NovoCure (NVCR -3.76%), known for its pioneering Tumor Treating Fields (TTFields) therapy, released its third-quarter results on Oct. 30. The company recorded revenue of $155.1 million, a 22% year-over-year rise, outperforming analysts' expectations of $143.95 million and indicating growing market acceptance of its novel therapies.
On the bottom line, its non-GAAP earnings per share (EPS) came in at negative $0.28, which was better than the consensus prediction of about negative $0.33. Though the company remains unprofitable, its losses did narrow, and key developments point to a promising trajectory.
| Metric | Q3 2024 Actual | Q3 2024 Analysts' Estimate | Q3 2023 Actual | % Change (YOY) |
|---|---|---|---|---|
| Revenue | $155.1 million | $143.95 million | $127.3 million | 22% |
| Non-GAAP EPS | ($0.28) | ($0.33) | ($0.46) | N/A |
| Net earnings | ($30.6 million) | N/A | ($49.5 million) | N/A |
| Adjusted EBITDA | $1.7 million | N/A | ($29.1 million) | N/A |
Source: Analyst estimates for the quarter provided by FactSet.
Understanding NovoCure
NovoCure specializes in TTFields therapy, which uses electric fields to disrupt cancer cells' reproduction. Its non-invasive flagship devices, Optune Gio and Optune Lua, continue to be its core revenue drivers. Optune Gio specifically targets glioblastoma multiforme while Optune Lua is focused on metastatic non-small cell lung cancer.
Strong geographic performance, notably in the U.S. and France, emphasizes the importance of further international market penetration. The company's success will hinge on broadening the indications for which TTFields therapy is approved.
Quarterly Highlights
This quarter, NovoCure's revenue surged to $155.1 million, with the U.S. market contributing $98.3 million. France and Japan also produced significant revenue streams at $15.2 million and $8.6 million, respectively. As of the end of the quarter, there were 4,113 active TTFields therapy patients.
While revenue rose, NovoCure booked a net loss of $30.6 million, compared to a loss of $49.5 million in the same quarter a year prior. Its gross margin improved by about 200 basis points year over year to 77%, further showcasing its cost-management efforts.
Notable regulatory milestones included the approval of Optune Lua for treating metastatic non-small cell lung cancer. Yet the company still faces significant hurdles in its efforts to manage marketing expenses and compete effectively within the oncology sector.
Management reduced R&D expenses by 3%, but that was countered by increased marketing outlays. On adjusted EBITDA, NovoCure showed notable progress, improving from a loss of $29.1 million to positive earnings of $1.7 million.
Looking Ahead
NovoCure is expected to maintain its focus on international market expansion and clinical pipeline enhancement. The unveiling of top-line data from its phase 3 PANOVA-3 trial in advanced pancreatic cancer is expected in the final quarter of 2024. A successful result could potentially lead to an expanded market for TTFields therapy.
Management projects further growth in 2024, contingent on strategic regulatory advancements. Although financial performance reflects ongoing challenges, based on the current trends and operational strategies, a sustainable trajectory toward profitability remains attainable. Stakeholders should closely monitor developments regarding regulatory approvals and market expansions.
