LOS ANGELES–(BUSINESS WIRE)–Puma Biotechnology, Inc. (NASDAQ: PBYI), a biopharmaceutical company,
announced financial results for the first quarter ended March 31, 2019.
Unless otherwise stated, all comparisons are for the first quarter 2019
compared to the first quarter of 2018.
Product revenue, net consists entirely of sales revenue from NERLYNX®,
Puma’s first commercial product. Net NERLYNX revenue in the first
quarter of 2019 was $45.6 million, compared to net NERLYNX revenue of
$36.0 million in the first quarter of 2018.
Based on accounting principles generally accepted in the United States
(GAAP), Puma reported a net loss of $10.1 million, or $0.26 per share,
for the first quarter of 2019, compared to a net loss of $24.3 million,
or $0.65 per share, for the first quarter of 2018.
Non-GAAP adjusted net income was $8.1 million, or $0.21 per basic share
and $0.20 per diluted share, for the first quarter of 2019, compared to
non-GAAP adjusted net income of $1.1 million, or $0.03 per basic share
and $0.02 per diluted share, for the first quarter of 2018. Non-GAAP
adjusted net income excludes stock-based compensation expense, which
represents a significant portion of overall expense. For a
reconciliation of GAAP net loss to non-GAAP adjusted net income and GAAP
net loss per share to non-GAAP adjusted net income per share, please see
the financial tables at the end of this news release.
Net cash used in operating activities for the first quarter of 2019 was
$16.1 million, compared to $6.3 million in the first quarter of 2018. At
March 31, 2019, Puma had cash and cash equivalents of $48.8 million and
marketable securities of $101.6 million, compared to cash and cash
equivalents of $108.4 million and marketable securities of $57.0 million
at December 31, 2018. Puma’s cash and cash equivalents at March 31, 2019
did not include a $60.0 million upfront license payment that was
received in April 2019. At March 31, 2019, the $60.0 million upfront
license payment was recorded in accounts receivable.
“Puma experienced lower than expected net product revenue in the first
quarter of 2019,” said Alan H. Auerbach, Chairman, Chief Executive
Officer and President of Puma. “This reduction in net revenues was the
result of an increase in expenses charged against gross revenue for the
quarter. Additionally, net product revenue declined in the quarter as a
result of an increase in patients discontinuing treatment with NERLYNX.”
Mr. Auerbach added, “During 2019, we anticipate the following key
milestones for Puma: (i) presenting data from the Phase III trial of
neratinib in third-line metastatic breast cancer patients in the second
quarter of 2019; (ii) filing a new drug application for neratinib based
on the results of the Phase III trial in third-line metastatic breast
cancer in the summer of 2019; (iii) meeting with the FDA to discuss the
clinical development and regulatory strategy for the SUMMIT trial in the
summer of 2019; (iv) receiving regulatory decisions for the extended
adjuvant HER2-positive early stage breast cancer indication in other
countries in the second half of 2019; (v) reporting additional data from
the Phase II CONTROL trial in the second quarter of 2019; and (vi)
reporting Phase II data from the SUMMIT basket trial in patients with
HER2 mutations in the second half of 2019.”
Revenue
Total revenue consists of product revenue, net from sales of NERLYNX,
Puma’s first commercial product, and license revenue. For the first
quarter ended March 31, 2019, total revenue was $99.1 million, of which
$45.6 million was net NERLYNX revenue and $53.5 million was license
revenue received from Puma’s sub-licensees. This compares to total
revenue of $66.5 million in the first quarter of 2018, of which $36.0
million was net NERLYNX revenue and $30.5 million was license revenue.
Operating Costs and Expenses
Total operating costs and expenses were $89.2 million for the first
quarter of 2019, compared to $89.9 million for the first quarter of 2018.
Cost of Sales:
Cost of sales was $8.0 million for the first quarter of 2019, compared
to $6.4 million for the first quarter of 2018.
Selling, General and Administrative Expenses:
Selling, general and administrative expenses were $45.5 million for the
first quarter of 2019, compared to $36.6 million for the first quarter
of 2018. The $8.9 million increase resulted primarily from increases of
approximately $6.8 million for professional fees such as legal fees and
marketing and commercial support, approximately $0.9 million related to
employee stock-based compensation expense, approximately $0.7 million in
payroll and payroll related expenses, and approximately $0.4 million in
travel and meeting-related expenses.
Research and Development Expenses:
Research and development (R&D) expenses were $35.7 million for the first
quarter of 2019, compared to $46.9 million for the first quarter of
2018. The $11.2 million decrease resulted primarily from decreases of
approximately $8.1 million of stock-based compensation, $2.1 million in
internal R&D primarily related to payroll and payroll related expenses,
$1.5 million in clinical trial expenses primarily due to external
clinical service, external manufacturing, testing and logistics,
partially offset by increases in CRO-related expenses, grant
expenditures and comparator drug expenses.
Total Other Income (Expenses)
Total other expenses were $20.0 million for the first quarter of 2019,
compared to total other expenses of $0.9 million for the first quarter
of 2018. Other expense recorded in the first quarter of 2019 includes
$16.4 million related to a March 2019 jury verdict against Puma in a
defamation lawsuit, Eshelman v. Puma Biotechnology, Inc., et al.,
and represents $22.4 million in damages awarded to the plaintiff, net of
a $6.0 million anticipated insurance receivable. Puma intends to
appeal the verdict and has filed a motion for a new trial or, in the
alternative, a reduced damages award. The plaintiff has also filed
motions seeking attorneys’ fees and pre-judgment interest. The total
amount of damages to be paid by Puma remains subject to the exhaustion
of post-trial motions and appeals.
Conference Call
Puma Biotechnology will host a conference call to report its first
quarter 2019 financial results and provide an update on the Company’s
business and outlook at 1:30 p.m. PDT/4:30 p.m. EDT on Thursday, May 9,
2019. The call may be accessed by dialing 1-877-709-8150 (domestic) or
1-201-689-8354 (international) at least 10 minutes prior to the start of
the call and referencing the “Puma Biotechnology Conference Call.” A
live webcast of the conference call and presentation slides may be
accessed on the Investors section of the Puma Biotechnology website at http://www.pumabiotechnology.com/.
A replay of the call will be available approximately one hour after
completion of the call and will be archived on the company’s website for
90 days.
About Puma Biotechnology
Puma Biotechnology, Inc. is a biopharmaceutical company with a focus on
the development and commercialization of innovative products to enhance
cancer care. The Company in-licenses the global development and
commercialization rights to three drug candidates — PB272 (neratinib,
oral), PB272 (neratinib, intravenous) and PB357. Neratinib, oral was
approved by the FDA in July 2017 for the extended adjuvant treatment of
adult patients with early stage HER2-overexpressed/amplified breast
cancer, following adjuvant trastuzumab-based therapy, and is marketed in
the United States as NERLYNX® (neratinib) tablets. NERLYNX was granted
marketing authorization by the European Commission in September 2018 for
the extended adjuvant treatment of adult patients with early stage
hormone receptor-positive HER2-overexpressed/amplified breast cancer and
who are less than one year from completion of prior adjuvant
trastuzumab-based therapy. NERLYNX is a registered trademark of Puma
Biotechnology, Inc.
Further information about Puma Biotechnology may be found at www.pumabiotechnology.com.
IMPORTANT SAFETY INFORMATION
NERLYNX® (neratinib) tablets, for oral use
INDICATIONS AND USAGE: NERLYNX is a kinase inhibitor indicated
for the extended adjuvant treatment of adult patients with early stage
HER2 overexpressed/amplified breast cancer, to follow adjuvant
trastuzumab-based therapy.
CONTRAINDICATIONS: None
WARNINGS AND PRECAUTIONS:
• Diarrhea: Aggressively manage diarrhea occurring despite
recommended prophylaxis with additional antidiarrheals, fluids, and
electrolytes as clinically indicated. Withhold NERLYNX in patients
experiencing severe and/or persistent diarrhea. Permanently discontinue
NERLYNX in patients experiencing Grade 4 diarrhea or Grade ≥ 2 diarrhea
that occurs after maximal dose reduction.
• Hepatotoxicity: Monitor liver function tests monthly for the
first 3 months of treatment, then every 3 months while on treatment and
as clinically indicated. Withhold NERLYNX in patients experiencing Grade
3 liver abnormalities and permanently discontinue NERLYNX in patients
experiencing Grade 4 liver abnormalities.
• Embryo-Fetal Toxicity: NERLYNX can cause fetal harm. Advise
patients of potential risk to a fetus and to use effective contraception.
ADVERSE REACTIONS: The most common adverse reactions (≥ 5%) were
diarrhea, nausea, abdominal pain, fatigue, vomiting, rash, stomatitis,
decreased appetite, muscle spasms, dyspepsia, AST or ALT increase, nail
disorder, dry skin, abdominal distention, epistaxis, weight decreased
and urinary tract infection.
To report SUSPECTED ADVERSE REACTIONS, contact Puma Biotechnology,
Inc. at 1-844-NERLYNX (1-844-637-5969) and www.NERLYNX.com
or FDA at 1-800-FDA-1088 or www.fda.gov/medwatch.
DRUG INTERACTIONS:
-
Gastric acid reducing agents: Avoid concomitant use with proton pump
inhibitors (PPI) and H2-receptor antagonists. Separate NERLYNX by at
least 2 hours before or 10 hours after H2-receptor antagonists. - Strong or moderate CYP3A4 inhibitors: Avoid concomitant use.
- Strong or moderate CYP3A4 inducers: Avoid concomitant use.
-
P-glycoprotein (P-gp) substrates: Monitor for adverse reactions of
narrow therapeutic agents that are P-gp substrates when used
concomitantly with NERLYNX.
USE IN SPECIFIC POPULATIONS:
• Lactation: Advise
women not to breastfeed.
Please see Full
Prescribing Information for additional safety information.
Forward-Looking Statements
This press release contains forward-looking statements, including
statements regarding Puma’s anticipated milestones for 2019. All
forward-looking statements involve risks and uncertainties that could
cause Puma’s actual results to differ materially from the anticipated
results and expectations expressed in these forward-looking statements.
These statements are based on current expectations, forecasts and
assumptions, and actual outcomes and results could differ materially
from these statements due to a number of factors, which include, but are
not limited to, the risk factors disclosed in the periodic and current
reports filed by Puma with the Securities and Exchange Commission from
time to time, including Puma’s Annual Report on Form 10-K for the year
ended December 31, 2018. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the
date hereof. The Company assumes no obligation to update these
forward-looking statements, except as required by law.
| PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARY | |||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
| (in millions except share and per share data) | |||||||||
| Three Months Ended | |||||||||
| March 31, | |||||||||
| (Unaudited) | |||||||||
| 2019 | 2018 | ||||||||
| Revenues: | |||||||||
| Product revenue, net | $ | 45.6 | $ | 36.0 | |||||
| License revenue | 53.5 | 30.5 | |||||||
| Total revenue | 99.1 | 66.5 | |||||||
| Operating costs and expenses: | |||||||||
| Cost of sales | 8.0 | 6.4 | |||||||
| Selling, general and administrative | 45.5 | 36.6 | |||||||
| Research and development | 35.7 | 46.9 | |||||||
| Total operating costs and expenses | 89.2 | 89.9 | |||||||
| Profit from operations | 9.9 | (23.4 | ) | ||||||
| Other income (expenses): | |||||||||
| Interest income | 0.9 | 0.2 | |||||||
| Interest expense | (4.5 | ) | (1.1 | ) | |||||
| Legal verdict expenses | (16.4 | ) | — | ||||||
| Other expense | – | — | |||||||
| Total other expenses | (20.0 | ) | (0.9 | ) | |||||
| Net loss | $ | (10.1 | ) | $ | (24.3 | ) | |||
| Net loss per common share—basic and diluted | $ | (0.26 | ) | $ | (0.65 | ) | |||
| Weighted-average common shares outstanding—basic and diluted | 38,481,824 | 37,699,024 | |||||||
| PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARY | |||||||||
| LIQUIDITY AND CAPITAL RESOURCES | |||||||||
| (in millions) | |||||||||
| March 31, | December 31, | ||||||||
| 2019 | 2018 | ||||||||
| Cash and cash equivalents | $ | 48.8 | $ | 108.4 | |||||
| Marketable securities | 101.6 | 57.0 | |||||||
| Working capital | 154.8 | 135.9 | |||||||
| Stockholders’ equity | 43.5 | 34.3 | |||||||
| Three Months | Three Months | ||||||||
| Ended | Ended | ||||||||
| March 31, | March 31, | ||||||||
| 2019 | 2018 | ||||||||
| Cash provided by (used in): | |||||||||
| Operating activities | $ | (16.1 | ) | $ | (6.3 | ) | |||
| Investing activities | (44.6 | ) | — | ||||||
| Financing activities | 1.1 | 3.2 | |||||||
|
|
|||||||||
|
Decrease in cash and cash equivalents, and restricted cash |
$ | (59.6 | ) | $ | (3.1 | ) | |||
Non-GAAP Financial Measures
In addition to operating results as calculated in accordance with GAAP,
Puma uses certain non-GAAP financial measures when planning, monitoring,
and evaluating operational performance. The following table presents the
Company’s net loss and net loss per share calculated in accordance with
GAAP and as adjusted to remove the impact of employee stock-based
compensation. For the three months ended March 31, 2019 and 2018,
stock-based compensation represented approximately 22.4% and 30.4% of
operating expenses, respectively, in each case excluding cost of sales.
Puma’s management believes that these non-GAAP financial measures are
useful to enhance understanding of Puma’s financial performance, and are
more indicative of its operational performance and facilitate a better
comparison among fiscal periods. These non-GAAP financial measures are
not, and should not be viewed as, substitutes for GAAP reporting
measures.
| PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARY | |||||||||||
|
Reconciliation of GAAP Net Loss to Non-GAAP Adjusted Net Income and |
|||||||||||
| GAAP Net Loss Per Share to Non-GAAP Adjusted Income Per Share | |||||||||||
| (in millions except share and per share data) | |||||||||||
| (Unaudited) | |||||||||||
| Three Months Ended March 31, | |||||||||||
| 2019 | 2018 | ||||||||||
| GAAP net loss | $ | (10.1 | ) | $ | (24.3 | ) | |||||
| Adjustments: | |||||||||||
| Stock-based compensation – | |||||||||||
| Selling, general and administrative | 9.9 | 9.0 | (1) | ||||||||
| Research and development | 8.3 | 16.4 | (2) | ||||||||
| Non-GAAP adjusted net income | $ | 8.1 | $ | 1.1 | |||||||
| GAAP net loss per share – basic | $ | (0.26 | ) | $ | (0.65 | ) | |||||
| Adjustment to net loss (as detailed above) | 0.47 | 0.68 | |||||||||
| Non-GAAP adjusted net income per share | $ | 0.21 | $ | 0.03 | (3) | ||||||
| GAAP net loss per share—diluted | $ | (0.26 | ) | $ | (0.60 | ) | |||||
| Adjustment to net loss (as detailed above) | 0.46 | 0.62 | |||||||||
| Non-GAAP adjusted diluted net income per share | $ | 0.20 | $ | 0.02 | (4) | ||||||
|
(1) To reflect a non-cash charge to operating expense for selling, general, and administrative stock-based compensation. |
|
(2) To reflect a non-cash charge to operating expense for research and development stock-based compensation. |
|
(3) Non-GAAP adjusted basic net income per share was calculated based on 38,481,824 and 37,699,024 weighted-average shares of common stock outstanding for the three months ended March 31, 2019 and 2018, respectively. |
|
(4) Non-GAAP adjusted diluted net income per share was calculated based on 39,281,714 and 40,642,311 weighted-average common shares outstanding and potentially dilutive common stock equivalents (stock options, restricted stock units and warrants) for the three months ended March 31, 2019 and 2018, respectively. |
Contacts
Alan H. Auerbach or Mariann Ohanesian, Puma Biotechnology, Inc., +1 424
248 6500
info@pumabiotechnology.com
ir@pumabiotechnology.com
David Schull or Juliette Gorson, Russo Partners, +1 212 845 4271 or +1
212 845 4235
david.schull@russopartnersllc.com
juliette.gorson@russopartnersllc.com