taking the questions. For GPM in the U.S., how are surgical volumes trending now relative to pre-COVID levels, if you have data on that? Pritesh, do you want to take this one?

Oh for G. P M and the U S. How're surgical volume is trending that relative to free to other levels and you have debt on that.

Protest you Wanna take this on yes.

Pritesh Shah: Yes, Bill, I can take this. So I think the short answer to that is that they fluctuate depending on patient flow in the institutions. So very early on, we did see a larger impact of patient flow as patients were not able to get to the institutions. We're seeing that now ebb and flow, but materially, we're not seeing a major impact of that, at least that we can point to that's quantifiable to say that patients are not getting care for GBM, given the rare nature of GBM and the deadly nature of the disease. It is an emergency procedure, and it is treated as such in academic centers and in the community.

Yes, Bill and I can and can take this so I think the the short answer to that is that they they fluctuate depending on patient flow in the institution. So very early on we did see a larger impact of patient flow as patients were not able to get to the institutions, we're seeing that now ebb and flow, but materially we're not.

Seeing a at a major impact of that at least that we can point to that is quantifiable to say that patients are not getting care for G. B M. Given the rare nature of G. G B M and the deadly nature of the disease. It is an emergency procedure and it is treated as such in the academic center.

And and the community.

Got it that's helpful question on yet 33 and high it and see a raise how do we think about the clinical and regulatory pathway. Assuming that study is positive well you'd have to conduct a larger phase 3 like you have 11, how do you plan to investigate the high intensity arrays for newly diagnosed G. B M.

Unknown Executive: That's helpful. Question on EF-33 and the high-intensity arrays. How do we think about the clinical and regulatory pathway, assuming that study is positive? Will you have to conduct a larger Phase III like EF-11? And how do you plan to investigate the high-intensity arrays for newly diagnosed GBMs? Yeah, so thanks for that question.

Yeah. So thanks for that question.

And it underlines the topic that we haven't spoken too much about on on this call. But in addition to all the clinical and geographic expansion that we have discussed 1 of the real sources of excitement and Susie S on for treating patients and the fact that we really but.

William F. Doyle: And it underlines a topic that we haven't spoken too much about on this call. But in addition to all that, Clinical and Geographic Expansion that we have discussed. One of the real sources of excitement and enthusiasm for treating patients is the fact that we really believe that we're only beginning our ability to deliver efficacy based on the tumor treating fields platform. Specifically, we think that and we see in our preclinical work and also in analysis of our clinical data that patients who have higher intensity do far better, far more better, that's not good English, do much better than And we think that this is an engineering issue; it's not an issue of science.

Leave that works only beginning our ability to deliver efficacy based on the tumor treating fields platform Uhm, specifically, we think that and we see and hour.

Free clinical work and also and analysis of our clinical data the patients who have higher intensity farm or bed Bath and we'll get her that's not good English [laughter] too much better and patients who have a low intensity exposure and we think that this is a and engineer.

Issue of thought and issue a side on.

The high intensity.

William F. Doyle: The high intensity phase two trial is underway and is recruiting, and we will report those results. But in parallel with that, we are doing a tremendous amount of work to further improve the arrays beyond the arrays that we're using in that particular trial. You asked about the regulatory pathway, but it's too early to discuss that specifically.

First high intensity phase 2 is underway uhm and is is recruiting and we will report those results, but and parallel with that we are doing a tremendous amount of work to further improve the array beyond the arrays that we're using and that.

Particular trial, you asked about the regulatory pathway uhm, it's it's too early to discuss that specifically and and and it may vary by region, but generally we think there's an opportunity to.

William F. Doyle: And it may vary by region, but generally, we think there's an opportunity to get approvals. Based on safety and laboratory data that would allow us to bring the arrays into the market, but without efficacy claims. You know, they would be intensity claims. And then it would require further clinical data and perhaps randomized clinical data to make specific efficacy claims. Of course, in our bag of tricks, too, there are also ISPs and other investigator trials that can be published.

Get.

Approvals.

Based on safety and laboratory data and that that.

Would allow us to bring the arrays into the market, but without efficacy claims they would be intensity claim and then it would require clinic further clinical data and and perhaps randomized clinical data to make specific efficacy.

Of course, and our bag of tricks too they're also iced teas and other investigator trials that can be published so there's a lot of different lovers, but we think fundamentally there's 2 approaches there's a there's a shorter approach to get a raise and markets with.

William F. Doyle: So there are a lot of different levers, but we think fundamentally there are two approaches. There's a shorter approach to get arrays in markets without specific efficacy claims, but with intensity description. And then there is the longer path to get the specific efficacy claim. Got it. That's very helpful. Thank you for taking the question.

Without specific efficacy claims, but but with intensity description and then there is the the longer to get the specific efficacy claims.

Got it that's very helpful. Thank you for taking the questions.

Thank you and this concludes our question and answer session and I would like to turn the conference back over to Mister Bill Doyle for any further remarks.

William F. Doyle: Thank you, and this concludes our question and answer session, and I would like to turn the conference back over to Mr. Bill Doyle for any further remarks.

William F. Doyle: First, I want to thank everybody on the call today for your time and participation. I'd also like to join Ashley and Asaf and thank the Novocure team for their dedication this quarter and throughout the pandemic. I mean, all of us know the many ebbs and flows of experience during the last 18 months. And during that time, the Novocure mission has remained clear.

First I want to thank everybody on the call today for your time and and participation.

I'd also like to join Ashley and Ah sauce and.

Thank the Novocure team for their dedication this quarter and throughout the pandemic.

All of US know the many ebbs and flows of experienced during the last 18 months and during that time. The Novocure mission is Renee clear, we're focused on extending patient survival and some of the most aggressive forms of cancer.

William F. Doyle: We're focused on extending patient survival in some of the most aggressive forms of cancer. Q2 was strong, we generated $134 million in net revenue, and we've now treated more than 20,000 patients with Optum. The consistency of our GBM business continues to enable aggressive investment in our future, and we have now invested a record $50 million in R&D activities this quarter. Our pipeline is primed for growth. And we're forging ahead in our brain and thoracic and abdominal programs, as well as the product development programs that I just described and about which we're, you know, we're so excited.

Q2, straw, we generated 134 million and net revenue and we've now treated more than 20000 patients without too.

And the consistency of our G. P. M business continues to enable aggressive investment and our future and we have now invested a record 50 million and are the activities and a quarter.

Our pipelines pipe broke.

And we're forging ahead, and our brain and Jurassic and abdominal programmers as well and product development programs.

And that I, just described and and which were were so excited and.

William F. Doyle: As we look to the future, the possibility of helping more cancer patients remains the driving force for everything that we do. So thanks again, and we look forward to speaking with you in a few months' time. This concludes today's conference call. Thank you for participating.

Because we looked at the future the possibility of helping more cancer patients remain the driving force for everything that we do.

So thanks, again, and we look forward to speaking with you and and a few months.

That concludes today's conference call. Thank you for participating and you may now disconnect.

Unknown Executive: This concludes today's conference call. Thank you for participating. You may now disconnect.

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