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Puma (PBYI) Beats on Q1 Earnings, Ups Nerlynx Sales View

Puma Biotechnology PBYI reported earnings of 40 cents per share for the first quarter of 2021, comfortably beating the Zacks Consensus Estimate of 29 cents. The company had reported a loss of 43 cents in the year-ago quarter.

Total revenues consisted of net product sales of Nerlynx (neratinib), Puma Biotech's only marketed drug, and license revenues from Puma’s sub-licensees and royalty revenues.

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.

In the first quarter, total revenues were $98.2 million, up almost 92% year over due to upfront payment received from its existing partner, Pierre Fabre for the addition of commercial rights to Nerlynx in Greater China. Sales also beat the Zacks Consensus Estimate of $75 million.

Product revenues from Nerlynx were $45.8 million, down 5.8% year over year due to business disruptions caused by the COVID-19 situation. However, product sales were better than the company’s guidance range of $42 million-$43 million

A decrease in Nerlynx’s new patients starts typically seen around the fourth-quarter holidays and increase in first-quarter Medicare patients requiring free drug through Puma’s patient assistance program also hurt first-quarter sales to an extent.

Royalty revenues from licensing partners were $2.4 million in the quarter while license revenues were $50 million (upfront payment from Pierre Fabre).

Total operating costs in the quarter were $78.0 million, up 19.1% year over year. Cost of sales rose 225% to $29.6 million in the quarter due to a termination fee paid to CANbridge Pharmaceuticals, which returned Nerlynx rights in Greater China. Research and development expenses were $20.2 million in the quarter, down 8.7% from the year-ago period. Selling, general and administrative expenses declined 7.7% year over year to $28.8 million.

2021 Guidance

In 2021, Puma Biotech expects Nerlynx’s net sales in the range of 208 million to $213 million, slightly higher than the prior expectation of $205 million to $210 million. Royalty revenues are expected to be in the range of $13 million to $15 million versus $16 million to $17 million previously. License revenues are expected to be in the range of $50 million to $52 million versus $30 million to $32 million previously. However, pandemic-related disruptions may continue to hurt the company’s revenues in 2021.

Meanwhile, Nerlynx’s net revenues are expected in the range of $46-$47 million in the second quarter of 2021.

Shares were up almost 6% in after-hours trading in response to the better-than-expected first-quarter results and the slight uptick in guidance. However, Puma Biotech’s shares have declined 5.7% this year so far compared with the industry’s decrease of 6%.

Pipeline & Other Updates

Several additional studies on Nerlynx targeting different types of breast cancer patient populations as well as other cancers are currently underway.

A key analysis of Nerlynx is the phase II SUMMIT basket study for treating solid tumors in patients with activating EGFR, HER2 or HER4 mutated cancers. The company completed enrolment in the randomized cohort of the study in HER2-positive breast cancer in the first quarter. Data from this cohort is expected to be reported later in the year. Additionally, the company plans to report data from another cohort of the SUMMIT study, which is evaluating Nerlynx in non-small cell lung cancer patients with EGFR exon 18 mutations in the second half of 2021

Meanwhile, Puma Biotech plans to release results from the phase II TBCRC-022 study on Nerlynx in combination with Roche’s Kadcyla in patients with HER2-positive breast cancer with brain metastases who have previously been treated with Kadcyla in the second half of 2021.

Zacks Rank and Stocks to Consider

Puma Biotech currently carries a Zacks Rank #3 (Hold).

Puma Biotechnology, Inc. Price, Consensus and EPS Surprise

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

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

Some better-ranked stocks in the healthcare sector are Repligen Corporation RGEN and Prothena Corporation PRTA. While Repligen carries a Zacks Rank of 1 (Strong Buy), Prothena has a Zacks Rank #2 (Buy).

Repligen’s earnings estimates for 2021 have gone up from $1.66 to $1.91 per share while that for 2022 have risen from $2.03 to $2.27 over the past 90 days.

Prothena’s loss estimates per share have narrowed from $2.16 to $1.57 for 2021 and from $3.70 to $3.61 over the past 90 days. Shares of the company have increased 97% this year so far.

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