Q3 2023 Novocure Ltd Earnings Call
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Good day and thank you for standing by welcome to the Novocure. She was 320 23 earnings conference call.
At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press star one one on your telephone you will then hear an automated message advising your hand, just raised to withdraw your question. Please.
Press Star one again please.
Please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today Ingrid Goldberg. Please go ahead.
Okay.
Good morning, and.
And thank you for joining us to review never care third quarter 2023 performance.
I'm on the phone this morning, with our executive Chairman Bill Doyle, our CEO of soft Donziger at our CFO Ashley Cordova other.
Other members of our executive leadership team are also on the call and available for Q&A.
For your reference slides accompanying this earnings release can be found on our website www dot novocure dot com.
Investor Relations page under quarterly reports.
Before we start I would like to remind you that our discussions during this conference call will include forward looking statements and actual results could differ materially from those projected in these statements.
These statements involve a number of risks and uncertainties some of which are beyond our control.
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 a measure of earnings before interest taxes, depreciation amortization and share based compensation.
We believe adjusted EBITDA is an important metric as it removes the impact of earnings attributable to our capital structure tax rate and non cash items and that reflects the financial that you generated by our business reconciliations of non-GAAP to GAAP financial measures are included in our press release earnings slide and in our form 8-K filed with the SEC today.
These materials can also be accessed in the Investor relations page of our website.
Following our prepared remarks today, we will open the line for your questions I will now turn the call over to our executive Chairman Bill Doyle.
Thank you Ingrid and good morning.
At Novocure, our mission is to extend survival in some of the most aggressive forms of cancer through the development of our novel therapy tumor treating fields.
This quarter, we made progress on numerous fronts in pursuit of our mission.
Before we review the quarter I would like to address the evolving situation in Israel.
<unk> was founded in Israel.
And as we've grown our Israeli DNA has remained an important part of our culture and identity.
We have 260 colleagues in Israel and hundreds of current and former patients who are affected by the terrorism or October seven and a terrific aftermath.
We are living with grief shock fear anger and sorrow.
We will do everything in our power to buttress members that the number to your family.
Thoughts and prayers are with everyone affected by these devastating events.
Shifting back to our quarterly results.
Q3 was a period of continued execution at Novocure.
We finished the period with 3639 global active patients on therapy and.
And significantly add to the body of clinical data supporting the use of TT fields therapy across multiple cancer indications.
We also made meaningful progress on our pipeline.
Including our next series of clinical trials.
And product development enhancements.
This morning, we will begin with an update of our lung cancer program.
We will then discuss our other clinical programs and our commercial business.
We will close with a review of third quarter financials.
In Q3, we continued to strengthen the foundation of clinical data supporting the use of peaky field therapy, especially in our thoracic program.
In August the results of the phase III lunar clinical trial in metastatic non small cell lung cancer were published in the journal Lancet oncology.
As a reminder, the lunar data showed a statistically significant and clinically meaningful expansion in overall survival for patients treated with <unk> therapy, and the standard of care exhibiting.
Exhibiting $13 two months median overall survival compared to $9 nine months for patients treated with standard of care alone.
The results were more pronounced in patients who received <unk> therapy, and an immune checkpoint inhibitor.
Demonstrating 18 five months meeting median overall survival compared to 10 eight months in patients treated with an immune checkpoint inhibitor alone.
Lancet oncology is one of the Premier clinical oncology research journals.
We are proud to have the lunar data published in this prestigious and impactful platform.
In addition to the lancet publication several key post hoc analyses of lunar were presented at major medical Congresses during the third quarter.
Further illustrating the broad and growing interest in the lunar clinical trial.
Key among these was an analysis of survival patterns for lunar patients with known tumor progression scores.
Presented at the World Conference on lung cancer in September.
This analysis showed that patients treated with TT fields, and then ICR with TPS scores greater than 1%.
Exhibited a substantially longer median overall survival compared to those patients treated with an immune checkpoint inhibitor alone.
$23 six months compared to 10 five months.
Further in patients with low TPS scores between 1% and 49%.
Median overall survival reached 19 months and the TT fields, plus ICI arm versus nine seven months for treated with an ICI alone.
While sample sizes are small these data support the potential of <unk> fields to materially extend survival in a large subpopulation of non small cell lung cancer patients, who may not be prime candidates for immune checkpoint inhibitor monotherapy.
And who could benefit from the addition of TT fields therapy to their pharmacological therapies.
The robust extension in survivals demonstrated in lunar.
It's key to our ongoing efforts to further explore the capabilities of TT fields and immune checkpoint inhibitors for the treatment of non small cell lung cancer.
In October at.
At the European Society of Medical Oncology Conference, we presented health related quality of life data from our lunar trial.
Consistent with all our previously conducted trials the.
The use of TT fields in the lunar study did not result in an increase in systemic toxicity.
And did not impact the health related quality of life of patients in the study.
Also in October at the American Society for radiation oncology annual meeting.
We presented a simulation showing the ability to treat cancerous lung tissue with TT fields, regardless of a patient's body mass index.
These analyses underscore the applicability of TT fields to treating metastatic non small cell lung cancer.
The growing interest in the lunar dataset within the oncology community.
On the regulatory front our teams are on track to submit the final module of our PMA application to the FDA later this year.
This comes on the heels of our completed European CE, Mark application last quarter.
The lunar trial is an important milestone.
As it is our first randomized clinical trial, demonstrating extended survival in the treatment of cancers of the torso.
We are now advancing our plans for our next lung cancer clinical trials.
These next lunar trials will explore the use of TTP yields together with Immunotherapies, which showed immense promise and our first lunar trial.
Success in these trials will allow us to expand the lung cancer patient populations.
Waited for <unk> therapy.
Beyond our thoracic program, we have two randomized phase III clinical trials nearing major milestones.
Top line data from the net is trial is expected late in Q1 2024.
<unk> is evaluating the use of <unk> therapy to treat brain metastases from non small cell lung cancer following stereotactic radiosurgery.
And in the second half of 2024, we expect topline data from the <unk> three trial.
<unk> is evaluating the use of TT fields therapy, together with Nab Paclitaxel and Jim side of me for the first line treatment of locally advanced pancreatic cancer.
In Q3, we also made progress in our <unk> study, which is exploring the use of TT fields therapy together with the lithium app for the treatment of metastatic pancreatic cancer.
<unk> enrolled its first patient and is now open and actively recruiting patients.
Finally in the third quarter, we announced the topline results from the innovate three trial in platinum resistant ovarian cancer.
Innovate three did not meet its primary endpoint flat.
Platinum resistant ovarian cancer is a difficult to treat condition.
And while we are disappointed with the topline results of innovate innovate III.
In Keaton earnings.
But the design of future trials.
Most notably we saw promising survival trend in patients who entered the trial after failing a single previous line of platinum therapy compared to those enrolled after failing multiple lines of therapy.
The benefit observed for women, who enrolled and innovate III earlier in their cancer therapy journey.
<unk> forces, our understanding that <unk> therapy is that it's most effective when used early on and informs our plans for future trials.
I'd like to close today.
By reiterating my enthusiasm for the milestones we have reached this year and for those to come in the near future.
With two phase III trial, Readouts and our launch in non small cell lung cancer on the docket for 2020 for the future is bright for Novocure and we look forward to the opportunity to treat many more patients suffering from difficult to treat cancers in the coming years.
I will now turn to SaaS to discuss our GBM business.
Thank you.
Our GBM business is the core driver of our financial strength generating half a billion dollars in revenue and free cash flow that are invested in the <unk> platform.
We ended the third quarter with a record 3639 active patients on therapy.
<unk> had a very successful opportune loans in France and have more than 150 <unk> patients on therapy.
We have learned many lessons through our French loans, we built our team in the country over the prior two years and focused on building awareness of TD feels therapy among Francesca leaders.
Early investments planted the seeds for an efficient and effective therapy rollout and we believe the French loans playbook will serve as a blueprint for future loan success.
In the U S. We continue to see new activities and dialogues in marriage furthering our commercial reorganization teams have improved cross functional alignment and a synchronized in addressing the key levers contributing to our growth, including patient stops patient therapy duration.
And patient usage.
All of these inputs are critical to long term growth in active patients and net revenue.
Our teams are focused on increasing awareness of the benefits of TT fields, among potential patients and prescribing physicians in Q3, we finalized our direct to consumer campaign I Paolo My life and expect to introduce the campaign to the market next year.
We believe direct to patient messaging will raise awareness of <unk> therapy and strengthen the demand from patients following diagnosis.
We expect direct to consumer engagement will be instrumental to driving greater demand from patients and caregivers.
We are also focused on driving awareness among the broader oncology community for treatment of GBM and cancers of the Tulsa.
Physician engagement has been strong doing recent congresses, especially during the Astro earlier this month.
Strengthening the foundation of clinical evidence is key to driving greater penetration in our current markets.
July Dr. Matthew Balogh published meta analysis, comparing the outcomes reported in nine studies of over 1400, GBM patients, where <unk> therapy with added to TMZ after surgery.
The October <unk> analysis of real World data confirmed the outcome of our phase III <unk> trial and confirmed the improved outcomes associated with patients using TT field therapy over 75% of the time available.
Operator: Good day, and thank you for standing by.
Operator: Welcome to the Novocure Q3 2023 earnings conference call. At this time, all participants are in a listen only mode.
Operator: After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded.
Real World analysis of this size reinforced the survival benefit achieved when TT fields Tapis is prescribed for GBM and are an important tool as we look to reach more patients and physicians.
Beyond our efforts to drive demand, we are working to improve ease of use and drive duration of therapy through further development.
Operator: I would now like to hand the conference over to your speaker today.
This month, we launched our next generation arrays in Germany.
Ingrid Goldberg: Ingrid Goldberg, please go ahead. Good morning, and thank you for joining us to review Novocure's third quarter 2023 performance. I am on the phone this morning with our executive chairman, Bill Doyle, our CEO, Asaf Danziger, and our CFO, Ashley Cordova.
As a reminder, these arrays leverage new materials and a unique design to improve the patient experience.
Lighter sooner and more flexible than previous versions and have the ability to deliver greater intensity to the tumor site without a corresponding increase in hate.
Ingrid Goldberg: Other members of our executive leadership team are also on the call and available for Q&A. For your reference, slide the company this earnings release can be found on our website, www.novocure.com on our investor relations page under quarterly reports.
We are on track to submit a PMA supplement to the FDA for the new arrays later this year.
Additionally, we are pleased to announce the hiring of our new Chief Medical Officer, who will join us in January.
Ingrid Goldberg: Before we start, I would like to remind you that our discussions during this conference call will include forward-looking statements and actual results could differ materially from those projected new statements. These statements involve a number of risks and uncertainties, some of which are beyond our control and are described from time to time in our SEC filing. We do not intend to update publicly any forward-looking statement except as required by law.
While we are restricted from sharing the candidates full details at this time, we are very pleased and look forward to adding his expertise and fresh perspectives to our leadership team.
<unk> will also be transitioning from novel Q Pretest plans to stay on its novel Q4, similar quarters as an adviser to ensure a smooth transition to the new CMO and the continued success of our teams.
Ingrid Goldberg: Where appropriate, we will refer to non-gap financial measures to evaluate our business, specifically adjusted debita, a measure of earnings for interest, taxes, depreciation, and monetization and share-based compensation. We believe adjusted debita is important metric as it removes the impact of earnings attributable to our capital structure, tax rate, and non-cash items and best reflects the financial value generated by our business. Reconciliation of non-gap financial measures are included in our press release, earnings slides, and in our form 8K file with the SEC today. These materials can also be accessed from the investor relations page of our website.
I would like to close by addressing the violent events in Israel.
It is difficult to describe the emotional impact over the last few weeks.
Many of us, including myself have lost loved ones to discount it.
And now all of US have family members and friends, who serve in Harm's way sons, and daughters brothers and sisters mothers and fathers.
Ingrid Goldberg: Following our prepared remarks today, we will open the line for your questions.
That's what cities before a horrible.
William Doyle: I will now turn the call over to our executive chairman Bill Doyle. Thank you, Ingrid, and good morning. At NovaCure, our mission is to extend survival in some of the most aggressive forms of cancer through the development of our novel therapy, tumor treating fields.
It makes me sad that this is our reality today.
I hope and pray that the conflict will be resolved swiftly.
I will now turn to Ashley to close today's call.
Thank you.
William Doyle: This quarter, we made progress on numerous fronts in pursuit of our mission. Before we review the quarter, I would like to address the evolving situation in Israel. NovaCure was founded in Israel, and as we've grown, our Israeli DNA has remained an important part of our culture and identity. We have 260 colleagues in Israel and hundreds of current and former patients who are affected by the terrorism of October 7th and its horrific aftermath. We are living with grief, shock, fear, anger, and sorrow. We will do everything in our power to bunch of members of the NovaCure, family, our socks and prayers are with everyone affected by these devastating events.
The third quarter was a period of consistent execution across multiple vertical with.
With several clinical Readouts regulatory filings and commercial launches on the horizon.
We're investing in the essential infrastructure to ensure we are prepared to fully leverage growth opportunities in the coming year.
We generated $127 million and net revenues in the third quarter and ended September with 3639 active patients on therapy and.
An increase of 6% from the same period last year.
Our successful launch in France continues to be a tailwind as we had a second straight quarter of strong prescription flow and patient starts.
The pre commercial engagement and subsequent commercial execution in France have provided a blueprint, which we will leverage and future country launches.
William Doyle: Chifting back to our quarterly results, Q3 was a period of continued execution at Novocure. We finished the period with 3,639 global active patients on therapy and significantly added to the body of clinical data supporting the use of T.T. Field Therapy across multiple cancer indications. We also made meaningful progress on our pipeline, including our next series of clinical trials and product development enhancements.
We collected $4 million in revenue from grants this quarter, but as a reminder, it will take several quarters for the collection cycle to reach full reimbursement level and France will impact the net revenue per active patient in EMEA. During this time.
And the U S.
We continued to experience a year over year headwind due to the absence of collections from denied <unk> appeal to claims.
William Doyle: This morning we will begin with an update of our lung cancer program. We will then discuss our other clinical programs and our commercial business.
Last year, we collected $15 million term. These claims in the third quarter, which have largely been exhausted at this point.
William Doyle: We will close with a review of third quarter financials. In Q3, we continue to strengthen the foundation of clinical data supporting the use of P.K. Field Therapy, especially in our thoracic program. In August, the results of the phase 3 lunar clinical trial and metastatic non-small cell lung cancer were published in the journal Lancet Oncology. As a reminder, the lunar data showed a statistically significant and clinically meaningful extension in overall survival for patients treated with T.T.
Moving forward, we expect our U S business to more closely track the key drivers of net revenue.
Patient starts duration of therapy, and net revenue per active patients per month.
In Germany, our recovery following defined coverage negotiations continued this quarter.
William Doyle: Field Therapy and the standard of care, exhibiting 13.2 months median overall survival compared to 9.9 months for patients treated with standard of care alone. The results were more pronounced in patients who received T.T. Field Therapy and in immune checkpoint inhibitors. Demonstrating 18.5 months median overall survival compared to 10.8 months in patients treated with an immune checkpoint inhibitor alone. Lancet Oncology is one of the premier clinical oncology research journals. We are proud to have the lunar data published in this prestigious and impactful platform.
We ended the third quarter with 492 active patients on therapy.
5% increase from Q3 of last year.
This quarter, we saw a decrease in prescriptions as our German team focuses on driving higher quality more readily reimbursable prescription and increasing pull through of patient starts and long term active patient growth.
Gross margin for the third quarter with 75%.
Over the course of the year, we have invested and expanded patient support capacity in anticipation of trading larger patient populations for new indications and geographic region.
As we have shared product development enhancements, such as our new arrays will impact our gross margin in the near term.
<unk> impact will be felt more acutely in the coming quarters as we roll out the new arrays in our largest markets beginning with Germany this quarter.
We are focused on pursuing opportunities to increase efficiencies and scale within our supply chain and we will take the steps needed to balance the impact of these product enhancements, while maintain maintaining a healthy margin.
William Doyle: In addition to the Lancet publication, several key post-cock analyses of lunar were presented at major medical congresses during the third quarter, further illustrating the broad and growing interest in the lunar clinical trial. He among these was an analysis of survival patterns for lunar patients with known tumor progression scores. Presented at the Ice Black World Conference on lung cancer in September. This analysis showed that patients treated with T.T. Field and an ICI with TPS scores greater than 1%.
SG&A expenses were $100 million this quarter.
We continue to invest tactically to ensure we are quick to capture growth opportunities in the future.
This includes investing in commercial capabilities to increase penetration in GBM pre.
Pre commercial activities and non small cell lung cancer and market access capabilities to reach new patient populations.
In addition, we have increased spending in it and supply chain capacity.
William Doyle: Exhibited a substantially longer median overall survival compared to those patients treated with an immune checkpoint inhibitor alone. 23.6 months compared to 10.5 months. Further, in patients with low TPS scores between 1% and 49%, median overall survival reached 19 months in the T.T.T. Fields Plus ICI arm versus 9.7 months for treated with an ICI alone. While sample sizes are small, these data supports the potential of T.T. Fields to materially extent survival in a large subpopulation of non-small cell lung cancer patients who may not be prime candidates for immune checkpoint inhibitor monothera, therapy, and who could benefit from the addition of T.T, field therapy to their pharmacological therapies.
Research development and clinical trial costs for the quarter were $54 million.
With the conclusion that the lunar and innovate three trials, our R&D investment is shifting to our next wave of phase III clinical trial.
This includes the lunar two trial, where we are preparing to engage sites and enroll patients in the coming months.
Look forward to updating you on the progress of this and other clinical trials in the coming quarters.
Cash and short term investments totaled $921 million as of September 32023.
Our net loss for the third quarter was $49 million or <unk> 46 per share and adjusted EBITDA with a negative $29 million.
We are in a window of investment and preparation with new commercial launches on the horizon and the potential of trading much larger patient population.
William Doyle: The robust extension and survival demonstrated in lunar is key to our ongoing efforts to further explore the capabilities of T.T, fields and immune checkpoint inhibitors for the treatment of non-small cell lung cancer.
With these growth opportunities approaching we are committed to investing tactically to align our near term capital allocation priorities with our long term strategic vision.
Our goal is to balance the capacity investments needed to treat more patients.
William Doyle: In October, at the European Society of Medical Oncology Conference, we presented health-related quality of life data from the lunar trial. Consistent with all our previously conducted trials, the use of T.T, fields in the lunar study did not result in an increase in systemic toxicity and did not impact the health-related quality of life of patients in the study. Also in October, at the American Society for Radiation Oncology Annual Meeting, we presented a simulation showing the ability to treat cancerous lung tissue with T.T, fields regardless of a patient's body mass index.
Preserving our financial strength and ensuring our ability to invest in value additive opportunities in the future.
I'd like to close today by sharing our story about one of our opportune users Joe Bonn connected.
As you May recall, we highlighted drove on last October javan with diagnosed with GBM in 2021 and begin using up too soon thereafter.
As an avid cyclist. She often bikes to hurricane visits at the Mayo clinic over 100 miles each way.
This summer Javan set out to tackle an even greater feat and 850 mile tour of the upper Midwest.
William Doyle: These analyses underscore the applicability of T.T, fields to treating metastatic non-small cell lung cancer and the growing interest in the lunar data sets within the oncology community. On the regulatory front, our teams are on track to submit the final module of our PMA application to the FDA later this year. This comes from the heel of our completed European CE mark application last quarter.
The logistics associated with the toward this great link can be daunting with daily checkpoints to reach and supplies to replenish.
<unk> worked with our encompass team to ensure all up to supply could be ready and waiting throughout her journey. So she could continue her opportune treatment while cycling.
Kevin completed her 850 mile tour in August and we are thankful for the opportunity to support her amazing peak.
Our mission to extend survival in some of the most aggressive forms of cancer is rooted in patients like giovani.
William Doyle: The lunar trial is an important milestone as it is our first randomized clinical trial demonstrating extended survival in the treatment of cancers of the torso. We are now advancing our plans for our next lung cancer clinical trials. These next lunar trials will explore the use of T.T, fields together with immunotherapies, which showed immense promise in our first lunar trial. Success in these trials will allow us to expand the lung cancer patient populations indicated for T.T, field therapy.
To give the gift of time for patients to be with their loved ones pursue dreams and achieved amazing feat by Javan.
Like to personally congratulate javan and thank her for letting us share her story.
With that I'll hand, it back to the operator for questions.
Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
William Doyle: Beyond our thoracic program, we have two randomized phase three clinical trials nearing major milestones. Top-line data from the NETIS trial is expected late in Q1 2024. NETIS is evaluating the use of T.T, field therapy to treat brain metastases from non-small cell lung cancer following stereotactic radiosurgery. And in the second half of 2024, we expect top-line data from the PNOVA-3 trial. PNOVA-3 is evaluating the use of T.T, field therapy together with NETIS, Paxa, Taksville, and Gem cytoming for the first line treatment of locally advanced pancreatic cancer.
Please standby, while we compile the Q&A roster.
Okay.
One moment for your first question.
And our first question comes from Jonathan Chang of Leerink Partners. Please proceed.
Hi, guys. Thanks for taking my questions.
Can you discuss your pancreatic cancer strategy for tumor treating fields, what's the rationale behind the <unk> four study and the timelines associated with that and how should we be thinking about the <unk> four study initiating before the panel three readout next year. Thank you.
William Doyle: In Q3, we also made progress in our PNOVA-4 study, which is exploring the use of T.T.T, field therapy together with a tethylismat for the treatment of metastatic pancreatic cancer. PNOVA-4 enrolled its first patient and is now open and actively recruiting patients.
So good morning, Jonathan This is bill.
I'll start and then turn it over to Ori too.
Describe the details of P&L before.
But of course pancreatic cancer is one of the most difficult diagnoses and has proven to be one of the most difficult.
William Doyle: Finally, in the third quarter, we announced the top-line results from the NETIS-3 trial in Platinum Resistant Ovarian, and Cancer. Innovate three did not meet its primary end point. Platinum resistance and ovarian cancer is a difficult to tree condition. And while we are disappointed with the top line results of innovate three, we have gained key learnings for the design of future trials. Most notably, we saw promising survival trend in patients who entered the trial after failing a single previous line of platinum therapy, compared to those enrolled after failing multiple lines of therapy.
Cancer.
To treat.
With with many many failures of course.
Our strategy starts with the fact.
William Doyle: But then if it observed for women who enrolled in innovate three earlier in their cancer therapy journey, reinforces our understanding that PTP field therapy is at its most effective when used early on and informs our plans for future trials.
We know that we can deliver tumor treating fields to the region of the therapy.
Chemotherapies that depend on the circulatory system can't even get to.
To the to the region because of.
Issues with the stromal tissue and differentiation of our pressures so we start there.
Further.
We start and have built on a very successful phase II trial, where we showed it.
Extremely impressive results.
In a small sample size for both locally advanced pancreatic cancer and.
Metastatic pancreatic cancer in.
William Doyle: I'd like to close today by reiterating my enthusiasm for the milestones we have reached this year and for those to come in the near future. With two phase three trial readouts and our launch and non-fault felt lung cancer on the docket for 2024, the future is bright for Novocure and we look forward to the opportunity to treat many more patients suffering from difficult to treat cancers in the coming years.
And our first panel of a trial and I'll remind everyone. This is a trial that we expect to read out.
Towards the end of next year, we focused on locally advanced pancreatic cancer.
And this is the stage of the disease, where we can completely encompass the <unk>.
Extended the disease with our tumor treating fields therapy.
But also as a first line trial. So we start at the time of diagnosis in combination with Gemcitabine and Nab Paclitaxel.
Asaf Danziger: I will now turn to Asaf to discuss our GBM business. Thank you, Bill. Our GBM business is the core driver of our financial strength generating half a billion dollars in revenue and free cash flow that are invested in the TTC field platform. We ended the third quarter with a record of 3,639 active patients on therapy. We have had a very successful optum launch in France and have more than 150 French patients on therapy. We have learned many lessons through our French launch. We built our team in the country over the prior two years and focused on building awareness of TTC therapy among French healthcare leaders.
And so we remain very.
<unk> and enthusiastic about the design of this trial and we're preparing.
For success here in terms of rolling out the therapy to this this patient population. So that's the first element of our pancreatic cancer strategy and now let me turn it over to <unk> to describe the results.
Pardon me not results, but to describe the intent to expand the patient population once we anchor in locally advanced.
Good morning, so the background for opening the funnel before this time is that we're doing our best to integrate lessons learned through our clinical program and our scientific program and learnings from two of the top study in newly diagnosed GBM patients and from there.
Asaf Danziger: Early investment planted the seeds for an efficient and effective therapy rollout and we believe the French launch playbook will serve as a blueprint for future launch success. In the U.S., we continue to see new activities and dialogues emerge following our commercial reorganization. Teams have improved cross-functional alignment and are synchronized in addressing the key levels contributing to our growth, including patient starts, patient surgery and patient usage. All of these inputs are critical to long-term growth in active patients and net revenue. Our teams are focused on increasing awareness of the benefits of TTC fields among potential patients and prescribing physicians.
Lunar study results, where we have seen an outstanding performance of TT fields, when concomitant use with immune checkpoint inhibitors, we feel that we should not hold off on the next step also in pancreatic cancer, even prior to reading the results of the panel of three <unk>.
<unk>, so kind of a <unk> for metastatic disease. It will incorporate that Theres no reason, Amit <unk> with chemotherapy and <unk> anti PDL, one and will be done in collaboration with Roche for these reasons.
Asaf Danziger: In case we refinalize our direct to consumer campaign, I power my life and expect to introduce the campaign to the market next year. We believe direct to patient messaging will raise awareness of TTC therapy and strengthen the demand from patients following diagnosis. We expect direct to consumer engagement will be instrumental to driving greater demand from patients and caregivers.
Thanks for taking my questions.
Thank you one moment for our next question.
And our next question comes from Jason Bednar with Piper Sandler. Please proceed.
Yes.
Asaf Danziger: Charles. We are also focused on driving awareness among the broader oncology community for treatment of GBM and cancers of the torso. Physician engagement has been strong during recent congresses, especially during the astro earlier this month. Threatening the foundation of clinical evidence is key to driving greater penetration in our current markets.
Jason Your line is open.
One moment for our next question.
Asaf Danziger: In July, Dr. Matthew Ballot published a meta-analysis comparing the outcomes reported in nine studies of over 1400 GBM patients, where Titi Field's therapy was added to TMZ after surgery. Dr. Ballot's analysis of real-world data confirmed the outcome of our Phase 3, E14 trial, and confirmed the improved outcomes associated with patients using Titi Field therapy over 75% of the time. Real-world analysis of this size reinforced the survival benefit achieved when Titi Field's therapy is prescribed for GBM and our important tool as we look to reach more patients and physicians.
And our next question comes from Li Wang of Wells Fargo.
Good morning, it's Lei, calling in for Larry. Thanks for taking my question can you hear me okay.
Thank you Ken Thanks Lee.
Thanks, Jim.
I have a few questions starting with.
Lung side is there any update on the Q&A will be 36 trial.
Clinical trials that does conclude.
A completion date for mid 2024.
Can you comment Alan can comment amo.
Yes, Lee this is protest thank you for that question.
We're very excited to have the trial open to be 36 study is a study that's a phase II pilot study that is exploring the use of tumor treating fields in the first line non small cell lung cancer with Keytruda. So it's an important study that will help us understand the benefits of moving tumor treating fields plus.
Asaf Danziger: Beyond our efforts to drive the men, we are working to improve ease of fears and drive duration of therapy through further development. This month, we launched our next generation arrays in Germany. As a reminder, these arrays leverage new materials and a unique design to improve the patient experience. They are lighter, thinner and more flexible than previous versions, and have their ability to deliver greater intensity to the tumor site without a corresponding increase in heat. We are on track to submit a PMA supplement to the FDA for the newer arrays later this year.
Nio App in the first line setting so the trial is open and enrolling.
One of the aspects of lung cancer that we already know that it's a very competitive space from a trial perspective because of the high unmet need there are lots of agents and there are lots of trials that are opened in this space. So to get rapid enrollment for a phase III study like this can be a challenge. Our teams are focused on ensuring that we do all the education and the <unk>.
Support work to make sure that this study continues to enroll because it will be important to help us understand again the role of tumor treating fields in the first line setting.
Asaf Danziger: Additionally, we are pleased to announce the hiring of our new Chief Medical Officer, who will join us in January. While we are restricted from sharing the candidate's full details at this time, we are very pleased and look forward to adding his expertise and fresh perspectives to our leadership team. Pritechia will also be transitioning from Novakiu.
Okay is there an update on the timeline is that mid 2020 for the clinical.
Clinical trials that Doug is that accurate.
So like with all studies because they are on a pace of enrollment I would say that's just an anchor point as this study enrollment.
Asaf Danziger: Pritech plans to stay on at Novakiu for several quarters as an advisor to ensure a smooth transition to the new CMO and the continued success of our teams. I would like to close by addressing the violent events in Israel. It is difficult to describe the emotional impact of the last few weeks. Many of us, including myself, have lost loved ones to this carnage, and now all of us have family members and friends who served in harm's way, sons and daughters, brothers and sisters, mothers and fathers. The atrocities of war are horrible. It makes me sad that this is our reality today. I hope and pray that the conflict will be resolved swiftly.
Sort of gets closer to an end date, we will continue to provide updates on that front.
Okay got it.
Related to that.
Is there any way to bridge keynote <unk> 36 to your new Lumina trials in first line to help expedite patient enrollment and the timeline of development.
Yes, that's an interesting question I think that anytime we can speed up enrollment.
Really wonderful to take take advantage of those opportunities. They are two different protocols at the moment. The Beast 36 protocol was ahead of the lunar two study, which is now going to be in an operational.
Setting so we can start getting enrollment and lunar two so this study is meant to give us a quicker read.
The similar patient population, albeit there are two different protocol so.
We will look at it as the study enrolls and see if there are any advantages to accelerate our lunar two efforts.
Ashley Cordova: I will now turn to Ashley to close today's call. Thank you, Esha. The third quarter was a period of consistent executions across multiple versions.
Okay. Thanks, and then just a few questions.
On the Q3 results.
Ashley Cordova: With several clinical readouts, regulatory filings and commercial launches on the horizon, we are investing in the essential infrastructure to ensure we are prepared to fully leverage growth opportunities in the coming year. Our successful launch in France continues to be a tailwind as we had a second straight quarter of strong prescription flow and patient starts. The pre-commercial engagement and subsequent commercial execution in France have provided a blueprint which we will leverage in future country launches.
On the call I think you actually talked about reps focusing on high quality prescriptions in Germany can you just expand on that.
And how do we think about the impact on the prescription volume going forward.
Rest of world prescription volume, which really strong patient volume as well and was that just France, the launch or were there other aspects of it.
Yes, Lee this is Ashley thanks for the question. So patients that we would have you focus on in Germany. So you can see that active patients were up 5% year over year, what that really does reflect as now the new coverage criteria is fully understood. Both on our side, but also on the physician side and so.
Over the course of 2023, what we've seen is that physicians have stopped writing scripts for patients that will not get reimbursed those were not scripts that were filled last year, nor were they spreads for which we are getting paid so that's kind of a natural and positive maturation that these messages are understood and everybody in market understands.
Ashley Cordova: We collected $4 million in revenue from France this quarter, but as a reminder, it will take several quarters for the collection cycle to reach full reimbursement level and France will impact the net revenue per activation and amea during this time. In the US, we continue to experience a year over year headwind due to the absence of collections from denied or appealed claims. Last year, we collected $15 million from these claims in the third quarter, which have largely been exhausted at this point.
Now what we'll get paid for so I would look at active patient growth. That's the right acre and that is really trending well right. There in that market and as you noted the rest of world as well. So I would say, we saw a stable business and occupations around the rest of the world and then a really strong performance in France, as we mentioned with more than 100 patients out there.
Ashley Cordova: Moving forward, we expect our US business to more closely track the key drivers of net revenue, active patient starts, duration of therapy and net revenue per active patients per month. In Germany, our recovery following defined coverage negotiations continued this quarter. We ended the third quarter with 492 active patients on therapy, a 5% increase from Q3 of last year. This quarter we saw a decrease in prescriptions as our German team focuses on driving higher quality, more readily reimbursable prescriptions, and increasing pull-through of patient starts and long term active patient growth.
Got it thanks, and then if I can squeeze in just one more you have.
You have a.
Zero convert that's due in November 2025.
I think you have a company has the option to redeem at some point this year, but presumably thats not going to happen at this point, how do we think about the redemption or the conversion optionality before maturity.
Yes, no. It's another great question and one that as you can imagine we are.
Getting asked a lot recently, what I will say is reiterate what I mentioned in the script.
We have an incredibly strong balance sheet, we have a GBM business, which generate $1 billion in revenue and throws off about $100 million in free cash flow.
Ashley Cordova: Growth margin for the third quarter with 75%. Over the course of the year, we have invested in expanded patient support capacity in anticipation of treating larger patient populations from new indications and geographic regions. As we have shared product development enhancement such as our new arrays will impact our growth margin in the near term. This impact will be felt more acutely in the coming quarters as we roll out the new arrays in our largest market, beginning with Germany this quarter.
We are an R&D organization. So we are committed to investing in these future opportunities and future growth, but we are very astute way looking at how we can both manage our short term goals and ensure that we have.
A strong balance sheet to get us through our pipeline investments and to get us through successful product launches, while ensuring that we keep our eyes on kind of the long term value creation, which we know is at hand, so what I will say is rest assured we are very focused on this and the P&L and free cash flow metrics are something that are in our control and.
Ashley Cordova: We are focused on pursuing opportunities to increase efficiencies and scale within our supply chain and will take the steps needed to balance the impact of these product enhancements while maintaining a healthy margin. S-T&A expenses were $100 million this quarter. We continue to invest tactically to ensure we are quick to capture growth opportunities in the future. This includes investing in commercial capabilities to increase penetration in GBM, pre-commercial activities and non-falsal lung cancer, and market access capabilities to reach new patient populations.
It very much.
Actively being managed I would say.
To ensure that we maintain our strength throughout the journey.
Okay. So no comment on the redemption or conversion Optionality at this point.
Okay. Thank you.
Thank you one moment for our next question.
And our next question comes from Emily Wagner of H C. Wainwright. Please proceed.
Ashley Cordova: In addition, we have increased spending in IT and supply chain capacity. Research, Development, and Clinical Trial Costs for the Quarter were $54 million. With the conclusion of the Lunar and Innovate Three Trials, our R&D investment is shifting to our next wave of Phase Three Clinical Trial. This includes the Lunar Two Trial, where we are preparing to engage sites and enroll patients in the coming months. We look forward to updating you on the progress of this and other clinical trials in the coming quarter.
Hi, Good morning, Thanks for taking the question maybe two for me Im starting with kind of a follow up from the first question.
I'm curious to get your thoughts on with three also using Paclitaxel backbone, which is an innovative three and maybe just discuss the differences and why you're still confident in Penn over three.
Thanks successful <unk> dot with innovate three of the Paclitaxel combination did not really show a survival benefit.
And second question as Youre getting closer to the <unk> readout.
Ashley Cordova: Cash and short-term investments totaled $921 million as of September 30th, 2023. Our net loss for the third quarter was $49 million or 46 cents per share and adjusted EBITDA with a negative $29 million. We are in a window of investment in preparation with new commercial launches on the horizon and the potential of treating much larger patient populations. With these growth opportunities approaching, we are committed to investing tactically to align our near-term capital allocation priorities with our long-term strategic vision. Our goal is to balance the capacity investments needed to treat more patients while preserving our financial strengths and ensuring our ability to invest in value-additive opportunities in the future.
What are how are you kind of thinking about the market opportunity there and any overlap that you think you may have.
In terms of launch benefits given your GBM commercial capabilities.
Sure. So thank you very much for the.
Quick question.
So.
Let me.
Comment.
On the differences between the innovate three study and the <unk> III study.
As we described in the script and other communications.
The patient population.
That was recruited into the innovate study.
Consisted of women, who had failed many prior lines of therapy.
And we showed a benefit.
When women entered the study after failing one prior line of therapy, but we were unable to show a benefit after they had sailed three four and up to five lines of prior therapy. So these were very sick very brittle and than fact.
Ashley Cordova: I'd like to close today by sharing a story about one of our opt-toon users, Jovon Knutson. As you may recall, we highlighted Jovon last October. Jovon was diagnosed with GBM in 2021 and began using opt-toons soon thereafter. As an avid cyclist, she often vikes to her routine visits at the Mayo Clinic over 100 miles each way. This summer, Jovon set out to tackle an even greater feat in 850 mile tour of the upper Midwest.
These women have.
Sales I shouldn't say the women of sale, but.
Phase III studies have sale again and again.
This particular population is.
It's also a stage of the disease, where the cancer has spread beyond.
The region that we are able to directly treat with the tumor treating fields electric fields by.
Ashley Cordova: The logistics associated with the tour of this great length can be daunting, with daily checkpoints to reach and supplies to replenish. Jovon worked with our encompassed team to ensure all opt-toon supplies would be ready and waiting throughout her journey, so she could continue her opt-toon treatment while cycling. Jovon completed her 850 mile tour in August, and we are thankful for the opportunity to support her amazing feet. Our mission to extend survival in some of the most aggressive forms of cancer is rooted in patients like Jovon.
By now contrast that with <unk> three as I said earlier. This is a study in the first line. So this is after diagnosis.
It's a study in patients who have locally advanced meaning that.
They have not that the disease is not fully spread.
Throughout the body. So we can treat the full.
<unk> of the disease, So I would anchor on these two.
Yes.
Ashley Cordova: To give the gift of time for patients to be with their loved ones, pursue dreams, and achieve amazing feet like Jovon, I'd like to personally congratulate Jovon and think her for letting us share her story.
Sacks.
When comparing our ability to derive.
Great benefit and in fact, we saw a greater benefit in the in our pancreatic phase III compared to the benefit that we saw in our ovarian phase to the benefit that we saw again in our ovarian phase II with women who were early in their cancer journey not at the end.
Operator: With that, I'll hand it back to the operator for questions. Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. One moment for our first question.
The journey and then that leads to <unk> before that already just described where we know we can treat systemic disease is when we combine with immunotherapy. This is what we saw in lunar where we were treating pay.
Patient to after.
With metastatic lung cancer after failing platinum therapy, and we saw really.
Jonathan Chang: And our first question comes from Jonathan Chang of Learing Partners. Please proceed. Hi, guys. Thanks for taking my questions. Can you discuss your pancreatic cancer strategy for tumor treating fields? What's the rationale behind the Penova 4 study and the timelines associated with that? And how should we be thinking about the Penova 4 study initiating before the Penova 3 readout next year? Thank you.
Tremendous results when we combined with an immune checkpoint inhibitor and in that case, you get the benefit of the Antimitotic.
Effect of the tumor treating fields alone where we create.
Immunogenic cell death, and then that will turbocharge the effect of immune checkpoint inhibitor.
So that was there was a lot of discussion.
But with tumor treating fields plus.
William Doyle: So, good morning, Jonathan. This is Bill. I'll start and then turn it over to Uri to describe the details of Penova 4. But, of course, pancreatic cancer is one of the most difficult diagnoses and has proven to be one of the most difficult cancer to treat with many, many failures, of course. Our strategy starts with the fact that we know that we can deliver tumor treating fields to the region of the therapy.
Chemotherapy.
We need to treat early in the disease progression in order to get up.
Really maximum benefit for patients and if we have to wait.
Until later in the disease journey, we want to treat with <unk>.
Immune checkpoint inhibitor.
Okay.
Okay, Thanks and on the.
Another readout.
So in the <unk> market.
So.
Again.
William Doyle: Many chemotherapies that depend on the circulatory system can't even get to the region because of issues with the stromal tissue and differentiation of pressures. So, we start there. Further, we start and have built on a very successful phase 2 trial where we showed extremely impressive results in a small sample size for both locally advanced pancreatic cancer and metastatic pancreatic cancer. In our first Penova trial, and I'll remind everyone, this is a trial that we expect to read out toward the end of next year.
I think we do have an advantage and that we will be using.
Excuse me.
The same commercial infrastructure so the same.
Collagen.
Who treat glioblastoma.
Even though it's a different disease, it's non small cell lung cancer that has metastasized to the brain. These.
These are the same clinicians.
And so we would expect to leverage the same commercial infrastructure, that's already in place and that will clearly be a benefit for us.
When we when we launch that indication.
Okay. Thank you.
Thank you one moment for our next question.
William Doyle: We focused on locally advanced pancreatic cancer. And this is the stage of the disease where we can completely encompass the extent of the disease with our tumor treating fields therapy. Penova also is a first line trial. So, we start at the time of diagnosis in combination with Gem cytobine and NAPACl attacks. So, we remain very optimistic and enthusiastic about the design of this trial. And we're preparing for success here in terms of rolling out the therapy to this patient population. So, that's the first element of our pancreatic cancer strategy.
Thanks.
And our next question comes from Jason Gardner of Piper Sandler. Please proceed.
Jason Your line is muted please on mute.
Okay.
Again, ladies and gentlemen, if you have a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment for our next question.
Okay.
Uri Weinberg: And now let me turn it over to URI to describe the results or to pardon not results, but to describe the intent to expand the patient population once we anchor in locally advanced. Good morning. So, the background for opening that one of us for this time is that we're doing our best to integrate lessons learned through our clinical program and our scientific program. And learning from the two that of study in newly diagnosed GBM patients and from the lunar study results where we have seen an outstanding performance of 30 fields when concomitant used with immune checkpoint inhibitors.
And our next question comes from Vijay Kumar of Evercore ISI. Please proceed.
Hi, This is Kevin on for Vijay.
Noticed that you called out $14 5 million denied payment just curious on what this means going forward is this a change.
Are payers, becoming more stringent.
Any color there would be helpful and were there any denied payment trends historically thank you.
Have any of this is Ashley I appreciate the question because it is really important that everybody understands. This one. So this is not a change this is not a reflection of any more stringent coverage criteria and in fact this is consistent with our messaging here over the prior three quarters and that we had a significant amount of claims.
Uri Weinberg: We feel that we should not hold off on the next step also in pancreatic cancer even prior to reading the results of the panover 3 studies. So, panover 4 is for metastatic disease. It will incorporate a teslorismate concomitantia with chemotherapy and PTT fields and anti-PDL1 and will be done in collaboration with Rosh for disease. Understood, thanks for taking my questions. Thank you one moment for our next question.
Jason Bednar: And our next question comes from Jason Bednar of Piper Sandler, Prisp Seed.
From.
Revenue from aged claim in our 2022 baseline number to the tune of over 40 million year to date in the first nine months and as we noted about $15 million in this quarter. So that is revenue that was in our year over year comparison in the baseline <unk> is not in the actual for 2023, we would not expect it to be.
Moving forward because we are now in a position where revenue reflects the base drivers of our business, which is our current asking patient volumes and the net revenue that we're able to collect on those patients that can be very clear. This is not more stringent coverage criteria and in fact as it is a factor of more of an elevated baseline than it is in <unk>.
Operator: Jason, your line is open. One moment for our next question.
23 trains.
Thank you Ed if I can follow up.
How should we think about the madis track as it relates to your GBM business.
Especially given its focus on the same region.
Do you see any potential impact or change in physician.
Lee Wang: And our next question comes from Lee Wang of Wells Fargo. Good morning. It's late calling in for Larry. Thanks for taking my question. Can you hear me okay? Thanks. I have a few questions starting on the wrong side. Is there any update on the QMOB 36 trial on clinical trials that does? There is a completion date for mid-2024. Can you comment on that? Yeah, Lee, this is Pritesh. Thank you for that question.
Hands on option positive or negative from those trial results on our GBM business. Thanks.
Kevin another important question. Thank you.
Simple answer is no.
These are two.
Pink diseases.
Even though they may be treated by the same.
Clinicians our GBM business is now well established and stable and.
And we have.
Resounding clinical evidence and commercial experience in the script in fact, we called out.
Recent reports of real World evidence.
Lee Wang: We're very excited to have the trial open B-36 study is a study that's a phase two pilot study that's exploring the use of tumor treating field in the first line non-small cell lung cancer with Katrina. So it's an important study that will help us understand the benefits of moving tumor treating fields plus NIO up in the first line setting. So the trial is open and enrolling. One of the aspects of lung cancer that we already know that it's a very competitive space from a trial perspective because of the high unmet need.
And in particular bellows meta analysis of nine separate real World papers and these are all coming in at exactly the same place supporting the results of our original clinical trial and we've reached a point in the world where clinicians also have their office experience.
They have substantial the prescribers have substantial numbers of patients they see the benefits they see the extension in survivals in their own practices.
So plus or minus.
Lee Wang: There are lots of agents and there are lots of trials that are open in this space. So to get rapid enrollment for a phase two study like this can be a challenge. Our teams are focused on ensuring that we do all the education and the support work to make sure that this study continues to enroll because it will be important to help us understand again the role of tumor treating field in the first line setting.
Think theres going to be an effect either way.
Thank you at this time I would like to turn the conference back to Bill Doyle for closing remarks.
So thank you very much I want to thank everyone for your continued interest and support in <unk>.
Lee Wang: Okay, is there an update on the timeline? Is that mid 2024 date on clinical trial? Is that accurate? So like with all studies because they are on a pace of enrollment, I would say that's just an anchor point. As the study enrollment sort of gets closer to an end date, we will continue to provide updates on that front. Okay, got it. Related to that, is there any way to bridge QNOB 36 to your new lunar trials in the first line to help expedite patient enrollment and the timeline of development?
The messages I want you to take away from this call are first and foremost that we are executing our plans.
GBM is a stable business, that's providing the financial support for us to invest in our future.
Made exciting clinical progress.
First and foremost in our thoracic program, where we're preparing to launch around the world.
And in the future where we are.
Excited by the imminent prospects of medicine and an over three.
Lee Wang: That's an interesting question. I think that any time we can speed up enrollment, it's really wonderful to take advantage of those opportunities. There are two different protocols at the moment. The B36 protocol was ahead of the lunar two study, which is now going to be in an operational setting so we can start getting enrollment in lunar two. So this study is meant to give us a quicker read of the similar patient population, albeit there are two different protocols.
Next year.
Lee Wang: So we will look at it as the study enrolls and see if there are any advantages to accelerate our lunar two efforts. Okay, thanks. And then just a few questions on the two, three results. On the call, I think you actually talked about rep focusing on high quality prescriptions in Germany. Can you just expand on that and how do we think about the impact on the prescription volume going forward? And the rest of world prescription volume was really strong in patient volume as well.
So it's an exciting time to Vietnam procure it's a busy time.
We stand with our Israeli colleagues and we couldn't be more appreciative of their hard work during this incredibly difficult time in their country.
So thanks, again, and we look forward to reporting next quarter.
This concludes today's conference call. Thank you for participating and you may now disconnect.
Okay.
[music].
Okay.
Okay.
Yes.
[music].
Okay.
Lee Wang: And was that just France, the launch, or were there other aspects of it? Yeah, this is Ashley. Thanks for the question. So it is patients that we have you focus on in Germany so you can see that active patients were up 5% year over year. What that really does reflect is now the new coverage criteria is fully understood both on our side but also on the physician side. And so, you know, over the course of 2023, what we've seen is that physicians have stopped writing scripts for patients that will not get reimbursed.
[music].
Okay.
[music].
Lee Wang: Those were not scripts that were still last year nor were they scripts for which we are getting paid. So that's kind of a natural and positive maturation that these messages are understood and everybody in market understands now what we'll get paid for. So I would look at active patient growth. That's the right anchor and that is really trending well right there in that market. And as you noted, rest of world as well.
Lee Wang: So I would say we saw a stable business and active patients around the rest of the world and then a really strong performance in France as we mentioned with more than 100 patients up here. Got it. Thanks. And then if I can squeeze and just one more, you have a zero convert that's due in November 2025. I think you have a company has the option to redeem at some point this year but presumably that's not going to happen at this point.
Lee Wang: How do we think about the redemption or the conversion optionality before maturity? Yeah, no, it's another great question and one that I, as you can imagine, we are getting asked a lot recently. What I will say is reiterate what I mentioned in the script that we have an incredibly strong balance sheet. We have a GVM business which generates half a billion dollars in revenue and throws off about 100 million dollars in free cash flow.
Lee Wang: We are an R&D organization. So we are committed to investing in these feature opportunities and future growth but we are very astutely looking at how we can both manage our short-term goals and ensure that we have the strong balance sheet to get us through our pipeline investments and to get us through successful product launches while ensuring that we keep our eyes on the long-term value creation which we know is in hand.
Lee Wang: So what I will say is rest assured we are very focused on this and the P&L and free cash flow metrics are something that are in our control and is very much actively being managed, I would say, to ensure that we maintain our strengths throughout maturity. Okay, so no comment on the redemption or conversion optionality at this point. Correct. Okay, thank you. Thank you, one moment for our next question.
Lee Wang: And our next question comes from Emily Bodnar of HC Wainwright. Please proceed.
Emily Bodnar: Hi, good morning. Thanks for taking your questions. Maybe two for me, and starting with kind of a follow-up from the first question. I'm curious to get your thoughts on Pinot with the Re as it's also using a pack with pack sold backbone, which is used in Innovate 3 and maybe just discuss the differences and why you're still confident in Pinot with 3 being successful given that with Innovate 3, the pack with pack with combination didn't really show much survival benefit.
Emily Bodnar: And then second question, as you're getting closer to the meta, to read out, how are you kind of thinking about the market opportunity there and any overlap that you think you may have in terms of launch benefits given your GBM commercial capabilities? Thanks. Sure, so thank you very much for the question. So, let me comment on the differences between the Innovate 3 study and the Pinot 3 study. As we described in the script and in other communications, the patient population that was recruited into the Innovate study consisted of women who had failed many prior lines of therapy.
Emily Bodnar: And we showed a benefit when women entered the study after failing one prior line of therapy, but we were unable to show a benefit after they had failed three, four and up to five lines of prior therapy. So these were very sick, very brittle, and in fact, these women have failed, I shouldn't say the women have failed, but phase three studies have failed again and again in this particular population. It's also a stage of the disease where the cancer has spread beyond the region that we're able to directly treat with the tumor treating fields, electric fields.
Emily Bodnar: By now contrast that with Pinot 3, as I said earlier, this is a study in the first one. So this is after diagnosis. It's a study in patients who have locally advanced, meaning that they have not the disease has not fully spread throughout the body, so we can treat the full extent of the disease. So I would anchor on these two facts when comparing our ability to derive great benefit. And in fact, we saw a greater benefit in our pancreatic phase to compare to the benefit that we saw in our ovarian phase to the benefit that we saw again in our ovarian phase two was with women who were early in their cancer journey not at the end of the journey.
Emily Bodnar: And then that leads to Penova 4 that already just described where we know we can treat systemic disease is when we combine with an immunotherapy. This is what we saw in lunar where we were treating patients after with metastatic lung cancer after failing platinum therapy. And we saw really tremendous results when we combined with an immune checkpoint, inhibitor. And in that case, you get the benefit of the any mitotic effect of the tumor treating fields alone, where we create a immunogenic cell death, and then that will turbo-charge the effect of immune checkpoint inhibitor.
Emily Bodnar: So that was a lot of discussion, but with tumor treating fields plus chemotherapy, we need to treat early in the disease progression in order to get a really maximum benefit for patients. And if we have to wait until later in the disease journey, we want to treat with an immune checkpoint inhibitor. All right, thanks. And on the meta-readout. Oh, so on the meta-market. So again, I think we do have an advantage in that we will be using the same commercial infrastructure.
Emily Bodnar: So the same oncologist who treat glioblastoma, even though it's a different disease. It's non-small cell lung cancer that has metastasized the brain. These are the same clinicians. And so we would expect to leverage the same commercial infrastructure that's already in place, and that will clearly be a benefit for us when we launch that indication.
William Doyle: Okay, thank you. Thank you one moment for our next question.
Jason Bednar: And our next question comes from Jason Bagnar of Piper Sandler. Please proceed to the next question. Jason, if your line is muted, please unmute. Again, ladies and gentlemen, if you have a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again, one moment for our next question.
Kevin Joaquin: And our next question comes from BJ Kumar of Evercore ITI. Please proceed. Hi, this is Kevin on for VJ. Notice that you called out for in-and-a-half million of denied payments. Just curious on what this means going forward. Is this a change? Are payers becoming more stringent? Any color there would be helpful? And were there any denied payment trends historically? Thank you.
Ashley Cordova: Kevin, yeah, this is Ashley. Appreciate the question because it is really important that everybody understands this one. So this is not a change. This is not a reflection of any more stringent coverage criterion. In fact, this is consistent with our messaging here over the prior three-quarters in that we had a significant amount of claims from, I mean, of revenue from aged claims in our 2022 baseline numbers, the tune of over 40 million year to date in the first nine months.
Ashley Cordova: And as you noted, about 15 million in this quarter. So that is revenue that was in our year-over-year comparison and the baseline and is not in the actual for 2023. We would not expect it to be moving forward because we are now in a position where revenue reflects the base drivers of our business, which is our current activation volumes and the net revenue that we're able to collect on those patients. So to be very clear, this is not more stringent coverage criterion. In fact, is the factor more of an elevated baseline than it is in 2023 trends?
Kevin Joaquin: Thank you, and if I can follow up, how should we think about the meta-strike as it relates to your GBM business, especially given its focus on the same region? Do you see any potential impact or change in physician perspectives on options, positive or negative from those trials results on your GBM business? Thanks. Kevin, another important question. Thank you. Simple answer is no. These are two distinct diseases, even though they may be treated by the same clinicians.
Kevin Joaquin: Our GBM business is now well established and stable, and we have resounding clinical evidence and commercial experience. In the script, in fact, we called out recent reports of real world evidence, and in particular, there are BALO's meta-analysis of nine separate real world papers, and these are all coming in at exactly the same place, supporting the results of our original clinical trial, and we've reached the point in the world where clinicians also have their in-office experience.
Kevin Joaquin: They have substantial, you know, the prescribers have substantial numbers of patients. They see the benefits, they see the extension and survivals in their own practices. So plus or minus, I don't think there's going to be an effect either way. Thank you.
William Doyle: At this time, I'd like to turn the conference back to Bill Doyle for closing remarks. So thank you very much. I want to thank everyone for your continued interest and support in NovaCure. The messages I want you to take away from this call are first and foremost, that we are executing our plans. GBM is a stable business that's providing the financial support for us to invest in our future. We've made exciting clinical progress, you know, first and foremost in our thoracic program, where we're preparing to launch around the world. And in the future, where we're excited by the imminent prospects of Metis and Penova 3 next year. So it's an exciting time to be at NovaCure. It's a busy time.
William Doyle: We stand with our Israeli colleagues, and we couldn't be more appreciative of their hard work during this incredibly difficult time in their country. So thanks again, and we look forward to reporting next quarter.
Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.
Operator: Thank you very much.