Puma Biotechnology Inc

Q1 2023 Earnings Conference Call


spk09: Good afternoon. My name is Rob, and I'll be your conference call operator today. At this time, all participants are in 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 question, 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 Investor Relations for PUMA Biotechnology. You may now begin your conference.
spk04: Thank you, Rob. Good afternoon and welcome to PUMA's conference call to discuss our financial results for the first quarter of 2023. 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 Ledwood, Chief Commercial Officer. After market closed today, PUMA issued a news release detailing first quarter 2023 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 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 SEC from time to time, including our annual report on Form 10-K for the year ended December 31, 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, May 4, 2023. 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 first quarter 2023 news release for a reconciliation of our GAAP to non-GAAP results. I will now turn the call over to Alan.
spk08: Thank you, Mary Ann, and thank you all for joining our call today. Today, PUMA reported total revenue for the first quarter of 2023 of $52.8 million. Total revenue includes product revenue net, which consists entirely of Neuralink sales, as well as royalties from our sub-licensees. Product revenue net was 46.8 million in the first quarter of 2023, which represents a decline as expected from 53.7 million reported in Q4 2022, and it represents a 15% increase from 40.7 million reported in Q1 of 22. Product revenue for the first quarter of 2023 was impacted by approximately 3.8 million of inventory drawdown at our specialty pharmacies and specialty distributors. Royalty revenue was $6 million in the first quarter of 2023, compared to $12 million in Q4 of 2022 and $5 million in Q1 of 2022. We reported 2,849 bottles of Neuralinks sold in the first quarter of 2023, compared to 3,323 bottles sold in Q4 of 2022. As we noted on last quarter's call, we estimate that the Q4 inventory build amounted to approximately 164 bottles. In Q1 2023, new prescriptions, or NRX, were up approximately 11% compared to Q4 22, and total prescriptions were down approximately 4% compared to Q4 22. 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 then follow with highlights of the key components of our financial statements for the fourth quarter of 2022. As investors are aware, in September 2022, PUMA was pleased to announce that we had in-licensed the anti-cancer drug Alacertib from Takeda. In clinical trials to date, Alicertib has shown single-agent activity and activity in combination with other anti-cancer drugs in the treatment of various cancers, including homoreceptor-positive breast cancer, triple-negative breast cancer, small-cell lung cancer, and head and neck cancer. The drug has also shown activity in previous clinical trials in peripheral T-cell lymphoma and non-Hodgkin's lymphoma. Takeda's previous clinical development program with Alicertib was extensive, and due to this, there is a large, well-characterized clinical safety database with over 1,300 patients who were treated across 22 company-sponsored trials. We are currently anticipating that we will be meeting with the FDA late in the second quarter of 2023 to discuss the registration pathway for L-acertib in small cell lung cancer and would substantially, I'm sorry, subsequently anticipate initiating clinical trials of L-acertib in small cell lung cancer in the fourth quarter of 2023. In March, we are pleased to announce the publication of clinical trial results from TBCRC41 in JAMA Oncology. This was a randomized trial that tested allocertib monotherapy versus allocertib plus fulvestrins in patients with homoerceptor-positive HER2-negative breast cancer. We are pleased to see the activity of allocertib in this patient population, as well as the resulting biomarker analysis in the publication. As investors are also aware, in April 2021, Data was published in JAMA Network Open from a randomized phase 2 trial of paclitaxel plus alicerib versus paclitaxel in patients with metastatic breast cancer. In patients with hormone receptor positive HER2 negative breast cancer, the data showed a statistically significant benefit in progression-free survival for patients who received alicerib plus paclitaxel compared to patients who received paclitaxel alone. We anticipate that the biomarker data from this trial will be presented as a poster at the American Society of Clinical Oncology, or ASCO, annual meeting in June. We further anticipate meeting with the FDA in the second half of 2023 to discuss the registration pathway for allocertib in homoreceptor-positive HER2-negative breast cancer and subsequently initiating clinical trials of allocertib in homoreceptor-positive HER2-negative breast cancer in the first half of 2024. We continue to anticipate that there will be several clinical milestones for the Allocerta program in the coming months. This includes the previously mentioned biomarker data from the randomized trial of Allocerta plus paclitaxel versus paclitaxel alone in homoreceptor-positive HER2-negative breast cancer, which, as I mentioned, will be presented at ASCO in June. Also, data from an ongoing investigator-sponsored Phase I-II trial of Allocerta plus pembrolizumab in the treatment of patients with RB deficiency head and neck squamous cell cancer, which is anticipated sometime in 2023, conducting a meeting with the FDA to discuss the registration pathway for allocertib and small cell lung cancer, which we anticipate in late Q2 of 2023, and conducting a meeting with the FDA to discuss the registration pathway for allocertib and homoreceptor-positive HER2-negative breast cancer, which we anticipate in the second half of 2023. As mentioned on prior earnings calls and in response to investor questions, PUMA continues to evaluate 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. The company will keep investors updated on 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 quarter.
spk06: Hey, thanks, Alan. I appreciate it. And thanks to everyone for joining our first quarter earnings call. Before I move into the commercial review, just a reminder that I will be making forward-looking statements. Our commercial strategy continues to be largely focused on the extended adjuvant indication with the goal of helping more patients reduce their risk of reoccurrence. Although progress continues to be made, this market is under-penetrated and more needs to be done to support patients in their battle with HER2-positive breast cancer. Our commercial team is focused on increasing our reach and frequency to HCPs via personal and non-personal promotion, as well as extending our outreach to better educate patients around the risk of reoccurrence and the risk-benefit profile of knurlings. Our goal is to increase penetration in the extended adjuvant setting and drive consistent growth. Specifically in regards to Q1, I am pleased that we saw HCP calls increase approximately 16% quarter over quarter, And of those calls, about 81% were live versus virtual. Also in Q1, our marketing team evaluated our non-personal promotion strategy and worked to refine or relaunch some of these tactics with the goal of increasing impact in Q2 and beyond. Lastly, the commercial team led by our clinical nurse educators continue to focus on expanding our outreach to local and regional advocacy organizations. With that very high-level update, let me transition to some of the U.S. commercial slides where I will provide some additional specifics around the business. Once I'm finished, I'll turn the call over to Maximo for a more detailed review of our financial results. And moving to slide three, our distribution model has not changed and remains separated into two distinct channels that provide Neuralinks to patients. We refer to these as our specialty pharmacy channel and our specialty distributor channel or in-office dispensing channel. Most of our business continues to flow through the specialty pharmacy channel, but we did see some stronger Q1 performance in the SD channel, so the overall splits did change slightly from Q4. In Q1, approximately 75% of our business went through the specialty pharmacy channel, with the remaining 25% of the business going through the specialty distributor channel. As a reminder, in Q4, we reported that 78% of our business went through the specialty pharmacy channel, and the remaining 22% went through the SD channel. Now, moving to slide four, Slide four shows U.S. quarterly net sales of Neuralink since FDA approval. As Alan noted, our net product sales were 46.8 million in the first quarter of 2023. This is a $6.1 million increase from Q1 of 2022 and a $6.9 million decrease from Q4 of 2022. Inventory changes clearly have an impact in these numbers, so let me give you some additional insight. In Q1, we estimate that inventory decreased by about 3.8 million. As a comparator, we estimate that inventory decreased by about 4.3 million in Q1 of 2022 and increased by about 2.6 million in Q4 of 2022. Moving to slide five. Slide five shows the bottles of Neuralink sold by quarter since launch. Please note that this slide shows ex-factory bottles sold, so it represents sales into our specialty pharmacy and specialty distributor channel and not end-user demand. We sold 2,849 bottles of Neuralinks in Q1 of 2023, which is about 6% higher compared to Q1 of 2022, and about 14% lower than Q4 of 2022. Now, again, let me provide a little more insight around inventory changes here. We estimate that inventory decreased by about 236 bottles in the first quarter of 2023. As a comparison, we estimate that inventory decreased by about 282 bottles in Q1 of 22 and increased by about 164 bottles in Q4 of 2022. Now, the commercial team is focused on execution with the goal of driving growth both quarter over quarter and year over year. Given this priority, let me provide some more specifics around a few key metrics. In Q1, we saw quarter over quarter growth in enrollments of about 2.5%, but a decline of about 10% year-over-year. In regards to commercial new patient starts, or NRX, we saw an 11% growth quarter-over-quarter and a 1% growth year-over-year. Lastly, turning to demand, in Q1, we saw quarter-over-quarter demand decrease by about 2.3%, but increase by about 4% year-over-year, driven by strong growth in the SD channel. Slide 6 highlights the adoption of dose escalation. We continue to believe that dose escalation is an important metric as it serves to improve the tolerability of NeurLynx by significantly reducing grade 3 diarrhea, decreasing discontinuation rates, and reducing the median days of grade 3 diarrhea. In Q1, approximately 64% of patients who received commercial drug started NeurLynx on a lower daily dose, which is similar to what we reported in Q4 of 2022. I am overall happy with the adoption of dose escalation and pleased to see dose escalation included in many prominent guidelines, including NCCN. We do have some physicians that are comfortable starting on full dose in the extended adjuvant setting and some that prefer to start at full dose in a metastatic setting. With that said, the commercial team continues to discuss and educate around the benefits of dose escalation. Slide 7 highlights the collaborations we have formed across the globe. In Q1 of 2023, Nearlinks received regulatory approval in the extended adjuvant setting in both Morocco and South Africa and received regulatory approval in the metastatic setting in Colombia. Also in Q1 2023, we're happy to announce that Nearlinks was officially launched in Mexico in the extended adjuvant setting. Our global partners continue to focus on driving increased adoption and preparing for future launches. I look forward to highlighting their continued progress moving forward. I want to thank my commercial colleagues for their continued dedication to becoming more efficient and more effective as we strive to make a bigger impact on patients battling breast cancer. I also want to thank the broader PUMA organization for their support and partnership. I know they also share a passion for making a broader impact on patients. I'm now going to turn the call over to Maximo for a full review of our financial results.
spk03: Thanks, Jeff. I will begin with a brief summary of our financial results for the first quarter of 2023. Please note that I will make comparisons to Q4 2022, which we believe is a better indication of our progress as a commercial company than year-over-year comparisons. For more information, I recommend that you refer to our Q1 2023 Thank You, which will be filed today and includes our consolidated financial statements. The first quarter of 2023, we reported net income based on gap of $1.4 million, or $0.03 per share. This compares to a net loss in Q4 2022 of $5.6 million, or $0.12 per share. On a non-gap basis, which is adjusted to remove the impact of stock-based compensation expense, we reported net income of $4.2 million, or $0.09 per share, for the first quarter of 2023. Gross revenue from Netlink sales was $59.4 million in Q1 2023 and $65.4 million in Q4 2022. As Alan mentioned, net product revenue from Netlink sales was $46.8 million compared to the $53.7 million reported in Q4 2022. We believe that Q1 net sales were impacted by approximately $3.8 million of inventory drawdown from our distributors. Royalty revenue totaled $6 million in the first quarter of 2023 compared to $12 million in Q4 2022. The lower royalties versus Q4 reflects the timing of shipments to our partner in China. Our gross to net adjustment in Q1 2023 was about 21.2%. compared to the 17.8% gross net adjustment reported in Q4 2022. Higher copay was the main driver of the increase versus Q4 2022. COFTO sales for Q1 2023 was $13.2 million, including $2.4 million for the amortization of intangible assets related to our neratinib license. COFTO sales for Q4 2022 was $16.8 million. Going forward, we will continue to recognize amortization of milestones to the licensor of about $2.4 million per quarter as cost of sales. For fiscal year 2023, PUMA anticipates that Net Netlink's product revenue will be in the range of $205 to $210 million. We also anticipate that our gross-to-net adjustment for the full year 2023 will be between 19% and 20%. In addition, for the fiscal year 2023, we anticipate receiving royalties from our partners around the world in the range of 25 to 30 million. We don't expect license revenue in 2023. We also expect that net income for the full year will be in the range of 20 to 24 million. We recognize there continues to be a great deal of uncertainty regarding the impact of COVID-19, especially in countries outside of the U.S., and this may continue to negatively impact our sales, royalties, and license revenue. We anticipate that for Q2 2023, Nalix net sales will be in the range of $47 to $50 million. Also, we expect Q2 royalties revenue will be in the range of $2 to $3 million. We further estimate that the gross net adjustment in Q2 2023 will be approximately 20 to 21 percent. UMA anticipates a Q2 net profit of between zero and 1.5 million. SG&A expenses were 22.5 million in the first quarter of 2023, compared to 25.1 million for the fourth quarter. SG&A expenses included non-cash charge charges for stock-based compensation of $2 million for Q1 2023 compared to $1.8 million for Q4. Research and development expenses were $12.7 million in the first quarter of 2023 compared to $13.8 million for the fourth quarter. R&D expenses included non-cash charges for stock-based compensation of $0.9 million in the first quarter of 2023 unchanged from the fourth quarter. In the first quarter of 2023, PUMA reported cash burn of approximately $9.9 million compared to cash earned of approximately $3.1 million in Q4 2022. In Q1 2023, we made a $12.5 million payment to Pfizer related to the achievement of a global revenue milestone and $8 million payment related to a legal settlement. The expense side, PUMA continues to anticipate a reduction in total operating expenses in 2023 compared to 2022. More specifically, we anticipate SG&A expenses to decline approximately 1% to 3%, and R&D expenses to increase 6% to 8% year-over-year. March 31, 2023, we had approximately $71 million in cash, cash equivalents, and marketable securities. Our account receivables balance was $31.2 million. Our account receivables terms range between 10 and 68 days, while our day sales outstandings are about 48 days. We estimate that as of March 31, 2023, our distribution network maintained approximately three weeks of inventory. Overall, we continue to deploy our financial resources to focus on the commercialization of Nearlinks, the development of Alicertif, and controlling our expenses.
spk08: Thanks, Maximo. We are pleased to be able to achieve positive net income during the first quarter of 2023. PUMA senior management, in cooperation with the board of directors, continues to remain focused on improving near-link sales in 2023 and beyond. In the fourth quarter of 2021, we implemented a reduction in expenses with the goal of reducing expenses in order to maximize operating cash flows. We believe that the positive net income reported in the first quarter was a direct result of these expense reductions. These expense reductions are also a major contributor to the positive net income and positive cash flow that the company is guiding to for full year 2023. The company remains committed to continuing to achieve these operational cash flows and positive net income and will continue to reduce expenses if needed to achieve this. We look forward to updating investors on this in the future. There continues to remain a significant unmet need for patients battling breast cancer, lung cancer, and other solid tumors. We at PUMA are committed and passionate about finding more effective ways at helping these patients during their journey and will continue to strive to achieve that goal. This concludes today's presentation. We will now turn the floor back to the operator for Q&A. Operator?
spk09: We will now begin the question and answer session. If you wish to ask a question, please press star 1 on your telephone keypad The confirmation tone will indicate your line is in the question queue. If you wish to withdraw your request, please press star 2. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you, and your first question comes from Ed White with HC Wainwright. Please proceed with your question.
spk07: Sorry, good afternoon. Thanks for taking my questions. So the first question is just a clarification. What was the gross to net in the quarter? Did I hear 22 point something?
spk03: Give me a second. No, the gross to net was 21.2.
spk07: 21.2, Ed. Great, thank you. And are you seeing an increase in your patient assistance programs, increase in participation?
spk06: So, Ed, in terms of patient assistance programs, are you talking about free drug or are you talking about additional support for mentorship and things of that nature? No, free drug. Free drug in Q4, we did not see an increase in that. We've actually been watching that very closely. We had a trend going for partial last year where we're seeing an increase in non-commercial drug. That did not hold true in Q1.
spk07: Okay, great. Thanks. And just regarding the royalties, can you provide maybe a little bit of clarity on the growth projections? I know China's always been lumpy for you. But with the sort of end of COVID over there, should we see it a little bit more smooth this year? And also, what are your partners doing outside the U.S. to sort of boost the sales numbers?
spk08: Yeah, to answer the question, in terms of the lumpiness of China, you're absolutely correct. It is lumpy. We do get payments of various amounts. A lot of that is also because of the fact that we manufacture the drug for our partners and then sell it to them and then they sell it to the market. With China specifically, a lot of that lumpiness has been that manufacturing of it as well. When we can transfer things over and the time it takes and things like that. That kind of contributes to that lumpiness. To answer your second question in terms of what our ex-US partners are doing, In every country, it's different. In a lot of them, there are situations where there's countries that we still haven't gotten reimbursement for, so we're waiting for that, and that will provide some additional boosts. But in all of them, we continue to see them doing the same thing we're doing in the U.S., which is trying to increase their share of voice and having more interactions with the physicians.
spk07: And are they also running their programs like you did to – in an effort to increase the number of patients that start on the lower dose?
spk06: In some countries, we do have lower dose approved. In others, it's not yet on the label. So I think there's educational efforts around appropriate dosing to try to reduce any of the side effects. In some countries, we do have that as a promotional portion of their mix. In others, it's not there yet from a label perspective.
spk07: Okay, thanks. My last question is just on the subject of starts at the lower dose. It seems the first quarter was down from the first quarter of last year. Are you sort of at a plateau right now? Do you think this is the level that patients will be at, or is there something that you can do to increase that lower dose start?
spk06: Ed, great question. I appreciate it. And obviously, as I keep saying, we think that's very important that we continue to drive the low dose as it does change that tolerability profile. I'm going to give you an estimate, and I would guess that we have still some room to further penetrate, but we're not too far off of the max that we're going to see, and I'll explain that a little bit more. There's a couple factors going on here. Number one, as I mentioned, there are some folks in the metastatic setting, which is a small part of our business, But there are clinicians in a metastatic setting that want to start on full dose for just efficacy reasons in a metastatic, that urgency to treat. We also have several clinicians or a group of physicians in the extended adjuvant that are very comfortable starting on full dose. And if a patient has challenges with side effects and or diarrhea, they want to dose reduce as opposed to going the other direction. But the vast majority are starting on low dose and moving up. The one other piece that I think is important, I want to make sure I articulate that again, is as you saw in my opening that about 25% of our business now goes through the SD channel. So we've seen some growth in the in-office dispensing channel. The reason that's important in this context is that if a patient starts in the SD channel, and stays in the SD channel, we won't know what their dosing is. We do not get patient-specific information. We also won't get an enrollment from those patients. They don't come over to the SP side where we collect enrollments. What is not uncommon is that a patient will start in the SD portion. The adoption of dose escalation, we believe, in the community setting is pretty strong. If they start in the SD portion of our business on a low dose, And because the payer forces them to move to a specialty pharmacy after the first or second fill, that specialty pharmacy prescription will start at 180, right? They will be on their second or third fill and come in at full dose. And we don't capture that as clearly as we would like. So the numbers I quote to you are understated from what we believe the actual execution of low dose is. Hopefully that makes some sense.
spk07: It does. Thanks a lot for the clarity.
spk09: The next question comes from the line of Divya Rao with TD Cowen. Please proceed with your questions.
spk02: Hi, this is Divya on for Mark. Thanks for taking our question. To follow up on the gross net question, it looks like for the full year to keep in line with the guidance, the second half gross net needs to be around 18%. I guess, what do you think What are the kind of assumptions you're making that would lead to a significant decrease in that gross net? I have a follow-up to that.
spk03: Yeah. So in terms of gross net, you're right. That's about what we expect for the back half. What we're seeing is some of the inflation data, right, that is offsetting some of the price increases that we had. So other than that, we really don't plan for any significant changes. Again, you need to remember that Q1 is usually the highest quarter in terms of gross net due to copay and donut holes and so on.
spk02: That's helpful. And then switching gears to the L-surgery program, I realize that you guys haven't had a conversation with the FDA yet, but I guess internally, do you guys expect to run a randomized trial or do you think you could potentially go forward with a single-arm trial? And then are there any kind of design criteria that you think the FDA would require that maybe you guys would reconsider moving forward with L-assertive in small cell lung cancer?
spk08: Divya, just so I understand your last part, can you repeat that question and clarify a little bit?
spk02: Yeah, I was just asking if there was any you know, design criteria that maybe the FDA might require for you to run in a trial that you move forward. And, um, just based on either cash constraints or anything like that, you guys might reconsider or conservation of capital guys might reconsider moving.
spk08: Yep. Yep. Okay. Okay. So first of all, in terms of your, uh, the first party question, which is, uh, you know, Alistair, do we think the, um, path to market is a, uh, single arm trial, which would allow for an accelerated approval or randomized trial? or a combination of both, that's the reason for having the meeting with the FDA. Now, you know, looking at small cell lung cancer, for example, you know, on one side of the ledger you have that, you know, there is a, you know, regulatory history of them approving drugs based on single arm trials in that indication. So you do have a regulatory precedent there. On the other side of the ledger you obviously have the, you know, recent guidance that's come out from the FDA, which has been leaning more toward randomized trials and away from single arm trials. That's the reason for having the discussion with them. So whether it's a monotherapy trial, whether it's a single arm trial, I should say, or a randomized, that's what we want to discuss with them. Whether it's in an entire small cell lung cancer population or one that's a biomarker focused is another discussion we want to have with them. To your last question, which is, you know, is there any design, you know, that due to, you know, cash reasons we would not take forward, you know, as we have said in every one of our earnings calls, the most important thing for this company is to make sure that we are, you know, net income positive and cash flow positive. So, you know, I think at your guys' conference, Mark had asked me the question as well, which was, you to be able to, you know, conserve cash and protect that net income line, absolutely. You know, if it need be and we need to stagger the breast and the lung indications such that we can continue to be net income positive and cash flow positive, there's no question we will do that. Like I said, in every one of our earnings calls we have said the most important thing for this company is to continue to be net income positive and cash flow positive, and we will manage our R&D budget in order to achieve that.
spk02: Got it. That's fairly helpful. Thank you.
spk09: Our next question comes from the line of Jeff Meacham with Bank of America. Please receive your questions.
spk10: Good afternoon. This is Hao. I'm for Jeff Meacham. Thank you for the question. So just a question on the QQ next product guidance. It seems to be indicating a decline year over year while your Q1 was pretty strong in terms of new patient growth quarter by quarter and year by year in terms of net product revenue. So just wanted to understand a bit more on the assumptions going to that 2Q guidance there.
spk08: Hey, I'm sorry. Can you repeat your question one more time, please?
spk10: Yeah, so my question is about the 2Q second quarter net product revenue guidance of 47 to 50 million seems to be a year-over-year decline. While you had a pretty strong wine queue in terms of revenue growth year-over-year, new patient enrollment was also 11% quarter-by-quarter growth. So I just wanted to understand the assumption goes into that 2Q net product revenue guidance.
spk08: Okay, so thank you for clarifying that. Comparing Q2 23 to Q2 22, you have to remember that there was an inventory build in Q2 of 2022 of roughly 150 to 200 bottles. So that's going to offset that revenue comparison that you're doing.
spk10: Awesome. Well, that's helpful. Thank you.
spk09: Our next question is from the line of Gina Wang with Barclays. Please proceed with your question.
spk01: Hi. Good evening. Thank you for taking our question. This is Hershita on for Gina. Perhaps a big picture question for you, Alan. So for neratinib, last quarter you announced discontinuation of the summit study. So what should our focus be on neratinib in terms of growth opportunities outside of already approved indications going forward, or is the thinking now primarily on L-acertib in terms of expansion opportunities while neratinib revenue provides floor value? And on the heels of that, if you could expand a little more on opportunities you're exploring to in-license other products, how are you thinking about it? Is it primarily in cancer that would complement your pipeline? Any additional color on that would be helpful. Thank you.
spk08: Yeah, thank you for the question. So with regard to Neuralink's Neuratinib, you're correct that we decided not to take the summit indications forward. And the main reason for that is that our composition of matter patent on Neuratinib expires in December 2030. So for us to go do randomized trials in these very rare mutations where you have to screen the patients, which can add additional time and cost, The ROI just wasn't positive to do that. Um, and again, for us to go run, you know, uh, five-year trials or something, uh, by the time it was your approved, it's already 2028 or 29. You're just not going to get the return on investment for that. And again, it's very important for us to protect the investors and protect their ROI. So you're correct that we chose not to take that forward and for neuratinib, the main growth will be continued execution. in both the extended adjuvant and the metastatic breast cancer settings. You know, obviously for L-acertib, you know, we have the two indications to go forward with, which is small cell lung cancer and non-small cell, I'm sorry, small cell lung cancer and HR positive HER2 negative metastatic breast cancer. And then we are continuing to look at other assets in license. We, first of all, you know, as I mentioned to the prior question, the most important thing to us is continuing to maintain the company at net income positive and cash flow positive. So we obviously would look to bring anything else in, and again, with a protection of those two things, net income positive and cash flow positive. Cancer is what we know. It's what our domain knowledge is. Would we look outside of that? I don't think so. We just don't possess the skill set to be able to do the right assessment of it. and to develop it and commercialize it. Right now we have an existing commercial infrastructure in oncology specifically. It doesn't really go outside of oncology. I realize there's some cancers, for instance, like prostate or something, where you go into urology and it's a different field and things like that. You don't really have that with breast cancer. It's just strictly an oncology setting. So what would make the most sense from a complement perspective is something in the oncology space. We really wouldn't look outside that.
spk09: Thank you. Our final question is from the line of Mayank Mumtani with B. Riley Securities. Please proceed with your question.
spk05: Hi, yes. Congratulations again, and thanks for taking our questions. This is actually William on Vermont. So, I realize that financials have been picked over a little bit, so I was actually curious about a couple of your trials with data reporting later this year. I'm just curious if we could get a little bit more color on the biomarker data that we should be expecting upcoming in your HER2 negative breast cancer, and then potentially also and then where we might be expecting that, and then sort of the same idea behind the investigator-sponsored Phase I-II trial also coming up this year. Thanks.
spk08: Thank you for the question. So aliceridib was previously tested in a trial in breast cancer, and it was both HR-positive HER2-negative breast cancer and triple-negative breast cancer. And it showed efficacy in both, specifically in the patients in HER2-negative HR-positive breast cancer. It was a trial of paclitaxel plus alacertib against paclitaxel alone, and the trial showed a progression-free survival benefit. They're doing a biomarker analysis on that, and that will be presented as a poster at the ASCO annual meeting in June. More specifically, what we're interested in looking at is with an aurora cranius inhibitor like alacertib, there's a lot of pathways that one would anticipate in could be inhibited by an aurora kinase inhibitor. So, for example, in our small cell lung cancer trial that was published, there was biomarker data, you know, showing greater efficacy in the patients with, you know, CMIC amplifications or with RB1 mutations or RB1 deletions. So, that is what we'd be very interested in seeing would be anything that would suggest to us that by enriching the population with a certain biomarker where we think Alacertib would be more active, you know, you would get a much greater magnitude of the benefits, which obviously would be better, you know, from a R&D perspective, but obviously potentially a commercial one as well. So that's really the data we would be looking for from that trial. On your second question, that trial, which is the pembrolizumab plus Alacertib in RB1 deficient head and neck cancer is still enrolling. My assumption would be that we would present that probably, you know, second half of this year sometime. I don't think we've chosen the conference yet for that, so once we do, we will definitely let investors know.
spk05: Awesome. Greatly appreciate that, and thanks again.
spk09: Thank you. This concludes our question and answer session. I would like to turn the conference back to Marianne for closing remarks.
spk04: Thank you all for joining us today. As a reminder, this call may be accessed via replay of the webcast at PumaBiotechnology.com beginning later today. Have a good evening.
spk09: Ladies and gentlemen, thank you for participating in today's conference call. This concludes our program. Everyone have a great day. You may now disconnect.

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