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Product revenue for 2025 was impacted by approximately $5.7 million of inventory build at our specialty pharmacies and specialty distributors. Royalty revenue was $15.6 million in 2025, compared to $2.6 million in Q3 2025 and $4.7 million in Q4 2024. We reported 3,298 bottles of NERLYNX sold in 2025, an increase of 349 from the 2,949 bottles sold in Q3 2025. In Q4 2025, we estimate that inventory increased by approximately 343 bottles. Q4 2025 new prescriptions were down approximately 11.4% compared to Q3 2025, and total prescriptions were up approximately 1.4% compared to Q3 2025. Roger will provide additional details in his comments and slides.
I will now provide a clinical review of the quarter and then Heather Blaber and Roger Storms will add additional color on NERLYNX commercial activities. Maximo F. Nougues will follow with highlights of the key components of our financial statements for 2025. As investors are aware, Puma Biotechnology, Inc. currently has two ongoing Phase 2 trials of alisertib. One is the ELISCA BREAST-1 trial, a Phase 2 trial of alisertib in combination with endocrine treatment in patients with HER2-negative, hormone receptor-positive, recurrent or metastatic breast cancer, and number two, ELISCA LUNG-1, a Phase 2 trial looking at efficacy of alisertib monotherapy in patients with small cell lung cancer.
As a reminder, the ELISCA BREAST-1 trial investigates alisertib in combination with endocrine treatment consisting of either anastrozole, exemestane, letrozole, fulvestrant, or tamoxifen in patients with HER2-negative, hormone receptor-positive, recurrent or metastatic breast cancer. Patients must be chemotherapy naive in the recurrent or metastatic setting, have had prior treatment with a CDK4/6 inhibitor, and received at least two prior lines of endocrine therapy in the recurrent or metastatic setting to be eligible for the trial. Patients are being dosed with alisertib at either 30, 40, or 50 milligrams twice daily (BID) on days 1–3, 8–10, and 15–17 on a 28-day cycle, in combination with the endocrine therapy of the investigator’s choice.
Patients must not have been previously treated with the endocrine treatment in the metastatic setting that will be given in combination with alisertib in the trial. The primary endpoint for the trial includes objective response rate, duration of response, disease control rate, and progression-free survival. As a secondary objective, the company will be evaluating each of these efficacy endpoints within biomarker subgroups in order to determine whether any biomarker subgroup correlates with better activity, as has been seen in preclinical and clinical studies in other cancers including breast and small cell lung cancer.
Depending on the outcome of the data, the company will then look to focus the future clinical development of alisertib in combination with endocrine therapy in patients with HER2-negative, hormone receptor-positive breast cancer in these biomarker-specific patient populations or in the broader population of interest.
The trial was initiated in late November 2024. There are currently 35 sites in the U.S. and 18 sites in Europe that have been activated for the trial, and the trial is enrolling ahead of expectations. The trial was originally designed to enroll 150 patients and was originally anticipated to achieve full enrollment in December 2026. As we have previously reported, enrollment in the trial has occurred faster than expected, and we therefore reached 150 patients enrolled in February 2026. There are currently 164 patients enrolled in the trial, and 15 additional patients in screening. Screening in the study is now closed. We anticipate that the interim data from this trial will be available in 2026.
Per the study protocol, the interim safety and efficacy analysis will be done after approximately 75 patients have been randomized and have completed at least two tumor assessments or have documented disease progression or death.
With respect to ELISCA LUNG-1, as investors are aware, Puma Biotechnology, Inc. has an ongoing Phase 2 study of our investigational drug alisertib to investigate the efficacy of alisertib monotherapy in patients with small cell lung cancer and to specifically look at the efficacy of the drug in patients with biomarkers where the aurora kinase pathway plays a role. The goal is to correlate the efficacy in these biomarker subgroups in the ELISCA LUNG-1 study to the efficacy that was previously seen in the biomarker subgroups on the randomized trial of paclitaxel plus alisertib versus paclitaxel plus placebo that was published in the Journal of Thoracic Oncology in 2020.
In that randomized trial, a progression-free survival benefit and overall survival benefit was seen in patients with biomarkers that correlate with the aurora kinase pathway. If the efficacy and biomarker data are comparable from the two studies, the company would look to engage the FDA to discuss the regulatory path further. As discussed on the recent earnings call, the company believes that the data obtained to date in the ELISCA LUNG-1 study is providing a preliminary indication of potentially better activity in patients with biomarkers where the aurora kinase pathway plays a role.
The most recent analysis of pharmacokinetic data from ELISCA LUNG-1 suggests that we are seeing lower PK of alisertib in the ELISCA LUNG-1 trial compared to the previous Phase 2 study of alisertib monotherapy in small cell lung cancer patients that was published in Lancet Oncology. The company amended the protocol for the trial to increase the dose of alisertib from 50 mg BID to 60 mg BID, which the company believes will increase the PK of the drug to levels closer to what was seen in the prior Phase 2. The company is currently enrolling patients at the 60 mg dose.
There are currently 79 patients enrolled in the trial, with 27 of these enrolled at the 60 mg BID dose, and an additional three patients in screening. Based on the preliminary review of the data from the 60 mg cohorts, the company believes that safety of the 60 mg dose is acceptable. The company is in the process of submitting a protocol amendment to the FDA to increase the dose to 70 mg on the trial. Separately, Puma Biotechnology, Inc. also plans to initiate a second trial of alisertib in small cell lung cancer. The drug will be given in combination with paclitaxel, similar to the previously mentioned trial that was published in the Journal of Thoracic Oncology.
The company will provide investors with further information on this trial in the future. The company anticipates that it will have additional interim data from the ELISCA LUNG-1 study in 2026. As per the trial protocol, this interim analysis will include safety and efficacy data for approximately 60 patients that have been enrolled in the trial and have completed at least two tumor assessments or have documented disease progression or death.
As mentioned on prior earnings calls and in response to investor questions, Puma Biotechnology, Inc. continues to evaluate several drugs to potentially in-license or acquire, which would allow the company to diversify itself and leverage the company’s existing R&D, regulatory, and commercial infrastructure. The company will keep investors updated on this as it progresses. I will now turn the call over to Heather Blaber for an update on our marketing initiatives. Roger Storms will follow with a review of our commercial performance during the quarter.
Heather Blaber: Thanks, Alan. I appreciate the opportunity to share some additional insights into our marketing strategy. The marketing team is focused on creating awareness of both clinical data for NERLYNX as well as reinforcing the continued unmet need in HER2-positive early-stage breast cancer after adjuvant therapy. We continue to invest in market research to help us better understand and validate the most effective ways to communicate this data with healthcare professionals through both personal and non-personal promotion. Our strategy is focused on increasing awareness of our dual indication in HER2-positive breast cancer. We believe NERLYNX plays an important role in the early stage by reducing the risk of recurrence, and in the metastatic setting by helping protect against progression.
Not only do physicians who have experience with NERLYNX continue to identify appropriate patients, we continue to adopt new prescribers year over year who recognize the unmet need and how NERLYNX can help their patients. In summary, we are excited about the potential to engage with more oncologists and support their patients diagnosed with HER2-positive breast cancer. I will now turn the call over to Roger Storms to provide an overview on the commercial performance for the fourth quarter.
Roger Storms: Thank you, Heather, and thanks to everyone for joining our fourth quarter earnings call. Before I move into the commercial review, just a reminder that I will be making forward-looking statements. The sales team remains focused on expanding overall HCP reach and frequency with a strong emphasis on driving engagements when treatment decisions are being made. Q4 2025 call activity increased 23% year over year and decreased 13% quarter over quarter. The year-over-year increase is a direct result of continued emphasis put on executional excellence and increased field accountability, and the quarter-over-quarter decrease was due to an increased number of vacant territories as well as fewer opportunities with HCPs due to the holidays.
We expect call activity to continue to improve as we fill vacancies. The commercial team continues to prioritize increasing use of NERLYNX, with the main focus on patients at higher risk of recurrence. We are also dedicated to enhancing clinical education and engaging through non-personal promotional efforts as well as utilizing patient resources to support persistence and compliance during NERLYNX therapy.
Let me now transition to some of the commercial slides, where I will provide some additional specifics around performance. Slide three is an illustration of our distribution model, which is broken out into the specialty pharmacy (SP) channel and the specialty distributor or in-office dispensing (SD) channel. In regards to the overall distribution of our business, in Q4 2025 about 63% of our business was purchased through the SP channel and the remaining 37% was purchased through the SD channel. We continue to see stronger growth in the SD channel driven by two main factors: one, increased sales in the Group Purchasing Organizations (GPO) segment, and two, increasing 340B purchasing.
Turning to slide four. NERLYNX net product revenue in Q4 2025 was $59.9 million, which represents an increase of $8.0 million from the $51.9 million we reported in Q3 2025, and an increase of $5.5 million from the $54.4 million we reported in 2024. As a reminder to investors, Puma Biotechnology, Inc.’s reported NERLYNX sales include both U.S. net sales of NERLYNX and product supply revenues of NERLYNX to Puma Biotechnology, Inc.’s ex-U.S. partners. Please note that in Q4 2024, we reported product supply revenue to our international partners of about $0.84 million versus $4.7 million in 2025. Therefore, U.S. net sales of NERLYNX in Q4 2025 were $55.2 million versus $53.5 million in 2024.
I will provide some more details around inventory changes, and Maximo will provide some additional specifics around gross-to-net expenses during his update. In Q4 2025, we estimate that inventory increased by about $5.7 million. As a comparator, we estimate that inventory increased by about $3.1 million in 2025, and increased by about $3.7 million in 2024.
Slide five shows Q4 2025 ex-factory bottle sales and also provides a year-over-year and quarter-over-quarter comparison. In Q4 2025, NERLYNX ex-factory bottle sales were 3,298, representing an approximate 12% increase quarter over quarter and an 11% increase year over year. Inventory declined for the first two quarters but increased in 2025 and 2025. Similar to the prior slide, let me specifically call out the inventory changes from a bottle perspective. In Q4 2025, we estimate that inventory increased 343 bottles. As a comparator, we estimate that inventory increased by 182 bottles in 2025 and increased by 205 bottles in 2024.
Let me take a moment to provide some additional metrics regarding our fourth quarter performance. In Q4, we saw enrollments decline by about 5% quarter over quarter and decline by about 3% year over year. New patient starts, or NRx, followed a similar pattern, declining approximately 11% quarter over quarter and declining about 6% year over year. Turning to total prescriptions, or TRx, we saw TRx increase about 2% quarter over quarter and decline about 6% year over year. Finally, let me share some specifics around demand. In Q4 2025, we saw demand increase by about 7% quarter over quarter and about 7% year over year.
As mentioned earlier, we have seen stronger demand growth in the SD channel, where we saw SD grow by about 17% quarter over quarter and about 46% year over year.
Slide six highlights the quarterly adoption of dose escalation since the launch of NERLYNX. In Q4 2025, approximately 75% of patients started NERLYNX at a reduced dose. This is lower compared to the 77% we reported in 2025. Continued messaging and adoption of dose escalation remains an important commercial priority. Patients who start on NERLYNX utilizing dose escalation have better persistence and compliance. We believe dose escalation, coupled with patient education resources, gives patients better support throughout their NERLYNX therapy and ultimately helps them reduce the risk of recurrence.
Slide seven highlights the strategic collaboration we have formed across the globe. In 2025, NERLYNX was launched in Algeria in the extended adjuvant setting. Most recently, in 2026, NERLYNX was launched in Thailand, also in the extended adjuvant setting. We really appreciate the excellent work being done by our partners around the world and look forward to supporting their continued success moving forward. I will close by sharing my sincere appreciation for the entire Puma Biotechnology, Inc. team and their steadfast commitment to supporting patients and families affected by breast cancer. This disease is truly devastating and, while meaningful progress has been made, we know there is still important work ahead and even more we can accomplish together.
I will now turn the call over to Maximo for a review of our financial results.
Maximo F. Nougues: Thanks, Roger. I will begin with a brief summary of our financial results for 2025. Please note that I will make comparisons to Q3 2025, which we believe is a better indication of our progress as a commercial company, and year-over-year comparisons. For more information, I recommend that you refer to our 2025 10-K, which will be filed today and includes our consolidated financial statements. For 2025, we reported net income based on GAAP of $13.4 million, or $0.20 per basic share and $0.26 per diluted share. This compares to net income in Q3 2025 of $8.8 million, or $0.18 per basic share and $0.17 per diluted share.
2025 included a net change in valuation allowance that unfavorably impacted net income by $3.2 million. On a non-GAAP basis, which is adjusted to remove the impact of stock-based compensation expense, we reported net income of $15.1 million, or $0.30 per basic share and $0.29 per diluted share for 2025.
Gross revenue from NERLYNX sales was $82.9 million in Q4 2025 and $70.0 million in Q3 2025. As Alan mentioned, net product revenue from NERLYNX sales was $59.9 million, an increase from the $51.9 million reported in Q3 2025 and an increase versus the $54.4 million reported in Q4 2024. As a reminder to investors, Puma Biotechnology, Inc.’s reported NERLYNX sales include both U.S. net sales of NERLYNX and product supply revenue of NERLYNX to Puma Biotechnology, Inc.’s ex-U.S. partners. Please note that in Q4 2025, we reported product supply revenue to our international partners of about $4.7 million; therefore, U.S. net sales of NERLYNX in Q4 2025 were $55.2 million versus $51.8 million in Q3 2025.
The increase in Q4 2025 net revenue versus Q3 2025 was driven primarily by an increase in NERLYNX demand and inventory build of $5.7 million, offset by higher gross-to-net expense. Royalty revenue totaled $15.0 million in 2025, compared to $2.6 million in Q3 2025. The increase in royalty was driven by the shipment to our partner in China.
Our gross-to-net adjustment in Q4 2025 was about 27.8%, versus 25.9% in Q3 2025. The increase in gross-to-net was driven mostly by higher Medicare and Medicaid share and higher government chargebacks. Cost of sales for Q4 2025 was $23.2 million and includes $2.4 million for the amortization of intangible assets related to our neratinib license. Cost of sales for Q3 2025 was $12.2 million. Going forward, we will continue to recognize amortization of milestones to the licensor of about $2.4 million per quarter as cost of sales.
For fiscal year 2026, Puma Biotechnology, Inc. anticipates that net NERLYNX product revenue will be in the range of $194 million to $198 million. We also anticipate that our gross-to-net adjustment for the full year 2026 will be between 27.5% and 28.5%, significantly higher than 2025, as we expect high government chargebacks on Medicare and Medicaid share to maintain at the same levels we saw in the last quarters of 2025. In addition, for fiscal year 2025, we anticipate receiving royalties from our partners around the world in the range of $20 million to $23 million. We expect no license revenue in 2025.
We also expect that net income for the full year will be in the range of $10 million to $13 million. The current guidance does not include any potential release of any additional tax asset valuation allowance in our net income estimate. The company is reviewing its deferred tax assets as part of its ongoing tax valuation analysis and has not yet determined whether any adjustments will be required or, if so, the potential timing or size of such an adjustment. We will continue to keep investors updated as this progresses.
At this time, we do not believe that tariffs imposed or proposed to be imposed by the United States, particularly with other countries, will have a material impact on our product cost or results of operations. However, shifts in trade policies in the United States and other countries have been rapidly evolving and are difficult to predict. As a point of reference, our manufacturing product cost accounts for a mid- to high-single-digit percentage of our total cost of goods sold.
We anticipate that for Q1 2026, NERLYNX product revenue, net, will be in the range of $36 million to $39 million. Please note that the Q1 net product revenue is usually the lowest quarter of the year, as we often see inventory burn-off from our distribution channel. We expect Q1 royalty revenue will be in the range of $2 million to $3 million, and no license revenue. We further estimate that the gross-to-net adjustment in Q1 2026 will be approximately 29.5% to 30.5%. Puma Biotechnology, Inc. anticipates a Q1 net loss of between $8 million and $10 million.
SG&A expenses were $18.4 million in 2025, compared to $16.8 million in the third quarter. SG&A expenses included non-cash charges for stock-based compensation of $1.0 million for Q4 and $1.1 million for Q3 2025. Research and development expenses were $16.8 million in 2025 and $15.9 million in the third quarter. R&D expenses included non-cash charges for stock-based compensation of $0.7 million in 2025, unchanged from the third quarter.
On the expense side, Puma Biotechnology, Inc. anticipates higher operating expenses in 2026 compared to 2025. More specifically, we anticipate SG&A expenses to increase by 3% to 5% and R&D expenses to increase by 30% to 35% year over year. The higher increase in R&D is driven by the progress of our clinical trials.
In 2025, Puma Biotechnology, Inc. reported cash burn of approximately $3.1 million. This compares to cash burn of approximately $1.6 million in Q3. Please note that during Q4, we made our seventh quarterly principal loan payment of $11.1 million related to our obligation with Athyrium. As a result of this, our total outstanding principal debt balance decreased to approximately $22 million. At 12/31/2025, we had approximately $97.5 million in cash, cash equivalents, and marketable securities, versus about $101 million at year end 2024. Our accounts receivable balance was $53.7 million. Our accounts receivable terms range between 10 and 68 days, while our days sales outstanding are about 48 days.
We estimate that as of 12/31/2025, our distribution network maintained approximately 4.5 weeks of inventory. Overall, we continue to deploy our resources to focus on the commercialization of NERLYNX, the development of alisertib, and controlling our expenses.
Alan Auerbach: Thanks, Maximo. On past earnings calls, we have stressed that Puma Biotechnology, Inc.’s senior management, in cooperation with the Board of Directors, continues to remain focused on NERLYNX sales trends and recognizes its fiscal responsibility to shareholders to continue to maintain positive net income. We are pleased to achieve positive net income for the full year 2025, which marks the third consecutive year of profitability for the company. We believe that the positive net income that the company is guiding to for the full year 2026 is resulting from continued financial discipline across the company over the last few years.
The company remains committed to continuing to achieve this positive net income and will continue to reduce expenses if needed to achieve this. We look forward to updating investors on this in the future. There continues to remain a significant unmet need for patients battling breast cancer, lung cancer, and other solid tumors. At Puma Biotechnology, Inc., we are committed and passionate about finding more effective ways of 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 call back to the operator for Q&A.
Sherry: Tone will indicate your line is in the question queue. We will now open for questions. Our first question is from Salvator Caruso with TD Cowen. Please proceed.
Salvator Caruso: Hi. This is Salvator Caruso on behalf of Marc Frahm over at TD Cowen. Great presentation. Just one quick question. Can you maybe speak to some of the dynamics around the inventory build in the fourth quarter as well as how it relates to builds in previous quarters? Is there any sort of overall trend that you are starting to see and what can we expect going forward?
Alan Auerbach: Salvator, this is Alan. We tend to always see an inventory build at the end of the year, especially in the fourth quarter. This has been since launch. A lot of the reason for that is that there is an assumption that you are going to take a price increase at the beginning of the year, so we perceive the reason they are doing that is to buy before you do the price increase. Maximo, if you want to speak to a little more of the logistics there?
Maximo F. Nougues: Yes. As Alan mentioned, we usually see that in Q4, and that is what we called out in terms of the increase that we saw in terms of the number of units on the net product sales in the U.S. We also, when we provide guidance for Q1, usually see a decrease or the burn-off of that inventory. Thus, our Q1 guidance is usually on the lower end in terms of the by-quarter comparison.
Alan Auerbach: Yes. So what we usually see is the inventory build-up in Q4, and it burns off in the first quarter. We are in year nine of launch here, so we have a lot of history. We saw the inventory burn-off. We see the inventory build-up in Q4, and it burns off in the first quarter. Thank you.
Sherry: This concludes our question-and-answer session. I would like to turn the conference back over to Mariann Ohanesian for closing remarks.
Mariann Ohanesian: Thank you all for joining us today. As a reminder, this call may be accessed via replay of the webcast at pumabiotechnology.com beginning later today. Have a good evening. Thank you.
Sherry: This does conclude today’s conference. You may disconnect at this time, and thank you for your participation.
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Puma Biotech (PBYI) Earnings Call Transcript was originally published by The Motley Fool