Business Overview
Puma Biotechnology, Inc. is a biopharmaceutical company with a focus on the development and commercialization of innovative products to enhance cancer care. The company's journey began in 2011 when it was founded by Alan H. Auerbach, who currently serves as the Chairman, Chief Executive Officer, President, and Secretary. Puma's primary commercial product is NERLYNX (neratinib), an oral version of neratinib, which is approved for the treatment of certain HER2-positive breast cancers.
Puma Biotechnology's roots trace back to 2011 when the company entered into a pivotal agreement with Pfizer to license the worldwide rights for the development, manufacture, and commercialization of the drug candidate PB272 (neratinib). This agreement set the stage for Puma's focus on developing neratinib for the treatment of HER2-positive breast cancer. The company's efforts culminated in a significant milestone in July 2017 when NERLYNX (neratinib) received FDA approval for the extended adjuvant treatment of adult patients with early-stage HER2-overexpressed/amplified breast cancer. This approval marked Puma's transition from a development-stage company to a commercial entity, as it began marketing NERLYNX in the United States.
The company's growth continued in 2018 when NERLYNX received marketing authorization from the European Commission for the extended adjuvant treatment of hormone receptor-positive HER2-overexpressed/amplified early-stage breast cancer. This expansion into the European market broadened Puma's commercial reach and potential revenue streams.
However, Puma's journey has not been without challenges. In 2020, the company faced a legal malpractice lawsuit related to the Eshelman v. Puma Biotechnology, Inc. case. Additionally, Puma has had to defend its NERLYNX patents against generic challengers in various jurisdictions, including the United States and China. These legal battles highlight the competitive nature of the pharmaceutical industry and the importance of intellectual property protection.
Despite these hurdles, Puma has remained committed to expanding its pipeline and exploring new opportunities. In 2022, the company in-licensed the drug candidate alisertib, demonstrating its ongoing efforts to diversify its portfolio and address unmet medical needs in oncology.
Financial Performance and Liquidity
In the fourth quarter of 2024, Puma reported total revenue of $59.1 million, which included $54.4 million in net product sales from NERLYNX and $4.7 million in royalty revenue. This represents a decline of 18.1% year-over-year, primarily due to lower royalty revenues. For the full year 2024, Puma recorded total revenue of $230.5 million, with net product sales of $195.2 million and royalty revenue of $35.3 million.
The company reported GAAP net income of $19.3 million, or $0.39 per share, in the fourth quarter of 2024. On a non-GAAP basis, which excludes the impact of stock-based compensation, Puma reported net income of $21.1 million, or $0.43 per share. This compares to GAAP net income of $12.9 million, or $0.26 per share, and non-GAAP net income of $15.3 million, or $0.31 per share, in the fourth quarter of 2023.
As of December 31, 2024, Puma had $101 million in cash, cash equivalents, and marketable securities, compared to $96 million at the end of 2023. The company's accounts receivable balance was $32 million, with days sales outstanding of 48 days. Puma estimates that its distribution network maintained approximately four weeks of inventory as of the end of 2024.
The company's debt-to-equity ratio stands at 0.804, indicating a moderate level of leverage. Puma's liquidity position appears stable, with a current ratio of 1.536 and a quick ratio of 1.446, suggesting the company can meet its short-term obligations.
NERLYNX Commercial Performance
NERLYNX, Puma's sole commercial product, generated net sales of $54.4 million in the fourth quarter of 2024, a decrease of 3.0% from the $56.1 million reported in the third quarter of 2024 but an increase of 2.3% from the $53.2 million reported in the fourth quarter of 2023. The decrease in net sales from the third quarter was primarily due to lower product supply revenue to Puma's global partners, as well as a higher gross-to-net adjustment.
In the fourth quarter of 2024, Puma recorded 2,964 bottles of NERLYNX sold, representing an increase of 9% from the third quarter of 2024 and an increase of 3% from the fourth quarter of 2023. The company estimates that inventory increased by approximately 205 bottles during the fourth quarter of 2024, compared to an increase of 37 bottles in the third quarter and an increase of 127 bottles in the fourth quarter of 2023.
New prescriptions (NRx) were down 7% in the fourth quarter of 2024 compared to the third quarter, while total prescriptions (TRx) were up 4% compared to the third quarter of 2024.
Puma's commercial team continues to focus on increasing the utilization of NERLYNX, with a particular emphasis on patients deemed to have a higher risk of recurrence. The company is working to enhance its engagement with clinicians through both personal and non-personal promotion, with the goal of increasing engagement when treatment decisions are being made.
Puma is also exploring opportunities to better support patients on NERLYNX, with the aim of maximizing persistence and compliance. The company's data shows that patients starting NERLYNX at a lower dose have a 5-10% higher rate of remaining on therapy compared to those starting at the full dose.
Clinical Pipeline and Partnerships
In addition to the commercialization of NERLYNX, Puma is actively developing its pipeline of investigational drugs, including alisertib, a selective, small-molecule inhibitor of aurora kinase A.
Puma is currently conducting two ongoing Phase 2 trials of alisertib. The first is the ALISCA-Breast1 trial, which is evaluating alisertib in combination with endocrine treatment in patients with chemotherapy-naïve, HER2-negative, hormone receptor-positive metastatic breast cancer. The second is the ALISCA-Lung1 trial, which is assessing the efficacy of alisertib monotherapy in patients with extensive-stage small cell lung cancer.
The company initiated the ALISCA-Lung1 Phase II trial of alisertib monotherapy for the treatment of patients with extensive stage small cell lung cancer in February 2024 and plans to commence the ALISCA-Breast1 Phase II trial in the fourth quarter of 2024.
Under the terms of the exclusive license agreement with Takeda, Puma paid an upfront fee of $7 million in October 2022 and is eligible to receive potential future milestone payments of up to $287.3 million upon achievement of certain regulatory and commercial milestones, as well as tiered royalty payments on any net sales of alisertib.
Puma is also collaborating with third parties to pursue regulatory approval and commercialization of NERLYNX in various regions outside the United States. As of September 30, 2024, NERLYNX has received approval for the treatment of certain patients with extended adjuvant or metastatic HER2-positive breast cancer in over 40 countries outside the U.S.
Risks and Challenges
Puma's success is largely dependent on the continued commercialization of NERLYNX, which faces competition from other HER2-targeted therapies. The company's ability to maintain and grow NERLYNX's market share will be crucial to its financial performance.
The development and regulatory approval of alisertib and other pipeline candidates also pose risks, as clinical trials may not meet their endpoints or face challenges in obtaining regulatory approval.
Puma's financial performance is also vulnerable to changes in reimbursement policies, as well as potential supply chain disruptions and pricing pressures. The company's reliance on a limited number of specialty pharmacies and distributors for NERLYNX sales also presents concentration risks.
Looking Ahead
For the full year 2025, Puma anticipates that net NERLYNX product revenue will be in the range of $192 million to $198 million, with a gross-to-net adjustment of 20.5% to 21.5%. The company also expects to receive royalties from its partners in the range of $20 million to $24 million, which is lower than 2024 due to fewer shipments expected to China as Puma's partner works through regulatory transitions.
Puma expects net income for the full year 2025 to be in the range of $23 million to $28 million, excluding any potential release of additional tax asset valuation allowance. The company anticipates that for the first quarter of 2025, NERLYNX product revenue net will be in the range of $41 million to $43 million, with royalty revenue between $1.5 million and $2.5 million. The gross-to-net adjustment in the first quarter of 2025 is expected to be approximately $22.5 million to $23.5 million, with a net loss between $2 million and breakeven.
Puma remains committed to its mission of enhancing cancer care and improving treatment outcomes for patients. The company's focus on the commercialization of NERLYNX, the development of alisertib, and the exploration of additional in-licensing opportunities will be crucial to its long-term success.