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Puma Biotech (PBYI) Up 7.5% Since Last Earnings Report: Can It Continue?

Zacks Equity Research

It has been about a month since the last earnings report for Puma Biotech (PBYI). Shares have added about 7.5% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Puma Biotech due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Puma Biotech’s Earnings & Revenues Beat Estimates in Q1

Puma Biotech incurred a loss of 43 cents per share in the first quarter of 2020, significantly narrower than the Zacks Consensus Estimate of a loss of 79 cents but wider than the year-ago loss of 26 cents.

The loss per share includes an impact of stock-based compensation expense. Excluding such impact, adjusted loss per share was 20 cents per share versus earnings of 20 cents in the year-ago quarter.

Total revenues consisted of net product revenues from the sales of Nerlynx license and royalty revenues. In the first quarter, total revenues were $51.2 million, comprising $48.6 million of product revenues from Nerlynx, $0.6 million of royalty revenues from licensing partners and license revenues worth $2 million. Sales beat the Zacks Consensus Estimate of $44 million, but were lower than the year-ago figure of $99.1 million due to lower license revenues.

Quarter in Detail

Sales of Nerlynx increased 6.6% year over year but declined17.2% on a sequential basis. Nerlynx’s bottle volumes declined 18.2% sequentially in the quarter. However, total prescription rose 6.8% as well as new prescriptions improved sequentially in the first quarter.Nerlynx sales exceeded management’s earlier expectation of $40-$42 million.

Total operating costs in the quarter were $65.5 million, down 26.5% year over year.

Research and development expenses (including stock-based compensation expense) were $25.5 million in the quarter, down 28.5% from the year-ago period.

Selling, general and administrative expenses (including stock-based compensation expense) declined 32.1% year over year to $30.9 million.

As of Mar 31, 2020, Puma Biotech had cash and cash equivalents of $100.6 millioncompared with $111.6 million as of Dec 31, 2019.

2020 Guidance

Puma Biotech now expects Nerlynx’s net revenues in the range of $48-$50 million for the second quarter of 2020.

How Have Estimates Been Moving Since Then?

Estimates review followed an upward path over the past two months. The consensus estimate has shifted 37.4% due to these changes.

VGM Scores

At this time, Puma Biotech has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Puma Biotech has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.



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