NovoCure Ltd (NVCR) September 2026 Conference Transcript

Good morning, everyone. My name is Leigh Huang with the Wells Fargo MedTech Research Team. Welcome. I'm pleased to have with us Novocure. And from the company is CEO Frank Leonard. Thank you, Frank, for joining us. Thanks, Leigh. Let's dive right in. You've had a very exciting launch with Optume Pax, and that's going very well, generating nearly 600 prescriptions so far, close to 300 active patients on therapy by the end of the quarter. Any update you can provide as far as that commercial launch, prescriber mix, where the product's being used, et cetera?

Yeah, happy to provide an update and also just want to start by saying thank you to you and to Wells Fargo for covering us with Larry for so many years and really being very detailed in your coverage of Novacure. Yeah, we are very excited about our launch with Optune Pax. As a reminder, we received approval for the treatment of locally advanced to pancreatic cancer. This is stage three pancreatic cancer. It is an indication that hasn't had a new therapy approved in over a decade. And we were really pleased with the clinical interest shown in our data from our phase three trial. As Leigh mentioned, we had a really strong launch. Q2 was our first full quarter in market. We finished with about 285 patients who are on therapy. And we are, as we said on our Q2 earnings call, we're well ahead of our expectations in terms of the number of practices prescribing, the numbers of patients on therapy. And as we enter into this third quarter, we do have a device. It is a device that's based on clinical data similar to a biotech product, but it is a device-based product. And our effort right now is to ensure that we consolidate the interest that we've seen and that we take the prescribers who maybe wrote one prescription to wait and see, and we convert them into being multiple prescribers. So we're not giving specific top-line guidance of where we think run rates will fall. We are saying we see significant clinical interest in the product. We believe that our stage of disease, as well as being a first-line therapy, differentiates this against diraxin racid, which we can talk about in a little bit. But we do, I think, as a device-based launch, it's not the hockey stick of a pure biotech launch. as we go through that process of making sure the initial prescribers have very strong confidence in the product going into the quarters to come.

That's helpful. Just on that, so with the 600 prescriptions in roughly four months, that's about 150 per month run rate. Is that the type of runway you should think about for Q3, Q4?

We're being really careful to not give out specific prescription guidance because I think, you know, as we saw in the initial launch, particularly in the first quarter, the physicians are still being educated. So sometimes there's prescriptions that come in, might not be the most appropriate patient. We're committed to growing active patients, as you've heard us say, and other indications. We really look at active patients as that key metric. And we're continuing to having growth in active patients over the year to come, and even out into the future, because we do think this is a very sizable market, but it's one where we are introducing the product to the physicians for the first time right now.

Got it. Any color on that conversion from number of prescriptions to active patients? It's been roughly 50% so far, but obviously a little early.

Yes. And so the interpretation of how you look at prescriptions turning into active patients typically takes a few quarters to develop. And so in the publicly reported numbers, it's probably hard to interpret that metric right now. But when we look at it, you know, looking at the patients that we're treating with pancreatic cancer. We compare them overall to patients with GBM from a health perspective, from an urgency perspective. We would say for right now, a good benchmark would just say that to be in that 70% range that, you know, we're expecting about 70% of prescriptions to convert.

Okay. To be clear, is that what you're seeing right now? Or that's what you expect on a kind of normalized rate?

We, so that's what we're seeing right now. And I think, but I wouldn't, I'm leaving specifically basically being, I'm conscious to say we do need to see another two quarters to really feel confident saying this is the benchmark. But based on what we're seeing right now, we think it's reasonable to use that, the benchmark from GBM, which is approximately 70%.

Okay, that's helpful. So let's touch on the approval of rest on Q recently. How does that launch factor to your PACS momentum, you know, second half this year, going to next year. Obviously, there's been investor concerns about the sustainability of the momentum we've seen in PACS, given the new competition. And any color from the field as far as how physicians are thinking about, you know, the RASK inhibitor versus TTF?

Absolutely. Yeah. And I'll start by saying, you know, as most people in the room, we got into healthcare because we wanted to make a difference. And it's really, it's an incredible advance to see diraxone or acid coming to market in an area where physicians and patients have been desperate for new treatments. So we welcome the addition of the therapy to pancreatic cancer. I'll start by, again, going back to the differentiated stages and lines of therapy where diraxone or acid is now approved, stage four metastatic disease, second line. Our approval is locally advanced pancreatic cancer, so stage three, first line. So when I think about the impact of diraxone racib in the market today, I separate into two different areas. One is when you speak to a physician about the clinical data supporting Optune Pax and the patient profile who could benefit from Optune Pax, we see very clear interest. We see very clear differentiation between Optune Pax treating a focal disease, a local disease that still has the potential to be a singular target of our local regional therapy, whereas daraxin-rasib has looked at this essentially a second line, let's knock down as much metastatic drug as we can, and we see the clinical differentiation in how our product is perceived relative to daraxin-rasib. That being said, there's a second component to the reality of having the two products in market, which is they are in the middle of a launch where they announced they had more than 2,000 patients on therapy from their early access program. And if you can imagine being a nurse in a clinical practice that's never used diraxin racin before, and suddenly you have 10 or 20 patients on therapy with significant, essentially significant skin irritation, there's a lot of effort that that practice is now making to take care of those patients. And I think we do feel that from a practical standpoint of saying, can our sales rep get back in? Can we make that second call? Can we talk to you about how your patient with Optune is doing? There is a lot more activity in the market right now that those practices are also practically trying to figure out how to integrate diraxin or acid, but at the same time, they're integrating tumor-treating fields. So again, going back to the big picture, we see that the clinical value of our Panova study is recognized. The differentiated patient population is recognized by the physicians. But as we go through this process of really ensuring we consolidate the interest in Optune packs, we absolutely acknowledge that there's a pure mind, I should say, timeshare of the practice that you can get to that we're feeling.

Okay, that's fair. So you've given some color around what you expect lung and pancreatic revenue could be this year. I see you factored in this competitive dynamic into that outlook for the rest of this year?

We have, yes. As you know, we updated the guidance in Q2 and took into account everything we knew at the time, including the pending Dirac's and RASM approval.

Okay, and it's been early, but kind of in line with what you've been thinking?

It has, and I think, you know, as we may touch on later, we've been very pleased in the pancreatic launch that we've already secured our first coverage policy from a major payer. So, you know, we've had some of these tailwinds come in that have made us confident in our revenue, our revenue guidance for the new indications.

That's perfect. And then you've talked about running a trial with TTF combination with, I guess, with Ras-On-Q. What are the next steps in the trial? Is that something you can share, what you hope to learn in the timeline?

Yes, absolutely. So what we've announced is that now that Dirac-San-Rasib is approved, We are able to use it in its commercial setting, so second line, stage four. We can pursue a clinical trial with Optune Pax and Daraxin-Rasib in that indication. The immediate next step is that we have to update our protocol to fully reflect the label for Daraxin-Rasib. So now that we have that label in the last two weeks, we've updated the protocol, And we'll be approaching the FDA soon to file the IDE to run a device-led trial with that concurrent therapy, with the concurrent therapy of Draxin-Rasib. From there, you know, what we're targeting is that we want to ensure we can give physicians a clear set of guidelines around how it could be safe and feasible to use the therapies together if they choose to do so. And from there, we would build potentially into a new clinical program. But at a minimum, because these two therapies are both new, because both therapies do have an element of skin irritation that can come up, we want to make sure that in a clinical setting, we address those concerns and document them and really make sure we understand how the therapies can be used together.

Got it. So is this something we could see launch next year, perhaps?

We haven't given specific guidance, but typically to get through an FDA process, it's a few months. So I think reasonably at this time of year, we're looking at the early part of next year, yeah.

Okay, that's helpful. And you mentioned initial coverage for OptinPact. Perhaps you can expand on that. You said year or two full coverage. What can you see on the commercial and the Medicare side at this point?

Thank you. Yeah, so for everyone in the audience, our product is provided to patients in their home. We are providing the device directly to them, so we qualify as durable medical equipment. So we fall into this very niche area of reimbursement. We typically expect, because of that, because we have to work through coverage both with Medicare and payers, we typically expect about a year to two years between initial launch when we've established at least the beginning of broad-based reimbursement coverage. Typically a year for private payers, more on the two-year side for the Medicare process. We still think that's in line with what we're expecting. I think we're, on the private side, we're ahead, having one of the big payers already come on board. So we're ahead on the private side. The next major milestone here will be to secure inclusion in the NCCN guidelines. And we can talk, I assume you maybe want to talk about the NCCN guidelines as well. So the NCCN guidelines for pancreatic cancer have historically been updated once a year. We unfortunately didn't have our FDA approval at the time that last year's guideline review was done. We've resubmitted now with our approved labeling, and we're just waiting for that guideline to come out. So hopefully with that guideline being published soon, we can then trigger the next leg in the process, which is pursuing Medicare coverage. Got it. Did you file for Category 1 with the guidelines? You actually don't file for a specific request in terms of coverage. You simply just file your data, and it's up to them. And as many people may have noticed, the NCCN, while there's one overarching organization, every single disease committee has its own rules, its own cadence, its own willingness to make updates. And so it's all quite different as to how the guidelines get updated.

Got it. So for GBM, as far as Category 1 guideline, it was four or five years after the newly diagnosed approval. Would you hope to be sooner than that for Optum Pax?

Yes. So the answer is yes. And let me give the context about NCCN guidelines. The NCCN has different rating systems. Essentially, favorable ratings start with 2B, which is lower level of evidence and some disagreement. 2A is higher level of evidence, but still some disagreement. And one is uniform consensus that the treatment should be used. Typically, you are able to start to receive reimbursement, especially with private payers, around the 2B recommendation. 2A is actually a pretty solid recommendation that also leads to Medicare approval often. And then 1 is obviously the gold standard, and it's outstanding. In terms of our launch in GBM, it did take five years to get to the Category 1 recommendation. But within, from memory, I want to say it was 18 months after the trial data was available, we achieved the 2A recommendation. So oftentimes there might be a stepwise function where it's an initial rating and then it can go up over time as you add more evidence. So I don't expect it to be five years is the short answer.

Fair enough. That's helpful. And then just wrapping up on PACS, I know you guys haven't given sort of a long-term revenue outlook. But if we look at GBM, about 10 years after the newly diagnosed launch in the U.S., global revenues was $650 million or so. How do we think about pancreatic in that context? It's a larger TAM. We've seen pretty good uptake initially. Any color around that?

Yeah, I think that we do. I wouldn't look to the 10 years as a specific window because it's a different context. We were a smaller company. We had to launch more sequentially overseas. I do think thematically, though, that the launch will pursue a device like LaunchCurve. We do have to go through the reimbursement process in every single country. We need to establish these relationships with practices. So while we're not giving a specific years or a peak, I would just say that we think this is a big market. It's as big or bigger than the current GBM market in the U.S. specifically. We do think it'll be a multi-year process to really ramp it up to the point where we've kind of left the launch phase and we're more into the incremental growth phase. The only other thing that I would point out that we haven't talked about is that in Japan, the incidence of pancreatic cancer is actually significantly higher than it is in the United States. And in Japan, we're expecting regulatory approval for opt-in packs at the end of this year with a reimbursement approval coming next year. And so I would just encourage everybody to look at that dynamic of our growth story over the next two years, that we really will have not just the U.S. being able to drive growth, but Japan driving growth in Optum packs.

That's helpful. Let's move on to a few of your other products. Optum Geo for GBM, your flagship product. Active patient growth was pretty strong in Q2, up 11%, including 8% growth in the U.S. what drove the strength in the quarter, and perhaps you can talk about what's sustainable going forward. Your guidance implies slightly slower growth in the second half for GBM versus first half, and anything you can say beyond 26, you know, kind of what's a good growth algorithm for that business?

Yeah, so I would just start by saying first, we've been incredibly pleased over the last three quarters, so Q2, Q1, and Q4 of last year with our GBM franchise for OptinGeo. So, and, you know, the truth is that there's not one exciting issue or change I can point to and say this is really what drove growth. You know, to be honest, it falls into two categories. One is simply we've made investments over the last three years to upgrade our software, our patient targeting algorithms, which are very complicated. This is a little-known fact, but GBM doesn't have its own ICD-10 code. Even though there's more than 12,000 patients a year who have the disease in the United States, it's very hard to target down from the full number of brain tumors into GBM. So as the only branded product pursuing GBM, we've actually had to build those algorithms, work with our vendors, and our team has gotten better at, quite frankly, chasing down where the patient is at the moment when they'd be eligible to use Optane Geo. So we've coupled that with the fact that now with our larger sales force that's also detailing to non-small cell lung cancer and pancreatic cancer, we have a much bigger breadth of reach than we've had historically. And so we've just been really pleased that when the team had all of the right elements in place, they've started to drive that growth in the U.S. I'm speaking to the U.S. specifically. to the to the question of the trend going into the end of the year that there's not really a change in what we view as the momentum it's just more the comps get tougher because all of our growth last year came in q4 so it sort of skews the way you think about year-over-year trends and I'd also highlight in in Germany and Japan we've seen similar dynamics that we've continued to drive growth we've also opened up Spain as a new market we've opened up some of the smaller markets like part of Canada, Czechia, our global markets franchise, which kind of covers all of the smaller markets, has really been successful at knocking down one small win after another. So we do see the GBM franchise continuing to grow. We talk about the mid-single digits going forward being feasible, and we're very pleased at the progress we've made this year in GBM because we have the reimbursement in place, it drives straight to the bottom line.

That's helpful. On Optune Lua for lung cancer, you launched in Japan recently, strong launch, 64 patients on therapy at the end of Q2. Help us size that opportunity perhaps. Again, we know the TAM there is larger for lung than it is for GBM, and the standard care is different there versus in the U.S.

Yes. So to set the stage in Japan, we've launched Optum Lua. It's consistent with our U.S. label. It's a second line treatment of stage four non-small cell lung cancer. As Leia mentioned, the guidelines in Japan over clinical treatment are more nuanced than in the United States, where immune checkpoint inhibitors are often continued into the second line if they have shown success in first line therapy. and moreover, whenever possible, delaying or using less chemotherapy as a preferred treatment. And so we've seen physicians in Japan are more willing to use tumor-treating fields in this second line, continuing an immune checkpoint inhibitor from line one to line two or line three. And that's really driven the clinical interest. And it's coupled also with the fact that in Japan, the primary treating physician is a thoracic surgeon who's typically more comfortable with devices than a medical oncologist. So we've seen a really nice setup. And the last thing I'll note is that in Japan, when we launch in Japan, it is always on the basis of having national reimbursement. And it's important to note that we've actually been able to reset our pricing in Japan, where the yen has obviously depreciated significantly over the last decade. So our pricing in Lua and our expected pricing in PAX is actually significantly higher than in GBM. So So we see a lot of really positive momentum. And you asked about setting the stage for where we think the TAM could be. We haven't commented yet on where we think we can get to in terms of a full TAM and peak penetration. But I do think, you know, if you look at these, you know, this first couple of quarters, you can get a sense that this is a stable, growing business that's going to expand. Got it. That's helpful.

So let's talk about the product that's in the pipeline, Optune Maya. Optumaya for brain meds. You expect approval possibly later this year. Talk about your confidence level in that, and can you comment whether you've had FDA labeling discussions so far?

Yeah, so Optumaya is our product to treat brain metastases from non-small cell lung cancer. The clinical trial, the METAS trial, showed that we essentially doubled the time to intracranial progression when applied after stereotactic radiosurgery. So patients received SRS plus tumor treating fields or SRS alone and watchful waiting. And we were able to show that doubling in time to intracranial progression. We have had multiple interactions with the FDA at this point. We're entering into the final stages of the FDA discussion. We've set the expectation of approval by year end. We don't comment at any more detailed level of where we are with the FDA other than to say that we reiterate that we believe approval is coming by year end. I think what we see in this market, especially, I'll just focus on the United States for a moment, we see tremendous clinical interest from the radiation oncology community to the point that the product has already been added to the NCCN guidelines with a 2A recommendation even before FDA approval. So we feel this really strong clinical pull. I think the challenge that we'll have to address is with the payer community. It's always more challenging when you're treating not the primary tumor, but a secondary tumor. And we fully acknowledge that we think we're going to be in the United States. We have really strong clinical interest to launch into, but we're being careful about setting expectations because we don't want to build up a massive clinical presence until we're really confident we can get over the hurdle with the pairs of having them believe that timed intracranial progression was significant to the patient that's helpful so in that context um with the guideline and what you said about pair how should we think about that commercial ramp let's say in 27 um would it look more like you know maybe not like packs more like gbm or anything you can come point us to i think it's right now we're i think what we want to do is get to the approval um with the full labeling before we start to talk about how we're going to think about the launch but i think the main message is that this is going to be, I would say, it's going to be a longer launch curve for us than what we saw in PAX, where we had sort of not only a lot of interest from physicians, but a lot of interest from patients. It was the first new product approved in a long time. I think this is one that we'll have to build over time.

That's fair. Just a couple financial ones. Last week, you issued an AK about unauthorized access to the company's information system. Obviously, we've seen that with the other companies across the med tech sector. Can you give it any update and what have you said in terms of financial implications?

Yes, Lea, thanks for the question because I'm actually glad I get to clarify this here. So number one, we've stated clearly there's no material financial impact from the cybersecurity incident. We were fortunate, I think, like all companies in this space, especially companies that have access to patient information, we were targeted. We were targeted by a very sophisticated scheme. Unfortunately, our, you know, our internal capabilities kicked in and we were able to prevent. There was no access or control lost over our systems. Our devices weren't implicated. And, you know, as we've announced, it was fewer than 50 patients where PHI with identifiable information was tracked down. So, you know, overall, I'd say we fell into the category of being lucky with ending up with no material impact that we're aware of today. We continue to evaluate the situation. But yeah, the long and short of it is that we think we were fortunate, and it's a good wake-up call to everybody in the industry that this is something you have to deal with and take it seriously.

That's a helpful update. I have to ask about 27. You haven't given guidance, but there's obviously a lot of interest across companies. So the street is modeling 12% top line growth next year, roughly 5% EBITDA margin. Again, I know you haven't given guidance. Can you just maybe give some color on the puts and takes for next year, both in terms of the top line and the profitability level and any reaction you may have to the consensus numbers?

Yeah, so to set the stage, when I took over as CEO So in December of last year, one of the things that we recommitted to as a management team and through the board is that we wanted to put the company on a path to double-digit top-line growth in the coming years, plus a clear path to profitability. You know, we took a very important first step this year in terms of issuing guidance for the year, for 2026. And as you've seen in the guidance, we've also really committed that we need to get to adjusted EBITDA positive as quickly as possible. So I would say that the founding or the foundational elements of how we think about next year is within that context, that we want to continue delivering double-digit top-line growth, and then we want to achieve double-digit top-line growth, and then we want to make sure we do that in the context of driving towards profitability. You know, what I would say is that I won't comment on the specific numbers regarding consensus for next year right now, but what I will say is that going back to Japan as a market, as I mentioned before, the incidence of pancreatic cancer in Japan is relatively higher than the United States. It's around three times higher. When you look at that against a population of 120 million people, that's a pretty big market to pursue for pancreatic cancer. We also have the tailwind of the successful lung launch in Japan. So we do think that between the U.S. market with PAX, continued growth in GBM around the world, and then now this tailwind kicking on of Japan becoming a more integrated part of the overall portfolio, we're in a really good place for next year from a financial standpoint.

That's helpful. And anything more specific on margin improvement?

I would say on margin improvement, I guess two things I would always point out. Number one is that from an SG&A standpoint and really from a sales and marketing standpoint, we've made the investments that we need to make to launch our products in PAX and Lua. By and large, there's some small incremental investments that may be needed in Japan. But we basically have already made those investments. We're repositioning our investments in Lung into Pank. So we don't see a stepwise growth in sales and marketing coming. We continue to be very vigilant about G&A spending. We're looking at anything we can do there to hold it flat or at least keep it in line with inflation. The biggest area where we have to focus is on R&D. The company invested a little bit more than $200 million in R&D last year. As I think you heard, or I know you heard on our Q2 earnings call, we've significantly resized one clinical trial to result in $90 million of savings. With that change, we can now commit to saying we can hold the $200 million level of spend. And, you know, I mentioned I've just gotten back from a trip to Israel where I saw our R&D facility. And we're really taking a look at everything right now and asking, you know, what within this, you know, what is the right level of R&D spend given our size, given our goals and aspirations? And so we'll continue looking there. But as a baseline, what we've committed to is sales and marketing. We think we've right-sized it. G&A, we want to hold the line. R&D, we're committed to the $200 million level. That alone, we think, puts us on the path to adjusted EBITDA positive and cash flow positive. And then from there, we'll continue looking at the $200 million to see what's feasible.

That's super helpful. Just going back to a couple of the products, on Optum Lua in Japan, you talked about the standard care being different versus U.S. and it's more consistent with the label. Is the standard care changing? Is that dynamic changing in Japan? And does it look more like the U.S. going forward, or is it fairly stable just in terms of implications for a continued uptake of the product?

We think in Japan the market has been pretty stable, especially in the second line. There hasn't been an introduction of new products. I think if anything is slightly different in Japan than the U.S., the guidelines generally discourage the use of docetaxel. which is another reason why we've seen Optune be a really viable product with an immune checkpoint inhibitor. So, no, in Japan, we don't see anything coming up in the market that would be disruptive to the lung business.

Okay, great. And then going back to Optune Pax, you also recently received approval in Europe. That label's a little bit different versus the U.S. label. Can you just talk about that difference briefly and, you know, any implications for the adoption over there?

Yeah, so in most of Europe, nabpaclitaxel, gemcitabine, the combination, is approved for use in metastatic pancreatic cancer. It's not technically approved by the EMEA Medicines Agency for locally advanced stage 3. That being said, most countries, including France and Germany, in the local clinical guidelines and the local reimbursement practices, they do include napaclitaxel gemcitabine in their treatment regimens. And so when we approached our CE marking body about our label, we had to make some modifications versus the U.S. In the U.S., we say very clearly that it's with napaclitaxel gemcitabine because those They're generally accepted by FDA as approved. In Europe, we need to be more explicit so that the pairs understood that we did not seek an approval for those drugs in that indication. But if it's consistent with your local practices, then it's okay to use them together. It's a very technical answer. The main point is that it's a technical nuance in how the labeling had to be done. We don't really expect it to be different in terms of the patient selection process. And we've launched in Germany, and we're looking forward to ESMO in the coming weeks in October. where we're really going to have our official launch at that point at ESMO and more to come on the earnings call.

That's great. And just lastly, on Japan, you said that approval is coming soon and you will launch with national coverage. Talk about the timeline for that.

So we've said that we expect approval for opt-in packs in Japan before the end of the year. And then historically, what we've seen is that anywhere from one quarter to two quarters later, if you're successful, you receive your national reimbursement. So we're saying in the first half of next year, we'd be able to launch with national reimbursement.

That's great. Thank you. So we covered a lot, about a minute and a half left or so. I will leave you, Frank, with the closing remarks. And thank you again for joining us.

Thank you. And again, thank you, Leigh. Thank you to Larry as well. I truly appreciate being here at the conference and to everything that Wells Fargo has done in terms of covering us for over a decade Now, I would say that, you know, Novacure is at an inflection point. We've gone through a period of time where we've grown into a global company. We, over the last six to nine months, have done the hard work to ensure that we control our destiny, where we've invested, where we can see clear paths to growth. We've right-sized our P&L so that in Q2, we actually generated cash for the first time in several years. And I think, you know, over the coming quarters, what you'll hear from us is that, you know, as we've right-sized the financial house, we'll start talking more about what comes next from an R&D perspective and how we continue that growth beyond 27 and into the future But it's a fantastic technology that has very low, it has no systemic toxicity, very low adverse event profile. It is an ideal product when you need to treat cancers that are tough to pursue with systemic therapies. And that's why we think it's been so broadly adopted in GBM and including in pancreatic cancer, where the systemic therapies often struggle to get to the tumor. So we're excited for the future. Great. Thank you so much.

Thank you.