Puma (PBYI) Falls Despite Narrower-Than-Expected Q3 Loss

Puma Biotechnology, Inc. (NASDAQ:PBYI) reported a loss of $2.07 in the third quarter of 2017, much narrower than the Zacks Consensus Estimate of a loss of $3.46. The company had reported a loss of $2.02 in the third quarter of 2016.

Shares of Puma, however, slumped 11.2% on Thursday. However, so far this year, Puma’s shares have outperformed the industry. Specifically, the company’s shares have risen 288.1% in this time frame while the industry registered an increase of 3.1%.

The small biotech’s only marketed product, Nerlynx (neratinib) was launched in the United States in August for the treatment of early stage HER2-positive breast cancer in patients who have been previously treated with Roche’s (OTC:RHHBY) Herceptin-based adjuvant therapy. So Q3 is the first quarter in which Puma recorded sales for Nerlynx. The FDA approved Nerlynx in July and shipments to wholesalers began later in the month.

In the quarter, the company recorded revenues of $6.1 million from initial sales of Nerlynx. Revenues came in higher than the Zacks Consensus Estimate of $3 million. The company did not report any product sales in the third quarter of 2016.

On the call, the company mentioned that in the specialty pharmacy channel, 779 new patient prescriptions have been received since the FDA approval in July through October end. A month-over-month increase in new patient enrollments has been witnessed in the specialty pharmacy network with the trend expected to continue.

Nerlynx is also under review in the EU for the same indication with an opinion from the Committee for Medicinal Products for Human Use (CHMP) expected in the first quarter of 2018.

In the third quarter, research and development (R&D) expenses were $49.5 million, down 4.8% from the year-ago quarter. Selling, general and administrative expenses however increased 132% year over year to $32.5 million due to higher professional fees, payroll costs and other costs to support the commercial launch of Nerlynx.

Additional Studies on Nerlynx

Several additional studies on Nerlynx targeting different types of breast cancer patient populations and in earlier-line settings are currently underway. Meanwhile, several phase II combination studies on Nerlynx for the treatment of breast cancer are ongoing.

In the quarter, the company presented five-year follow-up from the phase III ExteNET study at the European Society of Medical Oncology meeting. The data showed that after a median follow-up of 5.2 years, treatment with Nerlynx led to a 27% reduction in the risk of invasive disease recurrence or death versus placebo.

Meanwhile, Puma expects to present data from the phase III study in third-line HER2-positive metastatic breast cancer in the first half of 2018.

Apart from the HER2-positive breast cancer indication, the company believes that Nerlynx holds potential for the treatment of several other cancers as well, including NSCLC and other tumor types that over-express or have a mutation in HER2.

Zacks Rank & Stocks to Consider

Puma currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the biotech sector are PDL BioPharma, Inc. (NASDAQ:PDLI) and Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) , both with a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of PDL BioPharma have increased 42.9% this year so far while earnings estimates for 2018 have increased 3.2% in the past 30 days.

Shares of Ligand Pharmaceuticals have risen 42.2% this year so far while earnings estimates for 2018 have increased 0.5% in the past 30 days.

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