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What changed in NovoCure Ltd's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of NovoCure Ltd's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+340 added−354 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-22)

Top changes in NovoCure Ltd's 2024 10-K

340 paragraphs added · 354 removed · 260 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

87 edited+27 added−50 removed126 unchanged
Biggest changeOf this population, we estimate that approximately 2,500 patients who are candidates for treatment with Optune Gio based upon the rate of disease progression and medical eligibility will actively seek treatment. • 2,200 people will be diagnosed with GBM or tumors that typically progress to GBM in Japan.
Biggest changeAnnual diagnoses rates per capita are similar in our other European active markets. • 2,200 people will be diagnosed with GBM or tumors that typically progress to GBM in Japan. Of this population, approximately 1,200 patients are candidates for treatment with Optune Gio and will actively seek treatment. • 114,000 people will be diagnosed with metastatic NSCLC in the U.S.
FDA’s premarket clearance and approval requirements Unless an exemption applies, before we can commercially distribute medical devices in the U.S., we must obtain, depending on the type of device, either prior 510(k) clearance or premarket approval ("PMA") from the FDA. The FDA classifies medical devices into one of three classes.
FDA’s premarket clearance and approval requirements Unless an exemption applies, before we can commercially distribute medical devices in the U.S., we must obtain, depending on the type of device, either prior 510(k) clearance or PMA approval from the FDA. The FDA classifies medical devices into one of three classes.
Even if a study is completed, the results of clinical testing may not adequately demonstrate the safety and efficacy of the device or may otherwise not be sufficient to obtain FDA approval to market the product in the U.S. Post-approval studies are also typically required as a condition of PMA to reinforce the reasonable assurance of safety and effectiveness.
Even if a study is completed, the results of clinical testing may not adequately demonstrate the safety and efficacy of the device or may otherwise not be sufficient to obtain FDA approval to market the product in the U.S. Post-approval studies are also typically required as a condition of PMA approval to reinforce the reasonable assurance of safety and effectiveness.
These may include: • product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action; • QSR, which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the manufacturing process for products marketed in the U.S.; • labeling regulations and FDA and equivalent competent authority in other jurisdictions requiring promotion be truthful and non-misleading and prohibiting the promotion of products for uncleared, unapproved or off-label uses; • approval of product modifications that affect the safety or effectiveness of one of our devices that has been approved or is the subject of a CE Certificate; • Medical Device Reporting regulations of the FDCA and medical device vigilance, which require that manufacturers comply with FDA or equivalent competent authority requirements in other jurisdictions to report if their device may have caused or contributed to a death or serious injury, or has malfunctioned in a 15 way that would likely cause or contribute to a death or serious injury if the malfunction of the device or a similar device were to recur; • post-approval restrictions or conditions, including post-approval study commitments; • post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device; • the FDA’s and equivalent competent authority’s recall authority, whereby they can ask, or under certain conditions order, device manufacturers to recall from the market a product that is in violation of governing laws and regulations; • regulations pertaining to voluntary recalls; and • notices of corrections or removals.
These may include: • product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action; • the QSR, which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the manufacturing process for products marketed in the U.S.; • labeling regulations and FDA and equivalent competent authority in other jurisdictions requiring promotion be truthful and non-misleading and prohibiting the promotion of products for uncleared, unapproved or off-label uses; • approval of product modifications that affect the safety or effectiveness of one of our devices that has been approved or is the subject of a CE Certificate; • Medical Device Reporting regulations of the FDCA and medical device vigilance, which require that manufacturers comply with FDA or equivalent competent authority requirements in other jurisdictions to report if their device may have caused or contributed to a death or serious injury, or has malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction of the device or a similar device were to recur; • post-approval restrictions or conditions, including post-approval study commitments; • post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device; • the FDA’s and equivalent competent authority’s recall authority, whereby they can ask, or under certain conditions order, device manufacturers to recall from the market a product that is in violation of governing laws and regulations; • regulations pertaining to voluntary recalls; and • notices of corrections or removals.
We expect that the workforce reduction, along with other actions, will enable us to fund future growth priorities without an associated increase in expected forward operating cash burn. We continue to 18 focus resources on our global commercial infrastructure and launch preparation ahead of our anticipated indication in metastatic non-small cell lung cancer and on high-potential research and development programs.
We expect that the workforce reduction, along with other actions, will enable us to fund future growth priorities without an associated increase in expected forward operating cash burn. We continue to focus resources on our global commercial infrastructure and launch preparation ahead of our anticipated indication in metastatic non-small cell lung cancer and on high-potential research and development programs.
We plan to specifically target individual solid tumor types by optimizing field generator parameters such as frequency and power output. Our arrays have been developed and are in use, either commercially or clinically, for application on the head, thorax and abdomen. 2 Through engineering efforts, we plan to continue to advance our Products to optimize TTFields therapy for patients.
We plan to specifically target individual solid tumor types by optimizing field generator parameters such as frequency and power output. Our arrays have been developed and are in use, either commercially or clinically, for application on the head, thorax and abdomen. 2 Through engineering efforts, we plan to continue to advance our Products to optimize TTFields therapy.
As we work to increase market acceptance of our Products, we compete with companies commercializing or investigating other anti-cancer therapies, some of which are in clinical studies for GBM or MPM that currently specifically exclude patients who have been or are being treated with our Products. The introduction of competing therapies could materially impact our business and financial results.
As we work to increase market acceptance of our Products, we compete with companies commercializing or investigating other anti-cancer therapies, some of which are in clinical studies for GBM, NSCLC or MPM that currently specifically exclude patients who have been or are being treated with our Products. The introduction of competing therapies could materially impact our business and financial results.
Although we believe we are in compliance with all applicable federal and state regulations regarding accreditation and licensure requirements and similar requirements in other jurisdictions, if we are found to be noncompliant, we could lose our accreditation or 16 licensure in such states or our supplier rights under such federal healthcare programs, which could prohibit us from selling our current or future devices to patients in such state or to that federal healthcare program.
Although we believe we are in compliance with all applicable federal and state regulations regarding accreditation and licensure requirements and similar requirements in other jurisdictions, if we are found to be noncompliant, we could lose our accreditation or licensure in such states or our supplier rights under such federal healthcare programs, which could prohibit us from selling our current or future devices to patients in such state or to that federal healthcare program.
The collaboration agreement grants Zai a license to commercialize our Products in Greater China and establishes a development partnership intended to accelerate the development of TTFields therapy in multiple solid tumor cancer indications. Zai has launched Optune Gio for the treatment of newly diagnosed GBM in Hong Kong and mainland China and is seeking marketing authorization for GBM in Taiwan.
The collaboration agreement grants Zai a license to commercialize our Products in Greater China and establishes a development partnership intended to accelerate the development of TTFields therapy in multiple solid tumor cancer indications. Zai has launched Optune Gio for the 9 treatment of newly diagnosed GBM in Hong Kong and mainland China, is seeking marketing authorization for GBM in Taiwan.
These 11 agreements also generally provide that we own, or the individual is required to assign to us, all inventions conceived by the individual in the course of rendering services to us. Despite measures taken to protect our intellectual property, unauthorized parties may copy certain aspects of our products or obtain and use information that we believe is proprietary.
These agreements also generally provide that we own, or the individual is required to assign to us, all inventions conceived by the individual in the course of rendering services to us. Despite measures taken to protect our intellectual property, unauthorized parties may copy certain aspects of our products or obtain and use information that we believe is proprietary.
The FDA governs the following activities that we perform or that are performed on our behalf: • product design, development and manufacture; • product safety, testing, labeling and storage; • record keeping procedures; • product marketing, sales and distribution; and • post-marketing surveillance, complaint handling, medical device reporting, reporting of deaths, serious injuries or device malfunctions and repair or recall of products.
The FDA governs the following activities that we perform or that are performed on our behalf: 11 • product design, development and manufacture; • product safety, testing, labeling and storage; • record keeping procedures; • product marketing, sales and distribution; and • post-marketing surveillance, complaint handling, medical device reporting, reporting of deaths, serious injuries or device malfunctions and repair or recall of products.
IND clinical studies can be 14 suspended at any time by us, the FDA or an IRB for various reasons, including a belief that the risks to study subjects outweigh the anticipated benefits. Even if an IND study is completed, the results of clinical testing may not be sufficient to obtain FDA approval to market the product.
IND clinical studies can be suspended at any time by us, the FDA or an IRB for various reasons, including a belief that the risks to study subjects outweigh the anticipated benefits. Even if an IND study is completed, the results of clinical testing may not be sufficient to obtain FDA approval to market the product.
Treatment of MPM In 2019, we received FDA approval via the HDE pathway to market Optune Lua (then known as NovoTTF-100L) for the treatment of adult patients with unresectable, locally advanced or metastatic MPM concurrent with pemetrexed 4 and platinum-based chemotherapy. The FDA approved Optune Lua for MPM based on the STELLAR study ("STELLAR").
Treatment of MPM In 2019, we received FDA approval via the HDE pathway to market Optune Lua (then known as NovoTTF-100L) for the treatment of adult patients with unresectable, locally advanced or metastatic MPM concurrent with pemetrexed and platinum-based chemotherapy. The FDA approved Optune Lua for MPM based on the STELLAR study ("STELLAR").
For patients with locally advanced pancreatic cancer involving encasement of arteries but no extra-pancreatic disease, the standard of care is surgery followed by chemotherapy with or without radiation. Unfortunately, the majority of locally advanced cases are diagnosed once the cancer is no longer operable, generally leaving chemotherapy with or without radiation as the only treatment option.
For patients with locally advanced pancreatic cancer involving encasement of arteries but no extra-pancreatic disease, the standard of care is surgery followed by chemotherapy 7 with or without radiation. Unfortunately, the majority of locally advanced cases are diagnosed once the cancer is no longer operable, generally leaving chemotherapy with or without radiation as the only treatment option.
We are aware of a few third parties in the United States and China developing devices and filing for intellectual property protection related to TTFields therapy. Beginning in 2021, several of our early patents covering technology included in our Products began expiring in the U.S. and elsewhere.
We are aware of a few third parties in the United States and China developing devices and filing for intellectual property protection related to TTFields therapy. 10 Beginning in 2021, several of our early patents covering technology included in our Products began expiring in the U.S. and elsewhere.
However, our failure to adhere to these requirements could materially adversely impact our business and financial results. Additionally, a number of states have transparency reporting requirements similar to (and in some cases broader than) the Sunshine Act, and regulations similar to the Sunshine Act have been adopted in foreign countries including a number of EU member states.
However, our failure to adhere to these requirements could materially adversely 16 impact our business and financial results. Additionally, a number of states have transparency reporting requirements similar to (and in some cases broader than) the Sunshine Act, and regulations similar to the Sunshine Act have been adopted in foreign countries including a number of EU member states.
The complete devices, called Optune Gio and Optune Lua (for head and thoracic treatment, respectively), include a portable electric field generator, arrays, rechargeable batteries and accessories. Sterile, single-use arrays are placed directly on the skin in the region surrounding the tumor and connected to the electric field generator to deliver therapy.
The complete devices, called Optune Gio and Optune Lua (for head and thoracic treatment, respectively), include a portable electric field generator, arrays, rechargeable batteries and accessories. Single-use arrays are placed directly on the skin in the region surrounding the tumor and connected to the electric field generator to deliver therapy.
The EF-19 study studied Optune Gio as a monotherapy for the treatment of recurrent GBM in 192 patients compared to the 117 recurrent GBM patients who received best standard of care chemotherapy in Novocure’s EF-11 registration study. Optune Gio as monotherapy reduced the risk of death with fewer adverse events compared to best standard of care chemotherapy.
The EF-19 study studied Optune Gio as a monotherapy for the treatment of recurrent GBM in 192 patients compared to the 117 recurrent GBM patients who received best standard of care chemotherapy in Novocure’s EF-11 registration study. Optune Gio as monotherapy reduced the risk of death with 3 fewer adverse events compared to best standard of care chemotherapy.
We believe we have the experience and expertise to scale our sales and marketing efforts. 5 Billing and reimbursement We provide our Products directly to patients following receipt of a prescription order and a signed patient service agreement (except in Japan as described above).
We believe we have the experience and expertise to scale our sales and marketing efforts. Billing and reimbursement We provide our Products directly to patients following receipt of a prescription order and a signed patient service agreement (except in Japan as described above).
Moreover, the FDA and other applicable regulatory authorities can order a mandatory recall if there is a reasonable probability that our device would cause serious adverse health consequences or death. The FDA has broad post-market and regulatory enforcement powers.
Moreover, the FDA and other 14 applicable regulatory authorities can order a mandatory recall if there is a reasonable probability that our device would cause serious adverse health consequences or death. The FDA has broad post-market and regulatory enforcement powers.
In the UK, advertising and promotion is subject to the UK Regulations, general guidance and enforcement of the Medicines and Healthcare products Regulatory Agency (MHRA), and adherence to the Association of British HealthTech Industries (ABHI) Code of Ethical Business 12 Practices.
In the UK, advertising and promotion is subject to the UK Regulations, general guidance and enforcement of the Medicines and Healthcare products Regulatory Agency (MHRA), and adherence to the Association of British HealthTech Industries (ABHI) Code of Ethical Business Practices.
Future modifications may be considered by us as the need arises, some of which we may deem to require a PMA supplement application and others to require reporting in our PMA Annual Report.
Future modifications may be considered by us as the need arises, some of 12 which we may deem to require a PMA supplement application and others to require reporting in our PMA Annual Report.
In some cases, our practices may not meet all of the technical elements for protection under a federal Anti-Kickback Statute exception or safe harbor.
In some cases, our practices may not meet 15 all of the technical elements for protection under a federal Anti-Kickback Statute exception or safe harbor.
In August 2023, the data from the LUNAR study were published in The Lancet Oncology , and additional data detailing the LUNAR study have since been presented at multiple medical congresses.
In 2023, the data from the LUNAR study were published in The Lancet Oncology , and additional data detailing the LUNAR study have since been presented at multiple medical congresses.
Secondary endpoints included overall response rate (per mRECIST criteria), progression-free survival and safety. STELLAR investigated safety and efficacy among 80 patients treated with Optune Lua plus standard of care chemotherapy. In STELLAR, the median overall survival was 18.2 months (95% CI, 12.1-25.8 months) across all patients treated with Optune Lua plus chemotherapy.
Secondary endpoints included overall response rate (per mRECIST criteria), progression-free survival and safety. STELLAR investigated safety and efficacy among 80 patients treated with Optune Lua plus standard of care chemotherapy. Median overall survival was 18.2 months (95% CI, 12.1-25.8 months) across all patients treated with Optune Lua plus chemotherapy.
Arrays are changed when hair growth or the hydrogel reduces array adhesion to the skin. The therapy is designed to be delivered continuously throughout the day and night, and efficacy is strongly correlated to time on therapy. When the device is turned on, TTFields are continuously generated within the specific region of the body covered by the arrays.
Arrays are changed when hair growth or skin moisture reduces array adhesion to the skin. The therapy is designed to be delivered continuously throughout the day and night, and efficacy is strongly correlated to time on therapy. When the device is turned on, TTFields are continuously generated within the specific region of the body covered by the arrays.
Our robust global patent and intellectual property portfolio consists of hundreds of issued patents in multiple jurisdictions covering various aspects of our devices and related technology. In the U.S., our patents have expected expiration dates between 2024 and 2041.
Our robust global patent and intellectual property portfolio consists of hundreds of issued patents in multiple jurisdictions covering various aspects of our devices and related technology. In the U.S., our patents have expected expiration dates between 2025 and 2041.
Pancreatic cancer Pancreatic cancer is one of the most lethal cancers and is the third most frequent cause of death from cancer in the U.S. While overall cancer incidence and death rates are remaining stable or declining, the incidence and death rates for pancreatic cancer are increasing.
Torso Indications Pancreatic cancer Pancreatic cancer is one of the most lethal cancers and is the third most frequent cause of death from cancer in the U.S. While overall cancer incidence and death rates are remaining stable or declining, the incidence and death rates for pancreatic cancer are increasing.
Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings, public conference calls, webcasts and our social media accounts. 19
Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings, public conference calls, webcasts and our social media accounts. 17
In the future, we anticipate strategically expanding into additional geographic markets and additional indications, pending regulatory approval. Commercial execution As of December 31, 2023, we had 126 sales force colleagues globally. Healthcare providers must undergo a certification training in order to prescribe our Products.
In the future, we anticipate strategically expanding into additional geographic markets and additional indications, pending regulatory approval. Commercial execution As of December 31, 2024, we had 188 sales force colleagues globally. Healthcare providers must undergo a certification training in order to prescribe our Products.
In Japan, we distribute Optune Gio through hospitals and provide patient support services under a contractual arrangement with the hospital. Once an eligible patient is identified by a certified prescriber, the healthcare provider’s office submits a prescription order form and supporting documentation to us.
In Japan, we distribute our Products through hospitals and provide patient support services under a contractual arrangement with the hospital. Once an eligible patient is identified by a certified prescriber, the healthcare provider’s office submits a prescription order form and supporting documentation to us.
Legislation similar to the FCPA has been adopted in foreign countries, including a number of EU member states. Human Capital Resources As of December 31, 2023, we had 1,453 employees, compared to 1,320 employees as of December 31, 2022. We believe relations with our employees are good.
Legislation similar to the FCPA has been adopted in foreign countries, including a number of EU member states. Human Capital Resources As of December 31, 2024, we had 1,488 employees, compared to 1,453 employees as of December 31, 2023. We believe relations with our employees are good.
It is estimated that approximately 60,000 patients are diagnosed with pancreatic cancer each year in the U.S. Pancreatic cancer has a five-year relative survival rate of just 10 percent. Physicians use different combinations of surgery, radiation and pharmacological therapies to treat pancreatic cancer, depending on the stage of the disease.
We estimate that approximately 60,000 patients are diagnosed with pancreatic cancer each year in the U.S. Pancreatic cancer has a five-year relative survival rate of just 10 percent. Physicians use different combinations of surgery, radiation and pharmacological therapies to treat pancreatic cancer, depending on the stage of the disease.
In addition, the FDA will generally conduct a pre-approval inspection of the manufacturing facility or facilities to ensure compliance with the QSR. Prior to approval of the Optune Gio PMA for the treatment of recurrent GBM, we and our critical component suppliers were each inspected by the FDA.
The FDA may or may not accept the panel’s recommendation. In addition, the FDA will generally conduct a pre-approval inspection of the manufacturing facility or facilities to ensure compliance with the QSR. Prior to approval of the Optune Gio PMA for the treatment of recurrent GBM, we and our critical component suppliers were each inspected by the FDA.
The FDA may review a company’s decisions when reviewing the PMA Annual Report and require the filing of an application. As is typical with medical device companies, we have received approval for a number of post-approval PMA supplements for GBM, including for modifications to Optune Gio’s electric field generator, arrays, software, manufacturing processes and labeling.
The FDA may review a company’s decisions when reviewing the PMA Annual Report and require the filing of an application. As is typical with medical device companies, we have received approval for a number of post-approval PMA supplements for our approved Products, including for modifications to the electric field generator, arrays, software, manufacturing processes and labeling.
In 2024, we estimate that approximately: • 15,000 people will be diagnosed with GBM or tumors that typically progress to GBM in the U.S.
In 2025, we estimate that annually approximately: • 15,000 people will be diagnosed with GBM or tumors that typically progress to GBM in the U.S.
Our key priorities are to drive commercial adoption of Optune Gio ® and Optune Lua ® , our commercial TTFields therapy devices, and to advance clinical and product development programs intended to extend overall survival in some of the most aggressive forms of cancer. Optune Gio is approved by the U.S.
Our key priorities are to drive commercial adoption of Optune Gio ® and Optune Lua ® , our commercial TTFields therapy devices, and to advance clinical and product development programs intended to extend overall survival in some of the most aggressive forms of cancer.
Mild-to-moderate skin irritation was the only device-related side effect with Optune Lua. The STELLAR data were published in The Lancet Oncology in 2019. Our commercial markets We have built a commercial organization and market Optune Gio for the treatment of GBM in multiple countries in North America, Europe and Asia.
Mild-to-moderate skin irritation was the only device-related side effect with Optune Lua. The STELLAR data were published in The Lancet Oncology in 2019. Our commercial markets We have built a commercial organization and market Optune Gio for the treatment of GBM in multiple countries and Optune Lua for the treatment of NSCLC in the U.S..
Ovarian cancer INNOVATE-3 phase 3 trial In August 2023, we announced preliminary results from the phase 3 INNOVATE-3 trial ("INNOVATE-3"), studying the effectiveness of TTFields therapy with paclitaxel in patients with platinum-resistant ovarian cancer. INNOVATE-3 did not meet its primary endpoint of overall survival at the final analysis.
Ovarian cancer INNOVATE-3 Phase 3 trial In 2024 , we presented results from the Phase 3 INNOVATE-3 trial ("INNOVATE-3"), studying the effectiveness of TTFields therapy with paclitaxel in patients with platinum-resistant ovarian cancer. INNOVATE-3 did not meet its primary endpoint of overall survival at the final analysis.
We distribute our Products through hospitals in Japan with the hospitals receiving reimbursement from the government-mandated insurance program and in turn contracting with us for the equipment, supplies and services necessary to treat patients with our Product.
We distribute our Products through hospitals in Japan with the hospitals receiving reimbursement from the government-mandated insurance program and in turn contracting with us for the equipment, supplies and services necessary to treat patients with our Product. We maintain a monthly list price for our therapy.
Optune Lua is approved by the FDA under the Humanitarian Device Exemption ("HDE") pathway to treat malignant pleural mesothelioma and pleural mesothelioma (together, "MPM") together with standard chemotherapies. We have also received CE certification in the EU and approval or local registration to market Optune Lua in certain other countries.
Optune Lua is also approved under the Humanitarian Device Exemption ("HDE") pathway for the treatment of adult patients with malignant pleural mesothelioma or pleural mesothelioma (together, "MPM") together with standard chemotherapies. We have also received CE certification in the EU and approval or local registration to market Optune Lua in certain other countries for the treatment of MPM.
Secondary endpoints include, but are not limited to, overall survival, progression-free survival, one-year survival, objective response rate and frequency and severity of adverse events. PANOVA-4 is designed to accrue 76 patients with a 12-month follow-up following enrollment of the last patient. PANOVA-4 is the result of a clinical study collaboration with Roche.
Secondary endpoints include, but are not limited to, overall survival, progression-free survival, one-year survival, objective response rate and frequency and severity of adverse events. PANOVA-4 was designed to accrue 76 patients with a 12-month follow-up period following enrollment of the last patient. PANOVA-4 was designed and is being conducted as part of a clinical collaboration between Novocure and Roche.
LUNAR-2 is designed to accrue 734 patients with a 21-month follow-up following the enrollment of the last patient.
LUNAR-2 is designed 8 to accrue 734 patients with a 21-month follow-up following the enrollment of the last patient. LUNAR-2 is currently open and enrolling.
Chemotherapy is often given for the primary tumor, but many chemotherapy agents do not cross the blood brain barrier and are thus ineffective in the treatment of brain metastases. When brain metastases appear, they are either surgically removed or treated with radiation using stereotactic radiosurgery ("SRS") when possible.
Systemic therapies are often utilized to treat the primary tumor, but many systemic therapies do not cross the blood brain barrier and are thus ineffective in the treatment of brain metastases. When brain metastases appear, they are either surgically removed or treated with radiation using stereotactic radiosurgery ("SRS") when possible.
Department of Justice or other enforcement authorities outside of the U.S. To date, our facilities and those of our critical suppliers have been inspected by several relevant regulatory authorities in order to obtain regulatory approval of our Products. No inspectional observations were identified were issued following these inspections.
Department of Justice or other enforcement authorities outside of the U.S. To date, our facilities and those of our critical suppliers have been inspected by several relevant regulatory authorities in order to obtain regulatory approval of our Products.
Treatment of recurrent GBM We initially received FDA approval for Optune Gio in 2011 for use as a monotherapy treatment for adult patients with GBM, following confirmed recurrence after chemotherapy. The FDA approved Optune Gio based on the EF-11 study ("EF-11"), a randomized, phase 3 clinical study.
Treatment of recurrent GBM We received FDA approval for Optune Gio in 2011 for use as a monotherapy treatment for adult patients with GBM, following confirmed recurrence after chemotherapy based on the randomized Phase 3 EF-11 trial ("EF-11"), which compared Optune Gio versus physician's choice chemotherapy for the treatment of recurrent GBM..
The GDPR harmonizes data privacy laws and rules for the processing of personal data, including patient and employee data, across the EU and repeals and replaces Directive 95/46/EC of the European Parliament and of the Council of October 24, 1995, and applicable national laws.
In the EU, the General Data Protection Regulation ("GDPR") has applied since May 25, 2018. The GDPR harmonizes data privacy laws and rules for the processing of personal data, including patient and employee data, across the EU and repeals and replaces Directive 95/46/EC of the European Parliament and of the Council of October 24, 1995, and applicable national laws.
The exact incidence of brain metastases is unknown because no national cancer registry documents brain metastases, and estimates from 8 scientific literature vary greatly based on the study methodology applied.
The exact incidence of brain metastases is unknown because no national cancer registry documents brain metastases, and estimates from scientific literature vary greatly based on the study methodology applied. Brain metastases are commonly treated with a combination of surgery and radiation.
The false statements provision prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
The false statements provision prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Many states have similar healthcare fraud laws or insurance fraud laws that apply to claims for healthcare reimbursement.
We believe we possess global commercialization rights to our Products in oncology and are well-positioned to extend those rights into the future as we continue to find innovative ways to improve our Products. In 2018, we granted Zai Lab (Shanghai) Co., Ltd.
Our intellectual property portfolio contains hundreds of issued patents and numerous patent applications pending worldwide. We believe we possess global commercialization rights to our Products in oncology and are well-positioned to extend those rights into the future as we continue to find innovative ways to improve our Products. In 2018, we granted Zai Lab (Shanghai) Co., Ltd.
Of this population, we estimate that approximately 8,200 patients who are candidates for treatment with Optune Gio based upon the rate of disease progression and medical eligibility will actively seek treatment. • 4,600 people will be diagnosed with GBM or tumors that typically progress to GBM in Germany.
Of this population, approximately 8,200 patients are candidates for treatment with Optune Gio and will actively seek treatment. 4 • 4,600 people will be diagnosed with GBM or tumors that typically progress to GBM in Germany. Of this population, approximately 2,500 patients are candidates for treatment with Optune Gio and will actively seek treatment.
Accordingly, we were required to receive PMA for Optune Gio, which the FDA granted in April 2011 and October 2015 for the treatment of recurrent and newly diagnosed supratentorial GBM, respectively, in adult patients. We expect that we will be required to receive PMA for the use of our Products for future indications.
Accordingly, we were required to obtain PMA approval for Optune Gio, which the FDA granted in April 2011 and October 2015 for the treatment of recurrent and newly diagnosed supratentorial GBM, respectively, in adult patients.
In Switzerland, our Products and operations are subject to, inter alia, the Medical Devices Ordinance, which implements the MDR into Swiss law (See "Foreign approvals and CE mark" below). In Japan, our Products and operations are subject to regulation by the Pharmaceuticals and Medical Device Agency ("PMDA") under the Pharmaceuticals and Medical Devices Act ("PMD Act").
In Switzerland, our Products and operations are subject to, inter alia, the Federal Act on Medicinal Products and Medical Devices and the the Medical Devices Ordinance, which implements the MDR into Swiss law (See "Foreign approvals and CE mark" below).
The following graph presents the overall survival data in the intent-to-treat population from our five-year analysis: 3 The extension of progression-free and overall survival in patients receiving Optune Gio in combination with temozolomide in EF-14 was not specific to any prognostic subgroup or tumor genetic marker and was consistent regardless of MGMT methylation status, extent of resection, age, performance status or gender.
The extension of overall survival and progression-free survival in patients receiving Optune Gio with temozolomide was not specific to any prognostic subgroup or tumor genetic marker and was consistent regardless of MGMT methylation status, extent of resection, age, performance status or gender.
We market Optune Gio and Optune Lua in multiple countries around the globe with the majority of our revenues coming from the use of Optune Gio in the U.S., Germany and Japan. We are actively evaluating opportunities to expand our international footprint. We believe the physical mechanisms of action behind TTFields therapy may be broadly applicable to solid tumor cancers.
We market Optune Gio and Optune Lua in multiple countries around the globe with the majority of our revenues coming from the use of Optune Gio in the U.S., Germany, France and Japan. We are actively evaluating opportunities to expand our international footprint.
Our development pipeline Based on the results of our preclinical research, we have developed a pipeline strategy to advance TTFields therapy through phase 2 and phase 3 studies across multiple solid tumor types. We anticipate expanding our clinical pipeline over time to include additional solid tumor cancer indications.
Our development pipeline Based on the results of our preclinical and clinical research, we have developed a pipeline strategy to advance TTFields therapy through phase 2 and phase 3 studies across multiple solid tumor types where TTFields has shown efficacy, including GBM, NSCLC and pancreatic cancer.
Our sales and marketing efforts are principally focused on driving adoption of Optune Gio for the treatment of GBM among both neuro-oncologists and radiation oncologists. In certain countries, neurosurgeons and medical oncologists also drive adoption. We continue to focus on driving key academic center engagements. We currently operate as a direct-to-patient distributor of our Products, except for Japan.
Our sales and marketing efforts are principally focused on driving adoption of Optune Gio and Optune Lua among medical oncologists, specialty oncologists focused on treatment of the brain and thorax, and radiation oncologists. We continue to focus on driving key academic center engagement across all indications. We currently operate as a direct-to-patient distributor of our Products, except in Japan.
A combination of radiation, platinum-based chemotherapies, and immune checkpoint inhibitors, or targeted therapies, are the first line standard of care treatment for locally advanced or metastatic 7 NSCLC. Today, the standard of care for second line treatment is evolving and often includes immune checkpoint inhibitors, docetaxel, platinum-based chemotherapy or pemetrexed.
Today, the standard of care for second line treatment is evolving and often includes immune checkpoint inhibitors, docetaxel, platinum-based chemotherapy or pemetrexed.
Patients reported no serious adverse events related to TTFields therapy. PANOVA-4 phase 2 trial In 2023, the first patient was enrolled in the phase 2 PANOVA-4 trial ("PANOVA-4") evaluating the safety and efficacy of TTFields therapy together with atezolizumab, gemcitabine and nab-paclitaxel in the treatment of metastatic pancreatic cancer. The primary endpoint of PANOVA-4 is disease control rate.
PANOVA-4 Phase 2 trial In 2024, we completed enrollment in the Phase 2 PANOVA-4 trial ("PANOVA-4") evaluating the safety and efficacy of TTFields therapy together with atezolizumab, gemcitabine and nab-paclitaxel in the treatment of metastatic pancreatic cancer. The primary endpoint of PANOVA-4 is disease control rate.
Treatment of newly diagnosed GBM In 2015, we received FDA approval to market Optune Gio (then known as Optune) for the treatment of adult patients with newly diagnosed supratentorial GBM in combination with temozolomide.
Treatment of newly diagnosed GBM In 2015, we received FDA approval to market Optune Gio (then known as Optune) for the treatment of adult patients with newly diagnosed supratentorial GBM in combination with temozolomide based on the randomized Phase 3 EF-14 trial ("EF-14"), which compared Optune Gio plus temozolomide versus temozolomide alone for the treatment of newly diagnosed GBM post radiation.
A PMA must be supported by extensive data, including from technical tests, preclinical studies and clinical studies, manufacturing information and intended labeling to demonstrate, to the FDA’s satisfaction, the safety and effectiveness of a medical device for its intended use. During the PMA review period, the FDA will typically request additional information or clarification of the information already provided.
We expect that we will be required to obtain PMA approval for the use of our Products for future indications. A PMA must be supported by extensive data, including from technical tests, preclinical studies and clinical studies, manufacturing information and intended labeling to demonstrate, to the FDA’s satisfaction, the safety and effectiveness of a medical device for its intended use.
Also, an advisory panel of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations to the FDA 13 as to the approvability of the device. The FDA may or may not accept the panel’s recommendation.
During the PMA review period, the FDA will typically request additional information or clarification of the information already provided. Also, an advisory panel of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations to the FDA as to the approvability of the device.
Liver cancer HEPANOVA phase 2 trial In 2021, we announced the final results of our HEPANOVA phase 2 trial, a single-arm study evaluating the safety and efficacy of TTFields therapy in combination with sorafenib for the treatment of advanced hepatocellular cancer. 10 In 21 evaluable patients, HEPANOVA showed a 9.5% objective response rate and 76% disease control rate, as well as 5.8 months of progression free survival, compared to historical control data showing a 4.5% objective response rate and 43% disease control rate for patients treated with sorafenib alone.
In 21 evaluable patients, HEPANOVA showed a 9.5% objective response rate and 76% disease control rate, as well as 5.8 months of progression free survival, compared to historical control data showing a 4.5% objective response rate and 43% disease control rate for patients treated with sorafenib alone.
Of this population, we estimate that approximately 1,200 patients who are candidates for treatment with Optune Gio based upon the rate of disease progression and medical eligibility will actively seek treatment. We believe there are many more patients who could benefit from treatment with TTFields therapy than are currently on therapy. We continue to focus on increasing penetration for GBM.
We estimate that approximately 30,000 patients are candidates for second-line treatment with Optune Lua and will actively seek therapy. We believe there are many more patients who could benefit from treatment with Optune Gio or Optune Lua and we continue to focus on increasing penetration for GBM and NSCLC.
As of December 31, 2023, we have received national reimbursement for Optune Gio in Austria, France, Germany, Israel, Japan, Sweden and Switzerland. In the U.S., a substantial majority of Americans with private health insurance had coverage of Optune Gio for newly diagnosed GBM and/or recurrent GBM as of December 31, 2023.
In the U.S., a substantial majority of Americans with private health insurance had coverage of Optune Gio for newly diagnosed GBM and/or recurrent GBM as of December 31, 2024. Americans who are beneficiaries of the Medicare fee-for-service program also have coverage of Optune Gio for newly diagnosed GBM.
TRIDENT was designed to accrue 950 patients with a 24-month minimum follow-up period after the last patient is enrolled. Final data from the TRIDENT trial is anticipated in 2026. 2-THE-TOP phase 2 trial In November 2023, Dr.
TRIDENT was designed to accrue 950 patients with a 24-month minimum follow-up period after the last patient is enrolled. Final data from the TRIDENT trial is anticipated in 2026. KEYNOTE D58 Phase 3 trial In 2024, the FDA accepted the investigational new drug application for the randomized, double blind, placebo controlled Phase 3 KEYNOTE D58 clinical trial ("KEYNOTE D58").
Optune Gio was safely combined with temozolomide with no significant increase in serious adverse events compared with temozolomide alone. The most common side effect related to Optune Gio was mild to moderate skin irritation.
Patients treated with Optune Gio and temozolomide had no significant increase in serious adverse events compared with those treated with temozolomide alone. The most common side effect related to Optune Gio was mild to moderate skin irritation. The final EF-14 data were published in the Journal of the American Medical Association in 2017.
Following the issuance of this CE Certificate, we can draw up a declaration of conformity and affix the CE mark to the devices covered by this CE Certificate. The time required to CE mark our devices or to obtain approval from other non-U.S. authorities may be longer or shorter than that required for FDA approval.
The time required to CE mark our 13 devices or to obtain approval from other non-U.S. authorities is not defined, and therefore may be longer or shorter than that required for FDA approval.
PANOVA-3 phase 3 trial In February 2023, the final patient was enrolled in our PANOVA-3 trial ("PANOVA-3"), a phase 3 study evaluating the efficacy of TTFields therapy together with nab-paclitaxel and gemcitabine versus nab-paclitaxel and gemcitabine alone as a front-line treatment for unresectable locally advanced pancreatic cancer.
PANOVA-3 Phase 3 trial In 2024, we announced top-line results from the Phase 3 PANOVA-3 trial, which evaluated the safety and efficacy of TTFields therapy together with gemcitabine and nab-paclitaxel compared to gemcitabine and nab-paclitaxel alone for the treatment of unresectable, locally advanced pancreatic cancer.
Overall survival for patients treated with Optune Gio alone and active chemotherapy was 6.6 months and 6.0 months, respectively (p=0.27: HR = 0.86). The study demonstrated that Optune Gio provided clinically comparable survival with an overall better quality of life.
Patients randomized to receive Optune Gio monotherapy demonstrated 6.6 months of median overall survival, compared to 6.0 months in patients treated with physician's choice chemotherapy. Chemotherapies chosen for the active control arm included mainly bevacizumab, nitrosoureas and temozolomide. The study demonstrated that Optune Gio provided clinically comparable survival with an overall better quality of life.
This practice results in a window of unmet need after localized surgery and SRS are used and before whole brain radiation therapy is administered to delay or prevent the additional spread of brain metastases.
This practice results in a window of unmet need after localized surgery and SRS are used and before whole brain radiation therapy is administered to delay or prevent the additional spread of brain metastases. 6 METIS Phase 3 trial In 2024, we presented data from the Phase 3 METIS trial, which evaluated the safety and efficacy of TTFields therapy and best supportive care ("BSC") compared to BSC alone in the treatment of adult patients with brain metastases resulting from NSCLC following stereotactic radiosurgery.
We anticipate expanding our clinical pipeline over time to study the safety and efficacy of TTFields therapy for additional solid tumor indications and combinations with other cancer treatment modalities. Our therapy is delivered through a medical device and we continue to advance our Products with the intention to extend survival and maintain quality of life for patients.
Our therapy is delivered through a medical device and we continue to advance our Products with the intention to extend survival and maintain quality of life for patients. Optune Gio is approved by the U.S.
Legislation similar to the federal Anti-Kickback Statute, the Stark Law and False Claims Act has been adopted in foreign countries, including a number of EU member states. In the EU, the General Data Protection Regulation ("GDPR") has applied since May 25, 2018.
Sanctions under these federal and state laws may include civil monetary penalties, exclusion of a manufacturer’s products from reimbursement under government programs, criminal fines and imprisonment. Legislation similar to the federal Anti-Kickback Statute, the Stark Law and False Claims Act has been adopted in foreign countries, including a number of EU member states.
LUNAR phase 3 trial In 2021, we enrolled the last patient in our LUNAR trial ("LUNAR"), a phase 3 study testing the effectiveness of TTFields therapy in combination with immune checkpoint inhibitors or docetaxel versus immune checkpoint inhibitors or docetaxel alone for patients with stage 4 NSCLC who progressed during or after platinum-based therapy.
LUNAR evaluated the safety and efficacy of TTFields therapy when used together with immune checkpoint inhibitors or docetaxel (collectively, "standard therapies") versus standard therapies alone for patients with stage 4 NSCLC who progressed during or after platinum-based therapy.
Our ultimate goal is to optimize the energy delivered to patients' tumors, potentially improving efficacy. Any enhancements will be subject to applicable regulatory reviews and approvals. Our commercial business Optune Gio is currently marketed for the treatment of GBM, the most common form of primary brain cancer and an aggressive disease for which there are few effective treatment options.
Our commercial business Optune Gio is approved for use in multiple countries for the treatment of GBM, the most common form of primary brain cancer and an aggressive disease for which there are few effective treatment options. Optune Lua is approved for use in multiple countries for the treatment of MPM.
In addition to our studies in tumors of the head, thorax and abdomen, we continue 6 to conduct research in our approved indications to further advance the scientific evidence supporting the use of TTFields therapy in GBM and to gather additional information about our therapy's optimal use. Glioblastoma GBM is the most common and aggressive form of primary brain cancer.
In addition to our ongoing clinical trials, we continue to conduct research to further advance the scientific evidence supporting the use of TTFields therapy and to gather additional information about our therapy's optimal use. Central Nervous System Indications Brain metastases Metastatic cancer is cancer that has spread from the place where it first started to another place in the body.
In addition to our trials in NSCLC, we have multiple ongoing or planned trials in our brain and pancreatic cancer programs, including the phase 3 TRIDENT, KEYNOTE D58 and PANOVA-3 trials, and the phase 2 PANOVA-4 trial.
We have several ongoing clinical trials which further explore the use of TTFields therapy in these solid tumor cancers, including the Phase 3 TRIDENT and KEYNOTE D58 trials in GBM, Phase 3 LUNAR-2 and Phase 2 LUNAR-4 trials in NSCLC, and Phase 2 PANOVA-4 trial in pancreatic cancer.
It is estimated that approximately 15,000 patients are diagnosed with GBM or tumors that typically progress to GBM each year in the U.S. Following diagnosis, standard of care treatment includes surgical resection, followed by radiotherapy with concomitant chemotherapy, followed by TTFields therapy together with maintenance chemotherapy.
Following diagnosis, standard of care treatment includes surgical resection, followed by radiotherapy with concomitant chemotherapy, followed by TTFields therapy together with maintenance chemotherapy.
KEYNOTE B36 phase 2 trial In 2022, the first patient was enrolled in our KEYNOTE B36 trial ("KEYNOTE B36"), a phase 2 study evaluating the safety and efficacy of TTFields therapy together with the anti-PD-1 therapy pembrolizumab for the treatment of first-line metastatic NSCLC. The primary endpoint is progression-free survival.
LUNAR-4 Phase 2 trial In 2024, the FDA accepted the investigation device exemption for the LUNAR-4 clinical trial ("LUNAR-4"), a Phase 2 trial evaluating the safety and efficacy of TTFields therapy concomitant with pembrolizumab for the treatment of patients with metastatic NSCLC following previous treatment with PD-1/PD-L1 inhibitor and platinum-based chemotherapy. The primary endpoint of LUNAR-4 is overall survival.
We have several product development programs underway that are designed to optimize the delivery of TTFields to the target tumor and enhance patient ease of use. Our intellectual property portfolio contains hundreds of issued patents and numerous patent applications pending worldwide.
We anticipate expanding our clinical pipeline over time to study the safety and efficacy of TTFields therapy for additional solid tumor indications and for use together with other cancer treatment modalities. We have several product development programs underway that are designed to optimize the delivery of TTFields to the target tumor and enhance patient ease of use.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRegulations promulgated by the regulatory authorities in our applicable jurisdictions are wide-ranging and govern, among other things: • the conduct of preclinical and clinical studies; • product design, development, manufacturing, testing, storage and shipping; • product labeling, advertising and promotion; 33 • premarket clearance, approval and conformity assessment procedures, as well as for modifications introduced in marketed products; • post-market surveillance and monitoring; • reporting of adverse events or incidents and implementation of corrective actions, including product recalls; • interactions with healthcare professionals and patients; and • product sales and distribution.
Biggest changeRegulations promulgated by the regulatory authorities in our applicable jurisdictions are wide-ranging and govern, among other things: • the conduct of preclinical and clinical studies; • product design, development, manufacturing, testing, storage and shipping; • product labeling, advertising and promotion; • premarket clearance, approval and conformity assessment procedures, as well as for modifications introduced in marketed products; • post-market surveillance and monitoring; • reporting of adverse events or incidents and implementation of corrective actions, including product recalls; • interactions with healthcare professionals and patients; and • product sales and distribution. 30 We cannot be certain if or when the FDA, comparable regulatory agencies in other jurisdictions or our notified body might request additional or modified studies on our Products, under what conditions such studies might be requested, or the required size or length of any such studies.
In addition, even if we are successful in achieving market acceptance of our Products for GBM or MPM, we may be unsuccessful in achieving market acceptance of our Products for other indications, such as brain metastases from NSCLC, NSCLC, pancreatic cancer and other solid tumor cancers, because certain radiation, chemotherapies and/or systemic medical therapies may become or remain the preferred standard of care for these indications.
In addition, even if we are successful in achieving market acceptance of our Products for GBM, NSCLC or MPM, we may be unsuccessful in achieving market acceptance of our Products for other indications, such as brain metastases from NSCLC, pancreatic cancer and other solid tumor cancers, because certain radiation, chemotherapies and/or systemic medical therapies may become or remain the preferred standard of care for these indications.
We are subject to environmental laws and regulations, including those that impose various environmental controls on the manufacturing, transportation, storage, use and disposal of batteries and hazardous chemicals and other materials used in, and hazardous waste produced by, the manufacturing of our Products. We incur and expect to continue to incur costs to comply with these environmental laws and regulations.
We are subject to environmental laws and regulations, including those that impose various environmental controls on the manufacturing, transportation, storage, use and disposal of batteries and chemicals and other materials used in, and hazardous waste produced by, the manufacturing of our Products. We incur and expect to continue to incur costs to comply with these environmental laws and regulations.
The laws that affect our ability to operate our business in addition to the Federal Food, Drug, and Cosmetic Act and FDA regulations include, but are not limited to, the following: • the Federal Anti-Kickback Statute, an intent-based federal criminal statute which prohibits knowingly and willfully offering, providing, soliciting or receiving remuneration of any kind to induce or reward, or in return for, referrals or the purchase, lease, order or recommendation or arranging of any items or services reimbursable by a federal healthcare program; • the Federal Civil False Claims Act, which imposes civil penalties, including through civil whistleblower or " qui tam" actions, for knowingly submitting or causing the submission of false or fraudulent claims of payment to the federal government, knowingly making, using or causing to be made or used a false statement or record material to payment of a false claim or avoiding, decreasing or concealing an obligation to pay money to the federal government; • the Federal Criminal False Claims Act, which is similar to the Federal Civil False Claims Act and imposes criminal liability on those that make or present a false, fictitious or fraudulent claim to the federal government; • Medicare laws and regulations that prescribe requirements for coverage and reimbursement, including the conditions of participation for DME suppliers, and laws prohibiting false claims or unduly influencing selection of products for reimbursement under Medicare and Medicaid; • healthcare fraud statutes that prohibit false statements and improper claims to any third-party payer; • the Federal Physician Self-Referral Law, commonly known as the Stark law, which, absent an applicable exception, prohibits physicians from referring Medicare and Medicaid patients to an entity for the provision of certain designated health services (“DHS”), including DME, if the physician (or a member of the physician’s immediate family) has an impermissible financial relationship with that entity and prohibits the DHS entity from billing for such improperly referred services; 38 • the Federal Beneficiary Anti-Inducement Statute, which prohibits the offering of any remuneration to a beneficiary of Medicare or Medicaid that is likely to influence that beneficiary’s choice of provider or supplier.
The laws that affect our ability to operate our business in addition to the Federal Food, Drug, and Cosmetic Act and FDA regulations include, but are not limited to, the following: • the Federal Anti-Kickback Statute, an intent-based federal criminal statute which prohibits knowingly and willfully offering, providing, soliciting or receiving remuneration of any kind to induce or reward, or in return for, referrals or the purchase, lease, order or recommendation or arranging of any items or services reimbursable by a federal healthcare program; • the Federal Civil False Claims Act, which imposes civil penalties, including through civil whistleblower or " qui tam" actions, for knowingly submitting or causing the submission of false or fraudulent claims of payment to the federal government, knowingly making, using or causing to be made or used a false statement or record material to payment of a false claim or avoiding, decreasing or concealing an obligation to pay money to the federal government; • the Federal Criminal False Claims Act, which is similar to the Federal Civil False Claims Act and imposes criminal liability on those that make or present a false, fictitious or fraudulent claim to the federal government; • Medicare laws and regulations that prescribe requirements for coverage and reimbursement, including the conditions of participation for DME suppliers, and laws prohibiting false claims or unduly influencing selection of products for reimbursement under Medicare and Medicaid; • healthcare fraud statutes that prohibit false statements and improper claims to any third-party payer; • the Federal Physician Self-Referral Law, commonly known as the Stark law, which, absent an applicable exception, prohibits physicians from referring Medicare and Medicaid patients to an entity for the provision of certain designated health services (“DHS”), including DME, if the physician (or a member of the physician’s immediate family) has an impermissible financial relationship with that entity and prohibits the DHS entity from billing for such improperly referred services; • the Federal Beneficiary Anti-Inducement Statute, which prohibits the offering of any remuneration to a beneficiary of Medicare or Medicaid that is likely to influence that beneficiary’s choice of provider or supplier.
The fact that a substantial portion of our cash flow from operations could be needed to make payments on our indebtedness could have important consequences, including the following: • increasing our vulnerability to general adverse economic and industry conditions or increased interests rates; 45 • limiting the availability of our cash flow for other purposes and our flexibility in planning for or reacting to changes in our business and the markets in which we operate, which would place us at a competitive disadvantage compared to our competitors that may have less exposure to debt; • limiting our ability to borrow additional funds for working capital, capital expenditures and other investments; and • failing to comply with the covenants in our debt agreements could result in all of our indebtedness becoming immediately due and payable.
The fact that a substantial portion of our cash flow from operations could be needed to make payments on our indebtedness could have important consequences, including the following: • increasing our vulnerability to general adverse economic and industry conditions or increased interests rates; • limiting the availability of our cash flow for other purposes and our flexibility in planning for or reacting to changes in our business and the markets in which we operate, which would place us at a competitive disadvantage compared to our competitors that may have less exposure to debt; • limiting our ability to borrow additional funds for working capital, capital expenditures and other investments; and • failing to comply with the covenants in our debt agreements could result in all of our indebtedness becoming immediately due and payable.
There are established exceptions from liability, but we cannot guarantee that all of our practices will fall squarely within those exceptions; • similar state anti-kickback, false claims, insurance fraud and self-referral laws, which may not be limited to government-reimbursed items, as well as state laws that require us to maintain permits or licenses to distribute DME; • federal and state accreditation and licensing requirements applicable to DME providers and equivalent requirements in other jurisdictions; • the U.S.
There are established exceptions from liability, but we cannot guarantee that all of our practices will fall squarely within those exceptions; 35 • similar state anti-kickback, false claims, insurance fraud and self-referral laws, which may not be limited to government-reimbursed items, as well as state laws that require us to maintain permits or licenses to distribute DME; • federal and state accreditation and licensing requirements applicable to DME providers and equivalent requirements in other jurisdictions; • the U.S.
In addition, "legacy" medical devices that have obtained a CE Certification under the MDD may in principle continue to be marketed under such CE Certificate until the CE Certificate expires but at the latest by December 31, 2027 or 2028, depending on device class, under transitional provisions as amended in February 2023, provided that the manufacturer complies with the MDR’s additional requirements related to post-marketing surveillance, market surveillance, vigilance, and registration of economic operators and of devices.
In addition, "legacy" medical devices that have obtained a CE Certification under the MDD may in principle continue to be marketed under such CE Certificate until the CE Certificate expires but at the latest by December 31, 2027 or 2028, depending on device class, under transitional provisions as amended in February 2023, provided that the manufacturer complies with the MDR’s additional requirements related to post-marketing surveillance, market 34 surveillance, vigilance, and registration of economic operators and of devices.
In particular, our Products may not achieve market acceptance for current or future indications because of the following additional factors: • achieving patient acceptance could be difficult because we are targeting devastating diseases with poor prognoses, and not all patients with potentially short lifespans are willing to comply with requirements of treatment with our Products, such as the need to use our Products for a certain amount of time per day, carrying around a device and shaving the area where the arrays are worn, and other patients may forego our Products for financial, privacy, cosmetic, visibility or mobility reasons; • achieving patient compliance is difficult because the recommended use of our currently marketed Products is throughout the day, requiring patients to wear the device nearly continuously, which to some extent restricts physical mobility because the battery must be frequently exchanged and recharged, and the patient or a caregiver must ensure that it remains continuously operable and this may also impact the pool of patients to whom physicians may be willing to prescribe our Products; • certain patients are contraindicated to using our Products due to a variety of factors, including, but not limited to, those who have an active implanted medical device, those who have a skull defect, and those who are sensitive to conductive hydrogels; • there are certain perceived limitations to our study designs or data obtained from our clinical studies; • efficacy may also be limited in instances where patients take a break from the device, for example when experiencing skin rashes or while bathing or swimming (because our Products should not get wet); and • patients may decline therapy or prescribers may be unwilling to prescribe our Products due to certain adverse events reported in clinical studies by patients treated with our Products as monotherapy include medical device site reaction, headache, malaise, muscle twitching, fall and skin ulcer; additional adverse events reported in clinical studies by patients treated with our Products when used together with chemotherapies in addition to the above, were thrombocytopenia, nausea, constipation, vomiting, fatigue and other side effects consistent with treatment with chemotherapies.
In particular, our Products may not achieve market acceptance for current or future indications because of the following additional factors: • achieving patient acceptance could be difficult because we are targeting devastating diseases with poor prognoses, and not all patients with potentially short lifespans are willing to comply with requirements of treatment with our Products, such as the need to use our Products for a certain amount of time per day, carrying around a device and shaving the area where the arrays are worn, and other patients may forego our Products for financial, privacy, cosmetic, visibility or mobility reasons; • achieving patient compliance is difficult because the recommended use of our currently marketed Products is throughout the day, requiring patients to wear the device nearly continuously, which to some extent restricts physical mobility because the battery must be frequently exchanged and recharged, and the patient or a caregiver must ensure that it remains continuously operable and this may also impact the pool of patients to whom physicians may be willing to prescribe our Products; • certain patients are contraindicated to using our Products due to a variety of factors, including, but not limited to, those who have an active implanted medical device, those who have a skull defect, and those who are sensitive to the materials used in our Products; • there are certain perceived limitations to our study designs or data obtained from our clinical studies; • efficacy may also be limited in instances where patients take a break from the device, for example when experiencing skin rashes or while bathing or swimming (because our Products should not get wet); and • patients may decline therapy or prescribers may be unwilling to prescribe our Products due to certain adverse events reported in clinical studies by patients treated with our Products as monotherapy include medical device site reaction, headache, malaise, muscle twitching, fall and skin ulcer; additional adverse events reported in clinical studies by patients treated with our Products when used together with chemotherapies in addition to the above, were thrombocytopenia, nausea, constipation, vomiting, fatigue and other side effects consistent with treatment with chemotherapies.
If we fail to comply with present or future regulatory requirements that are applicable to us, we may be subject to enforcement action by the FDA or comparable regulatory authorities in other jurisdictions and notified bodies, which may include any of the following sanctions: • untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; • unanticipated expenditures to address or defend such actions; 36 • patient notification, or orders for repair, replacement or refunds; • voluntary or mandatory recall, withdrawal or seizure of our current or future devices; • administrative detention by the FDA or other regulatory authority in another jurisdiction of medical devices believed to be adulterated or misbranded; • operating restrictions, suspension or shutdown of production; • refusal or delay of our requests for PMA or analogous approval for new intended uses for or modifications to our Products or for approval of new devices; • refusal or delay in obtaining CE Certificates for new intended uses for or modifications to our Products; • suspension, variation or withdrawal of the CE Certificates granted by our notified body in the EU; • prohibition or restriction of Products being placed on the market; • operating restrictions; • suspension or withdrawal of PMA or analogous approvals that have already been granted; • refusal to grant export approval for our Products or any device candidates; or • criminal prosecution.
If we fail to comply with present or future regulatory requirements that are applicable to us, we may be subject to enforcement action by the FDA or comparable regulatory authorities in other jurisdictions and notified bodies, which may include any of the following sanctions: • untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; • unanticipated expenditures to address or defend such actions; • patient notification, or orders for repair, replacement or refunds; • voluntary or mandatory recall, withdrawal or seizure of our current or future devices; • administrative detention by the FDA or other regulatory authority in another jurisdiction of medical devices believed to be adulterated or misbranded; • operating restrictions, suspension or shutdown of production; 33 • refusal or delay of our requests for PMA or analogous approval for new intended uses for or modifications to our Products or for approval of new devices; • refusal or delay in obtaining CE Certificates for new intended uses for or modifications to our Products; • suspension, variation or withdrawal of the CE Certificates granted by our notified body in the EU; • prohibition or restriction of Products being placed on the market; • operating restrictions; • suspension or withdrawal of PMA or analogous approvals that have already been granted; • refusal to grant export approval for our Products or any device candidates; or • criminal prosecution.
While we monitor proposals and other developments that would materially impact our tax burden and effective tax rate and investigate our options accordingly, we could still be subject to increased taxation on a going forward and retroactive basis no matter what action we undertake if certain legislative proposals or regulatory changes are enacted, certain tax treaties are amended and/or our interpretation of applicable tax or other laws is challenged and determined to be incorrect.
While we monitor proposals and other developments that would materially impact our tax and tariff burden and effective tax rate and investigate our options accordingly, we could still be subject to increased taxation on a going forward and retroactive basis no matter what action we undertake if certain legislative proposals or regulatory changes are enacted, certain treaties are amended and/or our interpretation of applicable tax or other laws is challenged and determined to be incorrect.
Although we believe our Products represent a treatment modality that can be used together with other cancer treatment modalities, our current and future competitors may at any time develop additional drugs, biologics or devices for the treatment of GBM, MPM, or other solid tumors that could be more effective from a therapeutic or cost-basis perspective than using our Products.
Although we believe our Products represent a treatment modality that can be used together with other cancer treatment modalities, our current and future competitors may at any time develop additional drugs, biologics or devices for the treatment of GBM, NSCLC, MPM, or other solid tumors that could be more effective from a therapeutic or cost-basis perspective than using our Products.
In our current and future sales and distribution agreements with other companies, we generally do not and may not have control over the resources or degree of effort that any of these third parties may devote to our 22 Products, and if they fail to devote sufficient time and resources to the marketing of our Products, or if their performance is substandard, our revenues may be adversely affected.
In our current and future sales and distribution agreements with other companies, we generally do not and may not have control over the resources or degree of effort that any of these third parties may devote to our Products, and if they fail to devote sufficient time and resources to the marketing of our Products, or if their performance is substandard, our revenues may be adversely affected.
However, we cannot predict the ultimate content, timing or effect of any future healthcare initiatives or the impact any future legislation or regulation will have on us. 35 Governmental authorities in the U.S., EU member states, the UK, Switzerland, Israel, Japan, and other jurisdictions are increasingly active in their goal of reducing public spending on healthcare.
However, we cannot predict the ultimate content, timing or effect of any future healthcare initiatives or the impact any future legislation or regulation will have on us. Governmental authorities in the U.S., EU member states, the UK, Switzerland, Israel, Japan, and other jurisdictions are increasingly active in their goal of reducing public spending on healthcare.
The market price for our ordinary shares may be volatile and subject to wide fluctuations in response to factors such as publication of clinical studies relating to our Products, our system candidates or a competitor’s product, actual or anticipated fluctuations in our quarterly results of operations, changes in financial estimates by securities research 44 analysts, negative publicity, studies or reports, changes in the economic performance or market valuations of other companies that operate in our industry, changes in the availability of third-party reimbursement in the U.S. or other countries, changes in governmental regulations or in the status of our regulatory approvals or applications, announcements by us or our competitors of material acquisitions, strategic partnerships, joint ventures or capital commitments, intellectual property litigation, release of transfer restrictions on our outstanding ordinary shares, and economic or political conditions in the U.S. or elsewhere.
The market price for our ordinary shares may be volatile and subject to wide fluctuations in response to factors such as publication of clinical studies relating to our Products, our system candidates or a competitor’s product, actual or 41 anticipated fluctuations in our quarterly results of operations, changes in financial estimates by securities research analysts, negative publicity, studies or reports, changes in the economic performance or market valuations of other companies that operate in our industry, changes in the availability of third-party reimbursement in the U.S. or other countries, changes in governmental regulations or in the status of our regulatory approvals or applications, announcements by us or our competitors of material acquisitions, strategic partnerships, joint ventures or capital commitments, intellectual property litigation, release of transfer restrictions on our outstanding ordinary shares, and economic or political conditions in the U.S. or elsewhere.
In the event we are required to make such payments to our directors and officers, there can be no assurance that any of these payments will not be material. Global economic, political and industry conditions constantly change and unfavorable conditions may have a material adverse effect on our business and results of operations.
In the event we are required to make such payments to our directors and officers, there can be no assurance that any of these payments will not be material. Global economic, political, industry and environmental conditions constantly change and unfavorable conditions may have a material adverse effect on our business and results of operations.
We have borrowed a significant amount of debt and have the ability to borrow additional debt in the future, which could adversely affect our financial condition and results of operations and our ability to react to changes in our business. On November 5, 2020, we issued $575 million of 0% Convertible Senior Notes due 2025 (the “Convertible Notes”).
We have borrowed a significant amount of debt and have the ability to borrow additional debt in the future, which could adversely affect our financial condition and results of operations and our ability to react and make changes to our business. On November 5, 2020, we issued $575 million of 0% Convertible Senior Notes due 2025 (the “Convertible Notes”).
Our future revenues and results may be affected by the absence of CPT codes, as physicians may be less likely to prescribe the therapy when there is no certainty that adequate reimbursement will be available for the time, effort, skill, practice expense and malpractice costs required to provide the therapy to patients.
Our future revenues and results may be affected by the absence of specific CPT codes, as physicians may be less likely to prescribe the therapy when there is no certainty that adequate reimbursement will be available for the time, effort, skill, practice expense and malpractice costs required to provide the therapy to patients.
We expect that the vast majority of our revenues will come from third-party payers either directly to us in markets where we provide our Products or plan to provide our device candidates to patients or indirectly via payments made to hospitals or other entities providing our Products or which may in the future provide our device candidates to patients.
We expect that the vast majority of our revenues will come from third-party payers either directly to us in markets where we provide our Products or plan to provide our device candidates to patients or indirectly via payments made 22 to hospitals or other entities providing our Products or which may in the future provide our device candidates to patients.
Loss of these codes or any alteration in the reimbursement amounts attached to these codes would materially impact our operating results. We do not expect to obtain different codes for new indications. No CPT codes currently exist to describe physician services related to the delivery of therapy using our Products.
Loss of these codes or any alteration in the reimbursement amounts attached to these codes would materially impact our operating results. We do not expect to obtain different codes for new indications. No CPT codes specific to our therapy currently exist to describe physician services related to the delivery of therapy using our Products.
Our current intellectual property portfolio consists of hundreds of issued patents in multiple jurisdictions covering various aspects of our devices and related technology. The legal scope of our patents vary, with some having broad coverage and others having narrow coverage, for example being limited to certain intensities and frequencies.
Our current intellectual property portfolio consists of hundreds of issued patents in multiple jurisdictions covering various aspects of our devices and related technology. The legal scope of our patents vary, with some having broad 39 coverage and others having narrow coverage, for example being limited to certain intensities and frequencies.
Patent expiration could 42 adversely affect our ability to protect our Products and future product development and our competitors may develop and market competing products. We have also filed additional patent applications in several countries that may never be issued. Consequently, our operating results and financial position could be materially adversely affected.
Patent expiration could adversely affect our ability to protect our Products and future product development and our competitors may develop and market competing products. We have also filed additional patent applications in several countries that may never be issued. Consequently, our operating results and financial position could be materially adversely affected.
Clinical studies must be conducted in accordance with the FDA’s cGCPs and the equivalent laws and regulations applicable in other jurisdictions in which the clinical studies are conducted. The clinical studies are subject to oversight by the FDA, regulatory agencies in other jurisdictions, ethics committees and institutional review boards at the medical institutions where the clinical studies are conducted.
Clinical studies must be conducted in accordance with the FDA’s cGCPs and the equivalent laws and regulations applicable in other jurisdictions in which the clinical studies are conducted. The clinical studies are subject to 31 oversight by the FDA, regulatory agencies in other jurisdictions, ethics committees and institutional review boards at the medical institutions where the clinical studies are conducted.
There is a risk that the competent authorities of the EU member states or our notified body may disagree with our assessment of the changes introduced to our Products. 37 The competent authorities of the EU member states or our notified body also may come to a different conclusion than the FDA on any given product modification.
There is a risk that the competent authorities of the EU member states or our notified body may disagree with our assessment of the changes introduced to our Products. The competent authorities of the EU member states or our notified body also may come to a different conclusion than the FDA on any given product modification.
To ensure compliance with Medicare, Medicaid and other regulations, federal and state governmental agencies and their agents, including DME MACs, may conduct audits of our operations to support our claims submitted for 39 reimbursement of items furnished to beneficiaries and health care providers.
To ensure compliance with Medicare, Medicaid and other regulations, federal and state governmental agencies and their agents, including DME MACs, may conduct audits of our operations to support our claims submitted for reimbursement of items furnished to beneficiaries and health care providers.
In some cases, the determinations we have made as to the effect of the tax laws in a particular jurisdiction depend on the continuing effectiveness of administrative rulings we have received from the tax authorities in that jurisdiction, while in other cases, our determinations are based on the reasoned judgment of our tax advisors.
In some cases, the determinations we have made as to the effect of the laws in a particular jurisdiction depend on the continuing effectiveness of administrative rulings we have received from the authorities in that jurisdiction, while in other cases, our determinations are based on the reasoned judgment of our advisors.
The failure to obtain and maintain these codes could affect the future growth of our business. 25 There is no assurance that Medicare or the Medicare Administrative Contractors will provide, or continue to provide, coverage or adequate payment rates for our Products.
The failure to obtain and maintain these codes could affect the future growth of our business. There is no assurance that Medicare or the Medicare Administrative Contractors will provide, or continue to provide, coverage or adequate payment rates for our Products.
Because the techniques used to obtain unauthorized access, or to sabotage systems, change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.
Because the techniques used to obtain unauthorized access, or to sabotage systems, 29 change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.
The increasing use and evolution of technology, including cloud-based computing, creates additional opportunities for the unintentional dissemination 32 of information, intentional destruction of confidential information stored in our systems or in non-encrypted portable media or storage devices.
The increasing use and evolution of technology, including cloud-based computing, creates additional opportunities for the unintentional dissemination of information, intentional destruction of confidential information stored in our systems or in non-encrypted portable media or storage devices.
As a result of the uncertainties of patent law in general, we cannot predict how much protection, if any, will be given to our patents if we attempt to enforce them and they are challenged in court.
As a result of the uncertainties of patent law in general, we cannot predict how much protection, if any, will be given to our patents when we attempt to enforce them and they are challenged in court.
In addition, we may become subject to additional regulation in other jurisdictions as we increase our efforts to market and sell Optune Gio or Optune Lua and future Products outside of the U.S.
In addition, we may become subject to additional regulation in 32 other jurisdictions as we increase our efforts to market and sell Optune Gio or Optune Lua and future Products outside of the U.S.
The termination or revision of any of our tax rulings or indirect tax exemptions that we have or may have in the future may have a material adverse effect on our cash flows, financial condition and results of operations.
The termination or revision of any of our rulings or indirect exemptions that we have or may have in the future may have a material adverse effect on our cash flows, financial condition and results of operations.
As a consequence, our expenses associated with building up and maintaining our sales force and marketing capabilities may be disproportionate to the revenues we may be able to generate on sales of our Products.
As a consequence, our expenses associated with building up and maintaining our sales force and 20 marketing capabilities may be disproportionate to the revenues we may be able to generate on sales of our Products.
Such tax liabilities could be affected by changes in tax or other laws, treaties, and regulations, as well as the interpretation or enforcement thereof by tax or other governmental entities in any relevant jurisdiction.
Such liabilities could be affected by changes in tax or other laws, treaties, and regulations, as well as the interpretation or enforcement thereof by tax, customs or other governmental entities in any relevant jurisdiction.
Any of these events could have a material adverse effect on our business, prospects, financial condition and results of operations and cause our stock price to decline. 28 We face competition from numerous competitors, which may make it more difficult for us to achieve significant market penetration and which may allow our competitors to develop additional oncology treatments to compete with our Products.
Any of these events could have a material adverse effect on our business, prospects, financial condition and results of operations and cause our stock price to decline. 26 We face competition from numerous competitors, which may make it more difficult for us to achieve significant market penetration and which may allow our competitors to develop additional oncology treatments to compete with our Products.
Additionally, from time to time, proposals can be made and legislation can be introduced to change the tax laws, regulations or interpretations thereof (possibly with retroactive effect) of various jurisdictions or limit tax treaty benefits that, if enacted, could materially increase our tax burden, increase our effective tax rate or otherwise have a material adverse impact on our financial condition and results of operations.
Additionally, from time to time, proposals can be made and legislation can be introduced to change the tax and other laws, regulations or interpretations thereof (possibly with retroactive effect) of various jurisdictions or limit treaty benefits that, if enacted, could materially increase our tax and tariff burden, increase our effective tax rate or otherwise have a material adverse impact on our financial condition and results of operations.
We pay taxes in multiple jurisdictions and adverse determinations by taxing or other governmental authorities or changes in tax laws, rates or our status under which tax jurisdictions apply to us could increase our tax burden or otherwise affect our financial condition or results of operations, as well as subject our shareholders to additional taxes.
We pay taxes, including tariffs, in multiple jurisdictions and adverse determinations by taxing or other governmental authorities or changes in tax laws, rates or our status under which tax jurisdictions apply to us could increase our tax burden or otherwise affect our financial condition or results of operations, as well as subject our shareholders to additional taxes.
In particular, we have research facilities located in Israel, and certain key suppliers manufacture their goods in Israel. Due to the high-conflict nature of this area, Israel could be subject to additional political, economic and military confines, which could result in a material adverse effect on our operations.
In particular, we have research facilities located in Israel, and certain key suppliers manufacture their goods in Israel. Due to the high-conflict nature of this area, Israel is subject to additional political, economic and military confines, which could result in a material adverse effect on our operations.
Any intellectual property dispute, even a meritless or unsuccessful one, would be time consuming and expensive to defend and could result in the diversion of our management’s attention from our business and result in adverse publicity, the disruption of research and 43 development and marketing efforts, injury to our reputation and loss of revenues.
Any intellectual property dispute, even a meritless or unsuccessful one, would be time consuming and expensive to defend and could result in the diversion of our 40 management’s attention from our business and result in adverse publicity, the disruption of research and development and marketing efforts, injury to our reputation and loss of revenues.
Additionally, any third parties conducting our preclinical, clinical and other development programs are not and will not be our employees and, except for remedies available to us under our agreements with such third parties, we 27 cannot control whether or not they devote sufficient time and resources to our ongoing preclinical, clinical and other development programs.
Additionally, any third parties conducting our preclinical, clinical and other development programs are not and will not be our employees and, except for remedies available to us under our agreements with such third parties, we 25 cannot control whether or not they devote sufficient time and resources to our ongoing preclinical, clinical and other development programs.
The loss of the services of one or more of our current employees might impede the achievement of our business objectives. 29 The competition for qualified personnel in the oncology and medical device fields is intense, and we rely heavily on our ability to attract and retain qualified scientific, technical and managerial personnel.
The loss of the services of one or more of our current employees might impede the achievement of our business objectives. 27 The competition for qualified personnel in the oncology and medical device fields is intense, and we rely heavily on our ability to attract and retain qualified scientific, technical and managerial personnel.
From time to time, we may be subject to litigation and other legal and regulatory proceedings relating to our business or investigations or other actions by governmental agencies, including as described in Part I, Item 3 "Legal 30 Proceedings" of this Annual Report on Form 10-K.
From time to time, we may be subject to litigation and other legal and regulatory proceedings relating to our business or investigations or other actions by governmental agencies, including as described in Part I, Item 3 "Legal 28 Proceedings" of this Annual Report on Form 10-K.
There can be no assurance that the UK Regulations will be interpreted by UK regulators in the same manner as the MDR in the 34 future, which may prevent or delay the UK CE certification of our device candidates or impact our ability to modify our Products on a timely basis We may choose to, or may be required to, suspend, repeat or terminate our clinical studies if they are not conducted in accordance with regulatory requirements, the results are negative or inconclusive or the studies are not well designed.
There can be no assurance that the UK Regulations will be interpreted by UK regulators in the same manner as the MDR from which the UK Regulations are based, which may prevent or delay the UK CE certification of our device candidates or impact our ability to modify our Products on a timely basis We may choose to, or may be required to, suspend, repeat or terminate our clinical studies if they are not conducted in accordance with regulatory requirements, the results are negative or inconclusive or the studies are not well designed.
We may not achieve market acceptance of our Products for current or future indications within the timeframes we have anticipated, or at all, for a number of different reasons, including the following factors: • it may be difficult to gain or maintain broad acceptance of our Products because they are new technologies and involve a novel mechanism of action and, as such, physicians may be reluctant to prescribe our Products without prior experience or additional data or training; • physicians may be reluctant to prescribe our Products due to their perception that the supporting clinical study designs have limitations, as they are, for example, unblinded; • physicians at large academic universities and medical centers may prefer to enroll patients into clinical studies instead of prescribing our Products; • it may be difficult to gain broad acceptance at community hospitals where the number of patients seeking treatment may be more limited than at larger medical centers, and such community hospitals may not be willing to invest in the resources necessary for their physicians to become trained to use our Products, which could lead to reluctance to prescribe our Products; • patients may be reluctant to use our Products for various reasons, including a perception that the treatment is untested or difficult to use (for example, they will need to shave the areas on their bodies where the arrays are applied) or a perception that our software is not secure; 23 • our Products may have side effects (for example, dermatitis where the arrays are placed) and our Products cannot be worn in all circumstances (for example, they cannot get wet and are difficult to wear in high temperatures); and • the price of our Products includes a monthly fee for use of the device and therefore, as the duration of the treatment course increases, the overall price will increase correspondingly and, when used together with other treatments, the overall cost of treatment will be greater than using a single type of treatment.
We may not achieve market acceptance of our Products for current or future indications within the timeframes we have anticipated, or at all, for a number of different reasons, including the following factors: • it may be difficult to gain or maintain broad acceptance of our Products because they are new technologies and involve a novel mechanism of action and, as such, physicians may be reluctant to prescribe our Products without prior experience or additional data or training; • physicians may be reluctant to prescribe our Products due to their perception that the supporting clinical study designs have limitations, as they are, for example, unblinded, or because reimbursement for physician time spent prescribing and assisting patients with our Products is low compared to other therapies; • physicians at large academic universities and medical centers may prefer to enroll patients into clinical studies instead of prescribing our Products; 21 • it may be difficult to gain broad acceptance at community hospitals where the number of patients seeking treatment may be more limited than at larger medical centers, and such community hospitals may not be willing to invest in the resources necessary for their physicians to become trained to use our Products, which could lead to reluctance to prescribe our Products; • patients may be reluctant to use our Products for various reasons, including a perception that the treatment is untested or difficult to use (for example, they will need to shave the areas on their bodies where the arrays are applied) or a perception that our software is not secure; • our Products may have side effects (for example, dermatitis where the arrays are placed) and our Products cannot be worn in all circumstances (for example, they cannot get wet and are difficult to wear in high temperatures); and • the price of our Products includes a monthly fee for use of the device and therefore, as the duration of the treatment course increases, the overall price will increase correspondingly and, when used together with other treatments, the overall cost of treatment will be greater than using a single type of treatment.
Our business model is predicated on achieving market acceptance of our Products as a monotherapy or together with well-established cancer treatment modalities like surgery, radiation, pharmacological and immunocologic therapies.
Our business model is predicated on achieving market acceptance of our Products as a monotherapy or together with well-established cancer treatment modalities like surgery, radiation, pharmacological and immunologic therapies.
The amount we pay in tax to any particular jurisdiction depends, in part, on the correct interpretation of the tax laws in such jurisdiction, and we have made a number of determinations as to the effect of such tax laws in our particular circumstances.
The amount we pay in tax and tariffs to any particular jurisdiction depends, in part, on the correct interpretation of the relevant laws in such jurisdiction, and we have made a number of determinations as to the effect of such laws in our particular circumstances.
The commercial success of our Products and our ability to generate and maintain revenues from the sale of our Products will depend on a number of factors, including: • our ability to develop and obtain additional regulatory approvals and further commercialize our Products for additional indications; • our ability to expand into new markets and future indications; • the acceptance of our Products by patients and the healthcare community, including physicians and third-party payers (both private and governmental), as therapeutically effective and safe; • the accomplishment of various scientific, engineering, clinical, regulatory and other goals, which we sometimes refer to as milestones, on our anticipated timeline; • the relative cost, safety and efficacy of alternative therapies; • our ability to obtain and maintain sufficient coverage or reimbursement by private and governmental third-party payers and to comply with applicable health care coverage laws and regulations; • the ability of our third-party manufacturers to manufacture our Products in sufficient quantities with acceptable quality; • our ability to provide marketing, distribution and customer support for our Products; • the presence of competitive products in our active indications; • results of future clinical studies relating to our Products or other competitor products for similar indications; • compliance with applicable laws and regulatory requirements, in particular in the EU; • the maintenance of our existing regulatory approvals; and • the consequences of any reportable adverse events involving our Products. 20 In addition, the promotion of our Products is limited to approved indications, which vary by geography.
The commercial success of our Products and our ability to generate and maintain revenues from the sale of our Products will depend on a number of factors, including: • our ability to develop and obtain additional regulatory approvals and further commercialize our Products for additional indications; • our ability to expand into new markets and future indications; • the acceptance of our Products by patients and the healthcare community, including physicians and third-party payers (both private and governmental), as therapeutically effective and safe; • the accomplishment of various scientific, engineering, clinical, regulatory and other goals, which we sometimes refer to as milestones, on our anticipated timeline; • the relative cost, safety and efficacy of alternative therapies; • our ability to obtain and maintain sufficient coverage or reimbursement by private and governmental third-party payers and to comply with applicable health care coverage laws and regulations; • the ability of our third-party manufacturers to manufacture our Products in sufficient quantities with acceptable quality; • our ability to provide marketing, distribution and customer support for our Products; • the presence of competitive products in our active indications; • results of future clinical studies relating to our Products or other competitor products for similar indications; • compliance with applicable laws and regulatory requirements, in particular in the EU; • the maintenance of our existing regulatory approvals; and 18 • the consequences of any reportable adverse events involving our Products.
Such attempts may also provoke third parties to assert claims against us or result in our intellectual property being narrowed in scope or declared to be invalid or unenforceable. In addition, we rely on certain proprietary trade secrets, know-how and other confidential information.
Such attempts often provoke third parties to assert claims against us or result in our intellectual property being narrowed in scope or declared to be invalid or unenforceable. In addition, we rely on certain proprietary trade secrets, know-how and other confidential information.
In addition, the existence of our Convertible Notes may encourage short selling by market participants because the conversion of such notes could be used to satisfy short positions, or anticipated conversion of such notes into our ordinary shares could depress the price of our ordinary shares. 46 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
In addition, the existence of our Convertible Notes may encourage 43 short selling by market participants because the conversion of such notes could be used to satisfy short positions, or anticipated conversion of such notes into our ordinary shares could depress the price of our ordinary shares. 44 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Our existing and future patent portfolio also may be vulnerable to legal challenges worldwide. The standards that courts use to interpret patents are not always applied predictably or uniformly and can change from country to country, particularly as new technologies develop.
Our existing and future patent portfolio also is vulnerable to legal challenges worldwide. The standards that courts use to interpret patents are not always applied predictably or uniformly and can change from country to country, particularly as new technologies develop.
We may experience difficulties in patient enrollment in our clinical studies for a variety of reasons, including: • the severity of the disease under investigation; 21 • the limited size and nature of the patient population; • the patient eligibility criteria defined in our protocol and other clinical study protocols; • standards of care may vary by geographic region, affecting whether our protocols may be valid in a given region; • the nature of the study protocol, including the attractiveness of, or the discomforts and risks associated with, the treatments received by enrolled subjects; • difficulties and delays in clinical studies that may occur as a result of the COVID-19 or similar pandemic; • the ability to obtain IRB approval at clinical study locations; • clinicians’ and patients’ perceptions as to the potential advantages, disadvantages and side effects of our Products in relation to other available therapies, including any new drugs or treatments that may be approved for the indications we are pursuing; • availability of other clinical studies that exclude use of our Products; • the possibility or perception that enrolling in a Product’s clinical study may limit the patient’s ability to enroll in future clinical studies for other therapies due to protocol restrictions; • the possibility or perception that our software is not secure enough to maintain patient privacy; • patient referral practices of physicians; • the ability to monitor patients adequately during and after treatment; • the availability of appropriate clinical study investigators, support staff, drugs and other therapeutic supplies and proximity of patients to clinical sites; • physicians’ or our ability to obtain and maintain patient consents; and • the risk that patients enrolled in clinical studies will choose to withdraw from or otherwise not be able to complete a clinical study.
We may experience difficulties in patient enrollment in our clinical studies for a variety of reasons, including: • the severity of the disease under investigation; • the limited size and nature of the patient population; • the patient eligibility criteria defined in our protocol and other clinical study protocols; • standards of care may vary by geographic region, affecting whether our protocols may be valid in a given region; • the nature of the study protocol, including the attractiveness of, or the discomforts and risks associated with, the treatments received by enrolled subjects; • difficulties and delays in clinical studies that may occur as a result of economic, political, industry and environmental conditions outside of our control; • the ability to obtain IRB approval at clinical study locations; • clinicians’ and patients’ perceptions as to the potential advantages, disadvantages and side effects of our Products in relation to other available therapies, including any new drugs or treatments that may be approved for the indications we are pursuing; • availability of other clinical studies that exclude use of our Products; • the possibility or perception that enrolling in a Product’s clinical study may limit the patient’s ability to enroll in future clinical studies for other therapies due to protocol restrictions; • the possibility or perception that our software is not secure enough to maintain patient privacy; • patient referral practices of physicians; • the ability to monitor patients adequately during and after treatment; • the availability of appropriate clinical study investigators, support staff, drugs and other therapeutic supplies and proximity of patients to clinical sites; • physicians’ or our ability to obtain and maintain patient consents; and • the risk that patients enrolled in clinical studies will choose to withdraw from or otherwise not be able to complete a clinical study.
Additionally, natural disasters and public health emergencies, such as extreme weather events and the COVID-19 or other pandemics, could have a significant adverse effect on our business, including interruption of our commercial and clinical operations, supply chain disruption, endangerment of our personnel, fewer patient visits, increased patient drop-out rates, delays in recruitment of new patients, and other delays or losses of materials and results.
Additionally, natural disasters and public health emergencies, such as extreme weather events and pandemics, such as seen with COVID-19,, could have a significant adverse effect on our business, including interruption of our commercial and clinical operations, supply chain disruption, endangerment of our personnel, fewer prescriptions written, fewer patient visits, increased patient drop-out rates, delays in recruitment of new patients, and other delays or losses of materials and results.
Although we believe that we are in compliance with the administrative rulings we have received, that the assumptions made by our tax advisors in rendering their advice remain correct, and that as a result we are in compliance with applicable tax laws in the jurisdictions where we and our subsidiaries are organized and operate, a taxing authority in any such jurisdiction may challenge our interpretation of those laws and assess us or any of our subsidiaries with additional taxes, penalties, fees and interest.
Although we believe that we are in compliance with the administrative rulings we have received, that the assumptions made by our advisors in rendering their advice remain correct, and that as a result we are in compliance with applicable tax and customs laws in the jurisdictions where we and our subsidiaries are organized and operate, an appropriate authority in any such jurisdiction may challenge our interpretation of those laws and assess us or any of our subsidiaries with additional taxes, tariffs, penalties, fees and interest.
Any alternative interpretations of applicable tax laws asserted by a tax authority or changes in tax laws, regulations or accounting principles that limit our ability to take advantage of tax treaties between jurisdictions, modify or eliminate the deductibility of various currently deductible payments, increase the tax burden of operating or being resident in a particular country, result in transfer pricing adjustments or otherwise require the payment of additional taxes, may 41 have a material adverse effect on our cash flows, financial condition and results of operations.
Any alternative interpretations of applicable tax and other laws asserted by an authority or changes in tax and customs laws, regulations or accounting principles that limit our ability to take advantage of treaties between jurisdictions, modify or eliminate the deductibility of various currently deductible payments, increase the tax and tariff burden of operating 38 or being resident in a particular country, result in transfer pricing adjustments or otherwise require the payment of additional taxes or levies, may have a material adverse effect on our cash flows, financial condition and results of operations.
For example, we have exclusively licensed rights to commercialize our Products in the field of oncology in Greater China to Zai pursuant to an agreement that also establishes a development partnership for Tumor Treating Fields (“TTFields”) therapy in multiple solid tumor indications.
For example, we have exclusively licensed rights to commercialize our Products in the field of oncology in Greater China to Zai pursuant to an agreement that also establishes a development partnership for TTFields therapy in multiple solid tumor indications.
The amount of taxes we pay is subject to a variety of tax laws in the various jurisdictions in which we and our subsidiaries are organized and operate. Our domestic and international tax liabilities are dependent on the location of earnings among these various jurisdictions.
The amount of taxes we pay is subject to a variety of tax and customs laws in the various jurisdictions in which we and our subsidiaries are organized and operate. Our domestic and international tax and tariff liabilities are dependent on the location of goods or earnings among these various jurisdictions.
We cannot, therefore, guarantee that the treatment of patients with our Products would be reimbursed in any particular country or, if successfully included on reimbursement lists, whether we will remain on such lists.
We cannot, therefore, guarantee that the treatment of patients with our Products would be reimbursed in any particular country or, if successfully included on reimbursement lists, whether we will remain on such lists at a reasonable price.
Reimbursement for the treatment of patients with medical devices around the world is governed by complex mechanisms established on a national or sub-national level in each country. These mechanisms vary widely among countries, can be informal, somewhat unpredictable, and evolve constantly, reflecting the efforts of these countries to reduce public spending on healthcare.
Reimbursement for the treatment of patients with medical devices around the world is governed by complex mechanisms established on a national or sub-national level in each country. These mechanisms vary widely among countries, are sometimes informal and unpredictable, and evolve continuously, reflecting the efforts of these countries to reduce public spending on healthcare.
We anticipate that a significant portion of patients using our Products will be beneficiaries under the Medicare fee-for-service program in the U.S, including a majority of our Optune Lua patients for NSCLC, once approved in that indication.
We anticipate that a significant portion of patients using our Products will be beneficiaries under the Medicare program in the U.S, including a majority of our Optune Lua patients for NSCLC.
We may be unable to obtain reimbursement for our Products where our Products are already part of the approved standard of care.
We may be unable to obtain reimbursement for our Products used in clinical trials where our Products are already part of the approved standard of care.
Further, until we receive FDA and analogous approval in other jurisdictions for the use of our Products for other indications, almost all of our revenues will derive from sales and royalties from sales of Optune Gio for the treatment of newly diagnosed and recurrent GBM.
Further, until we receive FDA and analogous approval in other jurisdictions for the use of our Products for other indications (including for NSCLC pending obtaining widespread reimbursement agreements), almost all of our revenues will derive from sales and royalties from sales of Optune Gio for the treatment of newly diagnosed and recurrent GBM.
Optune Gio has a CE mark affixed for the treatment of GBM in the EU and Switzerland. We have also received FDA approval under the HDE pathway to market Optune Lua for unresectable, locally advanced or metastatic, MPM when used together with standard chemotherapies. Optune Lua is also CE Certified for the same indication in the EU and Switzerland .
We have also received FDA approval under the HDE pathway to market Optune Lua for unresectable, locally advanced or metastatic, MPM when used together with standard chemotherapies. Optune Lua is also CE Certified for the same indication in the EU and Switzerland.
Risks relating to our business and our Products Our business and prospects depend heavily on Optune Gio, which is currently approved only for the treatment of GBM, and Optune Lua, which is currently approved only for the treatment of MPM, with approvals pending for NSCLC.
Risks relating to our business and our Products Our business and prospects depend heavily on Optune Gio, which is currently approved only for the treatment of GBM, and Optune Lua, which is currently approved for the treatment of NSCLC in the United States and MPM.
In addition, the political and security situation in Israel may result in parties with whom we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in the agreements.
In addition, the political and security situation in Israel may result in parties with whom we have agreements involving performance in Israel being unable perform their obligations, due to transportation and other disruptions, and/or claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in the agreements.
Although we have received FDA approval to market Optune Gio in the U.S. for the treatment of adult patients with newly diagnosed GBM (together with temozolomide) and recurrent GBM and approval to market Optune Lua for adults patients with MPM, we will require additional FDA approval to market our Products for other indications.
Although we have received FDA approval to market Optune Gio in the U.S. for the treatment of adult patients with newly diagnosed GBM (together with temozolomide) and recurrent GBM and approval to market Optune Lua for adults with metastatic NSCLC who have progressed on or after a platinum-based regimen, together with docetaxel or ICI, and in patients with MPM, we will require additional FDA approval to market our Products for other indications.
Private and government payers around the world are increasingly challenging the prices charged for medical products and services. Additionally, the containment of healthcare costs has become a priority of governments around the world.
Additionally, private and government payers may consider the cost of a treatment in approving coverage or in setting reimbursement for the treatment. Private and government payers around the world are increasingly challenging the prices charged for medical products and services. Additionally, the containment of healthcare costs has become a priority of governments around the world.
Similarly, the label for Optune Lua also contains certain limitations that may adversely affect adoption, including the requirement in the United States (applicable to all HDE-approved devices) to display on all marketing materials that the efficacy of the Product has not been established, as well as a limitation for use by adults ages 22 and older, and the absence of phase 3 clinical data.
Similarly, the MPM indication in the U.S. includes the requirement in the United States (applicable to all HDE-approved devices) to display on all marketing materials that the efficacy of the Product has not been established, as well as a limitation for use by adults ages 22 and older, and the absence of phase 3 clinical data.
We may not be able to secure CPT codes for physician services related to our Products.
CPT codes for physician services specifically related to our Products may not be obtainable.
Additionally, some third-party payers may decline to cover and reimburse our Products for a particular patient even if the payer has a favorable coverage policy addressing our Products or previously approved reimbursement for our Products. 24 Additionally, private and government payers may consider the cost of a treatment in approving coverage or in setting reimbursement for the treatment.
Third-party payers may decline to cover and reimburse certain procedures, supplies or services. Additionally, some third-party payers may decline to cover and reimburse our Products for a particular patient even if the payer has a favorable coverage policy addressing our Products or previously approved reimbursement for our Products.
Further, as a result of the implementation of the MDR, our notified body (as well as many other notified bodies throughout the EEA) has suffered a significant backlog in issuing CE Certificate renewals. In the UK, we were able to market and sell our Products under the CE mark until June 2023.
Further, as a result of the implementation of the MDR, our notified body (as well as many other notified bodies throughout the EEA) has suffered a significant backlog in issuing CE Certificate renewals. In the UK, our Products are regulated under the UK Regulations.
Our costs associated with this program could increase if payers increase the cost-sharing burden of patients or we do not obtain coverage and reimbursement and we elect to continue providing financial assistance in those markets. Additionally we provide charitable donations to foundations that can then provide financial assistance to those receiving health care coverage from federal or state funded programs.
Our costs associated with this program could increase if payers increase the cost-sharing burden of patients or we do not obtain coverage and reimbursement and we elect to continue providing financial assistance in those markets.
The Medicare fee-for-service program denied coverage for all claims prior to the September 1, 2019 effective date for the DME MAC LCD, which provides coverage for Optune Gio for the treatment of newly diagnosed GBM subject to certain conditions and restrictions. We expect that Medicare will continue to deny essentially all claims that do not meet the coverage policy terms.
Medicare denied coverage for all claims prior to the September 1, 2019 effective date of DME MAC LCD L34823, which provides coverage for Optune Gio for the treatment of newly diagnosed GBM subject to certain conditions and restrictions.
If we, our collaborative partners, our contract manufacturers or our component suppliers fail to comply with the FDA’s QSR or equivalent regulations established in other countries, the manufacturing and distribution of our Products could be interrupted, and our Product sales and results of operations could suffer.
Depending on the nature of the conduct found in such audits and whether the underlying conduct could be considered systemic, the resolution of these audits could adversely impact our revenue, financial condition and results of operations. 36 If we, our collaborative partners, our contract manufacturers or our component suppliers fail to comply with the FDA’s QSR or equivalent regulations established in other countries, the manufacturing and distribution of our Products could be interrupted, and our Product sales and results of operations could suffer.
Our promotional materials and training materials must comply with FDA regulations and other applicable laws and regulations governing the promotion of our Products in the U.S. and other jurisdictions.
Medical devices may be marketed only for the indications for which they are approved. Our promotional materials and training materials must comply with FDA regulations and other applicable laws and regulations governing the promotion of our Products in the U.S. and other jurisdictions.
For example, the Organization for Economic Cooperation and Development (OECD) has secured agreements from many countries to push forward with proposals to fundamentally rewrite international tax rules, which could impact the amount of tax we will pay in the future. It is possible that these changes could adversely affect our business.
For example, the Organization for Economic Cooperation and Development (OECD) has secured agreements from many countries to fundamentally rewrite international tax rules and create a minimum global tax, which could impact the amount of tax we will pay in the future.
Any corrective action, whether voluntary or 40 involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital, distract management from operating our business, and may harm our reputation and financial results.
Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital, distract management from operating our business, and may harm our reputation and financial results. 37 We may be subject to fines, penalties or injunctions if we are determined to be promoting the use of our Products for unapproved or off-label uses.
Our Products and our systems and infrastructure face certain risks, including from cyber security breaches and data leakage. We increasingly rely upon technology systems and infrastructure. Our technology systems, including our Products, are potentially vulnerable to breakdown or other interruption by fire, power loss, system malfunction, unauthorized access and other events.
Our technology systems, including our Products, are potentially vulnerable to breakdown or other interruption by fire, power loss, system malfunction, unauthorized access and other events.
Outside the U.S., but excluding Germany and Japan, we have not secured codes to describe our Products or to document physician services related to the delivery of therapy using our Products.
Coverage and payment relating to these codes is subject to discretion by each third-party payer. 23 Outside the U.S., Germany, France and Japan, we have not secured codes to describe our Products or to document physician services related to the delivery of therapy using our Products.
While our existing material indebtedness does not accrue interest, our ability to incur indebtedness in the future and service that indebtedness could be impacted by interest and currency rate fluctuations. Our existing indebtedness and any additional indebtedness we may incur otherwise could require us to divert funds identified for other purposes for debt service and impair our liquidity position.
Our existing indebtedness and any additional indebtedness we may incur otherwise could require us to divert funds identified for other purposes for debt service and impair our liquidity position.
Our failure or the failure of third-party participants in our studies to comply with their obligations to follow protocols and/or legal requirements may also result in our inability to use the affected data in our submissions to regulatory authorities.
Our failure or the failure of third-party participants in our studies to comply with their obligations to follow protocols and/or legal requirements may also result in our inability to use the affected data in our submissions to regulatory authorities. 19 The timely completion of clinical studies depends, among other things, on our ability to enroll a sufficient number of patients who remain in the study until its conclusion.
Although we are actively appealing these coverage denials, we are unable to bill the vast majority of our existing Medicare fee-for-service patients for amounts not paid by Medicare. Therefore, we are absorbing and may continue to absorb the costs of treatment for amounts not paid by Medicare.
Therefore, we are absorbing and may continue to absorb the costs of treatment for amounts not paid by Medicare.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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We have not encountered any incidents from cybersecurity threats to date, including as a result of any previous cybersecurity incidents, that have materially affected, or are reasonably likely to materially affect, our business strategy, results of operations, or financial condition. 45

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Our global headquarters and operating center is located in Root, Switzerland, our U.S. operating center is located in Portsmouth, New Hampshire, and our research and development operations are located in Haifa, Israel, all of which 47 are leased. In December 2021 we acquired a property in downtown Portsmouth, New Hampshire that will become our U.S. flagship location.
Biggest changeITEM 2. PROPERTIES Our global headquarters and operating center is located in Baar, Switzerland, our U.S. flagship location and our operating center/warehouse are located in Portsmouth, New Hampshire, and our research and development operations are located in Haifa, Israel, all of which are leased, except for the U.S. flagship location, which we purchased in 2021 and became operational in 2024.
Construction on the property is expected to be completed in 2024. We also lease additional office and warehouse space across North America, Europe, Israel and Japan. We believe that our current facilities are adequate for our present purposes, but we may need additional space as we continue to grow and expand our operations.
We also lease additional office and warehouse space across North America, Europe, Israel and Japan. We believe that our current facilities are adequate for our present purposes, but we may need additional space as we continue to grow and expand our operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe complaint, later amended to add our Chief Financial Officer as a defendant, purports to be brought on behalf of a class of persons and/or entities who purchased or otherwise acquired ordinary shares of the Company from January 5, 2023 through June 5, 2023, and alleges material misstatements and/or omissions in the Company’s public statements with respect to the results from its phase 3 LUNAR clinical trial.
Biggest changeThe complaint, later amended to add our former Chief Financial Officer as a defendant, purports to be brought on behalf of a class of persons and/or entities who purchased or otherwise acquired ordinary shares of the Company from January 5, 2023 through June 5, 2023, and alleges material misstatements and/or omissions in the Company’s public statements with respect to the results from its Phase 3 LUNAR clinical trial.
ITEM 3. LEGAL PROCEEDINGS In June 2023, a putative class action lawsuit was filed against the Company, its Executive Chairman and its Chief Executive Officer.
ITEM 3. LEGAL PROCEEDINGS In June 2023, a putative class action lawsuit was filed against the Company, its Executive Chairman and its former Chief Executive Officer.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeUri Weinberg, M.D., Ph.D. , has served as our Chief Innovation Officer since January 2023, where he is responsible for expanding the innovative potential of Tumor Treating Fields therapy. Since joining Novocure in 2008, he has held several positions throughout his tenure with the Company and most recently held the position of Chief Science Officer since 2020. Dr.
Biggest changeHe earned his bachelor’s degree in economics from the University of Nantes and his master’s degree in strategic marketing from the Grenoble Business School. Uri Weinberg, M.D., Ph.D. , has served as our Chief Innovation Officer since January 2023, where he is responsible for expanding the innovative potential of Tumor Treating Fields therapy.
From 2014 to 2016 he was a member of the investment team at Pershing Square Capital Management L.P., a private investment firm and from November 2016 to January 2021, Mr.Doyle served as the Executive 48 Chairman of BlinkHealth LLC, which has developed a pharmacy-as-a-service, e-commerce platform. Mr.
From 2014 to 2016 he was a member of the investment team at Pershing Square Capital Management L.P., a private investment firm and from November 2016 to January 2021, Mr.Doyle served as the Executive Chairman of BlinkHealth LLC, which has developed a pharmacy-as-a-service, e-commerce platform. Mr.
Leonard was a venture capital investor focused on high-impact medical technologies. Mr. Leonard holds an A.B. from Harvard and an M.A. from the London School of Economics and Political Science. Nicholas Leupin, M.D., Ph.D., has served as our Chief Medical Officer since January 2024. Dr. Leupin previously served as Chief Medical Officer of Molecular Partners AG since August 2019.
Leonard holds an A.B. from Harvard and an M.A. from the London School of Economics and Political Science. Nicolas Leupin, M.D., Ph.D., has served as our Chief Medical Officer since January 2024. Dr. Leupin previously served as Chief Medical Officer of Molecular Partners AG since August 2019. Prior to that Dr.
Puri previously served as Vice President, HR Integration lead at CSL Limited, following the company’s acquisition of Vifor Pharma, where he served as Chief Human Resources Officer from 2015 to 2022. He also served as Chief Human Resources Officer at GrandVision, an international leader in optical retailing, from 2013 to 2015. Mr.
Michael Puri has served as our Chief Human Resources Officer since September 2023. Mr. Puri previously served as Vice President, HR Integration lead at CSL Limited, following the company’s acquisition of Vifor Pharma, where he served as Chief Human Resources Officer from 2015 to 2022.
Ben-Arye earned his Bachelor of Laws and his Bachelor of Business Administration from Reichman University (IDC Herzliya) in Israel. Ashley Cordova has been our Chief Financial Officer since September 2020. From October 2018 to August 2020, Ms. Cordova served as our Senior Vice President, Finance and Investor Relations. Ms. Cordova joined us in June 2014 as Director of Global Treasury.
From September 2020 to December 2024, Ms. Cordova served as our Chief Financial Officer and from October 2018 to August 2020, she served as our Senior Vice President, Finance and Investor Relations. Ms. Cordova joined us in June 2014 as Director of Global Treasury.
The following table lists information about our executive officers: Name Age Position Asaf Danziger 57 Chief Executive Officer and Director William Doyle 61 Executive Chairman and Director Barak Ben-Arye 48 General Counsel Ashley Cordova 44 Chief Financial Officer Moshe Giladi 54 Chief Science Officer Wilhelmus Groenhuysen 66 Chief Operating Officer Francis Leonard 44 Executive Vice President, President Novocure Oncology Nicholas Leupin 50 Chief Medical Officer Michael Puri 54 Chief Human Resources Officer Uri Weinberg 46 Chief Innovation Officer Asaf Danziger has served as our Chief Executive Officer since 2002 and has been a director of NovoCure since 2012.
The following table lists information about our executive officers: Name Age Position Ashley Cordova 46 Chief Executive Officer William Doyle 62 Executive Chairman and Director Barak Ben-Arye 49 General Counsel Christoph Brackmann 51 Chief Financial Officer Francis Leonard 45 Executive Vice President, President Novocure Oncology Nicolas Leupin 51 Chief Medical Officer Mukund Paravasthu 55 Chief Operating Officer Michael Puri 55 Chief Human Resources Officer Uri Weinberg 47 Chief Innovation Officer Ashley Cordova has been our Chief Executive Officer since January 1, 2025.
Prior to that Dr. Leupin served as Chief Medical Officer of argenx from 2016. Dr. Leupin holds an M.D. from the University of Bern, an M.B.A. from Jones International University and a Ph.D. from the Université Bourgogne-Franche-Comté. Michael Puri has served as our Chief Human Resources Officer since September 2023. Mr.
Leupin served as Chief Medical Officer of argenx from 2016. Dr. Leupin holds an M.D. from the University of Bern, an M.B.A. from Jones International University and a Ph.D. from the Université Bourgogne-Franche-Comté. Mukund Paravasthu has been our Chief Operating Officer since October 2024. Mr. Paravasthu previously served as Novocure’s Senior Vice President of Product Development beginning in April 2022.
Groenhuysen holds a Master’s Degree in Business Economics from VU University Amsterdam and graduated as a Registered Public Controller at VU University Amsterdam. Frank Leonard has been our Executive Vice President, President Novocure Oncology since January 2024. Mr. Leonard joined Novocure in 2010, and most recently served as President, CNS Cancers U.S. Prior to joining Novocure, Mr.
Frank Leonard has been our Executive Vice President, President Novocure Oncology since January 2024. Mr. Leonard joined Novocure in 2010, and most recently served as President, CNS Cancers U.S. Prior to joining Novocure, Mr. Leonard was a venture capital investor focused on high-impact medical technologies. Mr.
Doyle was a member of Johnson & Johnson’s Medical Devices and Diagnostics Group Operating Committee and was Vice President, Licensing and Acquisitions. While at Johnson & Johnson, Mr.
Doyle has been the managing director of WFD Ventures LLC, a private venture capital firm he co-founded, since 2002. Prior to 2002, Mr. Doyle was a member of Johnson & Johnson’s Medical Devices and Diagnostics Group Operating Committee and was Vice President, Licensing and 46 Acquisitions. While at Johnson & Johnson, Mr.
Cordova graduated with a bachelor’s degree in Music and Business from Furman University, and earned her International Master of Business Administration from the University of South Carolina. Moshe Giladi, Ph.D., has been our Chief Science Officer since July 2023. Dr. Giladi joined Novocure in 2005 and most recently held the title of Senior Vice President of Preclinical Research.
Cordova graduated with a bachelor’s degree in Music and Business from Furman University, and earned her International Master of Business Administration from the University of South Carolina. William Doyle has served as our Executive Chairman since 2016, as Chairman of the Board since 2009 and as a member of our Board of Directors since 2004. Mr.
Puri has also held leadership positions at Staples, Inc. and UCB S.A., a global biopharma company. He earned his bachelor’s degree in economics from the University of Nantes and his master’s degree in strategic marketing from the Grenoble Business School.
He also served as Chief Human Resources Officer at GrandVision, an international leader in optical retailing, from 2013 to 2015. Mr. Puri has also held leadership positions at Staples, Inc. and UCB S.A., a global biopharma company.
Weinberg holds an M.D. Ph.D. from the Technion – Israel Institute of Technology. 49 PART II
Since joining Novocure in 2008, he has held several positions throughout his tenure with the Company and most recently held the position of Chief Science Officer since 2020. Dr. Weinberg holds an M.D. Ph.D. from the Technion – Israel Institute of Technology. 47 PART II
Removed
From 1998 to 2002, Mr. Danziger was CEO of Cybro Medical, a subsidiary of Imagyn Medical Technologies, Inc. Mr. Danziger holds a B.Sc. in material engineering from Ben Gurion University of the Negev, Israel.
Added
Ben-Arye earned his Bachelor of Laws and his Bachelor of Business Administration from Reichman University (IDC Herzliya) in Israel. Christoph Brackmann has been our Chief Financial Officer since January 1, 2025. Mr. Brackmann joined us as a Special Advisor to the Chief Financial Officer in October 2024. Prior to joining Novocure, Mr.
Removed
William Doyle has served as our Executive Chairman since 2016, as Chairman of the Board since 2009 and as a member of our Board of Directors since 2004. Mr. Doyle has been the managing director of WFD Ventures LLC, a private venture capital firm he co-founded, since 2002. Prior to 2002, Mr.
Added
Brackmann served as the Senior Vice President of Finance at Moderna Inc. from October 2019 to June 2024. Mr. Brackmann earned his Master of Business Administration from the SDA Bocconi School of Management, Milan in 2003 and holds a bachelors degree in Business and Economics from the University of Mannheim.
Removed
He holds a Ph.D. in Microbiology and Biochemistry and a master’s degree in business administration from Tel Aviv University. Wilhelmus Groenhuysen has been our Chief Operations Officer since September 2020 and prior to that was our Chief Financial Officer since 2012. He has served on the Board of Optinose Inc., a commercial-stage specialty pharmaceuticals company, since October 2017.
Added
Mr. Paravasthu joined us in May 2020 as Vice President of Product Development. Before joining Novocure, Mr. Paravasthu held several leadership roles at Johnson & Johnson’s orthopedic franchise, DePuy Synthes, from 2007. Mr. Paravasthu holds a Master’s degree in Electrical Engineering from the University of Oklahoma and a Bachelors in Electrical and Electronics Engineering from Annamalai University, India.
Removed
From 2007 to 2011, Mr. Groenhuysen worked for Cephalon, Inc., a U.S. biopharmaceutical company, last serving as executive vice president and chief financial officer, where he had responsibility for worldwide finance, commercial operations and risk management. From 1987 to 2007, Mr.
Removed
Groenhuysen worked for Philips Group in various assignments in Europe, Asia and the United States, the latest of which started in 2002 when he was promoted to chief financial officer and senior vice president of Philips Electronics North America Corporation. Mr.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe shareholder return shown on the graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder returns. 50 12/18 12/19 12/20 12/21 12/22 12/23 NovoCure Ltd 100.00 251.70 516.85 224.25 219.09 44.59 Russell 2000 100.00 125.52 150.58 172.90 137.56 160.85 NASDAQ Biotechnology 100.00 125.11 158.17 158.20 142.19 148.72 Recent Sales of Unregistered Securities Not applicable Issuer Purchases of Equity Securities Not applicable.
Biggest changeThe shareholder return shown on the graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder returns. 48 12/19 12/20 12/21 12/22 12/23 12/24 NovoCure Ltd 100.00 205.34 89.09 87.04 17.72 35.36 Russell 2000 100.00 119.96 137.74 109.59 128.14 142.93 NASDAQ Biotechnology 100.00 126.42 126.45 113.65 118.87 118.20 Recent Sales of Unregistered Securities Not applicable Issuer Purchases of Equity Securities Not applicable.
Securities Authorized for Issuance Under Equity Compensation Plans The following table gives information about our ordinary shares that may be issued upon the exercise of stock options and vesting of restricted stock units, as applicable, under all of our existing equity compensation plans as of December 31, 2023, including the 2003 Share Option Plan (the "2003 Plan"), the 2013 Share Option Plan (the "2013 Plan"), the 2015 Omnibus Incentive Plan (the "2015 Plan") and the Employee Share Purchase Plan (the "ESPP").
Securities Authorized for Issuance Under Equity Compensation Plans The following table gives information about our ordinary shares that may be issued upon the exercise of stock options and vesting of restricted stock units, as applicable, under all of our existing equity compensation plans as of December 31, 2024, including the 2003 Share Option Plan (the "2003 Plan"), the 2013 Share Option Plan (the "2013 Plan"), the 2015 Omnibus Incentive Plan (the "2015 Plan"), the 2024 Omnibus Incentive Plan and the Employee Share Purchase Plan (the "ESPP").
Each of the 2003 Plan, the 2013 Plan, the 2015 Plan and the ESPP has been approved by the Company’s shareholders.
Each of the 2003 Plan, the 2013 Plan, the 2015 Plan, the 2024 Plan and the ESPP has been approved by the Company’s shareholders.
The graph below matches our cumulative 5-Year total shareholder return on our ordinary shares with the cumulative total returns of the Russell 2000 index and the Nasdaq Biotechnology index. The graph tracks the performance of a $100 investment in our ordinary shares and in each index (with the reinvestment of all dividends) from December 31, 2018 to December 31, 2023.
The graph below matches our cumulative 5-Year total shareholder return on our ordinary shares with the cumulative total returns of the Russell 2000 index and the Nasdaq Biotechnology index. The graph tracks the performance of a $100 investment in our ordinary shares and in each index (with the reinvestment of all dividends) from December 31, 2019 to December 31, 2024.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our ordinary shares are quoted on the NASDAQ Global Select Market under the symbol "NVCR." Holders of Ordinary Shares As of February 16, 2024, there were 17 holders of record of our ordinary shares.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our ordinary shares are quoted on the NASDAQ Global Select Market under the symbol "NVCR." Holders of Ordinary Shares As of February 21, 2025, there were 17 holders of record of our ordinary shares.
On February 16, 2024, the last reported sale price of our ordinary shares on the NASDAQ Global Select Market was $16.14 per share. Dividend Policy We have not paid any dividends on our ordinary shares since our inception and do not anticipate paying any dividends on our ordinary shares in the foreseeable future.
On February 21, 2025, the last reported sale price of our ordinary shares on the NASDAQ Global Select Market was $22.09 per share. Dividend Policy We have not paid any dividends on our ordinary shares since our inception and do not anticipate paying any dividends on our ordinary shares in the foreseeable future.
Equity Compensation Plan Information Plan Category (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (b) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (c) Number of Securities Remaining Available for Future Issuance (Excludes Securities Reflected in Column (a)) Equity compensation plans approved by shareholders 14,352,573 $ 23.84 28,632,049 Equity compensation plans not approved by shareholders — — — Total 14,352,573 $ 23.84 28,632,049 ITEM 6. [RESERVED] 51
Equity Compensation Plan Information Plan Category (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (b) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (c) Number of Securities Remaining Available for Future Issuance (Excludes Securities Reflected in Column (a)) Equity compensation plans approved by shareholders 23,381,983 $ 15.20 17,210,661 Equity compensation plans not approved by shareholders — — — Total 23,381,983 $ 15.20 17,210,661 ITEM 6. [RESERVED] 49

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

62 edited+35 added−28 removed40 unchanged
Biggest changeDecember 31, Operating statistics 2023 2022 2021 Active patients at period end United States 2,162 2,164 2,259 International markets: Germany 525 467 563 Japan 375 369 307 Other international 693 430 458 International markets - Total 1,593 1,266 1,328 Total 3,755 3,430 3,587 Year ended December 31, 2023 2022 2021 Prescriptions received in period United States 3,912 3,790 3,770 International markets: Germany 792 830 924 Japan 354 381 436 Other international 1,025 528 532 International markets - Total 2,171 1,739 1,892 Total 6,083 5,529 5,662 Year ended December 31, 2023 compared to year ended December 31, 2022 Year ended December 31, 2023 2022 Change % Change Net revenues $ 509,338 $ 537,840 $ (28,502) (5) % Net revenues.
Biggest changeDecember 31, Operating statistics 2024 2023 2022 CNS Lung Total CNS Lung Total CNS Lung Total Active patients at period end (1) United States 2,161 31 2,192 2,145 17 2,162 2,158 6 2,164 International markets: Germany 564 11 575 520 520 5 525 466 1 467 France 426 — 426 262 — 262 — — — Japan 420 — 420 375 — 375 369 — 369 Other international 506 7 513 431 — 431 430 — 430 International markets - Total 1,916 18 1,934 1,588 5 1,593 1,265 1 1,266 4,077 49 4,126 3,733 22 3,755 3,423 7 3,430 Year ended December 31, 2024 2023 2022 CNS Lung Total CNS Lung Total CNS Lung Total Prescriptions received in period (2) United States 3,757 80 3,837 3,863 49 3,912 3,758 32 3,790 International markets: Germany 789 57 846 763 29 792 829 1 830 France 727 — 727 450 — 450 — — — Japan 407 — 407 354 — 354 381 — 381 Other international 640 15 655 575 — 575 528 — 528 International markets - Total 2,563 72 2,635 2,142 29 2,171 1,738 1 1,739 6,320 152 6,472 6,005 78 6,083 5,496 33 5,529 (1) Lung includes both active patients in NSCLC and MPM.
We also have a CE certificate to market Optune Gio for the treatment of GBM in the 61 European Union ("EU"), as well as approval or local registration in the United Kingdom ("UK"), Japan, Canada and certain other countries.
We also have a CE certificate to market Optune Gio for the treatment of GBM in the European Union ("EU"), as well as approval or local registration in the United Kingdom ("UK"), Japan, Canada and certain other countries.
We make estimates of the useful life of our property and equipment and field equipment, based on similar assets purchased in the past and our historical experience with such similar assets, in order to determine the depreciation expense to be recorded for each reporting period.
We make estimates of the useful life of our field equipment, based on similar assets purchased in the past and our historical experience with such similar assets, in order to determine the depreciation expense to be recorded for each reporting period.
Cost of revenues per active patient is calculated by dividing the cost of revenues for the year less product sales to Zai for the year by the average of the active patients at the end of the each quarter in the current year and the end 57 of the year active patients from the prior year.
Cost of revenues per active patient is calculated by dividing the cost of revenues for the year less product sales to Zai for the year by the average of the active patients at the end of the each quarter in the current year and the end of the year active patients from the prior year.
Financial expenses, net Financial expenses, net, primarily consists of bank fees, credit facility interest expense and related debt issuance costs, interest income from cash balances and short-term investments and gains (losses) from foreign currency 53 transactions. Our reporting currency is the U.S. dollar.
Financial expenses, net Financial expenses, net, primarily consists of bank fees, credit facility interest expense and related debt issuance costs, interest income from cash balances and short-term investments and gains (losses) from foreign currency 51 transactions. Our reporting currency is the U.S. dollar.
We believe our cash, cash equivalents and short-term investments as of December 31, 2023 are sufficient for our operations for at least the next 12 months based on our existing business plan and our ability to control the timing of significant expense commitments.
We believe our cash, cash equivalents and short-term investments as of December 31, 2024 are sufficient for our operations for at least the next 12 months based on our existing business plan and our ability to control the timing of significant expense commitments.
We anticipate expanding our clinical pipeline over time to study the safety and efficacy of TTFields therapy for additional solid tumor indications and combinations with other cancer treatment modalities. . The table below presents the current status of the ongoing clinical trials in our pipeline and anticipated timing of data.
We anticipate expanding our clinical pipeline over time to study the safety and efficacy of TTFields therapy for additional solid tumor indications and for use together with other cancer treatment modalities. The table below presents the current status of the ongoing clinical trials in our pipeline and anticipated timing of data.
For additional information, see Note 15 to the Consolidated Financial Statements. Long-lived assets Property and equipment and field equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful life of the relevant asset.
For additional information, see Note 15 to the Consolidated Financial Statements. Long-lived assets Field equipment is stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful life of the relevant asset.
So long as our ordinary shares are publicly traded in a liquid market, we will rely on the daily trading price of our ordinary shares when we estimate the fair value of options granted. We incurred share-based compensation expense of $115.6 million, $107.0 million and $94.9 million during the years ended December 31, 2023, 2022 and 2021, respectively.
So long as our ordinary shares are publicly traded in a liquid market, we will rely on the daily trading price of our ordinary shares when we estimate the fair value of options granted. We incurred share-based compensation expense of $160.0 million, $115.6 million and $107.0 million during the years ended December 31, 2024, 2023 and 2022, respectively.
For additional information, see Note 14 to the Consolidated Financial Statements. 55 Results of operations The following discussion provides an analysis of our results of operations and reasons for material changes therein for 2023 as compared to 2022.
For additional information, see Note 14 to the Consolidated Financial Statements. Results of operations The following discussion provides an analysis of our results of operations and reasons for material changes therein for 2024 as compared to 2023.
Upcoming use of cash in operations will include payments in the normal course of business of $43.1 million in purchase obligations with certain of our suppliers, primarily for the purchase of Product components along with other commitments to purchase goods or services. These amounts include approximately $34.5 million of commitments with three major suppliers.
Upcoming use of cash in operations will include payments in the normal course of business of $47.1 million in purchase obligations with certain of our suppliers, primarily for the purchase of Product components along with other commitments to purchase goods or services. These amounts include approximately $33.1 million of commitments with three major suppliers.
Financing activities To date, our primary financing activities have been the sale of equity and the proceeds from long-term loans. Net cash provided by financing activities was $15.8 million for the year ended December 31, 2023 compared to $15.5 million for the year ended December 31, 2022.
Financing activities To date, our primary financing activities have been the sale of equity and the proceeds from long-term loans. Net cash provided by financing activities was $90.3 million for the year ended December 31, 2024 compared to $15.8 million for the year ended December 31, 2023.
Our key priorities are to drive commercial adoption of Optune Gio ® and Optune Lua ® , our commercial TTFields therapy devices, and to advance clinical and product development programs intended to extend overall survival in some of the most aggressive forms of cancer. Optune Gio is approved by the U.S.
Our key priorities are to drive commercial adoption of Optune Gio ® and Optune Lua ® , our commercial TTFields therapy devices, and to advance clinical and product development programs intended to extend overall survival in some of the most aggressive forms of cancer.
As of December 31, 2023, we have unrecognized compensation expense of $98.6 million, which is expected to be recognized over a weighted average period of approximately 1.64 years. We expect to continue to grant equity awards in the future, and to the extent that we do, our recognized share-based compensation expense will likely increase.
As of December 31, 2024, we have unrecognized compensation expense of $119.6 million, which is expected to be recognized over a weighted average period of 52 approximately 1.59 years. We expect to continue to grant equity awards in the future, and to the extent that we do, our recognized share-based compensation expense will likely increase.
Net cash provided by investing activities was $184.1 million for the year ended December 31, 2023 compared to net cash used in investing activities of $140.0 million for the year ended December 31, 2022.
Net cash used in investing activities was $140.2 million for the year ended December 31, 2024 compared to net cash provided by investing activities of $184.1 million for the year ended December 31, 2023.
The net cash provided by financing activities for 2022 was primarily 60 attributable to $10.3 million in proceeds from the exercise of options and $5.2 million in proceeds from the issuance of shares pursuant to the ESPP. Convertible Notes On November 5, 2020, we issued $575.0 million aggregate principal amount of 0% Convertible Senior Notes due 2025 (the “Notes”).
The net cash provided by financing activities for 2023 was primarily attributable to $11.4 million in proceeds from the exercise of options and $4.4 million in proceeds from the issuance of shares pursuant to the ESPP. Convertible Notes On November 5, 2020, we issued $575.0 million aggregate principal amount of 0% Convertible Senior Notes due 2025 (the “Notes”).
Optune Lua is approved by the FDA under the Humanitarian Device Exemption ("HDE") pathway to treat malignant pleural mesothelioma and pleural mesothelioma (together, "MPM") together with standard chemotherapies. We have also received CE certification in the EU and approval or local registration to market Optune Lua in certain other countries.
Optune Lua is also approved under the Humanitarian Device Exemption ("HDE") pathway for the treatment of adult patients with malignant pleural mesothelioma or pleural mesothelioma (together, "MPM") together with standard chemotherapies. We have also received CE certification in the EU and approval or local registration to market Optune Lua in certain other countries for the treatment of MPM.
The net cash provided by investing activities for 2023 was primarily attributable to net proceeds of $211.2 million from short-term investments, offset by $27.1 million invested in property and equipment. The net cash used in investing activities for 2022 was primary attributable to $21.4 million in property and equipment and the net purchase of $118.6 million in short-term investments.
The net cash used in investing activities for 2024 was primarily attributable to net purchase of $97.4 million from short-term investments, offset by $42.9 million invested in property and equipment. The net cash provided by investing activities for 2023 was primary attributable to $27.1 million in property and equipment and the net proceeds of $211.2 million in short-term investments.
Prescriptions are a leading indicator of demand. A "prescription received" is a commercial order for Optune Gio or Optune Lua that is received from a physician certified to treat patients with our Products for a patient not previously on Optune Gio or Optune Lua.
Prescriptions are a leading indicator of demand. A "prescription received" is a commercial order for Optune Gio or Optune Lua that is received from a physician certified to treat patients with our Products for a patient not previously on Optune Gio or Optune Lua. Orders to renew or extend treatment are not included in this total.
Research, development and clinical studies costs, including direct and allocated expenses, are expensed as incurred and consist primarily of the following: • personnel costs for those employees involved in our preclinical and basic research, clinical development programs, clinical affairs, product development and regulatory activities; • costs to conduct research, product development and clinical study activity through agreements with contract research organizations and other third parties; • manufacturing expenses associated with our Products, including durable components and disposable arrays, utilized in clinical studies and other research; • costs associated with publications, presentations and investigator-sponsored trials; • professional fees related to regulatory approvals and conformity assessment procedures; and • facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, depreciation of leasehold improvements and equipment and laboratory and other supplies. 52 The following table summarizes our research, development and clinical study expenses by program for the years ended December 31, 2023, 2022 and 2021: Year ended December 31, U.S. dollars in thousands 2023 2022 2021 Preclinical and basic research $ 18,936 $ 16,922 $ 15,580 Clinical development programs: LUNAR 6,846 6,905 9,069 LUNAR - 2 2,999 — — INNOVATE - 3 7,810 9,494 17,708 METIS 5,758 8,480 7,056 PANOVA - 3 18,243 22,185 15,026 TRIDENT 20,348 12,162 12,588 Other clinical studies 6,640 5,524 4,634 Clinical administration 25,363 22,690 19,764 Product development 18,219 15,323 15,248 Clinical affairs 15,935 19,891 24,486 Other research and development costs (1) 44,138 35,719 32,547 Share based compensation 31,827 30,790 27,597 Research, development and clinical studies $ 223,062 $ 206,085 $ 201,303 (1) Other research, development and clinical study costs include regulatory affairs, quality assurance, intellectual property, product safety, allocated facilities and other overhead costs.
Research, development and clinical studies costs, including direct and allocated expenses, are expensed as incurred and consist primarily of the following: • personnel costs for those employees involved in our preclinical and basic research, clinical development programs, clinical affairs, product development and regulatory activities; • costs to conduct research, product development and clinical study activity through agreements with contract research organizations and other third parties; • manufacturing expenses associated with our Products, including durable components and disposable arrays, utilized in clinical studies and other research; • costs associated with publications, presentations and investigator-sponsored trials; • professional fees related to regulatory approvals and conformity assessment procedures; and • facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, depreciation of leasehold improvements and equipment and laboratory and other supplies. 50 The following table summarizes our research, development and clinical study expenses by program for the years ended December 31, 2024, 2023 and 2022: Year ended December 31, U.S. dollars in thousands 2024 2023 2022 Preclinical and basic research $ 18,827 $ 18,936 $ 16,922 Clinical development programs: LUNAR 1,842 6,846 6,905 LUNAR - 2 14,645 2,999 — INNOVATE - 3 184 7,810 9,494 METIS 5,399 5,758 8,480 PANOVA - 3 9,535 18,243 22,185 KEYNOTE D58 5,651 241 — TRIDENT 18,369 20,348 12,162 Other clinical studies 13,375 6,960 5,524 Clinical administration 19,858 25,363 22,690 Product development 18,519 18,219 15,323 Clinical affairs 7,023 15,935 19,891 Other research and development costs (1) 43,702 43,577 35,719 Share based compensation 32,716 31,827 30,790 Research, development and clinical studies $ 209,645 $ 223,062 $ 206,085 (1) Other research, development and clinical study costs include regulatory affairs, quality assurance, intellectual property, product safety, allocated facilities and other overhead costs.
We recognize share-based compensation costs only for those shares expected to vest over the requisite vesting period of the award, which is generally the option vesting term of four years, using the accelerated method.
For information about our ESPP, see Note 15 to the Consolidated Financial Statements. We recognize share-based compensation costs only for those shares expected to vest over the requisite vesting period of the award, which is generally the option vesting term of four years, using the accelerated method.
Our net revenues were $509.3 million for the year ended December 31, 2023, $537.8 million for the year ended December 31, 2022 and $535.0 million for the year ended December 31, 2021.
Our net revenues were $605.2 million for the year ended December 31, 2024, $509.3 million for the year ended December 31, 2023 and $537.8 million for the year ended December 31, 2022.
We expect that our research, development and clinical expenses, sales and marketing expenses and general and administrative expenses will continue to increase over the next several years and may outpace our gross profit.
We expect that our research, development and clinical expenses, sales and marketing expenses and general and administrative expenses will continue to increase over the next several years and may outpace our gross profit. As a result, we may need to raise additional capital to fund our operations.
The Notes mature on November 1, 2025, unless earlier repurchased, redeemed or converted. The Notes are convertible at an initial conversion rate of 5.9439 ordinary shares per $1,000 principal amount of the Notes, which is equivalent to an initial conversion price of approximately $168.24 per ordinary share.
The Notes are convertible at an initial conversion rate of 5.9439 ordinary shares per $1,000 principal amount of the Notes, which is equivalent to an initial conversion price of approximately $168.24 per ordinary share.
Product's cost sold to Zai totaled $12.0 million for the year ended December 31, 2023 compared to $11.1 million for the year ended December 31, 2022. Gross margin was 75% for the year ended December 31, 2023 and 79% for the year ended December 31, 2022.
Product's cost sold to Zai totaled $9.7 million for the year ended December 31, 2024 compared to $12.0 million for the year ended December 31, 2023. Gross margin was 77% for the year ended December 31, 2024 and 75% for the year ended December 31, 2023.
We recognize compensation costs for the value of performance stock units ("PSU") over the performance period when the vesting conditions become probable in accordance with ASC 718. 54 The table below summarizes the assumptions that were used to estimate the fair value of the options granted to employees during the periods presented: Year ended December 31, 2023 2022 2021 Expected term (years) 5.50-6.00 5.33-5.83 5.50-6.00 Expected volatility 63%-70% 60%-62% 60%-63% Risk-free interest rate 3.48%-4.79% 1.58%-4.23% 0.78%-1.27% Dividend yield 0.00% 0.00% 0.00% If any of the assumptions used in the Black-Scholes option pricing model change significantly, share-based compensation for future awards may differ materially from the awards granted previously.
The table below summarizes the assumptions that were used to estimate the fair value of the options granted to employees during the periods presented: Year ended December 31, 2024 2023 2022 Expected term (years) 5.50-5.73 5.50-6.00 5.33-5.83 Expected volatility 71%-73% 63%-70% 60%-62% Risk-free interest rate 3.88%-4.43% 3.48%-4.79% 1.58%-4.23% Dividend yield 0.00% 0.00% 0.00% If any of the assumptions used in the Black-Scholes option pricing model change significantly, share-based compensation for future awards may differ materially from the awards granted previously.
To date, we primarily have financed our operations through the issuance and sale of equity and the proceeds from long-term loans. At December 31, 2023, we had $240.8 million in cash and cash equivalents and $669.8 million in short-term investments.
As of December 31, 2024, we had an accumulated deficit of $1,154.1 million. To date, we primarily have financed our operations through the issuance and sale of equity and the proceeds from long-term loans. At December 31, 2024, we had $163.8 million in cash and cash equivalents and $796.1 million in short-term investments.
General and administrative expenses increased by $31.3 million, or 24%, to $164.1 million for the year ended December 31, 2023 from $132.8 million for the year ended December 31, 2022.
General and administrative expenses increased by $25.8 million, or 16%, to $189.8 million for the year ended December 31, 2024 from $164.1 million for the year ended December 31, 2023.
Our net loss was $207.0 million for the year ended December 31, 2023, net loss was $92.5 million for the year ended December 31, 2022 and net loss was $58.4 million for the year ended December 31, 2021. As of December 31, 2023, we had an accumulated deficit of $985.5 million.
Our net loss was $168.6 million for the year ended December 31, 2024, net 61 loss was $207.0 million for the year ended December 31, 2023 and net loss was $92.5 million for the year ended December 31, 2022. As of December 31, 2024, we had an accumulated deficit of $1,154.1 million.
On or after August 1, 2025 until the close of the business on the business day immediately preceding the maturity date, holders may convert all or any portion of their Notes at the conversion rate at any time irrespective of the foregoing conditions.
On or after August 1, 2025 until the close of the business on the business day immediately preceding the maturity date, holders may convert all or any portion of their Notes at the conversion rate at any time irrespective of the foregoing conditions. Senior Secured Term Loan Credit Facility On May 1, 2024 Novocure Luxembourg S.a.r.l.
Our intellectual property portfolio contains hundreds of issued patents and numerous patent applications pending 62 worldwide. We believe we possess global commercialization rights to our Products in oncology and are well-positioned to extend those rights into the future as we continue to find innovative ways to improve our Products. In 2018, we granted Zai Lab (Shanghai) Co., Ltd.
We believe we possess global commercialization rights to our Products in oncology and are well-positioned to extend those rights into the future as we continue to find innovative ways to improve our Products. In 2018, we granted Zai Lab (Shanghai) Co., Ltd.
As a result, we may need to raise additional capital to fund our operations. 59 The following summary of our cash flows for the periods indicated has been derived from our consolidated financial statements, which are included elsewhere in this Annual Report: Year ended December 31, U.S. dollars in thousands 2023 2022 2021 Net cash provided by (used in) operating activities $ (73,336) $ 30,788 $ 82,756 Net cash provided by (used in) investing activities 184,148 (139,957) (144,834) Net cash provided by (used in) financing activities 15,787 15,491 25,702 Effect of exchange rate changes on cash and cash equivalents 131 (97) (188) Net increase (decrease) in cash, cash equivalents and restricted cash $ 126,730 $ (93,775) $ (36,564) Operating activities Net cash used in operating activities primarily represents our net loss for the periods presented.
The following summary of our cash flows for the periods indicated has been derived from our consolidated financial statements, which are included elsewhere in this Annual Report: Year ended December 31, U.S. dollars in thousands 2024 2023 2022 Net cash provided by (used in) operating activities $ (26,369) $ (73,336) $ 30,788 Net cash provided by (used in) investing activities (140,242) 184,148 (139,957) Net cash provided by (used in) financing activities 90,315 15,787 15,491 Effect of exchange rate changes on cash and cash equivalents (174) 131 (97) Net increase (decrease) in cash, cash equivalents and restricted cash $ (76,470) $ 126,730 $ (93,775) Operating activities Net cash used in operating activities primarily represents our net loss for the periods presented.
We market Optune Gio and Optune Lua in multiple countries around the globe with the majority of our revenues coming from the use of Optune Gio in the U.S., Germany and Japan. We are actively evaluating opportunities to expand our international footprint. We believe the physical mechanisms of action behind TTFields therapy may be broadly applicable to solid tumor cancers.
We market Optune Gio and Optune Lua in multiple countries around the globe with the majority of our revenues coming from the use of Optune Gio in the U.S., Germany, France and Japan. We are actively evaluating opportunities to expand our international footprint.
Net cash used in operating activities was $73.3 million for the year ended December 31, 2023 compared to $30.8 million provided by operating activities for the year ended December 31, 2022 a decrease of $ 104.1 million.
Net cash used in operating activities was $26.4 million for the year ended December 31, 2024 compared to $73.3 million used in operating activities for the year ended December 31, 2023 a decrease of net cash used in operating activities by $47.0 million.
The following table sets forth our consolidated statements of operations data: Year ended December 31, U.S. dollars in thousands, except share and per share data 2023 2022 2021 Net revenues $ 509,338 $ 537,840 $ 535,031 Cost of revenues 128,280 114,867 114,877 Gross profit 381,058 422,973 420,154 Operating costs and expenses: Research, development and clinical studies 223,062 206,085 201,303 Sales and marketing 226,809 173,658 137,057 General and administrative 164,057 132,753 126,127 Total operating costs and expenses 613,928 512,496 464,487 Operating income (loss) (232,870) (89,523) (44,333) Financial (expenses) income, net 41,130 7,677 (7,742) Income (loss) before income tax (191,740) (81,846) (52,075) Income tax 15,303 10,688 6,276 Net income (loss) $ (207,043) $ (92,534) $ (58,351) Basic and diluted net income (loss) per ordinary share $ (1.95) $ (0.88) $ (0.56) Weighted average number of ordinary shares used in computing basic and diluted net income (loss) per share 106,391,178 104,660,476 103,433,274 The following table details the share-based compensation expense included in costs and expenses: Year ended December 31, U.S. dollars in thousands 2023 2022 2021 Cost of revenues $ 6,587 $ 4,690 $ 3,471 Research, development and clinical studies 31,827 30,790 27,597 Sales and marketing 35,968 28,826 22,673 General and administrative 41,226 42,649 41,159 Total share-based compensation expense $ 115,608 $ 106,955 $ 94,900 Key performance indicators We believe certain commercial operating statistics are useful to investors in evaluating our commercial business as they help investors evaluate and compare the adoption of our Products from period to period.
See "Results of Operations" in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's 2023 Annual Report on Form 10-K, filed with the SEC on February 22, 2024, for an analysis of the 2023 results as compared to 2022. 53 The following table sets forth our consolidated statements of operations data: Year ended December 31, U.S. dollars in thousands, except share and per share data 2024 2023 2022 Net revenues $ 605,220 $ 509,338 $ 537,840 Cost of revenues 137,181 128,280 114,867 Gross profit 468,039 381,058 422,973 Operating costs and expenses: Research, development and clinical studies 209,645 223,062 206,085 Sales and marketing 239,063 226,809 173,658 General and administrative 189,827 164,057 132,753 Total operating costs and expenses 638,535 613,928 512,496 Operating income (loss) (170,496) (232,870) (89,523) Financial (expenses) income, net 39,334 41,130 7,677 Income (loss) before income tax (131,162) (191,740) (81,846) Income tax 37,465 15,303 10,688 Net income (loss) $ (168,627) $ (207,043) $ (92,534) Basic and diluted net income (loss) per ordinary share $ (1.56) $ (1.95) $ (0.88) Weighted average number of ordinary shares used in computing basic and diluted net income (loss) per share 107,834,368 106,391,178 104,660,476 The following table details the share-based compensation expense included in costs and expenses: Year ended December 31, U.S. dollars in thousands 2024 2023 2022 Cost of revenues $ 6,873 $ 6,587 $ 4,690 Research, development and clinical studies 32,716 31,827 30,790 Sales and marketing 43,097 35,968 28,826 General and administrative 77,349 41,226 42,649 Total share-based compensation expense $ 160,035 $ 115,608 $ 106,955 Key performance indicators We believe certain commercial operating statistics are useful to investors in evaluating our commercial business as they help investors evaluate and compare the adoption of our Products from period to period.
In addition, the decrease in net cash from operating activities was driven by increased expenses, primarily driven by a $84.5 million increase in sales, marketing, general and administrative expenses to enhance our capabilities in anticipation of potential future approvals of new indications and entry into potential new markets, and a $17.0 million increase in research and development expenses.
Furthermore, the benefit of a higher gross profit was partially offset by increased expenses, primarily driven by a $38.0 million increase in sales, marketing, general and administrative expenses to enhance our capabilities in anticipation of potential future approvals of new indications and entry into potential new markets, offset by a $13.4 million decrease in research and development expenses.
Sales and marketing expenses increased by $53.2 million, or 31%, to $226.8 million for the year ended December 31, 2023 from $173.7 million for the year ended December 31, 2022.
Sales and marketing expenses increased by $12.3 million, or 5%, to $239.1 million for the year ended December 31, 2024 from $226.8 million for the year ended December 31, 2023.
We are prioritizing launch readiness, including field-based commercial and field-based medical team hiring, for the anticipated approval of TTFields therapy for the treatment of metastatic non-small cell lung cancer following progression on or after platinum-based therapies. General and administrative General and administrative expenses consist primarily of personnel, professional fees and facilities costs.
We will continue to prioritize launch readiness, including field-based commercial and field-based medical team hiring, for the anticipated approval of TTFields therapy for the treatment of metastatic non-small cell lung cancer outside the United States and for future new indications around the world. General and administrative General and administrative expenses consist primarily of personnel, professional fees and facilities costs.
The decrease in net cash from operating activities was driven by a decrease in gross profits of $41.9 million driven by a revenue decrease of $28.5 million and an increase in costs of revenue of $13.4 million.
The decrease in net cash used in operating activities was driven by an increase in gross profits of $86.9 million driven by a revenue increase of $95.9 million offset by an increase in costs of revenue of $8.9 million.
Year ended December 31, 2023 2022 2021 Net income (loss) $ (207,043) $ (92,534) $ (58,351) Add: Income tax 15,303 10,688 6,276 Add: Financial expenses (income), net (41,130) (7,677) 7,742 Add: Depreciation and amortization 10,969 10,624 10,251 EBITDA $ (221,901) $ (78,899) $ (34,082) Add: Share-based compensation 115,608 106,955 94,900 Adjusted EBITDA $ (106,293) $ 28,056 $ 60,818 Adjusted EBITDA decreased by $134.3 million, or 479%, to $(106.3) million for the year ended December 31, 2023 from $28.1 million for the year ended December 31, 2022.
Year ended December 31, 2024 2023 2022 Net income (loss) $ (168,627) $ (207,043) $ (92,534) Add: Income tax 37,465 15,303 10,688 Add: Financial expenses (income), net (39,334) (41,130) (7,677) Add: Depreciation and amortization 11,235 10,969 10,624 EBITDA $ (159,261) $ (221,901) $ (78,899) Add: Share-based compensation 160,035 115,608 106,955 Adjusted EBITDA $ 774 $ (106,293) $ 28,056 Adjusted EBITDA increased by $107.1 million, or 101%, to $0.8 million for the year ended December 31, 2024 from $(106.3) million for the year ended December 31, 2023.
In the course of normal business operations, we also have agreements with contract service providers to assist in the performance of our research and development (including clinical studies) and manufacturing activities. We could also enter into additional collaborative research, contract research, manufacturing and supplier agreements in the future, which may require up-front payments and even long-term commitments of cash.
In the course of normal business operations, we also have agreements with contract service providers to assist in the performance of our research and development (including clinical studies) and manufacturing activities.
For additional information, see Note 2(m) to the Consolidated Financial Statements. We also receive revenues pursuant to the Zai Agreement. For additional information regarding the Zai Agreement, see Note 12 to the Consolidated Financial Statements.
Revenue recognition The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for our Products. For additional information, see Note 2(m) to the Consolidated Financial Statements. We also receive revenues pursuant to the Zai Agreement. For additional information regarding the Zai Agreement, see Note 12 to the Consolidated Financial Statements.
The fair value of share options is estimated at the date of grant using the Black-Scholes option pricing model and for market condition awards we also use the Monte-Carlo simulation model.
The fair value of share options is estimated at the date of grant using the Black-Scholes option pricing model and for market condition awards we also use the Monte-Carlo simulation model. Both models requires management to apply judgment and make estimates, which include the following. The computation of expected volatility is based on the historical volatility of our shares.
Income tax expenses increased by $4.6 million, or 43%, resulting in a tax expense of $15.3 million for the year ended December 31, 2023 compared to a tax expense of $10.7 million for the year ended December 31, 2022.
Year ended December 31, 2024 2023 Change % Change Income tax $ 37,465 $ 15,303 $ 22,162 145 % Income taxes. Income tax expenses increased by $22.2 million, or 145%, resulting in a tax expense of $37.5 million for the year ended December 31, 2024 compared to a tax expense of $15.3 million for the year ended December 31, 2023.
The net cash provided by financing activities for 2023 was primarily attributable to $11.4 million in proceeds from the exercise of options and $4.4 million in proceeds from the issuance of shares pursuant to the ESPP.
The net cash provided by financing activities for 2024 was primarily attributable to net proceeds of $96.9 million from the senior secured term loan credit facility offset by $12.9 million of early repayment of the convertible notes and $2.2 million in proceeds from the exercise of options and $4.1 million in proceeds from the issuance of shares pursuant to the ESPP.
Net revenues decreased by $28.5 million, or 5%, to $509.3 million for the year ended December 31, 2023 from $537.8 million for the year ended December 31, 2022.
Net revenues increased by $95.9 million, or 19%, to $605.2 million for the year ended December 31, 2024 from $509.3 million for the year ended December 31, 2023.
At December 31, 2023, our cash, cash equivalents and short-term investments totaled $910.6 million, a decrease of $58.8 million compared to $969.4 million at December 31, 2022. The decrease was primarily due to net cash used in operating activities partially offset by the net cash provided by the exercise of options.
At December 31, 2024, our cash, cash equivalents and short-term investments totaled $959.9 million, an increase of $49.3 million compared to $910.6 million at December 31, 2023. The increase was primarily due to net cash provided by financing activities.
Our therapy is delivered through a medical device and we continue to advance our Products with the intention to extend survival and maintain quality of life for patients. We have several product development programs underway that are designed to optimize the delivery of TTFields to the target tumor and enhance patient ease of use.
Our therapy is delivered through a medical device and we continue to advance our Products with the intention to extend survival and maintain quality of life for patients. Optune Gio is approved by the U.S.
We expect that our gross margins will continue to be impacted by current and future product enhancements, such as the ongoing launch of next generation arrays. We continue to focus on opportunities to increase efficiencies and scale within our supply chain. This includes evaluating new materials, manufacturers, and processes that could lead to lower cost.
The tariff environment is changing rapidly, and we cannot be assured that we will not ultimately be negatively impacted by these changes. We continue to focus on opportunities to increase efficiencies and scale within our supply chain. This focus includes evaluating new materials, manufacturers, structures and processes that could lead to lower costs.
Year ended December 31, 2023 2022 Change % Change Financial (expenses) income, net $ 41,130 $ 7,677 $ 33,453 436 % Financial (expenses) income, net. Financial income, net, increased by $33.5 million, or 436%, to $41.1 million income for the year ended December 31, 2023 from $7.7 million income for the year ended December 31, 2022.
Financial income, net, decreased by $1.8 million, or 4%, to $39.3 million income for the year ended December 31, 2024 from $41.1 million income for the year ended December 31, 2023.
Liquidity and capital resources We have incurred significant losses and cumulative negative cash flows from operations with only limited and intermittent operating profits since our founding in 2000. As of December 31, 2023, we had an accumulated deficit of $985.5 million.
We intend to take actions that prioritize growth and maintain financial health as we position our company for future profitability. 57 Liquidity and capital resources We have incurred significant losses and cumulative negative cash flows from operations with only limited and intermittent operating profits since our founding in 2000.
Orders to renew or extend treatment are not included in this total. 56 The following table includes certain commercial operating statistics for and as of the end of the periods presented.
The following tables include certain commercial operating statistics for and as of the end of the periods presented. 54 The following table includes certain commercial operating statistics for and as of the end of the periods presented.
In addition to our trials in NSCLC, we have multiple ongoing or planned trials in our brain and pancreatic cancer programs, including the phase 3 TRIDENT, KEYNOTE D58 and PANOVA-3 trials, and the phase 2 PANOVA-4 trial.
We have several ongoing clinical trials which further explore the use of TTFields therapy in these solid tumor cancers, including the Phase 3 TRIDENT and KEYNOTE D58 trials in GBM, Phase 3 LUNAR-2 and Phase 2 LUNAR-4 trials in NSCLC, and Phase 2 PANOVA-4 trial in pancreatic cancer.
Investing activities Our investing activities primarily consist of capital expenditures to purchase property and equipment and field equipment, as well as investments in and redemptions of our short-term investments.
We could also enter into additional collaborative research, contract research, manufacturing and supplier agreements in the future, which may require up-front payments and even long-term commitments of cash. 58 Investing activities Our investing activities primarily consist of capital expenditures to purchase property and equipment and field equipment, as well as investments in and redemptions of our short-term investments.
Research, development and clinical studies expenses increased by $17.0 million, or 8%, to $223.1 million for the year ended December 31, 2023 from $206.1 million for the year ended December 31, 2022. The change is primarily due to an increase of $11.0 million in costs incurred in support of ongoing and anticipated clinical trial launches and regulatory filings.
Research, development and clinical studies expenses decreased by $13.4 million, or 6%, to $209.6 million for the year ended December 31, 2024 from $223.1 million for the year ended December 31, 2023. The change was primarily due to a decrease in personnel expenses.
Excluding sales to Zai, cost of revenues per active patient per month were $2,714 for the year ended December 31, 2023 compared to $2,481 for the year ended December 31, 2022 driven by higher costs of arrays from our initial roll out of a next generation array and an increase in capacity of patient support services in anticipation of new indications.
Excluding sales to Zai, cost of revenues per active patient per month were $2,683 for the year ended December 31, 2024 compared to $2,714 for the year ended December 31, 2023.
Year ended December 31, 2023 2022 Change % Change Operating expenses: Research, development and clinical studies $ 223,062 $ 206,085 $ 16,977 8 % Sales and marketing 226,809 173,658 53,151 31 % General and administrative 164,057 132,753 31,304 24 % Total operating expenses $ 613,928 $ 512,496 $ 101,432 20 % Research, development and clinical studies expenses.
Year ended December 31, 2024 2023 Change % Change Operating expenses: Research, development and clinical studies $ 209,645 $ 223,062 $ (13,417) (6) % Sales and marketing 239,063 226,809 12,254 5 % General and administrative 189,827 164,057 25,770 16 % Total operating expenses $ 638,535 $ 613,928 $ 24,607 4 % Research, development and clinical studies expenses.
The increase reflects a change in the mix of applicable statutory tax rates in active jurisdictions. 58 Non-GAAP financial measures We also measure our performance based upon a non-U.S. GAAP measurement of earnings before interest, taxes, depreciation, amortization and shared-based compensation ("Adjusted EBITDA").
The change is primarily due to a $14.3 million decrease in tax benefits from share-based compensation, $10.6 million resulting from the utilization of tax credits in 2023 related to prior years and a change in the mix of applicable statutory tax rates. Non-GAAP financial measures We also measure our performance based upon a non-U.S.
Year ended December 31, 2023 2022 Change % Change Cost of revenues $ 128,280 $ 114,867 $ 13,413 12 % Cost of revenues. Our cost of revenues were $128.3 million for the year ended December 31, 2023, an increase of $13.4 million, or 12%, from $114.9 million for the year ended December 31, 2022.
Our cost of revenues were $137.2 million for the year ended December 31, 2024, an increase of $8.9 million, or 7%, from $128.3 million for the year ended December 31, 2023, primarily due to 10% growth in active patients and partially offset by lower shipments to Zai.
The decrease resulted primarily from $48.4 million in reduced collections from denied or appealed claims in the U.S., partially offset by an increase of $14.1 million resulting from improved reimbursement approval rates in Germany and $11.7 million from our launch in France.
The growth in net revenues was primarily driven by an increase of $44.0 million from our successful launch in France and an increase of $42.1 million of net revenues in the U.S. due to improved approval rates.
Our supply chain teams are working to increase stock levels to mitigate distribution and service risks from our suppliers in Israel. On January 19, 2024, President Biden signed into law a continuing resolution that allowed the U.S. government to continue to be funded and operating through March 1, 2024 (some government departments can continue operating through March 8, 2024).
Our supply chain teams are working to increase stock levels to mitigate distribution and service risks from our suppliers in Israel. We view our operations and manage our business in one operating segment.
The change primarily was due to an increase of $37.6 million in costs associated with geographic expansion and pre-launch activities intended to increase awareness of TTFields therapy in anticipation of our launch in NSCLC, as well as an increase in non-cash personnel costs of $7.1 million. General and administrative expenses.
The change was 56 primarily due to an increase of $22.0 million in costs related to a sales force expansion for NSCLC, partially offset by a $10.1 million reduction in marketing expenses. General and administrative expenses.
Removed
Revenue recognition In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09), an updated standard on revenue recognition and issued subsequent amendments to the initial guidance in March 2016, April 2016, May 2016 and December 2016 within ASU 2016-08, 2016-10, 2016-12 and 2016-20, respectively.
Added
The expected term of options granted is calculated using our historical and future exercise behavior. Historically, we have not paid dividends and have no foreseeable plans to pay dividends. Therefore, we use an expected dividend yield of zero in the option pricing model. The risk-free interest rate is based on the yield of U.S. treasury bonds with equivalent terms.
Removed
The Company adopted the standard effective January 1, 2018 using the modified retrospective method for all contracts. The reported results for 2018 and thereafter reflect the application of Accounting Standards Codification ("ASC") 606 guidance. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for our Products.
Added
We recognize compensation costs for the value of performance stock units ("PSU") over the performance period when the vesting conditions become probable in accordance with ASC 718.
Removed
Both models requires management to apply judgment and make estimates, including: • beginning with the first quarter of 2022, the computation of expected volatility is based on the historical volatility the Company's shares, beginning with the first quarter of 2021 and prior to the first quarter of 2022, the computation of expected volatility is based on a combination of actual historical share price volatility of comparable publicly-traded companies and the historical volatility the Company's shares.
Added
Worldwide, there were 29, 22 and 7 active MPM patients on therapy as of December 31, 2024, 2023 and 2022 and 20 active NSCLC patients on therapy as of December 31, 2024. (2) Lung includes both prescriptions for NSCLC and MPM.
Removed
Prior to the first quarter of 2021, due to the lack of sufficient historical information for the Company, the computation was based on actual historical volatility of comparable publicly-traded companies; • beginning with the first quarter of 2021, the expected term of options granted is calculated using the Company's historical and future exercise behavior.
Added
Worldwide, 98, 78 and 33 MPM prescriptions were received in the years ended December 31, 2024, 2023 and 2022 and 54 NSCLC prescriptions were received in the year ended December 31, 2024. 55 Year ended December 31, 2024 compared to year ended December 31, 2023 Year ended December 31, 2024 2023 Change % Change Net revenues $ 605,220 $ 509,338 $ 95,882 19 % Net revenues.
Removed
Prior to the first quarter of 2021, it was calculated using the average between the vesting period and the contractual term to the expected term of the options in effect at the time of grant; • the risk-free interest rate, which we base on the yield curve of U.S.
Added
The improved approval rates in the U.S. includes $22.3 million of increased net revenue from prior period claims during the year, primarily from 2023. Year ended December 31, 2024 2023 Change % Change Cost of revenues $ 137,181 $ 128,280 $ 8,901 7 % Cost of revenues.
Removed
Treasury securities with periods commensurate with the expected term of the options being valued; and • the expected dividend yield, which we estimate to be zero based on the fact that we have never paid cash dividends and have no present intention to pay cash dividends. For information about our ESPP, see Note 15 to the Consolidated Financial Statements.
Added
The improvement in gross margin is due to the increase in net revenue per patient primarily attributed to our improved approval rates in the U.S. and successful launch in France.
Removed
See "Results of Operations" in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's 2022 Annual Report on Form 10-K, filed with the SEC on February 23, 2023, for an analysis of the 2022 results as compared to 2021.
Added
We expect that our gross margins will be impacted by current and future product enhancements, such as the launch of our new arrays in the U.S., our launch of NSCLC and changes in the tariff environment.
Removed
Following regulatory approval and prior to the establishment of coverage criteria, we have treated on-label patients in the U.S. at risk and appealed denied claims for commercial and Medicare fee-for-service beneficiaries on a case-by-case basis.
Added
Our current analysis of the global tariff environment leads us to believe there should not be a material impact to margins in the short-term and we are actively working to mitigate any potential impacts in the medium to long-term.
Removed
For the year ended December 31, 2023, we recorded $5 million in revenue from the successful appeal of previously denied claims for Medicare fee-for-service beneficiaries billed prior to established coverage, a decrease of $27 million from $32 million recorded for the year ended December 31, 2022.
Added
The change was primarily due to a $36.1 million increase in shared-based compensation expenses mostly related to the indication approval for NSCLC, partially offset by $10.3 million lower personnel costs and professional services costs. Year ended December 31, 2024 2023 Change % Change Financial (expenses) income, net $ 39,334 $ 41,130 $ (1,796) (4) % Financial (expenses) income, net.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeForeign currency exchange risk Our consolidated results of operations and cash flow are subject to fluctuations due to changes in foreign currency exchange rates. All of our revenues are generated in the local currency for commercial markets.
Biggest changeA 10% change in SOFR would not be expected to have a material impact on our financial condition or our results of operations. Foreign currency exchange risk Our consolidated results of operations and cash flow are subject to fluctuations due to changes in foreign currency exchange rates. All of our revenues are generated in the local currency for commercial markets.
However, because of portfolio diversification, the 63 short-term nature of the instruments in our portfolio and our intent to hold non-money market instruments to maturity, a 10% change in market interest rates would not be expected to have a material impact on our financial condition or our results of operations.
However, because of portfolio diversification, the short-term nature of the instruments in our portfolio and our intent to hold non-money market instruments to maturity, a 10% change in market interest rates would not be expected to have a material impact on our financial condition or our results of operations.
Our market risk exposure is primarily a result of fluctuations in interest rates and foreign currency exchange rates. We do not hold or issue financial instruments for trading purposes. There were no material quantitative changes in our market risk exposures between the year ended December 31, 2023 and the year ended December 31, 2022.
Our market risk exposure is primarily a result of fluctuations in interest rates and foreign currency exchange rates. We do not hold or issue financial instruments for trading purposes. There were no material quantitative changes in our market risk exposures between the year ended December 31, 2024 and the year ended December 31, 2023.
The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have a material impact on our historical consolidated financial statements. We do not currently hedge our foreign currency exchange risk; however we may engage in hedging transactions in the future. 64
The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have a material impact on our historical consolidated financial statements. We do not currently hedge our foreign currency exchange risk; however we may engage in hedging transactions in the future. 62
Interest rate sensitivity Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio. Our cash, cash equivalents and short-term investment accounts as of December 31, 2023 totaled $910.6 million and consist of cash, cash equivalents and short-term investments with maturities of less than one year from the date of purchase.
Interest rate sensitivity Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio. Our cash, cash equivalents and short-term investment accounts as of December 31, 2024 totaled $959.9 million and consist of cash, cash equivalents and short-term investments with maturities of less than one year from the date of purchase.
Added
In addition, we have interest expense sensitivity in relation to our Senior Secured Term Loan Credit Facility (the "Facility"). Outstanding term loans under the Facility will bear interest at an annual rate equal to 6.25% plus the three-month floating SOFR (subject to a 3.25% floor). For additional information, see Note 10.b. to the Consolidated Financial Statements.

Other NVCR 10-K year-over-year comparisons