Executive Summary / Key Takeaways

• NovoCure is undergoing a strategic pivot from a glioblastoma-focused company to a multi-indication oncology platform, driven by recent positive Phase 3 trial results and regulatory approvals in non-small cell lung cancer (NSCLC), brain metastases, and pancreatic cancer.
• The core glioblastoma (GBM) business remains robust, achieving a record 4,162 active patients globally in Q1 2025 and providing a stable foundation for investment, though expected to grow at a low mid-single-digit rate in 2025.
• The U.S. launch of Optune Lua for metastatic NSCLC is showing encouraging early traction with 92 prescriptions and 62 active patients in Q1 2025, focusing on a disciplined approach targeting appropriate patients and physicians, with meaningful revenue anticipated to ramp up in 2026 as payer coverage expands.
• Positive Phase 3 data from METIS (brain metastases) and PANOVA-3 (pancreatic cancer) are expected to lead to PMA submissions in 2025, potentially unlocking significant new market opportunities in 2026 and substantially expanding the addressable patient population.
• While facing near-term headwinds from launch costs, R&D investments, and potential tariff impacts on gross margins (expected in the low seventies in 2025), the company possesses sufficient liquidity ($929.1M cash/investments) to fund operations and address debt obligations, positioning it to leverage its unique TTFields technology for long-term growth and sustainable profitability.

Setting the Stage: A Unique Approach to Cancer Treatment

NovoCure Limited is an oncology company dedicated to extending survival for patients battling some of the most aggressive solid tumors. Founded in 2000, the company has pioneered Tumor Treating Fields (TTFields) therapy, a non-invasive, device-based approach that utilizes electric fields tuned to specific frequencies to disrupt cancer cell division. This unique physical mechanism of action differentiates TTFields from traditional chemotherapies, radiation, or immunotherapies, offering a distinct modality in the fight against cancer.

The company's journey began with a focus on glioblastoma (GBM), a devastating form of brain cancer. Through rigorous clinical trials, NovoCure demonstrated the efficacy of TTFields therapy, leading to FDA approval for its Optune Gio device for both newly diagnosed and recurrent GBM. This established the company's foundational business, which has grown steadily over the years, reaching a record 4,162 active patients globally in the first quarter of 2025. This GBM franchise, primarily generating revenue in the U.S., Germany, France, and Japan, provides the financial stability necessary to fuel the company's ambitious expansion strategy.

The oncology landscape is highly competitive, with numerous players vying for market share across various tumor types. Traditional device competitors like Accuray (ARAY), Elekta (EKTAB), and ViewRay (VRAY) primarily offer radiation therapy systems. While these systems provide precision and can offer faster treatment sessions, TTFields therapy offers a complementary, non-invasive approach with a different safety profile, often avoiding the systemic toxicities associated with other treatments. Clinical data suggests TTFields can offer significant benefits, such as delaying progression and maintaining quality of life, which are crucial considerations for patients. For instance, the METIS trial in brain metastases demonstrated a median time to intracranial progression of 21.9 months with TTFields versus 11.3 months in the control arm, alongside positive trends in quality of life. Similarly, the PANOVA-3 trial in pancreatic cancer showed a statistically significant overall survival benefit (16.2 months vs 14.2 months) and improved pain-free survival (15.2 months vs 9.1 months).

Compared to competitors, NovoCure's proprietary TTFields technology represents a significant moat. The complex physics and engineering required to generate and deliver these specific electric fields create a high barrier to entry. While competitors like Elekta demonstrate strong operational efficiency with higher operating margins (10-12% vs. NovoCure's -16.96% TTM) and better profitability, NovoCure's focus on clinical validation and regulatory pathways for new indications positions it for potentially higher growth rates. NovoCure's TTM revenue growth of 15-20% (based on Q1 2025 vs Q1 2024 and FY 2024 vs FY 2023 trends) has recently outpaced some competitors like Accuray (8-10% revenue growth in FY2025) and ViewRay (5-7% revenue growth in 2025). However, NovoCure's higher R&D investment (around 35% of revenue in Q1 2025) and launch costs contribute to its current operating losses, contrasting with the profitability of established players like Elekta. The strategic emphasis on clinical trial success and regulatory approval is designed to leverage the unique technology into new, high-unmet-need markets, aiming to capture significant share as an adjunct or alternative therapy.

The Pivot to a Multi-Indication Future

2025 marks a pivotal year for NovoCure as it transitions from its GBM stronghold to become a multi-indication oncology company. This strategic shift is underpinned by recent clinical successes and regulatory milestones that are expected to significantly expand the addressable market. The most immediate manifestation of this pivot is the launch of Optune Lua for metastatic non-small cell lung cancer (NSCLC). Following FDA PMA approval in October 2024, the company initiated its U.S. launch, targeting a patient population with significant unmet need after platinum-based chemotherapy.

The early indicators from the NSCLC launch are encouraging. In the first quarter of 2025, NovoCure received 92 NSCLC prescriptions and ended the period with 62 active patients on therapy. The launch strategy is focused and disciplined, aiming to engage the "right physician for the right patients at the right time." This involves targeting physicians open to novel therapies, many in community settings, and identifying patients who are motivated to start treatment early (primarily second and third line) to maximize the potential benefit. The breadth of prescriber interest is notable, with 93 unique prescribers in Q1 2025, 60% of whom are new to TTFields therapy. The FDA label, allowing use with immune checkpoint inhibitors or docetaxel, aligns well with real-world treatment patterns, positioning the therapy for a large segment of the post-platinum NSCLC population, estimated at approximately 30,000 eligible patients annually in the U.S.

Securing payer coverage for this new indication is a critical focus. While revenue recognition in the U.S. currently reflects cash collections until a sufficient claims history is established, management anticipates achieving payer coverage milestones in 2025, leading to a meaningful revenue ramp in 2026. The company is leveraging its experience and established relationships from the GBM reimbursement process to navigate the complexities of securing coverage from commercial payers and eventually Medicare.

Beyond the U.S., international expansion for Optune Lua in NSCLC is underway. The recent CE Mark approval in Europe provides a broad label, and the team in Germany is launch-ready pending local registration. Preparations are also in progress for a launch in Japan later this year. These international markets, particularly Germany and Japan, are expected to contribute to the growth of the NSCLC franchise, building on the blueprint of successful European launches like the one in France, which continues to be a strong contributor to GBM revenue growth.

The clinical pipeline further reinforces the multi-indication strategy. Positive Phase 3 results from the METIS trial in brain metastases from NSCLC and the PANOVA-3 trial in locally advanced pancreatic cancer represent significant opportunities. Both indications have received FDA Breakthrough Device Designation, facilitating more interactive regulatory review. PMA submissions for both are on track for 2025, with potential launches in 2026. These indications, along with NSCLC, are projected to increase the total addressable patient population by approximately seven times the current GBM opportunity.

Ongoing trials like TRIDENT and KEYNOTE D58 in GBM, LUNAR-2 and LUNAR-4 in NSCLC, and PANOVA-4 in metastatic pancreatic cancer are exploring earlier use of TTFields and combinations with immune checkpoint inhibitors, aiming to further expand the therapy's reach and potential benefits. TRIDENT and PANOVA-4 are fully enrolled, with top-line data expected in the first half of 2026.

Financial Performance and Operational Execution

NovoCure's financial performance in the first quarter of 2025 reflects the ongoing investments in its strategic pivot while maintaining a solid core business. Net revenues for the quarter were $155.0 million, a 12% increase compared to $138.5 million in the same period of 2024. This growth was driven by the 11% increase in active patients globally and improvements in reimbursement across markets, particularly in EMEA (Germany, France, and other European markets). U.S. net revenues also saw an increase.

Cost of revenues rose to $38.5 million in Q1 2025 from $33.7 million in Q1 2024, primarily due to the growth in active patients and higher average array costs associated with the rollout of the new HFE arrays and the NSCLC launch. This resulted in a slight decrease in gross margin to 75% from 76% in the prior year period. Management anticipates gross margins in the low seventies for 2025, citing headwinds from the NSCLC launch (treating patients ahead of reimbursement) and the HFE array rollout. However, they expect these headwinds to lessen as reimbursement is established and manufacturing efficiencies for the new arrays improve. The evolving tariff landscape, particularly on arrays imported into the U.S. from Israel, also poses a potential impact on cost of goods, estimated at up to $11 million in 2025 if current temporary pauses expire. The company is implementing supply chain optimization initiatives, including adding production capacity in Mexico and Ireland, to mitigate these impacts.

Operating expenses totaled $154.3 million in Q1 2025, up from $146.3 million in Q1 2024. Research, development, and clinical study expenses increased by 4% to $53.8 million, driven by the ramp-up of later-stage clinical trials like LUNAR-2, LUNAR-4, and KEYNOTE D58. Sales and marketing expenses saw a modest 1% increase to $55.8 million, primarily due to the expansion of the NSCLC sales force. General and administrative expenses increased significantly by 13% to $44.8 million, including a one-time $2.3 million expense related to supply chain optimization and higher personnel and professional service costs supporting the NSCLC launch and future indication preparations. Management expects R&D expenses to be roughly stable in 2025 and anticipates only modest increases in G&A as the existing infrastructure can be leveraged for multiple launches. The net loss for the quarter was $34.3 million, compared to a net loss of $38.8 million in Q1 2024. Adjusted EBITDA was negative $5.0 million, a slight decrease from negative $4.6 million in the prior year period, reflecting the balance between revenue growth and increased operating expenses for launch and clinical trial activities.

As of March 31, 2025, NovoCure held $929.1 million in cash, cash equivalents, and short-term investments, a decrease of $30.7 million from December 31, 2024. This decrease was primarily due to net cash used in operating activities ($35.7 million) and investing activities ($6.5 million). The company has an accumulated deficit of $1.19 billion.

A significant financial obligation is the $559.0 million Convertible Senior Note due in November 2025, which is now classified as a current liability. The company has elected to settle conversions with a combination of cash ($1,000 per $1,000 principal) and shares. NovoCure also has access to a Senior Secured Credit Facility of up to $400 million, with $100 million drawn (Tranche A) and a required $100 million draw (Tranche B) by June 30, 2025. Management is confident that the combination of existing cash and the credit facility provides sufficient capital to retire the convertible note and fund operations through the anticipated revenue ramp from new indications.

Operational advancements continue alongside clinical and commercial efforts. The rollout of the next-generation HFE arrays, designed to be thinner, lighter, and more flexible, is progressing and is expected to enhance the patient experience, although initially at a higher cost. The launch of a patient app in the U.S., with over 1,400 users, provides tools for tracking usage and ordering supplies, setting the stage for scalable patient support in a multi-indication environment.

Outlook and Risks

The outlook for NovoCure in 2025 is one of focused execution on key strategic priorities. The core GBM business is expected to deliver low mid-single-digit revenue growth, driven by active patient volume. The U.S. NSCLC launch is anticipated to build demand and secure payer coverage throughout 2025, with meaningful revenue contribution expected in 2026. International NSCLC launches in Germany and Japan are also on the horizon for 2025.

Regulatory submissions for METIS and PANOVA-3 are planned for 2025, leveraging Breakthrough Device Designation to potentially accelerate review timelines. Positive outcomes here could lead to significant market expansion and new revenue streams starting in 2026. Key clinical data readouts from TRIDENT and PANOVA-4 in the first half of 2026 will provide further insights into the potential for label expansion in GBM and metastatic pancreatic cancer, respectively.

Financially, the company anticipates gross margins in the low seventies in 2025 due to launch and product enhancement costs, with R&D expenses remaining relatively stable. While operating expenses will see some increases related to launch activities, management is focused on leveraging existing infrastructure to control G&A costs. Reaching sustainable positive adjusted EBITDA is a key goal, expected to be achieved as material revenue from new indications comes online.

Investing in NovoCure carries inherent risks. The success of new indication launches is contingent on physician adoption and, critically, securing broad payer coverage, which can be a lengthy and unpredictable process. While early launch indicators for NSCLC are positive, the anticipated linear adoption curve means a rapid, exponential revenue surge is not expected in the near term. Clinical trials, despite promising early results, carry the risk of failure or delays, which could impact future label expansion and revenue potential. Regulatory reviews, even with Breakthrough Device Designation, are subject to the discretion of health authorities and can encounter unexpected hurdles or delays, as seen with the MDR process in Europe.

Supply chain disruptions, potentially exacerbated by geopolitical events like the conflict in Israel or changes in trade policies and tariffs, could impact manufacturing costs and product availability. The ongoing class action lawsuit, although the company's motion to dismiss was granted, remains a potential risk if the ruling is appealed. Finally, the company's ability to manage its cash burn and transition to profitability depends on the successful execution of its launch and pipeline strategies, requiring careful management of operating expenses relative to revenue growth.

Conclusion

NovoCure stands at a critical juncture, actively executing a strategic pivot designed to transform it into a multi-indication oncology powerhouse. Building upon the solid foundation of its established GBM business, the company is leveraging its unique TTFields technology and a robust clinical pipeline to target significant unmet needs in NSCLC, brain metastases, and pancreatic cancer. The early phase of the NSCLC launch is underway, with a disciplined approach focused on building a strong base for future growth and navigating the complex reimbursement landscape. Upcoming regulatory submissions and clinical data readouts from the pipeline hold the potential to unlock substantial new market opportunities in the coming years.

While the path to sustainable profitability involves near-term investments and faces risks related to market adoption, reimbursement, and operational challenges like tariffs, NovoCure's differentiated technology and strategic focus position it to potentially deliver meaningful value to patients and investors alike. The company's liquidity appears sufficient to bridge to the anticipated revenue growth from new indications, making execution on launch and pipeline milestones the paramount focus for the period ahead. The success of this pivot will ultimately determine NovoCure's trajectory as a leader in device-based oncology therapies.