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Novocure Reports Fourth Quarter and Full Year 2021 Financial Results and Provides Company Update

Full year 2021 net revenues of $535 million, an increase of 8% year-over-year

Invested record $201 million in 2021 in research and development initiatives intended to advance Tumor Treating Fields science and technology

Novocure (NASDAQ: NVCR) today reported financial results for the fourth quarter and full year ended December 31, 2021. Novocure is a global oncology company working to extend survival in some of the most aggressive forms of cancer by developing and commercializing its innovative therapy, Tumor Treating Fields (“TTFields”).

“We founded Novocure to exploit the novel observation that electric fields can be harnessed to disrupt cancer cell division,” said William Doyle, Novocure’s Executive Chairman. “More than two decades later, we continue to build our knowledge and capabilities to optimize the Tumor Treating Fields therapy platform and to bring Tumor Treating Fields therapy to cancer patients. Last year, we generated over half a billion dollars in net revenues and invested two hundred million dollars in R&D. With multiple pivotal clinical studies set to read out in the coming 24 months, we are nearing a key inflection point for cancer patients and our business.”

Financial updates for the full year and fourth quarter ended December 31, 2021:

  • Total net revenues for the year were $535.0 million, an increase of 8% year-over-year.
  • Total net revenues for the quarter were $133.2 million. The company did not recognize material revenue from its Medicare backlog in the quarter. This compares to $11 million received from the successful appeal of previously denied Medicare claims in the fourth quarter of 2020.
  • The United States, EMEA and Japan contributed $92.0 million, $26.5 million, and $8.8 million in quarterly net revenues, respectively. Revenue in Greater China from Novocure’s partnership with Zai Lab totaled $5.8 million.
  • Gross margin for the quarter was 78%.
  • Research, development and clinical studies expenses for the quarter were $56.9 million.
  • Sales and marketing expenses for the quarter were $39.0 million.
  • General and administrative expenses for the quarter were $31.0 million.
  • Net loss for the quarter was $26.5 million with loss per share of $0.25.
  • Adjusted EBITDA* for the quarter was $1.7 million.
  • Cash, cash equivalents and short-term investments were $937.7 million as of December 31, 2021.

Operational updates for the fourth quarter ended December 31, 2021:

  • As of December 31, 2021, there were 3,587 active patients on therapy, an increase of 5% year-over-year. Active patients from North America, EMEA and Japan contributed 2,272, 1,008 and 307 active patients, respectively.
  • 1,430 prescriptions were received in the quarter, an increase of 1% year-over-year. Prescriptions from North America, EMEA and Japan contributed 966, 349 and 115 prescriptions, respectively.

Quarterly achievements:

  • In November, we announced the last patient had been enrolled in our phase 3 pivotal LUNAR study for the treatment of non-small cell lung cancer (“NSCLC”). Patients will be followed for 12 months, with top-line data expected by year-end 2022.
  • In November, Dr. David Tran, Chief of the Division of Neuro-Oncology at the McKnight Brain Institute at the University of Florida, released updated data from the phase 2 pilot 2-THE-TOP study testing the safety and efficacy of TTFields together with pembrolizmuab and temozolomide for the treatment of adult patients with newly diagnosed glioblastoma (“GBM”). In patients with greater than 9 months of follow-up, median progression-free survival was at least 11.2 months compared to 6.7 months from Novocure’s pivotal EF-14 study, in which patients received TTFields and temozolomide, and 4.0 months from the control arm of EF-14, where patients received temozolomide alone.
  • In December, we announced the acquisition and construction of an office building in downtown Portsmouth, New Hampshire. The property will provide space for our growing employee base and house a world-class training and development center.

2022 Outlook:

  • The company expects to achieve active patient growth between 2% to 5% in 2022, in-line with the growth rate experienced in the fourth quarter of 2021. Longer term, the company continues to expect further adoption in its core GBM business.

Anticipated clinical milestones:

  • Data from phase 2 pilot EF-31 study in gastric cancer (2022)
  • Data from phase 2 pilot EF-33 study with high-intensity arrays in recurrent GBM (2022)
  • Last patient enrollment in phase 3 pivotal METIS study in brain metastases (2022)
  • Data from phase 3 pivotal LUNAR study in NSCLC (2022)
  • Last patient enrollment in phase 3 pivotal PANOVA-3 study in locally advanced pancreatic cancer (2023)
  • Data from phase 3 pivotal INNOVATE-3 study in recurrent ovarian cancer (2023)
  • Data from phase 3 pivotal METIS study in brain metastases (2023)
  • Data from phase 3 pivotal PANOVA-3 study in locally advanced pancreatic cancer (2024)

Conference call details

Novocure will host a conference call and webcast to discuss fourth quarter and full year 2021 financial results at 8 a.m. EST today, Thursday, February 24, 2022. Analysts and investors can participate in the conference call by dialing 855-442-6895 for domestic callers and 509-960-9037 for international callers, using the conference ID 8879093.

The webcast, earnings slides presented during the webcast and the corporate presentation can be accessed live from the Investor Relations page of Novocure’s website, www.novocure.com/investor-relations, and will be available for at least 14 days following the call. Novocure has used, and intends to continue to use, its investor relations website, as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

About Novocure

Novocure is a global oncology company working to extend survival in some of the most aggressive forms of cancer through the development and commercialization of its innovative therapy, Tumor Treating Fields. Novocure’s commercialized products are approved in certain countries for the treatment of adult patients with glioblastoma and malignant pleural mesothelioma. Novocure has ongoing or completed clinical studies investigating Tumor Treating Fields in brain metastases, gastric cancer, glioblastoma, liver cancer, non-small cell lung cancer, pancreatic cancer and ovarian cancer.

Headquartered in Jersey, and with a growing global footprint, Novocure has regional operating centers in Root, Switzerland, Portsmouth, New Hampshire and Tokyo, as well as a research center in Haifa, Israel. For additional information about the company, please visit Novocure.com and follow @Novocure on LinkedIn and Twitter.

*Non-GAAP Financial Measurements

We measure our performance based upon a non-U.S. GAAP measurement of earnings before interest, taxes, depreciation, amortization and shared-based compensation ("Adjusted EBITDA"). We believe Adjusted EBITDA is useful to investors in evaluating our operating performance because it helps investors compare the results of our operations from period to period by removing the impact of earnings attributable to our capital structure, tax rate and material non-cash items, specifically share-based compensation.

Forward-Looking Statements

In addition to historical facts or statements of current condition, this press release may contain forward-looking statements. Forward-looking statements provide Novocure’s current expectations or forecasts of future events. These may include statements regarding anticipated scientific progress on its research programs, clinical study progress, development of potential products, interpretation of clinical results, prospects for regulatory approval, manufacturing development and capabilities, market prospects for its products, coverage, collections from third-party payers and other statements regarding matters that are not historical facts. You may identify some of these forward-looking statements by the use of words in the statements such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” or other words and terms of similar meaning. Novocure’s performance and financial results could differ materially from those reflected in these forward-looking statements due to general financial, economic, environmental, regulatory and political conditions as well as issues arising from the COVID-19 pandemic and other more specific risks and uncertainties facing Novocure such as those set forth in its Annual Report on Form 10-K filed on February 24, 2022, as amended to date, with the U.S. Securities and Exchange Commission. Given these risks and uncertainties, any or all of these forward-looking statements may prove to be incorrect. Therefore, you should not rely on any such factors or forward-looking statements. Furthermore, Novocure does not intend to update publicly any forward-looking statement, except as required by law. Any forward-looking statements herein speak only as of the date hereof. The Private Securities Litigation Reform Act of 1995 permits this discussion.

Consolidated Statements of Operations

USD in thousands (except share and per share data)

 

 

Three Months Ended December 31,

 

Twelve months ended December 31,

 

2021

 

2020

 

2021

 

2020

Net revenues

$

133,213

 

 

$

143,953

 

$

535,031

 

 

$

494,366

 

Cost of revenues

 

29,687

 

 

 

28,136

 

 

114,877

 

 

 

106,501

 

Gross profit

 

103,526

 

 

 

115,817

 

 

420,154

 

 

 

387,865

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

Research, development and clinical studies

 

56,931

 

 

 

44,002

 

 

201,303

 

 

 

132,010

 

Sales and marketing

 

38,982

 

 

 

31,359

 

 

137,057

 

 

 

118,017

 

General and administrative

 

31,011

 

 

 

28,364

 

 

126,127

 

 

 

107,437

 

Total operating costs and expenses

 

126,925

 

 

 

103,725

 

 

464,488

 

 

 

357,464

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

(23,398

)

 

 

12,092

 

 

(44,333

)

 

 

30,401

 

Financial expenses (income), net

 

2,175

 

 

 

3,267

 

 

7,742

 

 

 

12,299

 

 

 

 

 

 

 

 

 

 

Income (loss) before income tax

 

(25,573

)

 

 

8,825

 

 

(52,075

)

 

 

18,102

 

Income tax

 

885

 

 

 

3,908

 

 

6,276

 

 

 

(1,706

)

Net income (loss)

$

(26,458

)

 

$

4,917

 

$

(58,351

)

 

$

19,808

 

 

 

 

 

 

 

 

 

 

Basic net income (loss) per ordinary share

$

(0.25

)

 

$

0.05

 

$

(0.56

)

 

$

0.20

 

Weighted average number of ordinary shares used in computing basic net income (loss) per share

 

103,884,288

 

 

 

101,945,085

 

 

103,433,274

 

 

 

100,930,866

 

 

 

 

 

 

 

 

 

Diluted net income (loss) per ordinary share

$

(0.25

)

 

$

0.04

 

$

(0.56

)

 

$

0.18

 

Weighted average number of ordinary shares used in computing diluted net income (loss) per share

 

103,884,288

 

 

 

110,604,714

 

 

103,433,274

 

 

 

108,877,648

 

 

Consolidated Balance Sheets

USD in thousands (except share data)

 

 

December 31,

 

2021

 

2020

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

208,802

 

 

$

234,674

 

Short-term investments

 

728,898

 

 

 

607,902

 

Restricted cash

 

807

 

 

 

11,499

 

Trade receivables, net

 

93,567

 

 

 

96,699

 

Receivables and prepaid expenses

 

17,025

 

 

 

21,245

 

Inventories

 

24,427

 

 

 

27,422

 

Total current assets

 

1,073,526

 

 

 

999,441

 

Long-term assets:

 

 

 

Property and equipment, net

 

22,693

 

 

 

11,395

 

Field equipment, net

 

12,923

 

 

 

11,230

 

Right-of-use assets, net

 

18,267

 

 

 

19,009

 

Other long-term assets

 

12,086

 

 

 

10,908

 

Total long-term assets

 

65,969

 

 

 

52,542

 

Total assets

$

1,139,495

 

 

$

1,051,983

 

 

Consolidated Balance Sheets

USD in thousands (except share data)

 

 

December 31,

 

2021

 

2020

Liabilities and shareholders’ equity

 

 

 

Current liabilities:

 

 

 

Trade payables

$

72,600

 

 

$

53,647

 

Other payables and accrued expenses

 

70,002

 

 

 

59,965

 

Total current liabilities

 

142,602

 

 

 

113,612

 

Long-term liabilities:

 

 

 

Long-term loan, net of discount and issuance costs

 

562,216

 

 

 

429,905

 

Deferred revenues

 

6,477

 

 

 

12,139

 

Employee benefit liabilities

 

4,543

 

 

 

5,171

 

Long term leases

 

12,997

 

 

 

14,293

 

Other long-term liabilities

 

166

 

 

 

337

 

Total long-term liabilities

 

586,399

 

 

 

461,845

 

Total liabilities

 

729,001

 

 

 

575,457

 

Commitments and contingencies

 

 

 

Shareholders’ equity:

 

 

 

Share capital -

 

 

 

Ordinary shares - No par value, Unlimited shares authorized; Issued and outstanding: 103,971,263 shares and 102,334,276 shares at December 31, 2021 and December 31, 2020 respectively;

 

 

 

 

 

Additional paid-in capital

 

1,099,589

 

 

 

1,111,435

 

Accumulated other comprehensive loss

 

(3,169

)

 

 

(3,832

)

Accumulated deficit

 

(685,926

)

 

 

(631,077

)

Total shareholders’ equity

 

410,494

 

 

 

476,526

 

Total liabilities and shareholders’ equity

$

1,139,495

 

 

$

1,051,983

 

 

Non-U.S. GAAP financial measures reconciliation

USD in thousands

 

 

Three months ended December 31,

 

Twelve months ended December 31,

 

2021

 

2020

 

% Change

 

2021

 

2020

 

% Change

Net income (loss)

$

(26,458

)

 

$

4,917

 

(638

) %

 

$

(58,351

)

 

$

19,808

 

 

(395

) %

Add: Income tax

 

885

 

 

 

3,908

 

(77

) %

 

$

6,276

 

 

$

(1,706

)

 

(468

) %

Add: Financial expenses (income), net

 

2,175

 

 

 

3,267

 

(33

) %

 

$

7,742

 

 

$

12,299

 

 

(37

) %

Add: Depreciation and amortization

 

2,667

 

 

 

2,473

 

8

%

 

$

10,251

 

 

$

9,150

 

 

12

%

EBITDA

$

(20,731

)

 

$

14,565

 

(242

) %

 

$

(34,082

)

 

$

39,551

 

 

(186

) %

Add: Share-based compensation

 

22,398

 

 

 

20,273

 

10

%

 

$

94,900

 

 

$

75,721

 

 

25

%

Adjusted EBITDA

$

1,667

 

 

$

34,838

 

(95

) %

 

$

60,818

 

 

$

115,272

 

 

(47

) %

 

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