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Puma Biotechnology Inc (PBYI 1.03%)
Q3Â 2020 Earnings Call
Nov 5, 2020, 4:30 p.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Greetings, ladies and gentlemen. Thank you for joining the Puma Biotechnology third quarter earnings call. [Operator Instructions] [Operator Instructions].
I will now turn the conference over to your host, Mariann Ohanesian, Senior Director. Thank you. You may begin.
Mariann Ohanesian -- Investor Relations
Thank you, Diego. Good afternoon, and welcome to Puma's conference call to discuss our financial results for the third quarter of 2020. Joining me on the call today are Alan Auerbach, Chief Executive Officer, President, and Chairman of the Board of Puma Biotechnology; Maximo Nougues, Chief Financial Officer; and Jeff Ludwig, Chief Commercial Officer. After market close today, Puma issued a news release detailing third quarter 2020 financial results. That news release, the slides that Alan and Jeff will refer to, and a webcast of this call are accessible via the homepage and Investor sections of our website at pumabiotechnology.com. The webcast and presentation slides will be archived on our website and available for replay for the next 90 days. Today's conference call will include statements about the company's future expectations, plans, and prospects that constitute forward-looking statements for purposes of federal securities laws.
Such statements are subject to risks and uncertainties, and actual results may differ from those expressed in these forward-looking statements, due to a number of factors, which include the risk factors disclosed in the periodic and current reports filed by Puma with the SEC from time to time. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this live conference call, November 5, 2020. The company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as required by law. During today's call, we may also refer to certain non-GAAP financial measures that involve adjustments to our GAAP figures. We believe these non-GAAP metrics may be useful to investors as a supplement to, but not a substitute for, our GAAP financial measures. Please refer to our third quarter 2020 news release for a reconciliation of our GAAP to non-GAAP results.
I will now turn the call over to Alan.
Alan H. Auerbach -- Chairman, Chief Executive Officer and President
Thank you, Mariann, and thank you all for joining our call today. Today, Puma reported total revenue for the third quarter of 2020 of $50.8 million. Total revenue includes net U.S. NERLYNX sales, as well as license and royalty fees from our sublicensees. Net NERLYNX sales were $49.3 million in the third quarter of 2020, representing a slight increase from the $48.8 million in net sales reported in the second quarter of 2020, and a decrease from the $53.5 million reported in Q3 of 2019. During the third quarter of 2020, we continued to experience challenges brought on as a result of the COVID-19 pandemic. Our third quarter results also included royalty revenue of $1.5 million. I will begin with a review of some of the highlights of the quarter and then Jeff Ludwig will provide more details on the NERLYNX commercial activities. Maximo Nougues will follow with highlights of the key components of our financial statements for the third quarter of 2020. As investors are aware, Puma has an ongoing trial of neratinib in the extended adjuvant HER2-positive early breast cancer setting, referred to as the control trial, where we are investigating the use of several prophylactic techniques, including the use of antidiarrheal drugs or dose escalation to reduce the incidence of neratinib-related diarrhea and improve the tolerability of the drug. Interim results from the control trial were published in the September issue of the medical journal, Annals of Oncology.
These results demonstrated that the incidence of grade three diarrhea with neratinib can be reduced, and the tolerability of the drug can be improved significantly using a wide variety of antidiarrheal strategies. We believe this publication will help to increase the awareness of using these techniques to improve the tolerability of the drug. We further anticipate that additional results from the trial will be presented in the fourth quarter of 2020, which may further help to increase awareness of these prophylactic techniques. In addition, in early October, we announced that the efficacy results of neratinib in HER2 positive, HR-positive early stage breast cancer from our Phase III ExteNET trial were published in the journal Clinical Breast Cancer. We believe that this population will also increase awareness of NERLYNX and its benefits in this patient population. As investors are also aware, Puma has an ongoing basket trial of neratinib in HER2-mutated cancers, referred to as the SUMMIT trial. The SUMMIT trial was modified in early 2020, such that ER-positive HER2-negative breast cancer patients who have a HER2 mutation were randomized to receive either fulvestrant alone, fulvestrant plus trastuzumab, or the combination of neratinib plus fulvestrant plus trastuzumab. Under the initial Simon's two-stage design, each arm of the amended study will enroll seven patients during Stage 1, and if no patient in a given arm responds, that arm is closed for further enrollment. If in the first stage, one or more patients respond, the arm will then be expanded up to 18 patients.
If less than four patients in the expanded arm respond, that arm will be closed to further enrollment. If more than four patients respond, the arm is expanded and additional patients are enrolled. As we reported on our second quarter earnings call, enrollment into the SUMMIT trial in Q2 of 2020 was negatively impacted by the COVID-19 pandemic. Enrollment did increase slightly in the third quarter and continued to increase in the month of October. Assuming this trend continues, we anticipate that enrollment into the initial stage of the Simon two-stage for the HR-positive breast cancer cohort of the trial will occur in the first half of 2020. However, we recognize that this could continue to be impacted by COVID-19, and also recognize the potential uncertainty associated with any additional wave of COVID-19, should one occur later this year or early next year. Once we receive the initial results from the Simon two-stage in the HR-positive breast cancer cohorts, we plan to schedule a pre-NDA meeting with the FDA to discuss the potential for accelerated approval. We also anticipate that in the first quarter of 2021, we will be reporting Phase II data from the cohort of the SUMMIT trial, in which patients with bile duct cancer with HER2 mutations were treated with neratinib monotherapy. In addition, the SUMMIT trial was most recently amended to include a new cohort of patients to be treated. This cohort included patients with non-small cell lung cancer with EGFR exon 18 mutations, who were treated with neratinib monotherapy.
We are today presenting the preliminary efficacy data from this cohort of patients. As you can see on the slide, EGF exon 18 mutations are rare mutations in lung cancer. Exon 18 mutations comprise approximately 5% of the EGFR mutations detected in lung cancer. The preclinical data has demonstrated that EGFR exon 18 mutations appear to be sensitive to neratinib. The data on this slide shows the preclinical efficacy of several EGFR-directed tyrosine kinase inhibitors, or TKIs, against EGFR exon 18 mutations. As you can see from the in vitro data on the slide, neratinib appears to have the strongest preclinical potency against EGFR exon 18 mutations, compared to the other EGFR-directed TKIs tested. Neratinib was previously tested in a Phase II clinical trial in lung cancer. This trial was published in 2010 in the Journal of Clinical Oncology. In that trial, there were four patients with exon 18 mutations in lung cancer who enrolled in the trial, all of which had the G719 times mutation. Of the four patients with exon 18 mutations, three experienced a partial response, with a median PFS of 52.7 weeks. Based on this data, we amended the SUMMIT trial to open a new cohort for patients with exon 18 mutated. Now on small cell lung cancer: these patients were treated with neratinib monotherapy. The study was designed as the Simon's two-stage trial, where we initially enrolled seven patients during stage one and if no patient responded, we would close the arm for further enrollment. If, in the first stage, one or more patients responded, the cohort was expanded up to 18 patients.
If less than four patients in the expanded arm respond, the arm will be closed to further enrollment. If more than four patients respond, the arm would be expanded and additional patients would be enrolled. To date, there have been 11 patients enrolled in this cohort. These patients received a median of two prior treatments in the metastatic setting, including treatment with chemotherapy and checkpoint inhibitors. Importantly, there were 10 patients in the trial who received prior treatment with an EGFR-directed tyrosine kinase inhibitor, which included reversible TKIs like gefitinib and erlotinib, as well as irreversible inhibitors like osimertinib and afatinib. The preliminary efficacy data from the trial demonstrates that for the 10 patients who received prior EGFR TKI treatment, six patients, or 60%, showed a partial response as best overall response, with four of these responses, or 40%, being confirmed partial responses. The median duration of these responses was 7.5 months. In this cohort of 10 patients who received prior EGFR TKI treatment, the clinical benefit rate was 80%, and the median PFS was 9.1 months. As you can see on this slide, you can see the waterfall plot on the right and the swirl plot on the left. As you can see from the plot, a number of the patients had either single or complex EGFR exon 18 mutations, and responses were seen in both groups of patients.
Of the 10 patients who had received prior EGFR TKI treatment, all of these patients had the G719 times mutation, which was present either as a single mutation or as a complex mutation in combination with either E709 times, S768I and/or T790M. As of the August data cutoff, there are still four patients being treated with neratinib monotherapy. The safety data from the trial demonstrated that for the 11 patients in the trial, the most common adverse event was diarrhea. There were no cases of grade three or higher diarrhea, and there were five patients, or 45.5% of the patients, experiencing any grade diarrhea. Looking at this diarrhea data closer, of the five patients who experienced diarrhea, one patient had grade two diarrhea, and four patients had grade one diarrhea. No patient required a dose hold or dose reduction or permanently discontinued neratinib due to diarrhea. To put this data into context is the only drug that is FDA-approved that have exon 18 mutations in its label is a afatinib, which is commercially known as Gilotrif. As you can see on the slide, in patients who have previously been treated with an EGFR TKI, afatinib has demonstrated an overall response rate of 10.5%. Although it is early, we believe that the data with neratinib in SUMMIT compares favorably to the afatinib data. The predetermined success criteria has been met for both the first stage and second stage
Of the Simon two stage criteria for this cohort of exon 18 EGFR-mutated non-small cell lung cancer patients. Enrollment is now continuing in the second stage, up to a total of 30 patients. We expect to present additional updated data from this cohort of patients at a medical conference during the first half of 2021. We further anticipate scheduling a meeting with the FDA to discuss the potential for accelerated approval in patients with EGFR exon 18-mutated non-small cell lung cancer who have previously been treated with an EGFR tyrosine kinase inhibitor sometime in 2021. In addition to the progress in the SUMMIT trial, on October 15, the National Comprehensive Cancer Network announced its plans to collaborate with Puma to study neratinib in various cancer research projects to explore its role in different tumor types. These projects will focus on treatment of pediatric tumors, early stage, and metastatic breast cancer, including those with HER2-positive brain mets, other HER2-amplified tumors, and EGFR-mutated glioblastoma.
I will now turn the call over to Jeff Ludwig, Puma's Chief Commercial Officer, for a review of our commercial performance during the quarter.
Jeff J. Ludwig -- Chief Commercial Officer
Thanks, Alan. Appreciate it, and thanks to everyone for joining this call. This is the second earnings call that I've had the privilege of representing Puma's commercial organization, and I can tell you that the team is working very hard to reposition the brand, tighten up our focus and execution, and deploy resources in a very smart and efficient manner. I am proud of the progress that the team is making, but all of us realize that more must be done to help patients and their families battling breast cancer. Before I move into the commercial review, just a reminder that I will be making forward-looking statements. As you may recall, we have two channels that provide NERLYNX to patients. We refer to these as our specialty pharmacy channel and our specialty distributor channel or in-office dispensing channel. The majority of our business flows through the specialty pharmacy channel. More specifically, in Q3, approximately 77% of our business went through this channel, with the remaining 23% flowing through the specialty distributor channel. This is in line with what we reported during our Q2 earnings call as well. Now later in this call, Maximo will review the full financial results, but I will now provide you with the current U.S. sales results. We continue to operate in a very unique environment, with the COVID-19 pandemic still impacting the majority of the country with no clear end in sight as of yet.
The commercial team has worked very hard to adapt to this new reality, but our overall promotional activities continued to be impacted in Q3. As expected, live face-to-face interactions with healthcare providers were very limited, with virtual engagements becoming the norm. But our net overall promotional interactions, combining both live and virtual, were down from our pre-COVID baseline. As we reported during our Q2 earnings call, we did see a decline in the number of new patients signing up through our specialty pharmacy channel in May, with some recovery in June, which we believe was related to the ebb and flow of the stay-at-home orders and the quarantines that were in place in various parts of the country. The volatility of COVID-19 continued throughout Q3, with some softening in both the specialty pharmacy channel, as well as within the specialty distributor channel. Slide four shows U.S. quarterly net sales of NERLYNX since FDA approval. As Alan noted, our net U.S. product sales were $49.3 million in the third quarter of 2020. This is a slight increase over the $48.8 million we reported in Q2 of 2020. Slide five shows the bottles of NERLYNX sold by quarter since launch. We sold 3,611 bottles of NERLYNX in Q3 of 2020, and which is a decrease of about 3% from our Q2 2020 bottle sales of 3,728. As mentioned previously, we believe that the COVID-19 pandemic and its impact on our promotional access played a role in the softness. With that said, the team is focused and committed to changing these trends.
Alan highlighted, in his opening remarks, two key publications that recently occurred. The first one was the publication of the interim results of the control study published in the September edition of Annals of Oncology. This is important because it highlights that antidiarrheal strategies can significantly reduce the incidence of grade three diarrhea and improve overall tolerability of NERLYNX. The second publication included the final efficacy results from the ExteNET trial, which was recently published in Clinical Breast Cancer in early October. This is important because, among other things, it highlighted the benefits seen in an exploratory analysis of patients at heightened risk of disease recurrence. These patients were HER2-positive HR-positive with residual disease receiving NERLYNX within one year following their trastuzumab-based therapy. This exploratory analysis demonstrated a consistent benefit in invasive disease-free survival, overall survival, and CNS events. We believe that these two publications are very important and will play a positive role in changing the perception of the risk-benefit profile of NERLYNX going forward. Having important new data not only makes our current interactions more effective, but it also helps to increase our overall access to customers. As an early indicator of the impact of the controlled publication can be seen on slide six, I which shows that in Q3, approximately 33% of all new patient starts were initiated at a reduced dose.
This is an increase over Q2, but more importantly, it is being driven by a fairly significant change in September, where over 40% of new patients started at a reduced dose. This is important, since the control data showed that utilizing a dose escalation strategy in the extended adjuvant setting, coupled with PRM loperamide, showed a greater than 60% reduction in grade three diarrhea, a 60% reduction in median cumulative days of grade three diarrhea, and an approximate 80% reduction in discontinuation. We believe that improving the tolerability of neratinib and reducing discontinuations should increase the average length of therapy and ultimately help more patients in their battle with breast cancer. Slide seven highlights the strategic collaborations we have formed across the globe, with the goal of making NERLYNX available to patients around the world. We are very happy with the progress that we've seen in 2019 and are very glad that this trend has continued in 2020. Key highlights include the following: in Q3, medicine received approval in metastatic breast cancer in Israel. Knight's submission for a metastatic indication was accepted by Health Canada in September. Peak Pharma received approval in Ecuador in Q3. Pierre Fabre is planning a Q4 launch in Finland. And finally, Bixink filed their NDA in South Korea in October. During the remainder of 2020 and beyond, we look forward to the potential for NERLYNX to be approved in additional countries in Europe, Latin America, Asia, Southeast Asia, and the Middle East. In summary, I am proud of the work that is being done by the team and believe that we are well positioned to increase the impact that we are having on patients battling HER2-positive breast cancer.
I will now turn the call over to Maximo for a review of our financial results. Maximo, the floor is yours.
Maximo F. Nougues -- Chief Financial Officer
Thanks, Jeff. I will begin with a brief summary of our financial results for the third quarter of 2020. Please note that I will make comparisons to Q2 and Q2 -- and Q1 2020, which we believe are better indications of our progress as a commercial company than year-over-year comparisons. For more information, I recommend that you refer to our 10-Q which will be filed today and includes our consolidated financial statements. For the third quarter of 2020, we reported a net loss based on GAAP of $31.5 million, or $0.79 per share. Our GAAP net income for Q2 2020 was $3.4 million, and our GAAP net loss for Q1 2020 was $16.9 million. On a non-GAAP basis, which is adjusted to remove the impact of stock-based compensation, we reported a net loss of $23.9 million, or $0.60 per share, for the third quarter of 2020. Gross revenue from NERLYNX sales was $58.6 million in Q3 2020 versus $57 million in Q2. As Alan mentioned it, net revenue from NERLYNX sales was $49.3 million, a slight increase from net sales of $48.8 million in the second quarter of 2020. In Q3, in 2020, we also recognized $1.5 million in royalty revenue from our global partners. Our gross-to-net adjustment in Q3 was about 15.8%, an increase from the 14.4% gross-to-net adjustment in Q2. The increase was driven mostly by higher rebates, due to our price increase in August. Hospital sales for the third quarter was $10 million, which included the amortization of milestone payments to the licensor of neratinib of approximately $2 million.
Going forward, we will continue to recognize amortization of the milestone payments to the licensor, or about $2 million per quarter, as cost of sales. For full-year 2020 Puma anticipates that NERLYNX net sales will be in the range of $196 million to $198 million. This is slightly lower than our prior guidance of $200 million to $210 million. We also anticipate that our gross-to-net adjustment in 2020 will be between 16% and 17%. Furthermore, for the full year 2020 we continue to anticipate receiving royalties from our licensors around the world in the range of $4 million to $5 million and potential license fees in the amount of $22.7 million. We recognize there is a great deal of uncertainty regarding the impact of COVID-19, and this may continue to negatively impact our sales, royalties, and license fees. Additionally, our NERLYNX net revenue expectations for Q4 2020 are in the range of $49 million to $51 million. As we have noted on prior earnings calls, we tend to see a decline in NRx in the fourth quarter of the year, and more specifically, during the Thanksgiving, Christmas, and New Year's holidays, which we believe is due to patients delaying starting NERLYNX until after the holidays. We have taken this into consideration in the Q4 -- in this Q4 guidance. We anticipate that the gross-to-net in Q4 will be approximately 17% to 18%. SG&A expenses were $29.6 million in the third quarter of 2020, compared to $29.4 million and $30.9 million for Q2 and Q1 2020 respectively. SG&A expenses included noncash charges for stock-based compensation of $4.1 million for the third quarter of 2020, compared to $4.7 million each for Q2 and Q1 2020.
Research and development expenses were $23.3 million in the third quarter, compared to $24.7 million and $25.5 million for Q2 and Q1 2020 respectively. R&D expenses included noncash charges for stock-based compensation of $3.5 million in Q3, compared to $5.9 million and $4.2 million for Q2 and Q1 2020 respectively. We have received additional data from the claims administrator related to our class action lawsuit. The claims report asserted damages of approximately $50.5 million, which is larger than the amount previously estimated. We intend to challenge some of these claims and estimate that the damages could be as low as $24.8 million. We increased our accrued legal reserve by $15.7 million, which impacted other income and expense. In the third quarter of 2020, Puma reported cash earned of $1.8 million, compared to cash earned of $6.2 million in Q2 2020 and cash burn of $11.6 million in Q1 2020. We ended the third quarter of 2020 with $109 million in cash, cash equivalents, and marketable securities. Our accounts receivables balance at September 30 was $27.1 million. Our accounts receivable terms range between 10 and 68 days, while our days sales outstanding are about 45 days. We estimate that as of September 30, 2020, our distribution network maintains approximately three weeks of inventory.
Overall, we continue to deploy our financial resources to focus on the advancement of neratinib, through ongoing clinical trials and the commercialization of NERLYNX.
Alan H. Auerbach -- Chairman, Chief Executive Officer and President
Thanks, Maximo. We continue to recognize that we need to improve NERLYNX sales growth and that the COVID-19 pandemic is presenting challenges to us with respect to achieving that growth. Puma's senior management, in cooperation with the Commercial Committee and the Board of Directors, continues to remain focused on NERLYNX revenue and sales growth for 2020 and beyond. We are continuing to adapt to the virtual commercial environment that we have needed to pivot toward due to the COVID-19 pandemic, and we are hopeful that changes to our commercial infrastructure will make a positive contribution to NERLYNX sales growth. We look forward to updating investors on this in the future. There continues to remain a significant unmet need for women battling breast cancer. We at Puma are committed and passionate about finding more effective ways and helping these patients during their journey, and we will continue to strive to achieve that goal. This concludes today's presentation.
We will now turn the floor back to the operator for Q&A. Operator?
Questions and Answers:
Operator
[Operator Instructions] Our first question comes from Ed White with H.C. Wainwright & Company. Please state your question.
Ed White -- H.C. Wainwright & Company -- Analyst
Good evening. Thanks for taking my question. So maybe the first question would just be -- and perhaps I didn't hear it and you said it -- but on the exon 18 mutations, can you just go over that again with the -- is it you're enrolling the 30 patients the cohort now? And when would we expect to see data from that cohort?
Alan H. Auerbach -- Chairman, Chief Executive Officer and President
Yes. So, in terms of the EGFR exon 18 mutation, this is part of the SUMMIT trial. So the first bogie we had to hit was one one of seven, and the next one we had to hit was four out of 18. So, as you can see, out of 11, we had 4, so we hit the bogie to continue enrollment. So the enrollment will be continuing, so it will be the current 11-plus additional. And we've been very pleased with the enrollment. I mean, if you look at clinicaltrials.gov, I think we've got somewhere in the neighborhood, ballpark of 45 to 55 sites in the study. These 11 patients were probably enrolled at less than 10 of them. So, since we've got the data, we're going out to the other sites and making them aware of this data because, obviously, knowing that it's active, you're going to be more interested in enrolling patients. And that has definitely helped with the enrollment in the study. So you've got a number of lung cancer-specific conferences in the first half of next year, like in Q1 and there are some in Q2 as well. So we'll continue to present updates to that during that time, so I would envision both Q1 and Q2, you could see updates to this data. And that should be certainly most of the 11 patients. I can't speculate as to exactly how many we would have efficacy data on. As we get closer, I'll be happy to provide more transparency on that.
Ed White -- H.C. Wainwright & Company -- Analyst
Okay, yes, because I was trying to think about a timing to path to submission, so I don't know if you have any thoughts on that at this time.
Alan H. Auerbach -- Chairman, Chief Executive Officer and President
Yes. Obviously, we can't -- obviously, we can't speculate on that until we've had a meeting with the FDA, which we plan to do sometime next year. But -- and obviously, it will be enrollment dependent as well. But again, I've been very pleased that as we go out to the sites in SUMMIT and present this data, the first response we're hearing from people is, I've got a patient I'm treating, and you know what, either when they progress -- or I'm going to call them up and bring them in and talk a little about this. So we're definitely getting the right feedback that I would like to see, which is them trying to pull patients in for this. I just can't speculate as to what that number is just yet.
Ed White -- H.C. Wainwright & Company -- Analyst
Okay. And that pre-NDA meeting for SUMMIT, you're expecting that still in the first quarter or second quarter of next year?
Alan H. Auerbach -- Chairman, Chief Executive Officer and President
For the exon 18 cohorts, we haven't scheduled the meeting yet, so I don't know when that will be. For the HR-positive breast cohorts, assuming we complete enrollment in the first half of 2021, which that cohort has been picking up very nicely in terms of enrollment, I would imagine, in that ballpark, first half of '21 would be when we would be having the pre-NDA meeting.
Ed White -- H.C. Wainwright & Company -- Analyst
That's the one I was talking about -- sorry, about that. And perhaps you could just talk about sales in Europe and royalties there. It seems like they're going through the same thing that we're going through here in the U.S. as far as the pandemic and lockdowns and everything. But if you have any insight on how sales are looking there in the various launches that you have ongoing, or that your partners have ongoing.
Alan H. Auerbach -- Chairman, Chief Executive Officer and President
Yes, absolutely. So our partner in Europe is Pierre Fabre, and they've been a really great partner to us. It's been a great relationship. What's different about launching in Europe versus the U.S. is, when you launch in the United States, you launch in all 50 states at the same time, whereas in Europe, you have to wait for reimbursement for each individual country. So of the, I believe it's 32 countries in Europe, you kind of launch them one by one, so it's a little more protracted. So we haven't launched in all of the European countries. I believe we only launched in like four or five of them. And so far, we've been seeing good sequential growth. Now, you're correct that they are going through lockdowns, etc. I don't know what impact that's going to have. But they're continuing throughout 2021 to launch in a lot of new countries, so you're going to have that as a source of growth as well, which is new launches in new countries. And Pierre Fabre's got a really great lineup of new countries that are launching it in 2021, so I'm optimistic on them in terms of their execution, but I'm also optimistic on their growth in the new countries as well as the existing.
Ed White -- H.C. Wainwright & Company -- Analyst
And perhaps the last question for me is just on SG&A expenses. So, with the virtual sales model that you're using now, combined with whatever meetings that you can get in person, I'm just wondering how we could think about the sales expenses going forward and how that's impacting. It would seem that -- I've been hearing that some companies are cutting back on their sales force as they move to a more virtual model, and just want to get your thoughts on expenses or what can be done to become more lean on the sales side.
Alan H. Auerbach -- Chairman, Chief Executive Officer and President
Jeff, do you want to hand that?
Jeff J. Ludwig -- Chief Commercial Officer
Yes. No question. I think it's a very good question. And certainly, as I mentioned up front, we're working very hard to be -- to have the field force operate in a much more effective way in the virtual environment. As part of that virtual environment, we are certainly seeing expenses, SG&A, come down when you have lack of travel, live engagements, so we are seeing those expenses come down. In addition, we're being very smart about headcount and making sure we're very smart with ensuring that we've got the proper number of FTEs out there. We have some decline in FTES, and we're being very diligent as we think about filling those FTES, thinking about that new future model. So we do expect to see continued efficiencies in the SG&A line going forward for sure.
Alan H. Auerbach -- Chairman, Chief Executive Officer and President
And Ed, I would also just add to this. Look, one of the big costs you would get from a sales force, obviously, is travel, right? Because you don't have a sales force who's going to have a territory that might span over three states or something, so they're going to be driving and flying and etc. Clearly, with a reduction in the number of in-person visits that you can do, that travel expense is a lot lower. And I would love to be able to tell you that I think things are all of a sudden going to turn around and we're going to be able to start doing more in-person meetings live. I just don't think that's going to happen for a long period of time. So I would imagine, because of that, you're likely to see the SG&A levels continue to be low and not see a huge uptick in travel-related expenses.
Ed White -- H.C. Wainwright & Company -- Analyst
Great, thanks for taking my question.
Operator
Our next question comes from Yigal Nochomovitz with Citi. Please state your question.
Samantha -- Citi -- Analyst
Hi, this is Samantha [Phonetic] on for Yigal. Just first on the non-small cell lung cancer, EGFR exon 18 data, the two patients that did not have confirmed PRs, just wanted to clarify, are those able to be confirmed, or are those two patients now off study?
Alan H. Auerbach -- Chairman, Chief Executive Officer and President
That is a good question. I don't know the answer that off the top of my head. I will maybe come back to you on that.
Samantha -- Citi -- Analyst
Okay. Okay, understood. And then, just as you're enrolling the -- up to the 30 patients, I think you said, in this cohort, and you're moving toward the pre-NDA meeting with the FDA or the -- to look at the accelerated approval, is your understanding that the SUMMIT trial and those 30 patients will be sufficient to support an accelerated approval? Or do you anticipate having to run an additional cohort or an additional trial?
Alan H. Auerbach -- Chairman, Chief Executive Officer and President
I obviously can't speculate until we meet with the FDA. I would not imagine we would have to go run a separate trial. If the FDA wanted us to have 50 patients instead of 30, we can just continue enrollment in the current cohorts. When we met with them regarding the SUMMIT trial, which was last year, we discussed with them both the breast trial -- the breast cohort and the cervical cohorts, and they didn't ask us to run a new trial. They just asked us to kind of continue enrolling the existing trial. So I wouldn't imagine having to go set up a completely new trial. My anticipation would be, again, we haven't met with the FDA, but based on our previous, my anticipation would be, just continue to roll the existing one.
Samantha -- Citi -- Analyst
Got it. That's helpful. And then, just switching to NERLYNX sales a bit. Just curious when you talk about how you're going to work to increase growth in sales, where is the focus for your sales force? Is that on the extended adjuvant indication, or is that on the metastatic indication? And what can you do between the two of these to increase growth? Is it the same plan? Or do you have separate priorities there?
Alan H. Auerbach -- Chairman, Chief Executive Officer and President
Jeff, you want to handle that?
Jeff J. Ludwig -- Chief Commercial Officer
Yes, happy to. No, very good question. And let me just say, we obviously launched NERLYNX in metastatic in the first quarter of 2020. Obviously, that's -- we launched along with several other competitors. We do believe that NERLYNX will play a significant role in the metastatic setting. But obviously, it's going to take some time to determine the sequencing of drugs, given the new entrants. We do know that in a metastatic setting, unfortunately, patients do progress, so it's going to be -- it's going to take us to understand how that sequencing progresses. But obviously, patients will ultimately progress through multiple therapies. Our real focus, and what we'd like to see, is to prevent patients or give them a better chance of preventing them from becoming metastatic, and so our focus is largely in the extended adjuvant setting. And given that, you asked a very good question, what are we doing to accelerate growth in the extended adjuvant setting? The marketing and sales team are working very hard to reposition the brand, tighten up that focus and execution, and adjust resource allocation to better align with the current market conditions. As Alan mentioned and I mentioned, we are excited about the new publication of the ExteNET final efficacy results. If you look at those results, what that showed was an exploratory analysis focused really in higher-risk patients.
And those higher-risk patients that were reported were those that were HER2-positive, HR-positive, less than one year with no PCR. And in that population, the author has described an absolute IDFS, or invasive disease-free survival, benefit of 7.4% at five years, an absolute overall survival benefit of 9.1% at eight years. In addition, there were fewer CNS-reported events in the NERLYNX arm. So, when you think about that higher-risk population, we are very happy with the results that we have seen there, and we believe that using that information, we now have a much more compelling message for clinicians to focus in, both clinically as well as with the control data being published, to also help the tolerability side of the drug as well. And as you look at the broader population, we think NERLYNX can play a very important role in a broader HER2-positive population. But even in this higher-risk population, there is very, very significant opportunities for growth. We have just now, in the last couple of weeks, began speaking and focused in on that population, and the early feedback from clinicians has been positive. It's early, but it's been very positive. So I hope that helps.
Samantha -- Citi -- Analyst
Yes, thank you. Appreciate all the color.
Jeff J. Ludwig -- Chief Commercial Officer
Thank you.
Operator
Our next question comes from Kennen MacKay with RBC Capital Markets. Please state your question.
Kennen MacKay -- RBC Capital Markets -- Analyst
All right, thanks for taking the question. Can you maybe talk to how new patient starts trended in Q3 versus Q1 and Q2, or trends in new-to-brand or new prescriptions? Obviously, saw the analysis of bottles sold and the percent of new patient starts at the lower dose, but just wondering again, how new prescriptions trended versus refills.
Alan H. Auerbach -- Chairman, Chief Executive Officer and President
Yes, new patient starts trended down in Q3. Obviously, it was impacted by the pandemic. We obviously saw this in our in-office distributing as well, as we were certainly hearing less patients were coming through the in-office -- the places that we have the in-office dispensing as well. So I think the trend was somewhere in the range of five-ish percent with the decline in NPS quarter-over-quarter.
Kennen MacKay -- RBC Capital Markets -- Analyst
Got it. Thank you.
Alan H. Auerbach -- Chairman, Chief Executive Officer and President
Thank you.
Operator
Our next question comes from Laura Christianson with Cowen & Company. Please state your question.
Laura Christianson -- Cowen & Company -- Analyst
Hi, thanks for taking my question. And I guess just a follow-up on the previous one: there are some oral oncology drugs that have been seeing resilience, if not strength, during COVID. I was wondering if you could just give us a little bit more information about the market that you're serving and why the COVID reaction might be different there, whether they need to be in person to start on drug or do any lab work, anything that might explain the difference.
Jeff J. Ludwig -- Chief Commercial Officer
Laura, that's a very good question, and let me address that, and Alan can weigh in. So let me just stress that NERLYNX is a very promotionally sensitive product. And as discussed previously, COVID has caused a reduction in our overall HCP interactions, which we believe has led to some softening in demand. But let me be clear, we're not waiting for COVID to go away in order to change these trends. The team has been working very hard to reposition the brand, obviously tighten up our focus and execution. And as I just mentioned, we recently now have brand-new data from ExteNET and control published in peer-reviewed journals. And as you think about this, clinicians make decisions and patients make decisions on the risk-benefit of those medications. We really believe now, with that new information, our messages are much more compelling, both from the clinical benefits side, as well as the tolerability side, for NERLYNX. As I mentioned, that data has just now come into our hands in the last couple of weeks. The team is really focused in on that. And in those patient groups, we feel very good about being able to make a positive impact moving forward. And early interactions with KOLs have been positive.
Laura Christianson -- Cowen & Company -- Analyst
Perfect. That's helpful, thanks.
Operator
Our next question comes from Jeff Meacham with Bank of America. Please state your question.
Jason -- Bank of America -- Analyst
Good afternoon, this is Jason [Phonetic] on for Jeff. Congratulations on the results. In talking a little bit about driving growth, what do you think are the biggest near-term drivers in terms of likelihood and the overall, I guess, ability to kind of move the needle? And then, if you could, could you discuss a little bit about the gross-to-net trends moving forward and kind of the ability to drive sales with price increases and what that looks like.
Alan H. Auerbach -- Chairman, Chief Executive Officer and President
So Jeff, if you want to handle the first part of that, and then Maximo can weigh in on the gross yes.
Jeff J. Ludwig -- Chief Commercial Officer
Yes, Jason, good question. I go back -- I don't want to repeat myself too much, but I would say we are, in terms of near-term growth opportunities, to us, it really is about focusing in on the new data that we have. We firmly believe that NERLYNX has a positive impact in a very broad patient population, so we feel good about those opportunities. But more specifically, when you look at the recent data that was just published, in those higher-risk patient populations, the data on IDFS, OS, and CNS is very, very positive. So our focus with the team is to look at those higher-risk patient populations. And those patients are the ones, as you know, that do progress, that have more events more quickly. So having an active agent, you would expect to see a separation, again, more quickly, and that's what we saw in the data. I also want to stress that we feel good about NERLYNX in a broader population. But even in that higher-risk patient population, there is very, very significant opportunities to grow this brand, not only in terms of patient penetration but also in length of therapy, and the control data helps us with the length of therapy, and the clinical data helps us with the penetration of overall patients. And Maximo, you want to weigh in on the gross-to-net, please?
Maximo F. Nougues -- Chief Financial Officer
Yes. So our gross-to-net, as I mentioned before, our expectation for Q4 is somewhere around between 17% and 18%. Quarter-over-quarter, we're going up a little bit, 15.8% in Q3, 14.4%. That is driven by the price increase that we took in Q -- in August. So we expect that trend to stay around that. Now also, you have to remember in Q1, we usually reflect a higher gross-to-net due to co-pays and so on, so we will come up with that at the end of the year.
Jason -- Bank of America -- Analyst
Great. Thank you so much for the color. Really appreciate it.
Operator
Our next question comes from Paul Choi with Goldman Sachs. Please state your question.
Corinne Jenkins -- Goldman Sachs -- Analyst
Hi, this is Corinne Jenkins on for Paul. First, I was hoping you could talk a little bit more about how you'd think about the clinical bar in exon 18 non-small cell lung cancer and how you're going to approach that conversation with the FDA.
Alan H. Auerbach -- Chairman, Chief Executive Officer and President
Yes. Well, look, as we mentioned during the slide presentation, the only drug that is currently approved in lung cancer and has the exon 18 mutations in its label is afatinib, which is Gilotrif, so the data on that is pretty well published in terms of what it looks like. And again, we're focusing on the patients who've already been treated with an EGFR TKI. So, in that population, the bar appears to be a 10.5% response rate. So we're right now at a 40% response rate, which is very encouraging. Obviously, as we get more data, we'll see where that goes. It could stay the same, it could go down, or could go up. We just have to wait and see. But if we continue to maintain the same type of effect, where we're seeing a large magnitude of difference from afatinib in response rate, and we're continuing to see an encouraging duration of response in PFS, I would feel very comfortable having that conversation with the FDA.
Corinne Jenkins -- Goldman Sachs -- Analyst
Okay, great. That's helpful. And then, I think you mentioned that exon 18 represents about 5% of the EGFR mutation. But to what extent is it identified and diagnosed in patients? Is that part of the normal screening process?
Alan H. Auerbach -- Chairman, Chief Executive Officer and President
Yes. In low cancer, here we're very fortunate, because everybody is getting screened. I recognize in some tumor types, the screening rates are very low. In lung cancer, from what we have seen, 100% of these patients get screened. So all of the screens pick up the specific EGFR mutation, so they know if it's like a exon 20 insertion, a DEL 19 deletion, a T790M, an L858. They know exactly what it is. So it's already picked up in the current screens that are out there for lung cancer.
Corinne Jenkins -- Goldman Sachs -- Analyst
Okay, that's helpful. Thank you.
Operator
Ladies and gentlemen, that's the end of our question-and-answer session. I'll turn it back to management for closing remarks.
Mariann Ohanesian -- Investor Relations
Thank you for your interest in Puma Biotechnology. As a reminder, this call may be accessed via replay of the webcast at pumabiotechnology.com beginning later today. Have a good evening.
Operator
[Operator Closing Remarks].
Duration: 51 minutes
Call participants:
Mariann Ohanesian -- Investor Relations
Alan H. Auerbach -- Chairman, Chief Executive Officer and President
Jeff J. Ludwig -- Chief Commercial Officer
Maximo F. Nougues -- Chief Financial Officer
Ed White -- H.C. Wainwright & Company -- Analyst
Samantha -- Citi -- Analyst
Kennen MacKay -- RBC Capital Markets -- Analyst
Laura Christianson -- Cowen & Company -- Analyst
Jason -- Bank of America -- Analyst
Corinne Jenkins -- Goldman Sachs -- Analyst
