On March 2, 2023 Puma Biotechnology, Inc. (NASDAQ: PBYI), a biopharmaceutical company, reported financial results for the fourth quarter and year ended December 31, 2022 (Press release, Puma Biotechnology, MAR 2, 2023, View Source [SID1234628072]). Unless otherwise stated, all comparisons are for the fourth quarter and full year 2022, compared to the fourth quarter and full year 2021
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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 2022 was $53.7 million, compared to $51.0 million in the fourth quarter of 2021. Product revenue, net for the full year 2022 was $200.0 million, compared to $189.1 million in 2021
Based on accounting principles generally accepted in the United States (GAAP), Puma reported a net loss of $5.6 million, or $0.12 per share, for the fourth quarter of 2022, compared to net income of $4.2 million, or $0.10 per basic and diluted share, for the fourth quarter of 2021. In the fourth quarter of 2022, Puma increased its legal accrual by approximately $12.4 million to reflect the settlement of a lawsuit. Net income for full year 2022 was $0.0 million, or $0.00 per basic and diluted share, compared to a net loss of $29.1 million, or $0.72 per share, for full year 2021
Non-GAAP adjusted net loss was $3.0 million, or $0.07 per share, for the fourth quarter of 2022, compared to non-GAAP adjusted net income of $8.4 million, or $0.21 per basic and diluted share, for the fourth quarter of 2021. Non-GAAP adjusted net income for full year 2022 was $11.8 million, or $0.26 per basic and diluted share, compared to non-GAAP adjusted net income of $3.5 million, or $0.09 per basic share and $0.08 per diluted share, for full year 2021. 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 2022 was $7.7 million, compared to net cash used in operating activities of $5.4 million for the fourth quarter of 2021. Net cash used in operating activities for full year 2022 was $15.8 million, compared to net cash provided by operating activities of $20.7 million for full year 2021. At December 31, 2022, Puma had cash, cash equivalents, and marketable securities of $81.1 million, compared to cash, cash equivalents, and marketable securities of $82.1 million at December 31, 2021
In the fourth quarter of 2022, we are very pleased to have achieved $53.7 million in NERLYNX revenues," said Alan H. Auerbach, Chairman, Chief Executive Officer and President of Puma. "This is being driven by the U.S. commercial revenues from NERLYNX and our commercial execution, which is designed to support increased patient awareness and access to NERLYNX. Puma also continued to execute on its key milestones during the quarter, which included presentation of updated findings from the Phase II SUMMIT basket trial of neratinib for EGFR exon 18-mutant non-small cell lung cancer (NSCLC) patients at the EORTC/NCI/AACR Molecular Targets and Cancer Therapeutics Symposium, as well as the presentation of data from the TBCRC-022 trial at the 2022 San Antonio Breast Cancer Symposium," said Mr. Auerbach. "We remain committed to supporting patients with HER2-positive breast cancer with NERLYNX and, with the addition of alisertib to our pipeline, we hope to be able to support more cancer patients in the future
Mr. Auerbach added, "We anticipate the following key milestones over the next 12 months: (i) publication of the biomarker studies from the randomized trial of alisertib plus fulvestrant versus alisertib alone in hormone receptor positive, HER2-negative breast cancer (H1 2023); (ii) reporting biomarker data from the randomized trial of alisertib plus paclitaxel versus paclitaxel alone in hormone receptor positive, HER2-negative breast cancer (H1 2023); (iii) reporting data from an ongoing investigator sponsored Phase I/II trial of alisertib plus pembrolizumab for the treatment of patients with Rb-deficient head and neck squamous cell cancer (2023); (iv) conducting a meeting with the FDA to discuss the registration pathway for alisertib in small cell lung cancer (H1 2023); and (v) conducting a meeting with the FDA to discuss the registration pathway for alisertib in hormone receptor positive, HER2-negative breast cancer (H2 2023
Revenue
Total revenue consists of product revenue, net from sales of NERLYNX, license revenue and royalty revenue. For the fourth quarter of 2022, total revenue was $65.7 million, of which $53.7 million was product revenue, net, and $12.0 million was royalty revenue. This compares to total revenue of $55.4 million for the fourth quarter of 2021, 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. For the year ended December 31, 2022, total revenue was $228.0 million, of which $200.0 million was product revenue, net, and $28.0 million was royalty revenue. This compares to total revenue in 2021 of $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
Operating Costs and Expenses
Total operating costs and expenses were $55.7 million for the fourth quarter of 2022, compared to $48.6 million for the fourth quarter of 2021. Total operating costs and expenses were $204.3 million for full year 2022, compared to $251.9 million for full year 2021
Cost of Sales
Cost of sales was $16.8 million for the fourth quarter of 2022, compared to $11.9 million for the fourth quarter of 2021. Cost of sales was $55.1 million for full year 2022, compared to cost of sales of $63.7 million for 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
Selling, General and Administrative Expenses
Selling, general and administrative (SG&A) expenses were $25.1 million for the fourth quarter of 2022, compared to $22.5 million for the fourth quarter of 2021. SG&A expenses for full year 2022 were $90.0 million, compared to $116.3 million for full year 2021. The $26.3 million decrease in SG&A expenses for full year 2022 compared to 2021 resulted primarily from a decrease in payroll and related costs of approximately $8.2 million, consisting of $7.6 million from lower headcount and a $2.0 million payroll tax credit under the CARES Act,; and a decrease in stock-based compensation expense of approximately $17.7 million, primarily due to $13.6 million of incremental expense in 2021, which resulted from modification to the term of a warrant held by Mr. Auerbach, offset by an increase of commissions and bonuses of $1.2 million.
Research and Development Expenses
Research and development (R&D) expenses were $13.8 million for the fourth quarter of 2022, compared to $14.2 million for the fourth quarter of 2021. R&D expenses for full year 2022 were $52.2 million, compared to $71.9 million for full year 2021. The $19.7 million decrease in R&D expenses during full year 2022 compared to full year 2021 resulted primarily from a decrease in clinical trial expense of approximately $8.7 million, primarily due to the reduction in the number of patients in certain clinical trials; a decrease in internal R&D expenses of approximately $5.6 million; a decrease in consultant and contractors’ expense of approximately $2.3 million, primarily due to the close of the CONTROL study and a reduction in the number of patients being treated in the SUMMIT study; and a decrease in stock-based compensation expense of approximately $3.2 million, primarily due to the impact of lower headcount combined with the decreased stock price
Acquired In-Process Research and Development Expense
In September 2022, the Company entered into an exclusive license agreement with Takeda Pharmaceutical Company Limited to in-license the worldwide research and development and commercial rights to alisertib. The Company recorded acquired in-process research and development expense related to the up-front payment of $7.0 million during the year ended December 31, 2022.
Total Other Income (Expenses)
Total other expenses were $15.3 million for the fourth quarter of 2022, compared to total other expenses of $2.4 million for the fourth quarter of 2021. Total other expenses were $23.2 million for full year 2022, compared to $30.1 million for full year 2021. The $6.9 million decrease in other expenses in full year 2022 consisted primarily of a net increase in legal verdict expense of $2.9 million, which included a $12.4 million expense related to the legal settlement in the year ended December 31, 2022; $8.1 million in loss on debt extinguishment related to our debt refinancing in July 2021; and a decrease of $1.3 million in lower interest expense related to our outstanding debt.
Full Year 2023 and First Quarter 2023 Financial Outlook
Full Year 2023
First Quarter 2023
Net Product Revenue
$205 – $210 million
$43 -$46 million
Royalty Revenue
$25 – $30 million
$4 – $6 million
Net Income/(Loss)
$20 -$24 million
$(5) – $(2) million
Gross to Net Adjustment
19% – 20%
21% – 21.5%
Conference Call
Puma Biotechnology will host a conference call to report its fourth quarter and full year 2022 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 2, 2023. 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.