Puma Biotechnology Inc

Good afternoon. My name is Julian and I'll 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 one on your telephone keypad. If you'd like to withdraw your question, please press star two. If you should require operator assistance during the conference, please press star zero. As a reminder, this call is being recorded. I would now like to turn the conference call over to Marianne Ohanesian, Senior Director of IR for PUMA Biotechnology. Thank you. You may begin.

Thank you, Julian. Good afternoon and welcome to PUMA's conference call to discuss our earnings results for the third quarter of 2025. Joining me on the call today are Alan Auerbach, Chief Executive Officer, President and Chairman of the Board of PUMA Biotechnology, Maximo Niguez, Chief Financial Officer, Heather Blaber, Senior Vice President of Marketing, and Roger Storms, Senior Vice President of Sales. After the close today, PUMA issued a news release detailing earnings results for third quarter 2025. That news release, the slides that Roger 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 PUMA'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 SEC from time to time, including our annual report on Form 10-K for the year ended December 31, 2024. 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, November 6, 2025. PUMA 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 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 third quarter 2025 earnings release for 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 third quarter of 2025 of $54.5 million. Total revenue includes product revenue net, which consists entirely of near-link sales, as well as royalties from our sub-licensees. Product revenue net was $51.9 million in the third quarter of 2025, an increase from $49.2 million reported in Q2 2025, and a decrease from $56.1 million reported in Q3 2024. As a reminder to investors, PUMA reported Nearlink sales includes both U.S. net sales of Nearlink's and product supply revenues of Neuralinks to Pumas ex-U.S. partners. Please note that in Q3 2024, we reported product supply revenue to our international partners of about 7.4 million versus 0.1 million in Q3 2025. Therefore, U.S. net sales of Neuralinks in Q3 2025 were 51.8 million versus $48.8 million in Q3 2024. Product revenue for the third quarter of 2025 was impacted by approximately $3.1 million of inventory billed in our specialty pharmacies and specialty distributors. Royalty revenue was $2.6 million in the third quarter of 2025 compared to $3.2 million in Q2 2025 and $24.4 million in Q3 2024. Q3 2024 royalty revenue included sales to China by our offshore partner, Pierrefarm. We reported 2,949 bottles of Neerlings sold in the third quarter of 2025, an increase of 341 from the 2,608 bottles sold in Q2 2025. In Q3 2025, we estimate that inventory increased by 172 bottles. In Q3 2025, new prescriptions were down approximately 3% compared to Q2 2025, and total prescriptions were down approximately 1% compared to Q2 2025. Roger will provide further details in his comments and slides. I will now provide a clinical review of the quarter, then Heather Blaber and Roger Storms will add additional color on Nearlink's commercial activities. Maximo Noguez will follow with highlights of the key components of our financial statements for the third quarter of 2025. As investors are aware, PUMA currently has two ongoing Phase II trials of our investigational drug, Alacertib, Aliska Breast 1, which is a Phase II trial of Alacertib in combination with endocrine treatment in patients with HER2-negative hormone receptor-positive breast cancer, and Aliska Lung 1, a Phase II trial looking at the efficacy of Alacertib monotherapy in and patients with small cell lung cancer. As a reminder, the ELISCA breast one trial investigates alicerib in combination with endocrine treatment, which consists of either anastrozole, exomestine, letrozole, fulvestrant, or tamoxifen, and patients with HER2 negative, hormone receptor positive, metastatic breast cancer. Patients must be chemotherapy naive, have been previously treated with a CDK4-6 inhibitor, and received at least two prior lines of endocrine therapy in the recurrent or metastatic setting to be eligible for the trial. Patients are being dosed with Allocertib given at either 30 milligrams, 40 milligrams, or 50 milligrams twice daily BID on days 1 to 3, 8 to 10, and 15 to 17 in a 28-day cycle in combination with the endocrine therapy of the investigator's choice. Patients must not have been previously treated with the endocrine treatment in a metastatic setting that will be given in combination with Allocertib in the trial. The primary efficacy endpoints include BID. objective response rate, duration of response, disease control rate, and progressions for each survival. As a secondary objective, the company will be evaluating each of these efficacy biomarkers within biomarker subgroups in order to determine whether any biomarker subgroup correlates with better efficacy and has been seen in preclinical and clinical studies in other cancers, including breast cancer and small cell lung cancer. The company will then look to focus the future clinical development of Alicerta in combination with endocrine therapy for patients with HER2-negative hormone receptor-positive breast cancer with these biomarkers. The trial was initiated in late November 2024. There are currently 34 sites in the U.S. and 18 sites in Europe that have been activated for the trial, and the trial is rolling ahead of expectations. There are currently 98 patients enrolled in the trial and 14 additional patients in screenings. Due to the faster-than-expected enrollment in the trial, the former interim analysis was triggered sooner than expected. We anticipate that the formal interim analysis will be completed in the first half of 2026 and look forward to sharing this with investors at that time. With respect to the Illisca Lung study, the Illisca Lung is a Phase II study of our investigational drug, allicertib. to investigate the efficacy of allocertib monotherapy in patients with small cell lung cancer, and to specifically look at the efficacy of the drug in patients with biomarkers where the rorokinase pathway plays a role. The goal is to correlate the efficacy in these biomarker subgroups in the ELISCA LUNG-1 study to the efficacy that was previously seen in the biomarker subgroups from the randomized trial of paclitaxel plus allocertib versus paclitaxel plus placebo, that was published in the Journal of Thoracic Oncology in 2020. In that randomized trial, a progression-free survival benefit and overall survival benefits were seen in patients with biomarkers which correlate with the aurora kinase pathway. If the efficacy and biomarker data are comparable from the two studies, the company would look to engage the FDA to discuss the regulatory path further. As discussed on the recent earnings call, the company believes the data obtained to date from the ALISCA Lung 1 is providing a preliminary indication of potentially better activity in patients with biomarkers where the Rurikonase plays a role. The most recent analysis of the PK data from the ALISCA Lung suggests that we're seeing lower PK of Alacertib in the ALISCA 1 study compared to the previous Phase 2 of Alacertib monotherapy in small cell lung cancer patients that was published in Lancet Oncology. The company has amended the protocol for the trial to increase the dose of Alcertib from 50 milligrams BID to 60 milligrams BID, which the company believes will increase the PK of the drug to levels closer to what was seen in the prior phase two. The company is currently enrolling patients at the 60 milligram dose, 60 milligram BID dose. There are currently 61 patients in the trial, with nine of these patients enrolled at the 60 milligram BID dose and an additional two patients in screening. Assuming the safety at the 60 milligram dose is acceptable, the company plans to meet with the FDA in order to amend the protocol to continue to dose escalate to 70 milligrams BID. The company looks to have additional interim data from this trial in the first half of 2026. As mentioned on prior earnings calls and in response to investor questions, PUMA continues to evaluate several drugs to potentially in-license or acquire 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 Heather Blaber for an update on our marketing initiatives. Roger Storms will follow with a review of our commercial performance during the quarter.

Thank you, Alan. I appreciate the opportunity to share some additional insights into our marketing strategy. The marketing team is focused on creating awareness of both clinical messaging for Neuralinks as well as recently published data that demonstrate the continued need to reduce the risk of recurrence in HER2-positive early breast cancer after treatment with adjuvant therapy. We continue to invest in market research to help us better understand risk factors that put a patient at high risk of recurrence in HER2-positive early stage breast cancer as well as garner insights on the Neuralinks clinical data in this patient population. Together with our marketing initiatives, our strategy is focused on increasing awareness of our broad indication of patients that are appropriate for treatment with Neuralinks. We have adjusted our strategy based on our learnings and revised both personal and non-personal messaging with the goal of engaging physicians on a broader set of patients where the risk of recurrence still remains high and where we believe Neuralinks can play an important role in helping to reduce the risk of recurrence in patients with early-stage HER2-positive breast cancer. In addition to revising our messaging, we have a new resource to support patients throughout their recommended course of Neuralinks therapy. This educational resource is provided to patients on a monthly basis with the goal of improving patient adherence as they receive their refills. Lastly, year-to-date, we have reached 99.7% of oncologists through non-personal promotion and continue to expand our share of voice, working closely with the sales team to increase engagement with healthcare providers. In summary, we are excited about our new marketing strategy and messaging, which we believe will continue to help educate and engage oncologists on the unmet need for those diagnosed with HER2-positive early breast cancer. I will now turn the call over to Roger Storms to provide an overview on the commercial performance for the third quarter.

Thank you, Heather, and thanks to everyone for joining our third quarter earnings call. Before I move into the commercial review, just a reminder that I'll be making forward-looking statements. The sales team remains focused on expanding overall HCP reach and frequency with a strong emphasis on driving engagement at key treatment decision points. In Q3 2025, call activity increased 22% year-over-year and increased 17% quarter-over-quarter. This is a direct result of continued emphasis put on executional excellence and increased accountability with the existing sales team. I expect call activity to continue to improve as we fill vacancies. Commercial team continues to prioritize increasing use of near links with the main focus on patients at higher risk of recurrence. They are also dedicated to enhancing clinical education and engagement through non-personal promotional efforts, as well as utilizing patient resources to support persistence and compliance during narrow-links therapy. Let me now transition to some of the commercial slides where I'll provide some additional specifics around performance. Slide three is an illustration of our distribution model, which is broken out into the specialty pharmacy channel and the specialty distributor or in-office dispensing channel. In regards to overall distribution of our business, in Q3 2025, about 65% of our business was purchased through the SP channel, and the remaining 35% was purchased through the SD channel. We are seeing some stronger growth in the SD channel driven by two main factors. One, increased sales in the group purchasing organization segment, and two, increased 340B purchasing. Turning to slide four. Neuralink's net product revenue in Q3 2025 was $51.9 million, which represents an increase of $2.7 million from the $49.2 million we reported in Q2 2025 and a decrease of $4.2 million from the $56.1 million we reported in Q3 of 2024. As a reminder to investors, PUMA's reported Neuralink sales includes both U.S. sales of Neuralink's and product supply revenues of Nearlinks to Pumas XUX partners. Please note that in Q3 2024, we reported product supply revenue to our international partners of about 7.4 million versus the 0.1 million in Q3 of 2025. Therefore, U.S. net sales of Nearlinks in Q3 2025 were 51.8 million versus the 48.8 million in Q3 of 2024. I will provide some more details around inventory changes and Maximo will provide some additional specifics around gross to net expenses during his update. In Q3 of 2025, we estimate that inventory increased by about 3.1 million. As a comparator, we estimate that inventory decreased by about 1.3 million in Q2 of 2025 and increased by about 0.7 million in Q3 of 2024. Slide 5 shows Q3 2025 ex-factory bottle sales and also provides both a year-over-year and a quarter-over-quarter comparison. In Q3 2025, Neuralink's ex-factory bottle sales were 2,949, which represents an approximate 13% increase quarter-over-quarter and an 8% increase year-over-year. Inventory declined for the first two quarters but increased in Q3 of 2025. Similar to the prior slide, let me specifically call out the inventory changes from a bottle perspective. In Q3 2025, we estimate the inventory increased by 172 bottles. As a comparator, we estimate that inventory decreased by 85 bottles in Q2 of 25 and increased by 39 bottles in Q3 of 2024. Let me take a moment to provide some additional metrics regarding our second quarter performance. In Q3, we saw enrollments increase by about 6% quarter over quarter and decline about 6% year over year. New patient starts, or NRX, follow a similar pattern, increasing 3% quarter over quarter and declining about 1% year over year. Turning to total prescriptions, or TRX, we saw TRX decline about 1% quarter over quarter and decline about 4% year over year. Finally, let me share some specifics around demand. In Q3 2025, we saw demand increase by about 3% quarter-over-quarter and about 3% year-over-year. As mentioned earlier, we have seen stronger demand growth in the SD channel where we saw SD demand grow by about 11% quarter-over-quarter and about 25% year-over-year. Slide 6 highlights the quarterly adoption of dose escalation since Neuralink's launch. In Q3 2025, approximately 77% of patients started Narrelinx at a reduced dose. This is higher compared to the 71% we reported in Q2 2025. Continued messaging and adoption of dose escalation remains an important commercial priority. Patients who are started on Narrelinx utilizing dose escalation have better persistence and compliance. We believe dose escalation, coupled with the new patient education resources, will give patients better support throughout their nailing therapy and ultimately help them reduce their risk of recurrence. Slide 7 highlights the strategic collaborations we've formed across the globe. We really appreciate the excellent work being done by our partners around the world and look forward to supporting their continued success moving forward. Let me close by expressing my heartfelt gratitude to the entire PUMA team for their unwavering passion and dedication to supporting patients and families affected by breast cancer. This disease can be devastating, and we recognize there is still more work to do and more that can be done. I will now turn the call over to Maximo for a review of our financial results.

Thanks, Roger. I will begin with a brief summary of our financial results for the third quarter of 2025. Please note that I will make comparisons to Q2 2025, 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 third quarter 2025 thank you, which will be filed today and includes our consolidated financial statements. For the third quarter of 2025, we reported net income benchmark gap of $8.8 million or $0.18 per basic share and $0.17 per diluted share. This compares to net income in Q2 2025 of $5.9 million, or $0.12 per share. On a non-GAAP basis, which is adjusted to remove the impact of stock-based compensation expense, we reported net income of $10.5 million, or $0.21 per basic and diluted share, for the third quarter of 2025. Gross revenue from Netlink Sales was $70 million in Q3 2025 and $62.1 million in Q2 2025. As Alan mentioned, net product revenue from Netlink Sales was $51.9 million, an increase from the $49.2 million reported in Q2 2025 and a decrease versus the $56.1 million reported in Q3 2024. As a reminder to investors, PUMA reported NERLINK sales include both U.S. net sales of NERLINKs and product supply revenue of NERLINKs to PUMA's XUX partners. Please note that in Q3 2024, we reported product supply revenue to our international partners of about 7.4 million versus 0.1 million in Q3 2025. Therefore, U.S. net sales of NERLINKs in Q3 2025 were 51.8 million versus 48.8 million in Q3 2024. The increase in Q3 2025 net revenue versus Q2 2025 was driven primarily by an increase in Nalox bottles sold in the U.S., inventory build of 3.1 million, offset by a higher gross to net expense. Inventory build by our distributors was approximately 3.1 million in Q3 versus drawdown of approximately $1.3 million in Q2 2025. Royalty revenue totaled $2.6 million in the third quarter of 2025 compared to $3.2 million in Q2 2025. Our gross to net adjustment in Q3 2025 was about 25.9% and 20.8% in Q2 2025. The increase on gross to net was driven mostly by a higher than expected Medicare rebate driven by the Inflation Reduction Act implemented in Q4 of 2022 and higher Medicaid share. Cost of sales for Q3 2025 was $12.2 million and includes $2.4 million for the amortization of intangible assets related to our neratinib license. Cost of sales for Q2 2025 was $12.3 million. Going forward, we will continue to recognize amortization of the milestones to the licensor, about $2.4 million per quarter as cost of sales. For fiscal year 2025, PUMA anticipates that net NIRNX product revenue will be in the range of $198 to $200 million, higher than our prior guidance. We also anticipate that our gross net adjustment for the full year 2025 will be between 23% and 23.5%. In addition, for fiscal year 2025, we anticipate receiving royalties from our partners around the world in the range of 22 to 23 million. Lower than 2024 due to the fewer shipments expected to China as our partner works through regulatory transitions during the first several quarters of 2025. We don't expect any license revenue in 2025. We also expect that net income for the full year will be in the range of 27 to 29 million. The current guidance does not include any potential release of any additional tax asset valuation allowance in our net income estimate. The company is reviewing its deferred tax assets as part of its ongoing tax valuation analysis has not yet determined whether any adjustment will be required, or if so, the potential timing or size of such an adjustment. We will continue to keep investors updated on this as it progresses. At this time, we do not believe the tariffs imposed or proposed to be imposed by the United States, particularly with other countries, will have a material impact on our product cost or results of operations. However, shifts in trade policies in the United States and other countries have been rapidly evolving and are difficult to predict. As a point of reference, our manufacturing product cost accounts for a mid to high single-digit percentage of our cost of goods sold. We anticipate that for Q4 2025, Nirlink's product revenue net will be in the range of $54 to $56 million. Please note that Q4 net product revenue guidance includes almost $4.5 million of product sales to one of our global partners as well as U.S. net revenue, which we expect to be in the range of $50 to $52 million. The sales to our global partners will also contribute to the large royalty revenue we expect in Q4. We expect Q4 royalty revenue will be in the range of $13 to $14 million and no license revenue. We further estimate that the gross to net adjustment in Q4 2025 will be approximately 24% to 25%. Puma anticipates Q4 net income between $9 million and $11 million. SG&A expenses were $16.8 million in the third quarter of 2025 compared to $18 million in the second quarter. SG&A expenses included non-cash charges for stock-based compensation of $1.1 million for Q3 and $1 million for Q2 2025. Research and development expenses were $15.9 million in the third quarter of 2025 and $15.5 million in the second quarter. R&D expenses included non-cash charges for stock-based compensation of $0.6 million in the third quarter of 2025, unchanged from the second quarter. On the expense side, PUMA anticipates flat to slightly higher total operating expenses in 2025 compared to 2024. More specifically, we anticipate SG&A expenses to decrease by 7% to 10%, and R&D expenses to increase by 20% to 25% year over year. The higher increase in R&D is driven by faster enrollment in our clinical trials than previously expected. In the third quarter of 2025, PUMA reported cash burn of approximately $1.6 million. This compares to cash earn of approximately $2.9 million in Q2. Please note that during Q3, we made our sixth quarterly principal loan payment of $11.1 million related to our obligation with Ethereum. As a result of this, our total outstanding principal debt balance decreased to approximately $33 million. On September 30, 2025, we had approximately $94 million in cash, cash equivalents, and marketable securities. versus about 101 million at the year-end 2024. Her accounts receivables balance was 33.6 million. Her accounts receivable terms ranged between 10 and 68 days, while our day sales outstanding are about 50 days. We estimate that as of September 30th, 2025, our distribution network maintained approximately 3.5 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.

Thanks, Maximo. On past earnings calls, we have stressed that PUMA's senior management, in cooperation with the Board of Directors, continues to remain focused on Nearlink sales trends in 2025 and beyond, and recognizes its fiscal responsibility to the shareholders to continue to maintain positive net income. We believe that this focus has contributed to our commercial execution in a positive way, as according to our current projections, 2025 will mark the first year-over-year demand increase for Nearlinks in the United States since 2018. We are pleased to report this demand-driven growth in Nearlink sales for the first nine months of 2025. In addition, we believe that the positive net income that the company achieved in Q3 2025 and that the company is guiding to for the full year 2025 has resulted from the continued financial discipline across the company over the last few years. The company remains committed to continuing to achieve this 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. The company 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 of helping these patients during their journey, and we 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?

Thank you. And with that, we will now be conducting a question and answer session. If you wish to ask a question, please press star 1 on your telephone keypad. Confirmation will indicate that your line is in the question queue. If you choose to withdraw your request, please press star 2. For participants using speaker equipment, it may be necessary to pick up the handset before pressing star keys. One moment while you poll for questions. And our first question comes from the line of Mark Fram. with TD Cowan. Please receive as your question.

To take my question, maybe just looking forward to the breast cancer interim, just remind us what the kind of bar you're going to be kind of evaluating that with in terms of, you know, willingness to continue to spend on that indication, you know, particularly in light to your comments and the prepared remarks of, you know, remaining committed to staying profitable.

Yeah, thanks, Mark. There's been two. This is going to be allocertib in combination with endocrine. You'll remember there was a previous trial, TBCRC41, of allocertib in combination with endocrine. And I think that's probably going to be the gauge we're looking for, you know, to see, to compare to those numbers. You know, right now, as you know, the standard of care for ER positive for two negative breast cancer is first line, they get a CDK4-6 inhibitor. The second line, depending on, you know, which mutation they have, they may get a targeted therapy or may get, you know, a different type of a combination therapy. Third line is still kind of a white space, if you will. And that's where we're focusing is in that third line white space. So all these patients are kind of third line endocrine, if you will. So obviously, what we would look for in terms of continued spend is would really be, you know, number one, how the efficacy compares to, you know, what we would typically expect and, you know, to be standard of care in third line. But then also, you know, assuming we're able to find a biomarker where, you know, it, you know, portends for or, you know, it predicts a better outcome to L-acertib, you know, that would obviously be, you know, quite compelling as well. So, you know, we've gotten asked that question in the past, which is, okay, you have both the breast and the lung. You want to remain profitable. As we've said in the past, and I will say again, we're happy to stagger the indications to control the burn so we can remain a profitable company.

Okay, that's helpful, but I guess the next steps could ultimately involve a larger pivotal program, which I think would strain, for any one of the indications, might strain the ability to stay profitable. Would you be willing to go negative the data, go back to a loss if the data supports it, or does that require a partner?

Yeah, so a couple things to remember from that perspective, Mark. If you look at our guidance for our full year in terms of net income, remember that includes us paying down our debt. The debt goes away mid-next year, and we become a debt-free company. So you start to see cash flow generation occurring because of that. Now, in terms of the pivotal phase three that you would need, Based on the other phase 3s I've seen in this space, I'm not anticipating this to be like a thousand patient trial or something. So I think it would still be within a manageable number, and especially given that you're not going to hit all those expenses at once. You're going to see it spaced out over time. I think it's still possible to be able to do a pivotal phase 3 just based on the cash flow from Nearlinks and remaining committed to being net income positive.

Okay. Thanks. That's very helpful.

Thank you. And with that, this does conclude today's question and answer session. I'd like to turn the conference back to Mary Ann for closing remarks.

Thank you for joining us today. As a reminder, this call may be accessed via replay at PumaBiotechnology.com beginning later today. Have a good evening.

Thank you, 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 your line.