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Puma Biotech (PBYI) Q4 Loss Narrows, Nerlynx Pulls Stock Up

Zacks Equity Research

Puma Biotechnology, Inc. PBYI incurred a loss of 80 cents per share for the fourth quarter of 2018, narrower than the Zacks Consensus Estimate of a loss of 92 cents as well as the year-ago loss of $1.71.

Total revenues consist of both net product revenues from the sales of Nerlynx (neratinib) and the company’s license revenues. In the fourth quarter of 2018, total revenues came in at $71.1 million comprising $61.1 million of product revenues from Nerlynx and $10 million of license revenues. Moreover, sales beat the Zacks Consensus Estimate of $53.5 million in the reported quarter and was also higher than the year-ago figure of $21.6 million.

Shares of Puma Biotech rallied almost 21.2% in after-hours trading following the earnings release on Thursday. In fact, the stock has surged 36.6% so far this year.

Full-Year Result

For 2018, Puma Biotech generated revenues of $251 million compared with $27.7 million in 2017. This revenue growth was mainly owing to Nerlynx, which was launched in July 2017. Nerlynx sales totaled $200.5 million in 2018, which slightly beat the earlier issued revenue guidance of $175-$200 million for the full year.

Nerlynx is marketed for the 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.

Puma Biotech plans to commercialize Nerlynx in Europe during 2019, starting with a launch in Germany during the first half of 2019 followed by other European countries in the second half of 2019.

For 2018, the company suffered a net loss of $2.99 per share.

Quarter in Detail

Nerlynx sales were up 16% on a sequential basis, which might have bumped up the stock price in after-hours trading. In fourth-quarter 2018, the drug saw an increase in patient refills in the specialty pharmacies and an increase in demand across both the specialty pharmacy and distribution channels.

On the conference call, the company stated that the supportive care voucher program, which provides up to three months of anti-diarrheal products for free to eligible patients, was introduced in the third quarter of 2018. Following this, the number of vouchers use has increased immensely and became an additional driver for sales growth in the fourth quarter, thereby curbing discontinuations which hurt sales earlier.

The company also mentioned that Total operating costs in the fourth quarter were $89.7 million, up almost 5.3% year over year.

Research and development (R&D) expenses were $38.4 million, down 23.5% from the year-ago period owing to lower clinical study costs and stock-based compensation expenses.

Selling, general and administrative expenses surged 32.7% year over year to $41 million, primarily due to the commercial launch of Nerlynx.

As of Dec 31, 2018, Puma Biotech had cash and cash equivalents of $108.4 million compared with $68.3 million as of Sep 30, 2018.

Other Updates

Last December 2018, Puma Biotech announced positive top-line results from the phase III NALA study, evaluating its only marketed drug, Nerlynx (neratinib), for the treatment of third-line hormone receptor-positive (HER2-positive) metastatic breast cancer.

Last July, Puma Biotech signed a collaborative agreement with the privately held Strata Oncology, Inc to boost patient enrollment in the SUMMIT study on Nerlynx. The company plans to discuss the regulatory strategy for the SUMMIT study with the FDA during the first half of 2019.

The company also plans to report data from the phase II SUMMIT basket study on Nerlynx pertaining to patients with HER2 mutations in the first half of 2019.

Puma Biotech is also conducting another phase II CONTROL program for using antidiarrheal prophylaxis on neratinib-associated diarrhea, evaluating patients with HER2-positive early-stage breast cancer. The company plans to post additional outcomes from this analyst in the first half of the ongoing year.

Puma Biotechnology, Inc. Price, Consensus and EPS Surprise

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

Zacks Rank & Stocks to Consider

Puma Biotech currently carries a Zacks Rank #4 (Sell).

Two better-ranked stocks in the healthcare sector are Celgene Corporation CELG and Sunesis Pharmaceuticals, Inc. SNSS, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Celgene’s earnings estimates have been revised 5.3% upward for 2019 over the past 60 days.

Sunesis’ loss per share estimates have been narrowed 11.9% for 2019 over the past 60 days.

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