Puma Biotechnology, Inc. (NASDAQ: PBYI), a biopharmaceutical
company, announced financial results for the third quarter ended
September 30, 2019. Unless otherwise stated, all comparisons are
for the third quarter 2019 compared to the third quarter 2018.
Product revenue, net consists entirely of sales revenue from
NERLYNX®, Puma’s first commercial product. Net NERLYNX revenue in
the third quarter of 2019 was $53.5 million, compared to net
NERLYNX revenue of $52.6 million in the third quarter of 2018. Net
NERLYNX revenue in the first nine months of 2019 was $152.9
million, compared to net NERLYNX revenue of $139.4 million in the
first nine months of 2018.
Based on accounting principles generally accepted in the United
States (GAAP), Puma reported a net loss of $16.9 million, or $0.44
per share, for the third quarter of 2019, compared to a net loss of
$14.2 million, or $0.37 per share, for the third quarter of 2018.
Net loss for the first nine months of 2019 was $64.4 million, or
$1.67 per share, compared to $82.9 million, or $2.19 per share, for
the first nine months of 2018.
Non-GAAP adjusted net loss was $4.7 million, or $0.12 per share,
for the third quarter of 2019, compared to non-GAAP adjusted net
income of $6.6 million, or $0.17 per basic share and $0.16 per
diluted share, for the third quarter of 2018. Non-GAAP adjusted net
loss for the first nine months of 2019 was $18.6 million, or $0.48
per share, compared to non-GAAP adjusted net loss of $14.5 million,
or $0.38 per share, for the first nine months of 2018. Non-GAAP
adjusted net loss excludes stock-based compensation expense. For a
reconciliation of GAAP net loss to non-GAAP adjusted net loss and
GAAP net loss per share to non-GAAP adjusted net loss per share,
please see the financial tables at the end of this news
release.
Net cash used in operating activities for the third quarter of
2019 was $7.3 million, compared to $7.3 million in the third
quarter of 2018. Net cash provided by operating activities for the
first nine months of 2019 was $20.8 million, compared to net cash
used in operating activities of $31.2 million for the first nine
months of 2018. At September 30, 2019, Puma had cash, cash
equivalents and marketable securities of $110.4 million, compared
to $165.4 million at December 31, 2018.
“In the third quarter of 2019 we were pleased to report that our
supplemental New Drug Application for neratinib for the treatment
of third-line HER2-positive metastatic breast cancer was accepted
by the U.S. Food and Drug Administration,” said Alan H. Auerbach,
Chairman, Chief Executive Officer and President of Puma. “The FDA
also granted Orphan Drug Designation for neratinib for the
treatment of breast cancer patients with brain metastases during
the quarter. In addition, we were pleased to report that NERLYNX
was approved by Health Canada and ANMAT in Canada and Argentina,
respectively, during the quarter.”
Mr. Auerbach added, “We anticipate the following key milestones
over the next 12 to 18 months: (i) reporting additional data from
the Phase II CONTROL trial in the fourth quarter of 2019; (ii)
reporting Phase II data from the SUMMIT basket trial of neratinib
in HER2 nonamplified (HER2 negative) breast cancer patients with a
HER2 mutation in the fourth quarter of 2019; (iii) receiving
regulatory decisions for the extended adjuvant HER2-positive early
stage breast cancer indication in additional countries; (iv)
receiving a U.S. regulatory decision on neratinib in third-line
HER2-positive metastatic breast cancer in the second quarter of
2020; and (v) conducting a pre-NDA meeting with the FDA to discuss
accelerated approval of neratinib in HER2 mutated hormone receptor
positive breast cancer and HER2 mutated cervical cancer in either
the fourth quarter of 2020 or the first half of 2021.”
Revenue
Total revenue consists of product revenue, net from sales of
NERLYNX, Puma’s first commercial product, license revenue and
royalty revenue. For the third quarter of 2019, total revenue was
$56.4 million, of which $53.5 million was net product revenue, $2.8
million was license revenue received from Puma’s sub-licensees and
$0.1 million was royalty revenue. This compares to total revenue of
$62.6 million in the third quarter of 2018, of which $52.6 million
was net product revenue and $10.0 million was license revenue
received from one of Puma’s sub-licensees. For the first nine
months of 2019, total revenue was $209.3 million, of which $152.9
million was net product revenue, $56.2 million was license revenue
received from Puma’s sub-licensees and $0.2 million was royalty
revenue. This compares to total revenue for the first nine months
of 2018 of $179.9 million, of which $139.4 million was net product
revenue and $40.5 million was license revenue.
Operating Costs and Expenses
Operating costs and expenses were $70.8 million for the third
quarter of 2019, compared to $73.9 million for the third quarter of
2018. Operating costs and expenses for the first nine months of
2019 were $239.7 million, compared to $256.0 million for the first
nine months of 2018.
Cost of Sales
Cost of sales was $9.4 million for the third quarter of 2019 and
$26.7 million for the first nine months of 2019, compared to $9.0
million for the third quarter and $24.3 million for the first nine
months of 2018.
Selling, General and Administrative Expenses
Selling, general and administrative expenses (SG&A) were
$31.4 million for the third quarter of 2019, compared to $28.5
million for the third quarter of 2018. SG&A expenses for the
first nine months of 2019 were $110.4 million, compared to $105.2
million for the first nine months of 2018. The $5.2 million
year-to-date increase resulted primarily from increases of
approximately $10.4 million for professional fees, such as legal
fees and marketing and commercial support, and $0.6 million for
office and banking expenses. These were partially offset by
decreases of approximately $4.0 million in employee stock-based
compensation expense, $0.9 million in payroll and payroll-related
expenses, and $0.9 million in travel and meeting-related
expenses.
Research and Development Expenses
Research and development (R&D) expenses were $30.0 million
for the third quarter of 2019, compared to $36.4 million for the
third quarter of 2018. R&D expenses for the first nine months
of 2019 were $102.6 million, compared to $126.5 million for the
first nine months of 2018. The $23.9 million year-to-date decrease
resulted primarily from decreases of approximately $18.5 million in
stock-based compensation expense, $4.4 million for internal
R&D, primarily related to payroll and payroll-related expenses,
$0.8 million in clinical trial expenses, and $0.2 million in
consulting and contractor expenses related to clinical research and
regulatory activities.
Total Other Income (Expenses)
Total other expenses were $2.5 million for the third quarter and
$34.0 million for the first nine months of 2019, compared to total
other expenses of $2.9 million for the third quarter and $6.8
million for the first nine months of 2018. The $27.2 million
year-to-date increase includes approximately $16.4 million related
to a March 2019 jury verdict against Puma, $8.1 million in loss on
debt extinguishment related to fees paid in connection with our
debt refinancing in the second quarter of 2019 and a $3.5 million
increase in net interest expense. These amounts were offset by
other immaterial fluctuations.
Conference Call
Puma Biotechnology will host a conference call to report its
third quarter 2019 financial results and provide an update on the
Company’s business and outlook at 1:30 p.m. PST/4:30 p.m. EST on
Wednesday, Nov. 6, 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
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. 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. 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 may 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 for the extended adjuvant treatment of adult patients
with 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, 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. 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 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.
The recommended dose of NERLYNX is 240 mg (six 40 mg tablets)
given orally once daily with food, continuously for one year.
Antidiarrheal prophylaxis should be initiated with the first dose
of NERLYNX and continued during the first 2 months (56 days) of
treatment and as needed thereafter.
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 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. 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
Nine Months Ended
September 30,
September 30,
(Unaudited)
(Unaudited)
2019
2018
2019
2018
Revenues: Product revenue, net
$
53.5
$
52.6
$
152.9
$
139.4
License revenue
2.8
10.0
56.2
40.5
Royalty revenue
0.1
—
0.2
—
Total revenue
56.4
62.6
209.3
179.9
Operating costs and expenses: Cost of sales
9.4
9.0
26.7
24.3
Selling, general and administrative
31.4
28.5
110.4
105.2
Research and development
30.0
36.4
102.6
126.5
Total operating costs and expenses
70.8
73.9
239.7
256.0
Loss from operations
(14.4
)
(11.3
)
(30.4
)
(76.1
)
Other income (expenses): Interest income
0.6
0.6
2.4
1.1
Interest expense
(3.1
)
(3.5
)
(11.9
)
(7.2
)
Legal verdict expenses
—
—
(16.4
)
—
Loss on debt extinguishment
—
—
(8.1
)
—
Other expense
—
—
—
(0.7
)
Total other expenses
(2.5
)
(2.9
)
(34.0
)
(6.8
)
Net loss
$
(16.9
)
$
(14.2
)
$
(64.4
)
$
(82.9
)
Net loss per common share—basic and diluted
$
(0.44
)
$
(0.37
)
$
(1.67
)
$
(2.19
)
Weighted-average common shares outstanding—basic and diluted
38,893,757
38,043,174
38,675,961
37,855,249
PUMA BIOTECHNOLOGY, INC. AND
SUBSIDIARIES
LIQUIDITY AND CAPITAL
RESOURCES
(in millions,
unaudited)
September 30,
December 31,
2019
2018
Cash and cash equivalents
$
58.9
$
108.4
Marketable securities
51.5
57.0
Working capital
62.8
135.9
Stockholders' equity
17.2
34.3
Nine Months Nine Months Ended Ended September 30,
September 30,
2019
2018
Cash provided by (used in): Operating activities
$
20.8
$
(31.2
)
Investing activities
5.6
(60.2
)
Financing activities
(67.1
)
78.0
Decrease in cash and cash equivalents, and restricted cash
$
(40.7
)
$
(13.4
)
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 nine months ended September 30, 2019 stock-based
compensation represented approximately 19.9% and 21.5% 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 SUBSIDIARIES Reconciliation
of GAAP Net Loss to Non-GAAP Adjusted Net Income (Loss) and
GAAP Net Loss Per Share to Non-GAAP Adjusted Income (Loss) Per
Share (in millions except share and per share data)
(Unaudited) Three Months Ended September 30,
2019
2018
GAAP net loss
$
(16.9
)
$
(14.2
)
Adjustments: Stock-based compensation - Selling, general and
administrative
5.6
9.4
(1)
Research and development
6.6
11.4
(2)
Non-GAAP adjusted net income (loss)
$
(4.7
)
$
6.6
GAAP net loss per share—basic
$
(0.44
)
$
(0.37
)
Adjustment to net loss (as detailed above)
0.32
0.54
Non-GAAP adjusted basic net income (loss) per share
$
(0.12
)
$
0.17
(3)
GAAP net loss per share—diluted
$
(0.44
)
$
(0.36
)
Adjustment to net loss (as detailed above)
0.32
0.52
Non-GAAP adjusted diluted net income (loss) per share
$
(0.12
)
(5)
$
0.16
(6)
Nine Months Ended September 30,
2019
2018
GAAP net loss
$
(64.4
)
$
(82.9
)
Adjustments: Stock-based compensation - Selling, general and
administrative
22.9
27.0
(1)
Research and development
22.9
41.4
(2)
Non-GAAP adjusted net loss
$
(18.6
)
$
(14.5
)
GAAP net loss per share—basic and diluted
$
(1.67
)
$
(2.19
)
Adjustment to net loss (as detailed above)
1.19
1.81
Non-GAAP adjusted basic and diluted net loss per share
$
(0.48
)
$
(0.38
)
(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 loss per share was calculated based on 38,893,757 and
38,043,174 weighted-average shares of common stock outstanding for
the three months ended September 30, 2019 and 2018, respectively.
(4) Non-GAAP adjusted basic net loss per share was calculated based
on 38,675,961 and 37,855,249 weighted-average shares of common
stock outstanding for the nine months ended September 30, 2019 and
2018, respectively. (5) 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 months ended September 30, 2019 as these shares
would be considered anti-dilutive. (6) Non-GAAP adjusted diluted
net income per share was calculated based on 39,677,446 weighted
average common shares outstanding and potentially dilutive common
stock equivalents (stock options, restricted stock units and
warrants) for the three months ended September 30, 2018.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191106005906/en/
Alan H. Auerbach or Mariann Ohanesian, Puma Biotechnology, Inc.,
+1 424 248 6500 info@pumabiotechnology.com
ir@pumabiotechnology.com
David Schull, Russo Partners, +1-212-845-4200
david.schull@russopartnersllc.com
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