Puma Biotechnology, Inc. (NASDAQ:PBYI) Q2 2025 Earnings Call Transcript

Puma Biotechnology, Inc. (NASDAQ:PBYI) Q2 2025 Earnings Call Transcript August 7, 2025

Puma Biotechnology, Inc. beats earnings expectations. Reported EPS is $0.15, expectations were $0.11.

Operator: Good afternoon. My name is Latanya, and I will be your conference call operator today. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the conference over to your host today, Mariann Ohanesian, Senior Director of IR for Puma Biotechnology. You may begin your conference.

Mariann Ohanesian: Thank you, Latanya. Good afternoon, and welcome to Puma’s conference call to discuss our earnings results for the second quarter of 2025. Joining me on the call today are Alan Auerbach, Chief Executive Officer, President and Chairman of the Board of Puma Biotechnology; Maximo Nougues, Chief Financial Officer; Heather Blaber, Senior Vice President of Marketing; and Roger Storms, Senior Vice President of Sales. After the close today, Puma issued a news release detailing earnings results for the second quarter 2025. That news release, the slides that Roger will refer to and a webcast of this call are accessible via the homepage and Investors sections of our website at pumabiotechnology.com. The webcast and presentation slides will be archived on our website and available for replay for the next 90 days.

Today’s conference call will include statements about Puma’s future expectations, plans and prospects that constitute forward-looking statements for purposes of federal securities laws. Such statements are subject to risks and uncertainties, and actual events and results may differ from those experienced in the — expressed in these forward-looking statements. For a full discussion of these risks and uncertainties, please review our periodic and current reports filed with the SEC from time to time, including our annual report on Form 10-K for the year ended December 31, 2024. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this live conference call, August 7, 2025. Puma undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as required by law.

During today’s call, we may refer to certain non-GAAP financial measures that involve adjustments to our GAAP figures. We believe these non-GAAP metrics may be useful to investors as a supplement to, but not a substitute for, our GAAP financial measures. Please refer to our second quarter 2025 earnings release for a reconciliation of our GAAP to non-GAAP results. I will now turn the call over to Alan.

Alan H. Auerbach: Thank you, Mariann, and thank you all for joining our call today. Today, Puma reported total revenue for the second quarter of 2025 of $52.3 million. Total revenue includes product revenue net, which consists entirely of NERLYNX sales as well as royalties from our sublicensees. Product revenue net was $49.2 million in the second quarter of 2025, an increase from $43.1 million reported in Q1 2025 and an increase from $44.4 million reported in Q2 2024. Product revenue for the second quarter of 2025 was impacted by approximately $1.3 million of inventory decrease at our specialty pharmacies and specialty distributors. Royalty revenue was $3.2 million in the second quarter of 2025 compared to $2.9 million in Q1 2025 and $2.7 million in Q2 2024.

We reported 2,608 bottles of NERLYNX sold in the second quarter of 2025, an increase of 270 from the 2,338 bottles sold in Q1 2025. In Q2 2025, we estimate that inventory decreased by 72 bottles. In Q2 2025, new prescriptions were down approximately 3% compared to Q1 2025 and total prescriptions were up approximately 3% compared to Q1 2025. Roger will provide further details in his comments and slides. I will now provide a clinical review of the quarter, then Heather Blaber and Roger Storms will additional color on NERLYNX commercial activities. Maximo Nougues will follow with highlights of the key components of our financial statements for the second quarter of 2025. As investors are aware, Puma currently has 2 ongoing Phase II trials of our investigational drug, alisertib.

One is the ALISCA-Breast trial, which is a Phase II trial of alisertib in combination with endocrine treatment in patients with HER2-negative hormone receptor- positive metastatic breast cancer. the second is the ALISCA-Lung1 trial, which is a Phase II study looking at the efficacy of alisertib monotherapy in patients with small cell lung cancer. As a reminder, the ALISCA-Breast1 investigates alisertib in combination with endocrine treatment, which consists of either anastrozole, exemestane, letrozole, fulvestrant or tamoxifen in patients with HER2-negative hormone receptor-positive metastatic breast cancer. Patients must be chemotherapy naive, must have previously received treatment with a CDK4/6 inhibitor and received at least 2 prior lines of endocrine therapy in the recurrent or metastatic setting to be eligible for the trial.

Patients are being dosed with alisertib either at 30 milligrams, 40 milligrams or 50 milligrams twice daily, b.i.d. on days 1 to 3, 8 to 10 and 15 to 17 on a 28-day cycle, in combination with endocrine therapy of the investigator’s choice. Patients must have not been previously treated with the endocrine therapy in the metastatic setting that is being given in combination with alisertib in the trial. The primary efficacy endpoints include objective response rate, duration of response, disease control rate and progression-free survival. As a secondary objective, the company will be evaluating each of these efficacy biomarkers within biomarker subgroups in order to determine whether any biomarker subgroup correlates with better efficacy as has been seen in preclinical and clinical studies in other cancers, including breast and small cell lung cancer.

The company will then look to focus the future clinical development of alisertib in combination with endocrine therapy for patients with HER2-negative hormone receptor-positive breast cancer within these biomarkers. The trial was initiated in late November 2024. There are currently 33 sites in the U.S. and 18 sites in Europe that have been activated for the trial, and the trial is enrolling ahead of expectations. There are currently 62 patients enrolled in the trial and 10 additional patients in screening. We are looking to have interim data from this trial later in 2025. With respect to the ALISCA-Lung1 study, as investors are aware, Puma has an ongoing Phase II trial of our investigational drug alisertib, to investigate the efficacy of alisertib monotherapy in patients with small cell lung cancer and specifically look at the efficacy of the drug in patients with biomarkers where the Aurora kinase pathway plays a role.

The goal is to correlate the efficacy in these biomarker subgroups in the ALISCA1 study to the efficacy that was previously seen in the biomarker subgroups from the randomized trial of paclitaxel plus alisertib versus paclitaxel plus placebo that was published in the Journal of Thoracic Oncology in 2020. In that randomized trial, a progression-free survival and overall survival benefit were seen in patients with biomarkers that correlate with the Aurora kinase pathway. If the efficacy and biomarker data are comparable from the 2 studies, the company would look to engage with the FDA to discuss the regulatory path further. As discussed on the recent earnings call, the company believes that the data obtained to date from the ALISCA-Lung1 study is providing a preliminary indication of potentially better activity in patients with biomarkers where the Aurora kinase pathway plays a role.

The most recent analysis of the pharmacokinetic data from the ALISCA-Lung1 study suggests that we are seeing a lower PK of alisertib in the ALISCA1 trial compared with the previous Phase II study of alisertib monotherapy in small cell lung cancer patients that was published in Lancet Oncology. The company has amended the protocol for the trial to increase the dose of alisertib from 50-milligram b.i.d. to 60-milligram b.i.d., which the company believes will increase the PK of the drug to levels closer to that what we’ve seen in the prior Phase II trial. The company is currently enrolling patients at the 60-milligram b.i.d. dose. There are currently 52 patients enrolled in the trial with an additional 3 patients in screening. The company looks to have additional interim data from the trial later in 2025.

As mentioned on prior earnings calls and in response to investor questions, Puma continues to evaluate several drugs to potentially in-license or acquire that allow the company to diversify itself and leverage Puma’s existing R&D, regulatory and commercial infrastructure. The company will keep investors updated on this as it progresses. I will now turn the call over to Heather Blaber for an update on our marketing initiatives, and Roger Storms will follow with a review of our commercial performance during the quarter.

Heather Blaber: Thank you, Alan. I appreciate the opportunity to share some additional insights into our marketing strategy. The marketing team is focused on creating awareness of both clinical messaging for NERLYNX as well as recently published data that demonstrate the continued need to reduce the risk of recurrence in HER2-positive early breast cancer after completion of adjuvant therapy. We continue to invest in market research to help us better understand risk factors that put a patient at high risk of recurrence in HER2- positive early-stage breast cancer as well as garner insights on the clinical data in this patient population. Together with our marketing initiatives, our strategy is focused on increasing awareness of our broad indication of patients that are appropriate for treatment with NERLYNX.

Based on our insights, we have adjusted our strategy on key learnings and revised both personal and nonpersonal messaging with the goal of engaging physicians on a broader set of patients where the risk of recurrence remains high and where we believe NERLYNX can play an important role in helping to reduce the risk of recurrence in patients with early-stage HER2-positive breast cancer. In addition to revising our messaging, we recently rolled out a new resource to support patients throughout their recommended course of NERLYNX therapy. This educational resource will be provided to patients on a monthly basis as they receive their refills. Lastly, year-to-date, we have reached 99.7% of oncologists through nonpersonal promotion and continue to expand our share of voice, working closely with the sales team to increase engagement with health care providers.

In summary, we are excited about our new marketing strategy and messaging, which we believe will continue to help educate and engage oncologists on the unmet need for those diagnosed with HER2-positive early-stage breast cancer. I will now turn the call over to Roger Storms to provide an overview on the commercial performance for the second quarter.

Roger Storms: Thank you, Heather, and thanks to everyone for joining our second quarter earnings call. But before I move into the commercial review, just a reminder that I’ll be making forward-looking statements. The sales team continues to work hard on expanding overall HCP reach and frequency with an emphasis on increasing engagement when treatment decisions are being made. Q2 2025 call activity was up 16% year-over-year and up 24% quarter-over-quarter. This is a direct result of being able to fill key vacancies that existed in Q1 as well as continued emphasis put on executional excellence and increased accountability in Q2 with the existing sales team. The commercial team remains focused on expanding the utilization of NERLYNX with a primary emphasis on patients who are at increased risk of recurrence.

The team has continued their emphasis on improving clinical education and engagement through nonpersonal promotion as well as using the patient resource brochure designed to improve persistence and compliance throughout their NERLYNX therapy. Let me now transition to some of the commercial slides where I’ll provide some additional specifics around performance. Slide 3 is an illustration of our distribution model, which is broken out into the specialty pharmacy channel and the specialty distributor or in-office dispensing channel. In regards to the overall distribution of our business, in Q2 ’25, about 63% of our business was purchased through the SB channel and the remaining 37% was purchased through the SD channel. We are seeing some stronger growth in the SD channel driven by 2 main factors: one, increased 340B purchasing; and two, increased sales in the group purchasing organization or GPO segment.

Turning to Slide 4. NERLYNX net product revenue in Q2 2025 was $49.2 million, which represents an increase of $6.1 million from the $43.1 million we reported in Q1 of ’25 and an increase of $4.8 million from the $44.4 million we reported in Q2 of ’24. I will provide some more details around inventory changes, and Maximo will provide some additional specifics around gross to net expenses during his update. In Q2 2025, we estimate that inventory decreased by about $1.3 million. As a comparator, we estimate that inventory increased by about $4.7 million in Q1 of 2025 and decreased by about $2.3 million in Q2 of 2024. Slide 5 shows Q2 2025 ex-factory bottle sales and also provides both a year-over-year and a quarter-over-quarter comparison. In Q2 2025, NERLYNX ex-factory bottle sales were 2,608, which represents an approximate 12% increase quarter-over-quarter and a 4% increase year-over-year.

Similar to the prior slide, let me specifically call out the inventory changes from a bottle perspective. In Q2 2025, we estimate that inventory decreased by 72 bottles. As a comparator, we estimate that inventory decreased by 250 bottles in Q1 of 2025 and decreased by 132 bottles in Q2 of 2024. Let me take a moment to provide some additional metrics regarding our second-quarter performance. In Q2, we saw enrollments decrease about 9% quarter-over-quarter and decline about 11% year-over- year. New patient starts or NRx followed a similar pattern, declining approximately 3% quarter-over-quarter and also declining 1% year-over-year. Turning to total prescriptions or TRx, we saw TRx increase 3% quarter-over-quarter and decline about 2% year-over- year.

Finally, let me share some specifics around demand. In Q2, we saw demand increase about 4% quarter-over-quarter and increase about 2% year-over-year. As mentioned earlier, we’ve seen a stronger demand growth in the SD channel where we saw demand grow about 8% quarter-over-quarter and about 17% year-over-year. Slide 6 highlights the quarterly adoption of dose escalation since NERLYNX launch. In Q2, approximately 71% of patients started NERLYNX at a reduced dose. This is similar to the 72% we reported in Q1 of 2025. Continued messaging and adoption of dose escalation remains an important commercial priority. Patients who are started on NERLYNX utilizing dose escalation have better persistence and compliance. We believe dose escalation, coupled with the new patient education resources will give patients better support throughout their NERLYNX therapy and ultimately help them reduce the risk of recurrence.

Slide 7 highlights the strategic collaborations we have formed across the globe. We really appreciate the excellent work being done by our partners around the globe and look forward to supporting their continued success moving forward. Let me wrap up by thanking the entire Puma team for their continued passion and commitment for helping patients and their families battling breast cancer. This disease can have devastating effects, and we know more can be done and more needs to be done. I will now turn the call over to Maximo for a review of our financial results.

Maximo F. Nougues: Thanks, Roger. I will begin with a brief summary of our financial results for the second quarter of 2025. Please note that I will make comparisons to Q1 2025, which we believe is a better indication of our progress as a commercial company than year-over-year comparisons. For more information, I recommend that you refer to our second quarter 2025 10-Q, which will be filed today and includes our consolidated financial statements. For the second quarter of 2025, we reported net income based on GAAP of $5.9 million or $0.12 per share. This compares to net income in Q1 2025 of $3 million or $0.06 per share. On a non-GAAP basis, which is adjusted to remove the impact of stock-based compensation expense, we reported net income of $7.5 million or $0.15 per basic and diluted share for the second quarter of 2025.

Gross revenue from NERLYNX sales was $62.1 million in Q2 2025 and $54.4 million in Q1 2025. As Alan mentioned it, net product revenue from NERLYNX sales was $49.2 million, an increase from the $43.1 million reported in Q1 2025. The increase in net revenue was driven primarily by an increase in NERLYNX bottles sold in the U.S. and an increase in net selling price. Inventory drawdown by our distributors was approximately $1.3 million in Q2 versus a drawdown of approximately $4.7 million in Q1 2025. Royalty revenue totaled $3.2 million in the second quarter of 2025 compared to $2.9 million in Q1 2025. Our gross to net adjustment in Q2 2025 was 20.8%, unchanged from Q1 2025. Cost of sales for Q2 2025 increased to $12.3 million and includes $2.4 million for the amortization of intangible assets related to our neratinib license.

Cost of sales for Q1 2025 was $10.6 million. Going forward, we will continue to recognize amortization of the milestone to the licensor about $2.4 million per quarter as cost of sales. For fiscal year 2025, Puma anticipates that net NERLYNX product revenue will be in the range of $192 million to $198 million. We also anticipate that our gross to net adjustment for the full year 2025 will be between 21.5% and 22%, higher than prior guidance due to an increase in government chargeback expenses. In addition, for fiscal year 2025, we anticipate receiving royalties from our partners around the world in the range of $20 million to $24 million. Lower than 2024 due to fewer shipments expected to China as our partner works through regulatory transitions during the first several quarters of 2025.

We don’t expect license revenue in 2025. We also expect that net income for the full year will be in the range of $23 million to $28 million. We are not forecasting any potential release of any additional tax asset valuation allowance in our net income estimate at this time. However, this will be evaluated on an ongoing basis. We will continue to keep investors updated on this as it progresses. At this time, we do not believe that the tariffs imposed or proposed to be imposed by the United States, particularly with other countries, will have a material impact on our product cost or results of operations. However, shifting trade policies in the United States and other countries have been rapidly evolving and are difficult to predict. As a point of reference, our manufacturing product cost accounts for a mid- to high single-digit percentage of our total cost of goods sold.

We anticipate that for Q3 2025, NERLYNX product revenue net will be in the range of $46 million to $48 million. Also, we expect Q3 royalty revenues will be in the range of $2 million to $3 million and no license revenue. We further estimate that the gross to net adjustment in Q3 2025 will be approximately 22.5% to 23.5%. Puma anticipates Q3 net income between $2 million and $4 million. SG&A expenses were $18 million in the second quarter of 2025 compared to $17.6 million in the first quarter. SG&A expenses included noncash charges for stock-based compensation of $1 million for Q2 and $1.2 million for Q1 2025. Research and development expenses were $15.5 million in the second quarter of 2025, an increase from the $13.8 million in the first quarter.

R&D expenses included noncash charges for stock-based compensation of $0.6 million in the second quarter of 2025 compared to $0.8 million in the first quarter. On the expense side, Puma anticipates flat to slightly higher total operating expenses in 2025 compared to 2024. More specifically, we anticipate SG&A expenses to decrease by 5% to 10% and R&D expenses to increase by 20% to 25% year-over- year. The higher increase in R&D is driven by faster enrollment in our clinical trials than previously expected. In the second quarter of 2025, Puma reported cash burn of about $2.9 million. This compares to the cash burn of approximately $7.8 million in Q1. Please note that during Q2, we paid our fifth principal payment — loan payment of $11.1 million related to our obligation with AstraZeneca.

As a result of this, our total outstanding principal debt balance decreased to approximately $45 million. June 30, 2025, we had approximately $96 million in cash, cash equivalents and marketable securities versus about $101 million at year-end 2024. Our accounts receivable balance was $25.9 million. Our accounts receivable terms range between 10 and 68 days, while our days sales outstanding are about 50 days. We estimate that as of June 30, 2025, our distribution network maintained approximately 3 weeks of inventory. Overall, we continue to deploy our financial resources to focus on the commercialization of NERLYNX, the development of alisertib and controlling our expenses.

Alan H. Auerbach: Thanks, Maximo. Puma’s senior management in cooperation with the Board of Directors, continues to remain focused on NERLYNX sales trends in 2025 and beyond and recognizes its fiscal responsibility to the shareholders to continue to maintain positive net income. We are pleased to report demand-driven growth in NERLYNX sales in the first half of 2025, and we believe that the positive net income that the company achieved in Q2 2025 and the company is guiding to for the full year 2025 resulted from the financial discipline across the company over the last 3 years. The company remains committed to continuing to achieve this positive net income, and we will continue to reduce expenses if needed to achieve this. We look forward to updating investors on this in the future.

There continues to be — remain a significant unmet medical need for patients battling breast cancer, lung cancer and other solid tumors. We at Puma are committed and passionate about finding more effective ways at helping these patients during their journey, and we will continue to strive to achieve that goal. This concludes today’s presentation. We will now turn the floor back to the operator for Q&A. Operator?

Q&A Session

Operator: [Operator Instructions] Your first question comes from Marc Frahm with TD Cowen.

Marc Alan Frahm: Maybe on the R&D side, you mentioned kind of 2 data disclosures coming up later this year. One, just the venue for that. Do you expect those to be at medical meetings? Or are those more likely to be corporate updates? And then maybe more importantly is how do you view the bar there for what justifies further advancement on either side? And how does meeting or, unfortunately, kind of falling short of those bars kind of impact the strategic views when you talk about continuing to look at in-licensing additional products?

Alan H. Auerbach: Yes, Marc, thanks for the question. Okay. So in terms of the venue, I think we’d probably do it as a corporate update. Not sure if we do it on an earnings call or something more formal like just a separate presentation to discuss it, but something in a venue, I would gauge November, December time frame for that. To kind of further go into a little more detail on that, on the small cell lung study, I would guess we would probably have somewhere in the neighborhood of 40-ish patients treated at 50 milligrams that we can talk about the safety, the efficacy and the biomarkers on. We’re just now enrolling at 60 milligrams, so not sure if we’d have enough data on that yet. On the breast, we would probably by year-end time frame, have, say, 40 to 45 patients across the 3 arms, so like 14 to 15 in each and be able to discuss the safety, efficacy and biomarkers on those.

With the breast because it’s enrolling a lot faster than we expected, I think it might be a little bit of a challenge to get all the data in by year-end, that might get pushed to 26, but we’ll do our best to try to deliver that. To answer your question in terms of development, so in terms of the path in small cell lung cancer, there was a previous study done, which was the Journal Thoracic Oncology study, which was the randomized study of paclitaxel plus alisertib against paclitaxel plus placebo in groups that had biomarkers that were known to have a role in Aurora kinase, looked at retrospectively, and that included like c-Myc, RB1, et cetera, you did see via retrospective analysis, a PFS benefit and OS benefit. So our assumption always was when we bought the drug, we were only looking at it in the tumors where the Aurora kinase pathway played a role.

The question we had was, were we seeing this benefit in that randomized study because alisertib had selective activity or that for some reason, there was preclinical data that alisertib could increase the PK of paclitaxel and increase the sensitivity was that just what we were seeing? So as you said, in the monotherapy study, we are indeed seeing a benefit of alisertib in the patients with the biomarker selected for those selected for the Aurora kinase pathway. To answer your question on the bar, look, you have a trial, which is paclitaxel plus alisertib against a paclitaxel placebo. Whatever that magnitude of benefit is, we would hope with the monotherapy to see a similar benefit in PFS, right? If you’re not seeing a PFS benefit, it would be difficult to get an OS benefit.

So you got to get both. And I think from an approval standpoint, that it’s clear in small cell lung cancer, you’re getting the PFS benefit and most likely in OS. So that — to answer your question, that would be the threshold to take forward. On the breast side, there’s no pathway in ER-positive breast to get approval based on response rate. It’s got to be PFS and OS. So I think, again, we would need to see a PFS in that third-line setting. That would be something we would want to invest in and take forward. That would clearly need to be something better than what is being seen with the endocrine alone. And again, I think we would again look to most likely try to develop that in biomarker subgroups where the Aurora kinase pathway plays a role.

And the last part of your question, should any of those fall short, would we immediately go run out and try to bring something else in? No, we probably want to be selective. Look, being a profitable company, we want 100% recognize our fiscal responsibility to the shareholders, spending money on projects that aren’t going to result in a benefit to patients and hence, the benefit to shareholders, not something we’re looking to do.

Marc Alan Frahm: Okay. That’s helpful. I mean I was also asking the other direction also as well, like if you do kind of meet those bars, next steps in 1 or 2 tumor types, is that enough that you maybe wouldn’t be very interested in bringing in additional products as well?

Alan H. Auerbach: To be honest, Marc, look, there’s a lot of things out there we could bring in. And to be honest, that’s both on the commercial side and on the development side. It’s having been a profitable company now for whatever, 3, 4 years, it allows you to be in control of your own destiny. And I think that’s something that we like and we like having the ability to tell shareholders that we don’t need any additional capital and we have enough to get this — in our models, we have enough to get alisertib to the market just through our own commercial efforts and investing the profits from NERLYNX in alisertib. I really wouldn’t want to do anything, as we’ve said in the speech many times, that makes this company unprofitable, just not something we would want to do. So — and that’s true both in terms of bringing in additional commercial assets and bringing in — and/ or bringing in a development stage one.

Operator: This concludes our question-and-answer session. I would like to turn the conference back to Mariann for closing remarks.

Mariann Ohanesian: Thank you all for joining us today. As a reminder, this webcast may be accessed via replay at pumabiotechnology.com beginning later today. Have a good evening.

Operator: Ladies and gentlemen, thank you for participating in today’s conference call. This concludes our program. Everyone, have a great day. You may now disconnect.