Executive Summary / Key Takeaways

• NovoCure is undergoing a transformative shift from a single-indication glioblastoma (GBM) company to a multi-indication oncology platform, targeting four cancer indications by year-end 2026, which is expected to expand its eligible patient population sevenfold compared to GBM.
• The company's proprietary Tumor Treating Fields (TTFields) technology, delivered via non-invasive, wearable devices like Optune Gio and Optune Lua, offers a differentiated approach to cancer treatment, demonstrating significant survival and quality-of-life benefits in aggressive solid tumors like pancreatic cancer and brain metastases.
• Despite a slower-than-anticipated launch for Optune Lua in non-small cell lung cancer (NSCLC) due to market complexities, NovoCure is refining its commercial strategy and leveraging its existing infrastructure to support upcoming launches in pancreatic cancer and brain metastases, with anticipated FDA approvals in mid to late 2026.
• Financially, NovoCure reported Q3 2025 net revenues of $167.2 million and is committed to achieving sustainable adjusted EBITDA breakeven by 2027, driven by new revenue streams and disciplined expense management, despite near-term gross margin pressures from new product rollouts and tariffs.
• Key catalysts include ongoing regulatory reviews for pancreatic cancer (Optune Pax) and brain metastases (Optune Mya), upcoming clinical data readouts for TRIDENT (GBM) and PANOVA-4 (metastatic pancreatic cancer) in H1 2026, and the continued expansion of Optune Lua in international markets like Japan.

The Dawn of a Multi-Indication Era

NovoCure Limited (NASDAQ:NVCR) stands at a pivotal juncture, transitioning from its established foundation in glioblastoma (GBM) to emerge as a multi-indication oncology company. Founded in 2000 with a mission to extend survival for patients with aggressive cancers, NovoCure has pioneered Tumor Treating Fields (TTFields) therapy, a novel device-based approach that utilizes electric fields to disrupt cancer cell division. This strategic evolution, particularly accelerated by key milestones in 2024 and 2025, positions the company to address a significantly broader patient population with high unmet medical needs.

The company's core business revolves around its proprietary TTFields technology, which delivers electric fields to exert physical forces that kill cancer cells through a variety of mechanisms. This non-invasive, wearable therapy offers tangible benefits over traditional systemic treatments, including a potentially lower side-effect profile and greater patient convenience, as it can be administered at home. For investors, this technological differentiation forms a crucial competitive moat, potentially leading to stronger customer loyalty, recurring revenue streams from device usage, and enhanced pricing power in specific market segments. NovoCure's ongoing research and development efforts are focused on optimizing TTFields delivery and enhancing patient ease of use, including the rollout of thinner, lighter, and more flexible HFE arrays across all material markets, with global completion expected by year-end. These advancements are critical for reducing barriers to adoption and expanding the market for TTFields therapy.

In the broader oncology landscape, NovoCure operates amidst formidable pharmaceutical and biotech giants such as Bristol-Myers Squibb (BMY), Merck (MRK), Roche (RHHBY), and AstraZeneca (AZN). These competitors primarily focus on systemic immunotherapies, targeted therapies, and biologics, often with extensive global distribution networks and diversified product portfolios. NovoCure's niche lies in its unique device-based electrotherapy, which, while offering a differentiated, patient-centric approach, necessitates a distinct market education and reimbursement strategy. For instance, while large pharma companies like Merck boast blockbuster immunotherapies, NovoCure's TTFields devices offer a non-pharmacological alternative that can be notably easier for patients to implement, potentially enhancing adherence. However, NovoCure's smaller operational scale and less diversified product lines mean it lags behind these larger players in overall financial resilience and market penetration. The company's strategy to leverage its GBM experience for new launches and foster peer-to-peer physician connections is a direct response to the challenge of introducing a novel device-based therapy to a medical oncology community more accustomed to drug-based treatments.

Expanding the Therapeutic Horizon: GBM, NSCLC, and Beyond

NovoCure's journey began with Optune Gio for glioblastoma (GBM), which remains the bedrock of its financial strength. The GBM business has demonstrated consistent growth, with active patients increasing between 5% and 12% year-over-year for the last nine consecutive quarters. As of September 30, 2025, 4,277 GBM patients were on therapy globally. This growth is particularly robust in international markets, with France, Japan, and Germany seeing active patient increases of 27%, 8%, and 7% respectively in Q3 2025. The recent national coverage decision in Spain for newly diagnosed GBM is expected to contribute annual net revenue approximately half that of France at maturity, albeit with a multi-year ramp-up due to the fragmented healthcare system. In the U.S., however, GBM active patient count has remained flat, partly due to academic centers prioritizing pharmaceutical clinical trials over device-based therapies.

The launch of Optune Lua for metastatic non-small cell lung cancer (NSCLC) in the U.S. (October 2024) and Germany (April 2025) marks NovoCure's first significant step into multi-indication therapy. While the company acknowledged the launch is "behind expectations" and "harder than we expected," it finished Q3 2025 with 100 active NSCLC patients globally. Challenges include the poor overall health status of advanced NSCLC patients, intense competition from existing drug therapies, and a shorter median duration of therapy (four months for NSCLC versus ten months for newly diagnosed GBM). NovoCure is adapting its strategy by focusing on specific patient profiles, such as those with durable responses to checkpoint inhibitors post-platinum doublet, and refining its messaging to position Optune Lua as a "post-platinum option" rather than strictly a second-line treatment. The company anticipates a stronger launch trajectory in Japan, where Optune Lua received regulatory approval in September 2025, citing a higher prevalence of lung cancer, physicians' comfort with device-based therapies, and a local standard of care that frequently uses immune checkpoint inhibitors.

Beyond NSCLC, NovoCure is poised for two additional launches in 2026: Optune Pax for locally advanced pancreatic cancer and Optune Mya for brain metastases from NSCLC. The Phase 3 PANOVA-3 trial for pancreatic cancer demonstrated a median overall survival of 16.2 months with TTFields therapy plus gemcitabine and nab-paclitaxel, compared to 14.2 months in the control arm. Critically, it also showed a greater median pain-free survival of 15.2 months versus 9.1 months, and statistically significant improvements in quality of life measures. This is a significant breakthrough in a cancer notoriously resistant to treatment, with a five-year survival rate of only 13%. The FDA accepted the PMA application for Optune Pax in August 2025, with approval expected mid-2026. Similarly, the Phase 3 METIS trial for brain metastases from NSCLC showed a statistically significant improvement in time to intracranial progression, with a median of 15 months for TTFields patients versus 7.5 months in the control arm, representing a 28% risk reduction (HR 0.72, p=0.044). The modular PMA for Optune Mya is progressing, with a final FDA decision anticipated in the second half of 2026. These new indications, combined with NSCLC, have the potential to increase NovoCure's eligible patient population sevenfold compared to its GBM opportunity, representing a transformative growth catalyst.

Financial Performance and Path to Profitability

NovoCure's financial performance in Q3 2025 reflects its ongoing transition and investment in future growth. Net revenues for the quarter reached $167.2 million, an 8% increase from the same period in 2024, driven by continued GBM growth in international markets and early contributions from Optune Lua. For the nine months ended September 30, 2025, net revenues totaled $481.0 million, also up 8% year-over-year. Recognized revenue from Optune Lua in Q3 2025 was $3.1 million, including $1.6 million from NSCLC collections and $1.5 million from malignant pleural mesothelioma (MPM) collections. It is important to note that revenue from new indications like NSCLC is recognized upon cash collection until sufficient claims history is established for reliable estimation.

Gross profit for Q3 2025 was $122.5 million, resulting in a gross margin of 73%, a decrease from 77% in Q3 2024. This reduction was primarily attributed to 7% growth in active patients, higher array costs associated with the new HFE array rollout and the NSCLC launch, increased tariffs, and a $2.9 million inventory obsolescence provision for Optune Lua arrays. The cost of revenues per active patient per month (excluding Zai sales) increased by 16% to $3,159. Management anticipates continued pressure on gross margins in the near term due to new product enhancements and the evolving tariff landscape but expects them to revert to the higher 70s once reimbursement for new indications is established and production costs for new arrays are optimized.

Operating expenses saw varied trends. Research, development, and clinical study expenses increased by 4% to $54.0 million in Q3 2025, driven by product development and regulatory expenses for PANOVA-3 and METIS PMA filings, partially offset by the completion of these trials. Sales and marketing expenses decreased by 2% to $58.5 million, mainly due to lower share-based compensation, despite increased marketing for the NSCLC launch and pre-launch activities for upcoming indications. General and administrative expenses rose by 15% to $45.9 million, primarily due to higher share-based compensation and increased personnel and professional service expenses to support the company's build-out, particularly in enterprise technology.

Despite these investments, adjusted EBITDA for Q3 2025 was negative $3 million, a significant improvement from previous periods and ahead of internal plans. NovoCure has incurred substantial losses and cumulative negative cash flows since its inception, with an accumulated deficit of $1,265.90 million as of September 30, 2025. However, the company maintains a strong liquidity position, with $1.034 billion in cash, cash equivalents, and short-term investments at the end of Q3 2025. This capital, combined with available funds from its senior secured credit facility (Tranche B of $100 million was drawn in Q3 2025, bringing total borrowings to $200 million), is deemed sufficient to fund operations for at least the next 12 months and to retire the $560.9 million convertible notes due on November 1, 2025. NovoCure is committed to achieving sustainable adjusted EBITDA breakeven by 2027, targeting a revenue range of $700 million to $750 million, driven by the revenue contribution from new indications and disciplined expense management.

Outlook and Key Risks

NovoCure's outlook is firmly centered on its transition to a multi-indication platform. The company expects GBM revenue growth to be in the low to mid-single-digit range in 2025, reflecting its maturity. For NSCLC, 2025 is a "demand-generation year," with material revenue ramping up in 2026 as payer coverage expands. FDA approval for Optune Pax (pancreatic cancer) is anticipated mid-2026, and a final FDA decision for Optune Mya (brain metastases) is expected in the second half of 2026. The company plans to leverage its existing sales forces for these new launches, with the GBM team detailing brain metastases and the lung sales force detailing pancreatic cancer, creating synergies and minimizing substantial additional investment.

Several risks could impact this trajectory. The NSCLC launch has proven more challenging than expected due to patient health, intense competition from drug therapies, and the novelty of device-based treatment for medical oncologists. Supply chain risks persist, particularly concerning single-source suppliers in Israel amidst ongoing conflict, despite efforts to secure second-source suppliers. Increased U.S. tariffs could impact cost of goods by approximately $5 million in 2025, and a prolonged U.S. government shutdown could delay FDA approvals for Optune Pax and Optune Mya, as well as Medicare reimbursements. While the company believes its current capital is sufficient, operating expenses are expected to increase with new indication expansion, potentially requiring additional capital if gross profit growth does not keep pace.

Conclusion

NovoCure stands at the precipice of a transformative era, evolving from a specialized GBM company into a diversified oncology platform. Its core investment thesis is rooted in the unique, differentiated Tumor Treating Fields technology, which has demonstrated compelling clinical benefits in aggressive solid tumors and offers a patient-centric, non-invasive treatment modality. While the initial launch of Optune Lua in NSCLC has encountered expected challenges, the company's strategic pivots and disciplined approach to market education and reimbursement are designed to build long-term value.

With the anticipated FDA approvals and subsequent launches of Optune Pax for pancreatic cancer and Optune Mya for brain metastases in 2026, NovoCure is set to unlock a significantly expanded market opportunity. The company's commitment to achieving sustainable adjusted EBITDA profitability by 2027, supported by a robust cash position and strategic leveraging of existing infrastructure, underscores its financial discipline amidst ambitious growth plans. Investors should recognize NovoCure's strong technological leadership and its strategic transition as key drivers for future value creation, even as the company navigates the complexities inherent in expanding novel device-based therapies into highly competitive oncology markets.