What NovoCure Ltd. told the SEC could break it.

NovoCure concentrates key activities in Israel: its R&D operations are in Haifa, and certain key suppliers manufacture their goods in Israel. Given the high-conflict nature of the region, Israel is subject to additional political, economic and military constraints, and an escalation (war, mobilization of reservists, infrastructure disruption, or supplier interruption) could materially adversely affect NovoCure's R&D and the supply of components produced by Israeli suppliers. A distinctive country (Israel) R&D-and-supplier concentration with geopolitical risk.

“we have research facilities located in Israel, and certain key suppliers manufacture their goods in Israel. Due to the high-conflict nature of this area, Israel is subject to additional political, economic and military confines, which could result in a material adverse effect on our operations.”

NovoCure's cost of revenues is exposed to import tariffs on its devices/arrays and components: higher tariffs (~$5.2 million in 2025) plus higher per-array costs drove gross margin down to 75% in 2025 from 77% in 2024, and it expects margins to continue to be affected (offset by hoped-for array-cost optimization). It explicitly flags that changes in the tariff environment could further impact results. As a cross-border manufacturer/distributor (Switzerland HQ, U.S./Israel operations, global sales), tariff escalation raises landed costs it may not fully pass through. A realized, quantified trade-policy exposure.

“The decrease in gross margin is due to the decrease of prior period claims in the U.S. and the aforementioned higher cost of revenues, mostly related to tariffs and a higher cost per array.”

NovoCure obtains some critical materials for its Tumor Treating Fields devices and transducer arrays from single-source suppliers in certain jurisdictions, and is still developing and obtaining regulatory approval for second sources across all jurisdictions. It holds safety stocks of single-source components to buffer against disruption. Because medical-device components require regulatory qualification, a disruption, quality failure, or loss of a single-source supplier (or a contract manufacturer) could interrupt array/device supply until an alternative is qualified — and it took a $3.2M Optune Lua array obsolescence charge in 2025. Suppliers unnamed, so a sole-source/component-concentration risk.

“While we currently obtain some critical materials for use in certain jurisdictions from single source suppliers, we have developed or are in the process of developing and obtaining regulatory approval for second sources for critical materials in all jurisdictions.”