Shares of Puma Biotechnology PBYI were up 17.4% at market close on Aug 5, following the earnings release following the better-than-expected earnings results. Puma Biotech’s shares have returned 31.2% this year against the industry’s 17.4% decline.
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Puma Biotechnology reported second-quarter 2022 earnings of 21 cents per share, beating the Zacks Consensus Estimate of 2 cents per share. In the year-ago quarter, the company reported a loss of 13 cents per share.
In the second quarter, total revenues were $59.5 million, beating the Zacks Consensus Estimate of $53 million. Revenues were up 11.4% year over year, driven by the worldwide commercial revenues and royalties from Nerlynx
Total revenues comprised net product sales of Nerlynx (neratinib), Puma Biotech's only marketed drug in the United States, and license fees and royalty revenues from PBYI’s sub-licensees.
Quarter in Detail
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 2020, the FDA expanded Nerlynx’s label to allow its use in combination with Roche’s Xeloda for third-line HER2-positive metastatic breast cancer.
Product revenues from Nerlynx were $51.3 million in the second quarter, up 4.9% year over year and 26% sequentially due to inventory built at specialty pharmacies/distributors. Nerlynx’s product revenues were much better than management’s guidance of $44 million - $47 million.
In the second quarter, Nerlynx’s new prescriptions were down approximately 8% from the first quarter of 2022, while total prescriptions were up approximately 1.6%.
Royalty revenues were $8.2 million in the quarter compared with $4.3 million in the year-ago quarter. Puma Biotech did not record any license revenues in the second quarter compared with $0.2 million in the year-ago quarter
Total operating costs in the quarter were $47.4 million, down 32.3% year over year. Research and development expenses were $11.9 million in the quarter, down 36% year over year, primarily from a decline in clinical trial expenses. Selling, general and administrative expenses fell 47.7% year over year to $20.6 million due to lower professional fees and expenses.
For 2022, Puma Biotech maintained Nerlynx’s net sales guidance range of $180-$190 million. However, the company lowered its royalty revenues and now expects the same to be in the $27-$30 million range, down from the previous guidance of $27-$34 million. The guidance for royalty revenues was lowered due to the delayed delivery of Nerlynx shipment to Puma’s Chinese partners and a potentially negative foreign exchange impact.
Operating expenses are expected to be lower in 2022 compared with 2021. SG&A expenses are expected to decline in the range of approximately 15% to 20% and R&D expenses are expected to be down 10-15% year over year.
Nerlynx’s net revenues are expected in the range of $44-$47 million in the third quarter of 2022, while royalty revenues are now expected in the range of $3-$6 million, down from the previous guidance of $7-$9 million. The downside is likely to be caused by delayed shipment deliveries to Chinese partners, due to supply chain delays and shutdowns in China.
Several additional studies on Nerlynx targeting different types of breast cancer patient populations and other types of 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.
In June, the company reported top-line data from the phase II SUMMIT trial, evaluating the efficacy of combined neratinib, fulvestrant, and trastuzumab in patients with hormone receptor positive, HER2-negative, HER2-mutant metastatic breast cancer. Puma reported final results from the biliary tract cohort of the phase II SUMMIT ‘basket’ trial in June. The. The company now intends to hold a pre-NDA meeting with the FDA to discuss the potential for an accelerated approval pathway for these two indications in the second half.
The company plans to report data from another cohort of the SUMMIT study in second-half 2022, evaluating Nerlynx in non-small cell lung cancer patients with EGFR exon 18 mutations and hold a pre-NDA meeting with the FDA to discuss the potential for an accelerated approval pathway for this indication by the end of 2022.
Meanwhile, Puma Biotech plans to release results from some cohorts of 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 second-half 2022.
Puma Biotechnology, Inc. Price, Consensus and EPS Surprise
Puma Biotechnology, Inc. price-consensus-eps-surprise-chart | Puma Biotechnology, Inc. Quote
Zacks Rank & Stocks to Consider
Puma Biotech currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same sector are Novavax NVAX and Sesen Bio SESN, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Novavax’s earnings estimates for 2022 have remained steady at $27.23 over the past 30 days. Shares of NVAX have declined 20.8% year to date. Earnings of Novavax missed estimates in all of the last four quarters. NVAX delivered a negative earnings surprise of 184.49%, on average.
Sesen Bio’s loss estimates for 2022 have remained steady at 44 cents per share over the past 30 days. Shares of SESN have declined 20.9% year to date. Earnings of Sesen Bio beat estimates in three of the last four quarters and missed the mark on one occasion. SESN delivered an earnings surprise of 69.94%, on average.
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