Background Results HER2 activation results in enhanced tumor growth in preclinical models Aberrant HER2 activation HER2 amplification or overexpressionHER2 (ERBB2) somatic mutations P P P P P P P P P Activation of downstream signal transduction pathways Subset of HER2 mutations result in constitutive kinase signaling, oncogenic transformation and enhanced tumor growth in preclinical models1 Biliary tract cancer and HER2 mutations Biliary tract cancer is a heterogeneous and rare disease with poor prognosis; ...

Financial Performance - Net NERLYNX revenue reached approximately $49.3 million in Q3 2020[10] - Approximately 3,600 ex-factory bottles of NERLYNX were sold in Q3 2020[15] NERLYNX Usage - Around 33% of patients in Q3 2020 started NERLYNX at a reduced dose (fewer than 6 pills per day)[18, 20] Global Expansion & Regulatory Milestones - Australia/SE Asia: Approved in Australia (March 2019), Singapore (December 2019), Brunei, Malaysia, New Zealand (Q2/Q3 2020)[23] - Israel: Launched in Q1 2020; Approved for metastatic breast cancer in Q3 2020[24] - Canada: Approved in July 2019; Metastatic sNDS accepted by HC in September 2020[24] - Greater China: Approved in Hong Kong (November 2019), China (April 2020), and Taiwan (August 2020)[24] - Latin America: Launched in Argentina (Q1 2020); Approved in Chile (Q2 2020) and Ecuador (Q3 2020); Expecting approvals in Brazil, Colombia, Mexico, and Peru in 2021[25] - Europe: Launched in Germany, United Kingdom, and Austria (Q4 2019); Launched in Sweden and approved in Switzerland (Q1 2020); Planned launch in Finland (Q4 2020)[26] - South Korea: NDA filed in October 2020[28]

Puma Biotechnology, Inc. (PBY) Q3 2020 Earnings Conference Call November 5, 2020 4:30 PM ET Company Participants Mariann Ohanesian – Senior Director-Investor Relations Alan Auerbach – Chief Executive Officer, President, and Chairman of the Board Jeff Ludwig – Chief Commercial Officer Maximo Nougues – Chief Financial Officer Conference Call Participants Ed White – H.C. Wainwright & Company Samantha Semenkow – Citi Kennen MacKay – RBC Capital Markets Laura Christianson – Cowen and Company Operator Greetings ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-35703 PUMA BIOTECHNOLOGY, INC. (Exact name of registrant as specified in its charter) Delaware 77-0683487 (State or other jurisdiction ...

NERLYNX Revenue and Sales - Net NERLYNX revenue for Q2 2020 was approximately $48.8 million[9] - Approximately 3,700 commercial bottles of NERLYNX were sold in Q2 2020[13] NERLYNX Dosing Trends - Approximately 31% of patients in Q2 2020 started NERLYNX at a reduced dose[17] Rest of World Partnerships - Regulatory and Launch Milestones - Australia/SE Asia: Approved in Australia (March 2019), Singapore (December 2019), Brunei, Malaysia, and New Zealand (Q2/Q3 2020)[22] - Israel: Launched in Q1 2020[22] - Canada: Approved in July 2019[22] - Greater China: Approved in Hong Kong (November 2019), China (April 2020), and Taiwan (August 2020)[22] - Latin America: Argentina-Launched (Q1 2020), Approved in Chile (Q2 2020), Ecuador (2H 2020), Brazil, Colombia, Mexico, Peru (2021)[22] - Europe Middle East North and West Africa South Africa Turkey: Germany-Launched (Q4 2019), United Kingdom-Launched (Q4 2019), Austria-Launched (Q4 2019), Sweden Launched (Q1 2020), Approved in Switzerland (Q1 2020), Rest of Territory (2020-2023)[22] - South Korea: NDA Filing expected by the end of 2020[22]

Financial Data and Key Metrics Changes - Puma reported total revenue for Q2 2020 of $70.6 million, which includes net U.S. NERLYNX sales and license and royalty fees [7] - Net U.S. NERLYNX sales were $48.8 million in Q2 2020, a slight increase from $48.6 million in Q1 2020 but a decrease from $53.8 million in Q2 2019 [7][8] - The company reported a GAAP net income of $3.4 million or $0.08 per diluted share for Q2 2020, compared to net losses of $16.9 million in Q1 2020 and $11.2 million in Q4 2019 [25] - On a non-GAAP basis, net income was $14 million or $0.35 per diluted share for Q2 2020 [25] - The gross to net adjustment in Q2 was 14.4%, down from 16.3% in Q1 2020 [26] Business Line Data and Key Metrics Changes - License fees increased by $20.7 million in Q2 2020, including a one-time payment due to regulatory approval of NERLYNX in mainland China [8] - Royalty revenue for the quarter was $1.1 million [8] - NERLYNX sales gross revenue was $57 million in Q2 2020, compared to $58 million in Q1 2020 [25] Market Data and Key Metrics Changes - The number of new patients signing up in April was flat compared to March, with a decline in May attributed to the COVID-19 pandemic [16] - Approximately 22% of total bottles sold in Q2 were through the specialty distribution channel, consistent with Q1 [17] - In Q2, 8% to 10% of new patient starts were in the metastatic setting, with the majority in the extended management setting [19] Company Strategy and Development Direction - The company is focused on improving NERLYNX sales growth and has made new hires in the commercial team to adapt to a virtual commercial environment due to COVID-19 [32][33] - Puma is committed to addressing the unmet needs of women battling breast cancer and aims to enhance the effectiveness of NERLYNX [33] - The company anticipates NERLYNX net sales for the full year 2020 to be in the range of $200 million to $210 million, a reduction from previous estimates [27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that COVID-19 has negatively impacted commercial access and patient enrollment in clinical trials [16][11] - The company expects continued uncertainty regarding the impact of COVID-19 on sales, royalties, and license fees [27] - Management remains optimistic about the potential for NERLYNX to be approved in additional countries and is focused on expanding its market presence [20][21] Other Important Information - The company ended Q2 2020 with $107.3 million in cash, cash equivalents, and marketable securities [30] - Research and development expenses were $24.7 million in Q2 2020, a decrease from previous quarters [29] Q&A Session Summary Question: Contribution of metastatic revenues to overall NERLYNX picture - Management indicated that 8% to 10% of NERLYNX usage is in the metastatic setting, with anecdotal reports of off-label use in HER2-mutated breast cancer [35] Question: Guidance confirmation for adjuvant and metastatic settings - Management confirmed that the guidance provided is for both the adjuvant and metastatic settings [36] Question: Research on neratinib as a COVID-19 treatment - Management acknowledged awareness of research suggesting neratinib's potential as a COVID-19 treatment and indicated ongoing investigations [41] Question: HER2-mutant cervical cancer cohort update - Management did not have specific enrollment numbers but indicated plans to present more data in the future [42] Question: NERLYNX pricing strategy - Management refrained from commenting on future pricing strategies but emphasized the importance of maintaining a strong value proposition [46] Question: Impact of new language in NERLYNX package insert - Management noted that the ExteNET trial included a wide range of patients and plans to present data on specific cohorts at an upcoming meeting [50] Question: Salesforce and virtual interaction capabilities - Management discussed adapting the salesforce to virtual interactions due to COVID-19 and emphasized careful resource management [59][60] Question: Pre-NDA meeting preparations for HER2-mutated breast cancer - Management indicated that further analyses would depend on the data from the ongoing trials [61][62]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Delaware 77-0683487 (I.R.S. Employer Identification Number) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition peri ...

Financial Data and Key Metrics Changes - Puma reported total revenue for Q1 2020 of $51.2 million, which included license revenue of $2 million, royalty revenue of $0.6 million, and net sales of NERLYNX of $48.6 million. This represents a decline from $58.7 million in Q4 2019 but an increase of 6.7% from $45.6 million in Q1 2019 [7][28] - The company reported a GAAP net loss of $15.9 million or $0.43 per share for Q1 2020, compared to losses of $11.2 million and $16.9 million in Q4 and Q3 2019, respectively [28] - Non-GAAP net loss for Q1 2020 was $8 million or $0.20 per share [28] Business Line Data and Key Metrics Changes - NERLYNX net sales decreased from $58.7 million in Q4 2019 to $48.6 million in Q1 2020, with gross revenue from NERLYNX sales at $58 million in Q1 2020 compared to $68.5 million in Q4 2019 [28][29] - The percentage of new prescriptions using dose escalation techniques increased from 28.7% in Q4 2019 to 30.4% in Q1 2020 [14] - The number of NERLYNX prescribers increased by approximately 6.8% in Q1 2020 compared to Q4 2019 [13] Market Data and Key Metrics Changes - In Q1 2020, 9.3% of bottles sold were in the metastatic setting, up from 8.9% in Q4 2019 [41] - The company anticipates NERLYNX net sales for the fiscal year 2020 to be in the range of $215 million to $225 million, despite uncertainties due to COVID-19 [31] Company Strategy and Development Direction - Puma is focused on improving NERLYNX sales growth and has made key hires in its commercial team to enhance its market presence [37] - The company is exploring partnerships to expand NERLYNX availability globally, with recent approvals in China and plans for additional launches in Europe and Latin America [21][23] Management's Comments on Operating Environment and Future Outlook - Management expressed a conservative outlook regarding future sales trends due to uncertainties related to COVID-19, but remains optimistic about improved access to healthcare providers in the second half of 2020 [20][44] - The company is committed to addressing the unmet needs of women battling breast cancer and aims to enhance the effectiveness of its treatments [38] Other Important Information - Cash burn for Q1 2020 was approximately $11.6 million, with the company ending the quarter with $100.6 million in cash and marketable securities [35] - The gross to net adjustment in Q1 was about 16%, an increase from 14% in Q4 2019, primarily due to higher co-pay and coverage expenses [30] Q&A Session Summary Question: Metastatic revenue generated in Q1 - Management indicated that 9.3% of bottles sold in Q1 were in the metastatic setting, slightly up from Q4 [41] Question: Guidance and sales trends - Management maintained a conservative outlook due to COVID-19 but expects improved access in the latter half of the year to support sales growth [44] Question: Impact of COVID-19 on prescriptions - Management noted that while there is uncertainty, they have not observed a significant drop in insurance coverage due to unemployment spikes [84]

[PART I – FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section details the unaudited financial statements and management's analysis of financial performance and condition [Item 1. Financial Statements (Unaudited)](index=2&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements and detailed notes for Q1 2020 and 2019 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, including assets, liabilities, and equity, as of March 31, 2020, and December 31, 2019 Condensed Consolidated Balance Sheets (in thousands) | ASSETS (March 31, 2020) | Amount ($) | ASSETS (December 31, 2019) | Amount ($) | | :---------------------- | :--------- | :------------------------- | :--------- | | Cash and cash equivalents | 83,385 | Cash and cash equivalents | 60,037 | | Marketable securities | 17,170 | Marketable securities | 51,607 | | Accounts receivable, net| 31,542 | Accounts receivable, net | 28,896 | | Total current assets | 158,681 | Total current assets | 166,296 | | Total assets | 225,529 | Total assets | 234,905 | | | | | | | LIABILITIES & EQUITY (March 31, 2020) | Amount ($) | LIABILITIES & EQUITY (December 31, 2019) | Amount ($) | | :------------------------------------ | :--------- | :--------------------------------------- | :--------- | | Accounts payable | 17,268 | Accounts payable | 19,183 | | Accrued expenses | 69,464 | Accrued expenses | 69,030 | | Total current liabilities | 90,467 | Total current liabilities | 90,837 | | Long-term debt | 95,755 | Long-term debt | 94,962 | | Total liabilities | 216,152 | Total liabilities | 217,442 | | Total stockholders' equity | 9,377 | Total stockholders' equity | 17,463 | - Total assets decreased by approximately **$9.4 million** from **$234.9 million** at December 31, 2019, to **$225.5 million** at March 31, 2020, primarily driven by a decrease in marketable securities, partially offset by an increase in cash and cash equivalents[13](index=13&type=chunk) - Total stockholders' equity decreased by approximately **$8.1 million** from **$17.5 million** at December 31, 2019, to **$9.4 million** at March 31, 2020, mainly due to the net loss incurred during the period[13](index=13&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net loss for the three months ended March 31, 2020 and 2019 Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2020 ($) | Three Months Ended March 31, 2019 ($) | Change ($) | Change (%) | | :---------------------- | :------------------------------------ | :------------------------------------ | :--------- | :--------- | | Product revenue, net | 48,609 | 45,567 | 3,042 | 6.7% | | License revenue | 2,000 | 53,500 | (51,500) | -96.3% | | Royalty revenue | 608 | — | 608 | N/A | | Total revenue | 51,217 | 99,067 | (47,850) | -48.3% | | Total operating costs | 65,468 | 89,219 | (23,751) | -26.6% | | (Loss) profit from operations | (14,251) | 9,848 | (24,099) | -244.7% | | Net loss | (16,933) | (10,087) | (6,846) | 67.9% | | Net loss per share | (0.43) | (0.26) | (0.17) | 65.4% | - Total revenue decreased by **48.3%** primarily due to a significant reduction in license revenue, despite an increase in product revenue and the introduction of royalty revenue[15](index=15&type=chunk) - The company reported a higher net loss of **$16.9 million** in Q1 2020 compared to **$10.1 million** in Q1 2019, leading to an increased net loss per share[15](index=15&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This section presents the net loss and other comprehensive loss components for the three months ended March 31, 2020 and 2019 Condensed Consolidated Statements of Comprehensive Loss (in thousands) | Metric | Three Months Ended March 31, 2020 ($) | Three Months Ended March 31, 2019 ($) | | :---------------------- | :------------------------------------ | :------------------------------------ | | Net loss | (16,933) | (10,087) | | Other comprehensive loss| (63) | 32 | | Reclassifications of gain on available-for-sale securities | 3 | — | | Comprehensive loss | (16,993) | (10,055) | - Comprehensive loss increased to **$17.0 million** in Q1 2020 from **$10.1 million** in Q1 2019, reflecting the higher net loss and an unrealized loss on available-for-sale securities in the current period[17](index=17&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section outlines changes in stockholders' equity, including net loss and stock-based compensation, for the period Changes in Stockholders' Equity (in thousands, except share data) | Item | March 31, 2020 ($) | December 31, 2019 ($) | | :------------------------------------ | :----------------- | :-------------------- | | Balance at period start | 17,463 | 34,306 (Dec 31, 2018) | | Stock-based compensation | 8,907 | 18,138 | | Shares issued/vested | — | 1,082 | | Unrealized (loss) gain on securities | (63) | 32 | | Net loss | (16,933) | (10,087) | | Balance at period end | 9,377 | 43,471 (March 31, 2019) | - Total stockholders' equity decreased from **$17.46 million** at December 31, 2019, to **$9.38 million** at March 31, 2020, primarily due to the net loss of **$16.93 million**, partially offset by **$8.91 million** in stock-based compensation[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section details cash flows from operating, investing, and financing activities for the three months ended March 31, 2020 and 2019 Condensed Consolidated Statements of Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2020 ($) | Three Months Ended March 31, 2019 ($) | | :---------------------- | :------------------------------------ | :------------------------------------ | | Operating activities | (11,540) | (16,130) | | Investing activities | 34,377 | (44,583) | | Financing activities | — | 1,082 | | Net increase (decrease) in cash, cash equivalents and restricted cash | 22,837 | (59,631) | | Cash, cash equivalents and restricted cash, end of period | 96,047 | 53,107 | - Net cash used in operating activities decreased from **$16.1 million** in Q1 2019 to **$11.5 million** in Q1 2020[22](index=22&type=chunk) - Investing activities shifted from a net cash outflow of **$44.6 million** in Q1 2019 to a net cash inflow of **$34.4 million** in Q1 2020, primarily due to maturities of available-for-sale securities[22](index=22&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's business, accounting policies, and specific financial line items [Note 1—Business and Basis of Presentation](index=9&type=section&id=Note%201%E2%80%94Business%20and%20Basis%20of%20Presentation) Puma Biotechnology, Inc. is a biopharmaceutical company focused on developing and commercializing cancer care products, primarily NERLYNX (neratinib) for HER2-positive breast cancer. The company has incurred significant operating losses and expects to continue doing so, but believes existing cash and future product/license revenues are sufficient for at least one year. NERLYNX received FDA approval in 2017 and 2020 for different indications, and EC marketing authorization in 2018 - Puma Biotechnology, Inc. focuses on developing and commercializing innovative products for cancer care, with its primary product being **NERLYNX (neratinib)**[23](index=23&type=chunk) - NERLYNX received FDA approval in July 2017 for extended adjuvant treatment of early-stage HER2-positive breast cancer and in February 2020 for advanced or metastatic HER2-positive breast cancer in combination with capecitabine[25](index=25&type=chunk)[26](index=26&type=chunk) - The company reported a net loss of approximately **$16.9 million** and negative cash flows from operations of approximately **$11.5 million** for the three months ended March 31, 2020[30](index=30&type=chunk) - As of March 31, 2020, the company had approximately **$83.4 million** in cash and cash equivalents and **$17.2 million** in marketable securities, which it believes are sufficient to satisfy operating cash needs for at least one year[30](index=30&type=chunk) [Note 2—Significant Accounting Policies](index=10&type=section&id=Note%202%E2%80%94Significant%20Accounting%20Policies) This note details the significant accounting policies, including principles of consolidation, single segment reporting, use of estimates for variable consideration, and net loss per share calculation. It outlines revenue recognition under ASC 606 for product, license, and royalty revenues, and policies for cost of sales, R&D, stock-based compensation, income taxes, and financial instruments. The company classifies investment securities as available-for-sale and measures fair value using a three-level hierarchy. Recent accounting standard updates (ASU 2016-13, ASU 2018-13, ASU 2019-12) had no material effect on financial statements - The company operates in one business segment: the development and commercialization of innovative products to enhance cancer care[33](index=33&type=chunk) - Revenue from product sales is recognized net of variable consideration (discounts, returns, rebates) when the customer obtains control of the product[41](index=41&type=chunk)[45](index=45&type=chunk) - Research and development expenses are charged to operations as incurred, including clinical manufacturing, trial expenses, and third-party costs[59](index=59&type=chunk) Fair Value Measurements of Assets (in thousands) | Category | March 31, 2020 ($) | December 31, 2019 ($) | | :---------------------- | :----------------- | :-------------------- | | Cash equivalents (Level 1)| 76,054 | 41,295 | | Corporate bonds (Level 2) | 12,133 | 41,557 | | U.S. government securities (Level 1) | 5,037 | 10,050 | | Total | 93,224 | 92,902 | - The adoption of ASU 2016-13 (Credit Losses), ASU 2018-13 (Fair Value Measurement Disclosures), and ASU 2019-12 (Income Taxes) did not have a material effect on the company's financial position or results of operations[93](index=93&type=chunk)[94](index=94&type=chunk)[96](index=96&type=chunk) [Note 3—Accounts Receivable, Net](index=20&type=section&id=Note%203%E2%80%94Accounts%20Receivable,%20Net) Accounts receivable, net, increased to $31.5 million at March 31, 2020, from $28.9 million at December 31, 2019. This increase was primarily driven by a rise in license revenue receivable from Pint Accounts Receivable, Net (in thousands) | Category | March 31, 2020 ($) | December 31, 2019 ($) | | :---------------------- | :----------------- | :-------------------- | | Accounts receivable, net| 27,042 | 26,396 | | License revenue receivable| 4,500 | 2,500 | | Total accounts receivable, net | 31,542 | 28,896 | - The license revenue receivable increased by **$2.0 million**, relating to amounts owed from Pint for license revenue recognized in Q3 2019 and Q1 2020[97](index=97&type=chunk) [Note 4—Prepaid Expenses and Other](index=20&type=section&id=Note%204%E2%80%94Prepaid%20Expenses%20and%20Other) Total prepaid expenses and other increased to $16.4 million at March 31, 2020, from $15.3 million at December 31, 2019. This was mainly due to increases in other clinical development and professional fees, partially offset by a decrease in CRO services Prepaid Expenses and Other (in thousands) | Category | March 31, 2020 ($) | December 31, 2019 ($) | | :---------------------- | :----------------- | :-------------------- | | Current: | | | | CRO services | 4,118 | 4,810 | | Other clinical development| 3,187 | 2,043 | | Insurance | 2,502 | 3,452 | | Professional fees | 1,127 | 544 | | Other | 3,003 | 2,410 | | Total current | 13,937 | 13,259 | | Long-term: | | | | CRO services | 376 | 400 | | Other clinical development| 476 | 468 | | Other | 1,609 | 1,131 | | Total long-term | 2,461 | 1,999 | | Totals | 16,398 | 15,258 | [Note 5—Leases](index=20&type=section&id=Note%205%E2%80%94Leases) The company leases office space in Los Angeles and South San Francisco, and copier equipment, all classified as operating leases. Lease liabilities totaled $24.7 million as of March 31, 2020, with a weighted-average remaining lease term of 6.0 years and a weighted-average discount rate of 10.9%. The company also has a sublease for a portion of its Los Angeles office space, generating $0.1 million in income for Q1 2020 - The company has non-cancelable operating leases for office space in Los Angeles (until March 2026) and South San Francisco (until March 2026, with a five-year extension option)[99](index=99&type=chunk)[100](index=100&type=chunk) Lease Liabilities Maturity (in thousands) | Year | Amount ($) | | :--------------- | :--------- | | 2020 (remaining) | 3,933 | | 2021 | 5,365 | | 2022 | 5,483 | | 2023 | 5,631 | | 2024 | 5,805 | | Thereafter | 7,490 | | Total | 33,707 | | Less: imputed interest | (9,042) | | Total lease liabilities | 24,665 | - Operating sublease income of **$0.1 million** was recognized for the three months ended March 31, 2020, from a sublease of Los Angeles office space[102](index=102&type=chunk) [Note 6—Property and Equipment, Net](index=22&type=section&id=Note%206%E2%80%94Property%20and%20Equipment,%20Net) Property and equipment, net, decreased to $3.1 million at March 31, 2020, from $3.3 million at December 31, 2019. The company incurred $0.2 million in depreciation expense for both Q1 2020 and Q1 2019 Property and Equipment, Net (in thousands) | Category | March 31, 2020 ($) | December 31, 2019 ($) | | :---------------------- | :----------------- | :-------------------- | | Leasehold improvements | 3,779 | 3,779 | | Computer equipment | 2,698 | 2,698 | | Telephone equipment | 340 | 340 | | Furniture and fixtures | 2,360 | 2,346 | | Total cost | 9,177 | 9,163 | | Less: accumulated depreciation | (6,092) | (5,859) | | Totals | 3,085 | 3,304 | [Note 7—Intangible Assets, Net](index=22&type=section&id=Note%207%E2%80%94Intangible%20Assets,%20Net) Intangible assets, net, related to acquired and in-licensed rights, decreased to $39.5 million at March 31, 2020, from $40.5 million at December 31, 2019. The company incurred $1.0 million in amortization expense for both Q1 2020 and Q1 2019 Intangible Assets, Net (in thousands) | Category | March 31, 2020 ($) | Estimated Useful Life | | :---------------------- | :----------------- | :-------------------- | | Acquired and in-licensed rights | 50,000 | 13 Years | | Less: accumulated amortization | (10,526) | | | Total intangible asset, net | 39,474 | | - Estimated future amortization expense for intangible assets is approximately **$2.9 million** for the remainder of 2020 and **$3.9 million** annually from 2021 through 2029[92](index=92&type=chunk) [Note 8—Accrued Expenses](index=22&type=section&id=Note%208%E2%80%94Accrued%20Expenses) Total accrued expenses increased slightly to $69.5 million at March 31, 2020, from $69.0 million at December 31, 2019. Key components include accrued legal verdict expense ($31.4 million), accrued royalties ($7.8 million), and accrued CRO services ($6.8 million) Accrued Expenses (in thousands) | Category | March 31, 2020 ($) | December 31, 2019 ($) | | :---------------------- | :----------------- | :-------------------- | | Accrued legal verdict expense | 31,443 | 31,350 | | Accrued royalties | 7,783 | 8,866 | | Accrued CRO services | 6,811 | 8,502 | | Accrued variable consideration | 9,709 | 7,978 | | Accrued bonus | 2,271 | 1,618 | | Accrued compensation | 4,196 | 4,138 | | Accrued other clinical development | 2,044 | 2,546 | | Accrued professional fees | 1,940 | 1,775 | | Accrued legal fees | 646 | 266 | | Accrued manufacturing costs | 1,327 | 869 | | Other | 1,294 | 1,122 | | Totals | 69,464 | 69,030 | - Accrued legal verdict expense includes estimates for Hsu v. Puma Biotechnology, Inc. (**$9.1 million to $18.1 million** range) and Eshelman v. Puma Biotechnology, Inc., et al. (**$22.4 million** initial estimate)[107](index=107&type=chunk) [Note 9—Debt](index=23&type=section&id=Note%209%E2%80%94Debt) The company has $100.0 million in term loans outstanding under a New Credit Facility, entered into on June 28, 2019, with Oxford Finance LLC. This facility replaced a previous $155.0 million credit facility. The loans bear interest at the greater of 9.0% or prime rate plus 3.5%, with interest-only payments until August 1, 2021, and full repayment due June 1, 2024. The facility is secured by personal property (excluding intellectual property) and 65% of subsidiary capital stock, and includes revenue covenants - As of March 31, 2020, the company had **$100.0 million** in term loans outstanding under the New Credit Facility[119](index=119&type=chunk) - The New Credit Facility bears interest at an annual rate equal to the greater of **9.0%** or the prime rate plus **3.5%**[115](index=115&type=chunk) - Monthly interest-only payments are required until August 1, 2021, with principal and interest payments thereafter, and full repayment due June 1, 2024[115](index=115&type=chunk) - The company was in compliance with all applicable covenants under the New Credit Facility as of March 31, 2020[119](index=119&type=chunk) [Note 10—Stockholders' Equity](index=25&type=section&id=Note%2010%E2%80%94Stockholders'%20Equity) The company has 100,000,000 authorized common shares. Stock-based compensation expense decreased significantly to $8.9 million in Q1 2020 from $18.1 million in Q1 2019. This note details activity for stock options and restricted stock units (RSUs) under the 2011 and 2017 Incentive Award Plans, including grants, forfeitures, and exercises - Stock-based compensation expense decreased by **50.9%** to **$8.9 million** for the three months ended March 31, 2020, from **$18.1 million** in the prior year period[127](index=127&type=chunk) Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended March 31, 2020 ($) | Three Months Ended March 31, 2019 ($) | | :---------------------- | :------------------------------------ | :------------------------------------ | | Options - SG&A | 920 | 2,986 | | Options - R&D | 841 | 2,333 | | RSUs - SG&A | 3,772 | 6,889 | | RSUs - R&D | 3,374 | 5,930 | | Total | 8,907 | 18,138 | - As of March 31, 2020, unrecognized compensation cost for non-vested stock options was **$10.4 million** (over 2.1 years) and for non-vested RSUs was **$35.5 million** (over 1.6 years)[127](index=127&type=chunk) [Note 11—401(k) Savings Plan](index=27&type=section&id=Note%2011%E2%80%94401(k)%20Savings%20Plan) The company incurred approximately $0.4 million in employer matching contributions to its 401(k) savings plan for both the three months ended March 31, 2020 and 2019 - The company matches **100%** of the first **3%** of wages deferred by employees and **50%** on the next **2%** of wages deferred[130](index=130&type=chunk) - Employer matching contributions were approximately **$0.4 million** for both Q1 2020 and Q1 2019[130](index=130&type=chunk) [Note 12—Commitments and Contingencies](index=27&type=section&id=Note%2012%E2%80%94Commitments%20and%20Contingencies) The company has contractual obligations related to manufacturing and clinical research, and a license agreement with Pfizer for neratinib, involving milestone payments (up to $187.5 million) and low-to-mid teens royalties on net sales. The company is also involved in two significant legal proceedings: Hsu v. Puma Biotechnology, Inc. (class action, estimated damages $9-18 million) and Eshelman v. Puma Biotechnology, Inc., et al. (defamation, total judgment $26.3 million, appealed) - Under its license agreement with Pfizer, the company is obligated to make substantial milestone payments totaling approximately **$187.5 million** if all milestones are achieved, and pay annual royalties at a fixed rate in the low-to-mid teens of net sales[135](index=135&type=chunk) - In Hsu v. Puma Biotechnology, Inc., a class action, the jury found liability for one statement, with estimated class-wide damages ranging from **$9.0 million to $18.0 million**, subject to a claims process and appeals[137](index=137&type=chunk) - In Eshelman v. Puma Biotechnology, Inc., et al., a defamation lawsuit, the jury awarded **$15.9 million** in compensatory and **$6.5 million** in punitive damages, with prejudgment interest bringing the total judgment to **$26.3 million**, which the company is appealing[140](index=140&type=chunk) [Note 13—Subsequent Events](index=29&type=section&id=Note%2013%E2%80%94Subsequent%20Events) Subsequent events include the ongoing monitoring of the COVID-19 pandemic's impact, the return of an $8.4 million Paycheck Protection Program loan, marketing approval for NERLYNX in mainland China, and a new sub-license agreement with Bixink Therapeutics for South Korea, involving upfront and milestone payments up to $6 million plus double-digit royalties - The company returned an **$8.4 million** Paycheck Protection Program loan on April 30, 2020, following additional guidance from the U.S. Small Business Administration[142](index=142&type=chunk) - On April 27, 2020, NERLYNX received marketing approval in mainland China for extended adjuvant treatment of early-stage HER2-positive breast cancer[143](index=143&type=chunk) - On April 28, 2020, the company entered into a sub-license agreement with Bixink Therapeutics for South Korea, which includes upfront and milestone payments up to **$6 million** and double-digit royalties on net sales[144](index=144&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operational results, and the impact of COVID-19 for Q1 2020 [Overview](index=30&type=section&id=Overview) Puma Biotechnology is a biopharmaceutical company focused on developing and commercializing cancer treatments, primarily the oral version of neratinib (NERLYNX) for HER2-positive breast cancer. NERLYNX has received FDA and EC approvals for various indications, and the company has sub-license agreements for international commercialization. Funding has primarily come from product/license revenue, stock offerings, and credit facilities - The company's core focus is the development and commercialization of oral neratinib (**NERLYNX**) for HER2-positive breast cancer and HER2 mutated cancers[147](index=147&type=chunk) - NERLYNX received FDA approval in 2017 for extended adjuvant treatment and in February 2020 for advanced/metastatic HER2-positive breast cancer in combination with capecitabine[148](index=148&type=chunk) - The company has sub-license agreements for NERLYNX commercialization in numerous regions outside the United States, including Europe, Canada, China, and South Korea[149](index=149&type=chunk) [Impact of COVID-19](index=30&type=section&id=Impact%20of%20COVID-19) The COVID-19 pandemic poses significant risks, including potential declines in NERLYNX revenue due to patient travel restrictions and reduced physician interactions. Clinical trials may face disruptions in patient enrollment, site initiation, and supply chains. Increased unemployment could lead to more uninsured/underinsured patients, further impacting revenue. The company relies on third-party manufacturers, and disruptions could affect supply. While operations were maintained in Q1 2020, the long-term impact remains uncertain, potentially affecting liquidity and compliance with loan covenants - COVID-19 restrictions may deter cancer patients from doctor visits, leading to a decline in NERLYNX revenue[151](index=151&type=chunk) - Commercial teams and sales forces have suspended in-person interactions, limiting promotional activities to virtual channels[151](index=151&type=chunk) - The pandemic may negatively impact clinical trials due to enrollment difficulties, site initiation delays, and supply chain disruptions[151](index=151&type=chunk) - Increased unemployment rates could result in more uninsured or underinsured patients, adversely affecting revenue and potentially the ability to satisfy minimum revenue covenants[151](index=151&type=chunk) [Critical Accounting Policies](index=31&type=section&id=Critical%20Accounting%20Policies) No material changes to critical accounting policies were identified for the three months ended March 31, 2020. The discussion highlights revenue recognition for license agreements under ASC 606, including the estimation of transaction price and allocation to distinct performance obligations. The Pint Agreement is specifically mentioned for its milestone and royalty payments - No material changes to critical accounting policies and estimates occurred during the three months ended March 31, 2020[155](index=155&type=chunk) - License revenue recognition involves estimating the transaction price, including variable consideration, and allocating it to distinct performance obligations based on standalone selling price[157](index=157&type=chunk)[158](index=158&type=chunk) - The Pint Agreement includes potential future milestone and royalty payments, with two development-based milestones achieved in Q3 2019 and Q1 2020, leading to recognized license revenue[159](index=159&type=chunk) [Summary of Income and Expenses](index=32&type=section&id=Summary%20of%20Income%20and%20Expenses) This section defines the components of the company's income and expenses. Product revenue is net of variable consideration. License revenue is from satisfied performance obligations in license agreements. Royalty revenue is from international sales by sub-licensees. Cost of sales includes manufacturing, freight, royalties to Pfizer, and amortization of milestone payments. Selling, general and administrative (SG&A) expenses cover payroll, professional fees, and corporate costs. Research and development (R&D) expenses include clinical services, manufacturing of clinical materials, and clinical trials - Product revenue, net, is derived from NERLYNX sales to specialty pharmacies and distributors, recorded net of variable consideration[160](index=160&type=chunk) - Cost of sales includes third-party manufacturing, freight, Pfizer royalties, and amortization of the NERLYNX FDA approval milestone payment[163](index=163&type=chunk) - SG&A expenses primarily consist of salaries, stock-based compensation, professional fees, and general corporate expenses[164](index=164&type=chunk) - R&D expenses are expensed as incurred and include CRO fees, consultant fees, salaries, and stock-based compensation related to clinical development[165](index=165&type=chunk) [Results of Operations (Three Months Ended March 31, 2020 Compared to Three Months Ended March 31, 2019)](index=32&type=section&id=Results%20of%20Operations%20(Three%20Months%20Ended%20March%2031,%202020%20Compared%20to%20Three%20Months%20Ended%20March%2031,%202019)) Total revenue decreased by 48.3% to $51.2 million, primarily due to a significant drop in license revenue, despite a 6.7% increase in product revenue. Operating costs and expenses decreased by 26.6%, driven by lower SG&A and R&D expenses. The company reported an operating loss of $14.3 million compared to a profit of $9.8 million in the prior year, and a net loss of $16.9 million, up from $10.1 million Revenue Comparison (in thousands) | Revenue Category | Q1 2020 ($) | Q1 2019 ($) | Change ($) | Change (%) | | :-------------------- | :---------- | :---------- | :--------- | :--------- | | Product revenue, net | 48,609 | 45,567 | 3,042 | 6.7% | | License revenue | 2,000 | 53,500 | (51,500) | -96.3% | | Royalty revenue | 608 | — | 608 | N/A | | Total revenue | 51,217 | 99,067 | (47,850) | -48.3% | - Product revenue increased by **6.7%** due to a **10%** increase in gross selling price, partially offset by a **9%** decrease in NERLYNX bottle volume[167](index=167&type=chunk) Operating Expenses Comparison (in thousands) | Expense Category | Q1 2020 ($) | Q1 2019 ($) | Change ($) | Change (%) | | :-------------------- | :---------- | :---------- | :--------- | :--------- | | Cost of sales | 9,076 | 7,985 | 1,091 | 13.7% | | SG&A | 30,937 | 45,506 | (14,569) | -32.0% | | R&D | 25,455 | 35,728 | (10,273) | -28.8% | | Total operating costs | 65,468 | 89,219 | (23,751) | -26.6% | - SG&A expenses decreased by **$14.6 million**, primarily due to an **$8.7 million** decrease in legal fees and a **$5.2 million** decrease in stock-based compensation[172](index=172&type=chunk) - R&D expenses decreased by **$10.3 million**, mainly due to a **$4.9 million** decrease in clinical trial expense and a **$4.0 million** decrease in stock-based compensation[177](index=177&type=chunk) Other Income (Expenses) Comparison (in thousands) | Category | Q1 2020 ($) | Q1 2019 ($) | Change ($) | Change (%) | | :-------------------- | :---------- | :---------- | :--------- | :--------- | | Interest income | 386 | 872 | (486) | -55.7% | | Interest expense | (3,068) | (4,443) | 1,375 | -30.9% | | Legal verdict expense | (93) | (16,350) | 16,257 | -99.4% | | Total other expenses | (2,682) | (19,935) | 17,253 | -86.5% | [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The company's cash and cash equivalents increased to $83.4 million at March 31, 2020, from $60.0 million at December 31, 2019, while marketable securities decreased. Net cash provided by investing activities was $34.4 million in Q1 2020, a significant improvement from a $44.6 million outflow in Q1 2019. Operating activities continued to use cash, but at a reduced rate. The company believes its current liquidity and future revenues are sufficient for at least one year, but acknowledges risks from market conditions and the COVID-19 pandemic Liquidity and Capital Resources (in thousands) | Metric | March 31, 2020 ($) | December 31, 2019 ($) | | :---------------------- | :----------------- | :-------------------- | | Cash and cash equivalents | 83,385 | 60,037 | | Marketable securities | 17,170 | 51,607 | | Working capital | 68,214 | 75,459 | | Stockholders' equity | 9,377 | 17,463 | Cash Flow Activities (in thousands) | Activity | Q1 2020 ($) | Q1 2019 ($) | | :---------------------- | :---------- | :---------- | | Operating activities | (11,540) | (16,130) |\ | Investing activities | 34,377 | (44,583) | | Financing activities | — | 1,082 | | Net increase (decrease) in cash, cash equivalents and restricted cash | 22,837 | (59,631) | - The company expects to continue incurring significant losses and will need to generate substantial revenue to sustain operations and commercialize neratinib[194](index=194&type=chunk) - The ability to obtain future funding may be adversely impacted by uncertain market conditions, the COVID-19 pandemic, commercialization success, regulatory decisions, or clinical trial results[194](index=194&type=chunk) [Non-GAAP Financial Measures](index=38&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP financial measures, specifically adjusted net (loss) income and adjusted net (loss) income per share, by excluding stock-based compensation. For Q1 2020, the non-GAAP adjusted net loss was $8.0 million, compared to a non-GAAP adjusted net income of $8.1 million in Q1 2019. Stock-based compensation represented 15.8% and 22.4% of operating expenses (excluding cost of sales) in Q1 2020 and Q1 2019, respectively Reconciliation of GAAP to Non-GAAP Net (Loss) Income (in thousands, except per share data) | Metric | Q1 2020 ($) | Q1 2019 ($) | | :---------------------- | :---------- | :---------- | | GAAP net loss | (16,933) | (10,087) | | Stock-based compensation - SG&A | 4,692 | 9,875 | | Stock-based compensation - R&D | 4,215 | 8,263 | | Non-GAAP adjusted net (loss) income | (8,026) | 8,051 | | GAAP net loss per share—basic | (0.43) | (0.26) | | Non-GAAP adjusted basic net (loss) income per share | (0.20) | 0.21 | - Stock-based compensation accounted for approximately **15.8%** of operating expenses (excluding cost of sales) in Q1 2020, down from **22.4%** in Q1 2019[197](index=197&type=chunk) [Off-Balance Sheet Arrangements](index=38&type=section&id=Off-Balance%20Sheet%20Arrangements) The company does not have any off-balance sheet arrangements as defined by SEC regulations - The company has no off-balance sheet arrangements[200](index=200&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risk primarily from interest rate fluctuations affecting its cash equivalents and borrowings. Investments in cash equivalents are short-term, limiting exposure to interest rate changes. However, its $100.0 million outstanding debt under the New Credit Facility bears a variable interest rate (greater of 9.0% or prime rate plus 3.5%), making interest expense sensitive to prime rate changes - The company's investment activities prioritize liquidity and principal preservation, with excess cash invested in short-term cash equivalents like money market investments[201](index=201&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[202](index=202&type=chunk) - The **$100.0 million** outstanding debt under the New Credit Facility has a variable interest rate (greater of **9.0%** or prime rate + **3.5%**), making interest expense susceptible to changes in the prime rate[203](index=203&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the effectiveness of the company's disclosure controls and procedures as of March 31, 2020, and concluded they were effective. There were no material changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were evaluated and deemed effective as of March 31, 2020[205](index=205&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended March 31, 2020[206](index=206&type=chunk) [PART II – OTHER INFORMATION](index=37&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section addresses legal proceedings, risk factors, equity sales, and other disclosures [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in two significant legal proceedings: Hsu v. Puma Biotechnology, Inc., a class action lawsuit where a jury found liability for one statement with estimated damages of $9-18 million, and Eshelman v. Puma Biotechnology, Inc., et al., a defamation case where the company was found liable for $26.3 million (including prejudgment interest). The company is appealing the Eshelman verdict - In Hsu v. Puma Biotechnology, Inc., a class action, the jury found liability for one statement, with estimated damages ranging from **$9 million to $18 million**, subject to a claims process and appeals[209](index=209&type=chunk) - In Eshelman v. Puma Biotechnology, Inc., et al., a defamation lawsuit, the jury awarded **$15.9 million** in compensatory and **$6.5 million** in punitive damages. With prejudgment interest, the total judgment is **$26.3 million**, which the company is appealing[211](index=211&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) The company's business, financial condition, results of operations, and clinical trials are significantly exposed to risks from the COVID-19 pandemic. These risks include potential revenue decline due to patient and sales force restrictions, disruptions to clinical trials (enrollment, site initiation, supply chain), increased cybersecurity risks from remote work, and volatility in capital markets. The extent of the impact remains uncertain - COVID-19 may deter cancer patients from seeking treatment and limit commercial team interactions, potentially leading to a decline in NERLYNX revenue[214](index=214&type=chunk) - Clinical trials face risks of delays in patient enrollment, site initiation, and supply chain disruptions due to pandemic-related restrictions[216](index=216&type=chunk)[217](index=217&type=chunk) - The pandemic could increase cybersecurity risks, create data accessibility concerns, and disrupt interactions with regulators and contractors due to remote work[215](index=215&type=chunk) - The global capital markets have experienced extreme disruption and volatility, increasing the cost of and impacting access to capital for the company[219](index=219&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not engage in any unregistered sales of equity securities or purchases of its own equity securities during the three months ended March 31, 2020 - No unregistered sales of equity securities occurred during Q1 2020[221](index=221&type=chunk) - Neither the company nor its affiliated purchasers bought back any equity securities during Q1 2020[222](index=222&type=chunk) [Item 3. Defaults Upon Senior Securities](index=43&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reporting period - No defaults upon senior securities were reported[223](index=223&type=chunk) [Item 4. Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[224](index=224&type=chunk) [Item 5. Other Information](index=43&type=section&id=Item%205.%20Other%20Information) No other information is reported under this item - No other information was reported[225](index=225&type=chunk) [Item 6. Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including organizational documents, amendments to loan agreements, compensation plans, certifications, and XBRL-related documents - The exhibits include the company's Second Amended and Restated Certificate of Incorporation, Third Amended and Restated Bylaws, and amendments to the 2011 Incentive Award Plan and Loan and Security Agreement[228](index=228&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial Officer pursuant to the Sarbanes-Oxley Act of 2002 are included[228](index=228&type=chunk) - Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase Documents, and Cover Page Interactive Data File) are filed[228](index=228&type=chunk) [SIGNATURES](index=46&type=section&id=SIGNATURES) This section contains the official signatures for the quarterly report - The report is signed by Alan H. Auerbach, President and Chief Executive Officer, and Maximo F. Nougues, Chief Financial Officer, on May 7, 2020[234](index=234&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K Commission File Number: 001-35703 PUMA BIOTECHNOLOGY, INC. (Exact name of registrant as specified in its charter) Delaware 77-0683487 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) ...