What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-30 compared with 2025-07-24 · 95 added, 90 removed, 248 unchanged (43% of the section changed)

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Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide information to assist you in better understanding and evaluating our financial condition and results of operations.

We encourage you to read this MD&A in conjunction with our unaudited consolidated financial statements and the notes thereto for the period ended June 30, 2025 included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

We encourage you to read this MD&A in conjunction with our unaudited consolidated financial statements and the notes thereto for the period ended September 30, 2025 included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

This discussion contains forward-looking statements that involve risks and uncertainties.

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Optune Lua is approved by the FDA under the PMA pathway for the treatment of adult patients with metastatic non-small cell lung cancer ("NSCLC") concurrent with PD-1/PD-L1 inhibitors or docetaxel following progression on or after a platinum-based regimen.

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 also have a CE certificate to market Optune Lua concurrent with PD-1/PD-L1 inhibitors or docetaxel following progression on or after a platinum-based regimen for the treatment of metastatic NSCLC in the EU and have launched in Germany.

In addition, we received regulatory approval for Optune Lua for the treatment of adult patients with unresectable advanced/recurrent NSCLC concurrent with PD-1/PD-L1 inhibitors following progression on or after a platinum-based regimen in Japan.

Optune Lua is also approved by the FDA 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.

We have also received CE certification for the use of Optune Lua for the treatment of adult patients with metastatic NSCLC concurrent with PD-1/PD-L1 inhibitors or docetaxel following progression on or after a platinum-based regimen, and have launched Optune Lua for the treatment of NSCLC in Germany.

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.

In August, we announced coverage of TTFields therapy for the treatment of patients with newly diagnosed GBM in Spain.

We are actively evaluating opportunities to expand our international footprint.

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In May, the full results of the PANOVA-3 trial were published in the Journal of Clinical Oncology.

In 2024, we presented data from the Phase 3 METIS clinical trial evaluating the use of TTFields therapy and best supportive care for the treatment of adult patients (n=298) with 1-10 brain metastases from NSCLC following stereotactic radiosurgery ("METIS").

In August, we filed a PMA application with the FDA seeking approval for the use of TTFields therapy together with GnP for the treatment of locally advanced, unresectable pancreatic cancer under the brand name Optune Pax ® .

In September, we presented final data from the Phase 3 METIS clinical trial evaluating the use of TTFields therapy and best supportive care for the treatment of adult patients (n=298) with 1-10 brain metastases from NSCLC following stereotactic radiosurgery ("METIS") at the 2025 American Society for Radiation Oncology Annual Meeting.

The METIS trial met its primary endpoint, demonstrating a statistically significant improvement in time to intracranial progression for patients treated with TTFields therapy and supportive care compared to patients treated with supportive care alone.

Subsequent to that presentation, the routine process of cleaning and qualification of the database was concluded.

The final analysis on the fully cleaned and qualified dataset confirmed that METIS met its primary endpoint, demonstrating a statistically significant improvement in time to intracranial progression in patients randomized to receive TTFields therapy.

Patients treated with TTFields therapy and supportive care exhibited a risk reduction of 28% (HR 0.72, p=0.044), with median time to intracranial progression of 15.0 months compared to 7.5 months in patients treated with supportive care alone.

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post hoc), respectively.

We are in the process of preparing FDA PMA applications for pancreatic cancer and brain metastases from NSCLC indications based on the PANOVA-3 and METIS trials, respectively.

Following pre-submission engagement with the FDA, we expect to file our PANOVA-3 application in the third quarter of 2025.

Our modular PMA shell for the METIS application has been approved by the FDA and we have filed the first 2 of 3 modules.

We expect to complete the METIS full submission by the end of 2025.

Our modular PMA shell for the METIS application has been approved by the FDA and we have filed the first two of three modules under the brand name Optune Mya ® .

We have received questions from the FDA regarding our second module and are prepared to file the third and final module once those questions are resolved.

We anticipate filing the third module before the end of 2025;

however, we cannot assure that the FDA will accept the filing before the end of 2025.

We believe the physical mechanisms of action behind TTFields therapy may be broadly applicable to solid tumor cancers.

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.

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, the Phase 3 LUNAR-2 trial in NSCLC, and the Phase 2 PANOVA-4 trial in pancreatic cancer.

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.

In August, we terminated the Phase 2 LUNAR-4 trial.

LUNAR-4 was a phase 2, single arm, open-label, multinational evaluating the use of TTFields concomitant with pembrolizumab for the treatment of metastatic NSCLC in patients previously treated with a PD-1/PD-L1 inhibitor and platinum-based chemotherapy.

The availability of real-world evidence will enable Novocure to achieve the objectives of LUNAR-4 without the need for an interventional clinical study.

This decision was not related to any safety concerns.

The table below presents the current status of the ongoing clinical trials in our pipeline and anticipated timing of data.

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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.

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.

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We view our operations and manage our business in one operating segment.

For the three and six months ended June 30, 2025, our net revenues were $158.8 million and $313.8 million.

Our net loss for the three and six months ended June 30, 2025 was $40.1 million and $74.5 million.

As of June 30, 2025, we had an accumulated deficit of $1,228.6 million.

For the three and nine months ended September 30, 2025, our net revenues were $167.2 million and $481.0 million.

Our net loss for the three and nine months ended September 30, 2025 was $37.3 million and $111.7 million.

As of September 30, 2025, we had an accumulated deficit of $1,265.9 million.

Impact of Current Events

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Recent Changes to U.S.

The manufacturing of our Products and associated accessories are fully outsourced to third parties across multiple countries.

Throughout 2025, the U.S.

has increased tariff rates on imported goods from numerous countries.

The manufacturing of our Products and associated accessories is fully outsourced to third parties across multiple countries.

In recent years, in anticipation of active patient growth and new indication launches, we began onboarding additional suppliers and/or supply nodes to increase the resilience of our network.

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This also helps us now to provide optionality around supply routes to optimize our cost structure, including the emerging tariff landscape.

In March and April 2025, the U.S.

increased tariff rates on imported goods from numerous countries.

At that time, our most significant tariff exposure resulted from the import of arrays into the U.S.

from Israel, which was subject to a 17% tariff rate.

This is compared to zero percent tariff rate prior to April 2025.

On April 9, 2025, the U.S.

temporarily delayed implementation of the new tariffs with respect to most countries until August 1, 2025, resulting in a 10% tariff for most countries.

On July 12, 2025, President Trump announced that tariffs on certain goods from Mexico and the European Union would be subject to 30% tariffs beginning on August 1, 2025, subject to ongoing negotiations with the U.S.

We continue to focus on opportunities to mitigate negative impacts and increase efficiencies and scale within our supply chain.

Following these efforts to date, if the tariffs return to the pre-April 9 rates after the pause expires and the July 12 announced tariffs go into effect, our current analysis of the global tariff environment leads us to estimate that import duties could increase by up to approximately $7 million in 2025.

For the three months ended June 30, 2025, we expensed an additional $1.3 million in duties as a result of the higher tariff rates.

Our current analysis of the global tariff environment leads us to estimate that import duties related to these new tariff rates could increase by approximately $5 million in 2025.

The global tariff environment is changing rapidly, and we cannot be assured that we will not ultimately be negatively impacted further by these changes.

Government Shutdown

As of the date of this report, the U.S.

Congress has failed to agree on a budget or appropriation legislation to fund the federal government’s operations (also known as a government shutdown).

As a result, federal agencies, including the FDA, have placed workers on furlough and scaled back their operations.

It is possible that a prolonged shutdown will cause delays with respect to the FDA's review and approval of our Optune Pax and Optune Mya PMA applications, as well as with respect to reviews and other actions by the FDA and other federal agencies that impact our business.

In addition to delays at the FDA, we could be impacted by delays in claims processing by the Centers for Medicare & Medicaid Services, which could delay our receipt of Medicare reimbursements.

Commentary on Results of Operations

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Results of Operations

The following discussion provides an analysis of our results of operations and reasons for material changes therein for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024.

The following discussion provides an analysis of our results of operations and reasons for material changes therein for the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024.

The tables contained in this section report U.S.

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The following table sets forth our consolidated statements of operations data:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

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The following table details the share-based compensation expense included in costs and expenses:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

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The following table includes certain commercial operating statistics for and as of the end of the periods presented.

September 30,

Optune Gio Optune Lua Total Optune Gio Optune Lua Total

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4,277 139 4,416 4,080 33 4,113

Three months ended June 30,

Three months ended September 30,

Optune Gio Optune Lua Total Optune Gio Optune Lua Total

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1,675 130 1,805 1,568 18 1,586

Six months ended June 30,

Nine months ended September 30,

Optune GIo Optune Lua Total Optune Gio Optune Lua Total

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(1) Optune Lua includes both active patients in NSCLC and MPM.

Worldwide, there were 43 and 25 active MPM patients on therapy as of as of June 30, 2025 and 2024 and 94 and 1 active NSCLC patient(s) on therapy as of as of June 30, 2025 and 2024.

Worldwide, there were 39 and 32 active MPM patients on therapy as of as of September 30, 2025 and 2024 and 100 and 1 active NSCLC patient(s) on therapy as of as of September 30, 2025 and 2024.

(2) Optune Lua includes both prescriptions for NSCLC and MPM.

Worldwide, 22 , 57 , 24 and 43 MPM prescriptions were received in the three and six months ended June 30, 2025 and 2024 and 121 , 213 , 2 and 2 NSCLC prescriptions were received in the three and six months ended June 30, 2025 and 2024.

Three and six months ended June 30, 2025 compared to three and six months ended June 30, 2024

Three months ended June 30, Six months ended June 30,

Worldwide, 21 , 78 , 18 and 61 MPM prescriptions were received in the three and nine months ended September 30, 2025 and 2024 and 109 , 322 , 0 and 2 NSCLC prescriptions were received in the three and nine months ended September 30, 2025 and 2024.

Three and nine months ended September 30, 2025 compared to three and nine months ended September 30, 2024

Three months ended September 30, Nine months ended September 30,

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Net revenues.

Net revenues increased 6% to $158.8 million for the three months ending June 30, 2025 from $150.4 million for the same period in 2024.

For the three months ended June 30, 2025 the net revenue increase primarily resulted from a $4.2 million increase from continued growth in France, a $4.0 million increase in Germany from active patient growth and reimbursement improvements, and a $3.0 million increase from the remaining international markets.

Included in these gains is $3.8 million of exchange rate benefits.

Net revenues increased 8% to $167.2 million for the three months ending September 30, 2025 from $155.1 million for the same period in 2024.

For the three months ended September 30, 2025 the net revenue increase primarily resulted from a $4.4 million increase from continued growth in France and a $3.3 million increase in Germany from active patient growth and reimbursement improvements.

This increase also includes a $4.4 million increase from other international markets, driven by active patient growth in Sweden, aged accounts receivable in the UK, and early commercialization efforts in Spain.

The overall increase includes $3.3 million of exchange rate benefits.

This increase was partially offset by $1.7 million less revenue in the United States related to a reduction in one-time benefits for prior period claims.

In addition, net revenues from Greater China were $1.3 million less than prior year.

Recognized revenue from Optune Lua in the quarter was $2.4 million, including $1.3 million from MPM, and $1.1 million from NSCLC.

For the six months ended June 30, 2025, the increase primarily resulted from an $11.5 million increase from continued growth in France, a $6.9 million increase in Germany from active patient growth and reimbursement improvements, and a $6.9 million increase from the remaining international markets driven by active patient growth.

Three months ended June 30, Six months ended June 30,

Recognized revenue from Optune Lua in the quarter was $3.1 million, including $1.6 million from NSCLC, and $1.5 million from MPM.

For the nine months ended September 30, 2025, the increase primarily resulted from a $15.9 million increase from continued growth in France, a $10.2 million increase in Germany from active patient growth and reimbursement improvements, and a $12.1 million increase from the remaining international markets driven by active patient growth.

The overall increase for the nine-month period includes $5.7 million of exchange rate benefits.

Three months ended September 30, Nine months ended September 30,

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Cost of revenues.

For the three and six months ended June 30, 2025, the increase in cost of revenues was primarily due to 9% growth in active patients, higher average array costs driven by the new array roll-out, the NSCLC launch and increased tariffs.

Excluding sales to Zai, cost of revenues per active patient per month was $2,970 for the three months ended June 30, 2025, an increase of 10% from $2,692 for the same period in 2024, primarily due to higher average array costs driven by the new array roll-out and the NSCLC launch.

Cost of revenues per active patient is calculated by

dividing the cost of revenues for the quarter less equipment sales to Zai for the quarter by the average of the active patients at the end of the prior quarter and the ending active patients in the current quarter.

For the three and nine months ended September 30, 2025, the increase in cost of revenues was primarily due to 7% growth in active patients, $1.3 million higher array costs driven by the new array roll-out and the NSCLC launch, and $1.5 million in higher tariffs.

In addition, the Company recognized a $2.9 million expense in the third quarter of 2025 related to an inventory obsolescence provision for Optune Lua arrays.

Excluding sales to Zai, cost of revenues per active patient per month was $3,159 for the three months ended September 30, 2025, an increase of 16% from $2,713 for the same period in 2024, primarily due to the Optune Lua inventory obsolescence provision.

Cost of revenues per active patient is calculated by dividing the cost of revenues for the quarter less equipment sales to Zai for the quarter by the average of the active patients at the end of the prior quarter and the ending active patients in the current quarter.

This quarterly figure is then divided by three to estimate the monthly cost of revenues per active patient.

Sales to Zai are deducted because they are sold at cost and in anticipation of future royalties from Zai, and Zai patient counts are not included in our active patient population.

Cost of products sold to Zai totaled $3.2 million and $6.5 million for the three and six months ended June 30, 2025 compared to $3.1 million and $5.9 million for the three and six months ended June 30, 2024.

Gross margin was 74% for the three months ended June 30, 2025 compared to 77% for the three months ended June 30, 2024.

Cost of products sold to Zai totaled $3.3 million and $9.8 million for the three and nine months ended September 30, 2025 compared to $2.5 million and $8.4 million for the three and nine months ended September 30, 2024.

Gross margin was 73% for the three months ended September 30, 2025 compared to 77% for the three months ended September 30, 2024.

The reduction in gross margin is primarily due to the aforementioned increase in cost of revenues.

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Operating Expenses.

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

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Research, development and clinical study expenses.

Research, development and clinical study expenses increased 2% to $55.8 million for the three months ended June 30, 2025 from $55.0 million for the same period in 2024.

For the three and six months ended June 30, 2025, the change was primarily due to a $1.9 and $2.6 million increase in engineering costs and a $1.8 million and $4.3 million increase in direct clinical trial expenses related to the ramp up of the LUNAR-2 and KEYNOTE D58 trials, partially offset by $3.7 and $6.1 million lower share-based compensation expenses in the three and six periods.

Research, development and clinical study expenses increased 4% to $54.0 million for the three months ended September 30, 2025 from $51.9 million for the same period in 2024.

For the three months ended September 30, 2025, the change was primarily due to a $2.6 million increase in product development costs and a $1.8 million increase in regulatory expenses related to the PANOVA-3 and METIS PMA filings, partially offset by $2.0 million in a reduction in direct clinical expenses due to the completion of the PANOVA-3 and METIS trials.

For the nine months ended September 30, 2025, the change was primarily due to a $4.5 million increase in engineering costs, $2.2 million in regulatory expenses, and $1.9 million in direct clinical trial expenses related to the ramp up of the LUNAR-2 and KEYNOTE D58 trials, partially offset by $7.3 million lower share-based compensation expenses.

Total research and development expenses can fluctuate quarter-to-quarter dependent upon the amount of clinical research organization services delivered, clinical materials procured and the number of trials actively underway within a given quarter.

Sales and marketing expenses.

Sales and marketing expenses increased 1% to $57.1 million for the three months ended June 30, 2025 from $56.6 million for the same period in 2024.

For the three months ended June 30, 2025, the change was primarily driven by $3.0 million higher costs associated with the expansion of the sales force for NSCLC and $1.7 million of higher marketing and market access expenses mostly attributable to the NSCLC launches, partially offset by $4.5 million in lower share-based compensation expenses.

For the six months ended June 30, 2025, the change was primarily driven by $7.3 million higher costs associated with the expansion of the sales force for NSCLC, partially offset by $7.1 million lower share-based compensation expenses.

Sales and marketing expenses decreased 2% to $58.5 million for the three months ended September 30, 2025 from $59.8 million for the same period in 2024.

For the three months ended September 30, 2025, the change was primarily driven by $2.6 million in lower share-based compensation expenses, partially offset by a $1.8 million increase in marketing expenses related to the Optune Lua for NSCLC launch and prelaunch activities for potential future indications in pancreatic cancer and brain metastases from NSCLC.

For the nine months ended September 30, 2025, the change was primarily driven by $9.7 million lower share-based compensation expenses, partially offset by $6.6 million higher costs associated with the expansion of the sales force for Optune Lua for NSCLC, $2.1 million in higher market access and reimbursement expenses, and $1.6 million in higher marketing expenses.

General and administrative expenses.

General and administrative expenses increased 17% to $44.0 million for the three-month period ended June 30, 2025 from $37.7 million for the same period in 2024.

For the three months ended June 30, 2025, these changes were primarily due to $3.3 million higher share-based compensation expenses and higher personnel and professional service expenses to support the NSCLC launch and preparations for potential future indications.

For the six-month period ended June 30, 2025, the change was primarily due to $4.4 million of higher share-based compensation expenses, a $2.3 million one-time expense to retire a production line related to supply chain optimization efforts, and higher personnel and professional service expenses to support NSCLC launches and potential future indications.

Three months ended June 30, Six months ended June 30,

General and administrative expenses increased 15% to $45.9 million for the three-month period ended September 30, 2025 from $40.1 million for the same period in 2024.

For the three months ended September 30, 2025, these changes were primarily due to $2.6 million higher share-based compensation expenses and higher personnel and professional service expenses to support the greater company build-out, particularly in enterprise technology as we invest in our digital infrastructure to enable scale.

For the nine-month period ended September 30, 2025, the change was primarily due to $7.0 million of higher share-based

compensation expenses, a $2.3 million one-time expense to retire a production line related to supply chain optimization efforts, and higher personnel and professional service expenses.

Three months ended September 30, Nine months ended September 30,

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Financial income (expenses), net.

Financial income decreased $ 6.3 million or 58%, to $4.5 million for the three months ended June 30, 2025 from $10.9 million in income for the same period in 2024, primarily due to a $2.9 million decrease in interest income on our investments, an increase of $1.5 million of foreign exchange expenses and a non-recurring gain of $1.1 million from the early redemption of our convertible note in the same period in 2024.

Financial income decreased $8.6 million or 42%, to $12.1 million for the six months ended June 30, 2025 from $20.7 million in income for the same period in 2024, primarily due to $3.3 million in higher interest expenses related to our senior secured credit facility, a reduction of $3.2 million in interest income received from our investments and the non-recurring gain of $1.1 million from the early redemption of our convertible note described above.

Three months ended June 30, Six months ended June 30,

Financial income decreased $ 4.5 million or 43%, to $6.0 million for the three months ended September 30, 2025 from $10.5 million in income for the same period in 2024, primarily due to a $2.7 million decrease in interest income on our investments and an increase of $2.0 million of foreign exchange expenses.

Financial income decreased $13.1 million or 42%, to $18.1 million for the nine months ended September 30, 2025 from $31.2 million in income for the same period in 2024, primarily due to a $5.9 million decrease in interest income on our investments, $3.2 million in higher interest expenses related to our senior secured credit facility, an increase of $1.7 million of foreign exchange expenses and the non-recurring gain of $1.1 million in 2024 from the early redemption of our convertible note described above.

Three months ended September 30, Nine months ended September 30,

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Income taxes .

Income taxes decreased 52% to $5.2 million for the three months ended June 30, 2025 from $10.6 million for the same period in 2024, and decreased 48% to $9.2 million for the six months ended June 30, 2025 from $17.8 million for the same period in 2024.

The changes are driven primarily by an increase in tax benefits from share-based compensation deductions in the periods.

In July 2025, the United States tax code was amended, including significant changes primarily focused on the permanent extension of certain business and international tax provisions enacted as part of the 2017 Tax Cuts and Jobs Act.

Except for certain provisions, the amendments are effective for tax years beginning on or after January 1, 2025 and include, among other things:

(i) bonus depreciation that will allow for full expensing of qualified property;

and (ii) immediate deductibility of domestic research or experimental expenditures.

We are evaluating the impact of the tax law changes and currently estimate a decrease in tax expense of approximately $1.7 million related to the six months ended June 30, 2025.

Income taxes decreased 19% to $7.2 million for the three months ended September 30, 2025 from $9.0 million for the same period in 2024 primarily due to a $1.9 million increase in tax benefits from share-based compensation deductions and $1.3 million resulting from tax law changes in the U.S.

Income taxes decreased 39% to $16.4 million for the nine months ended September 30, 2025 from $26.7 million for the same period in 2024 primarily due to a $9.9 million increase in tax benefits from share-based compensation and $1.8 million resulting from tax law changes in the U.S.

Non-GAAP financial measures

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The following table reconciles net income (loss), which is the most directly comparable GAAP operating performance measure, to Adjusted EBITDA.

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

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Adjusted EBITDA $ (3,037) $ 1,730 (276) % $ (17,959) $ (1,783) 907 %

Adjusted EBITDA decreased to a loss of $9.9 million for the three months ended June 30, 2025 from profit of $1.1 million for the same period in 2024.

For three months ended June 30, 2025, the change in adjusted EBITDA was

primarily driven by revenue growth from increasing active patients.

Adjusted EBITDA decreased to a loss of $3.0 million for the three months ended September 30, 2025 from profit of $1.7 million for the same period in 2024.

For three months ended September 30, 2025, the change in adjusted EBITDA was primarily driven by revenue growth offset by increasing costs for new indications.

The revenue increase drove a $2.8 million increase in gross profit.

The gross profit increase was offset by increased operating expenses, primarily due to our launch in NSCLC and ramp up of clinical trials.

We intend to take actions that prioritize growth and maintain financial health and flexibility as we position our company for future profitability.

The gross profit increase was offset by increased operating expenses, primarily due to our launch in NSCLC and prelaunch activities for potential new indications.

take actions that prioritize growth and maintain financial health and flexibility as we position our company for future profitability.

Liquidity and Capital Resources

We have incurred significant losses and cumulative negative cash flows from operations since our founding in 2000.

As of June 30, 2025, we had an accumulated deficit of $1,228.6 million.

As of September 30, 2025, we had an accumulated deficit of $1,265.9 million.

To date, we have primarily financed our operations through the exercise of options, issuance and sale of equity and the proceeds from long-term loans.

At June 30, 2025, we had $911.5 million in cash, cash equivalents and short-term investments, a decrease of $48.3 million compared to $959.9 million at December 31, 2024, primarily caused by net cash used in operations.

We believe our cash, cash equivalents and short-term investments as of June 30, 2025 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.

At September 30, 2025, we had $1,033.5 million in cash, cash equivalents and short-term investments, an increase of $73.6 million compared to $959.9 million at December 31, 2024, primarily attributable to the proceeds of Tranche B of our Senior secured debt offset by net cash used in operations.

We believe our cash, cash equivalents and short-term investments as of September 30, 2025 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 expect that our operating expenses will continue to increase over the next several years and may outpace our gross profit as we prepare to expand into additional indications beyond CNS and Lung.

As a result, we may need to raise additional capital to fund our operations.

On November 1, 2025, we will pay at maturity our Convertible Notes in the amount of $560.9 million.

The following summary of our cash flows for the periods indicated has been derived from our unaudited consolidated financial statements, which are included elsewhere in this Quarterly Report:

Six months ended June 30,

Nine months ended September 30,

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Operating cash flows are also impacted by changes in working capital as a result of collections from trade receivables and payments of accounts payables.

Net cash used in operating activities increased by $18.3 million from $33.3 million net cash used in operating activities for the six months ended June 30, 2024 to $51.6 million net cash used in operating activities for the six months ended June 30, 2025.

This was a result of a $2.3 million increase in net loss, a $10.2 million decrease of share-based compensation, a $2.4 million increase of accrued interest, a $2.3 million increase in asset write downs and impairment of field equipment, a $12.1 million increase in working capital primarily driven by a $5.6 million decrease in accounts payable and accrued expenses, a $4.7 million increase in accounts receivable, a $1.8 million increase in inventories, and an increase of $2.1 million in other long term assets offset by an increase of $3.4 million in other long-term liabilities.

Net cash used in operating activities increased by $8.1 million from $22.9 million net cash used in operating activities for the nine months ended September 30, 2024 to $31.0 million net cash used in operating activities for the nine months ended September 30, 2025.

This was primarily the result of a $9.0 million increase in net loss.

Other factors generally have offset one another, including a $12.2 million decrease of share-based compensation, a $11.8 million increase in accounts payable and accrued expenses, a $6.5 million decrease in accounts receivable and a $4.4 million increase of accrued interest.

Investing activities.

Our investing activities consist primarily of investments in and redemptions of our short-term investments as well as investments in property and equipment.

Net cash provided by investing activities was $29.5 million for the six months ended June 30, 2025, compared to $128.2 million used in investing activities for the six months ended June 30, 2024.

The $29.5 million net cash provided by investing activities for the six months ended June 30, 2025 was primarily attributable to $45.6 million of net proceeds of short term investments and the purchase of $16.1 million of property and equipment.

The $128.2 million net cash used in investing activities for the six months ended June 30, 2024 was primarily attributable to $105.0 million of net purchase of short-term investments and by the purchase of $23.2 million of property and equipment.

Net cash provided by investing activities was $100.9 million for the nine months ended September 30, 2025, compared to $118.0 million used in investing activities for the nine months ended September 30, 2024.

The $100.9 million net cash provided by investing activities for the nine months ended September 30, 2025 was primarily attributable to $122.7 million of net proceeds of short term investments and the purchase of $21.8 million of property and equipment.

The $118.0 million net cash used in investing activities for the nine months ended September 30, 2024 was primarily attributable to $84.1 million of net purchase of short-term investments and by the purchase of $33.9 million of property and equipment.

Financing activities.

Net cash provided by financing activities was $7.6 million for the six months ended June 30, 2025, as compared to $87.5 million provided by financing activities for the six months ended June 30, 2024, attributable for $97.2 million to the proceeds of senior secured debt, offset for $12.9 million for the partial repayment of the convertible loan and to the the exercise of options under the Company's share option plan.

Net cash provided by financing activities was $108.2 million for the nine months ended September 30, 2025, as compared to $87.6 million provided by financing activities for the nine months ended September 30, 2024.

The $108.2 million net cash provided by financing activities for the nine months ended September 30, 2025 was primarily attributable to $100.0 million proceeds from the closing of Tranche B of our senior secured debt and to the exercise of options under our share option plan.

The $87.6 million provided by financing activities for the nine months ended September 30, 2024 was attributable to $96.9 million of proceeds from Tranche A of the senior secured debt, offset by $12.9 million from the partial repayment of the convertible loan and to the the exercise of options under the Company's share option plan.

Convertible Notes

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Voluntary prepayment of all, but not less than all, of the term loans outstanding is permitted at any time, subject to make-whole and prepayment premiums as set forth in the Loan Agreement.

Prepayment of all term loans outstanding, subject to make-whole and prepayment premiums, is due and payable upon a change-in-control as defined in the Loan Agreement.

Prepayment of all term loans outstanding, subject to make-whole and

prepayment premiums, is due and payable upon a change-in-control as defined in the Loan Agreement.

Make-whole and prepayment premiums are due and payable for the Tranche B Loans for any voluntary prepayment of the term loans outstanding, upon a change-in-control (as defined in the Loan Agreement), and upon any acceleration of the maturity date, in each case regardless of whether the Tranche B Loan is drawn.

The Loan Agreement contains a

financial covenant only if the Tranche C Loan and/or Tranche D Loan are funded, in which case we are required to maintain at least Trailing Four Quarters of Net Revenue of at least $500.0 million, calculated on a trailing twelve-month basis as of the end of each fiscal quarter, beginning with the first quarter of 2027 based on year-end 2026 audited financial statements.

As of June 30, 2025 we have borrowed the Tranche A Loan in the principal amount of $100,000 and on that date we gave notice of intent to draw the Tranche B Loan, which will close on September 26, 2025.

The Loan Agreement contains a financial covenant only if the Tranche C Loan and/or Tranche D Loan are funded, in which case we are required to maintain at least Trailing Four Quarters of Net Revenue of at least $500.0 million, calculated on a trailing twelve-month basis as of the end of each fiscal quarter, beginning with the first quarter of 2027 based on year-end 2026 audited financial statements.

The draw of the Tranche B Loan closed on September 26, 2025.

As of September 30, 2025 the Company had borrowed the Tranche A Loan and the Tranche B Loans in the aggregate principal amount of $200.0 million.

Contractual Obligations and Commitments

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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-Q

Item 2. Management’s Discussion and Analysis