Why Puma Biotechnology Inc Stock More Than Tripled Today

Shares of the clinical-stage biotech launch into the stratosphere after a phase 3 trial success

Jul 23, 2014 at 2:05PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Puma Biotechnology (NYSE:PBYI), a clinical-stage biotech, crushed the market with a gain of more than 280% Wednesday after the company's breast cancer drug neratinib met its primary goals in a phase 3 clinical trial.

So What: Puma's neratinib trounced a placebo in the study, increasing disease-free survival for patients suffering from early stage HER2 positive breast cancer by 33% as compared to the control group. While many analysts had seen neratinib as capable of succeeding in the trial beforehand, Wall Street judged the data as one of the best case scenarios that Puma could have hoped for.

The biotech also announced an updated deal with Pfizer (NYSE:PFE), its licensing partner for the drug. Under the new terms, Puma will pay a fixed annual royalty rate on the drug's revenues in the teens, rather than an earlier agreement's arrangement to pay incremental royalties on sales.

Now What: The news is everything Puma investors could have hoped for, as the results prompted the company to announce its aims to apply for FDA approval sometime in the first half of next year. Numerous analysts raised their price targets on Puma, and given that neratinib -- Puma's lone drug in its pipeline -- is undergoing trials for other combinations and indications, there's more room to run in the future for this stock.

Puma will have to cover the costs of future research and development under its new deal with Pfizer, projecting that R&D costs could spike by $30 million. But with early stage HER2 breast cancer making up around 20% of overall cases of the disease, it wouldn't be surprising to see a takeover-hungry drugmaker come sniffing around Puma if neratinib continues its success in other trials.

Don't miss the coming blockbuster that will make every biotech jealous
Puma's leap today is a prime example of biotech's boom-or-bust potential. The best biotech investors consistently reap gigantic profits by recognizing true potential earlier and more accurately than anyone else. Let me cut right to the chase. There is a product in development that will revolutionize not just how we treat a common chronic illness, but potentially the entire health industry. Analysts are already licking their chops at the sales potential. In order to outsmart Wall Street and realize multi-bagger returns you will need The Motley Fool's new free report on the dream-team responsible for this game-changing blockbuster. CLICK HERE NOW.

Dan Carroll has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers