Core Insights - Puma Biotechnology, Inc. (NASDAQ:PBYI) is considered one of the best affordable biotech stocks to invest in currently [1] - The company reported fiscal Q2 2025 results with product revenue net reaching $49.2 million, an increase from $44.4 million in fiscal Q2 2024 [1] - The product revenue net for the first six months of 2025 was $92.3 million, up from $84.6 million in the same period in 2024 [2] Analyst Ratings - TD Cowen analyst Marc Frahm maintained a Hold rating on Puma Biotechnology, Inc. and set a price target of $4.00 [2] - Barclays analyst Gena Wang maintained a Sell rating on Puma Biotechnology, Inc. with a price target of $2.00 [3] Company Focus - Puma Biotechnology, Inc. is a biopharmaceutical company focused on acquiring and developing innovative products for cancer treatment [3] - The company aims to in-license drug candidates that are in the process of or have already undergone initial clinical testing for cancer treatment [4]

Core Insights - Puma Biotechnology (PBYI) stock has shown strong performance, increasing by 29.6% over the past three months, significantly outperforming the industry (3.9% rise) and the S&P 500 index [1][8] - The primary driver for this stock increase was better-than-expected results, along with improving sales of its sole marketed product, Nerlynx, and positive momentum in its pipeline [2][4] Nerlynx Sales Performance - Nerlynx (neratinib) is approved for treating early-stage HER2-positive breast cancer and advanced or metastatic HER2-positive breast cancer [3] - Sales of Nerlynx rose by 9% year-over-year to $92.3 million in the first half of 2025, with expectations for full-year sales to be between $192 million and $198 million [4][8] Pipeline Developments - Puma Biotechnology has in-licensed alisertib, an aurora kinase A inhibitor, from Takeda, targeting hormone receptor-positive breast cancer and small-cell lung cancer (SCLC) [5] - The company is conducting a phase II study (ALISCA-Lung1) for alisertib as a monotherapy for extensive-stage SCLC, with interim data expected in Q4 2025 [6][9] - Another phase II study (ALISCA-Breast1) is underway for alisertib in combination with endocrine treatment for chemotherapy-naïve HER2-negative, hormone receptor-positive metastatic breast cancer, with initial data also expected in Q4 2025 [9] Competitive Landscape - Puma Biotechnology is heavily reliant on Nerlynx for revenue, as it has no other approved products [11] - The breast cancer market is competitive, with established therapies like Roche's Herceptin and Novartis' Tykerb posing significant challenges [11][12] - Alisertib, if successfully developed, may face intense competition in its target market [12] Valuation and Earnings Estimates - Puma Biotechnology is currently trading at a price-to-sales (P/S) ratio of 0.94, which is lower than the industry average of 2.13, but above its five-year mean of 0.73 [13] - The Zacks Consensus Estimate for 2025 earnings per share has increased from 65 cents to 66 cents, while estimates for 2026 have risen from 51 cents to 60 cents [14]

Core Insights - The company is focused on the development of transcript-related projects, indicating a commitment to enhancing their offerings in this area [1] - The publication of thousands of quarterly earnings calls per quarter demonstrates significant growth and expansion in coverage [1]

Puma Biotechnology FY Conference Summary Company Overview - **Company**: Puma Biotechnology (NasdaqGS: PBYI) - **Key Products**: NERLYNX (neratinib), alisertib - **Focus**: Treatment of HER2-positive breast cancer and small cell lung cancer Key Points Product Pipeline - NERLYNX is FDA-approved for extended adjuvant treatment of HER2-positive breast cancer and metastatic HER2-positive breast cancer [1][25] - Alisertib is in phase 2 testing for hormone receptor-positive, HER2-negative metastatic breast cancer and small cell lung cancer [1] Commercial Capabilities - NERLYNX is sold in the U.S. through specialty pharmacy and specialty distribution channels [1][2] - Q2 2025 net revenue for NERLYNX was $49.2 million, up from $44.4 million in Q2 2024 and $43.1 million in Q1 2025 [2] Sales Performance - 2,608 bottles of NERLYNX were sold in Q2 2025, an increase from 2,515 in Q2 2024 and 2,338 in Q1 2025 [2][3] - 71% of patients started treatment at a reduced dose to improve tolerability, addressing GI toxicity [3][4] Market Potential - In the U.S., there are approximately 28,300 patients with early-stage HER2-positive breast cancer, with 6,000 patients recommended for NERLYNX [5] - In the EU, there are 37,000 patients with early-stage HER2-positive breast cancer, with 65% to 70% being HR-positive [5] Financial Guidance - Q3 2025 guidance for NERLYNX revenues is $46 million to $48 million, with full-year expectations of $192 million to $198 million [6] - Expected net income for the full year is $23 million to $28 million [6] Alisertib Development - Alisertib shows activity in various solid tumors and hematological malignancies [8] - A phase 2 trial for alisertib in breast cancer is ongoing, with interim data expected in Q4 2025 or Q1 2026 [14] Clinical Trials and Efficacy - Alisertib monotherapy showed a 23% objective response rate in hormone receptor-positive, HER2-negative breast cancer [10] - In combination with fulvestrant, alisertib showed a 20% response rate [11] - In small cell lung cancer, alisertib monotherapy had a 21% response rate [15] Intellectual Property - Strong IP for NERLYNX with patents extending to 2031 for specific uses [20][21] - Alisertib's composition of matter patent expires in 2029, with additional patents for various uses extending to 2034 [21] Financial Position - As of the last quarter, Puma had $96 million in cash and marketable securities, with a net income of $5.9 million [24] Company Highlights - NERLYNX is the first HER2-positive drug approved for extended adjuvant treatment in early-stage breast cancer [25] - Alisertib presents a novel biomarker-directed development opportunity [25] Management and Governance - Key management includes CEO and President, Maximo F. Nougues (CFO), and Doug Hunt (Chief Scientific Officer) [24] Additional Notes - The company has not raised public funds since 2016, with two private placements in 2022 [24] - A jury trial awarded Puma $107.5 million in damages against AstraZeneca for patent infringement, but the patents were later ruled invalid [22][23]

Core Viewpoint - Puma Biotech (PBYI) has experienced a bearish trend, losing 12% in the past two weeks, but the formation of a hammer chart pattern suggests a potential trend reversal as buying interest may be increasing [1][2]. Technical Analysis - The hammer chart pattern indicates a possible bottoming out, with reduced selling pressure, suggesting that bulls may be gaining control [2][5]. - A hammer pattern forms when there is a small candle body with a long lower wick, indicating that despite a downtrend, buying interest emerges after reaching a new low [4][5]. - The effectiveness of the hammer pattern is enhanced when used alongside other bullish indicators, as its strength is dependent on its placement on the chart [6]. Fundamental Analysis - Recent upward revisions in earnings estimates for PBYI are viewed as a bullish indicator, correlating strongly with near-term stock price movements [7]. - Over the last 30 days, the consensus EPS estimate for the current year has increased by 1%, indicating analysts expect better earnings than previously predicted [8]. - PBYI holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [9][10].

Core Viewpoint - Puma Biotech (PBYI) has shown strong stock performance, with a 40.6% increase over the past month and a 59% gain since the start of the year, outperforming the Zacks Medical sector and the Zacks Medical - Biomedical and Genetics industry [1] Financial Performance - Puma Biotech has consistently beaten earnings estimates, reporting an EPS of $0.15 against a consensus estimate of $0.11 in its last earnings report [2] - For the current fiscal year, the company is expected to post earnings of $0.65 per share on revenues of $216.32 million, reflecting a -16.67% change in EPS and a -6.15% change in revenues [3] - For the next fiscal year, earnings are projected to be $0.50 per share on revenues of $235.8 million, indicating a year-over-year change of -22.31% in EPS and a 9.01% increase in revenues [3] Valuation Metrics - Puma Biotech has a Value Score of A, with Growth and Momentum Scores of B and C respectively, resulting in a combined VGM Score of A [6] - The stock trades at 7.5X current fiscal year EPS estimates, significantly lower than the peer industry average of 21.2X, and at 5.7X trailing cash flow compared to the peer group's average of 14.9X, positioning it favorably for value investors [7] Zacks Rank - Puma Biotech holds a Zacks Rank of 2 (Buy), supported by a solid earnings estimate revision trend, making it a suitable choice for investors looking for stocks with strong potential [8]

Core Insights - Puma Biotechnology (PBYI) reported second-quarter 2025 adjusted earnings of 15 cents per share, surpassing the Zacks Consensus Estimate of 11 cents, and reversing the adjusted loss of 5 cents per share from the previous year [1][5] - Total revenues for the second quarter reached $52.4 million, exceeding the Zacks Consensus Estimate of $50 million, and reflecting an 11.2% year-over-year increase driven by higher product revenues [2][5] - The company maintained its 2025 revenue outlook of $212 million to $222 million, with Nerlynx sales expected to be between $192 million and $198 million [8] Financial Performance - Product revenues from Nerlynx amounted to $49.2 million in Q2, representing a 10.8% year-over-year increase and aligning with management's guidance [3][5] - Royalty revenues increased by approximately 18.5% year-over-year to $3.2 million, surpassing both model estimates and the guided range [6] - Total operating costs for the quarter were $45.8 million, down 7.1% year-over-year, with selling, general and administrative expenses declining 28% to $18 million [6] Future Guidance - For Q3 2025, total revenues are projected to be between $48 million and $51 million, with Nerlynx product sales expected in the range of $46 million to $48 million [9] - Royalty revenues for Q3 are anticipated to be between $2 million and $3 million, with net income expected to range from $2 million to $4 million [9] Pipeline Developments - Puma Biotechnology is developing alisertib, an aurora kinase A inhibitor, for hormone receptor-positive breast cancer and small-cell lung cancer (SCLC), having in-licensed the rights from Takeda in 2022 [10] - The company is conducting a phase II study (ALISCA-Lung1) for alisertib as a monotherapy in extensive-stage SCLC, with interim data expected in Q4 2025 [11] - Additionally, a phase II study (ALISCA-Breast1) is underway for alisertib in combination with endocrine treatment for chemotherapy-naïve HER2-negative, hormone receptor-positive metastatic breast cancer, with initial data also expected in Q4 2025 [12]

Core Insights - Puma Biotechnology reported a return to profitability in Q2 2025, with non-GAAP EPS of $0.15 and GAAP revenue of $52.4 million, exceeding estimates [1][2] - The company reiterated its full-year guidance, projecting total GAAP revenue between $212 million and $222 million and net income of $23 million to $28 million [1][13] Financial Performance - Non-GAAP EPS was $0.15, surpassing the estimate of $0.09, and up from a loss of $0.05 in Q2 2024 [2][7] - GAAP revenue reached $52.4 million, an increase of 11.3% from $47.1 million in Q2 2024 [2][7] - Net product revenue from NERLYNX was $49.2 million, up 10.8% from $44.4 million in Q2 2024 [2][5] - Royalty revenue increased by 18.5% to $3.2 million compared to $2.7 million in Q2 2024 [2][6] - GAAP net income was $5.9 million, a turnaround from a loss of $4.5 million in Q2 2024 [2][7] Business Strategy - Puma focuses on developing and commercializing cancer therapies, particularly NERLYNX for HER2-positive breast cancer [3][4] - The company emphasizes market penetration, global partnerships, and patient education to drive NERLYNX sales [4][9] - Ongoing clinical programs for alisertib are part of Puma's strategy for future growth [4][10] Operational Highlights - The company achieved a 28% reduction in SG&A costs to $18.0 million, primarily due to lower legal expenses [7][8] - R&D expenses increased by 14% to $15.5 million, reflecting investments in alisertib trials [7][11] - Cash and equivalents totaled $96.0 million, with a reduction in debt to $34.0 million [8] Outlook - Management expects total revenue for Q3 2025 to be between $48 million and $51 million, with net income projected at $2 million to $4 million [13][14] - The company aims to diversify revenue sources beyond NERLYNX and is exploring new pipeline assets for potential acquisition [14]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was reported at $52.3 million, with product revenue net at $49.2 million, an increase from $43.1 million in Q1 2025 and $44.4 million in Q2 2024 [5][19][26] - Net income based on GAAP for Q2 2025 was $5.9 million or $0.12 per share, compared to $3 million or $0.06 per share in Q1 2025 [25][26] - Non-GAAP net income for Q2 2025 was $7.5 million or $0.15 per share, reflecting an increase from Q1 2025 [26][27] - Cash burn for Q2 2025 was approximately $2.9 million, a decrease from $7.8 million in Q1 2025 [32] Business Line Data and Key Metrics Changes - NERLYNX sales in Q2 2025 were $49.2 million, up from $43.1 million in Q1 2025, driven by an increase in bottles sold [19][26] - Total prescriptions (TRx) increased by 3% quarter over quarter but declined by 2% year over year [21] - New prescriptions (NRx) decreased by approximately 3% quarter over quarter and 1% year over year [21] Market Data and Key Metrics Changes - The specialty pharmacy channel accounted for 63% of the business, while the specialty distributor channel accounted for 37% in Q2 2025 [18] - Demand in the specialty distributor channel grew by 8% quarter over quarter and 17% year over year [22] Company Strategy and Development Direction - The company is focused on increasing awareness of NERLYNX and its clinical benefits for HER2 positive early breast cancer patients [13][15] - Future clinical development of alasertib will focus on patients with specific biomarkers in breast and lung cancers [9][10] - The company is evaluating potential in-licensing or acquisition of additional drugs to diversify its portfolio [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining positive net income and emphasized fiscal responsibility to shareholders [34] - The company anticipates net NERLYNX product revenue for the full year 2025 to be between $192 million and $198 million [28] - Management acknowledged the significant unmet medical need in oncology and the commitment to finding effective treatments [35] Other Important Information - The company expects to have interim data from ongoing clinical trials later in 2025 [10][12] - The gross to net adjustment for Q2 2025 was 20.8%, unchanged from Q1 2025 [27] Q&A Session Summary Question: What is the venue for upcoming data disclosures? - Management indicated that disclosures would likely be presented as corporate updates, possibly around November [36][37] Question: What are the criteria for advancing clinical trials? - The company highlighted the need for progression-free survival (PFS) and overall survival (OS) benefits to justify further advancement in trials [40][41] Question: How will meeting or falling short of clinical trial bars impact strategic views? - Management stated that they would be selective in pursuing additional products and would not want to jeopardize profitability [43][44]

PART I – FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements, management's discussion, market risk disclosures, and controls and procedures [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements show a shift to net income and positive operating cash flow for the six months ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20and%20December%2031%2C%202024) The balance sheets show a decrease in total assets and liabilities, with an increase in stockholders' equity as of June 30, 2025 | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :----- | :--------------------------- | :------------------------------- | | Total Assets | $194.9 | $213.3 | | Total Liabilities | $90.2 | $121.2 | | Total Stockholders' Equity | $104.7 | $92.1 | - Cash and cash equivalents decreased from **$69.2 million** to **$54.7 million**, while marketable securities increased from **$31.7 million** to **$41.4 million**[13](index=13&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) The statements of operations show increased revenue and a shift from operating loss to income for the three and six months ended June 30, 2025 | Metric | 3 Months Ended June 30, 2025 (in millions) | 3 Months Ended June 30, 2024 (in millions) | 6 Months Ended June 30, 2025 (in millions) | 6 Months Ended June 30, 2024 (in millions) | | :----- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Total Revenue | $52.4 | $47.1 | $98.4 | $90.8 | | Income (loss) from operations | $6.6 | $(2.2) | $10.6 | $(4.5) | | Net Income (loss) | $5.9 | $(4.5) | $8.8 | $(9.3) | | Basic EPS | $0.12 | $(0.09) | $0.18 | $(0.19) | | Diluted EPS | $0.12 | $(0.09) | $0.18 | $(0.19) | - Total revenue increased by **11.4%** for the three months and **8.4%** for the six months ended June 30, 2025, compared to the same periods in 2024[15](index=15&type=chunk) - Operating costs and expenses decreased by **7.0%** for the three months and **7.9%** for the six months ended June 30, 2025, compared to the same periods in 2024[15](index=15&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) The statements show a positive shift in comprehensive income for the three and six months ended June 30, 2025, compared to prior year losses | Metric | 3 Months Ended June 30, 2025 (in millions) | 3 Months Ended June 30, 2024 (in millions) | 6 Months Ended June 30, 2025 (in millions) | 6 Months Ended June 30, 2024 (in millions) | | :----- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Net income (loss) | $5.9 | $(4.5) | $8.8 | $(9.3) | | Unrealized loss on available-for-sale securities, net of tax | $(0.003) | $(0.006) | $(0.02) | $(0.028) | | Comprehensive income (loss) | $5.9 | $(4.5) | $8.8 | $(9.4) | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) The statements detail changes in stockholders' equity, reflecting positive contributions from net income in 2025 compared to prior year losses | Metric | June 30, 2025 (in millions) | June 30, 2024 (in millions) | | :----- | :--------------------------- | :--------------------------- | | Total Stockholders' Equity (3 Months) | $104.7 | $48.5 | | Total Stockholders' Equity (6 Months) | $104.7 | $48.5 | | Additional Paid-in Capital (6 Months) | $1,410.8 | $1,403.0 | | Accumulated Deficit (6 Months) | $(1,306.1) | $(1,354.5) | - Net income of **$5.9 million** for the three months and **$8.8 million** for the six months ended June 30, 2025, contributed positively to equity, contrasting with net losses in the prior year[19](index=19&type=chunk)[21](index=21&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) The cash flow statements show increased cash from operating activities and a significant rise in cash used for financing activities in 2025 | Activity | 6 Months Ended June 30, 2025 (in millions) | 6 Months Ended June 30, 2024 (in millions) | | :------- | :------------------------------------------ | :------------------------------------------ | | Operating activities | $17.7 | $12.3 | | Investing activities | $(9.7) | $(18.4) | | Financing activities | $(22.5) | $(11.3) | | Net decrease in cash, cash equivalents and restricted cash | $(14.6) | $(17.4) | | Cash, cash equivalents and restricted cash, end of period | $56.8 | $69.2 | - Net cash provided by operating activities increased by **$5.4 million**, or **44.2%**, for the six months ended June 30, 2025, compared to the same period in 2024[24](index=24&type=chunk) - Cash used in financing activities increased significantly due to higher debt payments in 2025[24](index=24&type=chunk) [Note 1—Business and Basis of Presentation](index=11&type=section&id=Note%201%E2%80%94Business%20and%20Basis%20of%20Presentation) This note outlines the company's core business, financial performance highlights, and management's assessment of liquidity for the upcoming year - The Company commercializes NERLYNX® (neratinib) for HER2-positive breast cancer and is developing alisertib for various cancer types[25](index=25&type=chunk)[31](index=31&type=chunk) - The Company reported net income of approximately **$8.8 million** and cash provided by operations of approximately **$17.7 million** for the six months ended June 30, 2025[32](index=32&type=chunk) - Management believes existing cash, cash equivalents, marketable securities (**$96.0 million** total at June 30, 2025), product sales, and sub-license payments are sufficient to meet operating cash needs for at least one year[32](index=32&type=chunk)[33](index=33&type=chunk) [Note 2—Significant Accounting Policies](index=13&type=section&id=Note%202%E2%80%94Significant%20Accounting%20Policies) This note details the company's key accounting policies, including segment reporting, revenue recognition, and the evaluation of new accounting standards - The Company operates as a single reporting segment, focusing on the development and commercialization of cancer care products, with NERLYNX® generating global product, license, and royalty revenue[38](index=38&type=chunk) - Revenue recognition for product sales is recorded net of variable consideration, including trade discounts, product returns, chargebacks, government and payor rebates, and patient assistance programs[53](index=53&type=chunk) - The Company is evaluating the impact of new FASB ASUs on income tax disclosures (ASU 2023-09, effective after Dec 15, 2024) and expense disaggregation (ASU 2024-03, effective after Dec 15, 2026)[110](index=110&type=chunk)[111](index=111&type=chunk) [Note 3—Accounts Receivable, Net](index=30&type=section&id=Note%203%E2%80%94Accounts%20Receivable%2C%20Net) This note details the composition of net accounts receivable and the recorded recovery to the provision for credit losses | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :----- | :--------------------------- | :------------------------------- | | Trade accounts receivable | $22.5 | $26.4 | | Royalty revenue receivable | $3.6 | $6.0 | | Total accounts receivable, net | $25.9 | $32.0 | - A recovery to the provision for credit loss of **$0.3 million** and **$0.2 million** was recorded for the three months ended June 30, 2025 and 2024, respectively, and **$0.1 million** for each of the six months ended June 30, 2025 and 2024[113](index=113&type=chunk) [Note 4—Prepaid Expenses and Other](index=30&type=section&id=Note%204%E2%80%94Prepaid%20Expenses%20and%20Other) This note outlines the changes in current and long-term prepaid expenses, highlighting increases in prepaid taxes and other long-term amounts | Category | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :------- | :--------------------------- | :------------------------------- | | Current Prepaid Expenses | $3.9 | $5.9 | | Long-term Prepaid Expenses | $1.8 | $0.3 | | Totals | $5.7 | $6.2 | - Prepaid Taxes increased significantly from **$21 thousand** to **$722 thousand** in current prepaid expenses[114](index=114&type=chunk) - Other long-term prepaid amounts increased from **$119 thousand** to **$1.7 million**, primarily for commercial copay support programs[114](index=114&type=chunk) [Note 5—Leases](index=30&type=section&id=Note%205%E2%80%94Leases) This note details lease commitments, including a significant office lease amendment and future minimum lease payment obligations - The Los Angeles office lease was amended in July 2025, extending the term to August 31, 2031, with total future lease payments of approximately **$6.6 million** and the return of a **$1.0 million** letter of credit[116](index=116&type=chunk) | Metric | 6 Months Ended June 30, 2025 (in millions) | | :----- | :------------------------------------------ | | Operating cash flows used for operating leases | $3.1 | | Weighted-average remaining lease term | 0.8 years | | Weighted average discount rate | 10.9% | | Future Minimum Lease Payments (in millions) | Amount | | :----------------------------------------- | :----- | | 2025 | $3.0 | | 2026 | $1.5 | | Total minimum lease payments | $4.5 | [Note 6—Property and Equipment, Net](index=32&type=section&id=Note%206%E2%80%94Property%20and%20Equipment%2C%20Net) This note presents the net property and equipment balances and associated depreciation expenses for the reported periods | Asset Category | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :------------- | :--------------------------- | :------------------------------- | | Total property and equipment | $8.5 | $8.4 | | Less: accumulated depreciation | $(8.1) | $(7.9) | | Property and equipment, net | $0.4 | $0.5 | - Depreciation expense was **$0.1 million** for the three months and **$0.2 million** for the six months ended June 30, 2025 and 2024, respectively[124](index=124&type=chunk) [Note 7—Intangible Assets, Net](index=34&type=section&id=Note%207%E2%80%94Intangible%20Assets%2C%20Net) This note details the net intangible assets, including acquired rights, accumulated amortization, and projected future amortization expenses | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :----- | :--------------------------- | :------------------------------- | | Acquired and in-licensed rights | $102.5 | $102.5 | | Less: accumulated amortization | $(56.2) | $(51.4) | | Total intangible assets, net | $46.3 | $51.1 | - Amortization expense was **$2.4 million** for the three months and **$4.9 million** for the six months ended June 30, 2025 and 2024, respectively[125](index=125&type=chunk)[126](index=126&type=chunk) - Estimated future amortization expense is approximately **$4.9 million** for the remainder of 2025, **$9.7 million** for each year from 2026-2029, and **$2.4 million** for 2030[126](index=126&type=chunk) [Note 8—Accrued Expenses](index=34&type=section&id=Note%208%E2%80%94Accrued%20Expenses) This note provides a breakdown of accrued expenses, highlighting changes in royalties, CRO services, variable consideration, bonus, and compensation | Category | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :------- | :--------------------------- | :------------------------------- | | Accrued royalties | $8.8 | $10.2 | | Accrued CRO services | $1.7 | $1.0 | | Accrued variable consideration | $8.4 | $10.8 | | Accrued bonus | $3.4 | $8.0 | | Accrued compensation | $5.8 | $4.4 | | Total current accrued expenses | $31.8 | $36.9 | - Accrued variable consideration and accrued bonus decreased significantly, while accrued compensation and CRO services increased[127](index=127&type=chunk) [Note 9—Debt](index=34&type=section&id=Note%209%E2%80%94Debt) This note details the company's debt structure, including the Athyrium Notes' terms, interest rates, and compliance with covenants | Metric | June 30, 2025 (in millions) | | :----- | :--------------------------- | | Total debt, inclusive of exit payment | $102.0 | | Current portion of long-term debt | $34.0 | | Long-term debt, net | $10.9 | | Principal balance outstanding (Athyrium Notes) | $44.5 | | Exit fees (Athyrium Notes) | $0.9 | - The Athyrium Notes bear interest at an annual rate of **8.00%** plus a SOFR-based component, with an effective interest rate of **12.99%** as of June 30, 2025[131](index=131&type=chunk) - The Company began quarterly principal payments of approximately **$11.1 million** (plus **2.0%** exit payment) in Q2 2024 and was in compliance with all covenants as of June 30, 2025[131](index=131&type=chunk)[133](index=133&type=chunk) [Note 10—Stockholders' Equity](index=38&type=section&id=Note%2010%E2%80%94Stockholders'%20Equity) This note outlines the authorized common stock, stock-based compensation expenses, and a significant CEO stock warrant - The Company has **100,000,000** shares of common stock authorized for issuance[136](index=136&type=chunk) - Stock-based compensation expense totaled **$1.6 million** for the three months and **$3.7 million** for the six months ended June 30, 2025[141](index=141&type=chunk) - A warrant allows the CEO to acquire **2,116,250** shares at **$16 per share** until October 4, 2026, to maintain at least **20%** ownership[137](index=137&type=chunk)[138](index=138&type=chunk) [Note 11—401(k) Savings Plan](index=39&type=section&id=Note%2011%E2%80%94401(k)%20Savings%20Plan) This note describes the company's 401(k) matching policy and the employer contributions for the reported period - The Company matches **100%** of the first **3%** of wages deferred and **50%** of the next **2%** for participating employees in its 401(k) plan[144](index=144&type=chunk) - Employer matching contributions were approximately **$1.0 million** for the six months ended June 30, 2025, an increase from **$0.9 million** in the prior year[144](index=144&type=chunk) [Note 12—Commitments and Contingencies](index=41&type=section&id=Note%2012%E2%80%94Commitments%20and%20Contingencies) This note details the company's contractual obligations, license agreements, and ongoing legal and patent-related proceedings - Contractual obligations include agreements with CMOs and CROs, with variable costs and milestones that are difficult to predict[146](index=146&type=chunk) - The Company has license agreements with Pfizer for NERLYNX and Takeda for alisertib, involving milestone payments and royalties[147](index=147&type=chunk)[150](index=150&type=chunk) - The Company is involved in a legal malpractice suit and several patent-related proceedings, including the AstraZeneca litigation (US), multiple generic challenges in China (Acebright, Aosaikang, Convalife, Kelun, Demai), and a European patent opposition (Hexal)[152](index=152&type=chunk)[154](index=154&type=chunk)[156](index=156&type=chunk)[159](index=159&type=chunk)[162](index=162&type=chunk)[165](index=165&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes Puma Biotechnology's financial performance, liquidity, and critical accounting policies, highlighting increased revenue and net income [Overview](index=48&type=section&id=Overview) This overview introduces Puma Biotechnology's focus on cancer care, its key commercial product NERLYNX, and the development of alisertib - Puma Biotechnology develops and commercializes innovative products for cancer care, with NERLYNX as its primary commercial product for HER2-positive breast cancer[171](index=171&type=chunk)[172](index=172&type=chunk) - The Company in-licensed alisertib from Takeda in 2022 and initiated Phase II trials for small cell lung cancer (ALISCA™ -Lung1) in February 2024 and hormone receptor-positive breast cancer (ALISCA™ -Breast1) in November 2024[174](index=174&type=chunk) - NERLYNX is approved in over **40** countries outside the US and commercialized through exclusive sub-license agreements[173](index=173&type=chunk) [Critical Accounting Policies](index=49&type=section&id=Critical%20Accounting%20Policies) This section confirms no material changes to critical accounting policies and estimates during the six months ended June 30, 2025 - No material changes to critical accounting policies and estimates occurred during the six months ended June 30, 2025, compared to the December 31, 2024, Annual Report on Form 10-K[178](index=178&type=chunk) [Summary of Income and Expenses](index=50&type=section&id=Summary%20of%20Income%20and%20Expenses) This section defines revenue recognition policies, outlines components of cost of sales, SG&A, and R&D expenses, and notes potential tax law impacts - Product revenue is net of variable consideration (discounts, returns, rebates), while license revenue is from satisfied performance obligations in sub-license agreements, and royalty revenue is from sub-licensee sales[179](index=179&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk) - Cost of sales includes manufacturing, freight, Pfizer royalties, and amortization of milestone payments. SG&A covers payroll, professional fees, and general corporate expenses. R&D includes CRO fees, consultants, and personnel costs[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) - The Company does not expect tariffs to materially impact product costs or results of operations but is evaluating the 'One Big Beautiful Bill' for potential tax law changes[186](index=186&type=chunk)[187](index=187&type=chunk) [Results of Operations](index=50&type=section&id=Results%20of%20Operations) This section analyzes the company's revenue, selling, general and administrative, and research and development expenses for the reported periods - Total revenue increased by **$5.4 million** (**11.4%**) for the three months and **$7.6 million** (**8.4%**) for the six months ended June 30, 2025, compared to 2024[189](index=189&type=chunk)[202](index=202&type=chunk) - Selling, general and administrative expenses decreased by **$6.9 million** (**27.7%**) for the three months and **$11.1 million** (**23.7%**) for the six months, primarily due to lower legal fees from the AstraZeneca litigation[193](index=193&type=chunk)[196](index=196&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk) - Research and development expenses increased by **$1.8 million** (**13.4%**) for the three months and **$2.1 million** (**7.7%**) for the six months, mainly due to increased alisertib study activity[195](index=195&type=chunk)[197](index=197&type=chunk)[209](index=209&type=chunk)[214](index=214&type=chunk) [Liquidity and Capital Resources](index=57&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's liquidity and capital resources, including cash balances, working capital, debt, and future funding sufficiency | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :----- | :--------------------------- | :------------------------------- | | Cash and cash equivalents | $54.7 | $69.2 | | Marketable securities | $41.4 | $31.7 | | Working capital | $57.5 | $51.5 | | Current portion of long-term debt | $34.0 | $45.3 | | Long-term debt | $10.9 | $21.7 | | Stockholders' equity | $104.7 | $92.1 | | Cash Flow Activity | 6 Months Ended June 30, 2025 (in millions) | 6 Months Ended June 30, 2024 (in millions) | | :----------------- | :------------------------------------------ | :------------------------------------------ | | Operating activities | $17.7 | $12.3 | | Investing activities | $(9.7) | $(18.4) | | Financing activities | $(22.5) | $(11.3) | | Net decrease in cash, cash equivalents and restricted cash | $(14.6) | $(17.4) | - The Company believes its existing cash, cash equivalents, marketable securities (**$96.0 million** total at June 30, 2025), and future product sales/sub-license payments are sufficient for operating cash and capital needs for at least one year[229](index=229&type=chunk) [Non-GAAP Financial Measures](index=60&type=section&id=Non-GAAP%20Financial%20Measures) This section explains the use of non-GAAP financial measures, primarily by adjusting for stock-based compensation to highlight operational performance - Non-GAAP financial measures are used to enhance understanding of financial performance, focusing on operational performance by excluding stock-based compensation[232](index=232&type=chunk) - Stock-based compensation represented approximately **4.9%** and **5.6%** of operating expenses (excluding cost of sales) for the three and six months ended June 30, 2025, respectively[232](index=232&type=chunk) | Metric | 3 Months Ended June 30, 2025 (in millions) | 3 Months Ended June 30, 2024 (in millions) | 6 Months Ended June 30, 2025 (in millions) | 6 Months Ended June 30, 2024 (in millions) | | :----- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | GAAP net income (loss) | $5.9 | $(4.5) | $8.8 | $(9.3) | | Stock-based compensation (SG&A) | $1.0 | $1.4 | $2.2 | $2.9 | | Stock-based compensation (R&D) | $0.6 | $0.6 | $1.4 | $1.6 | | Non-GAAP adjusted net income (loss) | $7.5 | $(2.5) | $12.5 | $(4.9) | | GAAP basic EPS | $0.12 | $(0.09) | $0.18 | $(0.19) | | Non-GAAP adjusted basic EPS | $0.15 | $(0.05) | $0.25 | $(0.10) | [Off-Balance Sheet Arrangements](index=61&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of off-balance sheet arrangements as defined by SEC regulations - The Company has no off-balance sheet arrangements as defined by SEC regulations[238](index=238&type=chunk) [Contractual Obligations](index=61&type=section&id=Contractual%20Obligations) This section states that no material changes to contractual obligations have occurred since the prior annual report - No material changes to contractual obligations and commitments have occurred since the December 31, 2024, Annual Report on Form 10-K[239](index=239&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risk from interest rate fluctuations, impacting variable-rate debt and cash equivalents, with specific sensitivity to Athyrium Notes - The Company's investment activities prioritize liquidity and principal preservation, with excess cash invested primarily in money market instruments[240](index=240&type=chunk) - A **10%** increase in interest rates is not expected to materially affect the realized value of cash equivalents due to their short-term maturities[241](index=241&type=chunk) - A **100 basis point** increase in interest rates would increase interest expense on the **$44.5 million** outstanding Athyrium Notes by **$0.4 million** for the quarter ended June 30, 2025[242](index=242&type=chunk) [Item 4. Controls and Procedures](index=62&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[244](index=244&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025[245](index=245&type=chunk) PART II – OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, exhibits, and signatures [Item 1. Legal Proceedings](index=63&type=section&id=Item%201.%20Legal%20Proceedings) The company is engaged in a legal malpractice suit and various patent-related proceedings, including US, Chinese, and European litigations [Legal Malpractice Suit](index=63&type=section&id=Legal%20Malpractice%20Suit) This note details the re-filed legal malpractice lawsuit against former attorneys, its dismissal, and the ongoing appeal - The Company re-filed a legal malpractice lawsuit against former attorneys in June 2023, which was dismissed by the Superior Court in March 2024 and is currently under appeal[153](index=153&type=chunk)[248](index=248&type=chunk) [Patent-Related Proceedings](index=63&type=section&id=Patent-Related%20Proceedings) This note outlines key patent litigations, including the AstraZeneca case, multiple Chinese generic challenges, and a European patent opposition - In the AstraZeneca litigation, a jury awarded Wyeth **$107.5 million** for Tagrisso® infringement, but the District Court later granted AstraZeneca's motion for judgment as a matter of law, invalidating certain patent claims. Wyeth has appealed this ruling[154](index=154&type=chunk)[249](index=249&type=chunk) - Multiple Chinese generic companies (Acebright, Aosaikang, Convalife, Kelun, Demai) have filed ANDAs for generic NERLYNX, leading to ongoing patent infringement lawsuits and administrative actions in China[156](index=156&type=chunk)[159](index=159&type=chunk)[162](index=162&type=chunk)[165](index=165&type=chunk)[167](index=167&type=chunk)[251](index=251&type=chunk)[254](index=254&type=chunk)[257](index=257&type=chunk)[260](index=260&type=chunk)[262](index=262&type=chunk) - A European patent opposition against EP3000467 (NERLYNX) was upheld as amended after the first instance hearing, but Hexal, Generics [UK] Limited, and Wyeth have filed appeals[168](index=168&type=chunk)[263](index=263&type=chunk) [Item 1A. Risk Factors](index=68&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the last annual report, though new risks may emerge - No material changes to risk factors have occurred since the December 31, 2024, Annual Report on Form 10-K[265](index=265&type=chunk) - The Company acknowledges that additional risks and uncertainties, currently deemed immaterial or unknown, could affect future results[265](index=265&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=68&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales or purchases of equity securities by the issuer or affiliates occurred during the period - No recent sales of unregistered securities occurred[266](index=266&type=chunk) - No purchases of equity securities by the issuer or affiliated purchasers occurred[267](index=267&type=chunk) [Item 3. Defaults Upon Senior Securities](index=68&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - No defaults upon senior securities occurred[268](index=268&type=chunk) [Item 4. Mine Safety Disclosures](index=69&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item regarding mine safety disclosures is not applicable to the company - Mine Safety Disclosures are not applicable[269](index=269&type=chunk) [Item 5. Other Information](index=69&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[270](index=270&type=chunk) [Item 6. Exhibits](index=70&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, encompassing corporate documents, lease amendments, certifications, and XBRL files - Exhibits include the Second Amended and Restated Certificate of Incorporation, Fifth Amended and Restated Bylaws, Sixth Amendment to Office Lease, and certifications from principal executive and financial officers[272](index=272&type=chunk) - XBRL instance document, taxonomy extension schema, calculation, definition, and label linkbase documents, and cover page interactive data file are also included[272](index=272&type=chunk) [Signatures](index=71&type=section&id=Signatures) The report was officially signed by the President and CEO, and the CFO on August 7, 2025 - The report was signed by Alan H. Auerbach (President and CEO) and Maximo F. Nougues (CFO) on August 7, 2025[276](index=276&type=chunk)