After Puma Biotechnology (NASDAQ:PBYI) reported fourth-quarter financial results that were better than investors were expecting, its shares soared 15.06% higher on Friday.
Puma Biotechnology's only drug, the breast cancer drug Nerlynx, endured a lot of scrutiny during its development, including worries over high rates of diarrhea that clinical trial patients experienced, but the company's fourth-quarter financials show that doctors have been willing to prescribe it following its FDA approval last year.
Specifically, management reported that Nerlynx's use in early-stage HER2-positive breast cancer patients following adjuvant Herceptin-based therapy, resulted in sales of $20.1 million last quarter. That increased Nerlynx's total sales since its launch last July to $26.2 million.
As a result of Nerlynx's success, Puma Biotechnology reported total Q4 revenue of $21.6 million, which beat analysts' consensus estimate by $1.6 million. Management also reported a net loss of $1.03 per share in the quarter, which was better than the $1.36 per share loss analysts were expecting.
Nerlynx is an extended maintenance therapy that can help delay disease recurrence in breast cancer patients who have previously been treated for one year with Herceptin. This is an important market, but there's been some question as to how willing doctors would be to prescribe it given its common side effects. Management has conducted studies involving the use of loperamide and steroids to lower the incidence rate of those, and it appears that may be enough to encourage its use.
The better-than-hoped financials were also good news given the bad news last month that an EU advisory committee had taken a negative stance on Nerlynx that put its European approval in question.
Overall, Puma Biotechnology's financials are encouraging. The company only used $35.6 million in net cash for operating activities last quarter and Nerlynx is quickly heading toward a 9-figure annualized sales run rate. If additional trials that could expand its addressable market pan out, then there's reason to think this company could become increasingly attractive to a suitor.
Todd Campbell has no position in any of the stocks mentioned. His clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.