NovoCureNVCR

Novocure brought in about 184 million dollars in revenue last quarter, beating the 170 million dollars analysts expected. This growth was fueled by an 18 percent increase in the number of active patients using its Tumor Treating Fields therapy, which uses electric fields to treat aggressive cancers. The company also lost less money than expected, reporting a loss of 13 cents per share versus the 33 cents analysts predicted.

A key part of the growth story is the expansion into new types of cancer. The company recently received approval in Europe to treat pancreatic cancer with its Optune Pax device and already has more than 280 patients using it. For long-term owners, this quarter shows the business is successfully moving beyond its original focus on brain cancer and toward its goal of becoming a broader oncology platform.

See the full quarter, and how our tracked metrics did

Source: 8-K filing

Key highlights

• Revenue outlook raised: Management increased its full-year sales guidance to a range of $710 million to $725 million, up from the previous high end of $710 million, as new products begin to contribute more to the business. The company expects its newest therapies for lung and pancreatic cancer to bring in between $20 million and $30 million of that total this year.
• Active patient base expanding: The total number of patients using the company’s wearable cancer therapy grew 18% to 5,128, which is a key sign of adoption for a business that relies on long-term treatment cycles. This growth was led by the newer Optune Lua device, where the patient count jumped 51% to 207 compared to the same time last year.
• Gross margins widening: The company kept 78% of its sales as gross profit, which is the money left after paying for the physical devices and patient support, up from 74% a year ago. While this was helped by a one-time $4.9 million refund on import taxes, it shows the business can maintain its high profitability per patient even as it scales up.
• New product momentum: Doctors wrote 418 prescriptions for Optune Pax, a treatment for pancreatic cancer, in its first full quarter since launching in the United States. This fast start brought the total number of active patients for this specific device to 285 by the end of June, providing a new source of growth alongside the core brain cancer business.
• Operating expenses falling: Total spending on running the business dropped to $153 million, down from $156.9 million last year, as the company moved past the heavy costs of finished clinical trials. Research and development costs specifically fell 8% to $51.4 million, helping the company reach a positive adjusted EBITDA, a measure of cash-based profit, of $10.8 million.

Our take: A standout quarter that shows Novocure is successfully moving beyond its original brain cancer market. The combination of 18% patient growth and an upgraded full-year revenue outlook suggests the new launches in lung and pancreatic cancer are taking hold. This performance significantly strengthens the case that the company can reach sustainable profitability while expanding its reach.