Novocure Ltd (NVCR) 2016 Q3 法說會逐字稿

Good day ladies and gentlemen and welcome to the Novocure third-quarter 2016 earnings results conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. As a reminder, this conference is being recorded.

I would now like to have the conference over to Ashley Cordova, Vice President of Finance and Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining us to review Novocure's third-quarter 2016 performance. I'm 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 third-quarter financial results located in the events and presentation section in the lower middle column of the Investors page.

Before we start, I would like to remind you that our discussions in 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 then we will move on to a question-and-answer session. I will remind everyone that our financials for the three and nine months ended September 30, 2016 are available in our press release and in our 10-Q, both of which were released this morning.

With that, I'll now turn the call over to Bill Doyle.

Thank you, Ashley, and good morning everyone.

Before we jump into the details of the quarter, I want to remind everyone of Novocure's simple two-pronged strategy. We are focused on transforming the standard of care for glioblastoma to include treatment with Optune, and we are committed to developing TTFields for the treatment of a variety of other solid tumors. We made good progress on both fronts in the third quarter.

We saw year-over-year and sequential growth in the third quarter across all key operating statistics and in revenues. We finished the quarter with 690 prescriptions representing 94% growth compared to the third quarter 2015 and 5% growth compared to Q2 2016.

As of today, we have also negotiated contracts to establish Optune as an in-network benefit for more than 120 million lives, including agreements with two of the three largest health plans in the United States, to become effective during Q4 2016.

In September, we announced that the long-term analysis of our Phase III pivotal trial in newly diagnosed GBM confirms the superior progression free survival and overall survival seen at the interim analysis. The long-term analysis shows survival rates were significantly higher two, three and four years from randomization in patients receiving Optune with temozolomide compared to temozolomide alone. A number of clinicians have voiced a desire to see these long-term data to be presented as a latebreaking oral presentation at the 21st Annual Scientific Meeting of the Society for Neuro-Oncology on November 18.

Optune plus temozolomide is the first treatment in more than a decade to significantly improve outcomes for patients with newly diagnosed GBM. Importantly, treatment with Optune does not harm newly diagnosed patients' quality of life, cognitive and functional capabilities, or ability to perform functions of daily living. In our EF-14 trial, Optune extended survival for patients with newly diagnosed glioblastoma and is transforming the way that glioblastoma is treated.

I will now hand the call over to Asaf for a bit more color.

Thank you, Bill, and good morning everyone. We had 690 prescriptions in the third quarter, including 569 prescriptions in the US and 120 prescriptions in Germany, Switzerland and other EMEA markets. This represents 4% quarter-over-quarter growth in the US and 9% quarter-over-quarter growth in the EMEA. The sequential growth in the US was mainly driven by increased adoption from radiation oncologists. This group has been a core target of our certain marketing efforts since our launch in newly diagnosed GBM.

More than 50% of our prescriptions in the third quarter were from patients with newly diagnosed GBM. The prescription fill rate for the 12 months ended September 30, 2016 was 74%.

We continue to work towards wide acceptance of Optune by both clinicians and patients. Clinicians continue to gain experience with Optune. Clinicians are also gaining experience with how to present the treatment to their patients.

Treatment with Optune is the most significant advance in newly diagnosed GBM in more than a decade. Treatment with TTFields has the potential to impact the survival outcomes for patients with many types of solid tumors. Given what is at stake, we are relentless in our efforts to increase awareness and acceptance and drive adoption. We so increased third-party validation of the value of treatment with TTFields during the third quarter and CCM guidelines were updated in July, including in treatment guidelines is important in our outreach to community-based oncologists. It also facilitates our efforts to include patients treated with Optune and clinical trials. In fact, in the third quarter, the Alliance for Literate Study was updated to specifically include Optune as a part of their eligibility criteria. This NCI study is testing average PARP inhibitor in combination with temozolomide in newly diagnosed GBM.

Before I hand it over to Wilco to talk about the financials, I want to take a moment to thank all of our colleagues who worked so hard on the launch of the second generation Optune system. The second-generation Optune system is less than half the weight and size of the first generation and is designed for everyday life for our patients. We received FDA approval for the system in July, and we are fully prepared for the transition. The first patient was converted one week after FDA approval and 90% of the US patients were converted within one month. Our colleagues who work so hard on this transition exemplify our patient coordination.

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

Thank you Asaf, and good morning everyone.

There were 985 active patients on Optune therapy as of September 30, 2016, an increase of 516 patients, or 110%, compared to September 30, 2015, and an increase of 94 patients, or 11%, compared to June 30, 2016. The 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.

We continued to expand coverage of Optune for the treatment of newly diagnosed and/or recurring GBM in the third quarter of 2016. More than 40 million additional lives are now covered through renew policies with Medi-Cal, Premera Blue Cross and Geisinger Health Plan. This brought the total number of covered lives to approximately 130 million in the United States as of September 30, 2016.

Importantly, we have also made significant progress in contracting. As of today, we have negotiated contracts to establish Optune as an in-network benefit for more than 120 million lives, including agreements with two of the three largest health plans in the United States to become effective during the fourth quarter of 2016. We anticipate that a significant increase in contracted lives will facilitate a transition to accrual-based revenue recognition under US GAAP for certain payers as these contracts will enable us to reliably estimate the amount that will ultimately be collected.

We will continue to recognize revenue on a cash basis for individual third-party payers with whom we do not have contracts and with whom we have not built up sufficient history to reliably estimate their individual payment patterns. We anticipate there will be an extended period of time when our revenue is a mix of both cash-based and accrual-based revenue.

For the 12 months ended September 30, 2016, the average cash payments received continued to be more than $40,000 per charge month in the United States. The difference between billed and paid amounts consists of patient financial assistance, charitable care, discounts, disputed underpayments and indirect taxes.

The payment amount metric does not include our experiments with patients covered by the Medicare fee-for-service program as we have not received material payments from that program. These invoices remain open as we appeal the coverage denials that we have on the backlog ALGA controlled proceedings.

The percentage of our US active patient population who are beneficiaries of the Medicare fee-for-service program continues to range between 20% and 25%. The payment amount metric also does 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 an acquired in market infrastructure, certifying physicians to prescribe Optune, and obtaining a defined reimbursement pathway. Once established, our commercial efforts turn to increasing adoption of Optune within that market.

Now I would like to highlight a few key points on our financial statements. Third-quarter 2016 revenues increased to $21.7 million compared to $9 million for the same period in 2015, representing 142% 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 more than $3.5 million in third quarter of 2016, versus $0.4 million in the third quarter of 2015, reflecting an increasing scale of our global operations and increased collection rates in Germany.

Net loss for the third quarter of 2016 was $33.6 million compared to $26 million for the same period in 2015.

Our balance sheet remains strong. As of September 30, 2016, we had $115.8 million in cash and cash equivalents and $119.7 million in short-term investments for a total balance of $235.5 million in cash, cash equivalents and short-term investments. This balance includes net proceeds of $72.9 million received in July from a drawdown of funds available under our existing term loan agreement with an investment fund managed by Pharmakon Advisors LP.

Our third-quarter net cash used in operating activities was $33.5 million. In addition, we invested $4.8 million in PP&E and field equipment to support our commercial business.

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 III pivotal trials across multiple indications, we believe our current sources of liquidity should be sufficient to fund our operations through profitability.

I'll now turn the call back to Bill for some closing comments.

Thank you Wilco.

Before we open the call to questions, I want to spend a few moments reviewing our clinical pipeline, given its importance in the fundamental value of Novocure. The mechanism of action of TTFields is broadly applicable to multiple solid tumors. We have 15-plus years of research and multiple peer-reviewed publications with preclinical data in 14 indications.

Preclinical evidence shows that the combination of TTFields with radiation and certain types of chemotherapy or immunotherapy may lead to additive or synergistic efficacy. This includes recent preclinical data which suggests that TTFields, together with certain immunotherapies such as PD-1 inhibitors, might enhance tumor fighting effects.

We have recently enrolled the first patient in our METIS Phase III pivotal trial in brain metastases. This multicenter open-label study will test the effectiveness of TTFields following stereotactic radiosurgery compared with watchful waiting alone in 270 patients with brain mets stemming from non-small cell lung cancer. METIS is Novocure's first Phase III pivotal trial outside of glioblastoma, and represents a significant milestone for the Company.

We have developed a protocol for our LUNAR Phase III pivotal trial in non-small cell lung cancer and are in discussions with the FDA surrounding the IDE application. As currently drafted, this multicenter open-label study will test the effectiveness of TTFields in combination with PD-1 inhibitors, or docetaxel versus PD-1 inhibitors, or docetaxel alone for second line treatment of 512 patients with non-small cell lung cancer.

LUNAR builds on our Phase II pilot trial in 41 non-small cell lung cancer patients receiving TTFields in combination with pemetrexed published in lung cancer in July 2013, which showed a median progression free survival that was more than double historical controls and a median overall survival that increased by more than 65% compared to historical controls.

We also have three ongoing Phase II pilot trials in pancreatic cancer, ovarian cancer and mesothelioma. The first cohort of our PANOVA Phase II pilot trial in 20 advanced pancreatic cancer patients receiving TTFields in combination with gemcitabine presented at ASCO GI in January showed median progression free and overall survivals that were more than double historical controls.

We are excited to share an update of our full clinical pipeline, including data on the second cohort of the PANOVA trial and data from our INNOVATE Phase II pilot trial in recurrent ovarian cancer, at our R&D day planned for December 12, 2016.

In closing, we are optimistic about the year-over-year and sequential growth that we see as we continue to work towards broad acceptance of Optune. Optune offers significant improvements and survival outcomes for patients with newly diagnosed glioblastoma and is transforming the way that glioblastoma is treated. We look forward to the presentation of our long-term GBM survival data at SNO.

The broad applicability of TTFields across multiple solid tumor types, the potential compatibility of TTFields in combination with certain existing and novel therapies, and the potential of TTFields' superior outcomes with limited side effects gives us the confidence that this technology will play a valuable role in the solid tumor treatment paradigm.

With that, I'd 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.

Good morning guys and thanks for taking my questions. I guess I first wanted to ask you about what seemed like two very important developments in the third quarter, so the long-term data and the inclusion of Optune in treatment guidelines. So, first, on the follow-up survival analysis, I'm curious how or when you think that may begin to benefit Optune commercially. Is there already some anecdotal feedback that it is having an effect, or will it take the upcoming presentation at SNO to drive the awareness, or is this something that maybe we have to wait to be included in label?

Then just curious on any tangible feedback you have on the significance of the inclusion in those treatment guidelines since you do have roughly a full quarter since that took place. Thanks.

Good morning Cory. Thanks very much for your questions.

First of all, as you know, we don't provide predictions of the future, but I think the two achievements that you mentioned are extremely important for Novocure and for GBM patients.

With respect to the long-term survival data, we are all looking forward to the presentation at the Society of Neuro-Oncology. As we have announced, this will include data on, first of all, the full cohort of patients. Everyone on the phone will recall that we received FDA approval on an expedited basis based on interim analysis. However, at the time of the interim, we had recruited the entire cohort and continue to follow that cohort. So the presentation at SNO will include data on the full 695 patient data set; plus it will include the extended long-term analysis. And again, my expectation is that that is going to be extremely important for the GBM community. As you know, it's extremely rare to be talking about three- and four-year survivals in this disease.

With respect to NCCN, as we've discussed, we know that, for newly diagnosed GBM, a significant portion of those patients, approximately 60%, are treated in the community, and we believe that NCCN inclusion is extremely important, particularly in that area.

Asaf mentioned the increasing prescriptions from radiation oncologists. We think that the NCCN guidelines inclusion will continue to benefit in the community and with rad-oncs.

And one of the things I think we really saw in the third quarter as we reported is tremendous progress with payers, both in terms of covered and contracted lives. This was a tremendous achievement, and I think that we can attribute much of that to the NCCN inclusion.

Okay. To go back to the question about the long-term survival, I guess to ask this in a different way, in your second-quarter call, you talked about some of the headwinds or commercial hurdles that were in place, one of which was just there were some holdouts in the medical community who still maybe didn't necessarily fully (technical difficulty). So now that you have that long-term data you think would be pretty compelling to most physicians out there, and given how specialized of an (technical difficulty) glioblastoma is in a conference like (technical difficulty), is there a precedent that physicians see the data at SNO and that is -- it doesn't have to be for Optune necessarily, but for other products -- that that's what kind of drives adoption, or is this more of a community where it's got to be in the label for people to really grasp onto it?

Yes, I think our view is that the presentation of the data is the key event for this community and that while, over time, the data will be submitted and likely included in the label, we think the presentation of the data is the key.

Okay. Thank you.

Mike King, JMP Securities.

I guess my questions really are a bit of a follow-up to Cory's, which has to do with I think you've talked about some of the elements of growth for the quarter. But I'm just wondering if you can attribute the success in the quarter, the sequential growth, to any one particular factor or multiple factors. I know, in the second quarter, it was rather challenging, and I know that you also said with regard to the second quarter that it had to do with convincing physicians to prescribe it and getting patients to actually utilize the system. So, I'm just wondering if you can point to any key turnarounds. Was it more messaging? Was it more feet on the street? Anything in particular that you can point to?

Thank you for the question. It's Asaf. So again, there's only one reason. We believe that the combination of NCCN, the second generation, and the fact that our prescriber base will change toward and community drove this growth. And in addition, the fact that we are going to present the long-term survival in SNO, it's also I would phrase it addressing another question mark from some of the skeptics.

I was just wondering. I was looking at the slides in the appendix, and you have active patients on prior prescriptions in the period, prescriptions from the prior period filled, but there's no comment about duration. And I'm not sure if you've got any reliable numbers at this point, but can you talk a little bit about duration that you are seeing and whether that increased on a quarter-to-quarter basis?

So, the duration of therapy basically continue to be in line with our expectations.

And you don't want to give a figure on that number?

So, in the EF-14 trial, the medium treatment duration was eight point -- I'm sorry. The median was nine months, and we continue to be in line with these numbers.

Okay. But you also had a greater proportion of newly diagnosed patients in the quarter versus prior, so I'm just wondering if that's helping you at all.

Yes, I think the mix is over 50% of the patients are newly diagnosed, so you can make your own conclusions.

Right, fair enough.

Just to jump in on this, I think we are seeing consistency in terms of duration of therapy, so in the recurrent population where we have a lot of experience, we can continue to see approximately a four-month median. In the newly diagnosed, as Asaf mentioned, in the clinical trial, we saw approximately nine months. It's too early to field because these patients live much longer to report a field-based number, but we feel comfortable that nine is a number that will stand, at least stand the test of time.

And as also, as Asaf mentioned, we have seen our mix shift. We were at about 35% newly diagnosed in Q4 2015, and we know that we are now more than 50%, so there is some benefit to the continued shift to newly diagnosed.

Okay, fair enough. Sorry to be a pest on that. And then just one quick noncommercial question. You guys talked about the Phase IIs in pancreatic, lung and ovarian. Just any update on the combinations with the checkpoint inhibitors and when we might see some data on those trials? Thank you.

Yes. First of all -- and thanks for the question because we really want to emphasize that we are planning a comprehensive R&D day for December 12. That will be held in New York. And at that R&D day, we expect to share new clinical data, both from our pancreatic cancer Phase II and our ovarian cancer Phase II. We are also going to share the latest preclinical data that we have available. We will have an opportunity to really go in depth on the long-term analysis from SNO, because that will be by design after SNO. And we will also have a chance to go into more detail about our Phase III program and the trial design, including, as Eilon mentioned in his comments, in our non-small cell lung trial design that does include immunotherapies.

Thanks for the comprehensive answers. I appreciate it.

Larry Biegelsen, Wells Fargo.

Good morning. Thanks for taking the question. Hopefully you can hear me okay. Let me just start with the news that you're in-network for 120 million people in two large health plan starting in Q4. What are the implications of that?

This is Wilco. I think the implications are multifaceted. We see it of course -- I'm the finance guy, so we see it as an important step towards being able to shift to accrual-based revenue recognition. With these contracts, we have our certainty or enough certainty about payment and payment rates, so that's a development that we expect to kick in in the fourth quarter when some of these larger contracts become effective in the second half of the fourth quarter. We also see it as a validation point. The larger payers are contracting. As you know, historically, we've had a very high success rate in secured reimbursement, so we believe this is a confirmation of the consistency of that reimbursement and, from a payer perspective, the validation of TTFields as a treatment modality. It's also beneficial from an efficiency perspective. We were still handling all of those cases, both Novocure and those payers. And we've basically, with the volume and with the data that both Bill and Asaf were alluding to, come to a conclusion it doesn't make a whole lot of sense to spend a lot of time and energy on managing those claims.

So, again, from a reporting perspective, important in the sense of enabling us to switch to accrual based revenue recognition, from a validation perspective, important that a very substantial proportion of the US privately insured population is now under contract for TTFields. And from an efficiency perspective, we can deploy our resources on more meaningful efforts.

Thanks, that's very helpful. And you continue to do well outside the US. I think, in the quarter, about 17% of your prescriptions were from outside the US. How do you see that trending over time? And is there any update on Japan on newly diagnosed GBM? I did have another question after that.

I'll take the US. It's mainly we're talking about the Europe and specifically Germany and Switzerland. And we are seeing a dramatic uptick. We built the infrastructure over there to support all of these patients and we have the field team to promote our treatment, and we are expecting to continue to see this growth in Europe.

Regarding Japan, we are expecting to receive approval for newly diagnosed GBM during this year, and after that, we will continue our negotiation with the Japanese authorities regarding reimbursement. This is the process in Japan, which we started this negotiation a few months ago, but formal negotiations will be started after approval.

That's very helpful. And just lastly, you talked about 60% of patients, GBM patients, are managed in the community. What percent of Optune right now prescriptions are coming from community docs? How do you see that trending?

And just lastly, Q4 is typically your strongest quarter in terms of prescriptions. Would you expect that to be the case this year as well? Thanks for taking the questions.

So, originally, I'd just like to remind everyone we start in the academic community, and then we move to the community outside the academics to the community, and also we change -- we are changing -- this was part of our plan to move from no oncologists to rad-onc and general oncologists. And we see this trend moving. This quarter was our best quarter ever regarding this conversion. Just to remind you of a few numbers. I think last year we had 9% of our prescribers was rad-onc, and now it's 50% of our prescribers. So we actually feel that we are on the right direction in this respect.

Thanks for taking the questions.

I'm sorry, we move from 9% to 25%. I apologize for that.

25%. Any color on whether Q4 will be the strongest quarter of the year like we saw last year?

Again, it's very difficult for us to predict the future when we don't give guidance. So, I apologize for that.

Understood. I thought I would try. Thank you.

Tao Levy, Wedbush.

Great. Good morning. Just a couple of questions. Any update on CMS reimbursement? I might've missed it at the beginning. But any progress being made there?

Yes. As Wilco said, we have yet to receive significant payment from Medicare fee-for-service program. We continue to treat all Medicare patients who are prescribed, and we continue to encourage the clinical community to prescribe for this population, so there is no barrier with respect to prescriptions. This population continues to make up, quarter-on-quarter, somewhere between 20% and 25% of our total. We are invoicing Medicare for these patients, and providing all the appropriate paperwork for the challenges as they require.

We are also extremely active in discussions with them. Unfortunately, this is not a process that has a defined clock, as some do at the FDA. I think all of the things that we mentioned, and all of the achievements, the fact that such a large proportion now of the private payers are covering Optune and reaching contracted terms, the fact that we are included in the NCCN, and I think the data that we will be presenting at SNO are all critical factors in ultimately getting where we want to be with CMS.

The other thing I will say is this process, unfortunately, is not unique for Optune. This is just what companies who are bringing new therapies to market have to go through.

Got it. And in terms of being able to change to accrual accounting, what are the missing parts there, Wilco?

I think one missing part is no longer missing, which is the contracted lives. So, the key issue, as we discussed on an earlier call, is our ability to reliably predict collection on basically a patient plan basis, given the fact that we don't have tens of thousands of patients, but about 1,000 patients. That predictability is a test that's difficult to meet with statistical significance.

Now, with the contract, that test is no longer applicable, because you've written terms with contracted payers. So, for that reason, and we talked about it in earlier calls as well, Tao, we were pursuing contracting discussions. That was one of our objectives for this year. And we are very pleased that we now hit 120 million. Some of these contracts will become effective later in the quarter, but it will enable us to switch to accrual based revenue or recognition.

Some other payer patients plan combinations are not under contract and are of a volume where we still may not be able to meet that statistical significance. So, over time, you will see a migration from fully cash-based revenue recognition to fully accrual-based revenue recognition, and we will provide you ample transparency in that pathway as it occurs.

Got you. And so UnitedHealth has put you guys on their coverage, or Optune on their coverage, to begin at the beginning of next year. Is that -- was that the third large payer that was missing out of the two out of the three, or was one of the other two already United?

I'd like to make a distinction between covered lives and contracted lives. So, covered lives is basically when you are within certain guidelines, you have approval to start coverage and you will get -- and the coverage issue is no longer a challenge. So 130 million lives under contract at the end of the third quarter with United's publication of yesterday will add about 45 million to that effective January 1. So, if you do the math, as of January 1, if nothing else changes, we would have 175 million, a little bit more than 175 million, lives, covered lives, in the United States, privately insured lives. And that goes back to Bill's comment as well. So the vast majority of privately issued US lives would be covered or under contract, or both, while the Medicare fee-for-service process is still ongoing, but we believe that's an important factor in that discussion as well.

So, why wouldn't then accrual accounting kick in in the first quarter? You'd have practically the majority of the US adult population at that point.

So, first of all, our topline is not US-only. I think, for the 120 million, that would fully kick in in the first quarter. It will partially kick in in the fourth quarter as these contracts become effective. So, the more significant impact you would probably see in the first quarter, Tao.

Got you. Okay. And just the last one, sorry to belabor this. But in terms of the data that would be coming out at SNO, any chance that you could move up in the NCCN guidelines from a two-way to a one, or is that just impossible?

First of all, I think we are very happy with our NCCN inclusion today as a standard therapy. We don't see that there is a material effect, and we are delighted with two-way.

No doubt the NCCN will take into account all data as it's presented. And again, this is the most significant advance in GBM in over a decade. We're going to -- the community has asked for the full data set. We are going to give them the full data set. We are going to give them the extended long-term data. And again, we've already said that it is significant improvement, two, three, four years out. So, no doubt this will be considered by the community.

Fantastic. Thank you so much.

John Scotti, Evercore ISI.

It's Vlad Nikolenko on behalf of John Scotti and Mark Schoenebaum. So, I have a few questions. First of all, congrats with the sequential growth in prescription numbers. So, I'm wondering - since the growth from Q2 to Q3 is more in line with what you guys had seen last year, I wonder if you think that maybe Q4 of last year and Q1 of this year was some sort of an anomaly and if there was any specific reason for the sharp increase of new prescription at that time period that sort of changed the overall trends in the growth in new prescription. Maybe -- do you think it might have been some sort of warehousing effect? I'm curious if you have any thoughts on that.

And going forward, do you expect any seasonality in general with new prescriptions, either due to contract negotiations cycle or other reasons?

So of course, we don't know with precision what drives the specific trends. I think there's no doubt. Recall that we received FDA approval in October last year, and that no doubt had a material effect on the prescriptions in Q4 and the continued jump into Q1.

Historically, we have seen the summer as slower. That's also seen in other medical technology areas. I don't want to attribute anything to a particular seasonality, but that is something that we have seen historically.

But I think, more generally, we are working to build the tools and to provide the education for all clinicians who treat GBM. That, as Asaf has mentioned, has included a -- I won't call it a shift but really a growth beyond just the academic centers to include the community med-oncs and rad-oncs. That population is a little more diffuse. We've dramatically grown this year the number of training, centers which has taken a lot of energy but we think is critical to the long-term acceptance and growth. And we think there's just a general familiarity that is occurring over time.

All of the achievements on the coverage side also add confidence and ease paperwork for clinicians. So I think all of these things are additive. It doesn't mean we can predict with precision the future, but I think it underlines our confidence as we establish Optune TTFields as a standard of care.

Okay, thank you. And two sort of quicker questions. First of all, you used to provide an estimate for the current penetration in the front line GBMs. I'm wondering if you have a new estimate for this quarter. I think it was 18% in the previous quarter, or 18%.

And the second question, it's been already asked about the duration of therapy estimates. I just recall that you used to provide -- if you do a simple math dividing the number of patients on -- currently on Optune by a total number of new prescriptions in the previous period, you can get some sort of rough estimate of duration of therapy. I'm wondering if that method still works and the average duration of therapy is still between five to six months as a good estimate. And if you foresee any potential pushback from payers from policies from policies from companies such as United that sort of limit or that require continual approval of using Optune, if it's confirmed there is no further progression in the tumor, so I wondered if you foresee any potential limitations in case of patients will want to use Optune beyond progression. Thank you.

Let me take your three questions and see if I get them right. First of all, with respect to market penetration, here, again, we believe there's about 12,500 incidents in the US each year. That number is growing a little bit with the aging population, but it's a pretty stable number. We think that about 9,300 are eligible for Optune therapy. That haircut largely has to do with the fact that a certain fraction of these patients deteriorate very quickly during their radiation therapy, and we start treatment after radiation.

And with respect to the 569 prescriptions that we received in Q3, just doing the simple division, we get to about that same 18-ish% penetration in the quarter.

With respect to duration of therapy, I talked about that a little bit. We see, for the current population still in the four plus month range, newly diagnosed -- again, we're about 50% or so newly diagnosed prescriptions in the quarter. We see a higher duration of therapy there.

I mentioned we don't yet have the full field experience with -- particularly with the Gen 2 device to give a precise field number, but we think that the nine-month number from the EF-14 trial is a reasonable number.

And I think, with respect to modeling, I think, if you average those, you're probably in a safe place.

I think your final question related to pushback from payers. And again, I think what Wilco tried to describe is we see the opposite. I think with respect to the peer review data, the NCCN inclusion, and the acknowledgment throughout the community that this is standard therapy for newly diagnosed GBM as well as recurrent GBM, that we are having a very constructive, cooperative, successful working relationship with our payers.

Thank you.

That concludes our question-and-answer session for today. I would like to turn the conference back over to Novocure for any concluding comments.

So, first of all, again, I want to thank everybody for your time this morning and your interest in Novocure. It's interesting. It's been about a year since we've been public. In some sense, that time has flown. In others, it feels like we've been public for five years.

But what I reflect on when I think about the year is that we are a tremendously stronger company today than on the day we went public. We have made really extraordinary achievements, starting with FDA approval for newly diagnosed GBM, receiving peer-reviewed publication in JAMA, getting ourselves included in the NCCN guidelines, training centers across the country so we are now available in all 50 states, building the infrastructure in Europe, and really beginning to serve our patients, particularly in Germany and Switzerland, and preparing for expansion, all the work that was done in Japan that we believe will bear fruit for patients in the very near future, the work that was done to secure reliable payment and reimbursement. Asaf mentioned the extraordinary efforts on behalf of patients to get small, light second-generation device available first in Europe, and then in the US. And after a year like that, as I said, I've got nothing but confidence and enthusiasm for the year ahead. So thank you.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may disconnect. Everyone have a great day.