NovoCure Limited (NVCR) Q2 2021 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the NovoCure Second Quarter 2021 Earnings Conference Call. At this time, all participants lines are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference may be recorded. [Operator Instructions] I would now like to hand the conference over to one of your speakers today Ingrid Goldberg. Please go ahead.

Good morning, everyone, and thank you for joining us to review NovoCure's second quarter 2021 performance. I'm joined on the phone by our Executive Chairman, Bill Doyle; our CEO, Asaf Danziger; and our CFO, Ashley Cordova. Other members of our executive leadership are also on the call and available for Q&A. The slides presented today can be viewed on our website www.novocure.com by clicking on the link of the second quarter 2021 financial results located in the Events section on our Investor Relations page. Before we start, I would like to remind everyone that our discussions during this conference call will include forward-looking statements, and actual results could differ materially from those projected in these statements. These statements involve a number of risks and uncertainties some of which are beyond our control, including those risks and uncertainties described from time to time in our SEC filings. We do not intend to update publicly any forward-looking statements, except as required by law. Following our prepared remarks today, we will open the line for your questions. Financials for the three and six months ended June 30, 2021 are available in our press release and in our 10-Q both of which we released earlier this morning. Where appropriate we will refer to non-GAAP financial measures to evaluate our business. Reconciliations of non-GAAP financial measures to GAAP financial measures are also included in our press release in the appendix of the supplemental slides accompanying this presentation and in our Form 8-K filed with the SEC today. These materials can also be accessed from our Investor Relations page of our website. With that, I will now turn the call over to Bill Doyle.

Thank you, Ingrid, and good morning everyone. At NovoCure, we are singularly focused on our mission to extend survival in some of the most aggressive forms of cancer through the development and commercialization of our platform therapy Tumor Treating Fields. This quarter serves as another proof point that our commercial GBM business is providing the financial strength to aggressively invest in innovation to fuel the future growth of our company. In the second quarter, we generated $134 million in net revenues representing 15% growth year-over-year. We have treated more than 20,000 patients to date. We have four Phase III pivotal trials, multiple ongoing and planned Phase II pilot trials over 180 oncology patents issued in pending worldwide and nearly $900 million in cash on hand. Operational and financial strength provides NovoCure the flexibility to pursue growth initiatives across the organization. We believe our investments in commercial, clinical and product development capabilities are instrumental to ensure organizational readiness as we strive to unlock the long-term value of the Tumor Treating Fields platform. In today's call, we will first discuss the established position in multiple levers for expansion of our core GBM business. We will then turn to our recent clinical development progress, specifically within our thoracic and abdominal programs. And finally, we will address the financial power and flexibility afforded by the consistency and sustainability of our business. I will begin with our global Phase IV TRIDENT trial in newly diagnosed GBM. TRIDENT is designed to test the benefit of moving Tumor Treating Fields therapy earlier in the GBM treatment paradigm. Today, GBM patients typically follow the protocol established by our successful EF-14 clinical trial. Maximal debulking surgery is followed by chemoradiation. After chemoradiation, Tumor Treating Fields therapy is initiated concomitant with chemotherapy. TRIDENT builds on preclinical research that showed Tumor Treating Fields' increased sensitivity to radiation therapy and inhibited DNA damage repair. The randomized TRIDENT trial compares initiating Tumor Treating Fields with chemoradiation versus initiating Tumor Treating Fields with chemotherapy following chemoradiation. TRIDENT's objective is to extend survival by increasing the impact of chemoradiation and provide evidence of the benefit of initiating Tumor Treating Fields earlier in the patient's treatment journey. TRIDENT is one of the largest GBM clinical studies initiated in our industry to date, and underlines our commitment to the GBM community, our focus on increased engagement with research institutions and our determination to further explore the optimal application of Tumor Treating Fields platform. As of the end of the second quarter, we had 45 actively recruiting sites across the United States and EMEA. This quarter, we are also announcing an update to the Optune label for the treatment of GBM to include our EF-19 post-approval trial data. The EF-19 data confirm the effectiveness and safety of Optune as monotherapy in recurring GBM in a real-world setting, and the label update strengthens Optune's clinical profile in GBM. Continuing to explore new opportunities within GBM. This quarter we launched a clinical collaboration with GT Medical Technologies to study the combination of Tumor Treating Fields and GT Medical's gammatile brachytherapy. We plan to conduct a Phase II pilot study in patients with recurrent GBM to test the safety and effectiveness of neoadjuvant tumor treating fields followed by reception and implementation of GT Medical's gammatile brachytherapy and adjuvant tumor treating fields. The opportunity here is twofold. First, this trial design will provide an opportunity to further study the radio sensitizing effect of Tumor Treating Fields in solid tumor cancers. Second, this is an opportunity to further engage with oncologists at leading academic centers regarding the potential efficacy of Tumor Treating Fields together with other cancer therapies. In addition to our efforts to expand the eligible patient population through ongoing clinical research in GBM. We view the opportunity for geographic expansion as a key driver of future growth. We continue to strategically invest to enhance our market access capabilities. We believe these investments will enable us to successfully target optimal markets for Optune identify the most appropriate access pathways and successfully garner reimbursement in a timely manner. We've continued to negotiate with French health authorities to obtain national reimbursement there. This month, we received a positive assessment of Optune earning an ASA 3 rating. An ASA 3 rating enables our team to move forward in the reimbursement negotiation process with the ultimate goal of achieving national reimbursement in France. Beyond France, we are actively evaluating numerous additional markets across Europe and the Asia Pacific region, where Optune can be made available to more patients. We believe there remains a multitude of opportunities to expand the use of Optune for the treatment of GBM. We will continue to evaluate label expansion new clinical combination, collaborations and new geographic expansion opportunities in service of our patient forward mission to extend survival in some of the most aggressive forms of cancer. I will now turn the call over to Asaf to discuss our recent clinical update.

Thank you, Bill. We reported multiple clinical and product development updates in the second quarter as we continue to explore the broad applicability of TT Fields in solid tumor council. Our pipeline is primed for growth. As we move to expand our clinical footprint in non-small cell lung cancer, initiate a Phase III trial in advanced liver cancer and continue our ongoing efforts to optimize our therapy through product innovation. Following the April interim analysis of our Phase III pivotal LUNAR trial in non-small cell lung cancer, the independent Data Monitoring Committee recommended trial protocol amendments. These recommendations included a meaningful adjustment of patient accrual to 276 with a 12-month follow-up from the prior 534 patients with 18 months follow up. Following the committee's recommendation, we filed an investigational device exemption supplement with the FDA which was approved in May. We are now pushing forward with enrollment under the amendment protocol and we anticipate final patient enrollment in the fourth quarter of 2021 and final data in 2022. We have now opened sites and are actively seeking to enroll patients in our Phase II pilot KEYNOTE-B36 trial in non-small cell lung cancer. KEYNOTE-B36 trial is a notable study for NovoCure as it is designed to study TT Fields together with Merck's KEYTRUDA as a first-line therapy in stage three non-small cell lung cancer. is a notable study for Novocure as it is designed to study TT fields together with Merck's KEYTRUDA as a first-line therapy in stage three non-small cell lung cancer. KEYNOTE-B36 provides an opportunity to expand our study of TT Fields to an earlier stage of non-small cell lung cancer with a leader in the oncology field. KEYNOTE-B36 is also an important expansion of our clinical study of TT Fields together with immunotherapy which has shown promise in the laboratory and in early clinical results. We are also updating our anticipated timing for our Phase III pivotal METIS study in brain metastases from non-small cell lung cancer. The enrollment timelines for the METIS trial are reliant on clinical site expansion in regions that continues to be materially delayed as clinical sites devote significant resources to the COVID-19 global pandemic. Our clinical affairs teams are focused on accelerating enrollment at existing clinical size, but our efforts are challenged by a heavy reliance on virtual engagement. And as a result, we now anticipate a 2-quarter delay in last patient enrollment for METIS with final data in 2023. It is estimated that between 20% to 40% of patients with non-small cell lung cancer develop brain metastases and together with LUNAR the METIS data represents an important opportunity to demonstrate the efficacy of TT Fields at multiple stages in the lung cancer patient journey. Turning to our abdominal program advanced hepatocellular cancer is another indication where we are continuing our studies of TTFields plus immunotherapy. Earlier this month we presented the Phase 2 pilot HEPANOVA trial data at the ESMO GI Congress. As a reminder, HEPANOVA was designed to study the safety and efficacy of TTFields together with sorafenib in patients with advanced liver cancer. We are encouraged by the HEPANOVA results. Historical control data shows objective response rate of 4.5% and disease control rate of 43% for patients treated with sorafenib alone. In 21 available patients, HEPANOVA showed a 9.5% objective response rate and 76% disease control rate as well as 5.8 months of progression free survival. We believe these results are even more encouraging when considering the poor prognosis of the study population. Over 50% of the patients in HEPANOVA were categorized as Child-Pugh Class B. This indicates greater impairment of liver function is compared to Class A patients. In the historical control only 5% of patients were identified as Class B. Research has shown that the benefit of TTFields antimitotic effect is a function of exposure to the therapy and maximum benefit is achieved with continued news over many months. This was a challenge for HEPANOVA given the poor prognosis of the patients enrolled a median treatment duration of only 10 weeks was achieved. For the 11 patients who received at least 12 weeks of therapy, the disease control rate reached 91% with objective response rate of 18%. This data suggests that TTFields therapy has the potential to extend survival in advanced liver cancer. Our team, along with trial investigators, are actively designing a Phase 3 pivotal trial that contemplates TTFields therapy together with the current standard of care, including immunotherapy, and have engaged the FDA regarding the use of TTFields in advanced liver cancer. Looking ahead to the third quarter, we anticipate the last patient enrollment in interim analysis for a Phase 3 pivotal INNOVATE-3 trial in recurrent ovarian cancer. INNOVATE-3 is designed to study TTFields together with nab-paclitaxel in patients suffering from recurrent ovarian cancer following platinum failure. Together with our partners ENGOT and The GOG Foundation we have seen strong investigator interest in INNOVATE-3 since its launch in early 2019. Following the last patient enrollment, the trial protocol calls for an 18-month follow-up period. We anticipate final data from the INNOVATE-3 trial in 2023. Our product development initiatives also represent an important opportunity for NovoCure to optimize the benefit patients receive from TTFields therapy. Array design is paramount to that effort. We recently launched a usability study of new more flexible arrays in multiple clinical sites in Europe. The new arrays are designed to improve skin adhesion increased degree of motion and potentially reduce skin irritation, while enabling greater ease of use for our patients. This feasibility study is an important step forward in our ongoing efforts to optimize our therapeutic delivery systems, as we aim to improve the time on therapy and benefit to our patients. I want to take this opportunity to thank my NovoCure colleagues for their ongoing dedication to our patient forward mission. To those of you listening to the call today, I'm inspired by your hard work and enthusiasm and want to thank you for your passion and purpose as we look to achieve our goals. With that, I will pass the call over to Ashley to discuss our financial update for the second quarter.

Thank you Asaf. NovoCure ended the second quarter of 2021 in a strong financial position. Our GBM business generated $134 million in net revenues in the quarter, representing a 15% year-over-year increase. The drivers of revenue growth were threefold. First, we had 33,487 active patients at the end of June, an increase of 6% from the same period in 2020. Second, we improved our average reimbursement price by more than $400 per patient per month versus the same period last year. Finally, we reaped benefit from the successful launch of Optune in China by our partners Zai Lab. Notably, we grew active patients despite challenging prescription trends in key markets driven by the prolonged impact of COVID-19 on patient volumes and our heavy reliance on virtual customer engagement. We are focused on optimizing all available levers for growth specifically market penetration duration of therapy and reimbursement rates with the ultimate goal to deliver durable revenue growth over time. We recorded $8.2 million in revenues from Medicare fee-for-service beneficiaries in the quarter versus $10.8 million in the second quarter 2020. The decrease in revenue from Medicare does not reflect a reduction in active patients or a decrease in the contribution we ultimately expect for Medicare beneficiaries but instead reflects the impact of an extended appeal time line for certain claims. Our gross profit in the second quarter of 2021 was $105 million, an increase of 16% from the second quarter of 2020 with a gross margin for the quarter of 79%. We continue to focus on opportunities to increase efficiencies and scale within our supply chain. We are evaluating new materials, manufacturers and processes that could lead to lower costs. One example of this is our focus on reducing the cost per array. Year-over-year, we have seen a 7% improvement in cost per array. Our capital allocation priorities remain consistent as we focus on investing strategically to maximize the future growth potential of our therapy. SG&A expenses in the quarter were $67 million, an increase of 24% from Q2 2020. This increase reflects our ongoing commitment to disciplined spending to support growth initiatives. We are actively building out our commercial capabilities and other organizational readiness efforts in the anticipation of potential future approvals and new indications. Additionally, we are investing heavily in our market access capabilities in order to evaluate opportunities, identify optimal access pathways and successfully gain reimbursement in new geographies. We invested a record $50 million in research and development activities in Q2 2021, a notable increase of 68% from the prior year. This multifaceted investment was driven by increases in preclinical research and the expansion of medical affairs, activities, clinical trial and personnel expenses for our Phase III pivotal post-marketing and label expansion trials and development and personnel expenses to support our product development programs. Our net loss for the second quarter was $15 million equating to a loss of $0.14 per share. This was driven primarily by a $33 million year-over-year increase in our operating expenses. Our focus remains on optimizing investments in future growth before near-term profitability. Beyond earnings per share, we also evaluate operating performance based on adjusted EBITDA a non-GAAP measure of earnings before interest, taxes, depreciation, amortization and share-based compensation. We believe this is an important metric as it removes the impact of earnings attributable to our capital structure, tax rate and material noncash items, specifically share-based compensation and it best reflects the financial value generated by our business. In the second quarter of 2021, our adjusted EBITDA was $18 million. We are especially, encouraged by our stable financial performance in light of our aggressive investments in growth initiatives and the prolonged effects of the COVID pandemic. While our year-to-date adjusted EBITDA is approximately $4 million lower than the first half of 2020, we have invested an incremental $61 million in research and development, sales and marketing and other operational activities to maximize future growth opportunities. We ended the quarter with nearly $900 million in cash on hand. Our cash position provides the flexibility and strength needed for continued investment across multiple functional areas without sacrificing potential opportunities that would otherwise be left unpursued. This includes consistent investment in research and development, institutional readiness initiatives in anticipation of potential future approval of new indications and geographic expansion. Before I hand the call back to the operator for questions I would like to thank you all for your time and continued interest in NovoCure. We are proud of our team's performance this quarter and look to continue our track record of execution in the second half of the year. The fundamental prospects of our business are strong and we remain confident in our strategy, our team's ability to execute and the long-term potential of the Tumor Treating Fields platform to maximize shareholder value as we strive to extend survival in some of the most aggressive forms of solid tumor cancer. With that I will turn the call back over to the operator for Q&A.

[Operator Instructions] Our first question comes from the line of Jason Bednar with Piper Sandler. Your line is open. Please go ahead.

Thanks. Good morning, everyone. I wanted to start with the update on METIS. You're referencing a two-quarter delay that's tied to challenges in patient recruitment in the current environment. And I appreciate that you're not changing the time line to any other studies. But hoping you can help us understand what's maybe unique about the METIS study or brain meta patients that's leading to the enrollment delays for METIS but isn't impacting your other studies?

Hi, Jason it's Bill. I'll remind you and everyone that when we initiate a trial we have a recruitment estimate and we project a final patient in -- that recruitment pace can be affected by a lot of different things competition from other trials, movement of clinicians from one center to another. Sometimes there's something in the protocol that we didn't quite understand that may restrict patients from enrolling more than was anticipated during the initial design. And we make adjustments over time. But particularly in the number of centers to hit the targets. As the trials progress, those estimates become much firmer, right? We see the pace and we are able to turn estimates into projections. So METIS is nearing the end. We have the clinical trial footprint in place. We understand the patients that -- the patients per month that we can expect. We were unable as we've discussed to expand the footprint and therefore with the current footprint, we now expect and can project a two quarter delay. Each one of these trials, however is quite different. The two other trials that are also nearing the end are our LUNAR trial and our trial in ovarian cancer INNO2VATE. And because those trials are nearing the end again our estimates or projections and we don't see any reason based on the current footprint and the current rates to change those projections for the end. So it's almost as simple as that and I hope that provides a little bit of clarity Jason?

Yeah. Yeah, it does. Maybe if I shift over and talk about some of your studies or your data that came out here during the quarter on HEPANOVA. A common question that I received from investors after the results were made available was why the trial design included such sick patients? And I know that's in part why you run these Phase II studies, but it feels like this could have been an avoidable issue. So I guess the question in there is, why the original inclusion of patients that would potentially not be able to receive full therapy or the full 12 weeks of therapy? And then relatedly, when can we expect to see the trial protocol on the Phase III study that you're preparing? Thanks.

Yeah. Let me start and then I'm going to turn it over to Uri for some more detail. But remember, why do we do Phase II trials? First and foremost, we do them to establish the safety of Tumor Treating Fields plus whatever combination therapy in the target region. In that regard, of course HEPANOVA was an A plus. The second reason that we do the trials is to look for -- and these remember are small open-label trials are to look for signals of efficacy. Because they're open label we look -- and because they're small numbers, we can look in great detail at each patient the exposure to the therapy. We can look at their response, the durability of disease control. And remember we're paid based on disease control. And then we can discuss those results with our investigators to determine whether or not there's excitement about moving forward. You said disappointment and unavoidable error for us, and I understand in the financial community there is that sentiment. There is not that sentiment inside NovoCure or with our investigators. We view this as absolutely greenlight to move forward to a Phase III with the current standard of care. Maybe with that as an underlying Uri maybe you can give a little more color on HEPANOVA and the path forward.

Thank you, Bill. I will start by reiterating what Bill mentioned and say that the purpose of the HEPANOVA study was to get results which could serve as an efficacy signal for the design of a future large and randomized study in liver cancer. And let's be very clear. We are talking about HEPANOVA which was a small 27-patient single-arm study. Not a registrational study of course. When we design our study, we always try to be as inclusive as possible to patients with unmet need. And those patients with a Child-Pugh Class B for example certainly have this very clear unmet need unfortunately. It's very difficult to predict, how many such patients will be actually enrolled in that study and what the proportion will be. But given the actual numerical results of these small cohorts with very poor prognosis and therefore low exposure to therapy, we are naturally very encouraged. We feel that it provides us with what we needed to demonstrate safety and preliminary efficacy signal in this area. And we are certainly prepared to continue our work with investigators and with our teams for the design of a Phase III pivotal study in hepatocellular carcinoma including the current standard of care.

Jason, you asked about timing. Just a note, we are and our investigators are actively engaged with the FDA now. So we've progressed to discussions of the protocol with the FDA. And as soon as those discussions are concluded then we'll have more to say about the Phase III protocol.

Okay. Are you willing to venture a guess as maybe before year-end or early next year? Any, kind of, windows you can put around that?

Again when dealing with the FDA, it's hard to project. But again the fact that we're engaged with the FDA, I think gives some sense of the progression. And I will -- the one thing I will underline that the trial will not be a trial of Tumor Treating Fields plus sorafenib. The trial will be a trial of Tumor Treating Fields plus the current standard of care. One thing I'll mention here, we believe that the current standard of care, which includes immunotherapy plus bevacizumab has actually moved further in our corner. Sorafenib is a kinase inhibitor. We see Tumor Treating Fields working additively with sorafenib but we're seeing all this promising data now Tumor Treating Fields in immunotherapy. So that's clearly the direction that we're headed to the Phase III.

All right. Very helpful. Thank you.

Thank you. And our next question comes from the line of Cory Kasimov with JPMorgan. Your line is open. Please go ahead.

Great. Good morning guys. Thanks for taking the question. I have two for you as well. One is a follow-up on the METIS update this morning. For LUNAR that accrual delay prompted the earlier than expected interim efficacy look that the DMC just took during the routine safety check. So just curious is it possible that the DMC takes an early look at METIS as well like they did with LUNAR given the somewhat prolonged time lines?

Thanks Cory. Good morning. Again each one of these clinical trials there are certainly commonalities and there are also differences. [indiscernible] is one of the trials in fact the only one that does not have an interim analysis. So while the DMC for the trial does meet and looks at the safety on their periodic meetings there was no pre-specified interim in that. So it's not going to happen.

Okay. And then the other question I have is around LUNAR and I might be really way too much into this. But when you first announced the interim and proposed protocol changes, you said the study will provide sufficient overall power for both primary and secondary end points. And now the language around it saying it will provide sufficient overall power, as well as potentially providing important information regarding efficacy within treatment subgroups. So I guess I'm wondering if this is an actual change in language or expectations, or if I am just in fact reading way too much into the new launches around words I asked given the obvious interest that there is in this study from investors and from physicians.

Yeah. I appreciate the interest and -- but it's the latter. There's no change in expectations within the company. Now, of course, we're blinded to the data and we're relying on the interpretation of the DMC but that is -- I would not view that as a change in message from the company.

Okay, got it. Thanks a lot. I’ll appreciate taking the questions.

Thank you. And our next question comes from the line of Difei Yang with Mizuho Securities. Your line is open. Please go ahead.

Hi. Good morning and thanks for taking our questions. So a question with regards to how should we think about disease control relative to potentially reverse the tumor, which is measured by ORR because base of non-small cell lung cancer and liver cancer data we have seen so far [indiscernible] TTF does a better job in disease control. And in light of this how should we think about when we have the [indiscernible] TTF array that [Indiscernible]?

Thanks Difei. Good morning. I'm going to let Uri start and then we'll continue the discussion around disease control and the other parameters. Uri, can you provide some commentary?

Of course. Thank you. So I would start by mentioning that disease control rates includes both the objective response rate or the partial response proportion of patients, but also the patients who experienced stable disease. This has a very important correlation with clinical outcomes in multiple different [indiscernible] as it demonstrates the ability of a therapeutic agent or a device in our case to maintain control over the disease across a prolonged period of time. And when we compare the disease control rate of 76% that was reported in the HEPANOVA study to the -- about 40%, 43% disease control rate reported in previous historical controls, it's definitely a very encouraging signal that the addition of Tumor Treating Fields was able to control the disease better. But that is not the only evidence of that outcome, because we have also seen an expansion of the median progression-free survival to 5.8 months and a median time to progression of 8.9 months, which also served as very promising signal. And I remind everybody that we are comparing a single-arm study to historical controls. But nevertheless, every single such results support our excitement and the investigators' enthusiasm towards continuation of exploring the role of TT Fields and its efficacy in this malignancy. So we anticipate that similar to other malignancies, such as glioblastoma, where we have seen the expansion of progression-free survival correlating with overall survival, we expect and we hypothesize that we will see this also in hepatocellular carcinoma and that will be the subject of the upcoming Phase III study.

And I'll just add. From a business perspective, recall that our business model, we charge per month-to-month therapy. So again, from a business perspective, you can think of it we're essentially paid by disease control. And so it's an important metric, as we consider various investments as well. And one thing is in the side, because we have discussed HEPANOVA a couple of times. And again we acknowledge that, while we and the investigators are very excited that I think there was disappointment, at least, in some quarters in the financial community, some of that was self-inflicted. But the point I want to make, these data in HEPANOVA are actually more encouraging than the data that we looked at all those years ago in our Phase IIs and GBM. So just as a reference point. And it's -- again, it underlines our recent commitment to a Phase III program in this cancer with this huge unmet need.

Thank you, Bill, for that. I'll just have a follow-up question on the financial side. It looks like for the GBM business market penetration in EU is higher than U.S. Just wanted to see from your perspective if that's the case? And if that's the case, would you help us to understand might be some of the contributing factors?

Sure. So I'm going to ask Pritesh and Ashley to talk about the market penetration and the financial ramifications.

Thank you, Bill. Ashley I can start and then you can pick up. So, thank you for the question. I think when we look at our GBM business, one of the things that we're proud of is that we build a stable and sustainable business that now is allowing us the financial strength to make all the investments that you've heard about in our opening remarks, as well as some of the questions that have come in. When we think about where we go with GBM, we know that there are many more eligible patients that can receive Optune and that's one of the benefits of our product profile. And our singular focus now is to ensure that we increase the acceptance of Optune across the global community. And here, we're specifically working towards increasing our engagement and increasing our ability to work closer with academic centers. We know that many patients flow in these academic centers both in the U.S. and across the globe. And a lot of our effort specific initiatives, such as these clinical collaborations that you heard about today, are focused on working together with that academic community as partners, to think about how we can then further expand and build upon what we've been able to do in GBM. So when we look at our market penetration, we're -- in the U.S., we’re around 40%. If you look at the rest of the world, it's catching up, right? In Japan and in Europe, we're getting closer to that 40% mark. And our goal is going to be to continue the education that we're doing in this space. We're still changing minds on the new modality. We're still educating. We're still allowing the academic physician base to come together and partner with us and we believe that these opportunities will help us get closer and closer to where we think our clinical profile should yield, which is many more eligible patients be treated with Optune. In addition to that, I will end with the work that we're doing on expanding our footprint. So today, we're in a number of active markets and our efforts now allow us to expand the potential to bring TT Fields and Optune into other markets and more specifically and more tangibly, the work we're doing in France is yielding positive opportunities here and we expect to be in the marketplace sometime next year. Ashley, I'll turn it over to you for any further comments.

No, I think you summarized it well.

Thank you for taking my questions.

Thank you. And our next question comes from the line of Vijay Kumar with Evercore ISI. Your line is open. Please go ahead.

Hey, guys. Thanks for taking my question. I had my first one on lung cancer trials. On the LUNAR interim I guess, the sample size was cut on given the pace of accrual and the number of events. I guess that makes sense. I was curious why did the DMC give any reasoning or language around why the follow-up period was also shortened from 18 to 12 months? And sticking on to lung cancer I think on the KEYNOTE trial when is the first base is expected to enroll in the trial? Any time line on when the trial is expected to complete?

Hey, good morning, Vijay. I'm going to – we've talked quite a bit about this. I'm going to turn it over to Uri again to talk specifically about the DMC and the shortening of the protocol. Uri, can you give some more color on where we stand with LUNAR?

Gladly. So as a reminder, the DMC recommended lowering the overall patient accrual number to 276 and to shorten the follow-up a period follow the enrollment of the last patient in the study to 12 months. And the DMC did give a rationale for their recommendation and they stated this very clearly. They said that it is likely that it will be unnecessary and possibly unethical for patients randomized to the control arm to keep the original design as it has been until that point in time. Naturally, we don't have visibility to the data and to the results. So we cannot comment on this simply because we are blinded to it. But naturally, and I'm sure you all share this sense of great encouragement by this statement. Beyond the debt and we have discussed this multiple times, we cannot say more simply because we have no visibility to the study results.

And with respect to...

[indiscernible]

I was just going to jump in on KEYNOTE B36. KEYNOTE B36 is another important cornerstone of our non-small cell lung cancer program of course, along with LUNAR, which is in a – second line – second-line therapy KEYNOTE is in first line. And of course, we're partnering with Merck to undertake that study. You asked with respect to the timing. So the centers are screening and we'll announce when the first patient is enrolled. But we're delighted with the enthusiasm in – and again back to a theme that we mentioned in the academic community for using Tumor Treating Fields with KEYTRUDA. The [indiscernible] that are participating are among the best respected cancer centers in the world. And we'll announce the first patient as soon as the screening is successful.

Got you. Thanks. And maybe one for Ashley here in revenues 15% in Q2. If I just contrast that with the recent trends you're actually – you guys have grown revenues 40%. Given what's going on with the pandemic trends and script volumes and active patients is it possible that back half we could see a further slowing down of revenues? What is the right revenue trajectory for NovoCure, given the trends we're seeing here? Is the company 20% top line grower a 30% top line grower? I'm curious how you look at the [indiscernible] opportunity?

Yes. No I appreciate the question Vijay. I think you've heard us message this consistent and sustainable and stable [indiscernible]. And I think that's important. We clearly see multiple levers for growth. [indiscernible] on many of those earlier in his comments whether it's the underpenetration at academic centers or new market expansion. But those – those elements of growth will take time. I think in our core active markets now we have to acknowledge that we're five plus years post launch. And there remains many more patients that can benefit from our therapy but it is a maturing growth curve, right? I think fundamentally what I would highlight is that we are still seeing improving net revenues per active patients. We are still focused on driving penetration around the globe. But I do think it's fair to expect some moderation of that growth in our – in our core active market now as we work to continue to engage the academic centers and bring additional markets on in the medium-term.

And sorry, just a follow-up to that Ashley. Given where we are in the evolution of the GBM market, should we now look at just the base business right leaving the pipeline aside. Should this business now like comp start migrating so when I look at your back half comps last year obviously, CMS was a big contributor comps get harder. Is that a factor when we're modeling the back half here?

I mean there's still certainly growth in this business. I will say that we do believe there remains multiple levers for growth here. So, I think you do have to remove the impact of the CMS for reasons that we've talked about much in the past. But I think that base business remains consistent, durable, sustainable, and I think there still remains [indiscernible].

Got it. Thanks guys.

Thank you. And our next question comes from the line of Greg Fraser with Truist Securities. Your line is open, please go ahead.

Good morning folks. Thanks for taking the questions. For GBM in the US, how are surgical volumes trending now relative to pre-COVID levels if you have data on that?

Pritesh do you want to take this one?

Yes, Bill I can take this. So, I think the short answer to that is that they fluctuate depending on patient flow in the institutions. So, very early on. We did see a larger impact of patient flow as patients were not able to get to the institutions. We're seeing that now ebb and flow. But materially we're not seeing a major impact of that at least that we can point to that's quantifiable to say that patients are not getting care for GBM. Given the rare nature of GBM and the deadly nature of the disease, it is an emergency procedure and it is treated as such in the academic centers and in the community.

Got it. That's helpful. A question on EF-33 and the high-intensity arrays, how do we think about the clinical and regulatory pathway assuming that study is positive? Will you have to conduct a larger Phase III like EF-11? And how do you plan to investigate the high-intensity arrays for newly diagnosed GBM?

Yes. So, thanks for that question. And it underlines the topic that we haven't spoken too much about on this call. But in addition to all the clinical and geographic expansion that we have discussed, one of the real sources of excitement enthusiasm for treating patients is the fact that we really believe that we're only beginning our ability to deliver efficacy based on the Tumor Treating Fields platform. Specifically, we think that and we see in our preclinical work and also in analysis of our clinical data, the patients who have higher intensity, far more better. That's not good English -- do much better than patients who have low intensity exposure. And we think that this is an engineering issue, it's not an issue of science. The high intensity -- the first high-intensity Phase II is underway and is recruiting and we will report those results. But in parallel with that we are doing a tremendous amount of work to further improve the arrays beyond the arrays that we're using in that particular trial. You asked about the regulatory pathway. It's too early to discuss that specifically and it may vary by region. But generally, we think there's an opportunity to get approvals based on safety and laboratory data that would allow us to bring the arrays into the markets but without efficacy claims they would be intensity claims. And then it would require further clinical data and perhaps randomized clinical data to make specific efficacy claims. Of course in our bag of tricks too there are also ISTs and other investigator trials that can be published. So, there's a lot of different levers. But we think fundamentally there's two approaches. There's a shorter approach to get arrays in markets without specific efficacy claims, but with intensity description and then there is the longer path to get the specific efficacy claims.

Got it. That’s very helpful. Thank you for taking the questions.

Thank you. And this concludes our question-and-answer session. And I would like to turn the conference back over to Mr. Bill Doyle for any further remarks.

First, I want to thank everybody on the call today for your time and participation. I'd also like to join Ashley and Asaf and thank the NovoCure team for their dedication this quarter and throughout the pandemic. All of us know the many ebbs and flows we've experienced during the last 18 months and during that time the NovoCure mission has remained clear. We're focused on extending patient survival in some of the most aggressive forms of cancer. Q2 was strong. We generated $134 million in net revenue and we've now treated more than 20,000 patients with Optune. The consistency of our GBM business continues to enable aggressive investment in our future and we have now invested a record $50 million in R&D activities in the quarter. Our pipeline is primed for growth. And we're forging ahead in our brain and thoracic and abdominal programs as well as the product development programs that I just described and in which we're so excited. As we look to the future, the possibility of helping more cancer patients remains the driving force for everything that we do. So thanks again. And we look forward to speaking with you in a few months' time.

This concludes today's conference call. Thank you for participating. You may now disconnect.