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Why Is Puma Biotech (PBYI) Up 16.8% Since Last Earnings Report?

Zacks Equity Research

A month has gone by since the last earnings report for Puma Biotech (PBYI). Shares have added about 16.8% in that time frame, outperforming 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 drivers.

Puma Biotech Q2 Earnings Miss, Nerlynx Sales Rise

Puma Biotech incurred a loss of 97 cents per share in the second quarter of 2019, wider than the Zacks Consensus Estimate of a loss of 90 cents.

The loss per share includes an impact of stock-based compensation expense. Excluding such impact, adjusted net loss per share was 57 cents per share, lower than 59 cents a year ago.

Total revenues consist of net product revenues from the sales of Nerlynx as well as royalty revenues. In the second quarter of 2019, total revenues were $53.9 million comprising $53.8 million of product revenues from Nerlynx and $0.1 million of royalty revenues from two licensing partners. Moreover, sales beat the Zacks Consensus Estimate of $53 million and were also higher than the year-ago figure of $50.8 million.

Quarter in Detail

Sales of Nerlynx were up 18% on a sequential basis. A higher number of patients discontinuing treatment with Nerlynx due to its side effects had resulted in a sequential decline in Nerlynx’s sales in the first quarter. However, sales improved sequentially in the second quarter owing to higher bottle volumes. Nerlynx’s bottle volumes rose 7.6% sequentially in the quarter.

Puma established a specialty distribution network in the past two years by striking partnerships with physician networks to allow in-office dispensing. Growth in in-office dispensing setting coupled with aggressive sales efforts led to better volumes in the reported quarter.

Total operating costs in the quarter were $79.7 million, down 13.6% year over year.

Research and development expenses (including stock-based compensation expense) were $36.9 million in the quarter, down 14.8% from the year-ago period.

Selling, general and administrative expenses (including stock-based compensation expense) decreased 16.5% year over year to $33.5 million.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

At this time, Puma Biotech has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. 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 B. 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 #3 (Hold). We expect an in-line return from the stock in the next few months.



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