Puma Biotechnology(PBYI) - 2019 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, with notes on accounting policies Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets (in thousands) | ASSETS (in thousands) | June 30, 2019 | December 31, 2018 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $27,164 | $108,419 | | Marketable securities | $90,501 | $57,002 | | Total current assets | $157,609 | $203,003 | | Total assets | $239,858 | $259,122 | | | | | | LIABILITIES AND STOCKHOLDERS' EQUITY (in thousands) | June 30, 2019 | December 31, 2018 | | :---------------------------------- | :------------ | :---------------- | | Total current liabilities | $91,661 | $67,115 | | Long-term debt | $93,434 | $151,886 | | Total liabilities | $218,087 | $224,816 | | Total stockholders' equity | $21,771 | $34,306 | | Total liabilities and stockholders' equity | $239,858 | $259,122 | - The company's cash and cash equivalents significantly decreased from $108.4 million at December 31, 2018, to $27.2 million at June 30, 2019, while marketable securities increased from $57.0 million to $90.5 million[13] - Total current assets decreased by approximately $45.4 million, and total assets decreased by approximately $19.3 million from December 31, 2018, to June 30, 2019[13] - Long-term debt decreased from $151.9 million to $93.4 million, while total current liabilities increased from $67.1 million to $91.7 million[13] Condensed Consolidated Statements of Operations Condensed Consolidated Statements of Operations (in thousands, except per share data) | (in thousands, except per share data) | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Product revenue, net | $53,864 | $50,767 | $99,431 | $86,783 | | License revenue | — | — | $53,500 | $30,500 | | Royalty revenue | $55 | — | $55 | — | | Total revenue | $53,919 | $50,767 | $152,986 | $117,283 | | Total operating costs and expenses | $79,699 | $92,211 | $168,918 | $182,120 | | Loss from operations | $(25,780) | $(41,444) | $(15,932) | $(64,837) | | Net loss | $(37,424) | $(44,335) | $(47,511) | $(68,679) | | Net loss per share—basic and diluted | $(0.97) | $(1.17) | $(1.23) | $(1.82) | - Total revenue increased by 6.2% for the three months ended June 30, 2019, compared to the same period in 2018, and by 30.4% for the six months ended June 30, 2019, primarily driven by license revenue[15] - Net loss decreased for both the three-month period (from $44.3 million to $37.4 million) and the six-month period (from $68.7 million to $47.5 million) year-over-year[15] - Operating costs and expenses decreased for both periods, contributing to the reduced operating loss[15] Condensed Consolidated Statements of Comprehensive Loss Condensed Consolidated Statements of Comprehensive Loss (in thousands) | (in thousands) | For the Three Months Ended June 30, 2019 | For the Three Months Ended June 30, 2018 | For the Six Months Ended June 30, 2019 | For the Six Months Ended June 30, 2018 | | :------------- | :--------------------------------------- | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | Net loss | $(37,424) | $(44,335) | $(47,511) | $(68,679) | | Other comprehensive loss (gain) | $90 | $(1) | $122 | $(1) | | Comprehensive loss | $(37,334) | $(44,336) | $(47,389) | $(68,680) | - The company reported a comprehensive loss of $37.3 million for the three months ended June 30, 2019, an improvement from $44.3 million in the prior year period[16] - For the six months ended June 30, 2019, comprehensive loss was $47.4 million, significantly lower than the $68.7 million loss in the same period of 2018[16] Condensed Consolidated Statement of Stockholders' Equity Condensed Consolidated Statement of Stockholders' Equity (in thousands, except share data) | (in thousands, except share data) | Balance at Dec 31, 2018 | Stock-based compensation | Shares issued/vested | Unrealized gain | Net loss | Balance at Jun 30, 2019 | | :-------------------------------- | :---------------------- | :----------------------- | :------------------- | :-------------- | :------- | :---------------------- | | Common Stock Shares | 38,325,037 | — | 413,670 | — | — | 38,738,707 | | Common Stock Amount | $4 | — | — | — | — | $4 | | Additional Paid-in Capital | $1,236,355 | $33,578 | $1,276 | — | — | $1,271,209 | | Accumulated Other Comprehensive Income (Loss) | $(12) | — | — | $122 | — | $110 | | Accumulated Deficit | $(1,202,041) | — | — | — | $(47,511) | $(1,249,552) | | Total Stockholders' Equity | $34,306 | $33,578 | $1,276 | $122 | $(47,511) | $21,771 | - Total stockholders' equity decreased from $34.3 million at December 31, 2018, to $21.8 million at June 30, 2019, primarily due to the net loss incurred during the period, partially offset by stock-based compensation and shares issued[20] - The accumulated deficit increased by $47.5 million to $1,249.6 million as of June 30, 2019, reflecting the net loss for the six-month period[20] Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statements of Cash Flows (in thousands) | (in thousands) | For the Six Months Ended June 30, 2019 | For the Six Months Ended June 30, 2018 | | :------------- | :------------------------------------- | :------------------------------------- | | Net cash provided by (used in) operating activities | $28,117 | $(23,890) | | Net cash used in investing activities | $(33,377) | $(38,845) | | Net cash (used in) provided by financing activities | $(67,142) | $76,949 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(72,402) | $14,214 | - Operating activities generated $28.1 million in cash for the six months ended June 30, 2019, a significant improvement from $23.9 million cash used in the prior year period[23] - Cash used in financing activities was $67.1 million in 2019, primarily due to debt repayments and extinguishment costs, contrasting with $76.9 million cash provided in 2018 from new debt proceeds[23] - Overall, cash, cash equivalents, and restricted cash decreased by $72.4 million in the first half of 2019, ending at $40.3 million[23] Notes to the Unaudited Condensed Consolidated Financial Statements Note 1—Business and Basis of Presentation - Puma Biotechnology, Inc. is a biopharmaceutical company focused on developing and commercializing innovative products for cancer care, primarily NERLYNX (neratinib) for HER2-positive breast cancer[24][26] - The company has incurred significant operating losses and negative cash flows since inception but believes existing cash, marketable securities, and future product/license revenues are sufficient for at least one year[26][27][30] - NERLYNX received FDA approval in July 2017 for extended adjuvant treatment of early-stage HER2-overexpressed/amplified breast cancer and EC marketing authorization in September 2018[27][29] - The company has entered into exclusive license agreements with various partners for commercialization of NERLYNX outside the United States[29] Note 2—Significant Accounting Policies - The company adopted ASC Topic 606, Revenue from Contracts with Customers, on January 1, 2017, and recognizes product revenue net of variable consideration (discounts, returns, rebates)[47][48][49][50] - License revenue from non-refundable upfront fees is recognized when performance obligations are satisfied, such as when the license term commences and licensed data/technology is delivered[54] - The company adopted ASU No. 2016-02, Leases, in Q1 2019, resulting in an increase of approximately $21.6 million in right-of-use assets and $27.4 million in lease liabilities on the balance sheet, with no material impact on the income statement or cash flows[41][88] - R&D expenses are charged to operations as incurred, including clinical manufacturing, trial expenses, consulting, salaries, and stock-based compensation[79] Note 3—Accounts Receivable Accounts Receivable (in thousands) | (in thousands) | June 30, 2019 | December 31, 2018 | | :------------- | :------------ | :---------------- | | Accounts receivable | $25,346 | $20,773 | | Less: allowance for doubtful accounts | — | — | | Total accounts receivable, net | $25,346 | $20,773 | - Accounts receivable, net, increased by approximately $4.6 million from December 31, 2018, to June 30, 2019, consisting entirely of amounts owed from customers for product sales[89] Note 4—Prepaid Expenses and Other Prepaid Expenses and Other (in thousands) | (in thousands) | June 30, 2019 | December 31, 2018 | | :------------- | :------------ | :---------------- | | Current prepaid expenses | $11,008 | $12,397 | | Long-term prepaid expenses | $2,560 | $3,429 | | Totals | $13,568 | $15,826 | - Total prepaid expenses and other decreased by approximately $2.3 million from December 31, 2018, to June 30, 2019, with decreases in both current and long-term categories[90] Note 5—Other Current Assets Other Current Assets (in thousands) | (in thousands) | June 30, 2019 | December 31, 2018 | | :------------- | :------------ | :---------------- | | Insurance receivable | — | $1,175 | | Other | $330 | $612 | | Totals | $330 | $1,787 | - Other current assets decreased significantly from $1.8 million at December 31, 2018, to $0.3 million at June 30, 2019, primarily due to the absence of insurance receivables[91] Note 6—Leases - The company recognized approximately $2.4 million in fixed lease expense and $0.2 million in variable lease expense for the six months ended June 30, 2019[92] - The weighted-average remaining lease term is 6.7 years, with a weighted-average discount rate of 10.9%[93] Maturity of Lease Liabilities (in thousands) | Maturity of Lease Liabilities (in thousands) | Amount | | :----------------------------------- | :----- | | 2019 (remaining) | $2,477 | | 2020 | $5,196 | | 2021 | $5,355 | | 2022 | $5,477 | | 2023 | $5,631 | | Thereafter | $13,296 | | Total | $37,432 | | Less: imputed interest | $(11,101) | | Total lease liabilities | $26,331 | Note 7—Property and Equipment Property and Equipment (in thousands) | (in thousands) | June 30, 2019 | December 31, 2018 | | :------------- | :------------ | :---------------- | | Leasehold improvements | $3,780 | $4,048 | | Computer equipment | $2,400 | $2,402 | | Furniture and fixtures | $2,346 | $2,346 | | Total gross property and equipment | $8,866 | $9,139 | | Less: accumulated depreciation | $(5,434) | $(5,176) | | Totals | $3,432 | $3,963 | - Net property and equipment decreased by approximately $0.5 million from December 31, 2018, to June 30, 2019, primarily due to depreciation[95] Note 8—Intangible assets, net Intangible Assets, Net (in thousands) | (in thousands) | June 30, 2019 | | :------------- | :------------ | | Acquired and in-licensed rights | $50,000 | | Less: accumulated amortization | $(7,566) | | Total intangible asset, net | $42,434 | - Net intangible assets, primarily related to the Pfizer license, were $42.4 million as of June 30, 2019, with an estimated useful life of 13 years[96] - Amortization expense for the intangible asset was $1.0 million for the three months and $2.0 million for the six months ended June 30, 2019[39] Note 9—Accrued Expenses Accrued Expenses (in thousands) | (in thousands) | June 30, 2019 | December 31, 2018 | | :------------- | :------------ | :---------------- | | Accrued legal verdict expense | $31,350 | $9,000 | | Accrued CRO services | $13,214 | $10,187 | | Accrued royalties | $8,088 | $9,162 | | Accrued variable consideration | $5,492 | $3,818 | | Total Accrued Expenses | $74,251 | $46,431 | - Total accrued expenses increased significantly by approximately $27.8 million from December 31, 2018, to June 30, 2019, primarily due to an increase in accrued legal verdict expense[97] - Accrued legal verdict expense increased from $9.0 million to $31.4 million, reflecting initial estimates for the Hsu and Eshelman lawsuits[97][99] Note 10—Debt Debt (in thousands) | (in thousands) | June 30, 2019 | | :------------- | :------------ | | Long term debt | $100,000 | | Accretion of final interest payment | $1,285 | | Less: deferred financing costs | $(7,851) | | Total long term debt, net | $93,434 | - On June 28, 2019, the company entered into a new credit facility, repaying $155.0 million outstanding under the amended credit facility and borrowing $100.0 million, resulting in a net reduction of long-term debt[105] - The new credit facility bears interest at an annual rate equal to the greater of 9.0% or the prime rate plus 3.5%, with monthly interest-only payments until August 1, 2021, and full repayment due June 1, 2024[107] - The new credit facility is secured by substantially all of the company's personal property (excluding intellectual property) and 65% of its subsidiaries' capital stock, and includes financial covenants requiring achievement of certain product revenue targets[106][109] Note 11—Stockholders' Equity - As of June 30, 2019, 38,738,707 shares of common stock were issued and outstanding[13][18] - The company issued 67,625 shares upon stock option exercise and 346,045 shares upon RSU vesting during the six months ended June 30, 2019[112] Stock-based Compensation (in thousands) | Stock-based compensation (in thousands) | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Options - SG&A | $1,952 | $4,118 | $4,938 | $8,589 | | Options - R&D | $1,882 | $7,229 | $4,215 | $17,301 | | RSUs - SG&A | $5,500 | $4,454 | $12,389 | $8,949 | | RSUs - R&D | $6,106 | $6,383 | $12,036 | $12,697 | | Total stock-based compensation expense | $15,440 | $22,184 | $33,578 | $47,536 | - Total estimated unrecognized employee compensation cost related to non-vested stock options was $13.1 million (expected over 1.5 years) and for non-vested RSUs was $65.8 million (expected over 1.8 years) as of June 30, 2019[119] Note 12—401(k) Savings Plan - The company incurred approximately $0.8 million in employer matching contributions to its 401(k) plan for the six months ended June 30, 2019, a decrease from $0.9 million in the prior year period[122] Note 13—Commitments and Contingencies - The company has contractual obligations primarily from agreements with contract manufacturing organizations (CMOs) and clinical research organizations (CROs), which include variable costs and milestones[123] - Under its license agreement with Pfizer, the company is obligated to make substantial milestone payments (totaling up to $187.5 million if all achieved) and annual royalties in the low-to-mid teens of net sales for licensed products[126] - The company has accrued estimated losses of $9.0 million for Hsu v. Puma Biotechnology, Inc. (class action lawsuit) and $22.4 million for Eshelman v. Puma Biotechnology, Inc., et al. (defamation lawsuit), with potential for higher damages[127][128][130] - Several derivative lawsuits against officers and directors were settled in principle in July 2018 and subsequently dismissed with prejudice in early 2019[134] Note 14—Subsequent Events - The company noted no material subsequent events or transactions after the balance sheet date[135] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations for the three and six months ended June 30, 2019, covering business overview, accounting policies, income/expense analysis, liquidity, capital resources, and non-GAAP financial measures Overview - Puma Biotechnology is a biopharmaceutical company focused on developing and commercializing innovative cancer care products, primarily NERLYNX (neratinib) for HER2-positive breast cancer[139] - NERLYNX received FDA approval in July 2017, EC marketing authorization in September 2018, and Canadian marketing authorization in July 2019[140] - The company has entered into sub-license agreements for NERLYNX commercialization in various international regions and expects expenses to increase with continued commercialization efforts[141] Critical Accounting Policies - No material changes to critical accounting policies were identified for the three and six months ended June 30, 2019, except for the sub-license agreements[143] - License revenue is recognized when performance obligations are satisfied, with non-refundable upfront fees recognized upon license term commencement and delivery of licensed data/technology[143] - Variable consideration, including upfront license fees, R&D payments, milestones, and royalties, is estimated and included in the transaction price if a significant revenue reversal is improbable[144] Knight Agreement - In Q1 2019, the company entered a sub-license agreement with Knight for exclusive rights to commercialize neratinib in Canada, recognizing a non-refundable upfront license fee as revenue[146] - The agreement includes potential future milestone and royalty payments totaling up to $7.2 million, plus significant double-digit royalties on net sales in Canada[146] Pierre Fabre Agreement - In Q1 2019, the company entered a sub-license agreement with Pierre Fabre for rights in European, North African, and West African countries, recognizing a $51.0 million non-refundable upfront license fee as revenue[147] - This agreement includes approximately $9.0 million in additional variable consideration for a post-marketing commitment liability and potential future milestone payments up to $345 million, plus significant double-digit royalties[147] Summary of Income and Expenses - Product revenue, net, is derived from NERLYNX sales to specialty pharmacies and distributors, recorded net of variable consideration (discounts, returns, rebates)[148] - Cost of sales includes manufacturing costs, freight, indirect overhead, Pfizer royalties, and amortization of milestone payments[151] - Selling, general and administrative (SG&A) expenses are expected to remain higher in 2019 due to commercialization efforts and potential legal expenses from ongoing appeals[153] - Research and development (R&D) expenses are expensed as incurred, with clinical R&D expected to decline in 2019, but medical affairs, pharmacovigilance, and regulatory affairs costs are projected to increase[154][155] Results of Operations Three Months Ended June 30, 2019 Compared to Three Months Ended June 30, 2018 Results of Operations (in thousands) | (in thousands) | June 30, 2019 | June 30, 2018 | Change ($) | Change (%) | | :------------- | :------------ | :------------ | :--------- | :--------- | | Total revenue | $53,919 | $50,767 | $3,152 | 6.2% | | Product revenue, net | $53,864 | $50,767 | $3,097 | 6.1% | | Royalty revenue | $55 | — | $55 | N/A | | Cost of sales | $9,317 | $8,831 | $486 | 5.5% | | SG&A expenses | $33,527 | $40,135 | $(6,608) | -16.5% | | R&D expenses | $36,855 | $43,245 | $(6,390) | -14.8% | | Interest income | $908 | $329 | $579 | 176.0% | | Interest expense | $(4,448) | $(2,587) | $(1,861) | 71.9% | | Loss on debt extinguishment | $(8,103) | — | $(8,103) | 100.0% | | Other expenses | $(1) | $(633) | $632 | -99.8% | - Product revenue, net, increased by 6.1% due to a 10% increase in gross selling price, partially offset by an increase in variable consideration[157] - SG&A expenses decreased by $6.6 million, primarily due to lower professional fees (legal and consulting), travel expenses, and stock-based compensation[160][161] - R&D expenses decreased by $6.4 million, mainly from reduced stock-based compensation, internal R&D, and consultant/contractor expenses, partially offset by increased clinical trial expenses[162][163] - A significant loss on debt extinguishment of $8.1 million was recognized in Q2 2019 due to debt refinancing[167] Six Months Ended June 30, 2019 Compared to Six Months Ended June 30, 2018 Results of Operations (in thousands) | (in thousands) | June 30, 2019 | June 30, 2018 | Change ($) | Change (%) | | :------------- | :------------ | :------------ | :--------- | :--------- | | Total revenue | $152,986 | $117,283 | $35,703 | 30.4% | | Product revenue, net | $99,431 | $86,783 | $12,648 | 14.6% | | License revenue | $53,500 | $30,500 | $23,000 | 75.4% | | Royalty revenue | $55 | — | $55 | N/A | | Cost of sales | $17,302 | $15,214 | $2,088 | 13.7% | | SG&A expenses | $79,033 | $76,737 | $2,296 | 3.0% | | R&D expenses | $72,583 | $90,169 | $(17,586) | -19.5% | | Interest income | $1,780 | $503 | $1,277 | 253.9% | | Interest expense | $(8,891) | $(3,666) | $(5,225) | 142.5% | | Legal verdict expense | $(16,350) | — | $(16,350) | 100.0% | | Loss on debt extinguishment | $(8,103) | — | $(8,103) | 100.0% | | Other expenses | $(15) | $(679) | $664 | -97.8% | - Total revenue increased by 30.4%, primarily driven by a $23.0 million increase in license revenue due to new agreements and milestone achievements[171] - R&D expenses decreased significantly by $17.6 million, mainly due to lower stock-based compensation and reduced internal R&D and consulting fees[176][179] - A legal verdict expense of $16.4 million was recognized, related to the Eshelman lawsuit, net of insurance reimbursements[182] Liquidity and Capital Resources Liquidity and Capital Resources (in thousands) | Liquidity and Capital Resources (in thousands) | June 30, 2019 | December 31, 2018 | | :--------------------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $27,164 | $108,419 | | Marketable securities | $90,501 | $57,002 | | Working capital | $65,948 | $135,888 | | Stockholders' equity | $21,771 | $34,306 | | | | | | Cash Flow Activities (in thousands) | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--------------------------------------------- | :----------------------------- | :----------------------------- | | Operating activities | $28,117 | $(23,890) | | Investing activities | $(33,377) | $(38,845) | | Financing activities | $(67,142) | $76,949 | | Net increase (decrease) in cash and cash equivalents | $(72,402) | $14,214 | - Working capital decreased significantly from $135.9 million at December 31, 2018, to $65.9 million at June 30, 2019[185] - Operating activities generated $28.1 million in cash in H1 2019, a positive shift from cash usage in H1 2018, driven by reduced net loss and non-cash adjustments[186][187] - Financing activities used $67.1 million in H1 2019, primarily due to $80.0 million in debt repayments and associated costs, partially offset by $25.0 million in new debt proceeds[190] - The company expects to incur significant losses and remain dependent on external funding, with estimated R&D spending of $110.0 million to $120.0 million over the next 12 months[201][203] Non-GAAP Financial Measures - The company uses non-GAAP financial measures, specifically adjusted net loss and adjusted net loss per share (excluding stock-based compensation), to enhance understanding of operational performance[205] Non-GAAP Financial Measures (in thousands except share and per share data) | (in thousands except share and per share data) | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP net loss | $(37,424) | $(44,335) | $(47,511) | $(68,679) | | Stock-based compensation (SG&A) | $7,452 | $8,572 | $17,327 | $17,538 | | Stock-based compensation (R&D) | $7,988 | $13,612 | $16,251 | $29,998 | | Non-GAAP adjusted net loss | $(21,984) | $(22,151) | $(13,933) | $(21,143) | | GAAP net loss per share | $(0.97) | $(1.17) | $(1.23) | $(1.82) | | Adjustment to net loss per share | $0.40 | $0.58 | $0.87 | $1.26 | | Non-GAAP adjusted basic net loss per share | $(0.57) | $(0.59) | $(0.36) | $(0.56) | - Stock-based compensation represented approximately 21.9% and 22.1% of operating expenses for the three and six months ended June 30, 2019, respectively[205] Off-Balance Sheet Arrangements - The company does not have any off-balance sheet arrangements as defined by SEC regulations[209] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section discusses the company's exposure to market risks, primarily interest rate risk on its investments and borrowings, highlighting its investment strategy for liquidity and principal preservation, and the impact of variable interest rates on its long-term debt - The company is exposed to market risk from changes in interest rates affecting its cash equivalents and long-term debt[210][212] - Investment activities prioritize liquidity and principal preservation, with excess cash invested in short-term money market instruments[210] - A 10% increase in interest rates is not expected to materially affect the realized value of cash equivalents due to their short-term maturities[211] - The $100.0 million outstanding long-term debt bears a variable interest rate (greater of 9.0% or prime rate + 3.5%), making interest expense sensitive to prime rate fluctuations[212] Item 4. Controls and Procedures This section details the evaluation of the company's disclosure controls and procedures and any changes in internal control over financial reporting, concluding that disclosure controls were effective as of June 30, 2019, with changes related to new lease accounting standards - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2019[215] - Changes were made to internal controls over financial reporting to address risks associated with the adoption of ASC 842, Leases, effective January 1, 2019, including enhanced lease evaluation processes and controls for right-of-use assets and lease liabilities[216] - No other material changes in internal control over financial reporting occurred during the three months ended June 30, 2019[216] PART II – OTHER INFORMATION Item 1. Legal Proceedings This section provides updates on significant legal proceedings involving the company, including class action and defamation lawsuits, and derivative actions, detailing current status, jury verdicts, and estimated potential damages for ongoing cases - In Hsu v. Puma Biotechnology, Inc. (class action), a jury found liability on one statement, awarding a maximum of $4.50 per share in damages, with total estimated damages ranging from $9 million to $18 million after claims processing and appeals[219] - In Eshelman v. Puma Biotechnology, Inc., et al. (defamation), a jury found the company liable and awarded $15.9 million in compensatory and $6.5 million in punitive damages, with potential high-end damages estimated at $26.3 million, pending post-trial proceedings and appeals[221] - Several derivative lawsuits (Xie, Rommerswael, Duran) against the company's officers and directors were settled in principle in July 2018 and subsequently dismissed with prejudice in early 2019[225] Item 1A. Risk Factors This section states that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2018 - No material changes to the company's risk factors have occurred since the filing of its Annual Report on Form 10-K for the year ended December 31, 2018[226] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section confirms that the company did not engage in any unregistered sales of equity securities or purchases of its own equity securities during the three months ended June 30, 2019 - The company did not sell any equity securities without registration under the Securities Act of 1933 during the three months ended June 30, 2019[227] - Neither the company nor any affiliated purchasers made any purchases of its equity securities during the quarter ended June 30, 2019[228] Item 3. Defaults Upon Senior Securities This section states that there were no defaults upon senior securities - There were no defaults upon senior securities[229] Item 4. Mine Safety Disclosures This section indicates that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to the company[230] Item 5. Other Information This section states that there is no other information to report - There is no other information to report[231] Item 6. Exhibits This section lists all exhibits filed as part of the Form 10-Q, including corporate documents, loan agreements, and certifications, along with XBRL-related documents - The exhibits include the Second Amended and Restated Certificate of Incorporation, Third Amended and Restated Bylaws, and the Amended and Restated Loan and Security Agreement dated June 28, 2019[234] - Certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are filed[234] - XBRL Instance Document and Taxonomy Extension Documents are included[234]