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Puma Biotech (PBYI) Q1 Earnings Top, Nerlynx Disappoints

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  • CLSN
  • PBYI

Puma Biotechnology, Inc. PBYI incurred a loss of 26 cents per share for the first quarter of 2019, narrower than the Zacks Consensus Estimate of a loss of 69 cents as well as the year-ago loss of 65 cents.

Total revenues consist of both net product revenues from the sales of Nerlynx (neratinib) and the company’s license revenues. In the first quarter of 2019, total revenues came in at $99.1 million, comprising $45.6 million of product revenues from Nerlynx and $53.5 million of license revenues. Moreover, sales beat the Zacks Consensus Estimate of $65.0 million in the reported quarter and were also higher than the year-ago figure of $66.5 million.

However, product sales were lower than management’s expectations, which resulted in a sharp decline in the stock price in after-hours trading. Shares of Puma Biotech crashed 32.5% in after-hours trading following the earnings release on Thursday. However, the stock has gained 47.5% this year so far, outperforming the industry’s increase of 3.2%.

Sales of Nerlynx, Puma Biotech's only marketed drug, were down 25.4% on a sequential basis. Alan H. Auerbach, chief executive officer (CEO) of Puma Biotech attributed the disappointing performance to higher number of patients discontinuing treatment with Nerlynx. Also, an increase in expenses charged against gross revenues hurt sales in the quarter.

Nerlynx is indicated for extended adjuvant treatment of HER2-positive early stage breast cancer in patients, previously treated with Roche’s RHHBY Herceptin-based adjuvant therapy. It was approved in the EU last September.

Total operating costs in the quarter were $89.2 million, up 0.8% year over year.

Research and development (R&D) expenses were $35.7 million, down 23.9% from the year-ago period owing to lower clinical study costs and stock-based compensation expenses.

Selling, general and administrative expenses increased 24.3% year over year to $45.5 million, primarily due to higher professional fees, stock-based compensation expenses and other costs.

As of Mar 31, 2019, Puma Biotech had cash and cash equivalents of $48.8 million compared with $108.4 million as of Dec 31, 2018.

Other Updates

Several further studies on Nerlynx targeting different types of breast cancer patient populations and in earlier-line settings are currently underway. The drug’s label expansion will allow it to treat and access an expanded patient population. Notably, last December, Puma Biotech announced positive top-line results from the phase III NALA study, evaluating Nerlynx for the treatment of third-line HER2-positive metastatic breast cancer.

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

Last month, Puma Biotech added two cohorts to the phase II SUMMIT basket study on Nerlynx, which is currently being conducted for treating solid tumors in patients with activating EGFR, HER2 or HER4 mutations. Puma Biotech plans to report data from the SUMMIT study in the second half of 2019 and expects to meet with the FDA to discuss the regulatory strategy for the SUMMIT study in the summer of 2019.

Last month, the company out-licensed exclusive rights to develop/commercialize Nerlynx in Europe and across parts of Africa to French pharmaceutical company, Pierre Fabre. In January, it out-licensed commercialization rights in Canada to Knight Therapeutics.

Puma Biotechnology, Inc. Price and Consensus


Puma Biotechnology, Inc. Price and Consensus
Puma Biotechnology, Inc. Price and Consensus

Puma Biotechnology, Inc. price-consensus-chart | Puma Biotechnology, Inc. Quote


Zacks Rank & Stocks to Consider

Puma Biotech currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the biotech sector include Celsion Corporation CLSN and Fibrocell Science Inc FCSC, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Celsion’s loss estimates narrowed from 94 cents to 78 cents for both 2019 and 2020 over the past 60 days. Its shares have risen 53.9% this year so far.

Fibrocell’s loss estimates narrowed from $2.68 to $1.15 for 2019 and from $2.55 to 97 cents for 2020 over the past 60 days. The stock has gone up 50% this year so far.

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