Puma Biotechnology, Inc. (NASDAQ: PBYI), a biopharmaceutical
company, announced financial results for the second quarter ended
June 30, 2020. Unless otherwise stated, all comparisons are for the
second quarter of 2020 compared to the second quarter of 2019.
Product revenue, net consists entirely of sales revenue from
NERLYNX®, Puma’s first commercial product. Net NERLYNX product
revenue in the second quarter of 2020 was $48.8 million, compared
to $53.8 million in the second quarter of 2019. Net NERLYNX product
revenue in the first six months of 2020 was $97.4 million, compared
to $99.4 million in the first six months of 2019.
Based on accounting principles generally accepted in the United
States (GAAP), Puma reported net income of $3.4 million, or $0.09
per basic share and $0.08 per diluted share, for the second quarter
of 2020, compared to a net loss of $37.4 million, or $0.97 per
basic and diluted share, for the second quarter of 2019. Net loss
for the first six months of 2020 was $13.5 million, or $0.34 per
basic and diluted share, compared to a net loss of $47.5 million,
or $1.23 per basic and diluted share, for the first six months of
2019.
Non-GAAP adjusted net income was $14.0 million, or $0.36 per
basic share and $0.35 per diluted share, for the second quarter of
2020, compared to non-GAAP adjusted net loss of $22.0 million, or
$0.57 per basic and diluted share, for the second quarter of 2019.
Non-GAAP adjusted net income for the first six months of 2020 was
$6.0 million, or $0.15 per basic and diluted share, compared to
non-GAAP adjusted net loss of $13.9 million, or $0.36 per basic and
diluted share, for the first six months of 2019. Non-GAAP adjusted
net income (loss) excludes stock-based compensation expense. For a
reconciliation of GAAP net income (loss) to non-GAAP adjusted net
income (loss) and a reconciliation of GAAP net income (loss) per
share to non-GAAP adjusted net income (loss) per share, please see
the financial tables at the end of this news release.
Net cash provided by operating activities for the second quarter
of 2020 was $16.2 million, compared to $44.2 million for the second
quarter of 2019. Net cash provided by operating activities for the
first six months of 2020 was $4.7 million, compared to $28.1
million for the first six months of 2019. At June 30, 2020, Puma
had cash, cash equivalents and marketable securities of $107.3
million, compared to $111.6 million at December 31, 2019.
“We are pleased to announce that despite the challenges
presented by the COVID-19 situation as well as a significant
inventory draw down by specialty pharmacies in the quarter, we were
able to achieve NERLYNX revenues that were within the Company’s
previously stated second quarter guidance range,” said Alan H.
Auerbach, Chairman, Chief Executive Officer and President of Puma.
“Although we anticipate that COVID-19 may continue to impact our
revenues going forward, we remain focused on and committed to
providing support to patients battling breast cancer. The addition
of Jeff Ludwig to our team as Chief Commercial Officer demonstrates
our commitment to increasing the global success of NERLYNX.
Maintaining the health and safety of our employees remains a
priority for all of us at Puma, and we are pleased with the
accomplishments made by our team as they adjusted to working
remotely and responding to any COVID-related challenges.”
Mr. Auerbach added, “We anticipate the following key milestones
over the next 12 months: (i) reporting Phase II data from the
hormone receptor positive breast cancer cohort of the SUMMIT trial
of neratinib in patients with HER2 mutations in the fourth quarter
of 2020; (ii) reporting additional data from the Phase II CONTROL
trial in the fourth quarter of 2020; (iii) reporting data from the
Phase II TBCRC-022 trial of the combination of Kadcyla plus
neratinib in patients with HER2 positive breast cancer with brain
metastases who have previously been treated with Kadcyla in the
first half of 2021; (iv) conducting a pre-NDA meeting with the FDA
to discuss accelerated approval of neratinib in HER2 mutated
hormone receptor positive breast cancer in the first half of 2021;
and (v) receiving regulatory decisions for an extended adjuvant
HER2-positive early stage breast cancer indication in additional
countries.”
Revenue
Total revenue consists of product revenue, net from sales of
NERLYNX, Puma’s first commercial product, license revenue, and
royalty revenue. For the second quarter of 2020, total revenue was
$70.6 million, of which $48.8 million was net product revenue,
$20.7 million was license revenue received from Puma’s
sub-licensees, and $1.1 million was royalty revenue from Puma’s
sub-licensees. This compares to total revenue for the second
quarter of 2019 of $53.9 million, of which $53.8 million was net
product revenue and $0.1 million was royalty revenue from Puma’s
sub-licensees. For the first six months of 2020, total revenue was
$121.8 million, of which $97.4 million was net product revenue,
$22.7 million was license revenue received from Puma’s
sub-licensees, and $1.7 million was royalty revenue also from
Puma’s sub-licensees. This compares to total revenue for the first
six months of 2019 of $153.0 million, of which $99.4 million was
net product revenue, $53.5 million was license revenue received
from Puma’s sub-licensees, and $0.1 million was royalty revenue
also from Puma’s sub-licensees.
Operating Costs and Expenses
Total operating costs and expenses were $63.5 million for the
second quarter of 2020, compared to $79.7 million for the second
quarter of 2019. Operating costs and expenses in the first six
months of 2020 were $128.9 million, compared to $168.9 million in
the first six months of 2019.
Cost of Sales
Cost of sales was $9.4 million for the second quarter of 2020
and $18.5 million for the first six months of 2020, compared to
$9.3 million for the second quarter of 2019 and $17.3 million for
the first six months of 2019.
Selling, General and Administrative Expenses
Selling, general and administrative (SG&A) expenses were
$29.4 million for the second quarter of 2020, compared to $33.5
million for the second quarter of 2019. SG&A expenses for the
first six months of 2020 were $60.3 million, compared to $79.0
million for the first six months of 2019. The $18.7 million
year-over-year decrease for the first six months resulted primarily
from a decrease in stock-based compensation expense of
approximately $7.9 million, a decrease in professional fees and
expenses of approximately $7.7 million, a decrease in expenses
associated with travel and meetings of approximately $2.5 million,
and a decrease of approximately $0.4 million in payroll and
payroll-related expenses.
Research and Development Expenses
Research and development (R&D) expenses were $24.7 million
for the second quarter of 2020, compared to $36.9 million for the
second quarter of 2019. R&D expenses for the first six months
of 2020 were $50.1 million, compared to $72.6 million for the first
six months of 2019. The $22.5 million year-over-year decrease for
the first six months resulted primarily from a decrease in clinical
trial expense of approximately $13.5 million, a decrease in
employee stock-based compensation expense of approximately $6.1
million, and a decrease in consultant and contractors expenses of
approximately $2.9 million primarily due to the close out of
certain clinical trials.
Total Other Income (Expenses)
Total other expenses were $3.7 million for the second quarter of
2020 and $6.4 million for the first six months of 2020, compared to
total other expenses of $11.6 million for the second quarter of
2019 and $31.6 million for the first six months of 2019. The $25.2
million year-over-year decrease for the first six months primarily
resulted from a decrease in debt extinguishment loss of
approximately $8.1 million, a decrease in legal verdict expense of
approximately $16.2 million, and a decrease in interest expense of
approximately $2.0 million, partially offset by a decrease in
interest income of approximately $1.3 million.
Conference Call
Puma Biotechnology will host a conference call to report its
second quarter 2020 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, August 6, 2020. The call may be accessed by dialing
1-877-709-8150 (domestic) or 1-201-689-8354 (international). Please
dial in at least 10 minutes in advance and inform the operator that
you would like to join 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 shortly after completion of the call and will be archived
on Puma’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. Puma in-licenses the global
development and commercialization rights to PB272 (neratinib,
oral), PB272 (neratinib, intravenous) and PB357. Neratinib, oral
was approved by the U.S. Food and Drug Administration 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. In February 2020, NERLYNX
was also approved by the FDA in combination with capecitabine for
the treatment of adult patients with advanced or metastatic
HER2-positive breast cancer who have received two or more prior
anti-HER2-based regimens in the metastatic setting. NERLYNX was
granted marketing authorization by the European Commission in
August 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 can be found at
www.pumabiotechnology.com.
Important Safety Information Regarding NERLYNX® (neratinib)
U.S. Indication
NERLYNX® (neratinib) tablets, for oral use
INDICATIONS AND USAGE: NERLYNX is a kinase inhibitor
indicated:
- As a single agent, for the extended adjuvant treatment of adult
patients with early-stage HER2-positive breast cancer, to follow
adjuvant trastuzumab-based therapy.
- In combination with capecitabine, for the treatment of adult
patients with advanced or metastatic HER2-positive breast cancer,
who have received two or more prior anti-HER2 based regimens in the
metastatic setting.
CONTRAINDICATIONS: None
WARNINGS AND PRECAUTIONS:
- Diarrhea: Aggressively manage diarrhea. If diarrhea
occurs despite recommended prophylaxis, treat 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 (reported in ≥ 5% of patients)
were as follows:
- NERLYNX as a single agent: Diarrhea, nausea, abdominal pain,
fatigue, vomiting, rash, stomatitis, decreased appetite, muscle
spasms, dyspepsia, AST or ALT increased, nail disorder, dry skin,
abdominal distention, epistaxis, weight decreased, and urinary
tract infection.
- NERLYNX in combination with capecitabine: Diarrhea, nausea,
vomiting, decreased appetite, constipation, fatigue/asthenia,
weight decreased, dizziness, back pain, arthralgia, urinary tract
infection, upper respiratory tract infection, abdominal distention,
renal impairment, and muscle spasms.
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. When patients require gastric acid reducing
agents, use an H2-receptor antagonist or antacid. Separate NERLYNX
by at least 3 hours with antacids. Separate NERLYNX by at least 2
hours before or 10 hours after H2-receptor antagonists.
- Strong CYP3A4 inhibitors: Avoid concomitant use.
- Moderate CYP3A4 and P-glycoprotein (P-gp) dual 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.
To help ensure patients have access to NERLYNX, Puma has
implemented the Puma Patient Lynx support program to assist
patients and healthcare providers with reimbursement support and
referrals to resources that can help with financial assistance.
More information on the Puma Patient Lynx program can be found at
www.NERLYNX.com or 1-855-816-5421.
Forward-Looking Statements
This news release includes forward-looking statements, including
statements regarding Puma’s anticipated milestones. 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, any
adverse impact on Puma’s business or the global economy and
financial markets, generally, from the global COVID-19 pandemic,
and the other risk factors disclosed in Puma’s Annual Report on
Form 10-K for the year ended December 31, 2019, Puma’s Quarterly
Report on Form 10-Q for the quarter ended March 31, 2020, and
subsequent reports filed by Puma with the Securities and Exchange
Commission from time to time. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date hereof. Puma assumes no obligation to update
these forward-looking statements, except as required by law.
PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (in millions except
share and per share data) Three Months Ended Six Months
Ended June 30, June 30,
2020
2019
2020
2019
(Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues: Product
revenue, net
$
48.8
$
53.8
$
97.4
$
99.4
License revenue
20.7
—
22.7
53.5
Royalty revenue
1.1
0.1
1.7
0.1
Total revenue
70.6
53.9
121.8
153.0
Operating costs and expenses: Cost of sales
9.4
9.3
18.5
17.3
Selling, general and administrative
29.4
33.5
60.3
79.0
Research and development
24.7
36.9
50.1
72.6
Total operating costs and expenses
63.5
79.7
128.9
168.9
Income (loss) from operations
7.1
(25.8
)
(7.1
)
(15.9
)
Other income (expenses): Interest income
0.1
0.9
0.5
1.8
Interest expense
(3.8
)
(4.4
)
(6.9
)
(8.9
)
Legal verdict expense
(0.1
)
—
(0.2
)
(16.4
)
Loss on debt extinguishment
—
(8.1
)
—
(8.1
)
Other income
0.1
—
0.2
—
Total other expenses
(3.7
)
(11.6
)
(6.4
)
(31.6
)
Net income (loss)
$
3.4
$
(37.4
)
$
(13.5
)
$
(47.5
)
Net income (loss) per share of common stock—basic
$
0.09
$
(0.97
)
$
(0.34
)
$
(1.23
)
Net income (loss) per share of common stock—diluted
$
0.08
$
(0.97
)
$
(0.34
)
$
(1.23
)
Weighted-average shares of common stock outstanding—basic
39,432,030
38,647,775
39,361,596
38,565,258
Weighted-average shares of common stock outstanding—diluted
39,997,571
38,647,775
39,361,596
38,565,258
PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARIES
LIQUIDITY AND CAPITAL RESOURCES (in millions)
June 30, December 31,
2020
2019
(Unaudited) Cash and cash equivalents
$
90.9
$
60.0
Marketable securities
16.4
51.6
Working capital
64.7
75.5
Stockholders' equity
23.4
17.5
Six Months Six Months Ended Ended June 30, June 30,
2020
2019
(Unaudited) (Unaudited) Cash provided by (used in): Operating
activities
$
4.7
$
28.1
Investing activities
25.1
(33.4
)
Financing activities
-
(67.1
)
Increase (decrease) in cash and cash equivalents, and
restricted cash
$
29.8
$
(72.4
)
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 and six months ended June 30, 2020, stock-based compensation
represented approximately 19.7% and 17.7% of operating expenses,
respectively, and 21.9% and 22.2%, respectively, for the same
periods in 2019, 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,
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 SUBSIDIARIES Reconciliation
of GAAP Net Income (Loss) to Non-GAAP Adjusted Net Income (Loss)
and GAAP Net Income (Loss) Per Share to Non-GAAP Adjusted
Income (Loss) Per Share (in millions except share and per
share data) (Unaudited) Three Months Ended
June 30,
2020
2019
GAAP net income (loss)
$
3.4
$
(37.4
)
Adjustments: Stock-based compensation - Selling, general and
administrative
4.7
7.4
(1)
Research and development
5.9
8.0
(2)
Non-GAAP adjusted net income (loss)
$
14.0
$
(22.0
)
GAAP net income (loss) per share—basic
$
0.09
$
(0.97
)
Adjustment to net income (loss) (as detailed above)
0.27
0.40
Non-GAAP adjusted basic net income (loss) per share
$
0.36
(3)
$
(0.57
)
(4)
GAAP net income (loss) per share—diluted
$
0.08
$
(0.97
)
Adjustment to net income (loss) (as detailed above)
0.27
0.40
Non-GAAP adjusted diluted net income (loss) per share
$
0.35
(5)
$
(0.57
)
(6)
Six Months Ended June 30,
2020
2019
GAAP net income (loss)
$
(13.5
)
$
(47.5
)
Adjustments: Stock-based compensation - Selling, general and
administrative
9.4
17.3
(1)
Research and development
10.1
16.3
(2)
Non-GAAP adjusted net income (loss)
$
6.0
$
(13.9
)
GAAP net income (loss) per share—basic
$
(0.34
)
$
(1.23
)
Adjustment to net income (loss) (as detailed above)
0.49
0.87
Non-GAAP adjusted basic net income (loss) per share
$
0.15
(3)
$
(0.36
)
(4)
GAAP net income (loss) per share—diluted
$
(0.34
)
$
(1.23
)
Adjustment to net income (loss) (as detailed above)
0.49
0.87
Non-GAAP adjusted diluted net income (loss) per share
$
0.15
(5)
$
(0.36
)
(6)
(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 (loss) per share was calculated based on 39,432,030 and
39,361,596 weighted-average shares of common stock outstanding for
the three and six months ended June 30, 2020, respectively. (4)
Non-GAAP adjusted basic net income (loss) per share was calculated
based on 38,647,775 and 38,565,258 weighted-average shares of
common stock outstanding for the three and six months ended June
30, 2019, respectively. (5) Non-GAAP adjusted diluted net income
per share was calculated based on 39,997,571 and 39,815,867
weighted-average shares of common stock outstanding for the three
and six months ended June 30, 2020, respectively. (6) Potentially
dilutive common stock equivalents (stock options, restricted stock
units and warrants) were not included in this non-GAAP adjusted
diluted net loss per share for the three and six months ended June
30, 2019, as these shares would be considered anti-dilutive.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200806005684/en/
Alan H. Auerbach or Mariann Ohanesian, Puma Biotechnology, Inc.,
+1 424 248 6500 info@pumabiotechnology.com or
ir@pumabiotechnology.com
David Schull or Maggie Beller, Russo Partners, +1 212 845 4200
david.schull@russopartnersllc.com or
maggie.beller@russopartnersllc.com
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