Novocure Secures New $400 Million Multi-Tranche Non-Dilutive Debt Financing from Pharmakon

Rhea-AI Summary

Novocure (NASDAQ: NVCR) secured a new $400 million multi-tranche non-dilutive debt financing from Pharmakon Advisors, LP. The facility will be available in four tranches, with the first $100 million issued at closing and the rest to follow by 2026. The funds will support working capital needs for the anticipated launch in non-small cell lung cancer and settle Novocure’s convertible notes. The partnership with Pharmakon strengthens Novocure’s cash position and balance sheet, providing financial stability for future growth.

Positive

• Securing a $400 million debt financing from Pharmakon Advisors, LP enhances Novocure's cash position and balance sheet.

• The non-dilutive nature of the debt financing ensures that Novocure can invest in future growth without shareholder dilution.

• The funds will support Novocure's working capital needs for the anticipated launch in non-small cell lung cancer, demonstrating strategic financial planning.

Negative

• None.

Insights

Financial Analyst

Novocure’s new multi-tranche debt financing deal introduces a significant capital infusion of up to $400 million>, tailored to bolster its current financial structure with a focus on funding the working capital requirements. This strategic move underlines the company’s foresight in ensuring ample liquidity as they gear up for the introduction of treatments in the arena of non-small cell lung cancer (NSCLC), a critical segment due to its prevalence. The initial tranche, alongside the structured availability of subsequent tranches, underscores a cautious yet aggressive approach to capital management, pre-empting potential cash flow constraints. The deliberate use of non-dilutive financing mechanisms is a positive signal to shareholders, as it averts shareholder dilution which often accompanies equity financing. As for the convertible notes reaching maturity, this financial strategy offers a clear pathway for settlement, which may be reflected positively by the market as it diminishes future financial uncertainty. However, investors should be vigilant about the terms of such debt, including interest rates and covenants that could impact Novocure's financial flexibility.

Healthcare Industry Analyst

From an industry perspective, Novocure's focus on non-small cell lung cancer (NSCLC) represents a significant market opportunity given that NSCLC accounts for a major portion of lung cancer cases. As the therapeutic landscape evolves, Novocure positioning itself with a solid financial backing can be seen as a strategic initiative to carve out a competitive edge. This financing could be instrumental in facilitating research, market penetration and potentially expediting the launch cycle of their NSCLC treatments. For investors, the key interest lies in Novocure’s ability to convert this financial leverage into marketable innovations that can capture substantial market share within the oncology sector. The extent to which Novocure can capitalize on this opportunity will likely influence their revenue streams and market position in the long term. It is important to note, however, that success in clinical outcomes and market acceptance is not guaranteed and there are inherent risks associated with the development and commercialization of new therapeutics in the biotech industry.

Use of proceeds to fund working capital needs stemming from Novocure’s anticipated launch in non-small cell lung cancer and settle, upon maturity, Novocure’s convertible notes

ROOT, Switzerland--(BUSINESS WIRE)-- Novocure (NASDAQ: NVCR) announced today that it has entered into a new five-year up to $400 million committed senior secured credit facility with funds managed by Pharmakon Advisors, LP. The committed capital will be available to Novocure in four tranches of $100 million. The first $100 million was issued at closing, and the second $100 million will be issued by June 30, 2025. An additional $200 million is available to be drawn across two tranches, at Novocure’s discretion and subject to certain milestones, through March 31, 2026. The proceeds will be used to fund working capital needs stemming from Novocure’s anticipated launch in non-small cell lung cancer and settle, upon maturity, Novocure’s convertible notes. Additional information on the agreement will be filed with the U.S. Securities and Exchange Commission as a Current Report on Form 10-Q.

“As we look ahead to multiple milestones on the horizon for Novocure, we have strengthened our cash position with non-dilutive capital and further solidified our balance sheet,” said Ashley Cordova, Novocure’s Chief Financial Officer. “This multi-tranche, delayed-draw, debt facility provides us with the flexibility and financial stability to invest in future growth, specifically in non-small cell lung cancer, as we execute our objectives and advance our clinical pipeline. We are pleased to again partner with Pharmakon on this transaction.”

Pharmakon Advisors, LP is a leading investor in non-dilutive debt for the life sciences industry and is the investment manager of the BioPharma Credit funds. Established in 2009, funds managed by Pharmakon Advisors, LP have committed $8.2 billion across 52 investments.

About Novocure

Novocure is a global oncology company working to extend survival in some of the most aggressive forms of cancer through the development and commercialization of its innovative therapy, Tumor Treating Fields. Novocure’s commercialized products are approved in certain countries for the treatment of adult patients with glioblastoma, malignant pleural mesothelioma and pleural mesothelioma. Novocure has ongoing or completed clinical studies investigating Tumor Treating Fields in brain metastases, gastric cancer, glioblastoma, liver cancer, non-small cell lung cancer, pancreatic cancer and ovarian cancer.

Headquartered in Root, Switzerland and with a growing global footprint, Novocure has regional operating centers in Portsmouth, New Hampshire and Tokyo, as well as a research center in Haifa, Israel. For additional information about the company, please visit Novocure.com and follow @Novocure on LinkedIn and Twitter.

Forward-Looking Statements

In addition to historical facts or statements of current condition, this press release may contain forward-looking statements. Forward-looking statements provide Novocure’s current expectations or forecasts of future events. These may include statements regarding anticipated scientific progress on its research programs, clinical study progress, development of potential products, interpretation of clinical results, prospects for regulatory approval, manufacturing development and capabilities, market prospects for its products, coverage, collections from third-party payers and other statements regarding matters that are not historical facts. You may identify some of these forward-looking statements by the use of words in the statements such as “could,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” or other words and terms of similar meaning. Novocure’s performance and financial results could differ materially from those reflected in these forward-looking statements due to general financial, economic, environmental, regulatory and political conditions and other more specific risks and uncertainties facing Novocure such as those set forth in its Annual Report on Form 10-K filed on February 22, 2024, and subsequent filings with the U.S. Securities and Exchange Commission. Given these risks and uncertainties, any or all of these forward-looking statements may prove to be incorrect. Therefore, you should not rely on any such factors or forward-looking statements. Furthermore, Novocure does not intend to update publicly any forward-looking statement, except as required by law. Any forward-looking statements herein speak only as of the date hereof. The Private Securities Litigation Reform Act of 1995 permits this discussion.

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Investors & Media:

Ingrid Goldberg

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media@novocure.com

610-723-7427

Source: Novocure