This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk01: Good day and welcome to the NovaCare Q1 2022 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star then 1 on your touchtone telephone. If anyone should require assistance during the call, please press star then 0 to reach an operator. As a reminder, this call may be recorded. I would now like to turn the call over to Ingrid Goldberg. You may begin.
spk00: Good morning, everyone. And thank you for joining us to review Novacure's first quarter 2022 performance. I'm joined on the phone by our executive chairman, Bill Doyle, and our CFO, Ashley Cordova. Our CEO, Asaf Donziger, and other members of the 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 first quarter 2022 financial results located in the quarterly report section of our investor relations page. Before we start, I would like to remind you that our discussions during this conference call will include forward-looking statements, and actual results could differ materially from those projected in these statements. These statements involve a number of risks and uncertainties, some of which are beyond our control, 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. Where appropriate, we will refer to non-GAAP financial measures to evaluate our business, specifically adjusted EBITDA a measure of earnings before interest, taxes, depreciation, amortization, and share-based compensation. We believe adjusted EBITDA is an important metric as it removes the impact of earnings attributed to our capital structure, tax rate, and material non-cash items, and best reflects the financial value generated by our business. Reconciliations of this and any other 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 in our Form 8K file with the SEC today. These materials can also be accessed from our investor relations page of our website. Following our prepared remarks today, we will open the line for your questions. Financials for the three months ended March 31st, 2022 are available in our press release and in our 10Q, both of which we released earlier this morning. With that, I will now turn our call over to our Executive Chairman, Bill Doyle.
spk10: Thank you, Ingrid. At Novacure, we are focused on our mission to extend survival in some of the most aggressive forms of cancer through the development and commercialization of our innovative therapy tumor-treating fields. Since our founding over 20 years ago, we have completed multiple pivotal trials in glioblastoma, established a sustainable commercial business, and built a robust clinical pipeline that we believe will enable our company to serve thousands of future patients. We believe we are just scratching the surface of the ultimate potential for tumor-treating fields to extend the lives of cancer patients. For years, through our commercial and clinical research programs, we have worked to extend the pool of patients who potentially can benefit from tumor-treating fields therapy. With multiple key milestones anticipated in the near term, we are on the verge of realizing that goal. Over the next 24 months, we anticipate data readouts from several pivotal trials across a variety of solid tumor cancers. We also expect exciting product development improvements to reach cancer patients later this year. Finally, in addition to expanding our commercial footprint in glioblastoma, we are laying the pre-commercial foundations for multiple launches in new indications. In today's call, we will begin with a review of our commercial execution in the quarter. We will then discuss the near-term catalysts within our clinical pipeline. Finally, we will close with a discussion of our first quarter financial performance. Our GBM business remains a key driver of our long-term success, providing the critical financial support for our investments in future growth. Our GBM business also provides the commercial blueprint across numerous regions for potential future launches in new indications. Our GBM commercial strategy is focused on broadening our eligible patient population and driving greater penetration in our current markets. Geographic expansion is a key pillar of our strategy to expand the eligible GBM patient population. France is the next major market in which we are pursuing reimbursement. Discussions with French health authorities are ongoing, and we anticipate reaching agreements on the terms of national reimbursement and launching in France by year end. We are actively building up commercial infrastructure in additional markets in North America and EMEA, with the goal of making PT field therapy available to many more GBM patients in need. In-person education is the most fruitful approach to convince healthcare providers of the value to patients of using Optune therapy and to increase adoption in our current markets. Though face-to-face contact has been severely constrained due to the pandemic, we are seeing early signs of some COVID-related restrictions lifting in areas of the U.S. That said, we believe the return to normal prescriber access will be gradual as providers continue to wrestle with staffing shortages and turnover. We are hopeful that the current reopening trends hold and markets continue to normalize as we head into the summer. Academic centers remain an area of under-penetration. These centers treat a significant portion of GBM patients and are key to increasing broader adoption of tumor-treating fields. We work to engage academic oncologists on the clinical frontier through our GBM-focused trials. Our Trident trial in newly diagnosed GBM has proven to be a productive avenue to engage expert academicians. As a reminder, Trident is studying the use of tumor-treating fields concurrently with radiation therapy rather than following radiation in newly diagnosed GBM patients. This study is enrolling well, and we now have 92 clinical sites actively recruiting. Our investigator-sponsored trial program is another tool to engage and collaborate with academic oncologists. We currently support 37 ISTs, with a number focusing on new approaches to treating GBM, including novel therapy combinations and new patient populations. Trident and our IST program are paramount to generating more clinical data and building greater understanding and awareness of our therapies. Turning to our clinical pipeline, in 2022, we expect to release data from both pivotal and pilot studies, complete enrollment of another pivotal trial, and commence a limited release of our next-generation arrays. 2022 is the first of several years in which we expect to reach clinical milestones. As a reminder, we currently have four Phase III pivotal studies ongoing and expect to read out in the near term. The first to read out will be our LUNR study investigating the safety and efficacy of tumor treating fields together with docetaxel or physician's choice PD-1 inhibitor in non-small cell lung cancer. We anticipate LUNR top line data by year end following 12 month follow up from last patient in. LUNR is critical as it has the potential to unlock an entirely new patient population that can benefit from tumor treating field therapy. The LUNAR protocol contemplates multiple global standards of care, enabling tumor treating fields to work concomitantly with a number of treatment regimens in non-small cell lung cancer, which vary by geographic region. Next, we expect to complete the follow-up period of our INNOVATE III study in the first half of 2023. As a reminder, the pivotal INNOVATE III study is investigating the efficacy of TT fields and paclitaxel for the treatment of recurrent ovarian cancer. We completed enrollment of INNOVATE III in the fourth quarter of last year and in March received a recommendation from the DMC to continue the trial to completion. We are now following patients through the 18 months from last patient and follow-up period before releasing data in 2023. The third of our current pivotal studies to read out is our METIS study, which is investigating the use of TT fields following stereotactic radiosurgery for the treatment of brain metastases from non-small cell lung cancer. We expect a complete enrollment of METIS later this year. Final data will be available in 2023 following the completion of a 12-month last patient and follow-up period. Our Panova 3 study is investigating the efficacy of TT fields together with gemcitabine and nabpaclitaxel for the treatment of locally advanced pancreatic cancer. Pancreatic cancer holds one of the most devastating prognoses with a five-year survival rate of only 11%. We expect a complete enrollment of Panova 3 in 2023 with data to follow in 2024. I would also like to mention the EF31 pilot study investigating the safety and efficacy of PT fields together with chemotherapy in gastric cancer, for which we will share data in the coming months. Gastric cancer is one of the most prevalent cancers in Asia, with nearly half a million annual diagnoses in China alone. EF31 is a single-arm Phase II study that is the next clinical step in our abdominal cancer program. We are looking forward to sharing the data from EF31 with you and to reviewing potential next steps in gastric cancer. Each of our clinical trials takes years to design, execute, and read out. I am grateful for the tireless effort and dedication of our Novacure teams, investigators, and patients. We are at the beginning of a transformational period for our company. In the next eight months, we anticipate vital clinical data from pivotal and pilot trials, completion of enrollment of our third pivotal study in less than 12 months, and a meaningful product development milestone with European market release of our next generation arrays. Swiftly following these milestones, we expect to share additional pivotal data sets and potential new indications. Collectively, these trials could increase Novacure's addressable patient population by over 10 times, offering new treatment solutions for tens of thousands of cancer patients. I'd like to conclude my comments today by highlighting one of our remarkable patients. Wade Lewis was diagnosed with GBM in 2019 and will soon celebrate his second anniversary on Optune Therapy. Following his diagnosis, Wade formed a uniquely strong bond with neuro-oncologist Dr. Ekakobi Fonkum of Baylor Scott & White Health, through their mutual belief in serving others. As a visionary thinker, Dr. Fonkum is one of the founders of the Society of Neuro-Oncology, Sub-Saharan Africa, and together with Wade, recently completed filming a documentary to drive greater awareness in GBM. It is an inspiration to see our patients and physicians working together to advance patient care and reach more GBM patients in need. I will now turn the call over to Ashley to discuss our first quarter financial performance.
spk06: Thank you, Bill. We are incredibly excited about the potential catalysts ahead of us in the coming years. That said, we remain laser-focused on execution within our core GBM business. which continues to fuel our aggressive investments in long-term growth initiatives. In the first quarter of 2022, we generated $138 million in net revenues, a year-over-year increase of 2%. The number of active patients on therapy is our principal revenue driver. We ended the quarter with 3,549 patients on therapy, an increase of 3% from the same period last year. The key drivers for active patient growth remain expansion of our global footprint and increased penetration in our active markets. Given the various puts and takes in patient demand, we are reiterating our full-year active patient growth to be between 2% and 5% in 2022. We also experienced a tailwind in the US from collections of previously denied and appealed claims. As in the past, the cadence and size of these payments are impossible to predict. Given the unpredictability of collections of previously denied and appealed claims, we expect net revenues per active patient per month to be approximately the same in 2022 as realized in the fourth quarter of 2021. Our gross margin in the quarter was 80%. Cost of revenues per active patient per month was roughly unchanged versus the prior year, with increasing supply chain efficiencies offsetting the impact of broader economic challenges. Gross margin was also positively impacted by a decrease in Zylab purchases. As always, we are evaluating opportunities to further reduce our cost of goods sold, especially as we expand our scope into new geographies and potential new indications. SG&A expenses totaled $68 million in the first quarter, an increase of 9% year over year. With multiple pivotal trials nearing completion, we are investing in market research and strategic planning activities across the tumor treating field platform, particularly in lung and ovarian cancer, to ensure we can hit the ground running upon regulatory approval. This includes foundational investments in commercial infrastructure, as well as initiatives to enhance our capabilities to treat significantly larger patient populations. To summarize, our core GBM business generates strong cash flow, enabling us to substantially invest in ongoing research and development activities across the tumor treating fields platform. In the first quarter of 2022, we invested $42 million in research and development. Direct clinical trial costs represent approximately 30% of our total R&D spend and can fluctuate quarter to quarter depending on CRO services delivered. R&D remains one of our best uses of capital, and we are investing aggressively in future growth and development initiatives, specifically in basic scientific research, new clinical studies, and next-generation device components. Our net loss for the first quarter was $0.04 per share, or $5 million. Adjusted EBITDA for the quarter was $27 million, and we ended the quarter with $932 million in cash and short-term investments on the balance sheet. Our focus remains on investing strategically to pursue long-term organic growth opportunities. and ensure our organization and infrastructure is prepared for future launches. As we prepare for a new phase in growth, it is inspiring to reflect on how far we have come as a company. It has been 10 years since we completed our first pivotal study using a completely novel therapy to treat GVM patients. Since then, we have treated over 24,000 patients, and we are preparing to commence our next chapter with the potential to serve tens of thousands of critically ill cancer patients. The fundamentals of our business are strong, and the future is bright for NovoCure. We are primed to meet the moment and look forward to updating you on what stands to be a very exciting year.
spk01: Ladies and gentlemen, if you'd like to ask a question, please press star, then 1. If your question has been answered and you'd like to move yourself in the queue, press the pound key. Our first question comes from Corey Kasimov with J.P. Morgan. Your line is open.
spk11: Hey, good morning, guys. Thank you for taking the questions. I have two of them for you. First, can you talk about the jump in net revenue per active patient per month in Q1 and how sustainable you think that is going forward, as I know this tends to fluctuate a bit? And then the second question, Ashley, talking about the increase in sales and marketing and anticipation of potential future approvals and launches and new indications. So on that front, can you discuss the approach for building a long sales force in particular, given that is the next potential indication, obviously a very large market? Thanks a lot.
spk06: Sure. Thanks for the question, Corey. And I'll start by addressing the price. And you are correct that we saw a very strong net price per patient in the U.S. in the first quarter. That was driven both by the completion of the administrative ramp-up for Medicare and strength in our commercial business, as well as some tailwinds from previously denied and appealed claims. If you look to the model looking forward, we would anchor you to the price point in Q4 2021. We do think that is a sustainable price point that reflects both the reset in pricing in Germany as well as a sustainable price point for the U.S., and that's what we would have you anchor to moving forward. The cadence and collection on these previously denied and appealed claims is really impossible to predict, so we would not recommend you model it in. With regards to your second question, we are committed to these investments and we are looking both at geographical extension and investing in commercial infrastructure for ovarian and lung. I'm actually going to pass that question to Tesh who's on the phone and can speak specifically to the sales force in lung.
spk08: Great. Thanks for the question, Corey. So we're very excited about the possibility of planning for the new indications, first one being lung. I will remind you just in that we have a mesothelioma indication where we have a team of individuals today educating on tumor treating fields with a similar population, target population, so to speak, that will also prescribe TT fields in lung cancer. So we have a real nice opportunity here to bridge the path between today and what's to come. And in parallel, we're working now on understanding the market in the U.S. and in other geographies, and we'll make a decision on what the size of the sales force will look like in context of our experience with GBM and the specific indication, lung being one of the key ones, and then subsequently the rest of our pipeline. So a lot of planning underway, and we'll look to share that as we make decisions on this front.
spk11: Okay, thank you.
spk01: Our next question comes from Lee Huang with Wells Fargo. Your line is open.
spk05: Hi, good morning. Thanks for taking my question. Just a quick one to start. Ashley, did you mention how much that – backlog collection was, the amount of it?
spk06: No, we haven't given the specific breakdown. Again, I'll just reiterate that we would have you look to that Q4 baseline in 2021 as a reasonable baseline for the fundamental business.
spk05: Okay, but you're not quantifying the amount of the collection, the backlog collection? Correct. Okay. And then just on Xilab, you mentioned that the growth margin was better because of lower purchases there. I assume that has to do with the lockdowns in China. Is it a delay in new patient starts, or are current patients not receiving therapy?
spk06: I would actually, Leigh, I would time our Q1 more to just traditional launch trajectories. Remember, we are their supplier, and as they look at just distribution across their country, I would not tie it to the impact of lockdowns in Q1. And then specifically to the impact of lockdowns in Q1, we're going to have to ask you to go to Zai with that question.
spk05: Fair enough. And then just on your guidance, the 2% to 5%, I was 3% for patient growth. It was 3% in Q1. Would you point to kind of the midpoint of that range for the year or anything you can talk about in terms of low versus high end of the range? Thanks.
spk06: Yeah, no, thanks for the question. There's nothing that we're pointing to other than reiteration of that 2% to 5% range at this point.
spk01: Our next question comes from Jason Bednar with Piper Sandler. Your line is open.
spk03: Hey, good morning, everyone. You know, Billy, I just want to start on the clinical side here. Maybe with MEDIS, I mean, I believe you can see the total patient enrollment figures. Can you talk about how close we are on full enrollment there? I mean, I can see the commentary that, you know, expecting last patient in this year, but I'm just kind of curious, you know, what inning we're in or, you know, how close to the finish line we are. And then can you give us a sense on where things stand as well with keynote B36?
spk10: Sure. So, first of all, we'll just continue with the guidance that we expect to complete the enrollment of METIS by year end. We don't traditionally give breakdowns beyond the target completion date. And with respect to our partnership trial with Merck in non-small cell lung cancer, we are actively screening patients now, and that trial is proceeding.
spk03: Okay. All right. So I guess I appreciate all the irons in the fire on the clinical side, but is there timing we should have in mind, Bill, on this? you know, when protocols could be available for the phase three in advanced liver cancer, the next steps with, you know, maybe Keytruda plus TT fields and GBM. I guess I'm just trying to get a sense of, you know, whether you're confident we'll see additional building of that late stage clinical pipeline here in 2022 now that we've had some of your other, you know, phase threes, you know, actually, you know, reach LPI now.
spk10: So you're right. We have lots of irons in the fire. It's one of the great privileges of working with the tumor treating fields platform. And I appreciate your focus on the next wave of clinical trials and clinical opportunities. We haven't provided any timing on the release of protocols, but rest assured we are actively working on those protocols. We're in discussions with key opinion leaders and with regulators. And as we have done previously, when we have a trial that's fully baked, will share the protocol.
spk03: Okay. All right. Fair enough. Ashley, one for you. I wanted to ask on currency, and I think this shows up in how you recognize revenue per patient, but you're suggesting revenue per patient going forward should be about the same. So at least where we finished end of last year. So I guess I'm just trying to square these points, make sure we're all reflecting this appropriately in our model. And then is there anything you have at your disposal to offset these FX challenges that are going on right now in Europe and Japan?
spk06: Yeah, so I would say FX, while it's certainly, you know, we're not immune to it, is not a big driver of those fluctuations. It does impact Japan more than any other market when you look at that calculation. But the impact in Europe that you look at from Q4 is huge. has more to do with our implementation of the GBA-defined coverage criteria and those contract negotiations. And so that's why we're having you anchor towards the Q4 price point. That reflects the impact of those pricing negotiations in Germany as well as a sustainable business in the U.S. And so that's just what I would reiterate, that for a forward-looking model, given the impossibility to predict the kind of tailwinds from H claims in the U.S., we would anchor to that Q4 price.
spk03: I guess, sorry, just to come back, and then Demi to cut you off there, but just to come back, I mean, Japan took a step down, it looks like, in one cue as far as revenue per patient. And just given the recent moves here, even since the end of the quarter, it would seem like maybe another step down is warranted. So, again, I want to make sure we're all modeling this appropriately and making sure that's consistent with how you see it.
spk06: Yeah, no, I appreciate it. I would say I would still anchor to that Q4 price. Jason, I think there's a little bit of noise and kind of timing of array orders from the distribution model in Japan in the Q1 number. I would not be too concerned about overlaying an FX in there beyond what you see in the fourth quarter price.
spk03: Okay. All right. Fair enough. Thank you.
spk01: Our next question comes from Greg Fraser with Truist Securities. Your line is open.
spk04: Good morning, folks, and thanks for taking the questions. For GBM, how does penetration in the key academic institutions compare with the overall patient penetration of roughly 35%?
spk08: Yeah, thank you for that question. So what I would say is we don't break out penetration by sites, so those that are academic centers or those that are non-academic. I think in the U.S., our average penetration is around 40%. So generally, out of 10 GBM patients, four have access to tumor treating fields. And this is what you've heard us say and reiterate over and over again, that our work is not done in GBM because we believe that all six of those remaining patients should have access to tumor treating fields. And that's where our focus is in working with the academic centers, particularly on the clinical development front that you've heard about, in the past and some of the things that you heard Bill talk about earlier on the clinical trial front.
spk04: Got it. Okay. So the academic institutions where OPTUNE hasn't gotten traction, is skepticism on efficacy due to the lack of a sham device in ES14 something that you still hear about? And if so, how do you address that view?
spk08: Yeah, I can speak to that as well. We'll see if you have any further questions on that. So what I would say is we hear about it less and less now, as we are out there educating on the actual clinical profile of Optune in GBM, and we have now vast experience with patients that are benefiting on treatment, getting long-term quality survival benefit. We're hearing less and less about the sham control. We have many other trials that the sites are participating in, like the Trident study with radiation, And in radiation, the sham control is not something that is done in radiation-type studies. So we're seeing that sort of objection dissipate, and our ability now to march towards standard of care status really hinges upon the clinical data that we've generated and the patient experience that we can speak to. As you heard about, again, Bill talked about one of the patients that we highlighted in the preliminary comments of this call.
spk04: Great, that's helpful. How much overlap is there between the academic centers that have adopted OPTUNE for GBM and those participating in your other phase three trials?
spk08: So I'll start this and I'll ask Ellie Benane, who's our chief medical officer, to chime in if there's anything else to add. What I would say is our focus is on the large institutions. We know that that's where a large number of GBM patients are treated. So we want them to participate in generating additional clinical evidence. And so our focus will be on involving KOLs from those key centers and making sure that not only do they get to participate in the study, but they get to build additional evidence with other sort of modalities that they're interested in combining with tumor treating fields. And this way, it becomes a win-win proposition and allows us to ensure that TT fields and Optune get further incorporated into their clinical practice and, again, as we march towards standard of care status.
spk09: Yeah. Hi, Greg. I would like to add that, you know, the GBM always or obviously is an entry for us in many places academically because then the organization institution is used to it. The nurses are used to it. Patients see each other and say, what is that that somebody is wearing? So, we do have that opportunity, and we use it. I would just like to add that, you know, on the comment about engaging these sites, we have a very robust, as we've mentioned, IST program, and we have, you know, sites like Stanford, UPenn, MD Anderson, Mayo Clinic, et cetera, that are participating in these studies. So, it's not that we don't have a penetration in these groups. And most of them are GBM, but also in the new indications. Pritesh mentioned the Trident study. That is going well, and we keep having patients in this study. And I want to make a comment on the acceptance of tumor treating fields. We present a lot of medical congresses, a lot. Snow, asteroids, and others. And you have to remember that all these medical congress presentations, you know, are reviewed by our peers, you know, from these top institutions, right? And they decide who is going to present and why are they going to present. And since I joined Novograin before that, every year we just present more and more in all these medical congresses. So I think this is a sign of acceptance more and more in the scientific community.
spk04: Got it. Thanks for taking the questions.
spk01: As a reminder, to ask a question, please press star, then 1. Our next question comes from Jason Witts with Loop Capital. Your line is open.
spk12: Hi. Thanks for taking the questions. In terms of the higher-powered array that's coming out at the end of the year, what clinical data is going to be behind it? And also, if you could, what clinical data do you have available now that we could look at relating to that?
spk10: So, hi, Jason. So, we've discussed for now a number of years the benefits of increased dose. And if we go back to the EF14 Phase III trial in GBM and subsequent data that was published in the Red Journal by Professor Ballo and his colleagues, I think that's where I would point you to, to take a look at that. It's absolutely clear that the patients in EF14 who had tumors in the regions that had the highest exposure to tumor treating fields had the longest survivals in that trial. And this comes on top of years of preclinical research that demonstrate the dose dependence of the efficacy.
spk12: Yeah, no, thank you. That's fair. I think the dose response has been well documented and I think well accepted, especially amongst some of the physicians I've spoken to. But I'm just curious in terms of whether we can anticipate there will be any additional clinical data supporting that with the higher power to raise when you have the European limited launch. and if we can expect any other further clinical trials relating to that going forward.
spk10: Yes, so we do have our EF33 Phase II trial using a first-generation high-intensity array, and we do expect final data from that trial later this year. I'd say that's going to be an indication and just the first piece of data, and then we will continue to develop clinical evidence with the specific new arrays. And one of the things that we're very excited about and have been for many years, but now that we have the financial resources to really invest in product development, we see a cadence of potential product improvements coming, specifically in the arrays, but also in the field generator and in the software that we provide both the patients to monitor their compliance and to doctors to position the array. So there's a lot of exciting things coming in the product development front.
spk12: Okay, thank you. That's helpful. And then you guys have had a very, I would say, successful track record in terms of having Phase IIs come out successfully. I'm curious, should we assume for gastric that if that's a successful trial, that can lead directly to a initiation of a new phase three. And related to that, are there any other phase three pivotal trials that we might see initiated this year that you're planning?
spk10: Sure. So with respect to your first question, the reason, of course, that we go into a phase two program is to dial in parameters that will lead to a phase three program. And, you know, again, if we're and we take a look at the data, we've described this process before, we look at all the parameters, we look at the patient populations, and we will share the data and our analyses with you later this year. If it looks good, we will have a phase three program. In terms of other phase twos, I can tell you there's a lot in planning, and as I've said earlier in the call, When the details are fully determined, we'll make appropriate announcements of those. Good.
spk12: Thank you.
spk10: Very helpful.
spk12: I'll jump back in queue.
spk01: Our next question comes from Vijay Kumar with Evercore ISI. Your line is open.
spk07: Hi. This is Lily on for Vijay. Thanks for taking my question. One on R&D spend. I know it can fluctuate, but it was down this quarter. I was wondering if you could give probably on the ramp or cadence for R&D spend for the rest of the year? And then two, was there a revenue impact from reimbursement negotiations in Germany this quarter, and have you quantified this? Thank you.
spk06: Lily, thank you for those questions, and I'll address both specifically. So from an R&D perspective, you know, we continue to invest aggressively in R&D, and as I noted before, this can fluctuate quarter over quarter depending on the timing of direct clinical trial expenses, but I would really look to the full year 2021 number and then expect us to continue to grow off of that base as we just have increasing clinical trial numbers. you know, investments as the pipeline expands. So that's how I would think about R&D. Specific to the revenue number, yes, we will have an impact on a go-forward basis from the pricing negotiations in Germany, and that's why, again, I'll reiterate, we would have everybody look to the fourth quarter 2021 price point, and that's what we would recommend you carry forward.
spk01: Thank you. Our next question comes from Kevin DeJeter with Oppenheimer. Your line is open.
spk02: Hey, thanks for taking our questions. Appreciate the comments with regard to clinician access, you know, as we begin the reopening process, you know, as COVID recedes in many markets. But can you kind of comment where you are currently in the U.S. and perhaps in Germany with regard to access? clinician and site access, maybe using pre-COVID levels as a baseline, and how we should think about those trends perhaps through the balance of the year.
spk08: Yes, thank you for that question. So what I would start off with is in Q1, particularly given the impact of the Omicron variant, we saw challenges both in accessing physicians As a result of the impact of the variant, we also saw staffing changes, which has a big impact on how we interface on the education front with clinicians, patients' ability to get education. And then, of course, internal field team challenges, our internal team impacted by the Omicron variant as well. The good news is we saw recovery from this coming out of the last month in the quarter, and as we now start to see the rest of the year unfold, unfortunately COVID has been one of those waxing and waning aspects to how we conduct business, but we are encouraged by how we can continue the education with the ability to see physicians face-to-face, having access to their support staff that interfaces with patients face-to-face, And that's the premise that we're operating in. We're doing everything we can to make sure that our message gets out and patients get support as they're thinking about our therapy.
spk02: Great. No, appreciate that. And then maybe just returning to the update on reimbursement for France. As we think about the 2022 guide, should we anticipate any of the put and take on the revenue side being impacted by the timing of that decision in France, or is that really a 2023 opportunity from a revenue perspective?
spk06: Yeah, so I'll just reiterate, thanks for that, Kevin, that we are on track in France, and we do expect to finalize pricing negotiations and to start to treat patients later this year. You know, there is always a bit of a ramp up as to when that will flow through revenue from a 606 perspective. So I would say materially, you know, we would expect a launch, we would expect active patient participation, and it will begin to contribute materially to revenue in future years.
spk02: Thanks for taking our questions.
spk01: That concludes the question and answer session. I'd like to turn the call back over to Bill Doyle for any closing remarks.
spk10: So I'd like to thank everyone on the phone who joined us this morning for your interest and continued support of NovoCure. I'd also like to particularly thank all the NovoCure team members who are on the line for your dedication to our mission. This has obviously been a challenging two and a half years, and your dedication to serving patients why this is such a special company. We're entering a transformational period for NovoCure, with multiple clinical catalysts on the horizon, as well as product enhancements that will reach patients later this year. Our GBM business continues to grow, and we are expanding our commercial footprint. The fundamentals of our business remain strong, and we look forward to updating you on progress throughout the year.
spk01: This concludes the program. You may now disconnect. Everyone, have a great day.
Disclaimer