What happened

Puma Biotechnology (PBYI -2.34%), a biopharmaceutical company that specializes in oncology therapies, saw its shares drop as much as 17.7% this week, according to data from S&P Global Intelligence.

The stock closed at $3.10, then opened on Monday at that same price. The stock hit a low of $2.55 on Thursday. It has a 52-week low of $1.60 and a 52-week high of $7.73. Overall, its shares are down 13% this year despite a rise of more than 32% in the past three months.

So what

It was a bad week for stocks in general, and as a relatively small biotech with a market cap of $122.09 million, Puma's stock is more likely to be volatile. The company has only one commercial product, Nerlynx, to treat breast cancer. The stock is coming off a stronger-than-expected second quarter, for which it posted revenue of $51.3 million, up from $48.9 million in the same quarter in 2021. The company also reported earnings per share (EPS) of $0.21, compared to an EPS loss of $0.13 in the second quarter of 2021.

Now what

Puma's whole revenue stream is dependent on one drug. The key is how much the healthcare company can expand the label for Nerlynx (neratinib). A report by Global Markets Insights puts the breast cancer therapeutics market to grow to $42.6 billion by 2028. The problem for Puma is that there is already a lot of competition in the space, so it needs to find other uses beyond breast cancer. Puma also has the drug in Phase 2 trials to treat non-small cell lung cancer and cervical cancer.