Puma Biotechnology, Inc. (NASDAQ: PBYI), a biopharmaceutical
company, announced financial results for the first quarter ended
March 31, 2019. Unless otherwise stated, all comparisons are for
the first quarter 2019 compared to the first quarter of 2018.
Product revenue, net consists entirely of sales revenue from
NERLYNX®, Puma’s first commercial product. Net NERLYNX revenue in
the first quarter of 2019 was $45.6 million, compared to net
NERLYNX revenue of $36.0 million in the first quarter of 2018.
Based on accounting principles generally accepted in the United
States (GAAP), Puma reported a net loss of $10.1 million, or $0.26
per share, for the first quarter of 2019, compared to a net loss of
$24.3 million, or $0.65 per share, for the first quarter of
2018.
Non-GAAP adjusted net income was $8.1 million, or $0.21 per
basic share and $0.20 per diluted share, for the first quarter of
2019, compared to non-GAAP adjusted net income of $1.1 million, or
$0.03 per basic share and $0.02 per diluted share, for the first
quarter of 2018. Non-GAAP adjusted net income excludes stock-based
compensation expense, which represents a significant portion of
overall expense. For a reconciliation of GAAP net loss to non-GAAP
adjusted net income and GAAP net loss per share to non-GAAP
adjusted net income per share, please see the financial tables at
the end of this news release.
Net cash used in operating activities for the first quarter of
2019 was $16.1 million, compared to $6.3 million in the first
quarter of 2018. At March 31, 2019, Puma had cash and cash
equivalents of $48.8 million and marketable securities of $101.6
million, compared to cash and cash equivalents of $108.4 million
and marketable securities of $57.0 million at December 31, 2018.
Puma’s cash and cash equivalents at March 31, 2019 did not include
a $60.0 million upfront license payment that was received in April
2019. At March 31, 2019, the $60.0 million upfront license payment
was recorded in accounts receivable.
“Puma experienced lower than expected net product revenue in the
first quarter of 2019,” said Alan H. Auerbach, Chairman, Chief
Executive Officer and President of Puma. “This reduction in net
revenues was the result of an increase in expenses charged against
gross revenue for the quarter. Additionally, net product revenue
declined in the quarter as a result of an increase in patients
discontinuing treatment with NERLYNX.”
Mr. Auerbach added, “During 2019, we anticipate the following
key milestones for Puma: (i) presenting data from the Phase III
trial of neratinib in third-line metastatic breast cancer patients
in the second quarter of 2019; (ii) filing a new drug application
for neratinib based on the results of the Phase III trial in
third-line metastatic breast cancer in the summer of 2019; (iii)
meeting with the FDA to discuss the clinical development and
regulatory strategy for the SUMMIT trial in the summer of 2019;
(iv) receiving regulatory decisions for the extended adjuvant
HER2-positive early stage breast cancer indication in other
countries in the second half of 2019; (v) reporting additional data
from the Phase II CONTROL trial in the second quarter of 2019; and
(vi) reporting Phase II data from the SUMMIT basket trial in
patients with HER2 mutations in the second half of 2019.”
Revenue
Total revenue consists of product revenue, net from sales of
NERLYNX, Puma’s first commercial product, and license revenue. For
the first quarter ended March 31, 2019, total revenue was $99.1
million, of which $45.6 million was net NERLYNX revenue and $53.5
million was license revenue received from Puma’s sub-licensees.
This compares to total revenue of $66.5 million in the first
quarter of 2018, of which $36.0 million was net NERLYNX revenue and
$30.5 million was license revenue.
Operating Costs and Expenses
Total operating costs and expenses were $89.2 million for the
first quarter of 2019, compared to $89.9 million for the first
quarter of 2018.
Cost of Sales:
Cost of sales was $8.0 million for the first quarter of 2019,
compared to $6.4 million for the first quarter of 2018.
Selling, General and Administrative Expenses:
Selling, general and administrative expenses were $45.5 million
for the first quarter of 2019, compared to $36.6 million for the
first quarter of 2018. The $8.9 million increase resulted primarily
from increases of approximately $6.8 million for professional fees
such as legal fees and marketing and commercial support,
approximately $0.9 million related to employee stock-based
compensation expense, approximately $0.7 million in payroll and
payroll related expenses, and approximately $0.4 million in travel
and meeting-related expenses.
Research and Development Expenses:
Research and development (R&D) expenses were $35.7 million
for the first quarter of 2019, compared to $46.9 million for the
first quarter of 2018. The $11.2 million decrease resulted
primarily from decreases of approximately $8.1 million of
stock-based compensation, $2.1 million in internal R&D
primarily related to payroll and payroll related expenses, $1.5
million in clinical trial expenses primarily due to external
clinical service, external manufacturing, testing and logistics,
partially offset by increases in CRO-related expenses, grant
expenditures and comparator drug expenses.
Total Other Income (Expenses)
Total other expenses were $20.0 million for the first quarter of
2019, compared to total other expenses of $0.9 million for the
first quarter of 2018. Other expense recorded in the first quarter
of 2019 includes $16.4 million related to a March 2019 jury verdict
against Puma in a defamation lawsuit, Eshelman v. Puma
Biotechnology, Inc., et al., and represents $22.4 million in
damages awarded to the plaintiff, net of a $6.0 million anticipated
insurance receivable. Puma intends to appeal the verdict and has
filed a motion for a new trial or, in the alternative, a reduced
damages award. The plaintiff has also filed motions seeking
attorneys’ fees and pre-judgment interest. The total amount of
damages to be paid by Puma remains subject to the exhaustion of
post-trial motions and appeals.
Conference Call
Puma Biotechnology will host a conference call to report its
first quarter 2019 financial results and provide an update on the
Company’s business and outlook at 1:30 p.m. PDT/4:30 p.m. EDT on
Thursday, May 9, 2019. The call may be accessed by dialing
1-877-709-8150 (domestic) or 1-201-689-8354 (international) at
least 10 minutes prior to the start of the call and referencing the
“Puma Biotechnology Conference Call.” A live webcast of the
conference call and presentation slides may be accessed on the
Investors section of the Puma Biotechnology website at
http://www.pumabiotechnology.com/. A replay of the call will be
available approximately one hour after completion of the call and
will be archived on the company's website for 90 days.
About Puma Biotechnology
Puma Biotechnology, Inc. is a biopharmaceutical company with a
focus on the development and commercialization of innovative
products to enhance cancer care. The Company in-licenses the global
development and commercialization rights to three drug candidates —
PB272 (neratinib, oral), PB272 (neratinib, intravenous) and PB357.
Neratinib, oral was approved by the FDA in July 2017 for the
extended adjuvant treatment of adult patients with early stage
HER2-overexpressed/amplified breast cancer, following adjuvant
trastuzumab-based therapy, and is marketed in the United States as
NERLYNX® (neratinib) tablets. NERLYNX was granted marketing
authorization by the European Commission in September 2018 for the
extended adjuvant treatment of adult patients with early stage
hormone receptor-positive HER2-overexpressed/amplified breast
cancer and who are less than one year from completion of prior
adjuvant trastuzumab-based therapy. NERLYNX is a registered
trademark of Puma Biotechnology, Inc.
Further information about Puma Biotechnology may be found at
www.pumabiotechnology.com.
IMPORTANT SAFETY INFORMATION
NERLYNX® (neratinib) tablets, for oral
use
INDICATIONS AND USAGE: NERLYNX is a kinase inhibitor
indicated for the extended adjuvant treatment of adult patients
with early stage HER2 overexpressed/amplified breast cancer, to
follow adjuvant trastuzumab-based therapy.
CONTRAINDICATIONS: None
WARNINGS AND PRECAUTIONS:
• Diarrhea: Aggressively manage diarrhea occurring
despite recommended prophylaxis with additional antidiarrheals,
fluids, and electrolytes as clinically indicated. Withhold NERLYNX
in patients experiencing severe and/or persistent diarrhea.
Permanently discontinue NERLYNX in patients experiencing Grade 4
diarrhea or Grade ≥ 2 diarrhea that occurs after maximal dose
reduction.
• Hepatotoxicity: Monitor liver function tests monthly
for the first 3 months of treatment, then every 3 months while on
treatment and as clinically indicated. Withhold NERLYNX in patients
experiencing Grade 3 liver abnormalities and permanently
discontinue NERLYNX in patients experiencing Grade 4 liver
abnormalities.
• Embryo-Fetal Toxicity: NERLYNX can cause fetal harm.
Advise patients of potential risk to a fetus and to use effective
contraception.
ADVERSE REACTIONS: The most common adverse reactions (≥
5%) were diarrhea, nausea, abdominal pain, fatigue, vomiting, rash,
stomatitis, decreased appetite, muscle spasms, dyspepsia, AST or
ALT increase, nail disorder, dry skin, abdominal distention,
epistaxis, weight decreased and urinary tract infection.
To report SUSPECTED ADVERSE REACTIONS, contact Puma
Biotechnology, Inc. at 1-844-NERLYNX (1-844-637-5969) and
www.NERLYNX.com or FDA at 1-800-FDA-1088 or
www.fda.gov/medwatch.
DRUG INTERACTIONS:
- Gastric acid reducing agents: Avoid
concomitant use with proton pump inhibitors (PPI) and H2-receptor
antagonists. Separate NERLYNX by at least 2 hours before or 10
hours after H2-receptor antagonists.
- Strong or moderate CYP3A4 inhibitors:
Avoid concomitant use.
- Strong or moderate CYP3A4 inducers:
Avoid concomitant use.
- P-glycoprotein (P-gp) substrates:
Monitor for adverse reactions of narrow therapeutic agents that are
P-gp substrates when used concomitantly with NERLYNX.
USE IN SPECIFIC POPULATIONS:• Lactation: Advise
women not to breastfeed.
Please see Full Prescribing Information for additional safety
information.
Forward-Looking Statements
This press release contains forward-looking statements,
including statements regarding Puma’s anticipated milestones for
2019. All forward-looking statements involve risks and
uncertainties that could cause Puma’s actual results to differ
materially from the anticipated results and expectations expressed
in these forward-looking statements. These statements are based on
current expectations, forecasts and assumptions, and actual
outcomes and results could differ materially from these statements
due to a number of factors, which include, but are not limited to,
the risk factors disclosed in the periodic and current reports
filed by Puma with the Securities and Exchange Commission from time
to time, including Puma’s Annual Report on Form 10-K for the year
ended December 31, 2018. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date hereof. The Company assumes no obligation to update
these forward-looking statements, except as required by law.
PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS (in millions except
share and per share data) Three Months Ended March 31,
(Unaudited) 2019 2018 Revenues: Product
revenue, net $ 45.6 $ 36.0 License revenue 53.5
30.5 Total revenue 99.1 66.5 Operating costs and
expenses: Cost of sales 8.0 6.4 Selling, general and administrative
45.5 36.6 Research and development 35.7 46.9
Total operating costs and expenses 89.2
89.9 Profit from operations 9.9 (23.4 )
Other income (expenses): Interest income 0.9 0.2 Interest expense
(4.5 ) (1.1 ) Legal verdict expenses (16.4 ) — Other expense
- — Total other expenses (20.0 )
(0.9 ) Net loss $ (10.1 ) $ (24.3 ) Net loss per common
share—basic and diluted $ (0.26 ) $ (0.65 ) Weighted-average common
shares outstanding—basic and diluted 38,481,824
37,699,024
PUMA
BIOTECHNOLOGY, INC. AND SUBSIDIARY LIQUIDITY AND CAPITAL
RESOURCES (in millions) March 31, December 31,
2019 2018 Cash and cash
equivalents $ 48.8 $ 108.4 Marketable securities 101.6 57.0 Working
capital 154.8 135.9 Stockholders' equity 43.5 34.3 Three
Months Three Months Ended Ended March 31, March 31, 2019
2018 Cash provided by (used in): Operating
activities $ (16.1 ) $ (6.3 ) Investing activities (44.6 ) —
Financing activities 1.1 3.2
Decrease in cash and cash equivalents, and
restricted cash
$ (59.6 ) $ (3.1 )
Non-GAAP Financial Measures
In addition to operating results as calculated in accordance
with GAAP, Puma uses certain non-GAAP financial measures when
planning, monitoring, and evaluating operational performance. The
following table presents the Company’s net loss and net loss per
share calculated in accordance with GAAP and as adjusted to remove
the impact of employee stock-based compensation. For the three
months ended March 31, 2019 and 2018, stock-based compensation
represented approximately 22.4% and 30.4% of operating expenses,
respectively, in each case excluding cost of sales. Puma’s
management believes that these non-GAAP financial measures are
useful to enhance understanding of Puma’s financial performance,
and are more indicative of its operational performance and
facilitate a better comparison among fiscal periods. These non-GAAP
financial measures are not, and should not be viewed as,
substitutes for GAAP reporting measures.
PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARY
Reconciliation of GAAP Net Loss to Non-GAAP Adjusted Net Income
and GAAP Net Loss Per Share to Non-GAAP Adjusted Income Per
Share (in millions except share and per share data)
(Unaudited) Three Months
Ended March 31, 2019 2018
GAAP net loss $ (10.1 ) $ (24.3 ) Adjustments: Stock-based
compensation - Selling, general and administrative 9.9 9.0 (1)
Research and development 8.3 16.4 (2)
Non-GAAP adjusted net income $ 8.1 $ 1.1 GAAP
net loss per share - basic $ (0.26 ) $ (0.65 ) Adjustment to net
loss (as detailed above) 0.47 0.68
Non-GAAP adjusted net income per share $ 0.21 $ 0.03
(3) GAAP net loss per share—diluted $ (0.26 ) $ (0.60 ) Adjustment
to net loss (as detailed above) 0.46 0.62
Non-GAAP adjusted diluted net income per share $ 0.20
$ 0.02 (4) (1) To reflect a non-cash charge to
operating expense for selling, general, and administrative
stock-based compensation. (2) To reflect a non-cash charge
to operating expense for research and development stock-based
compensation. (3) Non-GAAP adjusted basic net income per
share was calculated based on 38,481,824 and 37,699,024
weighted-average shares of common stock outstanding for the three
months ended March 31, 2019 and 2018, respectively. (4)
Non-GAAP adjusted diluted net income per share was calculated based
on 39,281,714 and 40,642,311 weighted-average common shares
outstanding and potentially dilutive common stock equivalents
(stock options, restricted stock units and warrants) for the three
months ended March 31, 2019 and 2018, respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190509005898/en/
Alan H. Auerbach or Mariann Ohanesian, Puma Biotechnology, Inc.,
+1 424 248
6500info@pumabiotechnology.comir@pumabiotechnology.com
David Schull or Juliette Gorson, Russo Partners, +1 212 845 4271
or +1 212 845
4235david.schull@russopartnersllc.comjuliette.gorson@russopartnersllc.com
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