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Puma Biotech (PBYI) Down 6.3% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Puma Biotech (PBYI). Shares have lost about 6.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Puma Biotech due for a breakout? 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 drivers.

Puma Biotech’s Q4 Loss Wider Than Expected, Nerlynx Sales Fall

Puma Biotech reported a loss of 38 cents per share for the fourth quarter of 2020, significantly wider than the Zacks Consensus Estimate of a loss of 18 cents and also the year-ago quarter’s loss of 29 cents.

Total revenues consisted of net product sales of Nerlynx and royalty fees from sublicensees.

In the fourth quarter, total revenues were $52.6 million, down 16.4% year over year on lower Nerlynx sales and no license revenues compared with the year-ago quarter. Sales marginally beat the Zacks Consensus Estimate of $52 million.

Product revenues from Nerlynx were $50.0 million, down 14.8% year over year due to business disruptions caused by the COVID-19 situation. Generally, Puma Biotech sees a decline in Nerlynx’s new patients starts in the fourth quarter of each year as some patients prefer not to initiate new therapies around the holiday season. Royalty revenues from licensing partners were $2.6 million in the quarter.

Total operating costs in the quarter were $63.9 million, down 10.6% year over year. Research and development expenses were $24.4 million in the quarter, down almost 20% from the year-ago period. Selling, general and administrative expenses declined 7.7% year over year to $28.8 million.

2020 Results

Total revenues were $225.1 million in 2020, down 17.3% year over year. Of the total revenues $196.7 million was net product revenues, $22.7 million was license revenues, and $5.7 million was royalty revenues from Puma’s sub-licensees.

Loss per share was $1.52 per share compared to $1.95 per share in 2019..

2021 Guidance

In 2021, Puma Biotech expects Nerlynx’s net sales in the range of $205 million to $210 million. Royalty revenues are expected to be in the range of $16 million to $17 million. License revenues are expected to be in the range of $30 million to $32 million. However, pandemic-related disruptions may continue to hurt the company’s revenues in 2021.

Nerlynx’s net revenues are expected in the range of $42-$43 million for the first quarter of 2021. Royalty revenues are expected to be in the range of $2 million to $3 million. License revenues are expected to be $30 million.


How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 225% due to these changes.

VGM Scores

Currently, Puma Biotech has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Puma Biotech has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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