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Why is Puma (PBYI) Stock Up More than 150% in a Year's Time?

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Shares of Puma Biotechnology, Inc. (PBYI - Free Report) have significantly outperformed the industry in a year. The stock has skyrocketed 186.4% compared with the industry’s increase of 3.3% during the period.

Last year’s FDA approval of Puma’s cancer drug Nerlynx (neratinib) in the United States coupled with its strategic collaborations has been appreciating the company’s share price consistently.

Notably, Nerlynx received the FDA approval last July for the extended adjuvant treatment of patients with early-stage HER2 over expressed/amplified breast cancer, having been previously treated with Roche's (RHHBY - Free Report) Herceptin-based adjuvant therapy. Subsequently, the drug was launched in the United States in August 2017. Significantly, Nerlynx is the first anti-HER2 medicine to be approved as an extended adjuvant therapy for the aforementioned indication.

The FDA approval of Nerlynx for breast cancer was a huge boost to Puma, given the treatment’s immense commercial potential in the target market. The drug is also under review in the EU for the same indication with an opinion from the Committee for Medicinal Products for Human Use of the EMA expected in the first quarter of 2018.

Puma logged its first product revenues in the third quarter of 2017 from the initial sales of Nerlynx. The company recorded revenues of $6.1 million from Nerlynx during the period. In October 2017, Puma entered into a credit facility with Silicon Valley Bank and Oxford Finance to support Nerlynx commercial initiatives.

Several additional studies on Nerlynx targeting different types of breast cancer patient populations are also underway.

Puma believes that Nerlynx can also be developed for treating other cancers including non-small cell lung cancer and other tumor types that over-express or have a mutation in HER2.

Moreover, in November 2017, Puma entered into an exclusive licensing agreement with Specialised Therapeutics Asia, a Singapore-based biopharmaceutical company to commercialize Nerlynx in Australia, New Zealand and South-East Asia. This agreement will provide the company with funds in the form of milestone payments and double-digit royalties on Nerlynx sales. Incidentally, Specialised Therapeutics will also seek to get the drug approved in other countries like Singapore, Malaysia, Brunei and New Zealand.

About 25% of HER2-positive early-stage breast cancer patients treated with Herceptin-based adjuvant treatment experiences a recurrence. Hence, the consent for Nerlynx in the additional countries will be a big lift to Puma as the company is expected to address this hugely unmet medical need of patients experiencing the relapse of the disease worldwide.

Though HER2-positive breast cancer market provides vast commercial potential, Nerlynx is facing close competition from established products including Roche's Herceptin, Perjeta and Kadcyla, GlaxoSmithKline plc's (GSK - Free Report) Tykerb and Novartis AG's (NVS - Free Report) Kisqali.

It is important to note that quite a few other companies are also working hard to bring cancer curative treatments to the table for the target market.

However, Nerlynx looks promising at this juncture with many more studies targeting other cancer types.

Zacks Rank

Puma has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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