On February 25, 2021 Puma Biotechnology, Inc. (NASDAQ: PBYI), a biopharmaceutical company, reported financial results for the fourth quarter and year ended December 31, 2020 (Press release, Puma Biotechnology, FEB 25, 2021, View Source [SID1234575690]). Unless otherwise stated, all comparisons are for the fourth quarter and full year 2020, compared to the fourth quarter and full year 2019 .
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Product revenue, net consists entirely of sales revenue from NERLYNX, Puma’s first commercial product. Net NERLYNX revenue in the fourth quarter of 2020 was $50.0 million, compared to $58.7 million in the fourth quarter of 2019. Net NERLYNX revenue for the full year 2020 was $196.7 million, compared to $211.6 million for the full year 2019.
Based on accounting principles generally accepted in the United States (GAAP), Puma reported a net loss of $15.0 million, or $0.38 per share, for the fourth quarter of 2020, compared to a net loss of $11.2 million, or $0.29 per share, for the fourth quarter of 2019. Net loss for the full year 2020 was $60.0 million, or $1.52 per share, compared to $75.6 million, or $1.95 per share, for the full year 2019.
Non-GAAP adjusted net loss was $5.5 million, or $0.14 per basic and diluted share, for the fourth quarter of 2020, compared to non-GAAP adjusted net income of $0.3 million, or $0.01 per basic and diluted share, for the fourth quarter of 2019. Non-GAAP adjusted net loss for the full year 2020 was $23.4 million, or $0.59 per share, compared to non-GAAP adjusted net loss of $18.3 million, or $0.47 per share, for the full year 2019. Non-GAAP adjusted net (loss) income excludes stock-based compensation expense. For a reconciliation of GAAP net loss to non-GAAP adjusted net (loss) income and GAAP net loss per share to non-GAAP adjusted net (loss) income per share, please see the financial tables at the end of this news release.
Net cash used in operating activities for the fourth quarter of 2020 was $5.6 million, compared to net cash provided by operating activities of $1.6 million for the fourth quarter of 2019. Net cash provided by operating activities for the full year 2020 was $0.8 million, compared to net cash provided by operating activities of $22.4 million for the full year 2019. At December 31, 2020, Puma had cash, cash equivalents, and marketable securities of $93.4 million, compared to $111.6 million at December 31, 2019.
"During the fourth quarter of 2020 Puma continued to be negatively impacted by the challenges of COVID-19; however, we were pleased to be able to achieve NERLYNX revenues that were within the previously stated guidance," said Alan H. Auerbach, Chairman, Chief Executive Officer and President of Puma. "Our year concluded with a number of positive clinical milestones for the Company, including the publication of ExteNET data in Clinical Breast Cancer, a research collaboration with NCCN Oncology, the announcement of interim SUMMIT data in exon 18 mutated non-small cell lung cancer, and the presentation of neratinib data at the San Antonio Breast Cancer Symposium across multiple spotlight and traditional poster presentations. Although we anticipate that COVID-19 may continue to impact our operations in 2021, we remain focused on and committed to providing support to patients battling breast cancer."
Mr. Auerbach added, "We anticipate the following key milestones over the next 12 months: (i) completing enrollment in the randomized cohort in the Phase II SUMMIT trial of neratinib in hormone receptor positive breast cancer that has a HER2 mutation in the second quarter of 2021; (ii) reporting top line data from the randomized cohort in the Phase II SUMMIT trial of neratinib in hormone receptor positive breast cancer that has a HER2 mutation in 2021; (iii) conducting a pre-NDA meeting with the FDA to discuss accelerated approval of neratinib in HER2-mutated hormone receptor positive breast cancer and HER2-mutated cervical cancer in 2021; (iv) reporting Phase II data from the SUMMIT trial of neratinib in non-small cell lung cancer patients with EGFR exon 18 mutations in the second half of 2021; (v) reporting data from the Phase II TBCRC-022 trial of the combination of Kadcyla plus neratinib in patients with HER2-positive breast cancer with brain metastases who have previously been treated with Kadcyla in the second half of 2021; (vi) conducting a meeting with the FDA to discuss the potential for an accelerated approval pathway for neratinib in non-small cell lung cancer patients with EGFR exon 18 mutations who have been previously treated with an EGFR tyrosine kinase inhibitor in 2021; and (vii) receiving regulatory decisions for the extended adjuvant HER2-positive early stage breast cancer indication in additional countries in 2021."
Revenue
Total revenue consists of product revenue, net from sales of NERLYNX, license revenue and royalty revenue. For the fourth quarter of 2020, total revenue was $52.6 million, of which $50.0 million was net product revenue and $2.6 million was royalty revenue from Puma’s sub-licensees. This compares to total revenue of $62.9 million for the fourth quarter of 2019, of which $58.7 million was net product revenue, $4.0 million was license revenue, and $0.2 million was royalty revenue from Puma’s sub-licensees. For the year ended December 31, 2020, total revenue was $225.1 million, of which $196.7 million was net product revenue, $22.7 million was license revenue, and $5.7 million was royalty revenue from Puma’s sub-licensees. This compares to total revenue of $272.3 million for the year ended December 31, 2019, of which $211.6 million was net product revenue, $60.3 million was license revenue, and $0.4 million was royalty revenue from Puma’s sub-licensees.
Operating Costs and Expenses
Total operating costs and expenses were $63.9 million for the fourth quarter of 2020, compared to $71.5 million for the fourth quarter of 2019. Total operating costs and expenses were $255.5 million for the full year 2020, compared to $311.3 million for the full year 2019.
Cost of Sales
Cost of sales was $10.9 million for the fourth quarter of 2020 and $39.4 million for the full year 2020, compared to $10.1 million for the fourth quarter of 2019 and $36.8 million for the full year 2019. The increase in cost of sales was primarily attributable to increased royalty expense due to the increase in royalty revenue and an increase in the amortization of the intangible asset related to the milestone payments made to Pfizer.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $28.8 million for the fourth quarter of 2020, compared to $31.2 million for the fourth quarter of 2019. Selling, general and administrative expenses for the full year 2020 were $118.4 million, compared to $141.6 million for the full year 2019. The $23.2 million year-over-year decrease resulted primarily from decreases in stock-based compensation expense of approximately $10.1 million, professional fees of approximately $6.1 million, travel and meeting costs of approximately $6.3 million, and impairment loss of approximately $1.2 million, offset by an increase in credit loss expense of $1.0 million.
Research and Development Expenses
Research and development expenses were $24.2 million for the fourth quarter of 2020, compared to $30.2 million for the fourth quarter of 2019. Research and development expenses for the full year 2020 were $97.7 million, compared to $132.9 million for the full year 2019. The $35.2 million year-over-year decrease resulted primarily from decreases in stock-based compensation expense of approximately $10.6 million, internal R&D expenses of approximately $0.9 million, clinical trial expenses of approximately $20.1 million, and consultant and contractor expenses of approximately $3.6 million.
Total Other Income (Expenses)
Total other expenses were $3.7 million for the fourth quarter of 2020, compared to total other expenses of $2.5 million for the fourth quarter of 2019. Total other expenses were $29.4 million for the full year 2020, compared to total other expenses of $36.5 million for the full year 2019. The $7.1 million year-over-year decrease resulted primarily from decreases in interest expense of approximately $0.9 million and debt extinguishment loss of approximately $8.1 million, offset by a decrease in interest income of approximately $2.3 million.
Conference Call
Puma Biotechnology will host a conference call to report its fourth quarter and full year 2020 financial results and provide an update on the Company’s business and outlook at 1:30 p.m. PST/4:30 p.m. EST on Thursday, February 25, 2021. The call may be accessed by dialing 1-877-709-8150 (domestic) or 1-201-689-8354 (international). Please dial in at least 10 minutes in advance and inform the operator that you would like to join the "Puma Biotechnology Conference Call." A live webcast of the conference call and presentation slides may be accessed on the Investors section of the Puma Biotechnology website at View Source A replay of the call will be available approximately one hour after completion of the call and will be archived on Puma’s website for 90 days.