nvcr-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________________

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-37565

NovoCure Limited

(Exact Name of Registrant as Specified in Its Charter)


Jersey						98-1057807
(State or Other Jurisdiction of						(I.R.S. Employer
Incorporation or Organization)						Identification No.)

No. 4 The Forum

Grenville Street

St. Helier, Jersey JE2 4UF

(Address of principal executive offices, including zip code)

+44 (0) 15 3475 6700

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)

_______________________________________________________

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary Shares, no par value	NVCR	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class						Outstanding as of April 28, 2023
Ordinary shares, no par value						106,209,251 Shares

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

In addition to historical facts or statements of current condition, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements contained in this report are based on our current plans, expectations, hopes, beliefs, intentions or strategies concerning future developments and their impact on us. Forward-looking statements contained in this report constitute our expectations or forecasts of future events as of the date this report was filed with the Securities and Exchange Commission (the “SEC”) and are not statements of historical fact. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Such statements may include words such as “anticipate,” “will,” “estimate,” “expect,” “project,” “intend,” “should,” “plan,” “believe,” “hope” and other words and terms of similar meaning in connection with any discussion of, among other things, future operating or financial performance, strategic initiatives and business strategies, regulatory or competitive environments, our intellectual property and research and development related to our Tumor Treating Fields devices marketed under various brand names, including Optune and Optune Lua, and software and systems to support and optimize the delivery of Tumor Treating Fields (collectively, our “Products”). In particular, these forward-looking statements include, among others, statements about:

•our research and development, clinical study and commercialization activities and projected expenditures;

•the further commercialization of our Products for current and future indications;

•our business strategies and the expansion of our sales and marketing efforts;

•the market acceptance of our Products for current and future indications by patients, physicians, third-party payers and others in the healthcare and scientific community;

•our plans to pursue the use of our Products for the treatment of solid tumor cancers other than glioblastoma multiforme (“GBM”) and malignant pleural mesothelioma (“MPM”);

•our estimates regarding revenues, expenses, capital requirements and needs for additional financing;

•our ability to obtain regulatory approvals for the use of our Products in indications other than GBM and MPM;

•our ability to acquire from third-party suppliers the supplies needed to manufacture our Products;

•our ability to manufacture adequate supply of our Products;

•our ability to secure and maintain adequate coverage from third-party payers to reimburse us for our Products for current and future indications;

•our ability to receive payment from third-party payers for use of our Products for current and future indications;

•our ability to maintain and develop our intellectual property position;

•our ability to manage the risks associated with business disruptions caused by natural disasters, extreme weather events, pandemics such as the COVID-19 pandemic, including the emergence of variant strains, or international conflict and other disruptions outside of our control;

•our cash needs; and

•our prospects, financial condition and results of operations.

These forward-looking statements involve a number of risks and uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Factors which may cause such differences to occur include those risks and uncertainties set forth under Part I, Item 1A., “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed on February 23, 2023, as well as other risks and uncertainties set forth from time to time in the reports we file with the SEC. In our prior filings, references to NovoTTF-100L now refer to Optune Lua. We do not intend to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

TRADEMARKS

This Quarterly Report on Form 10-Q includes trademarks of NovoCure Limited and other persons. All trademarks or trade names referred to herein are the property of their respective owners.

Table of Contents

NovoCure Limited

Quarterly Report on Form 10-Q

TABLE OF CONTENTS


		Page
Cautionary Note Regarding Forward Looking Statements		i
Trademarks		ii

PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements	2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosures	25
Item 5.	Other Information	25
Item 6.	Exhibits	26

	Signatures	27

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements


NOVOCURE LIMITED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share data)
	March 31, 2023		December 31, 2022
	Unaudited		Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	185,963	$	115,326
Short-term investments	772,072		854,099
Restricted cash	676		508
Trade receivables, net	74,830		86,261
Receivables and prepaid expenses	23,730		25,959
Inventories	31,723		29,376
Total current assets	1,088,994		1,111,529
LONG-TERM ASSETS:
Property and equipment, net	36,454		32,678
Field equipment, net	12,216		12,684
Right-of-use assets	25,529		23,596
Other long-term assets	11,147		11,161
Total long-term assets	85,346		80,119
TOTAL ASSETS	$	1,174,340	$	1,191,648

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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NOVOCURE LIMITED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share data)
	March 31, 2023		December 31, 2022
	Unaudited		Audited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables	$	81,469	$	85,197
Other payables, lease liabilities and accrued expenses	67,306		73,580
Total current liabilities	148,775		158,777
LONG-TERM LIABILITIES:
Long-term debt, net	566,324		565,509
Deferred revenues	1,843		2,878
Long-term leases	19,973		18,762
Employee benefit liabilities	5,143		4,404
Other long-term liabilities	136		148
Total long-term liabilities	593,419		591,701
TOTAL LIABILITIES	742,194		750,478
COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
Share capital -
Ordinary shares no par value, unlimited shares authorized; issued and outstanding: 106,187,162 shares and 105,049,411 shares at March 31, 2023 (unaudited) and December 31, 2022, respectively	—		—
Additional paid-in capital	1,266,358		1,222,063
Accumulated other comprehensive income (loss)	(2,691)		(2,433)
Retained earnings (accumulated deficit)	(831,521)		(778,460)
TOTAL SHAREHOLDERS' EQUITY	432,146		441,170
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,174,340	$	1,191,648

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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NOVOCURE LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
	Three months ended March 31,			Year ended December 31,
		2023		2022		2022
	Unaudited			Audited
Net revenues		$	122,182	$	137,547	$	537,840
Cost of revenues		29,614		27,727		114,867
Gross profit		92,568		109,820		422,973

Operating costs and expenses:
Research, development and clinical studies		59,704		42,234		206,085
Sales and marketing		51,169		37,884		173,658
General and administrative		41,944		30,508		132,753
Total operating costs and expenses		152,817		110,626		512,496

Operating income (loss)		(60,249)		(806)		(89,523)
Financial income (expenses), net		9,169		(1,709)		7,677

Income (loss) before income tax		(51,080)		(2,515)		(81,846)
Income tax		1,981		2,132		10,688
Net income (loss)		$	(53,061)	$	(4,647)	$	(92,534)

Basic net income (loss) per ordinary share		$	(0.50)	$	(0.04)	$	(0.88)
Weighted average number of ordinary shares used in computing basic net income (loss) per share		105,667,072		104,186,120		104,660,476

Diluted net income (loss) per ordinary share		$	(0.50)	$	(0.04)	$	(0.88)
Weighted average number of ordinary shares used in computing diluted net income (loss) per share		105,667,072		104,186,120		104,660,476

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
U.S. dollars in thousands
	Three months ended March 31,			Year ended December 31,
		2023		2022		2022
	Unaudited			Audited
Net income (loss)		$	(53,061)	$	(4,647)	$	(92,534)
Other comprehensive income (loss), net of tax:
Change in foreign currency translation adjustments		300		330		1,425
Unrealized gain (loss) from debt securities		357		—		(445)
Pension benefit plan		(915)		1,511		(244)
Total comprehensive income (loss)		$	(53,319)	$	(2,806)	$	(91,798)


NOVOCURE LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
U.S. dollars in thousands (except share data)
	Ordinary shares	Additional paid-in capital		Accumulated other comprehensive loss		Retained earnings (accumulated deficit)		Total shareholders' equity

Balance as of December 31, 2022 (audited)	105,049,411	$	1,222,063	$	(2,433)	$	(778,460)	$	441,170

Share-based compensation to employees	—	39,084		—		—		39,084
Exercise of options and vested RSUs	1,137,751	5,211		—		—		5,211
Other comprehensive income (loss), net of tax benefit of $0	—	—		(258)		—		(258)
Net income (loss)	—	—		—		(53,061)		(53,061)
Balance as of March 31, 2023 (Unaudited)	106,187,162	$	1,266,358	$	(2,691)	$	(831,521)	$	432,146




	Ordinary shares	Additional paid-in capital		Accumulated other comprehensive loss		Retained earnings (accumulated deficit)		Total shareholders' equity

Balance as of December 31, 2021 (audited)	103,971,263	$	1,099,589	$	(3,169)	$	(685,926)	$	410,494

Share-based compensation to employees	—	25,045		—		—		25,045
Exercise of options and vested RSUs	587,825	3,148		—		—		3,148
Other comprehensive income (loss), net of tax benefit of $0	—	—		1,841		—		1,841
Net income (loss)	—	—		—		(4,647)		(4,647)
Balance as of March 31, 2022 (Unaudited)	104,559,088	$	1,127,782	$	(1,328)	$	(690,573)	$	435,881

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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NOVOCURE LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
	Three months ended March 31,			Year ended December 31,
		2023		2022		2022
	Unaudited			Audited
Cash flows from operating activities:
Net income (loss)		$	(53,061)	$	(4,647)	$	(92,534)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		2,722		2,610		10,624
Accrued Interest		(1,120)		(221)		(2,216)
Asset write-downs and impairment of field equipment		126		135		955
Share-based compensation		39,084		25,045		106,955
Foreign currency remeasurement loss (gain)		(127)		249		(3,256)
Decrease (increase) in accounts receivables		14,511		(7,461)		2,547
Amortization of discount (premium)		(4,056)		684		(1,536)
Decrease (increase) in inventories		(

SEC Form 10-Q filed by NovoCure Limited