SAN FRANCISCO – Wall Street isn't happy with oncology med-tech Novocure Ltd. The St. Helier, Jersey-based company is working to secure Medicaid reimbursement for its FDA-approved glioblastoma indication – and to move into other solid tumors – all while working to breakeven on its cash in hand.

Investors remain skeptical, having driven Novocure's valuation down by more than two-thirds since its IPO in October 2015 – and off 10 percent in just the first few weeks of this year. It's offer price at IPO was $22, but since then shares have descended to almost $7. The company had about $116 million in cash at the end of the third quarter.

"We do have a very viable, growing business with our first indication. We are committed to breaking even on the cash we have in the bank," Novocure CEO Asaf Danziger told the audience at the J.P. Morgan Healthcare conference in San Francisco.

THE BUSINESS CASE

Thus far, however, the revenue ramp and path to profitability haven't been stellar. Including the marketing of its Optune in newly diagnosed glioblastoma, Novocure had $21.7 million in revenue during the third quarter with a net loss of $33.6 million.

Novocure is making progress. By Dec. 31, Novocure had 1,091 active patients on Optune therapy, up 80 percent from 2015. Of these, 835 were in the U.S. and 256 were in Europe.

The company received FDA approval of Optune to treat newly diagnosed glioblastoma (GBM) patients in October 2015; last July, the agency approved a smaller, more portable next-generation version of the system that weighs only 2.7 pounds, down from 6 pounds. That's crucial, given how weak these patients are typically.

Novocure said it thinks it's already reaching about 18 percent of eligible patients in the U.S. and only 5 percent of them in Europe. Novocure is charging a global price of $21,000 per month for Optune therapy. Private insurer payment in the U.S. has been about $14,000, the company said.

Danziger said he thinks physicians are at a tipping point in terms of prescribing Optune in GBM – now that they have the complete data set, FDA approval and inclusion in the guidelines from the National Comprehensive Cancer Network (NCCN).

"We are introducing a brand new modality in cancer therapy. This is not something that any clinician studies in medical school. In many cases, we have to start from what is an electric field," he said.

Optune is based on Tumor Treating Fields, or TTFields, technology that works by disrupting the inner workings of cells via an electric field, thereby disrupting cell mitosis. The GBM device includes bandages worn on the head, which are attached to a small box worn by the patient that generates the TTFields.

In November, Novocure disclosed long-term pivotal phase III data in newly diagnosed GBM that bested the interim data from about a year earlier. Optune treated patients, who also received temozolomide, had median progression free survival (PFS) of 6.7 months versus 4.0 months for those on temozolomide alone.

Median overall survival also improved to 20.8 months versus 16.0 for temozolomide only. In addition, the number of Optune/temozolomide patients who were still alive after two years was 43 percent, as compared to 30 percent for the chemotherapy alone.

Up next in commercialization is securing Medicare reimbursement. The company has been treating Medicare patients – and billing the agency – but without systematic success. Danziger noted that there are 177 million private covered U.S. lives for Optune in GBM, with Medicare left as the last major reimbursement hurdle.

"One group that's left is Medicare fee-for-service. We have been checking off Medicare's boxes. There's a lot going on in Washington right now. But we remain very focused on providing access for all Medicare patients; we have been filling all the Medicare prescriptions and billing Medicare, those bills have been stacking up," Danziger said.

TACKLING SOLID TUMORS

Danziger remains confident that the company can successfully balance advancing into phase III testing for additional solid tumor indications, while it works to take full commercial advantage in the approved GBM indication and move toward profitability.

The company has already started a phase III trial in brain metastases, which is three times more common than cancer originating in the brain, Danziger said. Novocure also expects to start a phase III trial in pancreatic cancer this year, which is very difficult to treat.

"It will be a randomized, one-to-one trial in advance pancreatic cancer, the part of disease we can have the best impact on," said Eilon Kirson, Novocure CSO and head of R&D. All the patients will receive standard-of-care treatment gemcitabine and abraxane; the company is still determining the most appropriate endpoint.

Novocure also has ongoing phase II testing in ovarian cancer, non-small cell lung cancer and mesothelioma, but Danziger cautioned that the company has to balance the number of phase III clinical trials at any one time in order to meet its financial commitments. The number of investigator-sponsored trial applications has "ballooned," Danziger said. And in mesothelioma, given the small population size, he said the FDA may allow registration with the phase II data.

In phase II advanced pancreatic cancer data, PFS and one-year survival rate of TTFields treated patients plus nab-paclitaxel and gemcitabine were more than doubled versus historical controls on that chemotherapy regimen alone.

Similarly, another non-placebo controlled phase II study found that TTFields use in recurrent ovarian cancer resulted in a more than doubling of PFS and an improvement in overall survival, typically the most difficult oncology endpoint in which to move the needle, in combination with paclitaxel.

Physicians who treat these other solid tumors have been much more receptive to Optune than those focused on GBM, Kirson said. The company plans to present more detailed pancreatic and ovarian data at an undisclosed, upcoming oncology meeting.

"They are no longer taking a leap of faith on something that's never been proven – it has been proven. In mesothelioma, we're seeing a lot of excitement," said Kirson.