Q3 2021 Novocure Ltd Earnings Call

Operator: Good day, ladies and gentlemen, and welcome to Novocure's Third Quarter 2021 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. Later, we'll conduct a question-and-answer session, and instructions will be given at that time. To ask a question, you will need to press the star, then one on your telephone. As a reminder, this call is being recorded. If anyone should require operator assistance, please press star, then zero.

Good day, ladies and gentlemen, and welcome to Novocure third quarter 2021 earnings conference call.

This time all participant lines are in a listen only mode. Later, we'll conduct a question and answer session and instructions will be given at that time to ask a question you will need to press Star then one on your telephone as a reminder, this call is being recorded if anyone should require operator assistance. Please press Star then zero.

Ingrid Goldberg: I would now like to turn the call over to your host today, Ingrid Goldberg, Vice President of Finance and Investor Relations. Please go ahead. Good morning, everyone.

I would now like to turn the call over to your host today, Ingrid Goldberg, Vice President of Finance and Investor Relations. Please go ahead.

Good morning, everyone.

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

And thank you for joining us to review <unk> third quarter 2021 performance.

I'm joined on the phone by our executive Chairman Bill Doyle.

Ill start the answer there and our CFO Ashley Cordova.

Other members of the executive leadership team 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 to the third quarter 2021 financial results located in the events section of our investor relations page. Before I start, I would like to remind you 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 dot com by clicking on the link to the third quarter of 2021 financial results located near that section of our Investor Relations page.

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

It doesn't involve a number of risks and uncertainties some of which are beyond our control.

Those risks and uncertainties described from time to time in our SEC filings we.

Ingrid Goldberg: We do not intend to update publicly any forward-looking statement except as required by law. Following our prepared remarks today, we will open the line to your questions. Financials for the 3 and 9 months ended September 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. 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 of our website. With that, I will now turn the call over to our Executive Chairman, Bill Joy.

We do not intend to update publicly any forward looking statement, except as required by law.

Following our prepared remarks today, we'll open the line for your questions.

Financials for the three and nine months ended September 32021 are available in our press release and in our 10-Q, both of which were released earlier this morning.

Where appropriate we refer to non-GAAP financial measures to evaluate our business 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 asked.

That's my Investor Relations page of our website.

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

William F. Doyle: Thank you, Ingrid, and good morning, everyone. At Novocure, we are focused on our mission to extend survival in some of the most aggressive forms of cancer. Tumor Treating Fields is a platform therapy, and the totality of 20 plus years of scientific research supports our belief that we can safely use tumor treating fields with the evolving standards of care in a multitude of cancer indications. We also have numerous opportunities to improve our therapy to further enhance efficacy and ease of use for our patients and caregivers.

Thank you Ingrid and good morning, everyone.

And no mature we are focused on our mission to extend survival in some of the most aggressive forms of cancer.

Tumor treating fields as a platform therapy and the totality of 20 plus years of scientific research supports our belief that we can safely used tumor treating fields with the evolving standards of care in a multitude of cancer indications.

We also have numerous opportunities to explore improving our therapy to further enhance efficacy and ease of use for our patients and caregivers.

William F. Doyle: Our clinical trial pipeline is robust and continues to grow with organic research opportunities yet to be explored. We have an extensive intellectual property portfolio that we are consistently expanding and will rigorously defend. Since our founding over 20 years ago, we have established a cancer therapy business model that is unique, expandable, and repeatable. Our international GBM business is cash generative and is supporting the significant investments we are making to generate future growth.

Our clinical trial pipeline is robust and continues to grow with organic research opportunities yet to be explored we.

We have an extensive intellectual property portfolio that we are consistently expanding and we will rigorously defend.

Since our founding over 20 years ago, we've established our cancer therapy business model that is unique expandable and repeatable.

Our international GBM business is cash generative and is supporting the significant investments, we are making to generate future growth.

William F. Doyle: With multiple late-stage trials set to read out in the next 24 months, we believe Novocure is approaching a key inflection point for patients and our organization. As we close in on these milestones... And with the stability provided by over $900 million in cash on hand, we are aggressively investing in our pipeline and product development efforts to bring our novel therapy to many more patients in need. In summary, the fundamentals of our business are strong, and we are energized by the opportunities before us to help many more cancer patients and grow our company.

With multiple late stage trials set to read out in the next 24 months, we believe nobody curious approaching a key inflection point for patients and our organization as.

As we close in on these milestones and with the stability provided by over $900 million in cash on hand, we are aggressively investing in our pipeline and product development efforts to bring our novel therapy to many more patients in need.

In summary, the fundamentals of our business are strong and we are energized by the opportunities before us to help many more cancer patients and to grow our company.

William F. Doyle: Before we discuss our quarterly results, I would like to announce that we have enrolled the last patient in our Phase 3 Pivotal Innovate 3 trial for the treatment of platinum-resistant ovarian cancer. This is a major step forward for our clinical trial program and is an important achievement for all of those involved. Asaf will provide more detail on the next steps momentarily.

Before we discuss our quarterly results I would like to announce that we have enrolled the last patient in our phase III pivotal innovate three trial for the treatment of platinum resistant ovarian cancer.

This is a major step forward for our clinical trial program and is an important achievement for all of those involved.

<unk> will provide more detail on the next steps momentarily.

William F. Doyle: In today's call, first, we will discuss updates from the quarter in our core GBM business. We will then turn to our recent clinical development progress. Finally, we will underline the financial power and flexibility afforded by our sustainable business model. Our GBM business continues to fuel our aggressive investment in future growth initiatives. This quarter, we generated $133.6 million in global revenue and ended the quarter with over 3,500 active patients on therapy. We invested $48 million in research and development, bringing our total investment in R&D during the first three quarters of the year to $144 million, nearly 10% more than the total amount invested in all of 2020.

In today's call first we will discuss updates from the quarter in our core GBM business. We will then turn to our recent clinical development progress.

Finally, we will underline the financial power and flexibility afforded by our sustainable business model.

Our GBM business continues to fuel our aggressive investment in future growth initiatives. This quarter, we generated $133 $6 million in global revenue and ended the quarter with over 3500 active patients on therapy.

We invested $48 million in research and development, bringing our total investment in R&D. During the first three quarters of the year to $144 million nearly 10% more than the total amount invested in all of 2020.

Our GBM growth strategy focuses on broadening our eligible patient population through expansion of our geographic footprint and label as.

William F. Doyle: Our GBM growth strategy focuses on broadening our eligible patient population through expansion of our geographic footprint and label, as well as increasing penetration in our current market. We believe further engagement with key academic centers is paramount to our penetration efforts. We have identified academic centers that see a sizable portion of the GBM population where we are underpenetrated, and we are pursuing opportunities to increase and expand touchpoints with these centers.

As well as increasing penetration in our current markets.

We believe further engagement with key academic centers is paramount to our penetration efforts.

We have identified academic centers, which see a sizable portion of the GBM population, where we are underpenetrated.

We are pursuing opportunities to increase and expand touch points with these centers.

Our teams have opened multiple clinical trials with key academic centers with several site initiation scheduled.

Also we've launched multiple investigator sponsored trials.

William F. Doyle: Our teams have opened multiple clinical trials at key academic centers with several site initiation schedules. Additionally, we have launched multiple investigator-sponsored trials, such as Dr. Solti's study at Stanford University, examining the effects of hypofractionated chemoradiation plus TT field. Both our clinical trials and investigator-sponsored trials offer unique opportunities for academic practitioners to experience hands-on use of TT fields in their patient population. I would be remiss if I did not mention the ongoing impacts of the pandemic on our commercial business. Broadly, we have seen COVID-19 reduce cancer patient engagement with physicians, delay surgeries, and stress hospital staffing at all levels, all of which can affect a patient's starting Optune at the ideal time.

As Dr. <unk> study at Stanford University examining the effects of Hypo fractionated chemo radiation plus TT fields.

Both our clinical trials and investigator sponsored trials offer unique opportunities for academic practitioners to experienced hands on use of TT fields in their patient population.

I would be remiss, if I did not mention the ongoing impacts of the pandemic on our commercial business broadly we've seen COVID-19 reduced cancer patient engagement with physicians.

The lease surgeries and stress hospital staffing at all levels.

All of which can affect the patient starting opportune at the ideal time.

Policies adopted by hospitals to prevent infections and manage COVID-19 case loads have reduced our ability to interact with some oncologists.

These challenges wrought by the pandemic and then flow regionally with Covid case volumes. We are monitoring these situations daily and doing everything in our power to be nimble and innovative to provide <unk> therapy to all the patients who may benefit from it.

William F. Doyle: Policies adopted by hospitals to prevent infections and manage COVID-19 caseloads have reduced our ability to interact with some oncologists. These challenges wrought by the pandemic ebb and flow regionally with COVID case volumes. We are monitoring these situations daily and doing everything in our power to be nimble and innovative to provide PT fields therapy to all the patients who may benefit from it. Outside of GBM, we announced several notable achievements this quarter

Outside of GBM, we announced several notable achievements this quarter.

In September we announced a new clinical collaboration with Roche to co design, a single arm trial to study the use of tumor treating fields together with the anti PDL, one therapy and as old as amount for the first line treatment of metastatic pancreatic ductal cancer.

Preclinical data suggests TT fields together with immune checkpoint inhibitors can result in increased tumor control.

William F. Doyle: In September, we announced a new clinical collaboration with Roche to co-design a single-arm trial to study the use of tumor-treating fields together with the anti-PD-L1 therapy atazolizumab for the first-line treatment of metastatic pancreatic ductal cancer. Preclinical data suggest TT fields together with immune checkpoint inhibitors can result in increased tumor control. Up till now, the immune-shielded environment of the pancreas has proved to be difficult for immunotherapy agents to penetrate, and multiple clinical trials have failed in this high unmet need indication.

Up till now the immune shielded environment of the pancreas has proved to be difficult for immunotherapy agents to penetrate and multiple.

<unk> clinical trials have failed in this high unmet need indications.

We believe the use of tumor treating fields and that is the loser Mab may finally make an impact for patients diagnosed with pancreatic cancer.

We are extremely excited to begin our work with another global oncology leader.

Also this quarter the FDA granted breakthrough device designation for the Novo TTS 200 P system for the treatment of advanced liver cancer as.

As we look ahead to our future phase III trial in liver cancer breakthrough device designation offers the opportunity to interact directly with FDA experts through the pre market review process and allows for prioritized review of regulatory submissions.

William F. Doyle: We believe the use of tumor-treating fields and adizolizumab may finally make an impact for patients diagnosed with pancreatic cancer. We are extremely excited to begin our work with another global oncology leader. Also this quarter, the FDA granted breakthrough device designation for the NOVOTTF-200T system for the treatment of advanced liver cancer. As we look ahead to a future Phase III trial in liver cancer... Breakthrough Device Designation offers the opportunity to interact directly with FDA experts through the pre-market review process and allows for a prioritized review of regulatory submissions.

We also announced the final patient enrollment in our E. F 31 single arm trial studying the treatment of gastric cancer together with our partner <unk> lab.

As a reminder, gastric cancer is the third most common cancer in China.

And has a poor prognosis with median overall survival rates of approximately one year.

Now that <unk> 31 has completed enrollment we look forward to beginning the data analysis process and are on track to release data in 2022.

Finally, we recently celebrated a milestone internally that I'd like to share with you.

Daniel Torres was the first patient in the U S to enroll in our phase III.

William F. Doyle: We also announced the final patient enrollment in our EF31 single-arm trial, studying the treatment of gastric cancer together with our partner, Xi Lab. As a reminder, gastric cancer is the third most common cancer in China and has a poor prognosis with median overall survival rates of approximately one year.

11, GBM trial 15 years ago.

This summer Daniel celebrated his 66 birthday with his wife and four children in Chicago.

Daniels milestone is a strong reminder to everyone at Novocure of why our efforts are so important.

We are working to extend survival for patients diagnosed with some of the most aggressive forms of cancer. So patients like Daniel can celebrate more milestones with their loved ones.

William F. Doyle: Now that EF31 has completed enrollment, we look forward to beginning the data analysis process, and we are on track to release data in 2022. Finally, we recently celebrated a milestone internally that I'd like to share with you. Daniel Torres was the first patient in the U.S. to enroll in our Phase 3 EF-11 GBM trial 15 years ago. This summer, Daniel celebrated his 66th birthday with his wife and four children in Chicago. Daniel's milestone is a strong reminder to everyone at Novocure of why our efforts are so important.

I would personally like to thank Daniel for being a wonderful ambassador for our company and an inspiration to the Nova <unk> with.

With that I will now pass the call over to Assaf, who will discuss our pipeline updates.

Okay.

Thank you Bill first I would like to take a moment to congratulate and thank the novocure team for another strong performance. This quarter I appreciate your tireless dedication to our mission.

As Bill mentioned, we are nearing a potential inflection point with several of our late stage clinical trials.

William F. Doyle: We are working to extend survival for patients diagnosed with some of the most aggressive forms of cancer, so patients like Daniel can celebrate more milestones with their loved ones. I would personally like to thank Daniel for being a wonderful ambassador for our company and an inspiration to Novocure.

<unk> it to readout in the near term as a reminder, we currently have five large randomized trials ongoing innovate three lunar metis ponder over three and Trident.

I will begin with an appetite on our innovate three trial in recurrent ovarian cancer, which has now completed enrollment together with our partners and gold and the <unk> Foundation <unk> three is the largest abdominal trial to complete enrollment in the history of <unk> and the mens achievement for our team.

Asaf Danziger: With that, I will now pass the call over to Asaf, who will discuss our pipeline on. That's us. That's us. That's us.

Asaf Danziger: First, I would like to take a moment to congratulate and thank the Novocure team for another strong performance this quarter. I appreciate your tireless dedication to our mission.

The next step will be the independent data monitoring committee's review of the statistical analysis plan and the pre specified interim analysis.

Asaf Danziger: As Bill mentioned, we are nearing a potential inflection point with several of our late-stage clinical trials, expected to read out in the near term. As a reminder, we currently have five large randomized trials ongoing, INOVA-3, LUNAR, METIS, PANOVA-3, and TRIDENT. I will begin with an update on our INOVA-3 trial in recurrent ovarian cancer, which has now completed enrollment. Together with our partners, NGOT and the GOG Foundation, INOVA-3 is the largest abdominal trial to complete enrollment in the history of Novocure, an immense achievement for our team. The next step will be the Independent Data Monitoring Committee's review of the Statistical Analysis Plan and the pre-specified interim analysis.

Anil data will be collected following an 18 month follow up period.

Ovarian cancer is the fifth leading cause of cancer in women and we are hopeful that the data from this trial represents the next step in addressing this deadly disease.

Our lunar trial in non small cell lung cancer is on track to enroll its final patients this year.

200000 patients diagnosed with non small cell lung cancer in the U S alone each year.

As a reminder, following FDA approval for an IDE supplement incorporating the recommendations from the independent data monitoring Committee earlier. This year. The lunar trial will now enroll 276 patients with a 12 month follow up period prior to data collection.

Asaf Danziger: Final data will be collected following an 18-month follow-up period. Ovarian cancer is the fifth leading cause of cancer death in women, and we are hopeful that the data from this trial represents the next step in addressing this deadly disease. Our Lunar Trial in non-small cell lung cancer is on track to enroll its final patient this year. Nearly 200,000 patients are diagnosed with non-small cell lung cancer in the U.S. alone each year.

Enrolment continues in our Metis trial studying <unk> for the treatment of brain metastases from non small cell lung cancer as a secondary tumor shielded by the blood brain barrier. The standard of care for the treatment of brain metastases has not improved significantly below.

Asaf Danziger: As a reminder, following FDA approval of an IDE supplement incorporating the recommendations from the Independent Data Monitoring Committee earlier this year, the Lunar Trial will now enroll 276 patients with a 12-month follow-up period prior to data collection. Enrollment continues in our METI trial studying TT fields for the treatment of brain metastases from non-small cell lung cancer. As a secondary tumor shielded by the blood-brain barrier, the standard of care for the treatment of brain metastases has not improved significantly beyond stereotactic radiosurgery.

And so your tactic Radiosurgery. We believe this is a unique opportunity to study the effect of our therapy or non small cell lung cancer in a region of the body. We have proven we can impact.

We anticipate final data in our <unk> strives to be collected in 2023.

While our innovate lunar and met these trials are enrolling well and remain on track the panelists Sweet wine has been impacted by logistical constraints, Panama restarting the use of TT fields together with James <unk> and Nab Paclitaxel also commercially known as <unk>.

In patients with Unresectable locally advanced pancreatic cancer as you May know there is a global supply chain shortage of Brexit, we are working with our clinical sites to understand supply levels back recognize that some sites have been impacted Additionally, Chinese import license.

Asaf Danziger: We believe this is a unique opportunity to study the effects of our therapy on non-small cell lung cancer in a region of the body we have proven we can impact. We anticipate final data in our METIS trial to be collected in 2023. While our Innovate, Lunar, and Metis trials are enrolling well and remain on track, the Panova 3 trial has been impacted by logistical constraints. Panova 3 is studying the use of TT fields together with James Ciderbean and NAB-Paklitaxel, also commercially known as Abraxin, in patients with unresectable locally advanced pancreatic cancer.

It's required for Abraxas was denied by the Chinese governing body. We recognize these constraints will impact the enrollment timeline for the pan over suites, while and now anticipate final data in 2022.

To be clear this does not alter our excitement around the panel last week clinical trial or the unmet need for those suffering from pancreatic cancer. We continue to believe we can positively impact patients diagnosed with this deadly disease.

Moving beyond our late stage pipeline I would like to highlight an exciting presentation at next month's annual society for Neuro oncology Medical conference all snow.

Asaf Danziger: As you may know, there is a global supply chain shortage of Abraxin. We are working with our clinical sites to understand supply levels, but recognize that some sites have been impacted. Additionally, the Chinese import license required for Abraxin was denied by the Chinese governing body.

Doctor David trend from the University of Florida, we'll present updated data from the two the two investigator sponsored trial to the Tau is a single arm trial studying the impact of TT fields together with immunotherapy for the treatment of newly diagnosed GBM into the two following stand.

Asaf Danziger: We recognize these constraints will impact the enrollment timeline for the Panova 3 trial and now anticipate final data in 2024. To be clear, this does not alter our excitement around the Panova 3 clinical trial or the unmet need for those suffering from pancreatic cancer. We continue to believe we can positively impact patients diagnosed with this deadly disease. Moving beyond our late-stage pipeline, I would like to highlight an exciting presentation at next month's Annual Society for Neuro-Oncology Medical Conference, or SNO.

The chemo radiation patients, who currently receive <unk> field team was all in mind and pinball XOMA Doctor train III says is an important continuation of our exploration of synergies between <unk> and immunotherapy agents and is the first such trial in newly diagnosed GBM prelim.

Early data shared at our R&D day last year, we were very encouraging and we are eager to share the final data from Doctor train study.

Before passing the call to Ashley I would like to reiterate my congratulations to the Novocure team when I look at all we have accomplished as a team over the past 20 years. It gives me confidence that this is only just the beginning for Novocure I cannot wait to see what we can.

Asaf Danziger: Dr. David Tran, from the University of Florida, will present updated data from the To The Top Investigator-Sponsored Trial, a single-arm trial studying the impact of TT fields together with immunotherapy for the treatment of newly diagnosed GBM. In To The Top, following standard chemoradiation, patients concurrently receive TT fields, temozolomide, and pembrolizumab. Dr. Tran's research is an important continuation of our exploration of synergies between TT fields and immunotherapy agents and is the first such trial in newly diagnosed GBM.

Bliss together over the next 20 years.

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

Thank you soph.

<unk> completed the third quarter in a strong financial position, our core GBM business generated $133 6 million of net revenues in the quarter, bringing our year to date revenue to $402 million, an increase of 15% versus the first three quarters of 2020.

Asaf Danziger: Preliminary data shared at our R&D day last year were very encouraging, and we are eager to share the final data from Dr. Tran's study. Before passing the call to Ashley, I would like to reiterate my congratulations to the Novocure team. When I look at all we have accomplished as a team over the past 20 years, it gives me confidence that this is only just the beginning for Novocure. I cannot wait to see what we can accomplish together over the next 20 years. With that, I will pass the call over to Ashley to discuss our financial results.

Additionally, active patients on therapy grew to 3500 into representing a 4% year over year increase.

We have continued to see increased traction with our partner in China <unk> now in its sixth quarter of commercializing <unk> for the treatment of GBM.

Included in our net revenues is $10 $6 million in revenues from Medicare fee for services beneficiaries in the quarter. We believe we have completed our administrative ramp up for processing Medicare claims and efficiently pursuing appeals.

This is a meaningful milestone in our operational evolution.

While we are through the administrative ramp up for patients who started therapy post coverage. It is important to note that nearly 25% of our current Medicare patients.

Ashley Cordova: Novocure completed the third quarter in a strong financial position. Our core GBM business generated $133.6 million in net revenues in the quarter, bringing our year-to-date revenue to $402 million, an increase of 15% versus the first three quarters of 2020. Additionally, active patients on therapy grew to 3,502, representing a 4% year-over-year increase. Additionally, we have continued to see increased traction with our partner in China, Xilab, now in its sixth quarter of commercializing Optune for the treatment of GBM. Included in our net revenues is $10.6 million in revenues from Medicare fee-for-services beneficiaries in the quarter. We believe we have completed our administrative ramp-up for processing Medicare claims and efficiently pursuing appeals.

Damn therapy prior to our effective coverage date in September 2019, and as a result are not contributing revenue at the time of doing.

I would like to take a moment to highlight what this means for our patients clinically. This is an incredible feat and that <unk> has contributed to the continued survival of this patient cohort for more than two years.

It also represents additional upside over time as the Medicare patient mix shifts to include a greater percentage of patients who started therapy. After September 2019.

I would also like to highlight that we did not recognize any revenue from our Medicare backlog in the third quarter of 2021 versus the $8 million, we recognized in the third quarter of 2020.

We could see the same outcome in Q4 this year compared to the $11 million received in Q4 2020.

As we have stated in the past we continue to actively pursue previously denied claims, but the cadence and size of these Medicare payments are impossible to predict.

Ashley Cordova: This is a meaningful milestone in our operational evolution. While we are through the administrative ramp-up for patients who started therapy post-coverage, it is important to note that nearly 25% of our current Medicare patients began therapy prior to our effective coverage date in September 2019 and, as a result, are not contributing revenue at the time of billing. I would like to take a moment to highlight what this means for our patients clinically. This is an incredible feat in that T.T.

Third quarter gross profit was $103 million, which equates to a gross margin of 77% for the quarter.

The moderately lower gross margin in the third quarter was driven by an increase in XI lab purchases in the quarter.

SG&A expenses for the third quarter were $64 million, an increase of 13% from the third quarter of 2020.

As we approach multiple late stage data Readouts, we remain committed to strategically investing in operational readiness measures designed to ensure efficiency at lunch and potential new indications.

Ashley Cordova: Fields has contributed to the continued survival of this patient cohort for more than two years. It also represents additional upside over time as the Medicare patient mix shifts to include a greater percentage of patients who started therapy after September 2019. I would also like to highlight that we did not recognize any revenue from our Medicare backlog in the third quarter of 2021 versus the $8 million we recognized in the third quarter of 2020.

We invested $48 million in research and development activities in the quarter, an increase of 47% versus the same period in 2020.

This marks our fourth consecutive quarter of investing more than $40 million in R&D.

While we have already reviewed our growing our growing clinical trial pipeline. We are equally excited about the product development opportunities before us.

We believe we have substantial organic opportunities to enhance all components of our delivery system.

Ashley Cordova: We could see the same outcome in Q4 of this year, compared to the $11 million received in Q4 2020. As we have stated in the past, we continue to actively appeal and pursue previously denied Medicare payments. However, the cadence and size of these Medicare payments are impossible to predict.

Our development teams are experimenting with a variety of new materials designs and processes. We believe there is long term potential and continued product development and will continue to invest aggressively in this space.

Our net loss for the third quarter was 13 cents per share or $13 million.

Ashley Cordova: Third quarter gross profit was $103 million, which equates to a gross margin of 77% for the quarter. The moderately lower gross margin in the third quarter was driven by an increase in Zylab purchases during the quarter. SG&A expenses for the third quarter were $64 million, an increase of 13% from the third quarter of 2020. As we approach multiple late-stage data readouts, we remain committed to strategically investing in operational readiness measures designed to ensure efficiency at launch and potential new indications.

We are focused on leveraging our cash generative GBM business to aggressively invest in future growth opportunities before focusing on short term profitability.

This includes both research and development initiatives and continued organizational readiness build out ahead of potential future launches.

In addition to earnings per share, we evaluate 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 noncash items and best reflects the financial value generated by our business.

Ashley Cordova: We invested $48 million in research and development activities in the quarter, an increase of 47% versus the same period in 2020. This marks our fourth consecutive quarter of investing more than $40 million in R&D. While we have already reviewed our growing clinical trial pipeline, we are equally excited about the product development opportunities before us. We believe we have substantial organic opportunities to enhance all components of our delivery system. Our development teams are experimenting with a variety of new materials, designs, and processes. We believe there is long-term potential in continued product development and will continue to invest aggressively in this space. Our net loss for the third quarter was $0.13 per share, or $13 million.

And the third quarter of 2021, we generated adjusted EBITDA of $20 million.

To put this into greater context, our adjusted EBITDA margin this quarter with 15% due to our research and development investment, reaching 30, 36% of our net revenues.

We ended the third quarter with $934 million in cash on hand, our cash position gives us the flexibility to pursue multiple avenues for growth without finance constrained tradeoffs.

Especially important given our extra ordinary amount of organic growth opportunities.

If you take anything away from the quarter.

It should be that the fundamentals of the Novocure business are strong and stable and we are approaching a key inflection point.

We have built a sustainable business in GBM.

All of our late stage trials are approaching full enrollment with final data expected in the next 24 months.

Ashley Cordova: We are focused on leveraging our cash-generative GBM business to aggressively invest in future growth opportunities before focusing on short-term profitability. This includes both research and development initiatives and continued organizational readiness build-out ahead of potential future launches. In addition to earnings per share, we evaluate performance based on adjusted EBITDA, a non-gap 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 and best reflects the financial value generated by our business.

Tumor treating fields as a platform therapy, which we believe is only just scratching the surface of its full potential our.

Our clinical commercial and operational expertise combined with our financial strength allow us to pursue a multitude of organic growth opportunities.

We believe these core strengths will enable us to continue our mission as we strive to extend survival in some of the most aggressive forms of cancer.

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

You all for your time this morning.

Thank you to ask a question you will need to press Star then one on your telephone to withdraw your question. Please press the pound key please standby, while we compile the Q&A roster.

Our first question comes from the line of Cory <unk> with J P. Morgan Your line is open.

Good morning, guys. Thanks for taking the questions two of them for you.

Ashley Cordova: In the third quarter of 2021, we generated adjusted EBITDA of $20 million. To put this into greater context, our adjusted EBITDA margin this quarter was 15% due to our research and development investment reaching 36% of our net revenue. We ended the third quarter with $934 million in cash on hand.

I'm just curious if you have any incremental color on ovarian and how long it might take the DMC to complete the analysis and we will you will there be like a press release or disclosure. Upon this analysis. If it's just to go to the end and then the second the second question I have for you is regarding your gastric trial and what Youre looking for.

In that phase two study to give you confidence to advance that indication into a pivotal trial, knowing it's primarily an Asian market that youre looking into thank you.

Ashley Cordova: Our cash position gives us the flexibility to pursue multiple avenues for growth without finance-constrained tradeoffs. This is especially important given our extraordinary number of organic growth opportunities. If you take anything away from this quarter,

Hi, Good morning, Cory This is bill and.

As we've done in the.

The Q&A sessions during the pandemic I'm joined by my senior team from various locations around the world.

So I'll be directing the the questions but.

I'll take your first two.

Ashley Cordova: It should be that the fundamentals of the Novocure business are strong and stable, and we are approaching a key inflection point. We have built a sustainable business in GBM. Several of our late-stage trials are approaching full enrollment, with final data expected in the next 24 months. Tumor Treating Fields is a platform therapy, which we believe is only just scratching the surface of its full potential. Our clinical, commercial, and operational expertise, combined with our financial strength, allow us to pursue a multitude of organic growth opportunities. We believe these core strengths will enable us to continue our mission as we strive to extend survival in some of the most aggressive forms of cancer.

With respect to innovate we are.

Extremely proud and pleased of the fact that we have completed.

The enrollment of this trial anyone on the call who knows what.

Huge effort it is to conduct.

A major international randomized clinical trial in cancer will understand the effort.

This has required and we're particularly thankful for our partners.

Got and G O G.

With respect to the <unk>.

Interim all of our trials are designed.

To go to full enrollment and then to complete the full follow up.

The DMC is an independent body.

As an independent body they determine their timing.

We will press release the results of the of the interim but again I want to underline that our expectation is that the trial will proceed to to conclusion.

Operator: With that, I will turn it back to the operator for Q&A. Thank you all for your time this morning. Thank you. To ask a question, you will need to press star then 1 on your telephone. To withdraw your question, please press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from the line of Corey Casimo with J.P. Morgan. Your line is open.

With respect to the gastric phase II trial that we've conducted with our partners I lab in China.

That is another achievement again phase.

Our phase II trials are smaller but this is the first trial that we have undertaken in the very large China market.

Corey Langer: Good morning, guys. Thanks for taking the questions, two of them for you. I'm curious if you have any incremental color on ovarian cancer.

We mentioned that the gastric cancer is highly prevalent in China and throughout Asia, such as China Korea, Japan also have high prevalence of of gastric cancer and it is a cancer. That's also prevalent in the U S. Although to a lesser and lesser extent.

unknown: [inaudible]

unknown: And then the second question I have for you is regarding your gastric...

William F. Doyle: Asaf Danziger, Ingrid Goldberg, Novocure Ltd. Hi, good morning, Corey. This is Bill.

With these phase II trials, we look at a lot of different things.

William F. Doyle: And as we've done in the Q&A sessions during the pandemic, I'm joined by my senior team from various locations around the world. So I'll be taking questions, but I'll take your first two. With respect to innovation, we are extremely proud and pleased of the fact that we have completed enrollment in this trial. Anyone on the call who knows what a huge effort it is to conduct a major international randomized clinical trial in cancer will understand the effort that this has required, and we're particularly thankful for our partners NGOT and GOG.

Things first and foremost safety of course, and then we look at.

Sure.

What we often call himself efficacy or the efficacy signals.

And from there.

Chairman not only if we'll go forward with the phase III.

But the.

Exact design of the phase III. The other thing of course that we take into account is the standard of care.

In some cases.

As has been the case in our liver cancer indication the standard of care may have evolved and so the phase III trial.

We'll incorporate the.

The current standard of care. So I hope that gives you some clarity.

William F. Doyle: With respect to the interim, all of our trials are designed to go to full enrollment and then complete the full follow-up. The DMC is an independent body, and as an independent body, they determine their timing.

Yes. Thank you I appreciate it.

Our next question comes from the line of Jason Bednar with Piper Sandler Your line is open.

Hey, thanks for taking the questions.

Two from us.

From us today, we're on the commercial side or on the pipeline side maybe.

William F. Doyle: We will announce the results of the interim, but again, I want to underline that our expectation is that the trial will proceed to conclusion. With respect to the gastric phase 2 trial that we conducted with our partners iLab in China, that is another achievement. Again, the phase 2 trials are smaller, but this is the first trial that we have undertaken in the very large Chinese market. We mentioned that gastric cancer is highly prevalent in China and throughout Asia, so it's not just China. Korea and Japan also have a high prevalence of gastric cancer, and it is a cancer that's also prevalent in the U.S., although to a lesser extent.

Maybe starting first with the commercial.

Alright.

A two parter here.

This is the third quarter in a row, where revenues missed street expectations.

That gap versus the street does seem to be widening.

I get the best message on the business maturing.

I think it's been pretty clear, but I guess do you think you need to take the next step and provide more formal revenue guidance in order to have expectations be more consistent with what you think is appropriate for the prescription activity inactive patients that you're actively seen.

And then I guess related to that if the GBM business is maturing.

Do you see as the right growth rate for this business once we get past challenges that COVID-19 is creating for you guys.

So good morning, Jason.

Thanks, very much for the question I guess I'll start.

William F. Doyle: With these phase 2 trials, we look at a lot of different things. First and foremost, safety, of course, and then we look at what we often call hints of efficacy or efficacy signals and from there determine not only if we'll go forward with a phase 3, but the exact design of the phase 3. The other thing, of course, that we take into account is the standard of care. In some cases, as has been the case in our liver cancer indication, the standard of care may have evolved, and so the phase 3 trial will incorporate the current standard of care. I hope that gives you some clarity. Yes, thank you. I appreciate it.

The answer and then I'll pass it to my colleagues to be more.

Specific, but but first and foremost of course, our GBM business is extremely strong.

And.

Sustainable and the cash from the GBM business. As we've described is fueling the aggressive investments that we're making for future growth with that said.

And no one at Novocure is content with the 30% to 40% penetration in our key markets simply from the human side, we know that the patients that were not reaching.

Can benefit from our therapy.

Notwithstanding the the last two quarters of flattish.

Jason M. Bednar: Our next question comes from a line from Jason Bednar with Piper Sandler. Your line is open.

Performance were.

Determined to get to those patients maybe specifically with respect to the.

Jason M. Bednar: Thanks for taking the questions. We have two from us today, one on the commercial side and one on the pipeline side. Maybe starting first with the commercial. Sorry, it's a bit of a two-parter here. This is the third quarter in a row where revenues missed street expectations, and that gap versus the street does seem to be widening. I get the message on the business maturing. I think it's been pretty clear, but I guess do you think you need to take the next step?

The.

Delta between performance and street expectations, Ashley maybe you'd like to.

Give some color on that topic.

Sure I'm happy to and Jason. Thank you for the question. This is obviously something we focus a lot on internally as well and I do want to highlight that we do provide substantial qualitative guidance on multiple facets of the business and I think you can expect us to continue to do that.

Over time, specifically with regards to this quarter, you've heard us message consistency and stability within our GBM business, we clearly see multiple levers for future growth, but these elements of growth will take some time.

Jason M. Bednar: Prescription Activity and Active Patients

Unknown Executive: Unknown Executive, Asaf Danziger, Ingrid Goldberg, Novocure Ltd.

And importantly, we've stated that the favorable difference in growth rates between our operating statistics in net revenues would compress as our commercial organization matures and that Delta. Jason is now closing with the completion of our Medicare ramp. This means that you can look to active patient trains as.

Unknown Executive: So, good morning, Jason. Thanks very much for the question. I guess I'll start.

Unknown Executive: The answer, and then I'll pass it to my colleagues to be more. But first and foremost, of course, our GBM business is extremely strong and sustainable, and the cash from that GBM business, as we've described, is fueling the aggressive investments that we're making for future growth. With that said, we, and no one at Novocure, is content with the 30% to 40% penetration in our key markets, simply from the human side. We know that the patients that we're not reaching can benefit from our therapy, and notwithstanding the last two quarters of flattish performance, we're determined to get to those patients. Maybe, specifically with respect to the delta between performance and street expectations. Sure, I'm happy to answer any questions.

Indicative, leading indicator per se a future revenue trends and I think in the near term that's what that's what we would ask you guys to look at it are those active patient trends.

Okay, that's very helpful.

And then on the pipeline I guess I'm wondering if you can speak to just level of confidence in your updates today I guess in the context of what's what's still a fluid environment with Covid and now.

Supply constraints.

To be impacting the canova trial.

Totally appreciate there's only so much that is in your control, but you had been moving more aggressively to bring on new sites for medicine lunar the last few months to get those over the finish line.

Just again sitting here today, just your level of confidence on some of the upcoming items.

Unknown Executive: a lot going on internally as well, and I do want to highlight that we do provide substantial qualitative guidance on multiple facets of the business. And I think you can expect us to continue to do that over time. Specifically, with regard to this quarter, you've heard us talk about consistency and stability within our GVM business. We clearly see multiple levers for future growth, but these elements of growth will take some time. Additionally, and importantly, we've stated that the favorable difference in growth rates between our operating statistics and net revenues would compress as our commercial organization matures.

Getting those last patient thing on lunar and <unk> and then getting to some of the other clinical trials kicked off that you've announced here.

Yes, sure so when we start a clinical trial.

We make an estimate about the pace of enrollment.

The number of centers.

We will open and the timing for the opening of those centers and we project.

Our last patient in.

Those are obviously.

<unk> by lots of different variables as we proceed.

Some of them are unexpected COVID-19 completely unexpected the duration of Covid.

Unexpected.

Others.

Unknown Executive: And that delta, Jason, is now closing with the completion of our Medicare ramp. This means that you can look to active patient trends as, you know, an indicative meeting indicator per se of future revenue trends. And I think in the near term, that's what we would ask you guys to look at are those active patient trends.

Can be the amount of competition in a particular indication et cetera, as the trial proceeds.

Our confidence in those forecast goes up.

Meaning that we see the pace, we see the performance of the centers, we know what the footprint looks like so.

Obviously innovate our confidence is 100% we're done.

Jason M. Bednar: Okay. All right. Very helpful.

Getting close to lunar our confidence is high medicines next I'd say our confidence is high.

Jason M. Bednar: And then on the pipeline, I guess, wondering if you can speak to just the level of confidence in your updates today, I guess, in the context of what's still a fluid environment with COVID and now some supply constraints that seem to be impacting the PANOVA trial. I totally appreciate there's only so much that's in your control, but you have been moving more aggressively to bring on new sites for MEDIS and Lunar in the last few months to get those over the finish line.

And then.

Sometimes we're just affected by.

By things that are.

Very unexpected we would never have projected a global shortage of <unk> for instance that is very specific.

To Nova.

And we're also dealing as <unk> mentioned with the with issues with the Chinese regulators to get <unk> into the centers in China. So.

Those are clearly beyond our control, but were working very hard.

Jason M. Bednar: So I guess, again, sitting here today, just your level of confidence on some of the upcoming items, getting those last patients in on Lunar and MEDIS and then getting some of the other clinical trials kicked off that you've announced here. Yeah, sure.

Two.

Accommodate our centers for those issues.

And we updated the timing of that particular trial as soon as as.

As soon as it became clear that it was going to affect the the.

Unknown Executive: When we start a clinical trial, we make an estimate about the pace of enrollment and the number of centers that we will open and the timing for the opening of those centers, and we project the last patient. Those are obviously affected by lots of different variables as we proceed. Some of them are unexpected, right?

Timing of the last patient in so I would say generally.

Our covenants today is higher than it's been ever in large measure because of the passage of time.

For these trials.

Alright.

I can just squeeze in one more maybe you could just help us with exactly when that last patient was enrolled on innovate I mean was it.

And I'm, sorry, if I missed this but was it like within the last week last couple of weeks I'm, just trying to get a sense of maybe when we can expect that DMC update.

Unknown Executive: COVID completely unexpected, the duration of COVID unexpected. Others..., can be the amount of competition in a particular indication, etc. As the trial proceeds... Our confidence in those forecasts goes up, meaning that we see the pace, we see the performance of the centers, we know what the footprint looks like.

Thank you.

So again I think the less.

We don't.

First of all spend a lot of time in between last patient in and when we announce.

So it was it was recently, but we were able to mark that.

Milestone.

But I do want to say with respect to the DMC I want to underline again, we don't control that timing.

Unknown Executive: So obviously, innovate, our confidence is 100%, we're done. We're getting close to lunar, our confidence is high, MEDIS is next, I'd say our confidence is high. And then sometimes we're just affected by things that are very unexpected.

So no no doubt they will do their work.

But it's hard to triangulate perfectly from the time of the last patient in just want to state that.

Okay understood. Thank you.

Sure.

Thank you. Our next question comes from the line of Vijay Kumar with Evercore ISI. Your line is open.

Unknown Executive: We would never have projected a global shortage of Abraxane, for instance. That is very specific to Panova. And we're also dealing, as Asaf mentioned, with issues with the Chinese regulators to get Abraxane into the centers in China. So those are clearly beyond our control, but we're working very hard to accommodate our centers for those issues. And we updated the timing of that particular trial as soon as it became clear that it was going to affect the timing of the last patient.

Hey, guys. Thanks for taking my question.

Bill maybe.

Big picture clearly dependent Maxime said.

In fact across the space.

Can you guys.

Quantify what dependent must impact was in terms of patient access.

Is that improving or should we be conservative for Q4 as well.

Yes, so good morning, Vijay Thanks for the question I'm going to turn this one over to protest Shaw.

Unknown Executive: So I would say generally our confidence today is higher than it's ever been, in large measure because of the passage of time for these trials. All right, if I could just squeeze in one more. Maybe you could just help us with exactly when that last patient was in

Our chief commercial officer, who is with US this morning.

Maybe you can provide a little bit of color.

On the ground with respect to.

Covid in the core business.

Yes, Vijay Thank you for the question.

Of course, Covid certainly is a factor in the backdrop of everything that we're doing today one of the key things that we're seeing in terms of patient flow is that the clinic traffic and just how patients are diagnosed how the treatment plan is put into effect all of those things are changing their dynamic.

Jason M. Bednar: The last patient was enrolled on Innovate. I mean, was it, you know, I'm sorry if I missed this, but was it within the last week, last couple weeks? I'm just trying to get a sense of maybe when we can expect that DMC update.

And depending on the region, they're changing and shifting.

Unknown Executive: So again, I think the last one, we don't. First of all...

Third to how the Covid cases go up and down in different regions something that we can share specifically related to brain surgery, which is a key aspect of how opportune is that incorporated into the treatment plan. We've seen that brain surgery is down approximately 20% in the U S and another element compared to that we're also facing his face.

Unknown Executive: We spend a lot of time in between the last patient in and when we announce. So it was recently that we were able to mark that milestone. But I do want to say with respect to the DMC. I want to underline again, we don't control that timing. So, you know, no doubt they will do their work, but it's hard to triangulate perfectly from the time of the last patient in. I just want to state that.

The phase time with physicians so.

The clinics are turning into telehealth.

Sometimes physicians or in sometimes they are not we're seeing restrictions in our team's ability to get to the centers. So the just the general interaction that we would have is shifting and we're having to find new ways to engage both the physician and also the patient when we're able to engage the patient and I would say what drives us on this.

Jason M. Bednar: Okay, I understand. Thank you.

Vijay Kumar: Thank you. Our next question comes from the line of Vijay Kumar with Evercore ISI. Your line is open.

Front is to make sure as Bill mentioned.

Vijay Kumar: Hey guys, thanks for taking my question. One, Bill, maybe a big picture, clearly the pandemic seems to have had an effect everywhere.

We're certainly not happy with the number of patients that have been treated to date, because we believe the strength of our product the clinical profile as well as the positioning and the guidelines allows all eligible patients to.

Vijay Kumar: Effect Across the Space. Can you guys quantify what the pandemic impact was in terms of patient access? Is that improving, or should we be conservative for q4 as well?

I have a discussion around opportune, so engagement and education really becomes an important aspect.

And what drives US now our medical meetings are opening up we were just at Astro, where it was a hybrid meeting, but we were able to see and interact with the physician base Society of neuro oncology is coming up again, we will have another opportunity there to engage with their core stakeholders and these things give us further energy and drive to say hey.

William F. Doyle: Yes, so good morning, Vijay. Thanks for the question. I'm going to turn this one over to Pritesh Shah, our Chief Commercial Officer who's with us this morning. Pritesh, maybe you can provide a little bit of color on the ground with respect to COVID in the core business.

We want to make sure that no patient is left behind who is eligible for treatment.

Understood.

Pritesh Shah: Yes, Vijay, thank you for the question.

My follow up one on the clinical side.

Pritesh Shah: And of course, COVID certainly is a factor, and against the backdrop of everything that we're doing today, one of the key things that we're seeing in terms of patient flow is that clinic traffic and just how patients are diagnosed, how the treatment plan is put into effect, all those things are changing.

Actually a two part or if you will.

Just a clarification on the ovarian bill when you said.

No. That's fair we'll press release the result is that.

Well you have access to the complete analysis or is this just a one line statement, saying.

Unknown Executive: Unknown Executive, Asaf Danziger, Ingrid Goldberg, Novocure Ltd., Novocure Ltd., Unknown Executive, Asaf Danziger, Ingrid Goldberg, Novocure And another element compared to that that we're also facing is face-to-face time with physicians. So the clinics are turning into telehealth. Sometimes physicians are in, sometimes they're not. We're seeing restrictions in our team's ability to get to the centers.

The trial hit fruition or.

As expected.

Enrolled to completion and then on.

31.

Do we have some details on the trial design.

What kind of.

Treatment efficacy or we expect to see the hits that significant.

Sure so with respect to the first question.

The answer is straightforward and is consistent with all of our trials. So we do.

Do not receive.

Pritesh Shah: So just the general interaction that we would have is shifting, and we're having to find new ways to engage both the physician and also the patient when we're able to engage the patient. And I would say what drives us on this front is to make sure, as Bill mentioned, we're certainly not happy with the number of patients that haven't been treated to date because we believe the strength of our product, the clinical profile, as well as the positioning and the guidelines allow all eligible patients to have a discussion around Optune.

Any data from the interim analysis. So we have nothing to pass on we receive.

The feedback.

The data safety monitoring board with respect to.

Should the trial proceed.

Should the trial be stopped for.

Our success or should the trial be stopped.

For for failure, either for safety or for futility.

And we fully expect the middle case here with as I said before which is to proceed to to conclusion and that's what we're planning.

Pritesh Shah: So engagement and education really become an important aspect. And what drives us now? Our medical meetings are opening up. We were just at Astra, where it was a hybrid meeting, but we were able to see and interact with the physician-based society of neuro-oncology, which is coming up. Again, we'll have another opportunity there to engage with our core stakeholders. And these things give us further energy and drive to say, hey, we want to make sure that no patient is left behind who's eligible for our treatment.

And we will.

As I answered previously when we receive that feedback we will of course press release that as we have in the <unk>.

Past.

With respect to <unk> 31.

We look at the totality of the information available from these trials. These are open label trials.

And we just went through this exercise.

With <unk>.

With everyone.

We look at the patient characteristics.

That are enrolled we look at of course the.

Safety.

Profile and then we look at all of the standard.

As a courtesy measures.

Vijay Kumar: Understandable. And, you know, my follow-up, one on the clinical side. [inaudible]

To determine.

Whether we believe.

And investment in our phase III, which again I underlying is a very large undertaking.

Vijay Kumar: Will you have access to the complete analysis, or is this just a one-line statement saying...

Unknown Executive: is expected to enroll to completion, and then on EF31.

As.

It is worth it now I will say to date at Novocure.

Unknown Executive: Do we have any details on the trial design?

<unk>.

Found in every phase III that we've performed.

Unknown Executive: I'll let you know what kind of treatment efficacy we are expected to see to hit stash significance.

The combination of safety Tolerability and the efficacy signals that we've seen have justified moving.

Unknown Executive: Sure, so with respect to the first question, the answer is straightforward and is consistent with all of our trials. Therefore, we do not receive any data from the interim analysis, so we have nothing to pass on. We receive feedback from the Data Safety Monitoring Board with respect to whether the trial should proceed, should the trial be stopped for success, or should the trial be stopped for failure, either for safety or for futility.

Moving forward.

Two.

<unk> III, so that's our our track record to date.

But we'll we'll do the same sort of analysis when we have full access to the F 31 data in gastric.

Understood. Thanks, guys.

Our last question comes from the line of Greg Fraser with <unk> Securities. Your line is open.

Unknown Executive: And we fully expect the middle case here, as I said before, which is to proceed to conclusion, and that's what we're planning. And we'll, as I answered previously, when we receive that feedback, we will, of course, press release it as we have in the past. With respect to EF31, we look at the totality of the information available from these trials. These are open-label trials, and we just went through this exercise, recall, with HEPANOVA, with everyone where we look at the patient characteristics that are enrolled.

Good morning, folks and thanks for taking the questions.

I was wondering if you could comment at least high level on the pipeline of potential partnerships with other oncology companies that would study <unk> in combination with other oncology agents and then I just had a quick follow up on GBM I was wondering if you comment maybe qualitatively on how prescription volumes. It look so far in Q4, and whether you've seen sentiment.

Prudent in the pandemic related headwinds.

Sure. So so good morning, Greg I'll take the first question with respect to partnerships. So.

We are extremely.

Unknown Executive: We look at, of course, the safety profile, and then we look at all the standard efficacy measures to determine whether we believe an investment in phase three, which, you know, again, I underlined is a very large undertaking, is worth it. Now, I will say today that for Novocure, we've found in every phase two that we've performed that the combination of safety, tolerability, and efficacy signals that we've seen have justified moving forward to phase three. So that's our track record to date. But we'll do the same sort of analysis when we have full access to the ES31 data in gas. Thanks, guys.

Enthusiastic about our partnerships with.

Oncology leaders, who are commercializing complementary or synergistic therapeutic modality modalities.

The first partnership of course, we announced was with Merck.

In non small cell lung cancer first line non small cell lung cancer.

The trial that we are.

Undertaking with Merck in first line non small cell lung cancer is highly complementary.

Two hour.

Lunar trial in second line, non small cell lung cancer, and our Metis trial in brain Mets from non small cell lung cancer and of course.

Gregory Daniel Fraser: Our last question comes from the line of Greg Fraser with Truist Securities. Your line is open.

It is a trial that is.

Gregory Daniel Fraser: Good morning, folks, and thanks for taking the questions. I was wondering if you could comment at least at the high level on the pipeline of potential partnerships with other oncology companies that would study Optune in combination with other oncology agents. And then I just had a quick follow-up on GBM. I was wondering if you could comment, maybe qualitatively, on how prescription volumes have looked so far in Q4 and whether you've seen some improvement in the pandemic-related headwinds. Sure, so good morning, Greg.

Is based on the preclinical data that we've seen.

<unk>.

Combining.

Tumor treating fields with immunotherapies and the real opportunities.

For those two modalities to work together and to do a better job than than either modality alone.

The second program that we announced this quarter.

It's quite similar actually.

Focused in pancreatic cancer with Roche again, we're combining with.

Anti PDL one immunotherapy.

William F. Doyle: I'll take the first question with respect to partnerships. We are extremely enthusiastic about our partnerships with oncology leaders who are commercializing complementary or synergistic therapeutic modalities. The first partnership, of course, that we announced was with Merck in non-small cell lung cancer, first-line non-small cell lung cancer. The trial that we are undertaking with Merck in first-line non-small cell lung cancer is highly complementary to our lunar trial in second-line non-small cell lung cancer and our MEDIS trial in brain MEDS from non-small cell lung cancer.

In an area, where anti PDL, one therapies have not.

<unk> significant impact alone, but where all of our preclinical data suggests that the two therapies together.

Have a great benefit for patients and again, it's highly complementary to <unk> three <unk> three is recruiting patients with locally advanced pancreatic cancer pancreatic cancer that has not spread beyond.

The peritoneal region.

Our program with Roche.

<unk> focused on metastatic patient so think of.

William F. Doyle: And of course, it is a trial that is based on the preclinical data that we have seen in clinical trials in non-small cell lung cancer, combining tumor treating fields with immunotherapies and the real opportunities for those two modalities to work together and to do a better job than either modality alone. The second program that we announced this quarter is quite similar actually, focused on pancreatic cancer with Roche. Again, we're combining it with anti-PDL-1 immunotherapy in an area where anti-PDL-1 therapies have not made a significant impact alone but where all of our preclinical data suggests that the two therapies together can have a great benefit for patients.

Tumor treating fields, providing the immunogenic.

Cell death and kick start.

Plus attaining mitotic effect to the pancreas the primary tumor, but then the immunotherapy that's been energized or excuse me kickstarted by tumor treating fields doing its job on the on the metastatic spread.

Sure.

Trials like this our partnerships like this.

Our very interesting to us and while we don't talk about.

Trials that.

Work that hasn't been announced or Hasnt been finalized.

We are certainly.

Interested in pursuing additional programs like this also mentioned another program.

We have and we've announced a program with a small company.

That has a unique breaky therapy, so breakthrough therapies are.

William F. Doyle: And again, it's highly complementary to PANOVA-3. PANOVA-3 is recruiting patients with locally advanced pancreatic cancer, so pancreatic cancer that has not spread beyond the peritoneal region. Our program with Roche is focused on metastatic patients. So think of... tumor-treating fields providing the immunogenic cell death and kickstart, plus its antimyotic effect on the pancreas of the primary tumor, but then the immunotherapy that's been energized or kickstarted by tumor-treating fields doing its job on the metastatic spread.

Radiation sources that are implanted.

At the time of surgery to treat cancer.

They are introduced and then removed.

B B via specialized equipment again during a surgical procedure.

In this case, we're able to combine.

Tumor treating fields with a breakthrough therapy source that is implanted at the time of surgery by a neurosurgeon for recurrent GBM.

And this is a case, where the company is small, but where the therapy is extremely promising and the combination of our therapy and the breakthrough therapy offer the possibility of tremendous benefit to patients. So we're interested in both kinds of partnerships.

William F. Doyle: Trials like this or partnerships like this are very interesting to us, and while we don't talk about trials or work that hasn't been announced or hasn't been finalized, we are certainly interested in pursuing additional programs like this. I'll also mention another program we have, and we've announced, a program with a small company that has a unique brachytherapy. So brachytherapies are radiation sources that are implanted at the time of surgery to treat a cancer, or they're introduced and then removed via specialized equipment, again, during a surgical procedure.

Clearly the partnerships with the with the.

Therapeutic leaders like Roche and Merck.

Sure.

Present, great opportunities for patients and great opportunities for expanding our programs, but the programs with the little companies. The small guys that have unique.

<unk> therapies are also important for us and important for patients.

We're working on both types of partnerships in the future.

And then with respect to your second question on prescription trends of course, we don't guide, we don't talk about the future, but protests maybe back to you for a little more color on what youre seeing in the marketplace.

Yes. Thank you Bill and thank you again for the question. So I'll highlight here the significant unmet clinical need there remains for GBM patients. So not only our mission, but her passion remains to make sure that all of these patients have at least the conversation about opportune and then we provide the support necessary to help the <unk>.

William F. Doyle: In this case, we're able to combine tumor-treating fields with a brachytherapy source that is implanted at the time of surgery by a neurosurgeon for recurrent GBM. And this is a case where the company is small but where the therapy is extremely promising, and the combination of our therapy and brachytherapy offers the possibility of tremendous benefit to patients. So, we're interested in both kinds of partnerships. Clearly, partnerships with therapeutic leaders like Roche and Merck.

<unk> make decisions. So some of the things I'll highlight a couple of programs that help on this front that allow us to continue taking advantage of those patients that are presenting in the clinic and those patients that we continue to have access to and one such program in the U S. We have.

Graham club, considering opportune, which allows our teams to talk about the technical aspects of our therapy with patients and this again helps ensure that those patients that are coming in having a discussion around opportune are more prepared to consider the therapy and to take advantage of that.

William F. Doyle: And so, we're interested in both kinds of partnerships, which present great opportunities for patients and great opportunities for expanding our programs. But the programs with the little companies, the small guys that have unique therapies, are also important for us and important for patients. So we're working on both types of partnerships for the future. And then, with respect to your second question on prescription trends, of course, we don't guide, we don't talk about the future, but Pritesh, maybe back to you for a little more color on what you're seeing in the marketplace. Yes, thank you, Bill.

In addition to that what I mentioned, our two key congresses that take place in this horizon, one already took place.

We had 15 abstracts there. So it was clinical data that was presented our teams had opportunities to engage with physicians that we're at that Congress. Another one coming up as society of neuro oncology as I mentioned, so these opportunities again help us continue to educate raise awareness around opportune and the high unmet need.

Need that remains in GBM and this will.

Pritesh Shah: And thank you again for the question. So I'll highlight here the significant unmet clinical need there remains for GBM patients. So not only our mission but our passion remains to make sure that all of these patients have at least a conversation about Optune and then we provide the support necessary to help the patients make decisions. So some of the things I'll highlight a couple of programs that help on this front that allow us to continue taking advantage of those patients that are coming into the clinic and those patients that we continue to have access to.

We will be one of the drivers for our business in this quarter.

And maybe Greg what I'll add to that is that.

Throughout our organization as we've mentioned a number of times, we want to reach all these patients.

We know that we are underpenetrated in academic centers.

Academic centers are focus on research and specifically focused on drug research.

So oncology has been.

An area where.

The work that is done is primarily on.

By Neuro oncologist is experimenting with new drugs and new combinations. Our teams are very focused on engaging these research sites on their own terms.

Pritesh Shah: And one such program in the US, we have a program called Considering Optune, which allows our teams to talk about the technical aspects of our therapy with patients. And this, again, helps ensure that those patients that are coming in for a discussion around Optune are more prepared to consider the therapy and take advantage of it. And this will be one of the drivers for our business in this quarter. And maybe, Greg, what I'll add to that is that... Through our organization, as we've mentioned a number of times, we wanna reach all these patients. We know that we are under-penetrated in academic centers.

And in this engagement comes in a number of number of ways, we have a very.

Developed program.

Investigators sponsored trials. These are trials, where the investigator comes with the concept and I will say this is not just in the U S. This is an international program.

We mentioned in the prepared remarks and <unk>.

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Has been opened recently at Stanford for instance.

And we're also opening now the centers for our Trident.

Large randomized.

William F. Doyle: These academic centers are focused on research and specifically focused on drug research. Neuro-oncology has been an area where the work that is done primarily by neuro-oncologists is experimenting with new drugs and new combinations. Our teams are very focused on engaging these research sites on their own terms. And this engagement comes in a number of ways.

<unk> trial, where we are testing.

The use of opportune.

With radiation therapy.

Therapy in first line GBM, rather than waiting until after radiation These isps and.

Trials like Triton.

Allow the academic researchers to engage in the research that is.

Is of interest to them, but it also gives them that hands on experience with the therapy.

William F. Doyle: We have a very developed program in investigator-sponsored trials. These are trials where the investigator comes up with the concept, and I will say this is not just in the U.S.; this is an international program. We mentioned in the prepared remarks an IST that has been opened recently at Stanford, for instance, and we're also opening centers now for our Trident large randomized trial where we are testing the use of Optune with radiation therapy in first-line GBM rather than waiting until after radiation.

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We believe we will then.

Bleed into or begin to be used in their non research or non clinical trial <unk>.

Yes so.

A lot of efforts.

Going on standard commercial efforts as well as these research efforts.

To get to these patients that.

That we know can benefit from the therapy.

Thank you that was very helpful.

William F. Doyle: These ISTs and trials like Trident allow academic researchers to engage in the research that is of interest to them, but it also gives them that hands-on experience with the therapy that we believe will then bleed into or begin to be used in their non-research or non-clinical trial progress. So there is a lot of effort going on, standard commercial efforts, as well as these research efforts to get these patients that we know can benefit from the therapy. Thank you. That was very helpful.

Thank you.

There are no further questions I will now turn the call back to executive Chairman Bill Doyle for closing remarks.

So first I'd like to thank everyone for your time this morning.

We appreciate your interest in Novocure.

I also need to thank all of the Novocure team members on the call and who are listening today.

Know that working in.

This extended pandemic environment is extremely difficult and I want to thank you for your continued focus and dedication to our mission.

William F. Doyle: Thank you. There are no further questions. I will now turn the call back to Executive Chairman Bill Doyle for closing remarks.

I'll end, where I began.

The fundamentals of our business sitting over cure are strong.

William F. Doyle: So first, I'd like to thank everyone for your time this morning. We appreciate your interest in Novocure. I also need to thank all the Novocure team members on the call and who are listening today. We know that working in this extended pandemic environment is extremely difficult, and I want to thank you for your continued focus and dedication to our mission. I'll end where I began.

In fact, there is stronger than they have ever been.

Our sustainable business and GBM is generating financial strength that is Ashley underlined allows us to invest in organic growth opportunities without regard to financial constraints or trade offs, we made great progress in the quarter.

Notwithstanding the external environment.

William F. Doyle: The fundamentals of our business at Novocure are strong. In fact, they're stronger than they've ever been. Our sustainable business in GBM is generating financial strength that, as Ashley underlined, allows us to invest in organic growth opportunities without regard to financial constraints or trade-offs. We made great progress in the quarter, notwithstanding the external environment. We couldn't be happier with the progression of Innovate 3, and we look forward to sharing that data in the coming years.

We couldnt be happier.

With the progression of innovate three.

And we look forward to sharing that data in the coming years.

As we discussed we're also very pleased with the progress on the other trials notwithstanding.

The vaccine issues that we're working to solve.

And Penn Nova.

We believe we are approaching a major inflection point for our company.

William F. Doyle: And as we discussed, we're also very pleased with the progress on the other trials, notwithstanding the Abraxane issues that we're working to solve in Penova. We believe we're approaching a major inflection point for our company as we progress to the conclusion of these trials, and we're investing to prepare to be a substantially different company in the not-too-distant future. And substantially different, substantially larger, treating substantially more patients with the progress that we hope to undertake. So, thanks again, and we'll see you next quarter.

As we progress to the conclusion of these trials and we're investing to prepare to be a substantially different company.

In the not too distant future and by substantially different substantially larger treating substantially more patients.

With the.

With the progress that we hope to.

Undertake.

Thanks, again, and we'll see you next quarter.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Operator: BF-WATCH TV 2021

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