On February 29, 2024 Puma Biotechnology, Inc. (NASDAQ: PBYI), a biopharmaceutical company, reported financial results for the fourth quarter and year ended December 31, 2023. Unless otherwise stated, all comparisons are for the fourth quarter and full year 2023 compared to the fourth quarter and full year 2022 (Press release, Puma Biotechnology, FEB 29, 2024, View Source [SID1234640662]).
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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 2023 was $53.2 million, compared to $53.7 million in the fourth quarter of 2022. Product revenue, net for the full year 2023 was $203.1 million, compared to $200.0 million in 2022.
Based on accounting principles generally accepted in the United States (GAAP), Puma reported net income of $12.3 million, or $0.26 per basic and diluted share, for the fourth quarter of 2023, compared to a net loss of $5.6 million, or $0.12 per basic and diluted share, for the fourth quarter of 2022. Net income for full year 2023 was $21.6 million, or $0.46 per basic share and $0.45 per diluted share, compared to a net income of $2,000, or $0.00 per basic and diluted share, for full year 2022.
Non-GAAP adjusted net income was $14.8 million, or $0.31 per basic and diluted share, for the fourth quarter of 2023, compared to non-GAAP adjusted net loss of $3.0 million, or $0.07 per basic and diluted share, for the fourth quarter of 2022. Non-GAAP adjusted net income for full year 2023 was $31.8 million, or $0.68 per basic share and $0.67 per diluted share, compared to non-GAAP adjusted net income of $11.8 million, or $0.26 per basic and diluted share, for full year 2022. 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 provided by operating activities for the fourth quarter of 2023 was $10.4 million, compared to $7.7 million for the fourth quarter of 2022. Net cash provided by operating activities for full year 2023 was $27.0 million, compared to net cash used in operating activities of $15.8 million for full year 2022. At December 31, 2023, Puma had cash, cash equivalents, and marketable securities of $96.0 million, compared to cash, cash equivalents, and marketable securities of $81.1 million at December 31, 2022.
"We are pleased to report positive net income for both the fourth quarter and full year 2023," said Alan H. Auerbach, Chairman, Chief Executive Officer and President of Puma. "NERLYNX sales in the fourth quarter were negatively impacted by the lower enrollments seen in Q3, as well as a higher than expected gross to net for the quarter. We have continued to reduce our internal expenses to account for this higher gross to net and lower Q3 enrollments, as we recognize our fiscal responsibility to continue to be net income positive in 2024. Puma also continues to execute on the clinical development of alisertib, and in February, we were pleased to initiate ALISertib in CAncer (ALISCA-Lung1), a Phase II clinical trial of alisertib monotherapy for the treatment of patients with extensive stage small cell lung cancer."
Mr. Auerbach added, "We anticipate the following key milestones over the next 12 months: (i) presentation of biomarker studies from the randomized trial of alisertib plus fulvestrant versus alisertib alone in hormone receptor positive, HER2-negative breast cancer (H1 2024); (ii) updated data from the clinical trial of alisertib in combination with osimertinib in patients with metastatic EGFR-mutant non small cell lung cancer who have developed osimertinib resistance (H1 2024); (iii) initiation of ALISCA-Breast1, a Phase II trial of alisertib in combination with endocrine treatment in patients with chemotherapy-naïve HER2-negative, hormone receptor-positive metastatic breast cancer (Q4 2024); and (iv) interim data from ALISCA-Lung1, a Phase II clinical trial of alisertib monotherapy for the treatment of patients with extensive stage small cell lung cancer (H2 2024)."
Revenue
Total revenue consists of product revenue, net from sales of NERLYNX, license revenue and royalty revenue. For the fourth quarter of 2023, total revenue was $72.2 million, of which $53.2 million was product revenue, net, and $19.0 million was royalty revenue. This compares to total revenue of $65.7 million for the fourth quarter of 2022, of which $53.7 million was product revenue, net, and $12.0 million was royalty revenue. For the year ended December 31, 2023, total revenue was $235.6 million, of which $203.1 million was product revenue, net, and $32.5 million was royalty revenue. This compares to total revenue in 2022 of $228.0 million, of which $200.0 million was product revenue, net, and $28.0 million was royalty revenue.
Operating Costs and Expenses
Total operating costs and expenses were $57.4 million for the fourth quarter of 2023, compared to $55.7 million for the fourth quarter of 2022. Total operating costs and expenses were $203.0 million for full year 2023, compared to $204.3 million for full year 2022.
Cost of Sales
Cost of sales was $24.3 million for the fourth quarter of 2023, compared to $16.8 million for the fourth quarter of 2022. Cost of sales was $62.7 million for full year 2023, compared to cost of sales of $55.1 million for full year 2022.
Selling, General and Administrative Expenses
Selling, general and administrative (SG&A) expenses were $20.2 million for the fourth quarter of 2023, compared to $25.1 million for the fourth quarter of 2022. SG&A expenses for full year 2023 were $89.9 million, essentially unchanged from $90.0 million for full year 2022. The slight increase includes an increase in payroll and related costs of approximately $3.5 million, primarily due to a one-time $2.0 million CARES Act credit in 2022, increased compensation of $1.5 million in 2023, and a $0.9 million credit loss reserve. These increases were offset by a decrease of $4.1 million in professional fees and expenses related to consultants and contractors, as well as lower insurance expenses and administrative costs.
Research and Development Expenses
Research and development (R&D) expenses were $12.9 million for the fourth quarter of 2023, compared to $13.8 million for the fourth quarter of 2022. R&D expenses for full year 2023 were $50.4 million, compared to $52.2 million for full year 2022. The $1.8 million decrease in R&D expenses during full year 2023 compared to full year 2022 resulted primarily from the reduction and closure of NERLYNX clinical trial sites of approximately $4.7 million, partially offset by an increase in internal R&D expenses of approximately $3.2 million, primarily due to a tax credit recorded during the year ended December 31, 2022 under the CARES Act, without a comparable tax credit in 2023.
Acquired In-Process Research and Development Expense
Puma recorded acquired in-process R&D expense related to an alisertib up-front payment of $7.0 million during the year ended December 31, 2022. No similar expenses were recorded in 2023.
Total Other Income (Expenses)
Total other expenses were $2.0 million for the fourth quarter of 2023, compared to $15.3 million for the fourth quarter of 2022. Total other expenses were $9.9 million for full year 2023, compared to $23.2 million for full year 2022. The $13.3 million decrease in other expenses in full year 2023 resulted primarily from legal verdict expenses recorded in 2022, with no similar accruals in 2023, as well as an increase in other income related to higher interest rates in 2023.
First Quarter 2024 and Full Year 2024 Financial Outlook
First Quarter 2024
Full Year 2024
Net Product Revenue
$38 – $40 million
$183 – $190 million
Royalty Revenue
$2.5 – $3 million
$30 – $33 million
License Revenue
$0 million
$1 – $2 million
Net Income/(Loss)
$(10) – $(12) million
$12 – $15 million
Gross to Net Adjustment
23% – 24%
21.5% – 22.5%
Conference Call
Puma Biotechnology will host a conference call to discuss its fourth quarter and full year 2023 financial results and provide an update on Puma’s business and outlook at 1:30 p.m. PST/4:30 p.m. EST on Thursday, February 29, 2024. 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.