Good day and welcome to the NovoCure Q3 2026 earnings call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, you will need to press star 1-1 on your touchtone telephone. Please note, this call may be recorded. I would like to turn the call over to Adam Daney. Please go ahead.

Good morning, and thank you for joining us to review NovoCure's third quarter 2026 performance. I'm joined on the phone today by our Executive Chairman, Bill Doyle, CEO, Frank Leonard, Chief Innovation and Medical Officer, Uri Weinberg, and CFO, Christoph Brackmann. For your reference, slides accompanying this earnings release can be found on our website, www.novacure.com, on the Investor Relations page under Quarterly Results. 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 and are 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 and 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 attributable to our capital structure, tax rate, and material non-cash items, and best reflects the financial value generated by our business. We do not provide forward-looking guidance for adjusted EBITDA on a gap basis due to the inability to predict share-based compensation expenses contained in the reconciled gap measure net income without reasonable effort. Reconciliations of non-GAAP to GAAP financial measures are included in our press release, earnings slides, and in our Form 10-Q filed with the SEC today. These materials can be accessed from the Investor Relations page of our website. Following our prepared remarks, we will open the line for questions. I will now turn the call over to our Executive Chairman, Bill Doyle.

Thank you, Adam. This morning, Novocure reported results for the third quarter of 2026. This quarter was marked by solid execution. with continued momentum in our Optum Jio business and our promising launch of Optum Lua in Japan. We reached a record number of active patients on therapy, generated record high quarterly net revenue, and made strong progress on our path to profitability. We experienced headwinds in our Optum PACs launch this quarter, but remain committed to establishing TT Field therapy in the evolving PDAC standard of care. As we enter the final months of the year, we are on track to achieve our 2026 goals, and we believe we are well positioned to drive this positive momentum into 2027. I will begin this morning with a review of our Optune GEO and Optune Maya programs. Frank will provide an update on Optune Pax and Optune Lua, and Christoph will conclude our prepared remarks with a review of our third quarter financial results and updated guidance. We will then open the line for questions. Q3 was another strong quarter for our Optune Geo business. We finished the period with 4,729 GBM patients on therapy, an 11% increase year over year and our highest GBM active patient count to date. A notable feature of this growth cycle is the mix of contributions from both new and established markets. We continue to believe many more patients can benefit from OptumGio, and we are determined to find the avenues to reach them. Each of our active markets has opportunities to increase adoption in GBM, and our country-level teams are focused on improving outreach and targeting to connect with physicians and patients at the optimal points in their treatment journeys. OptuneGeo is a standard of care for newly diagnosed GBM, established on the foundation of the best-in-class clinical data for overall survival. And we're working to extend survival further. Our Phase III Keynote D58 clinical trial is evaluating adding the immunotherapy pembrolizumab to OptuneGeo and low-dose chemotherapy to diagnose glioblastoma. We've been pleased with the strong interest in D58 since launch, as physicians are eager to see whether concomitant use of TT fields in immunotherapy can improve survival in GBM further. D58 remains on track to complete enrollment by year end, and we look forward to sharing more information from this trial in the periods ahead. Turning to Opthun Maya. Our PMA application for the treatment of brain metastases from non-small cell lung cancer is under review with the FDA. As a reminder, this application is based on the data from the Phase 3 METIS trial, which showed a doubling in time to intracranial progression in patients on the TTF arm compared to control. We continue to expect a final decision on our PMA application by year end, with a potential launch in early 2027. As with our other launches, we expect to establish reimbursement within two years of launch. NovoCure continues to grow and evolve. We have reignited growth in our core GBM business and launched Optum, Lua, and Pax in multiple countries. With Maya, expect it to follow. We've established the infrastructure to service larger patient populations and have initiated structural changes to accelerate our transition to profitability. I'll now pass the call to Frank to discuss the ongoing launches of Optune Pax and Lua.

Thank you, Bill. We believe that we have multiple drivers of long-term growth, including increasing adoption of Optune Geo, successfully launching new indications like Optune Pax and Maya, and pursuing opportunistic launches such as the Optune Lua launch in Japan. We are two and a half quarters into our launch of Optune Pax and we finished the third quarter with 276 active patients on therapy and generated $3.7 million in net revenue. We have seen momentum slow in the U.S. due to the introduction of Durex on Rasa. Our ability to access practices to detail Optune Pax is significantly limited at this time. We acknowledge the challenges in the OptumPax launch and we will continue to evolve our tactics to ensure we maintain our share of voice in our approved indication, which is different than the approved indication for Deraxon RACID. We will also continue to monitor the details of the Deraxon RACID launch and invest appropriately in relation to the market realities. We look forward to the upcoming annual update of the NCCN guidelines for the treatment of pancreatic cancer. and we'll update our marketing materials accordingly. Most importantly, we will work closely with our physician collaborators to establish the best next set of clinical trials to establish TT fields more firmly as a standard of care for PDAC. We are specifically eager to generate data focused on concomitant use of TT fields and KRAS inhibitors. The initial step in this effort will be through two small safety and feasibility trials. The Penova 5 trial will explore the concomitant use of Optum Pax, Gemcitabine, now Paclitaxel, and Veristem's KRAS G12D inhibitor, VS7375, in our approved locally advanced setting. We are excited to collaborate with Veristem in this effort and expect to initiate this study in the first half of 2027. The PNOVA-6 trial will explore concomitant use of Optum Pax and Deraxan Racib in the metastatic setting, which we also expect to initiate in the first half of 2027. Moving to Optum Lua, we continue to see momentum in our launch in Japan. We finished the quarter with 255 Optum Lua active patients and $8 million net revenue globally, with 110 active patients and $4 million in net revenue contributed by Japan. Second-line use of immune checkpoint inhibitors is standard of care in Japan, which overlaps well with our label and the strongest outcomes from the lunar trial data. In addition to the promising commercial landscape, the negotiated monthly price for Optune Lua in Japan is approximately in line with our global price for Optune Geo. Optune Pax was also approved by Japanese regulators earlier this year, with reimbursement likely in the first half of 2027. Together with our growing Optune Geo business, we expect Japan will eventually be our second largest market behind the US. As Bill said earlier, we focused in recent years on diversifying and expanding our growth drivers. We are beginning to see those drivers contribute, specifically in our continued Optune Geo growth and Optune Lua launch in Japan. We expect Optune Pax to return to growth in the coming quarters, and with these drivers in place, as well as enhanced controls on operating expenses, we believe we are well positioned to make material strides forward in our path to profitability next year. I'll now pass the call over to Christoph to review our third quarter financials.

Thank you, Frank. This was a very strong commercial quarter. We generated $193 million in net revenue, an increase of 16% year over year. This includes contributions of $8 million and $4 million from Optium Lure and Optium Pax, respectively. The increase in net revenue was primarily driven by a 19% year-over-year increase in active patients, as well as a one-time benefit of $4 million from increased approval rates in the U.S. and Germany. We also experienced a $2 million headwind from foreign exchange rates in the quarter. Based on our strong commercial performance this quarter, we are raising our revenue balance. We now expect 2026 net revenue between 736 and $743 million, representing 12 to 13% growth. This includes net revenues from OptinLure and OptinPax collectively between 30 and $34 million. Gross margin for the quarter was 77% compared to 73% in Q3 of last year. An important aspect in our pursuit of profitability is optimizing our supply chain efficiency as we treat larger patient populations and we continue to see progress on these initiatives. We expect to maintain our gross margin in the mid to high 70s through the final quarter of 2026. turning to our operating expenses. Research and development costs this quarter were $58 million, an increase of 8% year over year. The increase was primarily driven by expenses related to our keynote D58 trial as we finalize enrollment. R&D expenses can fluctuate quarter to quarter, largely around clinical activity or services delivered in the period. We are confident that we can keep our D-costs roughly at or below current levels for the foreseeable future. Sales and marketing expenses in the quarter were $53 million, a decrease of 9% from the same period last year. The change was primarily driven by lower share-based compensation and lower general marketing expenses in the quarter. As we look ahead to Q4 in 2027, we intend to largely leverage our existing sales force. We do expect to make limited incremental marketing investments intended to support the launches of Obtune Tax and Obtune My. General and administrative expenses for the quarter were $44 million, a decrease of 5% year over year. The primary driver of the decrease was lower share rates compensation expenses. We have made the G&A investments required to support larger patient populations, and our aim is to maintain the current level of G&A with minimal increases due to inflation. Net loss in the quarter was $10 million compared to a $37 million loss for Q3 of last year, and loss per share was 9 cents. Our EBITDA loss in the quarter was $2 million compared to a loss of $32 million in Q3 of 2025. Adjusted EBITDA, which removes the impact from share-based compensation, was positive Thank you very much. and we are pleased with the progress made this quarter. The third quarter marked a new record high in net revenue generated and our strongest EBITDA and adjusted EBITDA quarter in over four years. The investments necessary to launch new indications and support larger patient populations have largely been made. As we continue to gain traction across our commercial portfolio We believe there's significant P&L leverage to be realized. Achieving adjusted EBITDA positivity this year is an important first step in the profitability journey, and we look forward to updating you on our progress and future objectives in the coming months. With that, we will now open the line for your questions.

Thank you. If you'd like to ask a question, please press star 1-1. If your question has been answered and you'd like to remove yourself in the queue, press star 11 again. Our first question comes from Vijay Kumar with Evercore ISI. Your line is open.

Hey, guys. Thank you for taking my question. Frank, maybe my first one on Pax Friends. And I know in the past you've said, look, this is not like a drug launch. Don't expect... script volumes similar to drugs. And I understand that, but in a sequential step down here on patients and script volumes, right, if you could just elaborate on what happened in the quarter, how we think about PACS launch, I think that'll be helpful.

Yeah, thank you, Vijay, for the question. It's clear we had a record quarter overall in terms of our commercial execution, as Christoph just detailed. Really strong progress. across geo around the world, as well as our Japan launch. But it is clear to us that, you know, we face significant challenges in the U.S. PACS launch this quarter. To give a little bit of color, you know, I think we all need to think about the just the sheer volume of patients now coming into practices and asking for duraxone or acid. And, you know, that has an immediate effect on a practice in a few different ways. I mean, one is that immediately the insurance appeals start. And I think as some on the line are tracking, the journey for direct under acid through the insurance process is just starting. And on the other side, as the patients progress on therapy, they do see a lot of skin irritation. And so what we face in terms of getting into practices right now is really just a share of voice issue as we see it right now that The practices are just a bit overwhelmed. They're overwhelmed with appeals. They're overwhelmed with skin irritation. But we do see that continued interest when we engage with clinicians in explaining Optune Pax. So to look ahead, we are committed to this market. We still see strong recognition of the clinical value of Optune Pax as a first-line treatment in locally advanced pancreatic cancer. and we are eager to see this early disruption, kind of the practice disruption settle down in the coming quarters and give us a chance to really get back in there and earn the patients that could really benefit from tumor treating fields.

Understood. Christoph, one for you, adjusted EBITDA performance here in the quarter was really a standout. Sustainability of this level of sequential improvements in adjusted EBITDA and what's the path followed when you think about adjusted EBITDA trends?

Yeah, thank you, Vijay. Yeah, you said it. I mean, we had a very strong quarter of financial performance, both on the or across all lines, really on the P&L, right? I mean, starting with revenue growth, very strong revenue growth based on like the patient growth, but also with some one time benefit. We had strong gross margin, relatively, you know, lower cost to previous quarters. And all of that culminated in a record high EBITDA and adjusted EBITDA. So, the first comment is, as we said in the past, we are really committed to this path of profitability, and we always said, as far as it's three steps. Step one is to get adjusted EBITDA breakeven. Step two is then cash flow breakeven. Step three is net income breakeven. And we are very happy that we passed the first step, and we are committed to adjusted EBITDA break even if you look at it on a full year basis. Now, I would caution, we will have some fluctuations quarter to quarter. You can also take from our guidance for adjusted EBITDA that we're not just straight line projecting a quarter over quarter increase, but we gave ourselves some room. One is on, we have a range on Revenue for our guidance, but then two is also now with Q4 coming up. It's typically a difficult quarter to estimate because we are getting ready for launches for next year. So in short, we are committed to adjusted EBITDA breakeven. We are committed to really focus on the next goal is cash flow breakeven, but I wouldn't want to commit to a straight line on a quarter-to-quarter basis.

Understood. Thank you.

Thank you. Our next question comes from Larry Beagleson with Wells Fargo. Your line is open.

Good morning. Thanks for taking the question. So one on 27, one on PACS. So, Frank, I think at our healthcare conference you talked about striving for double-digit growth in 2027. Is that still the case? And, you know, can you talk about, you know, the headwinds and tailwinds behind the outlook? Thank you.

Thanks, Larry. Yes, so as we've talked about the future of NovoCure, what we have aspired to be is a company that produces double-digit top-line growth and returns to profitability, as Christoph just outlined. We were really pleased in this quarter to have delivered double-digit growth, both when you look at all products together, but even in the GEO franchise, where Existing markets like the U.S. were growing strong, and we found new markets to continue building like Spain. I think that our commercial organization is really firing on all cylinders right now, and where there's opportunity, they're taking it, and I think I'm quite proud of those results. So yes, that's our vision is we remain committed to delivering that top-line, double-digit growth into the future.

That's helpful. and Japan was obviously very strong again this quarter. What are your expectations for Lua and Pax? Just remind us of the timeline for reimbursement there. We saw obviously you got approval and remind us why this is an exciting opportunity. Thanks.

Yes. Thank you, Larry. And I realize I missed the very end of your, I didn't answer the very end of your first question here. In terms of possible tailwinds or real tailwinds for the company overall, our business in Japan is definitely one of those tailwinds. We have launched Optune Lua successfully, continued to build our active patient volume through the year this year. We are already looking ahead to next year where we have our national symposium with all of the relevant physicians who treat non-small cell 1 cancer in Japan coming into Tokyo to do a symposium just focused on Optune Lua in January. So we see that strong continued interest for Lua to continue growing in Japan. Optune Pax was just approved for regulatory approval in the quarter. And we expect to have reimbursement early in 2027, first quarter of 2027, which would then allow us to begin the launch in Optune Pax. And as a reminder for both of these products, we were able to reset our price levels with the MHLW in Japan. And so both, you know, Lua is already priced at a higher level than our GEO product in Japan and we're hopeful that we'll be able to achieve a similar outcome for the PAX product as it comes to market. The last thing I'll say is just to remind everyone in Japan, historically our business in Japan has appeared relatively small relative to the rest of the company because the incidence of GBM is very low in Japan. That's not the case for lung cancer and in fact in pancreatic cancer is actually a higher incidence than in the U.S. So these are real sizable markets with strong physician interest, and we are very excited for our PACS launch in Japan.

All right, perfect. Thanks so much. Thank you.

Thank you. Our next question comes from Jason Bednar with Piper Sandler. Your line is open.

Good morning, everyone. I'll ask the obligatory question here on Optum PACS as well. Just curious, Frank, I guess, what are you able to control with the process here? And when we think about the accounts you had that were initial users of tax, are they still using or did activity, prescribing activity, more or less dry up after the approval? And sorry, I'm going to add another one. Is this an issue you think of practices simply being overwhelmed? and they don't have time or are you seeing just a lot of practices putting both locally advanced and metastatic PDAC patients on therapy?

Okay, thank you, Jason. I'll jump in on the second part of this. That's obviously our focus right now is trying to understand what has caused the slowdown in prescribing patterns. We're looking at it both quantitatively in terms of buying data and qualitatively in terms of speaking with physicians. And first and foremost, what I want to highlight is that we're not seeing patients leaving Optune packs in substantial numbers to start Durex and Rasen. And when we look at qualitative and quantitative data as well, We don't see strong signals that Deraxanracib is being used widespread in first line, except in the patients where they can't tolerate standard chemotherapy. So that leads us back to the hypothesis that we see the practices as just being simply overwhelmed right now, and that is what's limiting our ability to get in. And As we spoke briefly about earlier in the call, you know, this is, again, it's a device-based launch. Practices need training. They need support. They need help educating the patient. So we do see this as a bit of, right now, we see it as an issue with the noise of getting into the practice. What can we control? I think first and foremost, as an organization, we remain committed to this indication and our teams know we're committed to the indication and we are continuing to get as much as we can to get to our physicians. On that front, I would highlight one of the really promising signals that I picked up recently is I just came back from the ESMO conference in Madrid. We had incredible engagements with physicians across all of our indications. But when I look back at the numbers from the booth of unsolicited inquiries, the number one product that led to inquiries in our booth was Optune Pax. And so that's where we feel that the recognition of the clinical value is still there. It is up to us to execute with our teams in the field, getting that message out and highlighting the different indication, different stage of treatment that our product is approved for. And then lastly, as we announced yesterday and spoke about today, we are gonna continue building the evidence to support and consolidate our status as a valuable and standard of care treatment for PDAC.

All right, very helpful and very clear. One follow-up quick and then a separate question. I'm not sure if I caught where you're at with respect to commercial payers on Optune Pax. Sorry if I missed that, but refresh me there. And then on R&D, obviously a little bit of a step up in the quarter, but you're coming to the close of Keynote D58. How should we think about R&D trending as we move beyond 26 once that Keynote D58 trial ends? I know you've got a couple earlier stage trials, but those should be far cheaper than Keynote D58.

Yeah, Jason, I'll start and then I'll turn it over to Christoph. In terms of our payer engagement in the U.S., the next major milestone for us is to secure inclusion in the NCCN guidelines. The NCCN guidelines for pancreatic cancer are typically published once a year, either at the end of the year or early in the new year. We have submitted, we understand that we've been reviewed and we're eagerly waiting for those results to be published. That will trigger additional engagement with payers where we've already had and reported on our one success with Elevance, where we now have a coverage policy in place. and Christoph, I'll turn it over to you to talk about any other emerging trends with payers as well as the R&D question.

Yeah, I think on the payer side, I mean, as you noted, I think the real next milestone is NCCN guideline. And apart from that, we are having the discussions with the payer on the commercial side on the inclusion in medical policies. Obviously, this is a function of one the number of patients on therapy that helps us to, in essence, build pressure with payers and then to the guideline inclusion is an important factor for that as well. On the R&D question, Jason, so from a big picture perspective, 2026, we had larger Phase III trials roll off, as you know, and then we had particularly D58. Now being close to full enrollment is really at the, let's say, highest level of activity. And from that also from a spend intensity perspective at the highest level. And that essentially replaced the studies that we had that were rolling off. For 2027, we expect D58 but also Lunar 2 still be a significant portion of our spend. So, as we said, we expect R&D expenses flat to slightly declining and then going beyond that timeframe, as large phase three trials go off, namely D58 and Luna 2, we would expect our R&D expense to go down if we don't replace it with other larger trials.

All right, understood. Thank you both.

Thank you. Our next question comes from Jessica Fai with J.P. Morgan. Your line is open.

Hey, guys. Thanks for taking the question. This is Tanman on for Jess. I have a question around the updated total revenue guidance and when I was calculating I saw by your revised annual revenue guidance now implies 185 to 192 million in 4Q revenue which is below the 193 million revenue recorded in 3Q. So can you Can you talk about what assumptions are driving this sequential step down?

Yeah, I can take this. So maybe I share a bit more thoughts on our revenue guidance in general. First, Q3 was really a very successful quarter in terms of net revenue, adding about $9 million of revenues to what we had as a record a quarter in Q2, right? So thinking about Q4 revenue guidance, if we do in Q4 what we did in Q3, less the 4.4 million one-time revenue in Q3 that we pointed out, that essentially gets you to 740 million, which is around the midpoint of our guidance. And that was the thinking here. and then we accounted for some potential risk on collections aside and some opportunities that we have. Great, thank you.

Thank you. Our next question comes from Kevin DeGieter with Leidenberg Thalmann. Your line is open.

Hey, great. Yeah, thanks for taking our questions. I actually had one on the VeriSTEM collaboration or clinical trial you announced yesterday and from the NoviCure perspective, what's the more important learning from that study? Is it really kind of appreciating the patient sort of anti-tumor clinical benefit of a combination with the KRAS inhibitor, or is it really learn more about how the skin toxicities kind of play together? I just kind of want to understand I guess this is an OQR-funded study, kind of from your perspective. What are we trying to learn?

Excellent. Thank you for the question. I'll start off and then I'll turn it over to my colleague, Dr. Weinberg, to speak to some of the specifics of the trial. First, I just want to note that we are very pleased to have this collaboration in place with Veristem. We think that this asset has the potential to be best in class, and we are We are excited to work with them. I think I would also highlight that I think this trial being done in locally advanced pancreatic cancer first line, which is our FDA approved indication, is strong validation of tumor treating fields as an effective therapy in that indication already. And that really drove our ability to get a top tier partner to work with us on a study here. So my thanks to our partner, our collaborators at Veristem. And I'll turn it over to Dr. Weinberg to talk a little bit about what we hope to see and how it dovetails off some of the things we've already seen in preclinical research.

Thank you. So the Panova 5 study is going to focus on our approved indication in pancreatic cancer, namely locally advanced unresectable patients. and it will incorporate the Verastem's G12D-VS7375 inhibitor, KRAS inhibitor, concomitantly with gencytabine, napotlitaxel, and of course, Optium-PAX. This study will include around 25 patients. and we have also announced that we are opening the Panova 6 study that will use Daroxone Racid in its approved indication of metastatic pancreatic adenocarcinoma concomitantly with Opium Pax enrolling a similar number of patients. We are being very attentive to the developments in the field and dynamic in our approach to that, considering everything that we have done in pancreatic cancer so far. These two smaller single arm studies intend to give the first experience showing feasibility and tolerability and toxicity of the concomitant use of opium packs with KRAS inhibition in the disease. And as you mentioned, the first and foremost goal of these two studies is to give physicians with Thank you very much. Thank you very much. affecting downstream transcription factors to KRAS, which suggests that the concomitant use of our device with KRAS inhibitors of any kind might be very interesting and even could be synergistic, hopefully.

Great. Thanks for taking our questions.

Thank you. I'm showing no other questions. I'd like to turn the call over to Bill Doyle for closing remarks.

Thank you very much. I'd like to conclude today with a big thank you to the NovoCure team. This was an exceptionally strong quarter, and as Frank noted, it was strong across the board. Our emerging markets performed very well. but importantly our established markets really showed growth across the board. We've said for years that there are many more patients who can benefit from tumor treating fields than have been currently prescribed and our teams have begun to figure out the ways to get to those patients and their clinicians at the moment that decisions are made so that they can benefit from the therapy and and we saw it in the numbers. We're focused on Pax as you described. There's a tremendous amount of change in the pancreatic market. We're all aware of this. As Frank described in detail, it's creating quite a bit of work within the practices and that work involves learning how to use the new therapy, learning how to guide patients through the reimbursement process. But we also know that the KRAS therapies are not cures. And we're going to see a wave of recurrence later this year as well, if the data that we've seen in the clinical trials bears out, which we expect it to. And that's where we're really going to see, I think, the opportunity to one, get back into the practices, but really find the sweet spot for tumor treating fields in this emerging landscape, along with the activities that Uri described, really studying the concomitant use of the therapies together. And then finally, we are a company that's committed to profitability. And I think we have shown tangible progress on that path over the last few quarters. and we're very pleased to be able to increase our guidance both in terms of revenue but importantly in terms of adjusted EBITDA today. So thank you very much for your interest in Novocure and we look forward to our next report.

Thank you for your participation. This does conclude the program. You may now disconnect. Good day.