On November 9, 2016 Puma Biotechnology, Inc. (NYSE: PBYI), a biopharmaceutical company, reported financial results for the third quarter ended September 30, 2016 (Press release, Puma Biotechnology, NOV 9, 2016, View Source [SID1234516704]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Unless otherwise stated, all comparisons are for the third quarter and nine months ended September 30, 2016, compared to the third quarter and nine months ended September 30, 2015.

Based on accounting principles generally accepted in the United States (GAAP), Puma reported a net loss applicable to common stock of $65.8 million, or $2.02 per share, for the third quarter of 2016, compared to a net loss of $60.4 million, or $1.87 per share, for the third quarter of 2015. Net loss applicable to common stock for the nine months ended September 30, 2016 was $203.4 million, or $6.26 per share, compared to $177.6 million, or $5.55 per share, for the nine months ended September 30, 2015.

Non-GAAP adjusted net loss was $36.0 million, or $1.11 per share, for the third quarter of 2016, compared to non-GAAP adjusted net loss of $35.5 million, or $1.10 per share, for the third quarter of 2015. Non-GAAP adjusted net loss for the nine months ended September 30, 2016 was $115.4 million, or $3.55 per share, compared to $104.3 million, or $3.26 per share, for the nine months ended September 30, 2015. Non-GAAP adjusted net loss excludes stock-based compensation expense, which represents a significant portion of overall expense and has no impact on the cash position of the Company. 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 used in operating activities for the third quarter of 2016 was $34.9 million. Net cash used in operating activities for the nine months ended September 30, 2016 was $100.7 million. At September 30, 2016, Puma had cash and cash equivalents of $52.5 million and marketable securities of $56.4 million, compared to cash and cash equivalents of $31.6 million and marketable securities of $184.3 million at December 31, 2015. The Company’s balance of cash, cash equivalents and marketable securities at the end of the quarter does not include the net proceeds of approximately $162 million received from the Company’s public offering in October 2016.

"During the third quarter, we achieved several key milestones, including the European Medicines Agency’s (EMA) validation of the Marketing Authorization Application (MAA) for neratinib as an extended adjuvant treatment of HER2-positive early stage breast cancer in Europe, and the U.S. Food and Drug Administration’s (FDA) acceptance of the New Drug Application (NDA) for neratinib as an extended adjuvant treatment for patients with early stage HER2-overexpressed/amplified breast cancer who have received prior adjuvant trastuzumab (Herceptin)-based therapy," said Alan H. Auerbach, Chairman, Chief Executive Officer and President of Puma.

"We anticipate a number of additional milestones through the end of 2016 and first half of 2017," Mr. Auerbach added. "These include: (i) reporting additional data in the fourth quarter of 2016 from the Phase II trial of neratinib as an extended adjuvant treatment in HER2-positive early stage breast cancer using loperamide and budesonide prophylaxis; (ii) reporting additional Phase II data in the fourth quarter of 2016 from the FB-7 neoadjuvant HER2-positive breast cancer trial in the subgroup of patients who are MammaPrint High; (iii) reporting data in the fourth quarter of 2016 from the Phase II trial of neratinib plus fulvestrant in patients with HER2 non-amplified breast cancer that has a HER2 mutation; (iv) reporting data in the first half of 2017 from the Phase III trial of neratinib in third-line HER2-positive metastatic breast cancer patients; and (v) reporting data during the first half of 2017 from the Phase II trial of neratinib in HER2-positive metastatic breast cancer patients with brain metastases."

Operating Expenses

Operating expenses were $66.0 million for the third quarter of 2016, compared to $60.7 million for the third quarter of 2015. Operating expenses for the nine months ended September 30, 2016 were $203.7 million, compared to $178.2 million for the nine months ended September 30, 2015.

General and Administrative Expenses:

General and administrative expenses were $14.0 million for the third quarter of 2016, compared to $8.8 million for the third quarter of 2015. General and administrative expenses for the nine months ended September 30, 2016 were $37.3 million, compared to $22.2 million for the nine months ended September 30, 2015. The increase of approximately $15.1 million during the nine months ended September 30, 2016 compared to the same period in 2015 resulted primarily from increases of approximately $7.5 million in stock-based compensation, $1.9 million in payroll and related costs, $3.7 million in professional fees and expenses, and $1.6 million in facility and equipment costs. These increases reflect higher legal and compliance expenses, as well as overall corporate growth.

Research and Development Expenses:

Research and development expenses were $52.0 million for the third quarter of 2016, compared to $51.9 million for the third quarter of 2015. Research and development expenses for the nine months ended September 30, 2016 were $166.4 million, compared to $156.0 million for the nine months ended September 30, 2015. The increase of approximately $10.4 million during the nine months ended September 30, 2016 compared to the same period in 2015 resulted primarily from increases of approximately $7.2 million in stock-based compensation, $3.7 million for internal clinical development, regulatory affairs and quality assurance and internal chemical manufacturing expenses, and $2.7 million in consultants and contractors related expenses, offset by a $3.3 million decrease in clinical trial expenses