Novocure Ltd (NVCR) 2016 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to Novocure Q2 2016 earnings conference. (Operator Instructions) As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference, Ashley Cordova. Ashley, you may begin.

Thank you. Good morning, everyone. Thank you for joining us to review Novocure's second-quarter 2016 performance. I am joined today by our Executive Chairman, William Doyle; our CEO, Asaf Danziger; our CFO, Wilco Groenhuysen; and our Chief Science Officer and Head of Research and Development, Eilon Kirson.

The slides that will be presented today can be viewed on our homepage, www.Novocure.com, by clicking on the link for 2016 second-quarter financial results located in the events and presentations section in the lower-middle column of the investors page.

Before we start, I would like to remind you that our discussions during this conference call will include forward-looking statements, and actual results could differ materially from those projected in these statements. These statements involve a number of risks and uncertainties, some of which are beyond our control, including those risks and uncertainties described from time to time in our SEC filings. We do not intend to update publicly any forward-looking statement except as required by law.

We will first make some brief prepared remarks and will then move to a question-and-answer session. I will remind everyone that our financials for the three and six months ended June 30, 2016 are available in our press release and our 10-Q, both of which were released earlier this morning.

With that, I will now turn the call over to Asaf Danziger.

Thank you, Ashley, and good morning, everyone. I want to start with my key takeaways from the quarter.

Year-over-year growth in prescriptions, active patients and revenue continued in the second-quarter 2016, with sequential growth in active patients and revenue. We finished the quarter with 657 prescriptions, and I am proud of the progress we have made since FDA approval of Optune for newly diagnosed GBM in October. We did see a 20% dip in prescriptions in the US in Q2 compared to Q1 2016.

While we would, of course, prefer to see growth in prescription every quarter, we have historically seen variability in the pace of prescription growth as practice patterns vary and we address barriers to full adoption. These barriers include competition from some large, high-profile clinical trials that specifically exclude from enrollment patients treated with Optune.

Also, we need to educate and certify community oncologists who treat the majority of newly diagnosed GBM in the US, and we continue our effort to do so.

Finally, there is continued skepticism from a portion of our academic prescriber base that is voicing a desire to see presentation of additional clinical trial data, given their unfamiliarity with our new treatment modality.

While there are challenges inherent to bringing any novel therapy like Optune into widespread clinical use, I believe we have the right strategy and tools to overcome these challenges over time. The results of our EF-14 clinical trial of Optune plus temozolomide demonstrate the first advance in the treatment of newly diagnosed GBM in more than a decade, with significant improvements in progression-free, overall and two-year survival.

The NCCN just recommended, with uniform consensus, Optune as a standard treatment option for newly diagnosed GBM in its clinical practice guidelines. We believe this recommendation will have a positive impact on demand, especially in the community setting.

We recently received FDA approval for our second-generation Optune system, which is less than half the size and weight of the first-generation system and aims to make Optune even easier for patients. The second-generation weighs 2.7 pounds, compared to 6 pounds for the first-generation Optune system, and can be carried in a small over-the-shoulder bag rather than in a backpack. We have received very positive feedback from patients and prescribers in Europe and are excited to roll out the second-generation Optune in the US.

We continue to refine our sales, marketing and education efforts to ensure we maintain momentum within our existing base of core prescribers and also expand our base to include high-volume prescribers in the community setting who are new to Optune. Our marketing message is focused on ensuring that prescribers understand the strength of the Optune data and that they have the tools needed to confidently present Optune to their patients. We also plan to publish in the future additional data on Optune for the treatment of patients with GBM, including the 695-patient data set from the EF-14 trial.

Again, Optune is the first therapy to demonstrate an improvement in overall survival for newly diagnosed GBM in more than a decade, and we are committed to bringing this novel therapy to patients who have such a vital need for better treatment.

The second quarter was also our best quarter ever in terms of the extent of clinical pipeline development. I strongly believe that GBM is just the beginning for TTFields and Novocure.

With that, I will hand the call over to Wilco.

Thank you, Asaf, and good morning, everyone. 657 Optune prescriptions were received worldwide in the second quarter of 2016, representing 54% growth compared to the second quarter of 2015 and a 30% decrease compared to the first quarter of 2016. The prescription fill rate for the 12 months ended June 30, 2016 was 75%, and the 547 US prescriptions represent an estimated penetration rate of approximately 18% for the quarter.

While prescription volumes in the United States were less than we had anticipated for reasons Asaf has already mentioned, we saw strong a quarter-over-quarter growth in our ex-US markets.

EMEA markets represented almost 17% of our global prescription volumes in the second quarter. Germany continues to be our largest EMEA market, with approximately 75% over 2016 year-to-date ex-US prescription volume.

There were 891 active patients on Optune therapy as of June 30, 2016, an increase of 466 patients, or 110%, compared to June 30, 2015, and an increase of 94 patients, or 12%, compared to March 31, 2016. The year-over-year increase in active patients was driven both by prescription growth and by an increase in the percentage of newly diagnosed GBM patients who started Optune in prior periods and who typically have a longer duration of therapy. The portion of Optune prescription for newly diagnosed GBM was more than 50% in the second quarter of 2016.

We continued to expand coverage of Optune for the treatment of newly diagnosed and/or recurrent GBM in the second quarter of 2016. More than 10 million additional lives are now covered with new policies with Blue Cross Blue Shield of Michigan, Emblem Health, Blue Cross Blue Shield of Minnesota, and Group Health Cooperative Washington and Idaho. This brought the total number of covered lives to approximately 116 million in the United States, which is more than 60% of the privately insured lives as of June 30, 2016.

Since the publication of our phase 3 pivotal trial data for newly diagnosed GBM in JAMA, we have made significant progress in contract negotiations with many of the largest US commercial payers. We anticipate an increase in contracted lives will positively impact our time to collection in future quarters. It will also facilitate a transition to accrual-based revenue recognition.

For the 12 months ended June 30, 2016, the average cash payments received continue to be more than $14,000 per charge month in the United States. The difference between billed and paid amounts consists of patients' financial assistance, charitable care, discounts, disputed underpayments and indirect taxes.

Novocure's average time to collect on billed charges ranges between four and five months in the United States. Our time to collect reflects a wide distribution of payment times from payers. It remains a reasonable assumption that revenues correlate on average to active patient billings from two quarters prior to the current period.

The payment amount and average time to collect metrics do not include our experience with patients covered by the Medicare fee-for-service program, as we have not yet received material payments from that program. These invoices remain open as we appeal the coverage denials due to heavily backlogged administrative law judge-controlled proceeding.

The percentage of the US active patient population who are beneficiaries of the Medicare fee-for-service program continues to range from 20% to 25% in recent quarters. The payment amount and average-time-to-collect metrics also do not include our experience outside of the United States, as we do not yet have sufficient history with these payers to reliably report their payment patterns.

As we enter each new market, our commercial activities focus initially on establishing the required in-market infrastructure, certifying physicians to prescribe Optune and obtaining a defined reimbursement pathway. Once established, our commercial efforts turn into increasing adoption of Optune within that market.

Our 10-Q was filed earlier this morning, and I would like to highlight a few key points before handing the call over to Bill. Given that Optune represents a new treatment modality and unique business model, US GAAP requires that we recognize revenue on a cash basis until we are able to build up sufficient history with each individual third-party payer to reliably estimate their individual payment patterns. As a result, revenue in the reported periods is a mixture of amounts collected for patients on Optune in the current period and amounts collected from patients on Optune in prior periods. Historically, revenues have lacked active patient billings by approximately two quarters.

Second-quarter 2016 revenues increased to $17.9 million, compared to $6.5 million for the same period in 2015, representing 174% growth. This growth was driven by increased demand for treatment with Optune after FDA approval of Optune for the treatment of newly diagnosed GBM in October 2015. Global revenues included revenues outside of the United States of almost $1.8 million in the second quarter of 2016 versus $0.4 million in the second quarter of 2015, reflecting the increasing scale of our global operations.

We received FDA approval to market our second-generation Optune system in the United States on July 13, 2016 and are in the process of converting all patients from the first-generation to the second-generation Optune system. We are no longer manufacturing the first-generation Optune system.

Based upon our decision to convert active patients as quickly as possible, we recorded a non-cash impairment loss of $6.4 million for the write-off of first-generation Optune system field equipment for the three months ended June 30, 2016. We plan to convert all patients in the United States from the first-generation to the second-generation Optune system over the next three months and do not expect an additional material impairment charge in the future. Net loss for the second quarter 2016 was $14.6 million, compared to $29.4 million for the same period in 2015.

Our balance sheet remains strong. As of June 30, 2016, we had $80.9 million in cash and cash equivalents and $120 million in short-term investments for a total balance of $200.9 million cash, cash equivalents and short-term investments. Our second-quarter net cash used in operating activities was $29.4 million. In addition, we have a $6.6 million in PP&E and field equipment to support our commercial business.

On June 30, 2016, we provided a drawdown notice for the remaining $75 million available under our existing term loan agreement with an investment fund managed by Pharmacon Advisors LP. We will receive the funds in July 2016. For the avoidance of doubt, the net proceeds of $72.9 million are not included in the second-quarter cash balance. We believe our current cash and investment balances are sufficient to fund our operations for at least the next 12 months. We remain committed to advancing TTFields in its approved indications as well as running a broad clinical development pipeline for additional indications. Depending on the ultimate pace of commercial adoption and the timing of our phase 3 pivotal trials across multiple indications, we believe our current sources of liquidity should be sufficient to fund our operations through profitability.

I will now turn the call over to Bill for some closing comments.

Thank you, Wilco, and good morning, everyone. As we have consistently described, Novocure has a simple two-pronged strategy. We are focused on transforming the standard of care for glioblastoma to include treatment with TTFields, and we are committed to accelerating the development of TTFields for the treatment of a variety of other solid tumors. Scientific evidence suggests that TTFields is broadly applicable across solid tumors, and we currently have five ongoing or completed clinical trials in additional tumor types beyond GBM. Recent findings strengthen our belief that treatment with TTFields is compatible with both existing standards of care and emerging therapies.

In January 2016, we presented data from the first cohort of PANOVA, a phase 2 pilot trial in advanced pancreatic cancer, demonstrating that progression-free survival and overall survival in patients treated with TTFields combined with gemcitabine were more than double those of gemcitabine-treated historical controls. A subgroup analysis of the first cohort of the PANOVA trial was presented at ASCO in June 2016, demonstrating an overall survival benefit of TTFields plus gemcitabine in both locally, advanced and metastatic pancreatic cancer patients. Overall survival of patients with locally advanced pancreatic cancer treated with TTFields combined with gemcitabine had not yet reached a median after 15 months of follow-up.

In May 2016, we received FDA approval of our IDE application to initiate our METIS trial. The multi-center, open-label, randomized study will test the effectiveness of TTFields following stereotactic radiosurgery compared with watchful waiting alone in 270 patients with brain metastases stemming from non-small cell lung cancer. We are working closely with trial sites and institutional review boards to open sites so that patients can be enrolled as quickly as possible.

Also in May 2016, we finished enrollment of two phase 2 pilot trials, PANOVA and INNOVATE, studying TTFields in combination with standard-of-care therapies, including taxane, for advanced pancreatic and recurrent ovarian cancers, respectively. With six months follow-up for both trials, phase 2 pilot data is expected to be available for presentation in late 2016.

As previewed in our first-quarter call, we presented results at the American Association of Immunologists annual meeting in May 2016 which demonstrated that TTFields enhanced immunogenic cell death in non-small cell lung cancer cells in vivo. Preclinical mouse data suggests that combining TTFields with anti-PD-1 therapies may improve tumor control by enhancing any tumor immunity. We are extremely excited to further explore the potential combination of TTFields and emerging immunotherapies.

We have updated our LUNAR protocol design to capitalize on our potential synergies with taxane-based chemotherapies and our potential additivity with PD-1 inhibitors. LUNAR is a phase 3 pivotal trial in advanced non-small cell lung cancer, and we hope to enroll the first patients in late 2016.

As mentioned in our press release, we will hold a research and development day for analysts and investors on Monday, December 12, 2016. The event will provide analyses from completed clinical trials, including the 695-patient data set from our phase 3 pivotal trial study in newly diagnosed GBM, data from the PANOVA phase 2 trial in advanced pancreatic cancer, and data from INNOVATE phase 2 trial in recurrent ovarian cancer.

In addition, we will provide an update of recent preclinical findings related to Tumor Treating Fields and a review of our ongoing clinical activities. We are excited to share new data and additional details on our development progress at this meeting.

In closing, we are optimistic about the year-over-year growth that we continue to see as we build out Optune's commercial adoption in GBM. While we recognize that barriers to adoption still remain, we are optimistic that, in time, we will overcome the challenges inherent in bringing a completely new therapy into widespread clinical use. Novocure is transforming the standard of care for glioblastoma, and we are dedicated to bringing Optune to as many patients as can benefit from this new treatment as possible. The broad applicability of TTFields across multiple solid tumor types, the compatibility of TTFields in combination with certain existing and novel therapies, and the potential of TTFields' superior outcomes with no systemic toxicity give us the confidence that this technology will play a valuable role in the solid tumor treatment paradigm.

With that, I would like to thank everyone for their time this morning and for their interest in Novocure. Operator, can we please poll for questions?

(Operator Instructions) Cory Kasimov, JPMorgan.

This is Morgan on for Cory. Thanks for taking the question. I just wanted to dig in a little bit on that 20% decline in US prescriptions. Is that more of a function of not being able to expand the prescriber base, or is it kind of just doctors who have already prescribed it and not re-prescribing for new patients?

Good morning, Morgan. This is Bill. Thank you very much for your question. We know that transforming the standard of care with a novel therapy is challenging. We've known that from day one. And we've seen consistently that our growth has been more of a stair-step than a continuous upward line. This is also typical in other technologies. So, of course we would like to see quarter-over-quarter growth every quarter, but that is not likely to be the case.

With respect to the specific barriers that you address, I'm not sure that it's either/or. We spent a tremendous amount of effort this quarter in training new centers in the community. As we transition from recurrent GBM to newly diagnosed GBM based on our superiority data, we are expanding our coverage to the community where approximately 60% of the newly diagnosed patients are treated. So, during this quarter, a tremendous amount of our effort was focused on training in that particular arena.

Asaf mentioned also that in the academic setting, there are a number of high-profile clinical trials that are competing with us in that setting.

So, our goal remains to transform the standard of care. We are confident that we have both the data and that we are building the tools required to do that.

Asaf also mentioned that, just recently, we received two very important achievements that we think will be catalytic: the approval of the new gen-two device, which aims to make treatment much easier for patients and provide prescribers with even more confidence to prescribe the therapy; and, of course, the NCCN guidelines inclusion at the 2A level, which represents uniform consensus of the Optune therapy. We believe that that is particularly important in the community.

So, again, we would love to see continuous growth in prescriptions. We expect it to be step-wise. And we believe with our data and with the tools that we are providing, we will transform the standard of care.

Okay. And then you also mentioned in expanding that prescriber base that some of the doctors wanted to see more clinical data from that standpoint. Is this something that you are going to have to generate more clinical data on the GBM side, or do you think that the full 695-patient data set from EF-14 will be enough, or subsequent development in other tumor types would be enough?

Whenever a new technology is brought to the medical community, there are groups of doctors that remain skeptical. It's sort of the nature of the beast. I've introduced a lot of new technologies into widespread medical practice, and, in every single case, there is a range of response with a core of skeptics that always seem to exist.

In our particular case, a group of academic doctors has been requesting and is very interested in seeing the full data set. You will recall that our newly diagnosed indication was based on exceptionally strong interim data. The data was statistically powerful and resulted in the data monitoring committee's request that the trial be stopped for ethical reasons. That was a request that the FDA validated and agreed with. And, of course, we received our FDA approval on an expedited basis based on that data set. But there is interest in the community in seeing the full 695-patient data set. And, as was mentioned, those data will be available for the community before the end of the year.

I also think that continued success in other indications will only help. I think the strong data in pancreatic cancer that we showed at ASCO GI earlier this year certainly helped to build confidence. And I would expect as we continue to unveil or roll out additional data in pancreatic cancer, in ovarian cancer toward the end of the year that that will certainly be very helpful as well.

Okay. Great. Thank you.

Mark, your line is open.

I'm sorry, is it a question for Mark Schoenebaum?

Yes. Sorry.

Okay, yes. I didn't hear. It's Vlad on behalf of Mark Schoenbaum. Thank you for taking my questions. Previously, you gave slightly more color in terms of current penetration into the first line of the GBM patient population. And I wondered if you can update at this point for the current penetration in the first-line GBM, as well as at the current estimate of the duration of therapy, how long patients generally tend to stay on therapy.

Sure, Vlad. Good morning. I will take the question. And if we need additional detail, I will ask Asaf. But I think what you're asking is the percentage of the patients in the quarter that were newly diagnosed as opposed to recurrent....

Actually, no. If you have eligible patient population, how many patients are in the US will be eligible? Once we get GBM, how many of them are getting GBM at this point?

Okay. As Wilco mentioned, we don't break out our penetration by recurrent versus newly diagnosed. We believe that, in the quarter, approximately 18% of the eligible GBM patients received Optune therapy.

Okay. Thank you. And any update on the duration of therapy that you are seeing among patients? Is it consistent with clinical trials, or it's too early to say?

With respect to the recurrent patients, that remains the same -- approximately four to five months duration of therapy. With respect to the newly diagnosed, again, we received the approval in October of last year. So, we don't yet have enough commercial evidence to provide a specific figure. But everything that we see suggests that, at a minimum, it's consistent with the clinical trial of a duration of nine to 10 months.

Okay. And the final question will be about the delay between growth in patient numbers and growth in revenue. As you guys mentioned, there is a delay of about four to five months or almost a quarter between growth in patient numbers and growth in revenue. And I'm wondering if this is really a structural problem that we -- not a problem, a structural feature of the business and whether we have to expect this to continue. Or at some point, we will see this shrinking, and revenue growth will be in line with the growth in patient numbers. As well as whether this gap can shrink due to a recent update of the NCCN guidelines and potentially wider approval and lowering barriers for payers.

Wilco, why don't you take this question?

I hope everybody can hear me. I think we have some problems on the line, I think. But (multiple speakers) --

I just want to say hi and congratulations on the quarter. Also, apologize for Vlad's extra-long question.

Good morning. No problem; we love Vlad's questions.

Thanks for moving the call to the morning.

Wilco, take it away.

All right, guys. In terms of time to collect, we mentioned in the script that it's been consistently the case in the last few quarters that our time to collect is approximately four to five months. That's a two-quarter time lag that we have talked about in the past. It's driven by, as you know, accounting regs where we continue to recognize our revenue on a cash basis.

A few things that Vlad was mentioning such as the NCCN updated to 2A. In our earlier remarks we mentioned a lot of work we are putting into making progress in contracting and discussions. All those things, we believe, will help us to be able to secure a situation where the predictability of our revenue and collection is in line with the narrow bandwidth that we are allowed and that would enable us to switch to accrual-based revenue recognition. And, again, that disparity, if you want, between a revenue line and a cost in operating expenses line where the revenue essentially represents our activities of a couple quarters ago and the COGS and operating expense has represented our actual activities in the reported quarter that would go away.

So we're making good progress there. It's hard to tell if and when exactly that will materialize, but I think we're getting closer to being able to record at least part of our revenue on an accrual basis.

Okay. Thank you.

Lei Huang, Wells Fargo.

Just on this shift to accrual accounting, can you get a sense of when you expect that to happen? Do you think some of those accounts could convert over later this year? Is it more likely to start in 2017?

Wilco?

Yes, Lei. Good morning. Thanks for the question.

As I said, I think it depends on the number of things that have to happen, and contracting would be an important step to take. And I would like to think that that happens fast. We can make the switch, but we are in discussions. So, we would expect those discussions to be completed with a few of the payers constructively. But the timing is something that is very hard to predict within a month or a quarter.

So, we're making good progress. As we explained after Vlad's question, I think a 2A update is helping. We also mentioned in our prepared remarks that our collection remains about 14% overall. The acceptance in the payer community of our therapy remains strong. Expect contracting to be concluded for a proportion of our insured lives within the next period, whatever that period is.

But, again, we're making good progress. I can't say whether it's next week or next month or next quarter or in the beginning of next year, but we are hopeful that it will be relatively soon.

Okay. And so now that you have the NCCN treatment guideline upgrade to 2A from 2B, two questions on that. One, do you think this would encourage physicians to include Optune in study protocols for GBM going forward? And then, two, in terms of impact from the upgrade -- the treatment guideline upgrade, how quickly do you think we will see that materialize in your prescription numbers or your patient numbers?

Yes, I will take that. First, let me clarify that it wasn't an upgrade from 2B to 2A. We are in the guidelines for recurrent GBM at 2B, and this was based on the equivalence data of our EF-11 trial, the first trial that we did in extremely sick recurrent patients. And the 2A inclusion is a new inclusion for newly diagnosed GBM that was based on the JAMA publication of our superiority data in newly diagnosed GBM. So, we have both a 2B for recurrent and a 2A now for newly diagnosed.

I think this is undoubtedly helpful. It was one of the key catalysts along with peer-reviewed publication, FDA approval and now NCCN guideline inclusion that we discussed during our original IPO road show materials. So, we are delighted to have this.

Again, as Wilco said, we are not predicting precise impacts and timing because that's always very difficult. But we really have no doubt that this is going to be very helpful, particularly in the community as we expand to include those prescribers, both medical oncologists and radiation oncologists, who see the vast majority of the newly diagnosed patients.

With respect to the second part of your question, inclusion of Optune in study protocols, this is something that we feel very passionately about. We think every patient in every trial protocol, particularly patients who are agreeing to be randomized, should have the opportunity for the best standard of care when they volunteer for a trial. So this is also something that we are working very hard to make happen in the community. And the NCCN guideline inclusion will no doubt be very helpful with that effort as well.

Thanks. And then just my last question on the clinical trial -- the METIS trial that you just launched. One, can you confirm that you are using - I assume you are using the second-gen device in that trial. And then, two, did you give an estimate of how long you think it will take to fully recruit patients?

Yes, I'm going to -- we haven't heard from Eilon this morning. So let me turn this question over to our head of R&D, Eilon Kirson.

Thanks, Bill. First of all, we are not yet using the generation-two device in the METIS trial. The technology is frequency specific, as you know, for specific tumor types. The gen-two device works for the 200 kilohertz frequency which is specific for GBM.

We have not yet developed the gen-two brain mets device. It's not a very big development, and we will perform this as the results of the trial commence. The trial is itself is expected to accrue patients over about two years. So, we're expecting end of enrollment towards middle or end of 2018.

Thank you very much.

David Nierengarten, Wedbush Securities.

I this is Dilip for David. Thanks for taking my questions. I was wondering if you could discuss the duration of treatment and prescription fill rate in international markets and how that compares to use in the US.

Sure, maybe Asaf, you can comment on the international experience to date.

Thank you. In Europe, as we reported, we show a tremendous growth, especially in Germany. We have started active dialogue with the big payers in Germany, and our collection there in the coverage is improving every month. And you can see and realize it from the numbers. So, we feel very good about Europe. It's Germany and Switzerland, mainly.

Regarding the duration of treatment, right now we don't have enough data, but we feel comfortable with -- there is no news about changing duration of therapy here. And from our experience in recurrent GBM, the duration of therapy was even better than expected.

So, I guess that's fair to say there's more of a proportion who are newly diagnosed, I guess, outside the US than, I guess, in the US figure?

The answer is no.

Okay.

So the answer is basically no. You have anything to add?

No, I think it's too early to say what the ultimate distribution is, newly diagnosed or GBM in the European market versus what it is in the US market. And even the US market is in flux because we launched our GBM in 2012; newly diagnosed in -- late last year. So, these things are developing over time.

So, I think it's too early to call. I think we mentioned that we're north of 50% newly diagnosed overall treatment, and I think we should assume that is consistent of the geographies.

Okay. And I think you mentioned that the average reimbursement was over $14,000 for patients in the US. What's the corresponding figure you are seeing outside the US?

That's too early to tell. You know, we are developing a market in Europe, so there are a few steps that we take: making sure that we have communication on the clinical benefits into the medical community, that we certify the patients, that we are actively engaged in securing reimbursement. And those are the critical steps that we want to make sure we execute on before we start active marketing promotion.

In Germany, we see substantial growth. We have constructive discussions with the payer base. We do this on an individual basis. But it's too early to provide you with consistent data that you could model the way you would like to model. Unfortunately, it's a thing in flux.

All right. In that case, then, some US-centric questions. When can we expect that you will begin marketing the new NCCN guidelines, and how should we expect the sales force to expand in the near term?

Asaf, do you want to take that one?

Yes, sure. Thank you, Bill. NCCN, we received it a couple of days ago. Our goal is to increase our sales force. And right now, we have 41 people in the ground, and we're going to basically push it to around 60. So, we are actively increasing our sales force as we speak. I would just like to mention that (multiple speakers) -- six-zero.

Okay.

I just would like to mention that it takes probably six months to recruit and train this additional team. But we really feel comfortable with the new NCCN guidelines and the fact that we are a de facto moving to standard of care. We think it will be very influential on the prescriber, especially from the community.

Okay. And then I guess the final question is what percent of the patients on treatment in the quarter would you say were part of the Medicare-eligible population?

I think, as Wilco mentioned, this has been very consistent, between 20% and 25%, and this quarter was no different.

Thanks for taking my questions.

Gregg Gilbert, Deutsche Bank.

My first one is a direct question about just your confidence in your peak penetration assumptions for GBM and the speed with which you can achieve that peak penetration. Any updated thoughts on that?

Yes, Gregg. This is Bill. I will take the question. First of all, we have never predicted the rate because that's something that is impossible for anyone to predict.

With respect to the confidence, I think that, if anything, it's higher today than it's ever been. We are the people who see the therapy on the ground. And just to give you an anecdote, we've been converting the existing patients to the gen-two device. We received FDA approval on July 13, and, as of this morning, I think we have already completed over 100 conversions.

But one of those early conversions happened to be the very first patient that received Optune therapy in the US. It was a recurrent GBM patient refractory to chemo who is approaching his 10th year now, something that is inconceivable with recurrent GBM. And we went out to his home and we presented them with the new device, and it was tears and hugs. And this is the experience that all of us see day in, day out.

What we're focused on is building the tools to get there. Those tools started with the data, which remains the best, strongest data in GBM, period.

Secondly, we received FDA approval on an expedited basis with an exceptionally broad and compelling label.

Third, we had a publication in a peer-reviewed journal. We were published in JAMA with a wonderful article and a wonderful conclusion stating that we have superior overall and progression-free survival and two-year survival based on the interim data set.

Next on our list was NCCN guideline inclusion, which we just received a day or two ago.

And then, finally, we are doing everything we can to make this therapy manageable by patients, and that provides the confidence for the community that has never seen a therapy like this before. And we know that this was one of our barriers that -- this was the community that is used to prescribing drugs and not used to managing therapies. We make it very easy for these docs because they just need to prescribe. They don't need to train or manage that therapy. But as it's smaller and easier and simpler, that provides them with confidence.

So, we see these steps. A next step is going to -- or next tool will be the full data set, which will be again available later this year. But Gregg, our confidence is high.

Asaf mentioned some skepticism among prescribers. And I'm curious -- hopefully you are dialoguing with the skeptics. Are they most focused on the EF-14 final results and making sure the interim wasn't a fluke? Or will they remain skeptical based on lack of placebo-controlled? Help us set up the importance of EF-14 final data. And are we going to get that at SNO, or will we get that only at the analyst day?

Yes, so I will take your last question first, which is we haven't announced exactly -- it will certainly be available at the analyst day. We haven't announced exactly when it will be presented at a conference. But one plus one equals two. So, that will -- again, will be available certainly by the end of the year.

Every skeptic has a slightly different reason for being skeptical. As I mentioned in one of the answers to the questions, I have launched a number of new technologies that are now widespread standard of care. And this is something that always happens. When we launched and were bringing laparoscopic surgery to the market in the late 1980s, early 1990s, there were a core of surgeons that said, no, the gallbladder has to be taken out through open surgery. We need a week hospital stay. Today, you couldn't imagine that. At longest, it's an overnight procedure. So, this is what is required with a new technology.

That said, we do hear quite often that the full data set is important. So, our hope is that that is yet another tool that will help us in getting this therapy to the patients who really need it.

Okay. My last two-part question here is -- for the ovarian and pancreatic readouts, are you going to press-release the top line when you get them? Or will we wait for the R&D day for those? And any update on Medicare discussions?

We haven't decided yet, Gregg. Our typical history has been to press-release the top-line results. We expect them right about the same time as the R&D day. So, when you look at the six-month follow-up, they're going to be very close to one another. So, exactly when it will happen -- but I would not expect that significantly prior to the R&D day in any case.

And with respect to the discussions with CMS regarding the Medicare fee-for-service patients, those continue at a very high level. There's quite a bit of momentum. We feel on our side, with respect to those discussions, things like the peer-reviewed publication that was received in December and the NCCN inclusion of a couple of days ago are very important in those discussions.

That said, there is not a clock at CMS, and so it's difficult to predict the timing here. I will say that there is a tremendous amount of support also on Capitol Hill with respect to this therapy. There is widespread acknowledgment that this is a terrible disease and that Medicare beneficiaries should receive the best care possible. And so we appreciate that support.

You know that we continue to provide the therapy to those patients. We continue to build CMS. We are one of the many companies and service providers that are stuck in the backlogged ALJ queue. But we expect those claims to be resolved ultimately as well.

Thanks.

(Operator Instructions) I'm showing no further questions in the queue. I would like to turn the call back to Mr. William Doyle for closing comments.

My only closing comment is thank you. We are fully dedicated to our dual mission of bringing TTFields therapy to GBM patients worldwide as well as expanding into other solid tumors where we believe we can provide a significant benefit. And we really appreciate your interest in our activities. Have a great day, everybody.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the call, and you may all disconnect. Everyone have a wonderful day.