Q4 2021 Novocure Ltd Earnings Call

Good day, and thank you for standing by welcome to the Novocure fourth quarter and full year 2021 earnings conference call.

Operator: Good day and thank you for standing by. Welcome to the Novocure fourth quarter and full year 2021 earnings conference call. At this time, all participants are in listen-only mode.

At this time, all participants are in listen only mode.

Operator: After the presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star then 1 on your touchtone telephone. Please be advised, today's conference may be recorded. If you require operator assistance during the call, please press star then zero.

After the presentation, there will be a question and answer session.

To ask a question during the session you will need to press Star then one on your Touchtone telephone.

Please be advised today's conference maybe recorded.

If you require operator assistance during the call. Please press Star then zero.

Ingrid Goldberg: I'd now like to hand the conference over to Ingrid Goldberg. Please go ahead. Good morning, and thank you for joining us to review Novocure's fourth quarter and full year 2021 performance. 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 team are also on the call and available for Q&A. The slides presented today can be viewed on our website, www.novacure.com, by clicking on the link for fourth quarter and full year 2021 financial results located in the quarterly report section of our investor relations page.

I would now like to hand, the conference over to Ingrid Goldberg. Please go ahead.

Good morning, and thank you for joining us to review <unk> fourth quarter and full year 2021 performance.

Im joined on the phone by our executive Chairman Bill Doyle.

CEO of <unk>, and our CFO Ashley Cordova.

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

The slides presented today can be viewed on our website www dot novocure dot com by clicking on the link for fourth quarter and full year 2021 financial results located in the quarterly report section of our Investor Relations page.

Before we begin 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.

Ingrid Goldberg: Before we begin, 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 filing. We do not intend to update publicly any forelooking statements except as required by law. Where appropriate, we refer to non-GAAP financial measures to evaluate our business, specifically adjusted EBITDA, a measure of earnings before interest, taxes, depreciation, amortization, and share-based compensation.

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

Where appropriate we will refer to non-GAAP financial measures to evaluate our business specifically adjusted EBITDA.

Earnings before interest taxes, depreciation amortization and share based compensation.

Ingrid Goldberg: We believe adjusted EBITDA is an important metric as it removes the impact of earnings attributed to our capital structure, tax rate, and material non-cash items, and best reflects the financial value generated by our business. Reconciliations of this and any other non-GAAP financial measure 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 10-K file with the SEC today.

We believe adjusted EBITDA 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.

Reconciliations of this and any other 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 10-K filed with the SEC today.

These materials can also be accessed from our Investor relations page of our website.

Ingrid Goldberg: These materials can also be accessed from our Investor Relations page of our website. Following our prepared remarks today, we will open the floor for your questions. Financials for the 3 and 12 months ended December 31, 2021 are available in our press release and in our 10-K, both of which were released earlier this morning. With that, I will now turn the call over to our Executive Chairman, Bill Doyle.

Following our prepared remarks today, we will open the floor for your questions.

Financials for the three and 12 months ended December 31, 2021 are available in our press release and in our 10-K, both of which we released earlier this morning.

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

Thank you Ingrid and good morning, everyone.

Bill Doyle: Thank you, Ingrid, and good morning, everyone. We founded Novocure to explore the novel observation that electric fields can be harnessed to disrupt cancer cell division. Over the subsequent two decades, our team has worked tirelessly to bring tumor treating field therapy to patients to extend survival in some of the most aggressive forms of cancer. Over these years, we have completed multiple pivotal clinical trials, built a durable commercial business treating patients with glioblastoma and gained an immense amount of knowledge and experience which fuels our confidence in the future. We continue to develop the full potential of the tumor treating fields platform through research, clinical trials, and collaborations with academic centers and industry partners. The fundamentals of our business are strong.

Bill Doyle: 2021 was another year of achievement for the Novocure team. We completed the enrollment of two randomized pivotal trials. The first in recurrent ovarian cancer and the second in non-small cell lung cancer.

We founded Novocure to exploit the novel observation that electric fields can be harnessed to disrupt cancer cell division.

Over the subsequent two decades, our team has worked tirelessly to bring tumor treating fields therapy to patients.

Survival in some of the most aggressive forms of cancer.

Over these years, we've completed multiple pivotal clinical trials.

Built a durable commercial business treating patients with glioblastoma.

<unk> gained in the midst amount of knowledge and experience, which fuels our confidence in the future.

We continue to develop the full potential of the tumor treating fields platform through research clinical trials and collaborations with academic centers and industry partners.

The fundamentals of our business are strong.

2021 was another year of achievement for the Novocure team we.

Bill Doyle: We also completed enrollment of a pilot clinical study in gastric cancer. Exciting data from the to-the-top investigator-sponsored trial studying tiki fields together with immunotherapy were presented at the Society of Neuro-Oncology Annual Congress, which could lead to a paradigm shift in the treatment of patients with GBS. We also released data from our pilot clinical study in advanced liver cancer, which demonstrated an encouraging disease control rate and objective response rate in poor prognosis patients.

We completed the enrollment of two randomized pivotal trials.

First in recurrent ovarian cancer and the second in non small cell lung cancer.

We also completed enrollment of our <unk>.

<unk> clinical study in gastric cancer.

Exciting data from the two of the top investigator sponsor trial studying TT fields together with immunotherapy were presented at the society of Neuro oncology annual Congress.

Which could lead to a paradigm shift in the treatment of patients with GBM.

We also released data from our pilot clinical study in advanced liver cancer, which demonstrated an encouraging disease control rate and objective response rate and poor prognosis patients.

Bill Doyle: We expanded our collaboration network, which now includes oncology leaders Merck, Roche, Genentech, and GT Medical. We announced we are building a world-class training and development center where partners from around the world can convene to learn the latest advances in the study and use of tumor treating fields therapy, and we generated over half a billion dollars in net revenue. As impressive as this progress may be, we believe it is just the tip of the iceberg as we approach a key inflection point for our company and patient.

We expanded our collaboration network, which now includes oncology leaders, Merck Roche Genentech and GT medical.

Now we are building a world class training and development Center, where partners from around the world can convene to learn the latest advances in the study and use of tumor treating fields therapy.

And we generated over half a billion dollars in net revenues.

As impressive as this progress may be we believe it is just the tip of the iceberg as we approach a key inflection point for our company and patients.

In today's call. We will first discuss recent updates on our core GBM business we.

Bill Doyle: In today's call, we will first discuss recent updates in our core GBMs. We will then review developments in our clinical pipeline. Finally, we will close with a discussion of our fourth quarter financial results and the strength provided by our sustainable business model.

We will then review developments in our clinical pipeline.

Lee, we will close with a discussion of our fourth quarter financial results and the strength provided by our sustainable business model.

Our core <unk> business is a critical driver of nobody curious long term success.

Bill Doyle: Our core GVM business is a critical driver of Novocure's long-term success. Not only is our GBM business the financial engine fueling significant investment in future growth, but it is providing the blueprints for successful commercial launches and geographic expansion. COVID-19 was a headwind in 2021, with the Omicron surge repeating patterns of restricted physician engagement, Stress Hospital Staffing, and Delayed Diagnosis and Treatment seen throughout the year

We're only as our GBM business, the financial engine fueling significant investment in future growth.

This is providing the blueprints for successive successful commercial launches and geographic expansion.

COVID-19 was a headwind in 2021.

With the <unk> surge repeating patterns of restricted physician engagement.

Stressed hospital staffing and delayed diagnosis and treatment seen throughout the year.

Bill Doyle: Nevertheless, we generated $535 million in net revenues from our GBM business, an increase of 8% year over year. Our point of focus for increasing opt-in adoption is broadening our penetration at key academic institutions. In the U.S., whether through primary consultations or second opinions, academic institutions see a majority of GBM patient flows, and we remain underpenetrated in these settings. We are committed to providing every opportunity for oncologists at academic centers to learn about the science underpinning tumor treating fields therapy and to increase their understanding of the clinical benefits for patients. I would like to highlight two opportunities for academic oncologists to engage with, our IST program, and the TRIDENT trial in newly diagnosed GBM. Currently, Novocure supports 30 active investigator-sponsored trials, or ISTs.

Otherwise, we generated $535 million and net revenues from our GBM business, an increase of 8% year over year.

A point of focus for increasing off to an adoption is broadening our penetration of key academic institutions.

In the U S whether through primary consultations or second opinion.

<unk> institutions see a majority of GBM patient flows and we remain underpenetrated in these settings.

We are committed to providing every opportunity for oncologists academic centers to learn about the science underpinning tumor treating fields therapy and to increase their understanding of the clinical benefits for patients.

I would like to highlight two opportunities for academic oncologists to engagement.

Our ISP program and the Triton trial in newly diagnosed GBM.

Currently Novocure supports 30 active investigator sponsored trials are Isps.

Bill Doyle: ISPs explore a variety of clinical topics of interest to academicians, including new cancer indications, unique combinations with drugs and other therapies, and use in new patient populations. Novocure's IST program offers oncologists opportunities to perform research and publish their findings, and informs areas for further study including potential pivotal trials. Our ISTs can also potentially lead to important breakthroughs, such as the to-the-top study conducted by Dr. David Tran, Chief of the Division of Neuro-Oncology at the McKnight Brain Institute at the University of Florida, in newly diagnosed GBM.

Asps explore a variety of clinical topics of interest academicians, including new cancer indications unique combinations with drugs and other therapies and use the new patient populations.

Would be curious how <unk> T program offers oncologists opportunities to perform research and publish their findings.

And informs areas for further study, including potential pivotal trials.

Our Isps can also potentially lead to important breakthroughs such as the two the top study conducted by Dr. David <unk> Chief of the division of Neuro oncology at.

Brain Institute at the University of Florida.

In newly diagnosed GBM.

As seen in our press release this morning.

Bill Doyle: As seen in our press release this morning, we are extremely pleased to announce Dr. Tran's manuscript was published this week in the Journal of Clinical Investigation. As a reminder, To The Top was designed to study tumor-treating fields with temozolomide together with the immunotherapy pembrolizumab. As with our lunar trial, To The Top explores the potential benefits of using TT fields together with immunotherapies, and specifically whether TT fields induce cell death leads to an anti-cancer immune response. Such that the formerly cold tumor becomes hot for concomitant use with immunothermic therapy, in November at the Society for Neuro-Oncology Annual Congress.

We were extremely pleased to announce Dr. Trans manuscript was published this week in the journal of clinical investigation.

As a reminder to the talk was designed to study tumor treating fields with <unk> together with the immunotherapy Pember Elizabeth.

As with our lunar trial should the top explores the potential benefits of using TT fields, together with Immunotherapies and specifically, whether TT fields induced cell death leads to an anti cancer immune response.

Such that a formerly cold tumor becomes hot for concomitant use with immuno therapy.

In November at the <unk>.

Society for Neuro oncology annual Congress, Dr. Tran presented preliminary data, which we found very encouraging.

Bill Doyle: Dr. Tran presented preliminary data, which we found very encouraging, in 19 patients that had greater than nine months of follow-up, progression-free survival reached 11.2 months. For perspective, this compares to the 6.7 months achieved in Novocure's pivotal EF14 study of ttFields plus pimazolamide, and is nearly a three times improvement for the four months of progression pre-survival observed from treatment with Tendezilla might alone in the ES-14 control room. Dr. Tran's research might prove revolutionary for GBM patients, and may potentially position TT fields as a sensitizer for a immunotherapy agent to impact cancers in which they have so far proved in effect.

In 19 patients that had greater than nine months of follow up.

Progression free survival reached 11 two months for <unk>.

Perspective. This compares to the six seven months achieved in Noga cures pivotal <unk> study of <unk>, plus <unk> and is nearly three times improvement for the four months of progression free survival observed from treatment with <unk> alone in the Es 14 control.

Sure.

Dr. Trans research might prove revolutionary for GBM patients and may potentially position TT fields, as the sensitize or for immunotherapy agents to impact cancers in which they have so far proved ineffective.

The two of the top study is an example of a clinical research are performing in ISP that is driving the science exploring the most effective uses of TT fields and may change the treatment landscape for GBM patients.

Bill Doyle: The To the Top study is an example of a clinical researcher performing an IST that is driving the science exploring the most effective uses of TT fields and may change the treatment landscape for GBM patients. Novocure-sponsored clinical trials provide a second avenue to engage key academic centers. Our Trident Protocol is testing the use of T.T. fields concurrently with radiation therapy rather than following radiation therapy in newly diagnosed UBS.

Novocure sponsored clinical trials provide a second Adam to engage key academic centers.

Our Triton protocol is testing the use of TT fields concurrently with radiation therapy, rather than following radiation therapy in newly diagnosed GBM.

Studying the earlier introduction of October in the GBM treatment protocol is critical to Novocure for two principal reasons first shifting the introduction of TT fields to an earlier point in a patient's treatment journey.

Bill Doyle: Studying the earlier introduction of Optune in the GBM treatment protocol is critical to Novocure for two principal reasons. First, shifting the introduction of TP fields to an earlier point in a patient's treatment journey may lead to extended time on therapy and better survival outcomes. Second, it allows Novocure to engage additional members of a patient's oncology team, specifically radiation oncology. We believe greater awareness of the benefits of TT fields among all members of the treatment team is key to increasing adoption. We have opened Trident recruitment sites at several of our focus academic centers with the goal of opening Trident sites at all remaining centers this year.

Lead to extended time on therapy and better survival outcomes.

Second it allows novocure to engage additional members of our patients oncology team specifically the radiation oncologists.

We believe greater awareness of the benefits of TT fields. Among all members of the treatment team is key to increasing adoption.

We have open Trident recruitment sites at several of our focus academic centers with the goal of opening trial sites that all remaining centers this year.

Geographic expansion is another key component of our long term growth strategy.

Bill Doyle: Geographic expansion is another key component of our long-term growth strategy. In July, we announced Octoon had earned an ASA3 rating from the French Health Authority. An ASA III rating enables our team to engage in reimbursement negotiations with the ultimate goal of achieving national reimbursement in transit. We are in the final stages of price negotiations with French health authorities and expect to treat patients in France by the end of 2022. In addition to France, we are establishing the commercial foundations in a number of other markets across Europe and Canada.

In July we announced the ops team has earned an assay three rating from the French Health authority.

And ASC three rating enables our team to engage in reimbursement negotiations with the ultimate goal of achieving national reimbursement in France.

We are in the final stages of price negotiations with French health authorities and expect to treat patients in trends by the end of 2022.

In addition to France, we are establishing a commercial foundation and a number of other markets across Europe and Canada.

These new markets create the opportunity to serve more GBM patients as well as established commercial infrastructure in anticipation of future launches.

Bill Doyle: These new markets create the opportunity to serve more GVM patients as well as establish commercial infrastructure in anticipation of future launches. I would like to close my comments this morning by highlighting a recently announced product development milestone. Preclinical research shows that increasing tumor-treating field intensity enhances the cancer self-killing effect. The practical factor limiting field intensity in daily use is heat generation.

I would like to close my comments this morning by highlighting our recently announced product development milestone.

Preclinical research shows that increase increasing tumor treating fields intensity enhances the cancer cell killing effect.

The practical factor limiting field intensity and daily use heat generation.

We believe our next generation of rates have the potential to mitigate skin skin heating issue.

Bill Doyle: We believe our next generation arrays have the potential to mitigate the skin heating issue. Our research shows our next generation arrays can deliver a higher, more consistent tumor treating field intensity to the region of a patient's tumor. Our next generation arrays are also designed to be more comfortable and provide greater range of motion. I am incredibly excited about this product development milestone, as our next generation arrays have the potential to improve our therapy and the lives of patients, and could be another lever for increasing penetration.

Our research shows our next generation arrays can deliver a higher more consistent tumor treating fields intensity to the region of the patient's tumor.

Our next generation arrays are also designed to be more comfortable and provide greater range of motion.

I am incredibly excited about this product development milestone as our next generation rates have the potential to improve our therapy and the lives of patients.

It could be another lever for increasing penetration.

We are working with regulatory authorities in anticipation of a limited release in the in select EU markets later this year.

Bill Doyle: We are working with regulatory authorities in anticipation of a limited release in select EU markets later this year. Novocure is in the privileged position to have large, organic opportunities to extend the reach of the tumor-treating field's cancer therapy platform into new cancer indications and new geographies, we can further improve our therapy platform through product engineering, and our commercial bits.., fueling our many growth and product improvement initiatives. The durability of our core revenue streams allows our teams to focus on our strategic priority, all with the ultimate goal to extend survival in some of the most aggressive camps. With that, I will now pass the call over to Asaf to discuss our clinical updates from the quarter. Asaf?

No, but curious in the privileged position to have large organic opportunities to extend the reach of the tumor treating fields cancer therapy platform into new cancer indications and new geographies.

We can further improve our therapy platform through product engineering.

In our commercial business is fueling our many growth and product improvement initiatives.

The durability of our core revenue streams allows our teams to focus on our strategic priorities.

All with the ultimate goal to extend survival in some of the most aggressive cancers.

With that I will now pass the call over to SaaS to discuss our clinical updates from the quarter.

Yes.

Thank you Bill.

Asaf Danziger: Thank you, Bill. First, I would like to echo Bill's sentiment that our 2021 achievements are just the tip of the iceberg for Novocure. In the next 24 months, we anticipate data from three registrational trials and data from numerous pilot studies, which could be revolutionary for patients and transformational for our company. As we approach this critical inflection point, we are also finalizing protocols for our next wave of clinical development to maintain growth in the future.

First I would like to Echo <unk> sentiment since our 2021 achievements just the tip of the iceberg flown over Q in the next 24 months, we anticipate data from three Registrational trials and data from numerous pilot studies, which could be revolutionary for patients and transformational for our company.

As we approach this critical inflection point, we are also finalizing protocols for our next wave of clinical development to maintain growth in the future.

Asaf Danziger: Last year, we completed enrollment in two of our Phase III pivotal trials, Lunar and Innovate III. As a reminder, our Lunar trial is studying the use of T-diffuse redoxotaxel, or physician's choice PD-1 inhibitor, for the treatment of stage IV non-small cell lung cancer.

Last year, we completed enrollment in two of our phase III pivotal trials Luna and <unk> III.

A reminder, our lunar trial is studying the use of <unk> as we look for tax on all physicians choice PD one inhibitor for the treatment of stage four non small cell lung cancer Luna has a 12 month follow up from last patient in we are committed to sharing top line data by the end of the year.

Asaf Danziger: Lunar has a 12-month follow-up from last patient in. We are committed to sharing top-line data by the end of the year. The Innovate3 trial in recurrent ovarian cancer also completed enrollment in 2021, and we are awaiting the interim analysis from the Independent Data Monitoring Committee. As we recently disclosed, while we are encouraged by the rapid enrollment of Innovate3, not enough events have occurred in the two arms for the DMC to complete their interim review. We expect an adequate number of events in the second quarter, at which time the DMC will complete their analysis and we will make the findings of their report public.

The anyway, sweet wine and recurrent volume constant also completed enrollment in 2021, and we are awaiting the interim analyses from the independent data monitoring committee as we recently disclosed while we are encouraged by the rapid enrollment of innovate three not enough events have occurred in the two <unk> for the.

DMC to complete the interim review, we expect an adequate number of events in the second quarter at which time the DMC will complete the analysis and we will make the findings of the report public. These timing does not impact the timeline for data from this trial, which we expect in 2023.

Asaf Danziger: This timing does not impact the timeline for data from this trial, which we expect in 2023. Moving to our pivotal METIS trial in brain metastasis, we continue to enroll patients and expect final enrollment later this year with data in 2023. Finally, we are pleased to announce that along with our partner Xylab, we have identified a suitable generic Abraxin chemotherapy for use in China and enrolled our first Chinese patient in the pivotal PANOVA3 trial in pancreatic cancer.

Moving to pivotal Metis trial in brain metastases, we continue to enroll patients and expect final enrollment later this year with data in 2023.

Finally, we are pleased to announce that along with our partners xylem, we have identified a suitable generic <unk> in chemotherapy for using China and enrolled the first Chinese patients in the pivotal <unk> trial in pancreatic cancer.

Asaf Danziger: Outside of China, we continue to monitor the impact of the global abraxin shortage to ensure uninterrupted trial enrollment. We continue to expect final data in 2024. Looking ahead, we are excited about our next generation of clinical trials. In May 2022, we expect data from our pilot study in gastric cancer in partnership with Zyla. We are also finalizing the trial protocols for clinical collaboration with Roch, which will study Titi Fields together with Roch anti-PDL1 therapy for the treatment of metastatic pancreatic cancer.

Sales of China, we continue to monitor the impact of the global <unk> Shouldnt to ensure uninterrupted trial enrollment.

Continue to expect final data in 2024.

Looking ahead, we're excited about our next generation of clinical trials in mid 2022, we expect data from our pilot study in gastric cancer in partnership with <unk>.

We are also finalizing the trial protocol for a clinical collaboration with Roche, which will study <unk> together with Roche anti PDL, one therapy for the treatment of <unk>.

I think in pancreatic cancer.

Asaf Danziger: As we continue to generate data in new indications and combinations, it remains clear that our therapy is capable of impacting cancers in the head, thorax, and abdomen, and we look forward to continuing our research on cancers in these regions of the body. Before ending the call to Ashley, I would like to take a moment to congratulate the Novocure team on a successful 2021. As challenging as the last few years have been, I am excited for the fresh start of a new year.

We continue to generate data in new indications and combinations. It remains clear that our therapies capable of impacting cancers in the head and abdomen and we look forward to continuing our research in cancer in these regions of the body.

Before handing the call to Ashley I would like to take a moment to congratulate the novocure team on a successful 2021 as challenging as the last few years have been I am excited for the forest.

When you buy continuing to commit to our emission today. It is my hope that we will have the opportunity to help many thousands of additional patients in the future I would like to thank the normal Q team for their daily dedication to our mission and I look forward to another year of innovation and <unk>.

Asaf Danziger: By continuing to commit to our mission today, it is my hope that we will have the opportunity to help many thousands of additional patients in the future. I would like to thank the Novocure team for their daily dedication to our mission, and I look forward to another year of innovation and success. With that, I will pass the call over to Ashley to discuss our first quarter financial performance. Thank you, Asaf. Novocure finished the year in a strong financial position.

Okay.

With that I will pass the call over to Ashley to discuss our fourth quarter financial performance.

Thank you I'll hop.

Nobody care finished the year in a strong financial position.

Ashley Cordova: Our core GVN business generated a record $535 million in net revenues in 2021, an 8% increase from the prior year. The durability of our commercial business enables continued investment in initiatives designed to drive greater revenue in the future. This includes expansion of our clinical pipeline, new product development, and organizational readiness efforts in anticipation of potential future launches. In the fourth quarter specifically, we generated $133 million in net revenue.

Our core GBM business generated a record $535 million and net revenues in 2021.

8% increase from the prior year.

The durability of our commercial business enables continued investment in initiatives designed to drive greater revenue in the future.

This includes expansion of our clinical pipeline, new product development and organizational readiness efforts in anticipation of potential future launches.

In the fourth quarter, specifically, we generated $133 million and net Ravi.

Ashley Cordova: Unlike the fourth quarter of 2020, we did not recognize material revenue from our Medicare backlog. We also saw our net revenue per active patient per month come in slightly lower in the quarter, specifically due to negotiations with German payers. We have reached an agreement with the largest public payers in Germany, which enabled long-term price stability and greater operational efficiency, and provides a strong foundation for negotiations in Newmark. We ended the year with 3,587 patients on therapy, a 5% increase from the same time last year.

Unlike the fourth quarter of 2020, we did not recognize material revenue from our Medicare backlog.

We also saw our net revenue per active patient per month come in slightly lower in the quarter, specifically due to negotiations with chairman Payors.

We have reached an agreement with the largest public payers in Germany, which enables long term price stability and greater operational efficiency.

It provides a strong foundation for negotiations and new market.

We ended the year with 3587 patients on therapy.

5% increase from the same time last year.

Ashley Cordova: This reflects year-over-year active patient increases of 4%, 6%, and 16% in the U.S., EMEA, and Japan respectively. New markets coming online and greater penetration in current markets will continue to drive our active patient volumes in 2022, with full-year active patient growth expected between 2 and 5%. Moving down the P&L, our gross profit in the fourth quarter was $104 million, with a gross margin of 78%.

This reflects year over year active patient increases of 4%, 6% and 16% in the U S EMEA and Japan, respectively.

New markets coming online and greater penetration in current market will continue to drive our active patient volumes in 2022.

With full year active patient growth expected between two and 5%.

Moving down the P&L, our gross profit in the fourth quarter was $104 million with a gross margin of 78%.

This is the seventh consecutive quarter in which our gross margin has been 77% or higher.

Ashley Cordova: This is the 7th consecutive quarter in which our gross margin has been 77% or higher. We continue to evaluate opportunities to reduce our cost of goods sold as we expand our geographical footprint, launch product innovations, and prepare for new indications. We believe one of our best uses of capital is research and development. R&D initiatives are designed to unlock new cancer indications, expand addressable patient populations and enhance our product offers. 2021 was a record year for R&D, as we invested more than $200 million for the first time.

We continue to evaluate opportunities to reduce our cost of goods sold as we expand our geographical footprint.

<unk> product innovation and prepare for new indications.

We believe one of our best uses of capital as research and development.

R&D initiatives are designed to unlock new cancer indications.

And addressable patient populations and enhance our product offering.

2021, with a record year for R&D investment as we invested more than $200 million for the first time.

For perspective, we invested $132 million in R&D in 2020 and $79 million in 2019.

Ashley Cordova: For perspective, we invested $132 million in R&D in 2020 and $79 million in 2019. While we expect the level of R&D investment to stabilize over time, in 2022, we plan to pursue incremental R&D investments intended to unlock additional indication, and access the greatest number of patients. SGNA expenses and the fourth quarter were $70 million, an increase of 17% from the fourth quarter of 2020, bringing our full year SGNA expenses to $263 million.

While we expect the level of R&D investment to stabilize over time and 2022, we plan to pursue incremental R&D investments intended to unlock additional indication and access the greatest number of patients.

SG&A expenses in the fourth quarter were $70 million, an increase of 17% in the fourth quarter of 2020.

Our full year SG&A expenses to $263 million.

Last year, roughly $6 million whats, specifically invested in programs to reach new patient populations.

Ashley Cordova: Last year, roughly $6 million was specifically invested in programs to reach new patient populations, either through geographical expansion in GBM or pre-commercial build-up for future launches. Moving forward, we anticipate incremental investment in sGNA will focus on initiatives intended to reach new patient populations. Our net loss for the fourth quarter was $0.25 per share, or $26 million.

Either through geographical expansion in GBM or pre commercial buildout for future launches.

Moving forward, we anticipate incremental investments in SG&A, we will focus on initiatives intended to reach new patient populations.

Our net loss for the fourth quarter was <unk> 25 per share or $26 million as.

Ashley Cordova: As we have said many times today, we believe we are approaching a key inflection point for our company and are investing strategically to ensure we meet the moment. Our focus remains on organizational readiness activities and investment and growth drivers ahead of managing for maximum earnings. Our adjusted EBITDA for the quarter was $2,000,000, bringing our annual total to $61,000,000 compared to $115,000,000 in 2020.

As we have said many times today, we believe we are approaching a key inflection point for our company and are investing strategically to ensure we meet at the moment.

Our focus remains on organizational readiness activities and investment in growth drivers ahead of managing for maximum earnings.

Our adjusted EBIT for the quarter was $2 million, bringing.

Bringing our annual total to $61 million.

Compared to $115 million in 2020.

This decrease was in part due to an incremental investment of $60 million and research and development initiatives net of share based compensation as well as $6 million invested in programs designed to reach new patient populations.

Ashley Cordova: This decrease was, in part, due to an incremental investment of $60 million in research and development initiatives net of share-based compensation, as well as $6 million invested in programs designed to reach new patient populations. Looking ahead, we are still at the beginning of our journey as a company, and we plan to invest accordingly. We generated $83 million in cash flow from operations in 2021 and ended the year with $938 million in cash and short-term investments on the balance.

Looking ahead, we are still at the beginning of our journey as a company and we plan to invest accordingly.

We generated $83 million in cash flow from operations in 2021 and ended the year with $938 million in cash and short term investments on the balance sheet.

Our cash position continues to be bolstered by our durable GBM business.

Ashley Cordova: Our cash position continues to be bolstered by our durable GBM business. And we believe this gives us the flexibility to pursue a variety of long-term, organic growth opportunities without finance-constrained trade-offs. As we close the books on 2021, we are incredibly proud of what we have achieved. We crossed the $500 million net revenue threshold.

And we believe this gives us the flexibility to pursue a variety of long term organic growth opportunities without finance constraints tradeoffs.

As we close the books on 2021, we are incredibly proud of what we have achieved.

We crossed the $500 million net revenue thresholds.

Ashley Cordova: We have multiple pivotal trials set to read out in the coming years that could exponentially increase the number of patients that can benefit from our therapy. And finally, we are investing strategically to ensure our team is fully primed to execute when the time comes. The fundamentals of our business are strong and we look forward to another successful year in 2022. With that, I will turn it back over to the operator for Q&A.

We have multiple pivotal trials set to read out in the coming years that could exponentially increase the number of patients that can benefit from our therapy.

And finally, we are investing strategically to ensure our team is fully primed to execute when the time comes.

The fundamentals of our business are strong and we look forward to another successful year in 2022.

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

If you'd like to ask a question at this time. Please press. The Star then the number one key on your Touchtone telephone.

Ashley Cordova: If you'd like to ask a question at this time, please press the star, then the number 1 key on your touch tone telephone. To withdraw your question, press the pound key. Our first question comes from Jason Bednar with Piper Sandler. Hey, good morning. Thanks for taking the questions. Bill or Asaf, we'll start with you.

To withdraw your question press the pound key.

Our first question comes from Jason Bednar with Piper Sandler.

Hey, good morning, Thanks for taking the questions.

Jason Bednar: I'm just wondering if you can offer any additional visibility today and when we'll actually see the updates on, and if they create the internal analysis and or the gastric cancer trial. I think we all understand there aren't specific days or weeks you'll necessarily point to, but I guess as we're all trying to prepare appropriately, I wonder if there's anything you see from your side that allows you to dial in with a bit more detail, some of the timing on either of these studies.

Bill or a cycle will start with you.

Just wondering if you can offer any additional visibility today on when we'll actually see the updates on innovate three the interim analysis and the gastric cancer trial I think we all understand there aren't specific days or weeks youll necessarily point to but I guess, we're all trying to prepare appropriately I'm wondering if there's anything you see from your side that allows you to dial in.

A bit more detail some of the timing on either of these studies.

Jason Bednar: And I guess I'll innovate three in particular. I don't want to over read the comments today, but you've previously talked about the internal analysis coming in early to Q. I don't think I've heard that early qualifier today in my over reading that. So good morning, Jason.

On the innovate three in particular I don't want to over read the comments today, but you've previously talked about the interim analysis coming in early <unk> I don't think I have heard that early qualifier today and my overriding that.

So good morning, Jason.

Bill Doyle: Just before we, I'm going to turn it over to Asaf to answer the question about the interim and the gastric trial, but I just wanted to call out for everyone on the call a little late breaking news. Because we were very pleased to learn that our founder, your impalty, Professor Emeritus of the Technion yesterday was awarded the Israel prize for his work in cancer therapy and specifically for developing the tumor treating fields platform. The Israel prize is considered the highest honor that Israel gives to a civilian.

Just before we.

And I'm going to turn it over to SaaS to to answer the question about the interim in the gastric trial, but I just wanted to call out for everyone on the call a little late breaking news we were.

Very good.

Pleased to learn that our founder Yoram Palti.

Professor Emeritus at the Technion.

Yesterday was awarded the Israel Prize for his work.

In cancer therapy, and specifically for developing the tumor treating fields platform <unk>.

Bill Doyle: And I just wanted to mention that and congratulate Professor Paul T. And with that, Asaf, you want to make just a few comments about the interim and the gastric trial. So, um... Thank you for your question. Let's start with the gastric.

Israel Prize is considered the highest.

Honor.

That is real good.

<unk> to a civilian.

And I just wanted to mention that and congratulate professor Palti.

And with that.

You want to make just a few comments about the interim and the gastric trial. So.

Thank you for your question.

Asaf Danziger: The gastric is a trial that we did to recruit all the patients and we are right now collecting the data. Besides that, you know, we're all waiting, to present, with you when we will have it, that the trial will continue as planned. It's not changing anything about our data that we're going to basically to announce after the follow-up. So you can take it as we believe that the trial will continue as planned. Yeah, so you know, and following up, Jason, so you know, you asked is, should you read in anything to the wording? There's nothing to read in here.

Let's start with Augusta at Augusta.

Yeah.

We did record build a patient in.

Right now collecting the data.

We say that we.

We are waiting.

To announce about a data, but I cannot say anything bad debt.

The interim analysis.

What's going to happen.

Soon.

Sure.

Our expectation and we shared it with.

No.

With you when we will have it.

The trial will continue as planned.

It's not changing anything about <unk>.

Data.

And as we go into.

Basically to announce also.

After the follow up so you can take it.

We believe that the trial will continue as planned.

Yes.

Following up Jason. So you asked is should you read in anything to the wording there is nothing to read in here.

We expect the.

Asaf Danziger: You know, we expect the interim results here in Q2, and we're all looking forward to the gastric data mid this year. Okay. All right. Helpful. Thanks for that. And also congrats to Professor Palti.

The interim here in Q2, and we're all looking forward to the gastric data mid this year.

Okay, all right helpful.

Thanks for that and also congrats to professor Palti.

Jason Bednar: Bill, maybe on the clinical pipeline, over the past year you've talked about several new Phase II and Phase III studies that are in various planning stages. You spoke to another one, I think, as far as an update here today. You've got a lot of capital at your disposal with all the cash on the balance sheet, so getting these trials started isn't a matter of financial resources, but I guess has there been a rate-limiting factor that's kept this next wave of clinical development from really formally layering into the pipeline?

Bill maybe on the on our clinical pipeline.

Over the past year, you've talked about several new phase II and phase III studies that are in various planning stages, you spoke to another one I think as far as an update here today, you've got a lot of capital at your disposal all the cash on the balance sheet. So getting these trials started isn't a matter of financial resources, but has there been a rate limiting factor that's kept us.

Next wave of clinical development from really formally layering into the pipeline.

Any timing you are willing to commit to and when we might see more details in any of those those are studies that you've discussed in the past.

Jason Bednar: And then any timing you're willing to commit to, and when we might see more details in any of those studies that you've discussed in the past? Yeah, so as you stated, we're in the – and, you know, we mentioned this – we're in the privileged position that we are not limited by capital to invest.

So as you stated we're in and we mentioned this we're in the privileged position.

That we're not limited by.

By capital to invest.

And from our perspective.

Bill Doyle: And from our perspective, these trials are underway in the sense that in liver, for instance, we're actively working on that trial. We haven't announced the protocol yet because we're in discussions with the FDA. We're actively working on additional trials in core areas. In non-small cell lung cancer, there's going to be additional news, for instance.

These trials are underway in the sense that.

In liver.

For instance.

We're actively working on.

That trial, we haven't announced the protocol yet because we're in discussions with the FDA, we're actively working on additional trials in.

<unk> core.

Areas non small cell lung cancer, there's going to be additional news for instance.

Bill Doyle: And, of course, if the gastric phase II reads out as we all hope and expect, that will be followed by clinical trials there. So from our perspective, we're hard at work at the next wave. We don't announce the trials until we're through with the FDA and we actually have a finalized protocol. So no new updates in terms of timing, but we wanted to signal and you should rest assured that the next wave is underway. Alright, very clear. Thanks so much.

Of course, if the gastric phase II.

Reads out is as we all hope and expect.

That will be followed by.

Clinical trials there so.

From our perspective, we're hard at work at the next wave.

If we don't announce the trials until we are.

We're through with the FDA and we actually have.

A finalized protocol. So so no new updates in terms of timing, but.

We wanted to signal and you should rest assured that the next wave is underway.

Alright, very clear thanks, so much.

Our next question comes from Cory <unk> with J P. Morgan.

Jason Bednar: Our next question comes from Corey Kazimoff with J.P. Morgan. Hi, thank you. This is Gavin on Sucoli. Thanks for taking our question. I guess a couple for Ashley.

Alright, Thank you Gavin on for Cory. Thanks for taking my question I guess a couple.

For Ashley.

You talked about active patient growth for 2022, and 2% to 5% range I'm. Just curious if you could provide additional color on where.

Corey Kazimoff: You talked about active patient growth for 2022 and two to five. I'm just curious if you could provide additional color on where that growth is coming from from a geographic perspective, you know, primarily in the context of, you know, you discussed the net revenue per patient decline primarily from Germany, so any additional color there would be great. Yes, thank you for the question.

That growth is coming from from a geographic perspective.

Primarily in the context of this.

The net revenue per patient day.

Klein primarily from Germany.

So any any additional color on that.

Would be great. Thank you.

Yes. Thank you for the question. So I think the short answer is we continue to focus on growth in all of our active markets.

Ashley Cordova: So I think the short answer is we continue to focus on growth in all of our active markets. So we have opportunities, we believe, to, increase penetration both in our large, more mature markets such as the U.S., Germany and Japan as well as through expansion into new markets such as France and the continued development of markets we've expanded into over the prior years. So the short answer is in all of the above.

We have opportunities we believe Q.

Increased penetration both in our large more mature markets such as the U S, Germany, and Japan as well as through expansion into new markets, such as France, and the continued development of markets we've extended that.

So the short answer is in all of the above.

Ashley Cordova: I think specifically with regards to net revenue per active patient, what we now have I would say is a fairly stable assumption that you can use if you just look at the Q4 numbers moving forward. So while geographical growth will impact that patient mix somewhat, we are at a stable position I would say where, you know, you can look at our Q4 numbers and take that number out moving forward. Thank you. Thank you.

I think specifically with regards to net revenue per active patient what we now have I would say is a fairly stable assumption.

The assumption that you can use if you just look at the Q4 numbers moving forward and so while geographical growth will impact that patient mix somewhat we are at a stable position I would say where you can look at our Q4 numbers and take that number out moving forward.

Yes.

I'm going to pause there and ask if there's any additional follow up and just wanted to answer is we're focused on both increasing penetration at the key academic centers and our large mature markets and on expanding into new markets.

Ashley Cordova: I'm going to pause there and ask if there's any additional follow-up. The short answer is we're focused on both increasing penetration at the key academic centers in our large mature markets and on expanding into new markets. Okay, great. That makes sense.

Okay, great that makes sense and I guess, just a follow up to that.

Ashley Cordova: I guess just to follow up on that on the gross margin, I think you alluded to some efforts being made to reduce the cost of goods sold. So I guess, more specifically, what are those efforts? And are we around the margin profile that you expect to be somewhat stabilized? Yeah, so this is our 7th quarter with a margin above 77%, and I think a lot of the margin swings that you've seen in recent quarters have more to do with Zy purchasing than they do with the fundamental efforts that we have to drive ongoing efficiencies.

On the gross margin I think you alluded to some efforts being made to reduce costs.

Cost of goods sold so I guess more specifically.

Are those efforts and are we around the margin profile that you expect to be somewhat stabilized.

Yes. So this is our seventh quarter with a margin above 77% and I think a lot of the margin swings that you've seen in recent quarters have more to do with XI purchasing than they do with the fundamental efforts that we have to drive.

Ongoing efficiencies.

Ashley Cordova: We do believe that margin profile is sustainable, you know, as we expand geographically we would expect some modest pressure on the top line but we believe we'll be able to stay ahead of that with the efficiencies that we're getting just naturally through scale and through the maturation of our supply chain. I do have Wilco on the call as well, I don't know if there's anything he would add.

We do believe that margin profile is sustainable as we expand geographically we would expect some modest pressure on the pipeline that we believe will be able to stay ahead of that with the with the efficiencies that we're getting just naturally create scale and through the maturation of our supply chain.

I do have work on the call as well I don't know if theres anything you would add.

Thank you Ashley good morning.

Wilco: Thank you, Ashley. Morning. I think I'd like to point out, I'd like to re-emphasize what Ashley was pointing out, that we've seen significant.., high in the 70s, gross margins over a number of quarters. We actually improved our gross margin year on year by one full percent. We have a number of initiatives going on to address opportunities to further improve margins, which will play out in the foreseeable future. So I think current performance improvement with a full percentage point with future improvements in the pipeline. Great, thank you. Our next question comes from Kevin DeGeter with Oppenheimer. Hey, great.

I think I'd like to point out I'd like to reemphasize, what actually was pointing out that we've seen significant.

Hi to 70 gross margins over a number of quarters, we actually improved our gross margin year on year by one 4% we have a number of initiatives going on too to address opportunities to further improve our margins, which will play out in the foreseeable future. So I think.

Current performance.

<unk> improved with a full percentage points with future improvements in the pipeline.

Great. Thank you.

Our next.

Comes from Kevin <unk> with Oppenheimer.

Hey, great. Thanks for taking our questions.

Kevin DeGeter: Thanks for taking our questions. I guess I want to follow up on the comments with regard to the introduction of the Next Generation Array, you know, specifically, how should we be thinking about any, you know, clinician, you know, education, or just sort of use or familiarity adjustments with the introduction in Europe of the array later in the year. And then as we think about, you know, potential U.S. and more global introduction of that next generation array, maybe specific to the U.S., what are the rate limiting, you know, steps from either regulatory or, you know, supply chain perspective to a broader introduction of that array? Sure.

I guess I wanted to follow up on the comments with regards to the introduction of next generation array, specifically, how should we be thinking about any.

Clinician agitation or just wanted to review certain familiarity adjustments with.

Is there any introduction in Europe .

As we ramp later in the year in Venezuela think about.

Potential U S and more global introduction of that next generation, alright, and maybe specific to the U S. What are the rate limiting.

Steps from either a regulatory or.

Supply chain perspective to a broader.

Production of that alright.

Bill Doyle: So, you know, as I mentioned in the comments, we are extremely excited about the potential for improving our platform. And it's one of the big differences, of course, between a device-based therapy and a drug-based therapy. And in a device-based therapy, now that we have the financial power to build and invest in product development, we can – and we know we have the opportunity to improve the delivery of the therapy. And that improvement is focused on a few areas. You know, first and foremost, improving efficacy by increasing the intensity.

Sure. So as I mentioned in the comments we were extremely.

Excited.

The potential for improving our platform and it's one of the big differences of course between a device space therapy and drug based therapy other than a device based therapy.

Now that we have the financial.

Power to build and invest in product development.

And we know we have the opportunity to.

Improve the.

The delivery of the therapy and that improvement is.

It's focused on a few areas first and foremost improving efficacy.

Bill Doyle: But we're also very focused on improving the patient experience, so making it easier for the patient to use, more comfortable. And then finally, you know, Wilco's comments, we're – as we develop new products, we're focused on supply chain, manufacturing, with the ultimate goal to make them more efficiently, less expensively. So, all of those opportunities exist, and we're focused on them. With respect to your specific question, I'm going to take a few minutes to answer some of your questions. The rate-limiting step is, one word, regulatory.

By increasing the intensity, but we're also very focused on improving the patient experience, so making it easier for the patient to use more comfortable.

And then finally to Wilco comments.

We are.

As we develop new products, we're focused on.

Supply chain manufacturing with the ultimate goal to make them.

More efficiently less expensively, so all of those opportunities exist.

And we're focused on them.

With respect to your specific question.

The rate limiting step is one word regulatory.

Bill Doyle: We have the supply chain in place, or we're putting it in place. And in terms of training physicians, we do not expect any, if you will, barrier or headwind, if anything it will be a tailwind because we expect these arrays to be much more comfortable, much more easy to use for patients. So the reason that we're not giving any more specific dates is that we're confident that we can provide the rollout, begin the rollout in Europe at the end of this year based on where we are with the regulators in the EU. The U.S. process is a little more a function of the FDA. We're engaged, but it's too early for us to give a timing of a U.S. rollout.

We have the supply chain.

In in place or were putting it in place.

Yes.

In terms of training physicians, we do not expect any.

Yes.

If you will barrier or a headwind.

If anything it will be a tailwind.

Because we expect these rates to be much more comfortable much more easy.

To use for patients so.

The reason that we're not giving any more specific.

<unk>.

Gates is that we're confident that we can.

Provide the rollout begin the rollout in Europe .

End of this year based on where we are with the regulators in the EU.

The U S processes.

A little more a function of the FDA.

We're engaged but it's too early for us to give us.

Timing of the U S rollout.

Thanks for taking my questions.

Our next question comes from Lei, Wang with Wells Fargo.

Bill Doyle: Thanks for taking our questions. Our next question comes from Lei Huang with Wells Fargo. Hi, it's Lei calling in for Larry.

Hi, its Scott Lei, calling in for Larry. Thanks for taking my question just on your guidance to start out.

Lei Huang: Thanks for taking my question. Just on your guidance, to start out the two to 5% activation growth for 2022. That was your growth, obviously, for 2021.

<unk> active patient growth.

In 2010.

Your growth, obviously for 2021, and you mentioned kind of that kind.

Some of the headwinds that affected the growth at the start of the call. So my question is if you look at the 2% to 5%.

Ashley Cordova: And you mentioned some of those cooler headwinds that affected the growth, you know, at the start of the call. So my question is, as you look at the two to 5%, Could it be better than 5% as, you know, we think about COVID abating, going through 2022, or put another way, I guess, what are you assuming at the low end of the growth that would make the growth, you know, flow quite a bit versus last year?

Could it be better than 5%.

As we think about that.

Going through 2022 or put another way I guess, what are you assuming at the low end of the growth.

Slow quite a bit versus last year.

Sure.

Yes. Thanks for the question, Larry and I do think it is important to include that 2% to 5% on the growth from last year, which was the 5% and that is in that between can see here that we see kind of a stable engine of growth and durable in a sustainable engine of growth in our GBM business that continues to generate the cash to fuel innovation so that that.

Ashley Cordova: Yeah, thanks for the question, Lei. And I do think it is important to anchor that 2% to 5% on the growth from last year, which was the 5%. And that is the message we tend to see here, that we see kind of a stable engine of growth, a durable and a sustainable engine of growth in our GBM business that continues to generate the cash to fuel innovation. So that, you know, that is the anchor there is that 5% growth expectation for 2021.

As the anchor there or is that 5% growth 2021.

We see at this point, we have no reason to change that active patient growth expectation is that 2% to 5% and thats roughly what weeks. That's in line with what we expect for the full year.

Ashley Cordova: I will say we see at this point, we have no reason to change that active patient growth expectation of the 2% to 5%. And that is still roughly what we, you know, that is in line with what we expect for the full year, too early for us to refine them, I would say that that's, That's still the landscape we see looking forward. Fair enough, okay.

Yes.

Too early for us to refine that I will take that.

That's still the landscape we can't looking forward.

Fair enough okay.

And then I know.

Lei Huang: Then on the PANOVA study, so on the Q3 call, that study was delayed a bit because of the supply issue, and I think on today's call you mentioned monitoring the global supply situation. Can you tell us if it's gotten better, worse, you know, anything on the margin you can provide just as far as the supply situation versus what you saw in Q3? Thank you for the call. We have been monitoring very closely all over the world. The major deficiencies are in the states.

This study.

Our Q3 call.

That study was delayed a bit because of the supply issue I think on today's call you mentioned monitoring the global supply situation.

How has it gotten better worse.

Anything on the margin you can provide just as far as.

The supply situation first that's what you saw in Q3.

Sure. So early <unk> is with US here and he can comment on the kind of all the Trump highlight.

Further we have been monitoring very closely.

All over the World major deficiencies are in the states. So we have compensated really with.

Asaf Danziger: So we have compensated really with looking at other areas, geographic areas to push the enrollment of the Panovas trial. We're very happy that we were able to assure a generic. Pachytexel, NAP Pachytexel in China.

Looking at other areas geographic areas to push the enrollment of another trial are very happy that we were able to.

Sure.

A generic.

Asaf Danziger: And we already have our first patient that was enrolled in the study and we expect many more on such a large population. So right now our guidance is we're still going to have a last patient in, you know, sometime early in 2023 and we plan on that data in 2024. So we are really not concerned.

Paclitaxel Nab Paclitaxel in China, and we are.

Already have our first patient on that.

Was enrolled in this study and we expect many more such a large population so right now our.

The guidance is that we still going to have last patient in sometime early in 2023.

And with kind of that data in 2024, so we are really.

Not concerned with just working very hard to procure.

Asaf Danziger: We're just working very hard to procure the drugs for the patient. Got it, thank you. If I may just ask one more question, is there any update on the third generation TTF generator? Thanks.

The drugs for their patients.

Got it thank you.

Ask one more is there any update on the third generation CTF generator.

Yes, so no update on that.

Bill Doyle: Yeah, so no update on the the TTF generator. You know, the last update was that we were able to introduce the small neuro form factor into our torso applications. And as we stated, I think the next wave of product improvements are going to be on the on the array side, and also the continued rollout of our MaxPoint system for mapping for clinicians. Thanks for watching!

The CTF generator.

The last update was that we were able to introduce the small.

<unk> form factor into our torso applications.

Applications.

We stated I think the next wave of product improvements, we're going to be on the on the array side and also.

The continued rollout of our Max point system.

Four.

Mapping for clinician mapping.

Our.

Greg Frazier: Our next question comes from Greg Frazier with Truist Security. Good morning and thanks for taking the questions. My first one is on geographic expansion, which is a key part of your growth strategy for GBM. What are the important markets where you plan to take Optune next beyond France and Canada? And how should folks think about when those markets could become material revenue generators?

Next question comes from Greg Fraser with curious securities.

Good morning, and thanks for taking the questions.

My first one is on geographic expansion, which is a key part of your growth strategy for GBM. What are the important markets, where you plan to take op to index beyond France, and Canada, and how should folks think about windows markets could become material revenue generators.

So <unk> Shah our Chief commercial officer is with US. This morning, So protection great great. Thank you for that question. So what I would say is when we think about market expansion, particularly for GBM, but also for our future expansion and we want to make sure that we have a foundation built in the large markets in Europe and across.

Pritesh Shah: So Pritesh Shah, our Chief Commercial Officer, is with us this morning, so Pritesh. Great, Greg, thank you for that question. So what I would say is when we think about market expansion, particularly for GBM, but also for our future expansion, we want to make sure that we have a foundation built in the large markets in Europe and across the globe, such that we can continue to grow glioblastoma, but also pave the path to introduce lung cancer and to introduce ovarian cancer, so on and so forth.

The globe such that we can continue to grow glioblastoma, but also pave the path to introduce lung cancer and to introduce ovarian cancer cancers. So on and so forth. So as you would expect we are looking at the larger markets that were not active in today and that would principally mean, if you think about <unk> four plus the U K any any.

Pritesh Shah: So as you would expect, we're looking at the larger markets that we're not active in today, and that would principally mean, if you think about EU4 plus the UK, any market that we're not in currently, we look to explore opportunities to enter those. We're starting this effort with France.

A market that we're not in currently we look to explore opportunities to enter those.

We are starting this effort with France, we started our our market effort in France closer two years ago, and we hope to bring that to fruition at some point this year, which would transcend France from a pipeline opportunity to an active market opportunity for us and the work that we do there.

Pritesh Shah: We started our market effort in France close to two years ago, and we hope to bring that to fruition at some point this year, which would transcend France from a pipeline opportunity to an active market opportunity for us. And the work that we do there, then will transcend into opportunities in other countries like UK, Spain, and other markets that would be meaningful opportunities for the business, but also to expand our mission into these geographies.

<unk>, then will transcend into opportunities in other countries like U K, Spain, and other markets that would be meaningful opportunities for the business, but also to expand our mission into into these geographies.

Okay.

Got it.

Pritesh Shah: Got it. A couple of questions on the pipeline. Can you narrow down when you anticipate readouts from EF33? And then on the to-the-top study, do you have a sense for when additional data could come out from that study? And if that data is supportive of further evaluation of IO plus TT fields for GBM, what will be the next steps for development? Thanks.

Couple of questions on the pipeline can you narrow down when do you anticipate readout from <unk> 33.

And then on to the top study do you have a sense for when additional data could come out from that study and if that data is supportive of further evaluation of I O plus <unk> for GBM, but will be the next steps for development.

Yes, so I'm going to turn the.

Uri Weinberg: Yeah, so I'm going to turn the mic over to Uri Weinberg, our chief science officer. And I realize that it is, you know, very late breaking on a heavy news morning. But we did announce today that Trans Fundamental Research was published in JCI today. And we think his results are profound. So Uri, maybe if you start there, and then we can, you know, comment on, you know, the potential next. Sure, so I'll take a couple of minutes to describe the key points from this top-tier publication.

The mic over to re Weinberg, our Chief Science Officer, and I realize that it is.

Very late breaking on a heavy news morning, but we did.

Ounce today that trends.

Fundamental research was published in GCI.

Today and.

And we think it's his results of profound some or maybe if you start there.

And then we can.

Comment on.

The potential next steps.

Sure. So I'll take a couple of minutes to describe the key points.

Top tier applications.

Uri Weinberg: And, you know, we had evidence of increased immune system response following TT-FIELDS application in multiple models. Nevertheless, Dr. Tran's groundbreaking and independent research in TT-FIELDS really provides a very comprehensive explanation for that and, more importantly, suggests how we could exploit it better for patients. So thank you very much. His main findings are that TT fields induced focal disruption of the nuclear envelope of cancer cells leading to cytosolic release of large micronuclei class.

We had evidence of increased immune system response, following TT fields application in multiple models.

Nonetheless, doctores trends groundbreaking and independent research NTT feels really provides a very comprehensive explanation for that and more importantly suggests how we could exploit it's better for patients. So he.

<unk> main findings our debt.

<unk> induced focal disruption of the nuclear envelope of cancer cells, leading to <unk> release of large and micro nuclei clusters and this leakage of genetic material basically led to the recruitment of intracellular DNA sensors, which are part of the innate.

Uri Weinberg: And this leakage of genetic material, basically, led to the recruitment of intracellular DNA sensors, which are part of the innate immune system, and activation of inflammasomes. These are complexes of proteins which could elicit a pro-inflammatory anti-cancer response. And indeed, following this inflammasome activation, production of pro-inflammatory cytokines and type 1 interferon took place. And then, in an animal model, pretreatment of GBM cells with TTCs led, again, to inflammasome activation and induced a protective immunity also in poorly immunogenic GBM.

Immune system and activation of inflammatory <unk>. These are complex is of proteins, which include a lease at a pro inflammatory anticancer response and indeed following these inflammatory activation.

Production of pro inflammatory cytokines and type one interferon.

Took place.

Then in an animal model pre treatment of GBM sales with DTC has led again to inflammatory activation and.

<unk>.

Protective immunity also in poorly immunogenic GBM humans.

Uri Weinberg: So Dr. Tran and his team then also translated his findings to patients showing that TT fields activated adaptive immunity in GBM patients via the same type one interferon trajectory, which was accompanied by T cell activation that we would like to see so much against the tumor cells and clonal expansion of these cytotoxic T cells acting against the tumor. So I will summarize that all of these findings suggest the use of TT fields to generate this anti-tumor immunity that we aspire to have, and a memory response as well against GBM tumors and potentially other solid tumors, or in other words, it provides the scientific explanation to the ability of TT fields to turn cold tumors hot, and therefore also make such tumors more susceptible to immune checkpoint inhibitor treatment.

So doctor trend and his team then also translated.

Findings to patients showing that DTC is activated adaptive immunity in GBM patient via the same die.

Type one interferon trajectory.

Was accompanied by T cell activation that we would like to see so much against them that humira sales in Cologne clonal expansion of these cytotoxic T cells exiting against that humor. So it was summarized that all of these findings suggest the use of <unk> to generate these.

Tumor immunity that we aspire to have an in memory responses well against <unk> and potentially other solid tumors or in other words. It provides the scientific explanation to the ability of <unk> to turn cold tumors Hot and therefore also.

It makes such a tumors more susceptible to immune checkpoint inhibitor treatment. So.

Uri Weinberg: So thanks for your patience throughout this quick summary of TRAN's really canonical publication in a top-tier journal. As for your question, to the top study is another independent investigator-initiated study that is still being run by Dr. TRAN and his team, and so we are unable to be precise about the anticipated completion of the study, but again, it's the follow-up period, and it will take some additional months, and I'm sure that Dr. TRAN will be able to summarize his findings in another publication.

Thanks for your patience throughout this a quick summary of trends there.

Really canonical left publication in adult top tier journal as for your question to the adult study is there another independent investigator initiated study that is still being.

Run by Dr <unk> and his team.

So we are unable to be precise about that.

Dissipated completion of the study about again.

Follow up period.

<unk> will take us some additional months and I'm sure that doctors will be able to summarize.

Finding seen another publication as for the F 33, the gastric cancer study.

Uri Weinberg: As for the EF33, the gastric cancer study, we – sorry, was there a question about gastric cancer or about the EF33? The Yeah, so we are going to share the results from this study this year, as we have previously indicated.

Sorry was there a question about the gastric cancer or about 30.

<unk> 33.

Yes so.

We are.

Going to share the results from these studies this year.

We have previously announced.

Yes, so to underline.

Yes.

Bill Doyle: We were already extremely, impressed and enthusiastic as we described in the text, the clinical outcomes reported by TRAN at the Society of Neuro-Oncology meeting in November. Of course, we're eagerly awaiting data from Lunar, which incorporates an arm in lung cancer with tumor-treating fields and anti-PD1 therapy. And the fact that he's been able to now describe the mechanism of action, you know, that supports the observation, I think is leading us to, you know, back in terms of thinking about the next wave of trials, you know, this is clearly an important input for us and for our partners.

We were already extremely.

Impressed and enthusiastic as we described in the text with the.

Clinical.

Outcomes reported by trend at the society of Neuro oncology meeting in November .

We're eagerly awaiting.

Data from lunar which incorporates an arm in.

In lung cancer with tumor treating fields and anti PD one therapy.

And the fact that he has been able to now.

Describe the mechanism of action.

Supports the observation.

I think is leading us to.

Back in terms of thinking about the next wave of trials. This is clearly an important input.

For us and for our partners.

Bill Doyle: Merck and Enroche, and potentially others. So, you know, the fact that tumor-treating fields are a sensitizer or have the potential to be a sensitizer for immunotherapies is, we think, an important finding.

Merck and <unk>.

And Roche.

And potentially others.

The fact that tumor treating fields has a sensitize or has the potential to be a sensitize or for Immunotherapies. We think is an.

An important finding.

Great. Thanks for the color.

Our next question comes from Jason <unk> with loop capital.

Jason Wittes: Our next question comes from Jason Wittes with Loop Capital. Hi, thanks for taking the questions. First, as a follow-up to the last question, you mentioned Lunar does have a PD-1 arm.

Hi, Thanks for taking the questions first is a follow up to the last question.

Mentioned lunar does have a PD one arm.

Uri Weinberg: How does this new data on immunosensitivity impact your thinking there? One, do you expect to see a signal? And two, will we be able to tease it out based on how you design that trial? So, of course, the trans-publication is very encouraging in the context of the LUNAR study, where TT fields are combined with either chemotherapy, the cetaxel, that also showed synergy with tumor-treating fields in multiple models, and also immune checkpoint inhibitors, any of the approved ones for this patient population.

How does this new data on immuno sensitivity impact your thinking there.

One.

Do you expect to see a signal and to where we'd be able to tease. It out based on how you design that trial.

Yes.

So of course.

Trends publication is very encouraging in the context of the lunar study, where TT fields are combined with either chemotherapy docetaxel that also showed synergy with <unk>.

Tumor treating fields in multiple models and also an immune checkpoint inhibitors or any of the approved ones for this patient population now we are even more encouraged than before that the combination therapy could augment the efficacy of immune checkpoint inhibitors because there.

Uri Weinberg: Now, we are even more encouraged than before that the combination therapy could augment the efficacy of immune checkpoint inhibitors, because the TT fields application that is concomitant to the application of immune checkpoint inhibitors is anticipated to make the tumor cells become more immunogenic, ones that are becoming more susceptible, more exposed, more vulnerable to the natural immune system of each individual patient, making them hopefully more responsive to immune checkpoint inhibitors in this setting.

TT field application that is concomitant through the application of immune checkpoint inhibitors is anticipated to make the tumor cells become more immunogenic ones that are becoming more susceptible more exposed more vulnerable to that.

And natural immune system of each individual patient and making them and.

Hopefully more responsive to.

Immune checkpoint inhibitors in this setting and this is what we aspire to see of course ware.

Uri Weinberg: And this is what we aspire to see. Of course, we're as curious as all of you to see the results later. Okay, thank you. And then maybe just on ovarian, the Data Safety Monitoring Committee is going to comment. But should we expect much from that other than continue the trial? Or is there some type of, more significant data point that we might get out of that, that outcome. We will continue to try this plan. This is our assumption. It will not be a data event. We don't see the data. We just get the thumbs up from the...

I was curious.

All of you too.

Sure to see the results later this year.

Yeah.

Okay. Thank you and then maybe just on ovarian.

The data safety monitoring.

I mean, he is going to going to comment.

But should we expect much from that other than continue the trial or is there.

Some type of.

More significant data point that we might get out of that.

Okay.

So.

You're asking me to guess.

We believe that.

We will continue to try to plan.

Yes.

This is our assumption.

Will not be a data that we don't see the data.

We just get the thumbs up from the from the DMC.

Uri Weinberg: Okay, that's fair. I just want to clarify that. And then, on the NextGen arrays, you mentioned regulatory is a limiting step. I don't know if you can add a little more color in terms of what your discussions have been with the regulatory committees, especially the FDA. Are they looking for a full trial to get them approved in the U.S.?

Okay. That's fair just wanted to clarify that and then.

On the next generation.

You mentioned regulatory limiting step.

I don't know if you can add a little more color in terms of what your discussions have been with the regulatory.

Commodities, especially the FDA.

Are they looking for a full trial.

To get them approved in the U S and also related to that would they even be looking for specific trials for each indication or.

Asaf Danziger: And also, related to that, would they even be looking for specific trials for each indication or, I'm just curious of kind of what you think the pathway might be at this point.,,,,,,,, So I will... our approach will be to incorporate all the innovation and improvement in our way, not through a clinical trial. So this is basically our past. But still, you know.

Just curious kind of what you think the pathway might be at this point.

So our.

Approach would it be to incorporate all.

All the innovation.

And improvement.

In our way.

Through <unk>.

Clinical trial.

So this is.

Basically our path.

We still.

Neither that aside would agree to that.

Certainly this is the way that we do.

Yes, the only other thing I'll add.

Bill Doyle: And the only other thing I'll add, you know, just while we're talking about arrays, we're, you know, we're really excited about this next generation array, but it's not the last generation array, either. Now that we have the, the R&D capacity, we see a lot of an exciting pipeline, if you will, we talk about pipeline of indications, we see a pipeline in the product improvements as, Great, thank you. I'll jump back in queue.

What we're talking about a raise.

We're really excited about this next generation array, but it's not the last generation array either.

Now that we have the.

The R&D capacity.

We see a lot of it.

An exciting pipeline. If you will we talk about pipeline of indications, we see a pipeline in the product improvements as well.

Great. Thank you I'll jump back in queue.

As a reminder to ask a question that is star then one.

Vijay Kumar: As a reminder, to ask a question that is star, then 1. Our next question comes from Vijay Kumar with Evercore ISI. Hey guys, thanks for taking my question. Bill, maybe my first one on the Lunar, you know, the slide deck had the patient, U.S. patient opportunity has 46,000. I think there have been some questions on, is that 46,000 TAM, valid given, given this is a second line therapy in chemo failure. And I think the market's view is that if patients are given IO drugs, like do we still have 46,000 patients who are in a chemo failure? So maybe just talk about the lunar time and opportunity, given this changing standard of care, that we're seeing. Yeah, great. Vijay, this is Ashley.

Our next question comes from Vijay Kumar with Evercore ISI.

Hey, guys. Thanks for taking my question.

Bill maybe my first one on <unk>.

Luna.

The slide deck had.

The patient use patient opportunity is 46000, I think there have been some questions on is that 46000, Tim rather give given.

Kevin This is.

A second line therapy in chemo failure, and I think the market's view is if patients are given io drugs do we still have 46000 patients.

Chemo failure.

So maybe just talk about the lunar Tam opportunity.

Given those <unk>.

Changing standard of care.

If we're seeing.

Ashley Cordova: I can jump in. That $46,000 in the K represents what we believe is the.., patient population that actively treats second line for nonplussal lung cancer. So given our trial design, we are post-platinum. And as the first line evolves, I think we're going to have to evaluate that ultimate potential. But we do believe that 46,000 represents the portion of patients that actively seek second-line treatment for non-small cell lung cancer in the U.S. And of course, that's just the U.S. number, so this is an opportunity that's multiple fold that size when we look at the global population.

Yes, Great Hey, guys. This is actually I can jump in that 46000 in the K represents what we believe is the.

Patient population that actively treated second line in second line.

So given our trial design, we are post platinum.

Failure to a second line treatment clearly and as the first line and Paul I think we're going to have to evaluate that ultimate potential, but we do believe that 46000 represents the portion of patients that actively seek second line treatment for non small cell lung cancer in the U S and of course, that's just the U S. Number. So this is an opportunity that is multiple fold.

That size when we look at the global potential.

Okay.

Vijay Kumar: Okay, maybe one on the clinical trial side here, with a trial design change and Lunar with the follow-up now being 12 months. I guess, now when I look at the slide deck, your Phase II non-small lung cancer median overall survival was 13 months. I guess if the follow-up is 12 months.

Maybe one on the clinical trial side here.

The trial design change on lunar.

The follow up now being 12 months I guess now when I look at the slide deck right your phase III.

Non small lung cancer median overall survival of 13 months.

I guess, if the follow up was 12 months.

Uri Weinberg: And we know, you know, from phase two, your survival is going to be beyond 12 months. So maybe just talk about this trial design change of 12 months and whether that incorporates. Can we even see a median overall survival in the treatment arm because clearly your phase 2 was about 12 months.

And we know from phase two survival is limited beyond 12 months. So maybe just talk about the trial design change of 12 months and whether that incorporates.

Can you even see a median overall survival in the treatment arm because clearly a phase two.

Was about 12 months.

Sure. So I would like to remind everybody that D&C thoroughly reviewed the entire the entire dataset.

Uri Weinberg: I'd like to remind everybody that DMC thoroughly reviewed the entire dataset from the Lunar Study, including an evaluation of the number of events which is required to achieve a full readout of the results at the end of the follow-up. I would also like to remind everybody that it has taken longer than expected for all of us to approve the Lunar Study, making the number of events accumulated on this study higher at the point in time where the interim analysis was taking place.

From the lunar study, including an evaluation of the number of events, which is required to achieve the full readout of the results at the end of the <unk>.

Follow up.

I would also like to remind everybody that <unk> has taken longer than expected.

For all of us to accrue the lunar study.

I'm, making the number of events accumulated on these study higher.

Yes.

That point in time, where the interim analysis was taking place so in order to achieve a valid.

Uri Weinberg: So in order to achieve a valid analysis of the full dataset, what we need is enough sufficient follow-up period for the entire study population, not just for the last patient that was enrolled in the study. And we are going to have that towards the end of the follow-up period. Gotcha. And actually, if I may, one last one. The activation volume of 2 to 5 should resume, you know, a couple of hundred basis points headwind from Germany this year. So revenue outlook for fiscal 22 is, you know, perhaps in the low single-digit range. Yeah, no, it's an excellent question.

Disease that full dataset, what we need is enough sufficient follow up period for the entire study population not just for the last patient that was enrolled in the study and we are going to have that towards the end of the follow up period.

Got you and actually if I may ask one last one.

The active patient volume of Cuda five should we assume.

A couple of hundred basis points headwind from Germany. This year, so revenue outlook for fiscal 'twenty to us.

Perhaps in the low single digit range.

Yeah, No. It's an excellent question and what we do believe so again the occupation as the unit.

Vijay Kumar: And what we do believe so again, the occupation is the unit assumption is tied to our revenue, which is an obviously as a price assumption as well. And so our recommendation is that, You should look at the Q4 price as you model out the 2024 growth, so that includes, The headwinds in Germany, but I will point out that we do have tailwinds with a full year of Medicare post-administrative ramp up, so net-net I think we're at a stable price is how I would think about it.

<unk> tied to our revenue, which has been obviously at the prices we can as long as my recommendation is that.

You should look at the Q4 price as you model out the 'twenty to 'twenty port growth does that include.

The headwind in Germany, but I will point out that we do have tailwind with our full year Medicare administrative ramp up so net net I think we're at a stable price is how I would think about it.

That's helpful. Thank you guys.

Vijay Kumar: That's helpful, thank you guys. I'm showing no further questions in queue at this time. I'd like to turn the call back to William Doyle for closing remarks. So again, I want to thank everyone for your interest in Novocure. We are.

I'm showing no further questions in queue at this time I'd like to turn the call back to William Doyle for closing remarks.

William Doyle: We're very excited to continue our progress in 2022 and we're, anticipating a tremendous change in our company as we prepare for the readouts of Lunar and Innovate and the launching of our next wave of clinical trials. So, thanks to everybody. This concludes today's conference call. Thank you for participating. You may now disconnect.

So again I want to thank everyone for your interest in Novocure.

We are.

Cited to continue our progress in 2022.

And we're.

Anticipating.

A tremendous change in our <unk>.

Company as we prepare for the Readouts of lunar.

And innovate and the launching of our next wave of clinical trials. So thanks to everybody.

This concludes today's conference call.

Thank you for participating you may now disconnect.

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Okay.

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Okay.

Okay.

Okay.

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