PBYI Stock Nosedives: Puma Biotechnology’s Nerlynx Revenue Falls

PBYI stock

PBYI stock is the biggest loser in the biotech sector after Puma Biotechnology Inc. (NASDAQ:PBYI) reported disappointing revenue for its only commercial product, Nerlynx. Nevertheless, the company posted improved loss and revenue for the fiscal first quarter.

Nerlynx’s Revenue Spooks Investors

The biggest disappointment for PBYI stock investors is the company’s lower revenue for Nerlynx, compared to the previous quarter.

Puma Biotechnology reported a total revenue increase to $99 million, up from $67 million a year ago. The revenue was driven by Nerlynx sales, which is PBYI’s first commercial product. In Q1 2019, net revenue from Nerlynx was $45.6 million, down $15.5 million sequentially.

PBYI experienced lower than expected net product revenue in the quarter as a result of the increase in expenses. The decline is also attributed to an increase in the number of patients discontinuing Nerlynx treatment.

In the fourth quarter earnings call, management announced a sales estimates of $255 million–280 million for FY2019, so a downward revision is possible.

In the first quarter of 2019, PBYI reported a net loss of $10.1 million or 26 cents a share, improved from a year-ago net loss of $24.3 million or 65 cents per share. In Q1 2019, on an adjusted basis, the company reported a loss of 26 cents a share, ahead of the Zacks Consensus Estimate of a loss of 69 cents a share.

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PBYI Stock Decline

Following the announcement of an exclusive license agreement for Nerlynx in Europe in April, PBYI stock dropped 17.2%. PBYI investors were generally not pleased with the terms of the agreement in what is seen to be the drug’s second most important market.

The company received $60 million upfront and is likely to increase to $345 million. PBYI will also receive considerable double-digit royalties, but this was not considered good enough for Wall Street.

In its defense, Puma Biotechnology stated that the European licensing agreement was better compared to the other global deals it has had up to date. The upfront payment of $60 million was its largest yet, topping the $40 million the company received from CANbridge Pharmaceuticals for its distribution rights in Taiwan, China, and Hong Kong.

PBYI stock is down 38%, now selling at $18.63. Moreover, the stock has lost over 45% from its March peak price of $42.

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