On August 8, 2019 Puma Biotechnology, Inc. (NASDAQ: PBYI), a biopharmaceutical company, reported financial results for the second quarter ended June 30, 2019 (Press release, Puma Biotechnology, AUG 8, 2019, View Source [SID1234538440]). Unless otherwise stated, all comparisons are for the second quarter 2019 compared to the second quarter of 2018.

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Product revenue, net consists entirely of sales revenue from NERLYNX, Puma’s first commercial product. Net NERLYNX revenue in the second quarter of 2019 was $53.8 million, compared to net NERLYNX revenue of $50.8 million in the second quarter of 2018. Net NERLYNX revenue in the first six months of 2019 was $99.4 million, compared to net NERLYNX revenue of $86.8 million in the first six months of 2018.

Based on accounting principles generally accepted in the United States (GAAP), Puma reported a net loss of $37.4 million, or $0.97 per share, for the second quarter of 2019, compared to a net loss of $44.3 million, or $1.17 per share, for the second quarter of 2018. Net loss for the first six months of 2019 was $47.5 million, or $1.23 per share, compared to a net loss of $68.7 million, or $1.82 per share, for the first six months of 2018.

Non-GAAP adjusted net loss was $22.0 million, or $0.57 per share for the second quarter of 2019, compared to non-GAAP adjusted net loss of $22.2 million, or $0.59 per share for the second quarter of 2018. Non-GAAP adjusted net loss for the first six months of 2019 was $13.9 million, or $0.36 per share, compared to non-GAAP adjusted net loss of $21.2 million, or $0.56 per share, for the first six months of 2018. Non-GAAP adjusted net loss excludes stock-based compensation expense. For a reconciliation of GAAP net loss to non-GAAP adjusted net loss and GAAP net loss per share to non-GAAP adjusted net loss per share, please see the financial tables at the end of this news release.

Net cash provided by operating activities for the second quarter of 2019 was $44.2 million, compared to net cash used in operating activities of $17.6 million in the second quarter of 2018. Net cash provided by operating activities for the first six months of 2019 was $28.1 million, compared to net cash used in operating activities of $23.9 million in the first six months of 2018. At June 30, 2019, Puma had cash, cash equivalents, and marketable securities of $117.7 million, compared to cash, cash equivalents and marketable securities of $165.4 million at December 31, 2018. The reduction in cash, cash equivalents and marketable securities in the second quarter was the result of the previously disclosed repayment of the $155 million outstanding loan using cash on hand and $100 million in new borrowings from an amended and restated loan agreement in June 2019.

"The second quarter of 2019 included the achievement of several key milestones for Puma," said Alan H. Auerbach, Chairman, Chief Executive Officer and President of Puma. "This included sequential NERLYNX sales growth and the expansion of our global presence with NERLYNX with our European licensing agreement with Pierre Fabre. We saw the achievement of additional key milestones in July with the filing of the new drug application for neratinib in the metastatic breast cancer indication and obtaining approval for NERLYNX in the extended adjuvant indication from Health Canada."

Mr. Auerbach added, "We anticipate the following key milestones during the remainder of 2019: (i) meeting with the FDA to discuss the clinical development and regulatory strategy for the SUMMIT trial in the third quarter of 2019; (ii) reporting additional data from the Phase II CONTROL trial in the fourth quarter of 2019; and (iii) receiving regulatory decisions for the extended adjuvant HER2-positive early stage breast cancer indication in additional countries."

Revenue

Total revenue consists of product revenue, net from sales of NERLYNX, Puma’s first commercial product, license revenue and royalty revenue. For the second quarter ended June 30, 2019, total revenue was $53.9 million, of which $53.8 million was net NERLYNX revenue and $0.1 million was royalty revenue received from Puma’s sub-licensees. This compares to total revenue of $50.8 million in the second quarter of 2018, all of which was net product revenue. For the first six months of 2019, total revenue was $153.0 million, of which $99.4 million was net product revenue, $53.5 million was license revenue received from Puma’s sub-licensees, and $0.1 million was royalty revenue. This compares to total revenue for the first six months of 2018 of $117.3 million, of which $86.8 million was net product revenue and $30.5 million was license revenue.

Operating Costs and Expenses

Total operating costs and expenses were $79.7 million in the second quarter of 2019, compared to $92.2 million in the second quarter of 2018. Operating costs and expenses in the first six months of 2019 were $168.9 million, compared to $182.1 million in the first six months of 2018.

Cost of Sales:

Cost of sales was $9.3 million for the second quarter of 2019 and $17.3 million for the first six months of 2019, compared to $8.8 million for the second quarter of 2018 and $15.2 for the first six months of 2018.

Selling, General and Administrative Expenses:

Selling, general and administrative expenses (SG&A) were $33.5 million for the second quarter of 2019, compared to $40.1 million for the second quarter of 2018. SG&A expenses for the first six months of 2019 were $79.0 million, compared to $76.7 million for the first six months of 2018. The approximately $2.3 million year-to-date increase resulted primarily from increases of approximately $2.9 million for professional fees, such as legal fees and marketing and commercial support, $0.6 million in office and banking expenses, and $0.4 million in payroll and payroll-related expenses. These were partially offset by decreases of approximately $1.4 million in travel and meeting-related expenses and $0.2 million related to stock-based compensation expense.

Research and Development Expenses:

Research and development (R&D) expenses were $36.9 million for the second quarter of 2019, compared to $43.3 million for the second quarter of 2018. R&D expenses for the first six months of 2019 were $72.6 million, compared to $90.2 million for the first six months of 2018. The $17.6 million year-to-date decrease resulted primarily from decreases of approximately $13.8 million for stock-based compensation, $3.5 million for internal R&D primarily related to payroll and payroll-related expenses, and $0.5 million in consulting fees related to clinical trials.

Total Other Income (Expenses)

Total other expenses were $11.6 million for the second quarter and $31.6 million for the first six months of 2019, compared to total other expenses of $2.9 million for the second quarter and $3.9 million for the first six months of 2018. The increase in other expenses recorded in the first six months of 2019 primarily included $16.4 million related to a March 2019 jury verdict against Puma and $8.1 million related to the debt refinancing.

Conference Call

Puma Biotechnology will host a conference call to report its second quarter 2019 financial results and provide an update on the Company’s business and outlook at 1:30 p.m. PDT/4:30 p.m. EDT on Thursday, August 8, 2019. The call may be accessed by dialing 1-877-709-8150 (domestic) or 1-201-689-8354 (international) at least 10 minutes prior to the start of the call and referencing 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 the company’s website for 90 days.