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What's in the Cards for Puma Biotech (PBYI) in Q2 Earnings?

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What's in the Cards for Puma Biotech (PBYI) in Q2 Earnings?

On Puma Biotechnology's (PBYI) second-quarter 2018 earnings call, investor focus will be on the sales figures of its only marketed drug Nerlynx.

Puma Biotechnology, Inc. PBYI is scheduled to report second-quarter results on Aug 9 after the market closes.

The company’s earnings history has been impressive so far, having topped expectations in all the previous four quarters with an average beat of 58.87%. Last reported quarter, the company trumped the Zacks Consensus Estimate with a positive surprise of 102.67%.

However, shares of Puma have plummeted 51.9% so far this year, underperforming the industry’s decline of 4.8%.

Let’s see, how things are shaping up for the upcoming release.

Factors at Play

Puma Biotech’s only marketed product, Nerlynx (neratinib), was launched last July in the United States for an extended adjuvant treatment of HER2-positive early stage breast cancer. The drug generated sales of $36 million in first-quarter 2018, a sequential surge of 79% from $20.1 million recorded in the earlier reported quarter.

We remind investors that in the first quarter of 2018, the National Comprehensive Cancer Network (NCCN) guidelines were updated to include Nerlynx as a recommended combination treatment option for breast cancer patients with brain metastases. Most physicians use the NCCN guidelines to determine the best course of treatment for their cancer patients. Investors will be keen to know if sales of Nerlynx picked up in the second quarter.

Late last month, Puma Biotech filed a regulatory application looking for the approval of Nerlynx in Canada. Notably, Puma entered into a collaborative agreement with Strata Oncology, Inc to drive patient enrollment in the phase II SUMMIT study of Nerlynx. Per the agreement, Strata will refer HER2-mutated advanced cancer patients identified through the Strata Trial for enrollment in the trial of PB272 neratinib.

In June, Puma Biotech announced that the Committee for Medicinal Products for Human Use (CHMP) has adopted a positive opinion recommending a marketing approval for Nerlynx in Europe. The CHMP recommendation will now be reviewed by the European Commission (EC) to approve Nerlynx for the same indication.

Several additional studies on Nerlynx targeting different types of breast cancer patient populations and in earlier-line settings are under way. Also, several phase II combination programs evaluating Nerlynx for the treatment of breast cancer are going on. Notably, Puma Biotech expects to present data from the phase III NALA analysis, evaluating Nerlynx in third-line HER2-positive metastatic breast cancer during the fourth quarter of 2018.

Apart from the HER2-positive breast cancer indication, the company believes that neratinib holds great potential for treating several other cancers including NSCLC and other tumor types, which over-express or have a mutation in HER2.

We expect management to provide an update on some of these studies on second-quarter conference call.

What Our Model Indicates

Our proven model does not conclusively show that Puma Biotech is likely to beat estimates this quarter to be reported. This is because a stock needs to have both a positive Earnings ESP and a bullish Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Earnings ESP: Puma Biotech has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of $1.26 each. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.


Puma Biotechnology, Inc. Price and EPS Surprise

Puma Biotechnology, Inc. Price and EPS Surprise | Puma Biotechnology, Inc. Quote

Zacks Rank: Puma Biotech has a Zacks Rank #3, which increases the predictive power of ESP. However, a company’s 0.00% ESP makes surprise prediction difficult.  

We caution against Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are some biotech stocks you may want to consider as per our model, these possess the right combination of elements to beat on earnings this time around.

AC Immune SA ACIU has an Earnings ESP of +11.11% and a Zacks Rank #2.  The company is expected to release second-quarter results on Aug 8. You can see the complete list of today’s Zacks #1 Rank stocks here.

BioDelivery Sciences International, Inc. BDSI has an Earnings ESP of +8.60% and a Zacks Rank of 2. The company is scheduled to release second-quarter results on Aug 9 after the market closes.

Denali Therapeutics Inc. DNLI has an Earnings ESP of +15.79% and a Zacks Rank of 3. The company is expected to release second-quarter results on Aug 10.

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