Please ensure Javascript is enabled for purposes of website accessibility

Why Puma Biotechnology Inc. Got Hammered Today

By Brian Orelli, PhD - Mar 2, 2017 at 3:43PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Competition from rival Roche has the biotech trading lower.

What happened

Puma Biotechnology (PBYI -1.72%) ended the day down 13.8% after Roche (RHHBY 4.07%) reported that its rival breast cancer drug, Perjeta, had passed its phase 3 trial, dubbed "Aphinity."

Doctor looking at mammogram results

Image source: Getty Images.

So what

In Roche's trial, patients either took Perjeta and Herceptin with chemotherapy or just Herceptin with chemotherapy, and then took Perjeta and Herceptin, or just Herceptin, for an additional year. Roche didn't release the full data from the clinical trial, but it did say the triple combination reduced the risk of recurrence of invasive disease or death compared to Herceptin and chemotherapy alone.

The potential to establish a new standard of care where patients take Herceptin and Perjeta for a year could be problematic for Puma Biotechnology because its drug candidate, neratinib, was tested after just Herceptin use, the current standard of care.

Without any data, doctors will likely wonder whether neratinib helps patients that have received Herceptin and Perjeta. And the relapse rate for patients on the current standard of care is already quite low; if adding Perjeta decreases it further, doctors and their patients may decide taking another drug after that isn't worth it, especially given neratinib's side-effect profile.

Now what

Investors will have to wait for the full data from Aphinity -- perhaps at the American Society of Clinical Oncology meeting in June -- to know how much better Herceptin plus Perjeta is than Herceptin alone, and how that might affect neratinib's sales, assuming it's approved later this year.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Puma Biotechnology, Inc. Stock Quote
Puma Biotechnology, Inc.
PBYI
$2.85 (-1.72%) $0.05
Roche Holding AG Stock Quote
Roche Holding AG
RHHBY
$41.64 (4.07%) $1.63

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.