On March 3, 2022 Puma Biotechnology, Inc. (NASDAQ: PBYI), a biopharmaceutical company, reported that financial results for the fourth quarter and year ended December 31, 2021 (Press release, Puma Biotechnology, MAR 3, 2022, View Source [SID1234609456]). Unless otherwise stated, all comparisons are for the fourth quarter and full year 2021, compared to the fourth quarter and full year 2020.

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Product revenue, net consists entirely of revenue from sales of NERLYNX, Puma’s first commercial product. Product revenue, net for the fourth quarter of 2021 was $51.0 million, compared to product revenue, net of $50.0 million in the fourth quarter of 2020. Product revenue, net for the full year 2021 was $189.1 million, compared to product revenue, net of $196.7 million in 2020.

Based on accounting principles generally accepted in the United States (GAAP), Puma reported net income of $4.2 million, or $0.10 per basic and diluted share, for the fourth quarter of 2021, compared to a net loss of $15.0 million, or $0.38 per basic and diluted share, for the fourth quarter of 2020. Net loss for the full year 2021 was $29.1 million, or $0.72 per basic and diluted share, compared to a net loss of $60.0 million, or $1.52 per basic and diluted share, for the full year 2020.

Non-GAAP adjusted net income was $8.4 million, or $0.21 per basic and diluted share, for the fourth quarter of 2021, compared to non-GAAP adjusted net loss of $5.5 million, or $0.14 per basic and diluted share, for the fourth quarter of 2020. Non-GAAP adjusted net income for the full year 2021 was $3.5 million, or $0.09 per basic share and $0.08 per diluted share, compared to non-GAAP adjusted net loss of $23.4 million, or $0.59 per basic and diluted share, for the full year 2020. Non-GAAP adjusted net income/loss excludes stock-based compensation expense. For a reconciliation of GAAP net income/loss to non-GAAP adjusted net income/loss and GAAP net income/loss per share to non-GAAP adjusted net income/loss 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 2021 was $5.4 million, compared to net cash used in operating activities of $5.6 million for the fourth quarter of 2020. Net cash provided by operating activities for the full year 2021 was $20.7 million, compared to net cash provided by operating activities of $0.8 million for the full year 2020. At December 31, 2021, Puma had cash, cash equivalents, and marketable securities of $82.1 million, compared to cash, cash equivalents, and marketable securities of $93.4 million at December 31, 2020.

"In the fourth quarter of 2021 Puma executed on its key milestones, which included the presentation of data from the SUMMIT trial at the 2021 San Antonio Breast Cancer Symposium," said Alan H. Auerbach, Chairman, Chief Executive Officer and President of Puma. "We were also pleased to announce the extension of an additional five years to the U.S. patent term of NERLYNX during the quarter as well. We remain committed to providing neratinib to patients with HER2 positive breast cancer and we are grateful to the Puma team members, the physicians and scientists with whom we work, and, most importantly, the patients and caregivers we serve every day."

Mr. Auerbach added, "We anticipate the following key milestones over the next 12 months: (i) conducting a pre-NDA meeting with the FDA to discuss accelerated approval of neratinib in HER2-mutated HR-positive breast cancer (H1 2022); (ii) reporting Phase II data from the cohort of patients in the SUMMIT basket trial of neratinib in HER2-mutated HR-positive breast cancer (H1 2022); (iii) reporting Phase II data from the cohort of patients in the SUMMIT basket trial of neratinib in non-small cell lung cancer patients with EGFR exon 18 mutations (H2 2022); (iv) 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 previously been treated with an EGFR tyrosine kinase inhibitor (2022); (v) reporting Phase II TBCRC-022 trial data from Cohort 4B and 4C of the combination of Kadcyla plus neratinib in patients with HER2-positive breast cancer with brain metastases who have previously been treated with Kadcyla (H2 2022); and (vi) reporting Phase II data from the SUMMIT trial of neratinib in cervical cancer patients with HER2 mutations (H2 2022)."

Revenue

Total revenue consists of product revenue, net from sales of NERLYNX, license revenue and royalty revenue. For the fourth quarter of 2021, total revenue was $55.4 million, of which $51.0 million was product revenue, net, $1.5 million was license revenue received from Puma’s sub-licensees and $2.9 million was royalty revenue. This compares to total revenue of $52.6 million for the fourth quarter of 2020, of which $50.0 million was net product revenue and $2.6 million was royalty revenue. For the year ended December 31, 2021, total revenue was $253.2 million, of which $189.1 million was product revenue, net, $51.8 million was license revenue received from Puma’s sub-licensees, which included a $50 million upfront payment for providing development, manufacturing and commercial rights to NERLYNX in Greater China to Pierre Fabre, and $12.3 million was royalty revenue. This compares to total revenue of $225.1 million for the year ended December 31, 2020, of which $196.7 million was product revenue, net, $22.7 million was license revenue, and $5.7 million was royalty revenue from Puma’s sub-licensees.

Operating Costs and Expenses

Total operating costs and expenses were $48.6 million for the fourth quarter of 2021, compared to $63.9 million for the fourth quarter of 2020. Total operating costs and expenses were $251.9 million for the full year 2021 compared to $255.5 million for the full year 2020.

Cost of Sales

Cost of sales was $11.9 million for the fourth quarter of 2021, compared to $10.9 million for the fourth quarter of 2020. Cost of sales was $63.7 million for the full year 2021, of which $20.0 million was a termination fee paid to a former sub-licensee for the return of commercial rights to NERLYNX in Greater China, compared to cost of sales of $39.4 million for the full year 2020.

Selling, General and Administrative Expenses

Selling, general and administrative (SG&A) expenses were $22.5 million for the fourth quarter of 2021, compared to $28.8 million for the fourth quarter of 2020. SG&A expenses for full year 2021 were $116.3 million, compared to $118.4 million for full year 2020, a decrease of $2.1 million. The decrease in SG&A expenses for the full year 2021 compared to 2020 resulted primarily from a decrease in payroll and related costs of $3.2 million due to a reduction in headcount, a decrease of $4.6 million in professional fees related to marketing and commercialization efforts, and a $2.0 million change due to a credit loss recovery related to an outstanding license payment, offset by an increase in stock-based compensation expense of $7.9 million.

Research and Development Expenses

Research and development (R&D) expenses were $14.2 million for the fourth quarter of 2021, compared to $24.2 million for the fourth quarter of 2020. R&D expenses for the full year 2021 were $71.9 million, compared to $97.7 million for the full year 2020. The decrease of $25.8 million in R&D expenses during full year 2021 compared to full year 2020 resulted primarily from a decrease in stock-based compensation expense of $11.9 million, a decrease in internal R&D expense of $5.7 million as a result of lower headcount and related compensation expense, and a decrease in clinical trial related expenses of $8.3 million due to the close out of certain clinical trials, a reduction in patient enrollments and monitoring cost and a reduction in consulting costs.

Total Other Income (Expenses)

Total other expenses were $2.4 million for the fourth quarter of 2021, compared to total other expenses of $3.7 million for the fourth quarter of 2020. Total other expenses were $30.1 million for the year ended December 31, 2021, compared to total other expenses of $29.4 million for the year ended December 31, 2020. The $0.7 million increase in other expenses for full year 2021 consisted primarily of an increase of $8.1 million related to a loss on extinguishment of debt, offset by decreases of $6.6 million related to legal verdict expenses and $1.3 million in interest expense.

Conference Call

Puma Biotechnology will host a conference call to report its fourth quarter and full year 2021 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, March 3, 2022. 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.