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Why Is Puma Biotech (PBYI) Up 39.5% Since Last Earnings Report?

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A month has gone by since the last earnings report for Puma Biotech (PBYI - Free Report) . Shares have added about 39.5% in that time frame, outperforming the S&P 500.

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

Puma Biotech Q4 Loss Narrows, Nerlynx Pulls Stock Up

Puma Biotech incurred a loss of 80 cents per share for the fourth quarter of 2018, narrower than the Zacks Consensus Estimate of a loss of 92 cents as well as the year-ago loss of $1.71.

Total revenues consist of both net product revenues from the sales of Nerlynx and the company’s license revenues. In the reported quarter, total revenues came in at $71.1 million comprising $61.1 million from Nerlynx and $10 million of license revenues. Moreover, sales beat the Zacks Consensus Estimate of $53.5 million in the reported quarter and was also higher than the year-ago figure of $21.6 million.

Quarter in Detail

Nerlynx sales were up 16% on a sequential basis. In fourth-quarter 2018, the drug saw an increase in patient refills in the specialty pharmacies and an increase in demand across both the specialty pharmacy and distribution channels.

On the fourth-quarter conference call, the company stated that the supportive care voucher program, which provides up to three months of anti-diarrheal products for free to eligible patients, was introduced in the third quarter of 2018. Following this, the number of vouchers use increased immensely and became an additional driver for sales growth in the fourth quarter, thereby curbing discontinuations which hurt sales earlier.

The company also mentioned that total operating costs in the fourth quarter were $89.7 million, up almost 5.3% year over year.

Research and development (R&D) expenses were $38.4 million, down 23.5% from the year-ago period owing to lower clinical study costs and stock-based compensation expenses.

Selling, general and administrative expenses surged 32.7% year over year to $41 million, primarily to support the commercial launch of Nerlynx.

As of Dec 31, 2018, Puma Biotech had cash and cash equivalents of $108.4 million.

How Have Estimates Been Moving Since Then?

Fresh estimates followed an upward path over the past two months. The consensus estimate has shifted 18.82% due to these changes.

VGM Scores

At this time, Puma Biotech has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. 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 #2 (Buy). We expect an above average return from the stock in the next few months.


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