Puma Biotechnology Inc

Good afternoon. My name is Alex, and I will be your conference call operator today. At this time, all participants are in a listen-only mode. After the speaker's formal remarks, there will be a question and answer session. If you'd like to ask a question during that time, simply press the star key, then the number 1 on your telephone keypad. If you'd like to withdraw your questions, please press star 2. If you should require operator assistance during the conference, please press star 0. As a reminder, this call is being recorded. I would now like to turn the conference call over to Marianne Ohannesson, Senior Director of IR for PUMA Biotechnology. You may begin your conference.

Thank you, Alex. Good afternoon and welcome to PUMA's conference call to discuss our financial results for the second quarter of 2022. Joining me on the call today are Alan Auerbach, Chief Executive Officer, President and Chairman of the Board of PUMA Biotechnology, Maximo Noguez, Chief Financial Officer, and Jeff Ludwig, Chief Commercial Officer. After market closed today, PUMA issued a news release detailing second quarter 2022 financial results. That news release, the slides that Jeff will refer to, and a webcast of this call are accessible via the homepage and investor 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 the company'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 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 Securities and Exchange Commission from time to time, including our annual report on Form 10-K for the year ended 12-31-21 and our quarterly report on Form 10-Q for the period ended June 30, 2022. 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 4, 2022. The company 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 also 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 2022 news release for a reconciliation of our GAAP to non-GAAP results. I will now turn the call over to Alan.

Thank you, Marianne, and thank you all for joining our call today. Today, PUMA reported total revenue for the second quarter of 2022 of $59.5 million. Total revenue includes product revenue net, which consists entirely of Neuralink sales, as well as license fees and royalties from our sub-licensees. Product revenue net was $51.3 million in the second quarter of 2022, which represents an increase as expected from the $40.7 million in product revenue net reported in the first quarter of 2022 and $48.9 million in product revenue net reported in Q2 2021. Product revenue for the second quarter of 2022 included approximately $2.7 million of inventory bill that our specialty pharmacies and specialty distributors. Royalty revenue was 8.2 million in the second quarter of 2022, an increase from 5 million in Q1 2022 and 4.3 million in Q2 2021. We recorded no license revenue in the latest quarter. We reported 3,200 bottles of Nearlinks sold in the second quarter of 2022, an increase of 520 from the 2,680 bottles sold in Q1 2022. We estimate that the Q2 inventory builds amounted to approximately 175 bottles. As noted on our last quarter call, we estimate that inventory stocking in late 2021 caused a reduction of approximately 282 bottles in Q1 2022. In Q2 2022, new prescriptions, NRX, were down approximately 8% compared to Q1, while total prescriptions, TRX, were up about 1.6%. Jeff will provide further details in his comments and slides. I will now provide a clinical review of the quarter, and then Jeff Ludwig will add additional color on Nearlink's commercial activities. Maximo Noguez will follow what highlights the key components of our financial statements for the second quarter of 2022. As we have mentioned on our prior calls, PUMA has an ongoing basket trial of neuratinib and HER2-mutated cancers referred to as the summit trial. The arm of the trial that has enrolled the most patients to date is the arm that is testing neuratinib in patients with hormone receptor positive, HER2-negative breast cancer who have a HER2 mutation, and as we have discussed on previous investor calls, PUMA has been looking to pursue a regulatory approval in this indication and more specifically for the triplet of neratinib plus trastuzumab plus fulvestrant for which clinical data was presented at the recent American Society of Clinical Oncology Annual Meeting in June. As investors are aware, at the American Society of Clinical Oncology Meeting in June, Data was presented on the HER2-targeted antibody drug conjugate in HER2 in patients with HER2-negative HR-positive metastatic breast cancer in a trial referred to as Destiny Breast 04 or DB04. This trial showed an improvement in progression tree survival and overall survival, and assuming that it is approved, we believe it is likely to become the new standard of care for patients with HER2-negative metastatic breast cancer. Based on the inclusion criteria for DbO4, we believe it is likely that the population of patients studied in DbO4 overlaps with that of summit for neratinib, an HR-positive HER2-negative, HER2-mutated breast cancer. While we do not know what percent of the patients in DbO4 had HER2 mutations, we acknowledge that an HER2 is a HER2-targeted agent and has shown activity in and is in the NCCN guidelines for other HER2-mutated tumors. Due to this, we believe that it is unlikely that the FDA would grant accelerated approval for neratinib based on the summit data and would instead inquire us to either, one, do a head-to-head trial against N-HER2 in the syndication, two, do a trial of the triplet in combination with N-HER2 versus N-HER2 monotherapy, or three, study neratinib in a HER2-mutated population that does not overlap with a DBO4 indication. We believe that the head-to-head trial against NHER2 is not in the best interest of shareholders, as the cost of this trial would be prohibited and the likelihood of success would be low. The trial of the triplet in combination with NHER2 versus NHER2 monotherapy would require a new trial of the safety of the triplet with NHER2, and it's further complicated by the fact that NHER2 is trastuzumab-based which would complicate giving the triplet, which includes trastuzumab, with in HER2. The third option of studying neuratinib in a different indication would require us to redo the randomized three-arm study, which tested neuratinib plus trastuzumab plus fulvestrant versus trastuzumab plus fulvestrant versus fulvestrants alone in a new population, such as an earlier stage group of patients who are fulvestrant-naive or a later group of patients who have already received in HER2. Due to the rarity of the HER2 mutation in breast cancer and the time it would take to enroll this three-arm randomized trial and the subsequent Simons two-stage expansions, it is not clear that this can be accomplished in a timeframe that would result in a positive return for PUMA shareholders. PUMA plans to submit the final data from Summit to the FDA later this year to confirm our thoughts on this indication with the FDA and obtain their guidance. PUMA will continue to update investors on the status of this as it progresses. As investors are also aware, in November 2020, we announced interim data from another cohort of the summit trial, and more specifically, the cohort of patients with metastatic non-small cell lung cancer with epidermal growth factor exon 18 mutations who have been previously treated with an EGFR-targeted tyrosine kinase inhibitor. As was shown in the data that was presented, there were four responders out of 11 patients and therefore the criteria had been met to proceed to stage two of the Simon's two-stage design and to enroll 30 patients. There are currently 31 patients enrolled in this arm of the trial, and we anticipate that we will have additional data from this cohort to report in the second half of 2022. Once we receive the data, we plan to meet with the FDA to discuss the regulatory pathway for this indication. PUMA anticipates that the FDA will either allow the company to file for accelerated approval based on single arm data or may require additional data or a separate randomized trial for this indication. If a randomized trial is required, the company will make a decision whether or not to proceed based on the time and cost of the trial versus the potential market opportunity. Enrollment to this arm of the trial has been halted while we analyze the current data and wait for regulatory guidance. As mentioned on prior earnings calls and in response to investor questions, Puma is also evaluating several drugs to potentially end license that would allow the company to diversify itself and leverage Puma's existing R&D, regulatory, and commercial infrastructure. Puma will continue to update investors on the status of this as it progresses. I will now turn the call over to Jeff Ludwig, Puma's Chief Commercial Officer, for a review of our commercial performance during the course.