NovoCure (NASDAQ:NVCR), a medical device company focused on oncology, reported its second-quarter results on Wednesday.

Revenue growth continues to remain strong and came in at 41% for the period. The sales leverage helped expand its gross margin, enabling the company to significantly reduce its bottom-line loses and produce operating income for the first time.

NovoCure Q2 results: The raw numbers


Q2 2019

Q2 2018



$86.7 million

$61.5 million


Operating Income

$1.2 million

($7.1 million)


Net income

($1.3 million)

($15.5 million)


Earnings per share




Data source: NovoCure.

What happened with NovoCure this quarter?

  • Active patients, which is a metric that counts the number of active Optune users at the end of the period, increased 26% to 2,726. Domestic active patient growth was 17%. Active patient growth was 32% in Germany and other EMEA markets, and 286% in Japan.
  • The number of Optune prescriptions received during the quarter grew 9% to 1,362. 
  • Revenue growth of 41% outpaced active patient growth. Management stated that net revenue per active patient increased during the period thanks to improved reimbursement rates. The company believes that higher reimbursement rates are sustainable.
  • Gross margin expanded 800 basis points to 76%.
  • Research and development costs grew by 71% with four phase 3 trials currently in progress.
  • Sales and marketing expenses increased 24% due to the recent launch of NovoTTF-100L, its recently approved treatment for mesothelioma.
  • Cash balance at quarter-end was $285 million.
Female doctor giving thumbs-up

Image source: Getty Images.

What management had to say

CEO Asaf Danziger called the quarter "transformative" and was thrilled with the FDA approval of its new mesothelioma product, stating, "Our torso device, NovoTTF-100L, was approved by the FDA to treat malignant pleural mesothelioma in combination with standard chemotherapies via the Humanitarian Device Exemption pathway. For the first time in over 15 years, there's a new FDA-approved treatment for mesothelioma."

Bill Doyle, NovoCure's executive chairman, also shared some details about Medicare's recent decision to reimburse for Optune: "Last week, Medicare released a final local coverage determination and fee schedule amount which provides coverage and pricing of Optune for newly diagnosed GBM, effective September 1, 2019. In response to public comments, the final coverage criteria eliminated or revised many of the restrictions originally proposed."

Looking forward

Management doesn't share guidance with Wall Street. However, the company did state that Zai Lab, which is its commercial partner in China, could launch Optune before the end of the year.

Overall, there are a lot of good things happening at NovoCure right now. Active patient count is on the rise, revenue per patient is growing, Medicare reimbursement is on the horizon, the pipeline continues to move forward, and profitability appears to be within reach. Investors have every reason to be excited about where this company is heading.

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