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Why Is Puma Biotech (PBYI) Down 39.8% Since Last Earnings Report?

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It has been about a month since the last earnings report for Puma Biotech (PBYI - Free Report) . Shares have lost about 39.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Puma Biotech due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Puma Biotech Q3 Loss Narrows

Puma Biotech incurred a loss of 37 cents per share for the third quarter of 2018, narrower than the Zacks Consensus Estimate of a loss of $1.07 and the year-ago loss of $2.07.

Total revenues consist of net product revenues from the sales of Nerlynx as well as the company’s license revenues. In the third quarter of 2018, total revenues were $62.6 million, of which, $52.6 million were net product revenues and $10 million were license revenues. Moreover, sales beat the Zacks Consensus Estimate of $55 million in the reported quarter and the year-ago figure of $6 million.




Quarter in Detail

Product revenues comprised sales of Puma Biotech’s only marketed product Nerlynx. However, Nerlynx sales of $52.6 million were up a mere 3.5% on a sequential basis. The softer Nerlynx sales were due to increased patient discontinuations in the last reported quarter.

On third-quarter conference call, the company stated that the percentage of patients, who discontinued Nerlynx due to adverse events, has increased since the second quarter and is now approximately 18% since the product’s launch.

During the conference call, the company mentioned that as of Oct 31, there are 2,139 active patients on Nerlynx, of which, an estimated 87% received the drug through specialty pharmacies.

Puma Biotech plans to commercialize Nerlynx in Europe during 2019, starting with a launch in Germany during the first half of 2019 followed by other European countries in the second half of 2019.

During the third quarter, the new drug submission for Nerlynx was accepted in Canada for the given indication. Additionally, Puma Biotech’s licensing partner CANbridge Pharmaceutical filed a new drug application (NDA) for Nerlynx to the National Medical Products Administration (NMPA) in China. The drug received a confirmation from the regulatory agency in China for the same disease.

Total operating costs (including SBC) in the third quarter were $73.9 million, down almost 11.5% year over year.

Research and development (R&D) expenses were $36.4 million, down 26.5% from the year-ago period owing to lower clinical study costs and stock-based compensation expenses. Puma Biotech expects its R&D costs to decrease in subsequent quarters as clinical studies wind down.

Selling, general and administrative expenses reduced 12.3% year over year to $28.5 million.

2018 Guidance

The company expects Nerlynx sales to be in the range of $175-$200 million for fiscal year 2018.

How Have Estimates Been Moving Since Then?

Fresh estimates followed an upward path over the past two months.

VGM Scores

Currently, Puma Biotech has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Puma Biotech has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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