What changed in this filing

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Item 1A. Risk Factors

2023-02-23 compared with 2022-02-24 · 57 added, 49 removed, 686 unchanged (13% of the section changed)

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If we are unable to increase sales of our Products, obtain further regulatory approvals and commercialize our Products for the treatment of additional indications, or are significantly delayed or limited in doing so, our business and prospects will be materially harmed.

To date we have received FDA regulatory approval under the PMA pathway and certain approvals in other jurisdictions for the use of Optune for the treatment of adult patients with newly diagnosed GBM in combination with temozolomide (a form of chemotherapy) and for the treatment of adult patients with recurrent GBM as monotherapy.

To date we have received FDA regulatory approval under the PMA pathway and certain approvals in other jurisdictions for the use of Optune for the treatment of adult patients with newly diagnosed GBM in combination with certain forms of chemotherapy and for the treatment of adult patients with recurrent GBM as monotherapy.

Optune has a CE mark affixed for the treatment of GBM in the EU and Switzerland.

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• the consequences of any reportable adverse events involving our Products.

In addition, the promotion of our Products is limited to approved indications, which vary by geography.The labelling for Optune in the U.S.

In addition, the promotion of our Products is limited to approved indications, which vary by geography.

The labelling for Optune in the U.S.

is limited in certain respects (for example, it is approved specifically for glioblastomas of the supratentorial region of the brain, is indicated for use in the treatment of newly diagnosed GBM only when used together with temozolomide, and limited to use by adults ages 22 and older), which may limit the number of patients to whom it is prescribed.

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 a limitation for use by adults ages 22 and older, and the absence of phase 3 pivotal clinical data.

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 pivotal clinical data.

Our ability to generate future revenues will also depend on achieving regulatory approval of, and eventual commercialization of, our Products for additional indications and in additional geographies, which is not guaranteed.

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Additionally, our collaborators may not perform their obligations as expected or in compliance with study protocols or applicable laws.

Our collaborators may also be subject to additional risks in their particular territories, such as a lack of intellectual property protections and/or enforcement or the possibility of nationalization.

Acts or omissions by collaborators may disqualify study data for use in regulatory submissions and/or create liability for us in the jurisdictions in which we operate.

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We may not be successful in achieving market acceptance of our Products by healthcare professionals, patients and/or third-party payers in the timeframes we anticipate, or at all, which could have a material adverse effect on our business, prospects, financial condition and results of operations.

Our business model is predicated on achieving market acceptance of our Products as a monotherapy or in combination with well-established cancer treatment modalities like surgery, radiation and pharmacological therapies.

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:

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Additionally, the containment of healthcare costs has become a priority of governments around the world.

Adoption of additional price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our revenues and operating results.

Adoption of additional price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures by both private and public payers, could further limit our revenues and operating results.

If third-party payers do not consider our Products or the combination of our Products with additional treatments to be cost-justified under a required cost-testing model, they may not cover our Products for their populations or, if they do, the level of reimbursement may not be sufficient to allow us to sell our Products on a profitable basis.

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Furthermore, we may abandon our Products for indications that we previously believed to be promising.

Over time, we expect to make modifications to our Products that are designed to improve efficacy, reduce side effects, enhance the user experience and other purposes.

It is possible that our patients will not accept these developments or see them as improvements, necessitating abandoning the development or spending additional development efforts to refine the modification.

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.

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The oncology market is intensely competitive, subject to rapid change and significantly affected by new product introductions and other market activities of industry participants.

Our Products primarily compete with radiation and

pharmacological therapies.

Our Products primarily compete with radiation and pharmacological therapies.

We may face additional competition as advancements are made in the field of anti-cancer therapies and as we enter additional oncological markets.

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We are aware of third parties in the United States and China developing devices and filing for intellectual property protection related to TTFields, which, if approved, may directly compete with our Products.

Competitors could also pursue alternative technologies for the application of TTFields into a patient that we did not foresee or protect.

Competitors could also pursue lawsuits to invalidate our patents or develop alternative technologies for the application of TTFields into a patient that we did not foresee or protect.

As we expand, we may experience difficulties managing our growth.

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These activities will require the addition of new personnel and the development of additional expertise by existing management personnel.

We face intense competition for qualified individuals from numerous pharmaceutical, biopharmaceutical and biotechnology

companies, as well as academic and other research institutions.

We face intense competition for qualified individuals from numerous pharmaceutical, biopharmaceutical and biotechnology companies, as well as academic and other research institutions.

We may not be able to attract and retain these individuals on acceptable terms or at all.

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Other future litigation and regulatory actions could have a material adverse impact on the Company.

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 Proceedings" of this Annual Report on Form 10-K.

Proceedings" of this Annual Report on Form 10-K.

No assurances can be given that the results of these or new matters will be favorable to us.

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Defending ourselves in these matters may be time-consuming, expensive and disruptive to normal business operations and may result in significant expense and a diversion of management’s time and attention from the operation of our business, which could impede our ability to achieve our business objectives.

Additionally, any amount that we may be required to pay to satisfy a judgment, settlement, fine or penalty

may not be covered by insurance.

Additionally, any amount that we may be required to pay to satisfy a judgment, settlement, fine or penalty may not be covered by insurance.

Subject to the Jersey Companies Law, our articles of association permit us to indemnify any director against any liability, to purchase and maintain insurance against any liability for any director and to provide any director with funds (whether by loan or otherwise) to meet expenditures incurred or to be incurred by such director in defending any criminal, regulatory or civil proceedings or in connection with an application for relief (or to enable any such director to avoid incurring such expenditure).

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The extent to which the pandemic may impact our business and clinical studies will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the pandemic, travel restrictions and social distancing guidelines, business closures or business disruptions and the effectiveness of actions taken to contain and treat the disease.

The response to the pandemic may result in permanent changes to the environment in which we operate as described above in ways we are unable to predict.The COVID-19 pandemic may also have the effect of heightening many of the other risks described herein.

The response to the pandemic may result in permanent changes to the environment in which we operate as described above in ways we are unable to predict.

The COVID-19 pandemic may also have the effect of heightening many of the other risks described herein.

We are increasingly dependent on information technology systems and subject to privacy and security laws.

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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.

We could also experience a business interruption, information theft of confidential information, or reputational damage from industrial espionage attacks, malware or other cyber incidents, which may compromise our system infrastructure or lead to data leakage, either internally or at our third-party service providers or other business partners.

We could also experience a business interruption, information theft of confidential information, or reputational damage from industrial espionage attacks, malware or other cyber incidents, which may

compromise our system infrastructure or lead to data leakage, either internally or at our third-party service providers or other business partners.

The size and complexity of our computer systems, and scope of our geographic reach, make us potentially vulnerable to information technology system breakdowns, internal and external malicious intrusion, cyberattacks and computer viruses.

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.

If we do not allocate and effectively manage the resources necessary to build and sustain the proper technology infrastructure or properly manage third-party

contractors who perform data management services on our behalf, then a security breach could subject us to, among other things, transaction errors, business process inefficiencies, the loss of customers, damage to our reputation, business disruptions or the loss of or damage to intellectual property.

If we do not allocate and effectively manage the resources necessary to build and sustain the proper technology infrastructure or properly manage third-party contractors who perform data management services on our behalf, then a security breach could subject us to, among other things, transaction errors, business process inefficiencies, the loss of customers, damage to our reputation, business disruptions or the loss of or damage to intellectual property.

Such security breaches could expose us to a risk of loss of information, litigation, penalties, remediation costs and potentially significant liability to customers, employees, business partners and regulatory authorities, including, for example, under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) in the United States and Regulation 2016/679 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data under GDPR in the EU.

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Our research and development activities, as well as the manufacturing and marketing of our Products, are subject to regulation, including regulation for safety, efficacy and quality, by the FDA in the U.S.

and comparable authorities in other countries.

FDA regulations and the regulations of comparable regulatory authorities in other jurisdictions are wide-ranging and govern, among other things:

In the EU member states where we market our Products and operate, we are subject to, inter alia, the Medical Device Regulation ("MDR"), which applies directly in all EU member states.

In Switzerland, our Products and operations are subject to, inter alia, the Medical Devices Ordinance, which implements the MDR into Swiss law.

In the United Kingdom, our Products and operation are subject to, inter alia, the Medical Devices Regulations 2002 and the Medical Devices (Amendment etc.) (EU Exit) Regulations 2020 (the "UK Re, which implements the MDR and MDR like provisions into UK law.

We are regulated by comparable authorities in other countries.

Regulations promulgated by the regulatory authorities in our applicable jurisdictions are wide-ranging and govern, among other things:

• the conduct of preclinical and clinical studies;

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Even if we believe the data collected from our clinical studies are sufficient, the FDA and comparable regulatory bodies in other jurisdictions have substantial discretion in the assessment and approval or conformity assessment processes and may disagree with our interpretation of the data.

Our failure to adequately demonstrate the safety and efficacy of any of our device candidates would delay or

prevent regulatory approval in the U.S., Japan and other countries or delay or prevent a CE Certificate in the EU (and therefore be unable to affix the CE mark) for our device candidates, which could prevent us from being sustainably profitable.

Our failure to adequately demonstrate the safety and efficacy of any of our device candidates would delay or prevent regulatory approval in the U.S., Japan and other countries or delay or prevent a CE Certificate in the EU (and therefore be unable to affix the CE mark) for our device candidates, which could prevent us from being sustainably profitable.

In addition, any change in the laws or regulations that govern the clearance and approval processes relating to our current and future devices could make it more difficult and costly to obtain clearance or approval for new devices, or to produce, market and distribute our Products.

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or in other countries for the approval or CE marking of a medical device during the period of product development and regulatory agency review or notified body review of each submitted new application may cause delays or rejections.

Regulation (EU) 2017/745 on medical devices (“MDR”) became active on May 26, 2021 and replaced Council Directive 93/42/EEC concerning medical devices (“MDD”), introduced significant changes to the regulatory framework for medical devices in the EU.

In the European Economic Area (“EEA”), we are required to obtain a CE Certificate and to affix a CE mark to our Products.

In the EEA, our devices must be subject to conformity assessment procedure involving an EEA notified body, a private organization accredited by an EEA member state to conduct conformity assessment procedures under the MDR.

The notified body typically audits and examines the device’s technical documentation, including the clinical evaluation, and the quality system for the manufacture, design and final inspection of our devices before issuing a CE Certificate demonstrating compliance with the relevant requirements or the quality system requirements laid down in the relevant Annexes to the MDR.

The MDR became active on May 26, 2021 and replaced Council Directive 93/42/EEC concerning medical devices (“MDD”) with transitional provisions for "legacy" devices under the MDD.

The MDR introduced significant changes to the regulatory framework for medical devices in the EU.

including new, stricter requirements that we must comply with in order to obtain CE Certificates for new product candidates, and to renew the CE Certificates for our "legacy" MDD-Products when they expire or by December 31, 2027 or 2028, depending on device class, whichever occurs first.

These changes may prevent or delay the CE Certification of our device candidates or impact our ability to modify our Products on a timely basis.

In particular, the delay in the publication of key MDR guidance documents at EU level and the limited availability of qualified notified bodies might affect our ability to timely comply and demonstrate such compliance with the new requirements or delay the MDR CE Certification of our device candidates.

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 may continue to market and sell our Products under the CE mark until June 2023.

Thereafter, our Products will be regulated under the UK Regulations.

There can be no assurance that the UK Regulations will be interpreted by UK regulators in the same manner as the MDR in the 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.

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Accordingly, any of our device candidates could take a significantly longer time than we expect to, or may never, gain regulatory approval or obtain CE Certification in the EU, which could have a material adverse effect on our business, prospects, financial condition and results of operations and cause our stock price to decline.

The process of obtaining and maintaining regulatory approvals may be further complicated when we seek approval for indications involving the use of our products together with pharmacological/immunological therapies and therapy candidates.

If our regulators determine that the predominant questions stem from the pharmacological/immunological therapy in the study, they may require us and our partners to conduct the study under trial rules and regulations governing pharmacological/immunological therapies, which may differ significantly from medical device requirements.

Adhering to pharmacological/immunological regulations and requirements governing clinical trials could make it more difficult to enroll study sites and patients, increase compliance costs and lengthen the time it takes to complete the study.

Legislative and regulatory changes in the U.S.

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With respect to countries outside the U.S., the national competent authorities in the EU member states, the UK, Switzerland, Israel, Japan, and other jurisdictions are also increasingly active in their goal of reducing public spending on healthcare.

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.

We are subject to extensive post-marketing regulation by the FDA and comparable authorities in other jurisdictions, which could impact the sales and marketing of our Products and could cause us to incur significant costs to maintain compliance.

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Approval time frames from the MHLW vary from simple notifications to review periods of one or more years, depending on the complexity and risk level of the device.

importation into Japan of medical devices is subject to "Quality Management System (QMS) Ordinance," which includes the equivalent of "Good Import" regulations in the U.S.

In addition, importation into Japan of medical devices is subject to "Quality Management System (QMS) Ordinance," which includes the equivalent of "Good Import" regulations in the U.S.

As with any highly regulated market, significant changes in the regulatory environment could adversely affect our ability to commercialize Optune in Japan.

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We can provide no assurance that we will receive FDA approval for these changes on a timely basis, or at all.

We also may make additional changes in the future that we may determine do

not require the filing of a new PMA, HDE or PMA/HDE supplement application.

We also may make additional changes in the future that we may determine do not require the filing of a new PMA, HDE or PMA/HDE supplement application.

The FDA may not agree with our decisions regarding whether the filing of new PMAs, HDEs or PMA/HDE supplement applications are required.

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We must inform the notified body that conducted the conformity assessment of the Products we market or sell in the EU of any planned substantial changes to our quality system or changes to our Products that could, among other things, affect compliance with the MDR or the devices’ intended use.

The notified body will then assess the changes and verify whether they affect the Product’s conformity with the Essential Requirements laid down in Annex I to the MDD or the conditions for the use of the device.

If the assessment is favorable, the notified body will issue a new CE Certificate or an addendum to the existing CE Certificate attesting compliance with the Essential Requirements laid down in Annex I to the MDD.

The notified body will then assess the changes and verify whether they affect the Product’s conformity with the Essential Requirements laid down in Annex I to the MDR or the conditions for the use of the device.

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.

In addition, 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 and at the latest until May 27, 2024, 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 surveillance, vigilance, and registration of economic operators and of devices.

However, if such medical devices undergo a significant change in their design or intended use, we would need to obtain a new CE Certificate under the MDR for these devices.

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• 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.

This can include, but is not limited to, inappropriate provision of patient services including financial assistance.

This can include, but is not limited to, inappropriate provision of patient services including financial

Recent government investigations have focused on this particular prohibition.

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Similarly, if there is a change in law, regulation or administrative or judicial interpretations, we may have to change our business practices or our existing business practices could be challenged as unlawful, which likewise could have a material adverse effect on our business, prospects, financial condition and results of operations and cause our stock price to decline.

Fines and penalties for violations of these laws and regulations could include severe criminal and civil penalties, including, for example,

significant monetary damages, exclusion from participation in the federal healthcare programs and permanent disbarment of key employees.

Fines and penalties for violations of these laws and regulations could include severe criminal and civil penalties, including, for example, significant monetary damages, exclusion from participation in the federal healthcare programs and permanent disbarment of key employees.

Any penalties, damages, fines, curtailment or restructuring of our operations would adversely affect our ability to operate our business, our prospects and our financial results.

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authorities could take enforcement action if we fail to report the recalls when they were conducted.

Recalls of our Products would divert managerial and financial resources and could have a material

adverse effect on our business, prospects, financial condition and results of operations and cause our stock price to decline.

Recalls of our Products would divert managerial and financial resources and could have a material adverse effect on our business, prospects, financial condition and results of operations and cause our stock price to decline.

If our Products cause or contribute to a death or a serious injury, or malfunction in certain ways, we will be subject to medical device reporting regulations, which can result in voluntary corrective actions or agency enforcement actions.

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Consequently, our operating results and financial position could be materially adversely affected.

In addition, due to the extensive time needed to develop, test and obtain regulatory approval for our treatment therapies, any patents that protect our Product candidates may expire early during commercialization.

In addition, due to the extensive time needed to develop, test and obtain regulatory approval for our treatment therapies, any patents

that protect our Product candidates may expire early during commercialization.

This may reduce or eliminate any market advantages that such patents may give us and harm our financial position.

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The occurrence of 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.

Our existing and future patent portfolio also may be vulnerable to legal challenges.

The standards that courts use to interpret patents are not always applied predictably or uniformly and can change, particularly as new technologies develop.

On September 16, 2011, President Obama signed into law the Leahy-Smith America Invents Act ("AIA") a significant patent law reform.

The AIA implements a first-inventor-to-file standard for patent approval, changes the legal standards for patentability and creates a post-grant review system.

As a result of the uncertainties of patent law in general, and surrounding the interpretation of the AIA in particular, we cannot predict with certainty how much protection, if any, will be given to our patents if we attempt to enforce them and they are challenged in court.

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.

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.

Any attempt to enforce our intellectual property rights may also be time-consuming and costly, may divert the attention of management from our business, may ultimately be unsuccessful or may result in a remedy that is not commercially valuable.

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Additionally, in recent years, individuals and groups have begun purchasing intellectual property assets for the purpose of making claims of infringement and attempting to extract settlements from companies like ours.

With respect to our current Products, the risk of infringement claims is exacerbated by the fact that there are numerous issued and pending patents relating to the treatment of cancer.

With respect to our current Products, the risk of infringement claims is exacerbated by the fact that there are numerous

issued and pending patents relating to the treatment of cancer.

Because patent applications can take many years to issue, and in many cases remain unpublished for many months after filing, there may be applications now pending of which we are unaware that may later result in issued patents that our Products may infringe.

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The Notes are not redeemable prior to November 6, 2023 and are convertible into a combination of cash and ordinary shares on or after August 1, 2025, or earlier upon certain events.

On November 6, 2020, we entered into a new $150.0 million senior secured revolving credit facility with J.P.

Morgan Chase Bank, N.A., as administrative agent, and a syndicate of relationship banks (the “Credit Facility”).

We may, subject to certain conditions and limitations, increase the revolving credit commitments outstanding under the Credit Facility in an aggregate principal amount not to exceed $250.0 million.

The commitments under the Credit Facility are guaranteed by certain of our subsidiaries and secured by a first-lien of our and certain of our subsidiary’s assets.

Outstanding loans will bear interest per annum at a sliding scale between 2.75% and 3.25% above the applicable interbank borrowing reference rate for the currency in which the loan is denominated.

As of the date of this Annual Report, we had no outstanding balance borrowed under the Credit Facility.

Our existing indebtedness and any additional indebtedness we may incur under the Credit Facility or otherwise could require us to divert funds identified for other purposes for debt service and impair our liquidity position.

In addition, the Credit Facility contains usual and customary restrictive covenants relating to the operation of our business, including restrictions on our ability to incur or guarantee additional indebtedness, to incur or permit to exist certain liens, and other restrictions on corporate actions.

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.

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:

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors