NovoCure Limited

Good day, and thank you for standing by. Welcome to the Novocure first quarter 2021 in-news conference. 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 that session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Adam Taney.

Good morning, everyone, and thank you for joining us to review Novacure's first quarter 2021 performance. I'm joined on the phone by our executive chairman, Bill Doyle, our CEO, Asaf Danziger, and our CFO, Ashley Cordova. Other members of our executive leadership team are also on the call and available for Q&A. The slides presented today can be viewed on our website, www.novacure.com, by clicking on the link for the first quarter 2021 financial results. located in the events section of our investor relations page. Before we start, I would like to remind you that our discussion during this conference call will include forward-looking statements, and actual results could differ materially from those projected in these statements. These statements involve a number of risks and uncertainties, some of which are beyond our control, including those risks and uncertainties described from time to time in our SEC filings. We do not intend to update publicly any forward-looking statement except as required by law. Following our prepared remarks today, we will open the line for questions. Financials for the three months ended March 31, 2021 are available in our press release and in our 10Q, both of which we released earlier this morning. Where appropriate, we will refer to non-GAAP financial measures to evaluate our business. Reconciliations of non-GAAP financial measures to GAAP financial measures are also included in our press release, in the appendix of the supplemental slides accompanying this presentation, and on our Form 8K filed at the SEC today. These materials can be accessed from our investor relations page of our website, www.novacure.com. With that, I will now turn the call over to Bill Doyle.

Thank you, Adam, and good morning, everyone. We are pleased to share our first quarter results today. Over the last several months, we made progress across our clinical development programs to determine tumor treating fields optimal use. Our established commercial business continued to generate the financial strength needed to invest in our future. As we look ahead, we believe multiple levers remain to unlock the full potential of the tumor treating fields platform. Our commercial business generated $135 million in net revenue in the first quarter of 2021. And we invested $46 million in research and development programs intended to fuel future growth. We recently reached exciting milestones in several clinical programs and continue to actively enroll patients in seven trials across six solid tumor cancers. Almost 20,000 patients have been treated with tumor treating fields. As we reflect on our progress to date and the road ahead, we believe we are just beginning. Earlier this month, we announced that the pre-specified interim analysis for our phase three pivotal lunar trial in non-small cell lung cancer concluded with a favorable recommendation from the Independent Data Monitoring Committee, or DMC, to continue accrual, successfully clearing the futility hurdle. There was no evidence of clinically relevant increased toxicity other than expected generally low-grade skin toxicity in the experimental arm. The DMC went on to say that continued accrual to 534 patients as proposed in the original protocol, given the current rate of accrual and the interim data presented, is likely unnecessary and possibly unethical for patients randomized to control. For this reason, the DMC recommended an adjustment of accrual to approximately 276 patients with a 12-month follow-up following the enrollment of the last patient. The DMC believes this amended protocol would provide adequate data regarding toxicity and efficacy, providing sufficient overall power, as well as potentially providing important information regarding efficacy within the treatment subgroups. LUNR is a multinational trial with sites in the United States, Western and Eastern Europe, and Israel, testing the safety and effectiveness of immune checkpoint inhibitors or docetaxel together with tumor treating fields versus immune checkpoint inhibitors or docetaxel alone for patients with stage four non-small cell lung cancer who progressed during or after platinum-based therapy. Advanced or metastatic non-small cell lung cancer is commonly treated with platinum-based therapy in the first line, and the LUNAR trial was designed to generate data that contemplate multiple clinically meaningful outcomes for non-small cell lung cancer patients following platinum failure. Though Novacure is fully blinded to the trial data and expects to remain blinded through completion of the trial, the DMC had full access to the trial data from both arms of the study when making their recommendations. We are very excited by the DMC's recommendations and believe the potential to power all endpoints with the reduced sample size and follow-up duration is an indication of the maturity of the trial data and strength of the signal generated to date. We have submitted an IDE supplement to the FDA which incorporates the recommended protocol adjustments and are awaiting the agency's final determination following a 30-day review period. We are also engaging with our trial investigators to identify opportunities to accelerate enrollment. If approved, the new protocol could accelerate our trial completion by more than a year. The DMC recommendation represents an important milestone in our lung cancer development program and in our efforts to better understand the potential benefits of tumor treating fields mechanism of action when used together with immunotherapies. Greek clinical research has shown that tumor-treating fields can induce immunogenic cell death. Multiple markers of cellular stress, specifically high-mobility group B1 secretion and calreticulin exposure increase significantly in the presence of tumor-treating fields. Cells treated with tumor-treating fields also exhibit autophagy-dependent reductions in adenosine triphosphate levels. Our in vitro observations have been reproduced in animal models. Tumor treating fields together with anti-PD-1 therapy enhanced anti-tumor immunity and resulted in increased tumor control in vivo. We have observed a significantly higher frequency of macrophages and dendritic cells in tumors in mice treated with tumor treating fields and anti-PD-1 therapies. Compared to tumors in mice treated with tumor treating fields alone, anti-PD-1 therapy alone and in untreated control mice. The PD-L1 expression levels increased in tumors treated with tumor-treating fields, suggesting an elevated inflammatory response. We are eager to translate this preclinical experience to clinical data. In addition to our lunar trial, we recently received IDE approval to initiate our Phase 2 pilot Keynote B36 trial conducted in collaboration with MSD, a trademark of Merck. Keynote B36 is designed to study tumor-treating fields together with Pembrolizumab in first-line non-small-cell lung cancer. We believe data generated from the Lunar and Keynote B36 trials will provide valuable insights into the potential benefits of treating cancer with tumor treating fields therapy concomitant with immunotherapy. Combination therapy is a cornerstone of cancer care, and we are developing tumor treating fields as a limited toxicity backbone therapy upon which other standard of care and emerging cancer treatments can be added. In addition to immunotherapy, we continue to explore the potential benefits of using tumor treating fields together with radiation therapy, and certain chemotherapies. We recently concluded our HEPA-NOVA trial investigating tumor-treating fields together with serapinib, a kinase inhibitor, in 25 patients with advanced liver cancer. We have submitted an abstract for presentation at an upcoming medical conference in late June and look forward to discussing the full data set with clinicians, investigators, and investors in the future. I will now turn the call over to Asaf to discuss our commercial results for the quarter.

Thank you, Bill. Our team delivered another consistent quarter of execution in the first three months of 2021. Global net revenues totaled $135 million with an 80% growth margin. This represents an increase of 32% in net revenues versus Q1 2020. we ended the quarter with 3,454 active patients on therapy, an increase of 12% versus Q1 2020 and 1% versus 2020 year-end. This represents our 25th consecutive quarter of active patient growth. We are especially encouraged by the durability of our GBM business as we have seen disruptions in patterns of care due to the COVID-19 pandemic. We believe the challenges posed by the pandemic have caused some patients with increased health risk to delay in-person consultations with the healthcare providers. In the aggressive cancers we treat, this postponement can sometimes allow a patient's disease to progress past the point of care. Last month, we supported the launch of a nationwide campaign by S.V. Cancer in Germany to raise awareness of the dangers of postponing care together with Bristol-Myers Squibb. In the U.S., our ability to engage with healthcare providers in person has increased to begin the year. We are hopeful that the continued distribution of vaccines and subsequent normalization of activity between healthcare providers and patients will alleviate this factor going forward. We believe there are multiple opportunities to drive continued Optium adoption. Last year, we submitted a full reimbursement package to the French Ministry of Health to establish reimbursement for Optium and are awaiting guidance from the Ministry. In addition to France, we are continuing to evaluate opportunities to expand access in our approved indications in new markets. Beyond the opportunity to expand our geographical presence, we are under-penetrated at several key academic centers in the US and Germany, representing a significant opportunity to further increase Optune adoption. As a less entrenched treatment modality compared to surgery, radiation, chemotherapy, and even immunotherapy, Optune requires significant educational effort to drive awareness and increase confidence and belief in the therapy as the best chance for long-term survival in newly diagnosed GBM. We are actively engaging with leading cancer institutions to broaden their awareness of our therapy and further adoption. We are also working to increase our clinical presence at leading academic centers and our engagement with key opinion leaders. In recent months, researchers at Stanford University launched a study to determine the efficacy of TT fields in addition to stereotactic radiosurgery for the treatment of GBM. We continue to onboard sites to our Trident trial, evaluating TT fields concurred with radiation for the treatment of newly diagnosed GBM. We recently announced the steering committee for our keynote B36 trial, including representatives from MD Anderson the University of Pennsylvania, the Miami Cancer Institute, and the Mayo Clinic. We believe each of these engagements represent an opportunity to further increase confidence and belief in TT fields at leading institutions. In light of the exciting news from our lunar trial, I would like to take a moment to discuss our MPM business. The launch of MPM has provided the opportunity to engage with healthcare providers, focus on cancer of the thorax, and build awareness of TT field therapy among this specialty. While we do not expect MPM to materially contribute to net revenues in 2021, we believe the knowledge gained from this launch will prove quite valuable as we look ahead to potential launches in other torso indications. Time and time again, our team has risen to overcome challenges and seize opportunities to accomplish our mission. The recent news about our Lunar Trial moves us one step closer to making our therapy available to many more patients who may benefit from TT Fields. I want to reiterate my thanks to the entire NovoCure team for their continued dedication to our mission to extend survival in some of the most aggressive forms of cancer. With that, I will turn the call over to Ashley to discuss our financial results for the quarter.

Thank you, Asaf. In the first quarter of 2021, our GBM business generated $135 million in net revenues, representing a 32% year-over-year increase. Our net revenue growth was driven by steady active patient growth and a durable improvement in the net revenues per active patient. Incremental net revenues resulting from the successful appeal of previously denied Medicare fee-for-service beneficiaries reverted to normalized levels from the first half of 2020. As a result, quarter-over-quarter revenue comparisons must adjust for the incremental $8 million and $11 million net revenues recorded in the third and fourth quarter 2020, respectively. While we continue to actively appeal and pursue previously denied claims, the cadence and size of Medicare payments on these claims are impossible to predict. We had 3,454 active patients at the end of the first quarter, an increase of 12% versus the first quarter of 2020, and a 1% increase versus the fourth quarter 2020. Over the past several years, we have seen a notable favorable delta between the growth rates of prescriptions received in period, active patients, and net revenues as we reach the benefit of patient mix improvement and broadening reimbursement. Looking ahead, we expect the favorable difference in growth rates among these metrics to compress as our commercial organization matures. Moving down the P&L, gross profit in the first quarter of 2021 was $108 million with an 80% gross margin. We continue to see the benefits of increased efficiencies and scale within our supply chain. Our SG&A expenses in the quarter were $62 million, an increase of 13% from Q1 2020. This reflects our ongoing commitment to maintain a disciplined approach to spending to support the growth of our established commercial businesses as well as organizational readiness efforts in anticipation of potential future approval and new indications. Our capital allocation priorities remain unchanged, and we continue to invest strategically to maximize the growth potential of the tumor treating fields platform. We invested $46 million in research and development activities in the quarter, an increase of 82% versus Q1 2020. This was primarily due to an increase in clinical trial and personnel expenses for our Phase III pivotal and post-marketing trials, an increase in development and personnel expenses to support our product development programs, increased investments in preclinical research, and the expansion of our medical affairs activities. Moving forward, we remain committed to balancing profitability with aggressive investments in future growth. Our net loss for the quarter was $4 million, equating to a loss of 4 cents per share. We remain committed to making the investments needed to advance our development programs and solidify our commercial infrastructure prior to future potential launches and additional solid tumor indications. The recent announcement regarding our lunar trial only underscores the sizable potential opportunity present in our late-stage pipeline. Our focus remains on optimizing investments and future growth, before near-term profitability. Beyond earnings per share, we also evaluate operating performance based on adjusted EBITDA, a non-GAAP measure of earnings before interest, taxes, depreciation, amortization, and share-based compensation. We believe this is an important metric as it removes the impact of earnings attributable to our capital structure, tax rate, and material non-cash items, specifically share-based compensation. and it best reflects the financial value generated by our business. In the first quarter of 2021, our adjusted EBITDA was $21 million, an increase of 40% from the same period in 2020. We ended the quarter with $864 million in cash on hand. We remain confident that our current balance sheet and continued generation of financial strength provide the backstop to continue aggressively investing in the future growth of our company. With that, I will turn the call back to Bill to provide more detail about our development pipeline.

Thank you, Ashley. We believe multiple levers remain to unlock the full potential of the tumor treating fields platform. Through our ongoing preclinical and clinical research efforts, we continue to explore many new therapy combinations, applications, and downstream effects of tumor treating fields. The more we learn about our therapy, the more we believe we are only beginning to understand its full potential. Our existing late stage pipeline programs create the potential for substantial market expansion into new solid tumor indications over the next few years. In addition to our lunar trial discussed earlier, we have ongoing phase three trials in ovarian cancer, one of the deadliest cancers for women, pancreatic cancer, where there has been very little progress in recent years, and brain metastases caused by non-small cell lung cancer. Our Innovate3 trial represents an opportunity to address a large unmet need and continue our exploration of the effect of tumor treating fields in combination with best standard of care. Almost all patients with recurrent ovarian cancer ultimately develop platinum resistance, and the prognosis for these patients remains poor. Innovate 3 tests the efficacy of tumor-treating fields used together with the taxane chemotherapy paclitaxel. We currently anticipate the interim analysis for Innovate 3 in the third quarter of 2021 with 18-month follow-up. Our PANOVA-3 trial in pancreatic cancer also addresses a cancer with poor prognosis and significant unmet need. Five-year survival rates in pancreatic cancer remain below 10%. Following promising data in our pilot BASE-2 trial, PANOVA-3 tests the effectiveness of tumor-treating fields used with weekly nabpaclitexel and gemcitabine. The interim analysis of PANOVA-3 is expected to occur next year with final data in late 2023. These two trials represent an exciting step in our efforts to expand the use of tumor treating fields to cancers of the abdomen. Our late stage pipeline also includes the METIS trial in brain metastases from non-small cell lung cancer. METIS presents a unique opportunity when compared to our other late stage trials as it expands the scope of our research in non-small cell lung cancer in a region of the body where our therapy has already demonstrated the ability to kill dividing cancer cells. METIS is designed to measure an extension to intracranial progression of six months. We expect the final data from our METIS trial in 2022. All of our late stage trials offer unique attributes that will enhance our understanding of the optimal use of tumor treating fields. They address different regions of the body, unique combination therapies, and distinct cancer indications. These trials could increase our potential market opportunity by 20-fold. We also believe we can continue to improve our therapy through investments in product innovation programs intended to extend survival and maintain the quality of life of our patients. Our product development teams remain focused on delivering product innovations that prioritize patient usability and increasing the delivered dose of tumor-treating fields. We are evaluating opportunities to optimize the tumor-treating field's electric field generator, design next-generation arrays, and create patient-centric software enabling our team to support larger populations across multiple indications. Beyond our current clinical pipeline, exciting research is ongoing to identify new cancer indications, combinations, and novel applications for tumor-treating fields therapy. Through in vitro application, researchers at Virginia Tech have concluded that tumor-treating fields may be effective for treatment of renal cell carcinoma. Investigators at Beth Israel Deaconess Medical Center and Washington University of St. Louis are exploring the effect of tumor-treating fields in addition to immunotherapies for the treatment of melanoma brain meds. and Story at Southwestern Medical Center in Dallas have identified a novel action of tumor-treating fields in DNA damage repair and replication stress pathways. These examples are a small sample of the innovative research being conducted to identify the optimal use of tumor-treating fields. As we continue to accumulate more knowledge and evidence of the many potential applications of tumor-treating fields, we have even greater confidence that we are just beginning to understand the true potential of the platform. Before I hand the call over to the operator for questions, I would like to thank everyone on the phone for their continued interest in Novacure. Our team delivered another strong quarter of commercial execution, positioning us to continue investing in the advancement of our clinical and product development initiatives and in organizational readiness efforts to sustain long-term growth and maximize shareholder value. We remain confident in our team, our strategy, our mission, and the long-term potential of tumor-treating fields. With that, I'll now turn the call back over to the operator for Q&A.

Thank you. And gentlemen, if you have a question at this time, just press star then one on your telephone keypad. To withdraw your question, press the hash key. Again, that is star one to get in the queue. One moment while we compile the Q&A after. Our first question is from Jason Bednar with Piper Sandler. Your question, please.

Hey, good morning. Thanks for taking the questions. Bill, I wanted to start with Lunar. Probably not surprising, a lot of questions that have obviously come up here just regarding how to interpret the release, and I'm sure those will get discussed here today, but Why don't I ask, let's assume the FDA approves the IDE. What's the right way to think about timing then on hitting that recommended 276 enrollment target? It seems like it shouldn't be that long when we pair the enrollment of 210 in February and the original interim that was slated for later this year. And then building on that, what's the right way to think about how the timeline then could play out for data presentation and submission for approval, assuming the data all looks good?

So good morning, Jason. And again, thanks for your question, and you're right. It's not surprising. So basically where we stand today, in order to meet the target recruitment that was recommended by the DMC, we need to recruit approximately 60 more patients into the trial. And it's will certainly be the focus of our organization to work with investigators to actively get those patients recruited. Another important part of the recommendation of the DMC was to reduce the follow-up from the last patient in, and this is important, from the last patient in to 12 months from 18 months. So that's another time savings. And we would expect as we have done previously, a modular submission of the PMA application with the clinical component being the last part. So we're already beginning to work on the other modules of the submission. So in general, if the FDA accepts the recommendations of the DMC, we think this would accelerate our time to market by over a year.

Okay. Okay, that's helpful. And, you know, a lot of other questions I have on that, but I'll save those for later. I do want to ask a question on the commercial business. So, you know, Bill or Ashley, you know, the impact from COVID seems to affect the business most here in the U.S., but it's probably safe to assume you're feeling some disruption in your other markets as well. So for the U.S. or international, however you want to answer it, can you talk about what you saw with prescribing patterns during the quarter and then here into April?

Sure. So we're joined for the Q&A by Pritesh Shah, our Chief Commercial Officer, and I'm going to just turn the call to Pritesh, who will give you the color to answer your question.

Great. Thank you, Bill, and good morning, Jason. Thank you for the question. So One of the key things that we've been focused on in the midst or the backdrop of the pandemic is to make sure that no patient is left behind. Those patients that are eligible for our treatment find a way to access our treatment. And then on the back end of that, we make sure that our teams are prepared to help the patients initiate treatment and provide support. We realize that we're not immune to all the things that are happening in the healthcare sector, particularly in the oncology sector. These patients are immunocompromised in many situations, and their ability or their desire to seek treatment may be a bit limited. So we see these micro fluctuations, if you will, based on what's happening within the pandemic across the globe, and we see sometimes markets that are a little bit more open, access to the healthcare system, is a bit better but then something may happen where that may shut down so we are flexible on this front and if you if you really look below the the broad results of the 3500 over almost 3500 active patients you see that the the greatest impact was felt in the US in this quarter and that was primarily because of the patient traffic that we saw those seeking surgeries in the early part of the year we saw a bit of a pressure point on that, and our therapy is downstream to that. So we are a bit sort of relying upon patients getting the surgical resection. So we keep on top of this, and we are flexible, but we're not seeing sort of the broad aspects because GBM is still an important disease where patients and providers are looking to make sure that they get patients on treatment.

All right. Thank you very much.

Our next question comes from Vijay Kumar with Evercore ISI. Your question, please.

Congrats on the Lunar interim update. And I had three questions. Maybe I'll start with Lunar. I guess they'll maybe at a high level. Could you just simplify, you know, what this means for the company, right? Does human get the approval? What is the FDA label going to look like? What is the patient population? My understanding of this GBM patient pool is 10,000, maybe second line is 40,000, 50,000. Is this a very simplistic way of thinking about this as 4 to 5X TAM expansion, and how does that fit in with perhaps changing standards in care given these patients' Bruce, you came out of the first line.

So, good morning, D.J., and thanks for your question. You know, I'll start with we are extremely excited by the recommendations of the DMC, and it really has kicked off a whole set of streams of activities within the company to prepare for expansion of the business into this new area. I'll also say, again, just before I answer the question specifically, that lunar is one component of a much broader lung cancer program at NovoCure. In the script, I mentioned the METIS trial to treat brain metastases from non-small cell lung cancer. We also mentioned our collaboration with MSD in first-line non-small cell lung cancer in combination with Catruda. And there's just a tremendous amount of other work in our IST program, in our preclinical program, across the board in non-small cell lung cancer. Also mention that, you know, just as you said, at the very top line, our focus in our tumor treating fields development is to provide a background, pardon me, a new backbone modality to which whatever the standards of care in pharmacology evolves to can be added. What does that mean? That means that the standard of care is chemotherapy. We would expect the chemotherapy to be added to tumor-treating fields. If it's radiotherapy, we would expect radiation to be added to tumor-treating fields. And I have to say, very exciting for all of us, based on what we're seeing in our preclinical work and now in our clinical work, adding the new immunotherapies to tumor treating fields. So this really is about a broad-based program. But specifically, you know, it's estimated that there are about 193,000 new cases of non-small cell lung cancer diagnosed in the U.S. each year. About 46,000 of those patients receive second-line treatment for stage 4 in the U.S. each year. So within the narrow confines, That's the number, and as you suggest, just that number is 4 to 5x where we are. Advanced or metastatic non-small cell lung cancer is commonly treated with platinum-based therapies in the first line, and LUNAR was designed, again, with arms in combination with chemotherapy and an arm in combination with immunotherapy to contemplate this this changing standard of care that we see.

Understood. And then just one, I guess, to layer this. I mean, I don't think many of us were, you know, if I had to go back three to six months ago, we weren't expecting an interim update, right? I think the messaging was that these trials were in design, you know, to show efficacy or signal at interim. I guess in the context of Lunar, How should we think about ovarian intramural? And what is the standard of care in ovarian? Is that, you know, first line, you know, chemo is the standard of care?

So, again, with respect to each of our late stage phase three trials, each one of those trials is designed specifically for that indication. Each one of those trials has its own data monitoring committee. So we would continue to recommend and we continue to believe that those trials will recruit through their, to their conclusion. We allow very little alpha spend for the interim analyses. And so, you know, again, Notwithstanding the great news for Lunar, I wouldn't suggest that anyone change their expectations for the other trials. With respect to ovarian cancer specifically, we mentioned in the script that the first line for, again, you know, may move over time, but most women will ultimately fail platinum therapy or first-line therapy and then progress. And once they progress into second line, their prognosis is very poor. Our INOVATE trial, our first trial, phase three trial in ovarian cancer, is focused on that population that's failed first-line therapy.

Understood. And then one last quick one if I may. The CMS, you know, backlog payments, is that, I guess, you know, based on, you know, back half of last year's trends versus zero being recognized in Q1? Is that just a timing element perhaps, you know, CMS processing some of these requests or should we model, I guess, no further contribution from, you know, catch-up payments?

Yeah, thank you, Vijay. It's an important point for everybody to realize as we look forward to the model. So we continue to aggressively pursue these claims, and there is a significant volume of potential there in the backlog from Medicare prior to receiving coverage for opting to newly diagnosed GBM. But the cadence and size of collections is simply impossible to predict, and for that reason I would not recommend that you attempt to do that in your forward-looking model, right? This is out of our control. We pursue these, again, aggressively, but really impossible to predict in terms of cadence of size.

Thanks, guys.

Our next question is from DeFay Young with Mizzou.

Hi. Good morning. This is Dan Clark on for DeFay. Just one from us. Can you share the frequency of DMC meetings in your ongoing clinical trials, and does this vary by indication?

Dan, we lost you.

Oh. Sorry, can you hear me now? Yes.

Yes.

Okay. My apologies.

It's a fairly simple answer that for each of these trials, The DMC meets once a year. Okay, got it. Thank you.

All right. Our next question comes from Jason with Northland Capital. Jason from Northland Capital, your line is open.

Jason, we don't hear you if you're speaking.

Please check your mute button. Sir, with your permission, I can move to the next question. Larry Bigelson with Wells Fargo. Please go ahead.

Hey, good morning, guys. Thanks for taking the question. Bill, can you hear me okay? I can, Larry. Good morning. I just wanted to make sure. Bill, just two on Lunar. When the results came, when the press release came out, you know, we thought it was, you know, highly positive. But some of the experts we've talked to, you know, have said the DNC's communication to you is highly unusual. So I guess my first question is how confident are you that the DNC's recommendation is positive? Could there be other scenarios that are not positive? And is there a precedent? And I have one follow-up.

So there's two parts to that. We believe and we're highly confident that this is a very positive event and a very positive communication from the DMC. We don't believe there's another way to interpret this, just as simple as that. That said, we are not aware of a precedent for this type of recommendation, and, you know, very specifically stems from the fact that because of COVID, the time to recruit the trial extended beyond the time that was originally anticipated. And as a result, there were more events, and they had the full data. They were able to do the statistical analysis, and they were able to make the recommendations that they made.

And then what does it mean possibly unethical to randomize patients to the control arm? What's the rule for determining whether it's ethical or not? And why didn't they just stop the trial now? And how do you randomize the final 60 patients if it's possibly unethical? Thanks for taking the questions.

Yeah, so again, we haven't seen the data. I think the words speak for themselves. The reason they you know, again, likely cannot stop the trial at this point is because of the very small alpha spend allowed in the analysis. And, you know, we are going to work with all of our investigators to quickly enroll the remaining 60 patients. Again, patients in the control arm do receive the standard of care, just minus the tumor treating fields.

Just maybe lastly, Bill, what happens if the FDA does not approve the protocol change? Is there any risk of that? Thanks again.

Again, we are working with the FDA. We have submitted the IDE, pardon me, too many acronyms. We've submitted the PMA supplement with the DMC recommendation. So far, so good. We're We're interacting with the FDA. There are a variety of outcomes possible. And we will, when we have the final determination from the FDA, we'll make that information available to everyone. All right. Thanks so much, Bill.

Thank you. Our next question comes from Corey Casimo with JP Morgan.

Question. A couple of them for you. So first, Bill, on this issue of these interim analyses and keeping expectations in check, I totally understand you not wanting investors to get out over their ski, so to speak. But Optune did hit the interim for GBM, obviously one of the worst and most difficult to treat tumors out there. And then you believe you're very close on long, which is clearly a super complicated indication at this point. So Why shouldn't we have more expectations for ovarian and pancreatic interims? And then I have one follow-up.

Yeah, I think, Corey, first of all, I want to reiterate the statement that we don't want investors to get out over their skis. If we did, we'd tell you. The situation with GBM was extraordinary. The situation with non-small cell lung cancer was as I just mentioned, was a function of the duration of the recruiting, you know, clearly as well as the performance. You know, if I were to use the ovarian cancer trial Innovate 3, that's recruiting very, very quickly. And so we expect that to complete recruitment, you know, as we said, by Q3. And, again, the interims have such a small alpha spend that we just don't, I'll use your phrase, we just don't think investors should get out over their skis on these other trials. They're all different.

Okay. And then just to follow up with this interim, as it relates to the ongoing METIS trial in brain METs, I mean, this has been on track for a final analysis in 2022, but was there a prior interim efficacy analysis conducted for this? I think you said you do this for all of your trials. Yeah. So is there anything you can comment on that?

This is the one exception, Corey. So MEDIS is the one trial of the late-stage pipeline that does not have an interim analysis.

Okay. So the DMC is just doing the annual safety check, and that's it? Correct. Okay. Any particular reason why you wouldn't have put one in on that one?

Let me – Ori's on the call, and he was very much involved with the trial designs. Ori, do you have any color on the design of MEDIS?

Yes, good morning, everybody. So the reason why we don't have an interim analysis on the METI study is that the study is smaller, basically, 270 patients, and we did not want to cause any deterioration in terms of the statistical considerations on this study. And so on this one, we do not have an interim analysis. It's for 270 patients, brain metastasis from non-small cell lung cancer, with the primary endpoint of intracranial progression, and there was no need to include an interim analysis on this one.

Okay. Thank you. It's helpful.

Thank you. Our next question is from Jason with Northland. Please go ahead.

Thank you. Hopefully you can hear me. Apologies. Yes, we can. Yes, Scott Rudin stopped by and threw my phone, and apparently the mute button got stuck, but I'm back. So thank you. So, first off, you know, you guys seem to be, I wouldn't say doubling down, but more direct in terms of the fact that there's an amplification effect with immunotherapies. Is that based on new animal data or preclinical data that you've done, or is there some read-through as well from the Lunar announcement that just came out?

Yeah, I'm going to ask Ori to comment on this, but I would say that, you know, just start with the fact that we've now been fully engaged in research and development for over 20 years. And with the financial strength that Ashley described, we're able to significantly expand the research activities, development activities, plus our support of external investigators. And this is generating tremendous amounts of data. And we're really just beginning to reap the benefits now of these investments. And I'll let Uri comment specifically on the reason for our increasing enthusiasm about combinations with immunotherapies.

Thank you, Bill. So what we do already know is that tumor-treating fields lead to immunogenic cell death in multiple models of cancers in vitro and in vivo. And we have demonstrated that specifically in lung cancer, in colon cancer, and in other models. What we basically were able to demonstrate, and this is published data, is that cells that are treated with TT fields express hallmarks of immunogenic cell death. specifically calreticulin exposure on the surface of the cells and release of HMGB1 and release of ATP. All of these serve as signals for antigen-presenting cells like dendritic cells to act as phagocytic cells, meaning they would process antigens that are presented by that. Cancer cells, they will present them to the factor cells, to T cells, in order to activate them and increase and augment the immune response against the cancer. And this was demonstrated in vitro and also in vivo and was accompanied by an augmentation of the overall immune response against the cancer at the tumor sites in animals. with infiltration of T cells, cytotoxic T cells in the tumor, decrease in the volume of the tumor, of course, and increased abundance of antigen-presenting cells also residing at the tumor site. When we combined TT cells with anti-PD-1 therapy, we saw an increase of this response, and better control of the tumors, better response of the tumor. And that, of course, comes together with data that comes from other sites, from other researchers that use TT fields independently outside of NovoCure. such as Dr. David Tran at the University of Florida, who is running research that shows another path of activation of the immune system under TT fields, and that explains the results that we see in patients. And basically, all of this preclinical data translates very nicely to what we do in the clinic right now, So lunar is an excellent example, and I think we expanded enough on lunar on the call, but the integration of immune checkpoint inhibitors concomitant with TT fields now seems to be even more logical, makes more sense than when we started the study several years ago. But in addition to that, the Keynote B36 study that showed is running collaboration with MSD, with Merck, that will incorporate pembrolizumab, Keytruda, with TT pills. The first-line therapy of non-small-cell lung cancer is another great example, and we are going to, I believe, see more of these projects and more towards... the combination with immunotherapies in the clinic later on.

Okay, thank you. That's very helpful. And actually, related to Keynote B36, you know, given the Lunar announcement, that potentially could be very exciting. Do you have a general timeline in terms of how long that trial will take to enroll and get results?

So we are currently at the phase of working with the sites in order to open the study, and we have assembled a steering committee on the study that includes leading key opinion leaders, such as Corey Langer from UPenn or Ann Tsao from MD Anderson, And we will for sure announce the timelines that are anticipated for the completion of the study once we see the first patient in.

Okay. Thank you. Very helpful. And lastly, you mentioned, you know, NPM is, you know, relatively small contribution, if any, at this point. It sounds like we shouldn't be assuming much for this year. Specifically for MPM, is that the right read-through for those comments?

Yes, I think that's exactly the right read-through. We continue to be very enthusiastic, very active, engaged with centers and payers, but we don't expect material net revenue contribution in 2021.

Okay, great. Thank you. I'll jump back in queue. Thank you very much.

Thank you, and I'm not showing any further questions in the queue, sir.

Okay, great. So I want to thank everyone for their interest in NovoCure. I want to thank the NovoCure team for their brilliant work, quite frankly, in very difficult circumstances. And I want to end by reminding everyone of our strategy. We have a new modality that is broadly applicable to solid tumor cancers. The strategy of the company is to develop that platform and serve all of the patients who can benefit from our therapy around the world. The strategy specifically has been to develop the first business in GBM, That business still has a long way to go, but has provided great financial strength so that we're financially independent and we can make tremendous investments in the platform to drive future growth. I think the fact that we've been able to invest $46 million last quarter in R&D really points to what I've described as a virtuous cycle. build the GBM business, generate financial strength, invest in clinical and product development to further drive patient benefit and long-term growth. We are just at the beginning of seeing the benefits of that virtuous cycle. We've tried to highlight some of the things in the clinical side in this quarter and this fall. But it is a tremendously exciting time at NovoCure, and we look forward to future reports as we continue our work. Thank you.

And this concludes today's conference call. Thank you for your participation, and you may now disconnect.