10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 001-35703

PUMA BIOTECHNOLOGY, INC.

(Exact name of registrant as specified in its charter)

Delaware	77-0683487
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

10880 Wilshire Boulevard, Suite 2150, Los Angeles, CA 90024

(Address of principal executive offices) (Zip code)

(424) 248-6500

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 28,689,304 shares of Common Stock, par value $0.0001 per share, were outstanding as of November 7, 2013.

PUMA BIOTECHNOLOGY, INC.

- INDEX -

		Page
PART I – FINANCIAL INFORMATION:
Item 1.	Financial Statements:		1
	Condensed Consolidated Balance Sheets as of September 30, 2013 (Unaudited) and December 31, 2012		1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2013 and 2012, and from September 15, 2010 (Date of Inception) to September 30, 2013 (Unaudited)		2
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2013 and 2012, and from September 15, 2010 (Date of Inception) to September 30, 2013 (Unaudited)		3
	Condensed Consolidated Statements of Stockholders’ Equity for the Period from September 15, 2010 (Date of Inception) through September 30, 2013 (Unaudited)		4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2013 and 2012 and from September 15, 2010 (Date of Inception) to September 30, 2013 (Unaudited)		5
	Notes to Condensed Consolidated Financial Statements		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		22
Item 4.	Controls and Procedures		23
PART II – OTHER INFORMATION:
Item 1.	Legal Proceedings		24
Item 1A.	Risk Factors		24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		24
Item 3.	Defaults Upon Senior Securities		24
Item 4.	Mine Safety Disclosures		24
Item 5.	Other Information		24
Item 6.	Exhibits		25
Signatures			26

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward looking. These forward-looking statements include, but are not limited to, statements about:

• the development of our drug candidates, including when we expect to undertake, initiate and complete clinical trials of our product candidates;

• the regulatory approval of our drug candidates;

• our use of clinical research organizations and other contractors;

• our ability to find collaborative partners for research, development and commercialization of potential products;

• our ability to market any of our products;

• our history of operating losses;

• our expectations regarding our costs and expenses;

• our anticipated capital requirements and estimates regarding our needs for additional financing;

• our ability to compete against other companies and research institutions;

• our ability to secure adequate protection for our intellectual property;

• our ability to attract and retain key personnel; and

• our ability to obtain adequate financing.

These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend” and similar words or phrases. Accordingly, these statements involve estimates, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them. Discussions containing these forward-looking statements may be found throughout this Quarterly Report on Form 10-Q, including, in Part I, the section entitled “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These forward-looking statements involve risks and uncertainties, including the risks discussed in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2012, that could cause our actual results to differ materially from those in the forward-looking statements. Such risks should be considered in evaluating our prospects and future financial performance. We undertake no obligation to update the forward-looking statements or to reflect events or circumstances after the date of this document.

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	September 30,			December 31,
	2013			2012
	(unaudited)			(Note 1)
ASSETS
Current assets:
Cash and cash equivalents	$	51,261		$	137,408
Marketable securities		44,377			—
Licensor receivable		11,294			10,612
Prepaid expenses and other assets		3,644			952
Total current assets		110,576			148,972
Property and equipment, net		1,619			1,479
Deposits		1,701			36
Restricted cash		1,213			1,212
Total assets	$	115,109		$	151,699
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	9,730		$	482
Accrued expenses		9,496			21,219
Total current liabilities		19,226			21,701
Deferred rent		1,123			1,089
Total liabilities		20,349			22,790
Stockholders’ equity:
Common stock - $.0001 par value; 100,000,000 shares authorized; 28,689,304 issued and outstanding at September 30, 2013 and 28,676,666 issued and outstanding at December 31, 2012		3			3
Additional paid-in capital		218,070			213,498
Accumulated other comprehensive loss		(8	)		—
Deficit accumulated during the development stage		(123,305	)		(84,592	)
Total stockholders’ equity		94,760			128,909
Total liabilities and stockholders’ equity	$	115,109		$	151,699

See accompanying notes to the condensed consolidated financial statements

1

PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except per share data)

(unaudited)

													Period from September 15, 2010
	Three Months Ended						Nine Months Ended						(date of inception) to
	September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012			September 30, 2013
Operating expenses:
General and administrative	$	2,263		$	8,094		$	6,804		$	11,149		$	40,956
Research and development		12,068			17,779			32,040			41,354			82,502
Totals		14,331			25,873			38,844			52,503			123,458
Loss from operations		(14,331	)		(25,873	)		(38,844	)		(52,503	)		(123,458	)
Other income (expenses):
Interest income		9			14			128			63			230
Other income (expense)		39			—			3			—			(77	)
Totals		48			14			131			63			153
Net loss	$	(14,283	)	$	(25,859	)	$	(38,713	)	$	(52,440	)	$	(123,305	)
Net loss applicable to common stock	$	(14,283	)	$	(25,859	)	$	(38,713	)	$	(52,440	)	$	(123,305	)
Net loss per common share—basic and diluted	$	(0.50	)	$	(1.29	)	$	(1.35	)	$	(2.62	)
Weighted-average common shares outstanding—basic and diluted		28,682,055			20,040,000			28,678,439			20,040,000

See accompanying notes to the condensed consolidated financial statements

2

PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)

													Period from
	Three Months Ended						Nine Months Ended						September 15, 2010
	September 30,						September 30,						(date of inception) to
	2013			2012			2013			2012			September 30, 2013
Net loss	$	(14,283	)	$	(25,859	)	$	(38,713	)	$	(52,440	)	$	(123,305	)
Other comprehensive loss
Unrealized loss on available-for-sale securities		66			—			(8	)		—			(8	)
Comprehensive loss	$	(14,217	)	$	(25,859	)	$	(38,721	)	$	(52,440	)	$	(123,313	)

See accompanying notes to the condensed consolidated financial statements

3

PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

THE PERIOD FROM SEPTEMBER 15, 2010 (DATE OF INCEPTION) THROUGH SEPTEMBER 30, 2013

(in thousands, except share data)

(unaudited)

	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Deficit Accumulated During the Development			Total
	Shares		Amount		Capital		Loss			Stage
Balances, beginning		—	$	—	$	—	$	—		$	—		$	—
Common stock issued for cash at $0.0001 per share		4,000,000		—		—		—			—			—
Paid-in capital		—		—		7		—			—			7
Net loss		—		—		—		—			(7	)		(7	)
Balance at December 31, 2010		4,000,000		—		7		—			(7	)		—
Paid-in capital		—		—		61		—			—			61
Issuance of shares of common stock through private placements at $3.75 per share, net of issuance costs		16,000,000		2		56,739		—			—			56,741
Conversion of stockholder’s note payable to equity		40,000		—		150		—			—			150
Stock option compensation		—		—		67		—			—			67
Anti-dilutive warrant		—		—		7,586		—			—			7,586
Net loss		—		—		—		—			(10,233	)		(10,233	)
Balance at December 31, 2011		20,040,000		2		64,610		—			(10,240	)		54,372
Issuance of shares of common stock through equity offering at $16.00 per share, net of issuance costs		8,625,000		1		129,213		—			—			129,214
Stock option compensation		—		—		1,408		—			—			1,408
Anti-dilutive warrant		—		—		18,222		—			—			18,222
Exercises of stock options		11,666		—		45		—			—			45
Net loss		—		—		—		—			(74,352	)		(74,352	)
Balance at December 31, 2012		28,676,666		3		213,498		—			(84,592	)		128,909
Unrealized loss on available for sale securities		—		—		—		(8	)		—			(8	)
Stock option compensation		—		—		4,426		—			—			4,426
Exercises of stock options		12,638		—		146		—			—			146
Net loss		—		—		—		—			(38,713	)		(38,713	)
Balance at September 30, 2013		28,689,304	$	3	$	218,070	$	(8	)	$	(123,305	)	$	94,760

See accompanying notes to the condensed consolidated financial statements

4

PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Nine Months Ended September 30,						Period from September 15, 2010 (date of inception) to September 30,
	2013			2012			2013
Operating activities:
Net loss	$	(38,713	)	$	(52,440	)	$	(123,305	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		298			187			574
Build-out allowance received from landlord		—			237			903
Stock option expense		4,426			820			5,901
Anti-dilutive warrant		—			6,250			25,808
Changes in operating assets and liabilities:
Licensor receivable		(682	)		—			(11,294	)
Prepaid expenses and other assets		(4,357	)		(489	)		(5,345	)
Accounts payable		9,248			931			9,730
Accrued expenses		(11,723	)		25,142			9,496
Accrual of deferred rent		34			159			220
Net cash used in operating activities		(41,469	)		(19,203	)		(87,312	)
Investing activities:
Purchase of property and equipment		(435	)		(437	)		(1,280	)
Expenditures for leasehold improvements		(3	)		(236	)		(913	)
Purchase of marketable securities		(44,385	)		—			(44,385	)
Restricted cash		(1	)		(159	)		(1,213	)
Net cash used in investing activities		(44,824	)		(832	)		(47,791	)
Financing activities:
Proceeds from issuance of stockholder’s convertible note payable		—			—			150
Net proceeds from issuance of common stock		—			—			185,955
Net proceeds from exercise of stock options		146			—			191
Capital contributions by stockholder		—			—			68
Net cash provided by financing activities		146			—			186,364
Net increase (decrease) in cash and cash equivalents		(86,147	)		(20,035	)		51,261
Cash and cash equivalents, beginning of period		137,408			53,382			—
Cash and cash equivalents, end of period	$	51,261		$	33,347		$	51,261
Supplemental disclosures of non-cash investing and financing activities:
Conversion of stockholder’s note payable to common stock	$	—		$	—		$	150

See accompanying notes to the condensed consolidated financial statements

5

PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Business and Basis of Presentation:

Business:

Puma Biotechnology, Inc., or Puma, is a development stage biopharmaceutical company based in Los Angeles, California that acquires and develops innovative products for the treatment of various forms of cancer. References in these Notes to Condensed Consolidated Financial Statements to the “Company” refer to Puma Biotechnology, Inc., a private Delaware company formed on September 15, 2010, for periods prior to the Merger (as defined below), which took place on October 4, 2011, and Puma Biotechnology, Inc., a Delaware company formed on April 27, 2007, and formerly known as Innovative Acquisitions Corp., for periods following the Merger. The Company focuses on in-licensing drug candidates that are undergoing or have already completed initial clinical testing for the treatment of cancer and then seeks to further develop those drug candidates for commercial use.

In November 2012, the Company established and incorporated Puma Biotechnology Ltd, a wholly owned subsidiary, for the sole purpose of serving as Puma’s legal representative in the United Kingdom and the European Union in connection with Puma’s clinical trial activity in those countries.

Basis of Presentation:

The Company is a development stage enterprise since it has not yet generated any revenue from the sale of products and, through September 30, 2013, its primary focus has been the transition of operational responsibility for its lead drug candidate, PB272 (neratinib (oral)), from Pfizer, Inc., or the Licensor, to the Company (see the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, for details of the license agreement) along with the initiation of a Phase III clinical trial in HER2-positive metastatic breast cancer, a Phase II clinical trial in non-small cell lung cancer and a Phase II clinical trial in HER2-mutation positive solid tumors. The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC, for interim financial information. Accordingly, the financial statements do not include all information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the accompanying unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation. Interim operating results are not necessarily indicative of results that may be expected for the year ending December 31, 2013, or for any subsequent period. These unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. The condensed consolidated balance sheet at December 31, 2012, has been derived from the audited financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

The Company has reported a net loss of approximately $14.3 million and $38.8 million and negative cash flows from operations of approximately $12.0 million and $41.5 million for the three and nine months ended September 30, 2013, respectively. The net loss from the date of inception, September 15, 2010, to September 30, 2013, amounted to approximately $123.3 million while the negative cash flows from operations from the date of inception amounted to approximately $87.3 million. Currently, the Company’s negative cash flows from operations are being adversely impacted by a timing difference related to the payment of “cap cost” expenses to vendors and receipt from the Licensor for said expenses (see Note 2—Significant Accounting Policies: Research and Development Reimbursement). Management believes that the Company will continue to incur net losses and negative net cash flows from operating activities through the drug development process.

The Company’s continued operations will depend on its ability to raise funds through various potential sources such as equity and debt financing. Through September 30, 2013, the Company’s financing was primarily through a public offering of Company common stock and private equity placements. Given the current and desired pace of clinical development of its three product candidates, management estimates that the Company has sufficient cash on hand to fund clinical development through 2014 and into 2015. The Company will need additional financing thereafter until it can achieve profitability, if ever. The Company may choose to raise additional capital before 2015 in order to fund its future development activities. There can be no assurance that such capital will be available on favorable terms, or at all, or that any additional capital that the Company is able to obtain will be sufficient to meet its needs. If it is unable to raise additional capital, the Company could likely be forced to curtail desired development activities, which will delay the development of its product candidates.

6

Merger with Public Company:

On September 29, 2011, the Company entered into an agreement and plan of merger, or the Merger Agreement, with Innovative Acquisitions Corp., or IAC, and IAC’s wholly-owned subsidiary, IAC Merger Corporation, or Merger Sub. On October 4, 2011, the Company completed a reverse merger in which Merger Sub merged with and into the Company and the Company became a wholly-owned subsidiary of IAC, or the Merger. At the effective time of the Merger, the Company’s then issued and outstanding 18,666,733 shares of common stock were exchanged for 18,666,733 shares of common stock of IAC and each share of the Company’s common stock that was outstanding immediately prior to the effective time was cancelled, with one share of the Company common stock issued to IAC. Concurrently, IAC redeemed all of its shares from its pre-Merger stockholders in exchange for aggregate consideration of $40,000 paid by the Company. The Company also paid $40,000 for IAC’s professional fees associated with the Merger directly to legal counsel for IAC’s former stockholders. Following the Merger and the redemption, the Company’s prior stockholders owned the same percentage of IAC’s common stock as they held of the Company’s common stock prior to the Merger.

Upon completion of the Merger, the Company merged with and into IAC, and IAC adopted the Company’s business plan and changed its name to “Puma Biotechnology, Inc.” Further, upon completion of the Merger, the existing officers and directors of IAC resigned and the existing officers and directors of the Company were appointed officers and directors of IAC.

The Merger was accounted for as a reverse acquisition, with the Company as the accounting acquirer and IAC as the accounting acquiree. The merger of a private operating company into a non-operating public shell corporation with nominal net assets is considered to be a capital transaction, in substance, rather than a business combination for accounting purposes. Accordingly, the Company treated this transaction as a capital transaction without recording goodwill or adjusting any of its other assets or liabilities. Consideration in the amount of $80,000 paid to the former stockholders of IAC and their attorney was recorded as an other expense item and included in the Company’s net loss for the year ended December 31, 2011.

Note 2—Significant Accounting Policies:

The significant accounting policies followed in the preparation of these condensed consolidated financial statements are as follows:

Use of Estimates:

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and reported amounts of expenses for the period presented. Accordingly, actual results could differ from those estimates. Significant estimates include the cost of services provided by consultants who manage clinical trials and conduct research and clinical trials on behalf of the Company that are billed on a delayed basis. As the actual costs become known, the Company adjusts its estimated cost in that period. The value of stock-based compensation includes estimates based on future events which are difficult to predict. It is at least reasonably possible that a change in the estimates will occur in the near term.

Principles of Consolidation:

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents:

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value.

Licensor Receivable:

Licensor receivable represents external “out of pocket” clinical trial costs in excess of an agreed upon “cap” for clinical trials that were ongoing at the time the licensing agreement with the Licensor was reached. The licensing agreement allows the Company to bill the Licensor for all external “out of pocket” costs in excess of the cap cost on a quarterly basis. The Licensor, per the license agreement, has 60 days to review the invoice and supporting documentation. Licensor receivable includes both invoiced and non-invoiced costs in excess of the cap. The Company has not established a reserve against this receivable (approximately $11.3 million at September 30, 2013).

7

Marketable Securities:

The Company classifies all investment securities (short-term and long-term) as available-for-sale, as the sale of such securities may be required prior to maturity to implement management’s strategies. These securities are carried at fair value, with the unrealized gains and losses, if material, reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis. A decline in the market value of any available-for-sale security below cost that is determined to be other than temporary results in a revaluation of its carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the straight-line method. Interest income is recognized when earned.

Assets Measured at Fair Value on a Recurring Basis:

Accounting Standards Codification, or ASC 820, Fair Value Measurement, provides a single definition of fair value and a common framework for measuring fair value as well as new disclosure requirements for fair value measurements used in financial statements. Under ASC 820, fair value is determined based upon the exit price that would be received by a company to sell an asset or paid by a company to transfer a liability in an orderly transaction between market participants, exclusive of any transaction costs. Fair value measurements are determined by either the principal market or the most advantageous market. The principal market is the market with the greatest level of activity and volume for the asset or liability. Absent a principal market to measure fair value, the Company uses the most advantageous market, which is the market from which the Company would receive the highest selling price for the asset or pay the lowest price to settle the liability, after considering transaction costs. However, when using the most advantageous market, transaction costs are only considered to determine which market is the most advantageous and these costs are then excluded when applying a fair value measurement. ASC 820 creates a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below, with Level 1 having the highest priority and Level 3 having the lowest.

Level 1:	Quoted prices in active markets for identical assets or liabilities.
Level 2:	Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.
Level 3:	Valuations derived from valuation techniques in which one or more significant inputs are unobservable.

Following are the major categories of assets measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012, using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3) (in thousands):

September 30, 2013	Level 1		Level 2		Level 3		Total
Cash equivalents	$	50,584	$	—	$	—	$	50,584
Corporate bonds		—		44,377		—		44,377
Total	$	50,584	$	44,377	$	—	$	94,961
December 31, 2012	Level 1		Level 2		Level 3		Total
Cash equivalents	$	134,867	$	—	$	—	$	134,867
Total	$	134,867	$	—	$	—	$	134,867

The Company’s investments in short-term investment securities are exposed to price fluctuations. The fair value measurements for short-term investment securities are based upon the quoted price in active markets multiplied by the number of securities owned, exclusive of any transaction costs and without any adjustments to reflect discounts that may be applied to selling a large block of securities at one time.

Concentration of Risk:

Financial instruments, which potentially subject the Company to concentrations of credit risk, principally consist of cash and cash equivalents. The Company’s cash and cash equivalents in excess of the Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation insured limits at September 30, 2013, were approximately $52.6 million. The Company does not believe it is exposed to any significant credit risk.

8

Property and Equipment:

Property and equipment are recorded at cost and depreciated over estimated useful lives ranging from three to five years using the straight-line method. Leasehold improvements are recorded at cost and amortized over the shorter of their useful lives or the term of the lease by use of the straight-line method. Maintenance and repair costs are charged to operations as incurred.

The Company assesses the impairment of long-lived assets, primarily property and equipment, whenever events or changes in business circumstances indicate that carrying amounts of the assets may not be fully recoverable. When such events occur, management determines whether there has been impairment by comparing the asset’s carrying value with its fair value, as measured by the anticipated undiscounted net cash flows of the asset. Should impairment exist, the asset is written down to its estimated fair value. The Company has not recognized any impairment losses through September 30, 2013.

Research and Development Expenses:

Research and development expenses are charged to operations as incurred. The major components of research and development costs include clinical manufacturing costs, clinical trial expenses, consulting and other third-party costs, salaries and employee benefits, stock-based compensation expense, supplies and materials, and allocations of various overhead costs. Clinical trial expenses include, but are not limited to, investigator fees, site costs, comparator drug costs, and clinical research organization, or CRO, costs. In the normal course of business, the Company contracts with third parties to perform various clinical trial activities in the ongoing development of potential products. The financial terms of these agreements are subject to negotiation and variations from contract to contract and may result in uneven payment flows. Payments under the contracts depend on factors such as the achievement of certain events, the successful enrollment of patients and the completion of portions of the clinical trial or similar conditions. The Company’s cost accruals for clinical trials are based on estimates of the services received and efforts expended pursuant to contracts with numerous clinical trial sites, cooperative groups and CROs. The objective of the Company’s accrual policy is to match the recording of expenses in the condensed consolidated financial statements to the actual services received and efforts expended. As actual costs become known, the Company adjusts its accruals in that period.

In instances where the Company enters into agreements with third parties for clinical trials and other consulting activities, upfront amounts are recorded to prepaid expenses and deposits in the accompanying condensed consolidated balance sheets and expensed as services are performed or as the underlying goods are delivered. If the Company does not expect the services to be rendered or goods to be delivered, any remaining capitalized amounts for non-refundable upfront payments are charged to expense immediately. Amounts due under such arrangements may be either fixed fee or fee for service, and may include upfront payments, monthly payments and payments upon the completion of milestones or receipt of deliverables.

Costs related to the acquisition of technology rights and patents for which development work is still in process are charged to operations as incurred and considered a component of research and development costs.

Research and Development Reimbursement:

The licensing agreement set a “cap” on the amount of external expenses the Company would incur, beginning January 1, 2012, in completing the clinical trials transferred from the Licensor to the Company. The license agreement stipulates that the Licensor would be responsible for all external expenses associated with the transferred clinical trials and that the Company would invoice for such costs on a quarterly basis. The Licensor has 60 days to review the invoice and supporting documentation. All amounts reimbursed from the Licensor represent charges for services provided by third parties and not the Company. Accordingly, the Company has elected to treat the reimbursed costs as “pass-through” expenses billable to the Licensor and as an offset to research and development expenses. Research and development expenses are recorded net of any excess cap costs billed to the Licensor. The Company recognized approximately $3.4 million and $13.1 million of excess cap costs during the three months and nine months ended September 30, 2013, respectively.

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Stock-Based Compensation:

Stock option awards:

ASC 718, Compensation-Stock Compensation, or ASC 718, requires the fair value of all share-based payments to employees, including grants of stock options, to be recognized in the statement of operations over the requisite service period. Under ASC 718, employee option grants are generally valued at the date of grant, or grant date, and those valuations do not change once they have been established. The fair value of each option award is estimated on the grant date using the Black-Scholes Option Pricing Method. As allowed by ASC 718 for companies with a short period of publicly traded stock history, the Company’s estimate of expected volatility is based on the average expected volatilities of a sampling of five companies with similar attributes to the Company, including industry, stage of life cycle, size and financial leverage. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant valuation. ASC 718 does not allow companies to account for option forfeitures as they occur; instead, estimated option forfeitures must be calculated when the option is granted to reduce the option expense to be recognized over the life of the award and updated upon receipt of further information as to the amount of options expected to be forfeited. Due to its limited history, the Company uses the simplified method to determine the expected life of the option grants.

Warrants:

Warrants granted to employees are normally valued at the fair value of the instrument on the grant date and are recognized in the statement of operations over the requisite service period. When the requisite service period precedes the grant date and a market condition exists in the warrant, the Company values the warrant using the Monte Carlo Simulation Method. When the terms of the warrant become fixed, the Company values the warrant using the Black-Scholes Option Pricing Method. As allowed by ASC 718 for companies with a short period of publicly traded stock history, the Company’s estimate of expected volatility is based on the average volatilities of a sampling of eight to nine companies with similar attributes to the Company, including industry, stage of life cycle, size and financial leverage. The risk-free rate for periods within the contractual life of the warrant is based on the U.S. Treasury yield curve in effect at the time of grant valuation. In determining the value of the warrant until the terms are fixed, the Company factors in the probability of the market condition occurring and several possible scenarios. When the requisite service period precedes the grant date and is deemed to be complete, the Company records the fair value of the warrant at the time of issuance as an equity stock-based compensation transaction. The warrant is revalued each reporting period up to the grant date when the final fair value of the warrant is established and recorded. The grant date is determined when all pertinent information, such as exercise price and quantity, is known.

Net Loss per Common Share:

Basic net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding during the periods presented, as required by ASC 260, Earnings per Share. Diluted earnings per common share are the same as basic earnings per share because the assumed exercise of the Company’s outstanding options are anti-dilutive. For the three and nine months ended September 30, 2013, potentially dilutive securities excluded from the calculations were 2,373,309 shares issuable upon exercise of options and 2,116,250 shares issuable upon exercise of an outstanding warrant. For the three and nine months ended September 30, 2012, potentially dilutive securities excluded from the earnings per common share calculation were 1,422,500 shares issuable upon exercise of options.

Deferred Rent:

The Company has entered into operating lease agreements for its corporate offices in Los Angeles and South San Francisco that contain provisions for future rent increases, leasehold improvement allowances and rent abatements. The Company records monthly rent expense equal to the total of the payments due over the lease term, divided by the number of months of the lease term. The difference between the rent expense recorded and the amount paid is credited or charged to deferred rent, which is reflected as a separate line item in the accompanying condensed consolidated balance sheets. Additionally, the Company recorded as deferred rent the cost of the leasehold improvements paid by the landlord, which is amortized on a straight-line basis over the term of the lease.

Reclassifications:

Certain amounts for 2012 have been reclassified to conform to the current year’s presentation.

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Note 3—Property and Equipment:

Property and equipment consisted of the following (in thousands):

	September 30,			December 31,
	2013			2012
Leasehold improvements	$	913		$	910
Computer equipment		710			535
Telephone equipment		57			34
Furniture and fixtures		513			276
		2,193			1,755
Less: accumulated depreciation and amortization		(574	)		(276	)
Totals	$	1,619		$	1,479

Note 4—Accrued Expenses:

Accrued expenses consisted of the following (in thousands):

	September 30,		December 31,
	2013		2012
Accrued CRO/licensor services	$	5,887	$	19,846
Accrued other clinical development		1,371		389
Accrued legal fees		294		121
Accrued compensation		1,866		787
Other		78		76
	$	9,496	$	21,219

Accrued CRO/licensor services represent the Company’s estimate of such costs as of September 30, 2013, and will be adjusted in the period the actual costs become known. Accrued compensation includes estimated bonus and earned but unused vacation for full-time employees. When actual performance bonuses are paid out to employees on the employee’s anniversary of hire, the bonus expense will be adjusted to reflect the actual expense for the year. Additionally, vacation is accrued at the rate the employee earns vacation and reduced as the vacation is used by the employee.

Note 5—Stockholders’ Equity:

Warrants:

Following a private placement of the Company’s common stock in October 2011, Alan H. Auerbach, the Company’s founder, Chairman, Chief Executive Officer and President, held approximately 21% of the 18,666,733 outstanding shares of the Company’s common stock. Pursuant to the terms of the securities purchase agreement entered into in connection with this private placement, the Company issued an anti-dilutive warrant to Mr. Auerbach, as the Company’s founder. The warrant was issued to provide Mr. Auerbach with the right to maintain ownership of at least 20% of the Company’s common stock in the event that the Company raised capital through the sale of its securities in the future.

The warrant has a ten-year term and became exercisable upon the first subsequent financing, excluding certain types of financings set forth in the warrant, that resulted in gross cash proceeds to the Company of at least $15 million. The warrant’s exercise price equals the price per share in such financing and is exercisable for the number of shares of the Company’s common stock necessary for Mr. Auerbach to maintain ownership of at least 20% of the outstanding shares of Company common stock after such financing. The warrant may be exercised any time up to the ten-year expiration date of October 4, 2021. The Company determined that the warrant had an implied service requisite period in 2011 that was prior to its grant date. The Company also determined that a market condition subsequent to the implied service period exists as the exercise or partial exercise of the warrant could only occur if there is a subsequent financing.

In connection with the closing of a public offering of the Company’s common stock on October 24, 2012, the exercise price and number of shares underlying the warrant issued to Mr. Auerbach were established and, accordingly, the final value of the warrant became fixed. Pursuant to the terms of the warrant, Mr. Auerbach may exercise the warrant to acquire 2,116,250 shares of the Company’s common stock at $16.00 per share until October 4, 2021.

The warrant was valued at approximately $6.9 million at the time of issuance and $7.6 million at December 31, 2011, using the Monte Carlo Simulation Method, as both the exercise price per share and the number of shares were unknown at

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that time, and recorded to the consolidated statements of operations. The warrant was revalued at approximately $13.8 million on September 30, 2012, using the below Monte Carlo Simulation Method. The revaluation resulted in an adjustment to the fair value of approximately $6.5 million and $6.2 million, which was included in general and administrative expense in the accompanying condensed consolidated statement of operations for the three and nine months ended September 30, 2012, respectively.

The fair value of the warrant during the quarter ended September 30, 2012, was determined by the following assumptions using the Monte Carlo Simulation Method:

	September 30, 2012
Common stock price	$	15.00
Dividend yield		0.00	%
Expected volatility		75.70	%
Risk-free interest rate		1.65	%
Warrant term in years		10

The fair value of the warrant at September 30, 2012, was estimated based on an assumption that the Company would complete an equity financing between $86 million and $100 million during October or November 2012. In conjunction with a public offering that closed in October 2012, the warrant was deemed to be granted as the quantity and exercise price of the warrant were determined to be 2,116,250 shares of the Company’s common stock at a price of $16.00 per share.

Once the terms of the warrant became fixed, the fair value of the warrant as of October 24, 2012, using the Black-Scholes Option Pricing Method, was approximately $25.8 million and resulted in an adjustment to the fair value of the warrant of $18.2 million for the year ended December 31, 2012.

Stock-Based Compensation:

The Company’s 2011 Incentive Award Plan, or the 2011 Plan, was adopted by the Board of Directors on September 15, 2011. Pursuant to the 2011 Plan, the Company may grant incentive stock options and nonqualified stock options, as well as other forms of equity-based compensation. Incentive stock options may be granted only to employees, while consultants, employees, officers and directors are eligible for the grant of nonqualified options under the 2011 Plan. The maximum term of stock options granted under the 2011 Plan is 10 years. The exercise price of incentive stock options granted under the 2011 Plan must be at least equal to the fair value of such shares on the date of grant. Through September 30, 2013, a total of 3,529,412 shares of the Company’s common stock have been reserved for issuance under the 2011 Plan.

The fair value of options granted to employees was estimated using the Black-Scholes Option Pricing Method (see Note 2—Significant Accounting Policies) with the following weighted-average assumptions used during the nine months ended September 30, 2013 and 2012:

	Nine Months Ended September 30,
	2013			2012
Dividend yield		0.0	%		0.0	%
Expected volatility		85.4	%		85.4	%
Risk-free interest rate		1.3	%		1.0	%
Expected life in years		5.85			5.82

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Employee stock-based compensation for the three and nine months ended September 30, 2013 and 2012, were as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2013		2012			2013		2012
	(in thousands except per share data)
Stock-based compensation:
Options:
Research and development	$	1,333	$	248		$	3,072	$	530
General and administrative, or G&A		473		101			1,354		290
Warrants: G&A		—		(6,575	)		—		6,250
Total stock-based compensation expense	$	1,806	$	(6,226	)	$	4,426	$	7,070
Impact on basic and diluted net loss per share	$	0.06	$	(0.31	)	$	0.15	$	0.35
Weighted average shares (basic and diluted)		28,682,055		20,040,000			28,678,439		20,040,000

Activity with respect to options granted under the 2011 Plan is summarized as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2012		1,906,334		$	8.93		9.4	$	18,966
Granted during the nine months ended September 30, 2013		499,475			36.80		—		—
Forfeited during the nine months ended September 30, 2013		(19,862	)		11.60		—		—
Exercised during the nine months ended September 30, 2013		(12,638	)		11.60		—		—
Outstanding at September 30, 2013		2,373,309			14.76		8.8	$	90,329
Nonvested at September 30, 2013		1,615,623		$	19.42		9.0	$	64,490
Exercisable at September 30, 2013		757,686		$	4.82		8.4	$	37,007

At September 30, 2013, total estimated unrecognized employee compensation cost related to non-vested stock options granted prior to that date was approximately $19.0 million, which is expected to be recognized over a weighted-average period of 2.4 years. The intrinsic value of stock options exercised during the nine months ended September 30, 2013 was approximately $486,000. The weighted-average grant date fair value of options granted during the nine months ended September 30, 2013 and 2012, was $25.95 per share and $4.63 per share, respectively.

Stock options	Shares			Weighted Average Grant-Date Fair Value
Nonvested shares at December 31, 2012		1,659,399		$	7.03
Granted		499,475			25.95
Vested/Issued		(523,389	)		3.86
Forfeited		(19,862	)		8.12
Nonvested shares at September 30, 2013		1,615,623

Note 6—401(k) Savings Plan:

During 2012, the Company adopted a 401(k) savings plan for the benefit of its employees. The Company is required to make matching contributions to the 401(k) plan equal to 100% of the first 3% of wages deferred by each participating employee and 50% on the next 2% of wages deferred by each participating employee. The Company incurred expenses for employer matching contributions of approximately $97,000 and $200,600 for the three and nine months ended September 30, 2013, respectively. For the three and nine months ended September 30, 2012, the Company incurred expenses for employer matching contributions of approximately $40,800 and $97,400, respectively.

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Note 7—Marketable Securities:

Marketable securities consist primarily of corporate bonds and are classified as “available for sale.” Available for sale securities are reported at fair value based on quoted market prices, with unrealized gains and losses reported in accumulated other comprehensive income (loss) within stockholders’ equity. The cost of a security sold or the amount reclassified out of accumulated other comprehensive income (loss) into earnings is determined using specific identification. The Company may pay a premium or receive a discount upon the purchase of marketable securities. Interest earned and gains/losses realized on marketable securities and amortization of discounts received and accretion of premiums paid on the purchase of marketable securities are included in investment income/expense. The weighted-average maturity of the Company’s current marketable securities as of September 30, 2013 was approximately four months.

Available-for-sale marketable securities consisted of the following (in thousands):

	September 30, 2013
	Adjusted		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
	(In thousands)
Corporate bond investments—Current	$	44,385	$	4	$	(12	)	$	44,377

Note 8 – Subsequent Events:

During October 2013, the Company entered into an agreement with a clinical research organization, or CRO. This CRO will provide services for initiating, managing and conducting a new Phase II clinical trial for patients with HER2-mutated solid tumors using PB272. The Company shall pay the CRO up to approximately $2.2 million over the life of the agreement (approximately 37 months). The Company may cancel the agreement at any time with a 30-day written notice. The Company would be obligated to pay for any services previously rendered, with any prepaid, unused funds returned to the Company.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included in Item 1 in this Quarterly Report on Form 10-Q. The following discussion should also be read in conjunction with our audited financial statements and the notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2012.

Unless otherwise provided in this Quarterly Report, references to the “Company,” “we,” “us,” and “our” refer to Puma Biotechnology, Inc., a Delaware corporation formed on April 27, 2007 and formerly known as Innovative Acquisitions Corp., together with its wholly-owned subsidiary, Puma Biotechnology Ltd, and all references to “Former Puma” refer to Puma Biotechnology, Inc., a privately held Delaware corporation formed on September 15, 2010 that merged with and into us on October 4, 2011. This transaction was accounted for as a reverse acquisition whereby Former Puma was deemed to be the acquirer for accounting and financial reporting purposes and we were deemed to be the acquired party. Consequently, our financial statements prior to the reverse merger transaction reflect the assets and liabilities and the historical operations of Former Puma from its inception on September 15, 2010 through the closing of the reverse merger transaction on October 4, 2011. Our financial statements after completion of the reverse merger transaction include the assets and liabilities of Former Puma and us and the operations of Former Puma and us.

Overview

We are a development-stage biopharmaceutical company based in Los Angeles, California with a focus on the acquisition, development and commercialization of innovative products to enhance cancer care. We aim to acquire proprietary rights to these products, by license or otherwise, fund their research and development and bring the products to market. Our efforts and resources to date have been focused primarily on acquiring and developing our pharmaceutical technologies, raising capital and recruiting personnel. As a development-stage company, we have had no product sales to date and we will have no product sales until we receive approval from the United States Food and Drug Administration, or FDA, or equivalent foreign regulatory bodies to begin selling our pharmaceutical candidates. Developing pharmaceutical products, however, is a lengthy and very expensive process. Assuming we do not encounter any unforeseen safety issues during the course of developing our product candidates, we do not expect to receive approval of a product candidate until approximately 2015.

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We currently license the rights to three drug candidates:

• PB272 (neratinib (oral)), which we are developing for the treatment of advanced breast cancer patients, non-small cell lung cancer patients and patients with HER2 mutation-positive solid tumors;

• PB272 (neratinib (intravenous)), which we are developing for the treatment of advanced cancer patients; and

• PB357, which we believe can serve as a backup compound to PB272 and which we plan to evaluate for further development in 2013.

A large portion of our expenses to date have been related to the clinical development of our lead product candidate, PB272 (neratinib (oral)), and the transition of the neratinib program from Pfizer, Inc., or the Licensor. During this transition period, as we developed our infrastructure and assumed responsibility for the neratinib program, a duplication of effort took place that resulted in higher than normal operating expenses. We estimate the duplication of effort for the three months ended September 30, 2013 had an impact on research and development, or R&D, operating expense of approximately $0.2 million, which consisted mainly of data management and pharmacovigilance. We anticipate these costs to decline through the duration of the clinical trials for PB272 that were ongoing at the time we entered into the license agreement with the Licensor. We refer to these clinical trials as the legacy clinical trials.

The license agreement for PB272 established a limit for our expenses related to the legacy clinical trials. This capped our “out-of-pocket” costs incurred beginning January 1, 2012, in conducting these existing trials. We reached the cost cap during the fourth quarter of 2012 and have recorded a reduction in our R&D expenses, as the Licensor is responsible for such costs. The Licensor will continue to be responsible for these costs until the existing trials are completed. Additionally, our expenses to date have been related to hiring of staff and development of our corporate infrastructure. As we proceed with clinical development of PB272 (neratinib (oral)), and as we further develop PB272 (neratinib (intravenous)) and PB357, our second and third product candidates, respectively, we expect our R&D expenses and expenses related to our third-party contractors will increase.

To the extent we are successful in acquiring additional product candidates for our development pipeline, our need to finance R&D will increase. Accordingly, our success depends not only on the safety and efficacy of our product candidates, but also on our ability to finance product development. Our major sources of working capital have been proceeds from private sales and a public offering of our common stock.

R&D expenses include costs associated with services provided by consultants who conduct clinical services on our behalf, contract organizations for manufacturing of clinical materials, and clinical trials. During the nine months ended September 30, 2013, our R&D expenses consisted primarily of CRO costs, salaries and related personnel costs (including stock-based compensation expenses), and fees paid to other consultants. We expense our R&D costs as they are incurred.

General and administrative, or G&A, expenses consist primarily of salaries and related personnel costs (including stock-based compensation expense), professional fees, business insurance, rent, general legal activities, and other corporate expenses.

Critical Accounting Policies

We believe there have been no material changes to our critical accounting policies and estimates during the nine months ended September 30, 2013, as of the date of filing of this quarterly report, from our accounting policies at December 31, 2012, as reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Emerging Growth Company

We are currently an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. On June 28, 2013, our public float exceeded $700 million. As a result, beginning January 1, 2014, we will begin reporting as a large accelerated filer and will no longer be eligible to rely on the benefits afforded to emerging growth companies under the JOBS Act.

Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. We have irrevocably elected not to avail ourselves of this extended transition period for complying with new or revised accounting standards and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other companies; however, we have elected to take advantage of certain of the reduced disclosure obligations and may elect to take advantage of other reduced burdens in future filings. As a result, the information that we provide to our stockholders may be different from the information that you might receive from other public reporting companies in which you hold equity interests.

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Results of Operations

Three Months Ended September 30, 2013 Compared to Three Months Ended September 30, 2012

General and administrative expenses:

For the three months ended September 30, 2013, G&A expenses were approximately $2.3 million, compared to approximately $8.1 million for the three months ended September 30, 2012. G&A expenses for the three months ended September 30, 2013 and 2012 were as follows:

General and administrative expenses	Three Months Ended September 30,
in thousands ($000)	2013		2012
Professional fees	$	554	$	588
Payroll and related costs		644		511
Facility and equipment costs		290		212
Employee stock-based compensation		473		6,575
Other		302		208
	$	2,263	$	8,094

The decrease in G&A expenses for the three months ended September 30, 2013, compared to the three months ended September 30, 2012, consisted primarily of a decrease in employee stock-based compensation of approximately $6.1 million. During the three months ended September 30, 2012, we recognized approximately $6.6 million in employee stock-based compensation expense that reflected the increase in the value of the outstanding anti-dilutive warrant held by our Chief Executive Officer and President. In October 2012, we closed a public offering of our common stock, which resulted in a final fair value determination for the warrant of $25.8 million. We recognized the increase in the fair value of the warrant, approximately $12 million, in the fourth quarter of 2012. Because the final fair value of the warrant was determined and recognized in 2012, there is no corresponding expense in the three months ended September 30, 2013, and we do not expect the 2012 level of stock-based compensation to repeat in the future. G&A expenses for the three months ended September 30, 2013 compared to the three months ended September 30, 2012, also included an increase in payroll and related costs of approximately $0.1 million due to an increase of two full-time employees. Additionally, facility and equipment costs increased approximately $0.1 million from the increase in our rented square footage for office space as well as the cost of maintaining two office locations. We expect facility and equipment costs should remain at least at comparable levels to the three months ended September 30, 2013 for the remainder of 2013. However, we are currently looking for additional office space to accommodate our increased headcount. While professional fees were consistent for the three months ended September 30, 2013 compared to the three months ended September 30, 2012, we expect an increase going forward as we are no longer eligible for the benefits afforded to emerging growth company under the JOBS Act and as such, are required to be fully compliant with the Sarbanes-Oxley Act, which we expect will increase our professional fees as our independent auditors will evaluate the effectiveness of our internal control over financial reporting.

Research and development expenses:

For the three months ended September 30, 2013, R&D expenses were approximately $12.1 million compared to approximately $17.8 million for the three months ended September 30, 2012. R&D expenses for the three months ended September 30, 2013 and 2012 were as follows:

Research and development expenses	Three Months Ended September 30,
in thousands ($000)	2013		2012
Outside CRO/Licensor services	$	2,972	$	13,626
Outside other clinical development		3,711		1,852
Internal regulatory affairs and quality assurance		1,720		1,083
Internal clinical development		2,132		895
Internal chemical manufacturing		200		75
Employee stock-based compensation		1,333		248
	$	12,068	$	17,779

For the three months ended September 30, 2013, R&D expenses for our lead drug candidate consisted primarily of outside other clinical development costs that increased to approximately $3.7 million for the three months ended September 30, 2013, compared to approximately $1.9 million for the three months ended September 30, 2012. The increase of approximately $1.8 million is primarily due to an increase of approximately $1.4 million related to data management and biostatistics services, an increase of approximately $0.2 million for clinical services and consultants, and an increase of approximately $0.2 million for regulatory affairs and quality assurance. Outside CRO/Licensor services decreased to approximately $3.0 million compared to approximately $13.6 million for the three months ended September 30, 2012. The decrease in outside CRO/Licensor services is due to reaching the clinical trial cost cap in the fourth quarter of 2012 (see Note 2 to the Condensed Consolidated Financial Statements–Significant Accounting Policies: Research and Development Reimbursement). Additionally, Licensor services provided in maintaining and transitioning the legacy clinical trials have

17

decreased dramatically and are expected to cease completely as the legacy trials are completed. Of the approximately $2.9 million in CRO/Licensor expenses incurred in the three months ended September 30, 2013, approximately $0.2 million is related to the Licensor legacy clinical trials with the remaining approximately $2.7 million related to the Company-initiated clinical trials. Because the Company initiated trials began in April 2013, we expect to continue to see an increase in CRO and supporting activities through 2014. The increase in internal regulatory affairs and quality assurance, internal clinical development and internal chemical manufacturing expenses is related to the increase in headcount required to support Company-initiated clinical trials. We expect to continue to hire additional employees focused on R&D activities during 2013 in support of additional Company-initiated clinical trials. The increase in employee stock-based compensation to approximately $1.3 million for the three months ended September 30, 2013, from approximately $0.2 million for the three months ended September 30, 2012, was due to the increase in employee headcount, and additional option grants to existing, eligible employees.

Interest income:

For the three months ended September 30, 2013, we recognized approximately $9,000 in interest income compared to approximately $14,000 for the three months ended September 30, 2012. This decrease in interest income is due to having moved funds from the money market account into short-term investments, such as corporate bonds. Based on market conditions, we placed our excess funds in money market accounts, “high yield” savings accounts and other marketable securities, per our investment policy.

Nine Months Ended September 30, 2013 Compared to Nine Months Ended September 30, 2012

General and administrative expenses:

For the nine months ended September 30, 2013, G&A expenses were approximately $6.8 million compared to approximately $11.1 million for the nine months ended September 30, 2012. G&A expenses for the nine months ended September 30, 2013 and 2012 were as follows:

General and administrative expenses	Nine Months Ended September 30,
in thousands ($000)	2013		2012
Professional fees	$	1,732	$	1,744
Payroll and related costs		1,825		1,505
Facility and equipment costs		929		610
Employee stock-based compensation		1,354		6,540
Other		964		750
	$	6,804	$	11,149

The decrease in G&A expenses for the nine months ended September 30, 2013, compared to the nine months ended September 30, 2012, consisted primarily of a decrease in employee stock-based compensation of approximately $5.2 million. During the nine months ended September 30, 2012, we recognized approximately $6.5 million in employee stock-based compensation expense that reflected the increase in the value of the outstanding anti-dilutive warrant held by our Chief Executive Officer and President. In October 2012, we closed a public offering of our common stock, which resulted in a final fair value determination for the warrant of $25.8 million. We recognized the increase in the fair value of the warrant, approximately $12 million, in the fourth quarter of 2012. Because the final fair value of the warrant was determined and recognized in 2012, there is no corresponding expense in the nine months ended September 30, 2013, and we do not expect the 2012 level of stock-based compensation to repeat in the future. G&A expenses for the nine months ended September 30, 2013, compared to the nine months ended September 30, 2012, also included an increase in payroll and related costs of approximately $0.3 million due to two additional employees hired. Additionally, facility and equipment costs increased approximately $0.3 million from an increase in our rented square footage for office space from approximately 13,250 square feet in the first nine months of 2012 to approximately 24,250 square feet in the first nine months of 2013. We expect facility and equipment costs should remain at least at comparable levels to the nine months ended September 30, 2013. However, we are currently looking for additional office space to accommodate our increased headcount. While professional fees were consistent for the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012, we expect an increase going forward as we are no longer eligible for the benefits afforded to an emerging growth company under the JOBS Act and as such, are required to be fully compliant with the Sarbanes-Oxley Act, which we expect will increase our professional fees as our independent auditors will evaluate the effectiveness of our internal control over financial reporting.

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Research and development expenses: For the nine months ended September 30, 2013, R&D expenses were approximately $32.0 million compared to approximately $41.4 million for the nine months ended September 30, 2012. R&D expenses for the nine months ended September 30, 2013 and 2012 were as follows:

Research and development expenses	Nine Months Ended September 30,
in thousands ($000)	2013		2012
Outside CRO/Licensor services	$	8,801	$	32,069
Outside other clinical development		10,464		2,389
Internal regulatory affairs and quality assurance		4,396		3,603
Internal clinical development		4,886		2,518
Internal chemical manufacturing		421		245
Employee stock-based compensation		3,072		530
	$	32,040	$	41,354

For the nine months ended September 30, 2013, R&D expenses consisted primarily of outside other clinical development costs that increased to approximately $10.5 million for the nine months ended September 30, 2013, compared to approximately $2.4 million for the nine months ended September 30, 2012. The increase of approximately $8.1 million is primarily due to increases of approximately $3.0 million related to chemical manufacturing, such as testing and validation of the active pharmaceutical ingredient of our lead drug candidate, $1.8 million for clinical services and consultants, $1.6 million for data management and biostatistics services, $0.9 million for regulatory and quality assurance and approximately $0.8 million for drug safety and pharmacovigilance services. Outside CRO/Licensor services decreased to approximately $8.8 million compared to approximately $32.1 million for the nine months ended September 30, 2012. This decrease in outside CRO/Licensor services is due to reaching the clinical trial cost cap (see Note 2 to the Condensed Consolidated Financial Statements–Significant Accounting Policies: Research and Development Reimbursement). Additionally, Licensor services provided in maintaining and transitioning the legacy clinical trials have decreased dramatically and are expected to cease completely as the legacy trials are completed. Of the approximately $8.8 million of CRO/Licensor expense in the nine months ended September 30, 2013, approximately $0.5 million is related to the Licensor legacy clinical trials with the remaining approximately $8.3 million related to the Company-initiated clinical trials. Because the Company-initiated trials began in April 2013, we expect to continue to see an increase in CRO and supporting activities through 2014. The increases in internal regulatory affairs and quality assurance, internal clinical development and internal chemical manufacturing expenses are related to the increase in headcount from a limited number of employees during the nine months ended September 30, 2012 to a full staff during the nine months ended September 30, 2013. We expect to continue to hire additional employees focused on R&D activities during 2013 and in 2014. The increase in employee stock-based compensation to approximately $3.1 million for the nine months ended September 30, 2013, from approximately $0.5 million for the nine months ended September 30, 2012, was due to the increase in employee headcount, and additional option grants to existing, eligible employees.

While expenditures on current and future clinical development programs, particularly our PB272 program, are expected to be substantial and to increase, they are subject to many uncertainties, including the results of clinical trials and whether we develop any of our drug candidates with a partner or independently. As a result of such uncertainties, we cannot predict with any significant degree of certainty the duration and completion costs of our research and development projects or whether, when and to what extent we will generate revenues from the commercialization and sale of any of our product candidates. The duration and cost of clinical trials may vary significantly over the life of a project as a result of unanticipated events arising during clinical development and a variety of other factors, including:

• the number of trials and studies in a clinical program;

• the number of patients who participate in the trials;

• the number of sites included in the trials;

• the rates of patient recruitment and enrollment;

• the duration of patient treatment and follow-up;

• the costs of manufacturing our drug candidates; and

• the costs, requirements, timing of, and ability to secure regulatory approvals.

Interest income:

We recognized approximately $128,000 in interest income during the nine months ended September 30, 2013, compared to approximately $62,600 for the nine months ended September 30, 2012. This increase in interest income is due to having a larger total balance resulting from the October 2012 equity placement prior to moving funds from the money market account into short-term investments.

19

Liquidity and Capital Resources

The following table summarizes our liquidity and capital resources as of September 30, 2013, and is intended to supplement the more detailed discussion that follows:

Liquidity and capital resources (in thousands ($000)	September 30, 2013			December 31, 2012
Cash and cash equivalents	$	51,261		$	137,408
Marketable securities		44,377			—
Working capital		91,350			127,271
Stockholders’ equity		94,760			128,909
	Nine Months Ended September 30, 2013			Nine Months Ended September 30, 2012
Cash provided by (used in):
Operating activities	$	(41,469	)	$	(19,203	)
Investing activities		(44,824	)		(832	)
Financing activities		146			—
Increase (decrease) in cash	$	(86,147	)	$	(20,035	)

Operating Activities:

For the nine months ended September 30, 2013 and the nine months ended September 30, 2012, we reported net loss of approximately $38.7 million and $52.4 million, respectively, and cash flows used in operating activities of approximately $41.5 million and $19.2 million, respectively. Our net loss from Former Puma’s date of inception, September 15, 2010, through September 30, 2013 amounted to approximately $123.3 million, while negative cash flow from operating activities amounted to approximately $87.3 million for the same period.

For the nine months ended September 30, 2013, the net cash used in operating activities, noted above, consisted of approximately $38.7 million of net loss excluding non-cash items, an increase in Licensor receivable of approximately $0.7 million and an increase of approximately $4.4 million in prepaid expenses and other assets. Accrued expenses and accounts payable decreased $2.5 million during the nine months ended September 30, 2013, due to the payments made during 2013 mainly related to the Licensor legacy clinical trials. The increase in Licensor receivable (see Note 2—Significant Accounting Policies: Research and Development Reimbursement) represents external charges for services provided by third parties pertaining to the legacy clinical trials. We received payments of approximately $14.6 million (including offsetting amounts to Licensor payables) related to legacy clinical trials from the Licensor. We anticipate continuing to receive payments for the remaining outstanding amounts in accordance with the terms of the license agreement. Per the license agreement, the Licensor has 60 days to review the invoices and supporting documentation. However, the Licensor review process and payment has been taking approximately 90 to 105 days. The increase in prepaid expenses and other assets of approximately $3.9 million reflects advance payments to our CROs and other service providers or suppliers as we ramp up our Phase II and Phase III trials while the remaining $0.5 million relates to insurance and other miscellaneous prepayments.

For the nine months ended September 30, 2012, the net cash used in operating activities, noted above, consisted of approximately $52.4 million of net loss excluding non-cash items, increased by a reduction in accounts payable and accrued expenses of approximately $26.0 million related to charges from transition activities billed to us as we assume clinical trial responsibilities from the Licensor of our lead product candidate. Approximately $4.3 million of accrued expenses represents duplication of effort as the Licensor transferred clinical trial knowledge and responsibility to us.

Investing Activities:

During the nine months ended September 30, 2013, we invested approximately $44.4 million of excess cash in corporate bonds and $0.4 million in the purchase of property and equipment, compared to approximately $0.4 million in the purchase of property and equipment, $0.2 million for leasehold improvements and $0.2 million for a standby letter of credit for our office space lease for the nine months ended September 30, 2012.

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Financing Activities:

During the nine months ended September 30, 2013, we received proceeds from the exercise of stock options of $0.1 million. We did not engage in financing activities for the nine months ended September 30, 2012.

Current and Future Financing Needs:

We have incurred negative cash flow from operations since we started our business. We have spent, and expect to continue to spend, substantial amounts in connection with implementing our business strategy, including our planned product development efforts, our clinical trials and our R&D efforts. Given the current and desired pace of clinical development of our six product candidates, over the next 12 months we estimate that our R&D spending will be approximately $45 million to $55 million, excluding stock-based compensation. We anticipate spending approximately $7 million to $8 million for general and administrative expenses over the next 12 months, excluding stock-based compensation. The actual amount of funds we will need to operate is subject to many factors, some of which are beyond our control.

While we believe that the approximately $95.6 million in cash, cash equivalents and marketable securities and the $11.3 million Licensor receivable as of September 30, 2013, will be sufficient to enable us to meet our anticipated expenditures through 2014 and into 2015, we may seek to obtain additional capital through the sale of debt or equity securities, if necessary, especially in conjunction with opportunistic acquisitions or licensing arrangements. We expect to continue incurring significant losses for the foreseeable future and our continuing operations will depend on whether we are able to raise additional funds through additional equity or debt financing or by entering into a strategic alliance with a third party concerning one or more of our product candidates. Through September 30, 2013, a significant portion of our financing has been through a public offering and private placements of our equity securities. We will continue to fund operations from cash on hand and through the similar sources of capital previously described. We can give no assurances that any additional capital raised will be sufficient to meet our needs. Further, in light of current economic conditions, including the lack of access to the capital markets being experienced by small companies, particularly in our industry, there can be no assurance that such capital will be available to us on favorable terms or at all. If we are unable to raise additional funds in the future, we may be forced to delay or discontinue the development of one or more of our product candidates and forego attractive business opportunities. Any additional sources of financing will likely involve the sale of our equity securities, which will have a dilutive effect on our stockholders.

In addition, we have based our estimate of funding on capital requirements on assumptions that may prove to be wrong. We may need to obtain additional funds sooner than planned or in greater amounts than we currently anticipate. Potential sources of financing include strategic relationships, public or private sales of equity or debt and other sources of funds. We may seek to access the public or private equity markets when conditions are favorable due to our long-term capital requirements. We do not have any committed sources of financing at this time, and it is uncertain whether additional funding will be available when we need it on terms that will be acceptable to us, or at all. If we raise funds by selling additional shares of common stock or other securities convertible into common stock, the ownership interests of our existing stockholders will be diluted. If we are not able to obtain financing when needed, we may be unable to carry out our business plan. As a result, we may have to significantly limit our operations, and our business, financial condition and results of operations would be materially harmed. In such an event, we would be required to undertake a thorough review of our programs, and the opportunities presented by such programs, and allocate our resources in the manner most prudent.

Adjusted Statement of Operations:

The following tables present our operating results, as calculated in accordance with the accounting principles generally accepted in the United States, or GAAP, as adjusted to remove the impact of employee stock-based compensation and the outside CRO/Licensor services and outside clinical development costs associated with the Licensor legacy clinical trials that we are in the process of completing. These non-GAAP financial measures are not, and should not be viewed as, substitutes for GAAP reporting measures. We believe these non-GAAP measures enhance understanding of our financial performance, are more indicative of our operational performance and facilitate a better comparison among fiscal periods. The majority of the cost associated with the Licensor legacy clinical trials related to external costs that we were responsible for but that were subject to a cap. Having reached the cap, the Licensor is responsible for all external costs associated with the legacy clinical trials going forward and we expect to have only limited costs associated with our managing these trials through completion.

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Reconciliation of GAAP and Non-GAAP Financial Information

(in thousands except share and per share data)

	GAAP Measure (Reported) Three Months			Expense Adjustments						Non-GAAP Measure Three Months			GAAP Measure (Reported) Nine Months			Expense Adjustments						Non-GAAP Measure Nine Months
	Ended September 30,			Stock-based			Licensor legacy			Ended September 30,			Ended September 30,			Stock-based			Licensor legacy			Ended September 30,
	2013			compensation			clinical trials			2013			2013			compensation			clinical trials			2013
Operating expense:
General and administrative	$	2,263		$	(473	)	$	—		$	1,790		$	6,804		$	(1,354	)	$	—		$	5,450
Research and development		12,068			(1,333	)		(181	)		10,554			32,040			(3,072	)		(706	)		28,262
Loss from operations		(14,331	)		1,806			181			(12,344	)		(38,844	)		4,426			706			(33,712	)
Other income (expense):
Interest income		9			—			—			9			128			—			—			128
Other expense		39			—			—			39			3			—			—			3
Totals		48			—			—			48			131			—			—			131
Net loss	$	(14,283	)	$	1,806		$	181		$	(12,296	)	$	(38,713	)	$	4,426		$	706		$	(33,581	)
Net loss applicable to common stock	$	(14,283	)	$	1,806		$	181		$	(12,296	)	$	(38,713	)	$	4,426		$	706		$	(33,581	)
Net loss per common share—basic and diluted	$	(0.50	)	$	0.06		$	0.01		$	(0.43	)	$	(1.35	)	$	0.15		$	0.02		$	(1.17	)
Weighted-average common shares outstanding—basic and diluted		28,682,055			28,682,055			28,682,055			28,682,055			28,678,439			28,678,439			28,678,439			28,678,439
	GAAP Measure (Reported) Three Months			Expense adjustments						Non-GAAP Measure Three Months			GAAP Measure (Reported) Nine Months			Expense Adjustments						Non-GAAP Measure Nine Months
	Ended September 30,			Stock-based			Licensor legacy			Ended September 30,			Ended September 30,			Stock-based			Licensor legacy			Ended September 30,
	2012			compensation			clinical trials			2012			2012			compensation			clinical trials			2012
Operating expense:
General and administrative	$	8,094		$	(6,575	)	$	—		$	1,519		$	11,149		$	(6,540	)	$	—		$	4,609
Research and development		17,779			(248	)		(15,459	)		2,072			41,354			(530	)		(33,902	)		6,922
Loss from operations		(25,873	)		6,823			15,459			(3,591	)		(52,503	)		7,070			33,902			(11,531	)
Other income (expense):
Interest income		14			—			—			14			63			—			—			63
Other expense		—			—			—			—			—			—			—			—
Totals		14			—			—			14			63			—			—			63
Net loss	$	(25,859	)	$	6,823		$	15,459		$	(3,577	)	$	(52,440	)	$	7,070		$	33,902		$	(11,468	)
Net loss applicable to common stock	$	(25,859	)	$	6,823		$	15,459		$	(3,577	)	$	(52,440	)	$	7,070		$	33,902		$	(11,468	)
Net loss per common share—basic and diluted	$	(1.29	)	$	0.34		$	0.77		$	(0.18	)	$	(2.62	)	$	0.35		$	1.69		$	(0.58	)
Weighted-average common shares outstanding—basic and diluted		20,040,000			20,040,000			20,040,000			20,040,000			20,040,000			20,040,000			20,040,000			20,040,000

Off-Balance Sheet Arrangements

We do not have any “off-balance sheet agreements,” as defined by SEC regulations.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The primary objective of our investing activities is to preserve principal while maximizing the income we receive from our investments without significantly increasing the risk of loss. Some of the investable securities permitted under our cash management policy may be subject to market risk for changes in interest rates. To mitigate this risk, we maintain a portfolio of cash equivalents and available-for-sale investments in a variety of securities, which may include investment grade

22

commercial paper, money market funds, government debt issued by the United States of America, state debt, certificates of deposit and investment grade corporate debt. Presently, we are exposed to minimal market risks associated with interest rate changes because of the relatively short maturities of our investments and we do not expect interest rate fluctuations to materially affect the aggregate value of our financial instruments. We manage our sensitivity to these risks by maintaining investment grade short-term investments. We do not purchase or hold derivative or commodity instruments or other financial instruments for trading purposes. Additionally, we periodically monitor our investments for adverse material holdings related to the underlying financial solvency of the issuer. As of September 30, 2013, our investments consisted primarily of corporate obligations. Our results of operations and financial condition would not be significantly impacted by either a 10% increase or 10% decrease in interest rates due mainly to the short-term nature of our investment portfolio. We have not used derivative financial instruments in our investment portfolio. Additionally, we do not invest in foreign currencies or other foreign investments.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the timelines specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (the Company’s principal executive officer) and Senior Vice President, Finance and Administration (the Company’s principal financial and accounting officer), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Senior Vice President, Finance and Administration, we have evaluated the effectiveness of our disclosure controls and procedures (as defined under Exchange Act Rule 13a-15(e)), as of September 30, 2013. Based on that evaluation, our Chief Executive Officer and Senior Vice President, Finance and Administration have concluded that these disclosure controls and procedures were effective as of September 30, 2013.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

23

PART II – OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

We are not involved in any material pending legal proceedings. Additionally, we are not aware of any contemplated proceedings against us by any governmental authority.

Item 1A. RISK FACTORS

Under Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012, which was filed with the SEC on April 1, 2013, we identified important factors that could affect our financial performance and could cause our actual results for future periods to differ materially from our anticipated results or other expectations, including those expressed in any forward-looking statements made in this Form 10-Q. There has been no material change in our risk factors subsequent to the filing of our Annual Report. However, the risks described in our Annual Report are not the only risks we face. Additional risks and uncertainties that we currently deem to be immaterial or not currently known to us, as well as other risks reported from time to time in our reports to the SEC, also could cause our actual results to differ materially from our anticipated results or other expectations.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Securities

We did not sell any of our equity securities without registration under the Securities Act of 1933, as amended, during the quarter ended September 30, 2013.

Use of Proceeds from the Sale of Registered Securities

On October 18, 2012, our Registration Statement on Form S-1, as amended (File No. 333-184187), was declared effective for our first registered offering. As a result of the offering, we received net proceeds of approximately $129.2 million. Through September 30, 2013, approximately $26.8 million of the net proceeds from the offering have been used to fund the ongoing clinical programs for our lead drug candidate and for other general corporate purposes. We have invested the unused proceeds from the offering in a variety of capital preservation investments, including money market funds and short-term, investment grade, interest-bearing securities. There has been no material change in our planned use of proceeds from the offering as described in our final prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Neither we nor any “affiliated purchasers” within the definition of Rule 10b-18(a)(3) made any purchases of our equity securities during the quarter ended September 30, 2013.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. OTHER INFORMATION

None.

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Item 6. EXHIBITS

(a) Exhibits required by Item 601 of Regulation S-K.

Exhibit	Description
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

25

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PUMA BIOTECHNOLOGY, INC.
Date: November 12, 2013	By:	/s/ Alan H. Auerbach
		Alan H. Auerbach
		President and Chief Executive Officer
		(Principal Executive Officer)
Date: November 12, 2013	By:	/s/ Charles R. Eyler
		Charles R. Eyler
		Senior Vice President, Finance and Administration and Treasurer
		(Principal Financial and Accounting Officer)

26

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Alan H. Auerbach, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Puma Biotechnology, Inc. for the quarter ended September 30, 2013;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 12, 2013	/s/ Alan H. Auerbach
	Alan H. Auerbach
	Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Charles R. Eyler, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Puma Biotechnology, Inc. for the quarter ended September 30, 2013;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 12, 2013	/s/ Charles R. Eyler
	Charles R. Eyler
	Principal Financial and Accounting Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The following certification is being furnished solely to accompany the Quarterly Report of Puma Biotechnology, Inc. for the quarter ended September 30, 2013 pursuant to 18 U.S.C. § 1350 and in accordance with SEC Release No. 33-8238. This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference in any filing of Puma Biotechnology, Inc. under the Securities Act of 1933, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Certification of Principal Executive Officer

I, Alan H. Auerbach, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Puma Biotechnology, Inc. for the quarter ended September 30, 2013 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of Puma Biotechnology, Inc.

Date: November 12, 2013	/s/ Alan H. Auerbach
	Alan H. Auerbach
	Principal Executive Officer

A signed original of this written statement required by Section 906 has been provided to Puma Biotechnology, Inc. and will be retained by Puma Biotechnology, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The following certification is being furnished solely to accompany the Quarterly Report of Puma Biotechnology, Inc. for the quarter ended September 30, 2013 pursuant to 18 U.S.C. § 1350 and in accordance with SEC Release No. 33-8238. This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference in any filing of Puma Biotechnology, Inc. under the Securities Act of 1933, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Certification of Principal Financial Officer

I, Charles R. Eyler, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Puma Biotechnology, Inc. for the quarter ended September 30, 2013 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of Puma Biotechnology, Inc.

Date: November 12, 2013	/s/ Charles R. Eyler
	Charles R. Eyler
	Principal Financial and Accounting Officer

A signed original of this written statement required by Section 906 has been provided to Puma Biotechnology, Inc. and will be retained by Puma Biotechnology, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2013

Use of Estimates

Use of Estimates:

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and reported amounts of expenses for the period presented. Accordingly, actual results could differ from those estimates. Significant estimates include the cost of services provided by consultants who manage clinical trials and conduct research and clinical trials on behalf of the Company that are billed on a delayed basis. As the actual costs become known, the Company adjusts its estimated cost in that period. The value of stock-based compensation includes estimates based on future events which are difficult to predict. It is at least reasonably possible that a change in the estimates will occur in the near term.

Principles of Consolidation

Principles of Consolidation:

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

Cash and Cash Equivalents:

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value.

Licensor Receivable

Licensor Receivable:

Licensor receivable represents external “out of pocket” clinical trial costs in excess of an agreed upon “cap” for clinical trials that were ongoing at the time the licensing agreement with the Licensor was reached. The licensing agreement allows the Company to bill the Licensor for all external “out of pocket” costs in excess of the cap cost on a quarterly basis. The Licensor, per the license agreement, has 60 days to review the invoice and supporting documentation. Licensor receivable includes both invoiced and non-invoiced costs in excess of the cap. The Company has not established a reserve against this receivable (approximately $11.3 million at September 30, 2013).

Marketable Securities

Marketable Securities:

The Company classifies all investment securities (short-term and long-term) as available-for-sale, as the sale of such securities may be required prior to maturity to implement management’s strategies. These securities are carried at fair value, with the unrealized gains and losses, if material, reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis. A decline in the market value of any available-for-sale security below cost that is determined to be other than temporary results in a revaluation of its carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the straight-line method. Interest income is recognized when earned.

Assets Measured at Fair Value on Recurring Basis

Assets Measured at Fair Value on a Recurring Basis:

Accounting Standards Codification, or ASC 820, Fair Value Measurement, provides a single definition of fair value and a common framework for measuring fair value as well as new disclosure requirements for fair value measurements used in financial statements. Under ASC 820, fair value is determined based upon the exit price that would be received by a company to sell an asset or paid by a company to transfer a liability in an orderly transaction between market participants, exclusive of any transaction costs. Fair value measurements are determined by either the principal market or the most advantageous market. The principal market is the market with the greatest level of activity and volume for the asset or liability. Absent a principal market to measure fair value, the Company uses the most advantageous market, which is the market from which the Company would receive the highest selling price for the asset or pay the lowest price to settle the liability, after considering transaction costs. However, when using the most advantageous market, transaction costs are only considered to determine which market is the most advantageous and these costs are then excluded when applying a fair value measurement. ASC 820 creates a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below, with Level 1 having the highest priority and Level 3 having the lowest.

Level 1:	Quoted prices in active markets for identical assets or liabilities.
Level 2:	Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.
Level 3:	Valuations derived from valuation techniques in which one or more significant inputs are unobservable.

Following are the major categories of assets measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012, using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3) (in thousands):

September 30, 2013	Level 1		Level 2		Level 3		Total
Cash equivalents	$	50,584	$	—	$	—	$	50,584
Corporate bonds		—		44,377		—		44,377
Total	$	50,584	$	44,377	$	—	$	94,961
December 31, 2012	Level 1		Level 2		Level 3		Total
Cash equivalents	$	134,867	$	—	$	—	$	134,867
Total	$	134,867	$	—	$	—	$	134,867

The Company’s investments in short-term investment securities are exposed to price fluctuations. The fair value measurements for short-term investment securities are based upon the quoted price in active markets multiplied by the number of securities owned, exclusive of any transaction costs and without any adjustments to reflect discounts that may be applied to selling a large block of securities at one time.

Concentration of Risk

Concentration of Risk:

Financial instruments, which potentially subject the Company to concentrations of credit risk, principally consist of cash and cash equivalents. The Company’s cash and cash equivalents in excess of the Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation insured limits at September 30, 2013, were approximately $52.6 million. The Company does not believe it is exposed to any significant credit risk.

Property and Equipment

Property and Equipment:

Property and equipment are recorded at cost and depreciated over estimated useful lives ranging from three to five years using the straight-line method. Leasehold improvements are recorded at cost and amortized over the shorter of their useful lives or the term of the lease by use of the straight-line method. Maintenance and repair costs are charged to operations as incurred.

The Company assesses the impairment of long-lived assets, primarily property and equipment, whenever events or changes in business circumstances indicate that carrying amounts of the assets may not be fully recoverable. When such events occur, management determines whether there has been impairment by comparing the asset’s carrying value with its fair value, as measured by the anticipated undiscounted net cash flows of the asset. Should impairment exist, the asset is written down to its estimated fair value. The Company has not recognized any impairment losses through September 30, 2013.

Research and Development Expenses

Research and Development Expenses:

Research and development expenses are charged to operations as incurred. The major components of research and development costs include clinical manufacturing costs, clinical trial expenses, consulting and other third-party costs, salaries and employee benefits, stock-based compensation expense, supplies and materials, and allocations of various overhead costs. Clinical trial expenses include, but are not limited to, investigator fees, site costs, comparator drug costs, and clinical research organization, or CRO, costs. In the normal course of business, the Company contracts with third parties to perform various clinical trial activities in the ongoing development of potential products. The financial terms of these agreements are subject to negotiation and variations from contract to contract and may result in uneven payment flows. Payments under the contracts depend on factors such as the achievement of certain events, the successful enrollment of patients and the completion of portions of the clinical trial or similar conditions. The Company’s cost accruals for clinical trials are based on estimates of the services received and efforts expended pursuant to contracts with numerous clinical trial sites, cooperative groups and CROs. The objective of the Company’s accrual policy is to match the recording of expenses in the condensed consolidated financial statements to the actual services received and efforts expended. As actual costs become known, the Company adjusts its accruals in that period.

In instances where the Company enters into agreements with third parties for clinical trials and other consulting activities, upfront amounts are recorded to prepaid expenses and deposits in the accompanying condensed consolidated balance sheets and expensed as services are performed or as the underlying goods are delivered. If the Company does not expect the services to be rendered or goods to be delivered, any remaining capitalized amounts for non-refundable upfront payments are charged to expense immediately. Amounts due under such arrangements may be either fixed fee or fee for service, and may include upfront payments, monthly payments and payments upon the completion of milestones or receipt of deliverables.

Costs related to the acquisition of technology rights and patents for which development work is still in process are charged to operations as incurred and considered a component of research and development costs.

Research and Development Reimbursement

Research and Development Reimbursement:

The licensing agreement set a “cap” on the amount of external expenses the Company would incur, beginning January 1, 2012, in completing the clinical trials transferred from the Licensor to the Company. The license agreement stipulates that the Licensor would be responsible for all external expenses associated with the transferred clinical trials and that the Company would invoice for such costs on a quarterly basis. The Licensor has 60 days to review the invoice and supporting documentation. All amounts reimbursed from the Licensor represent charges for services provided by third parties and not the Company. Accordingly, the Company has elected to treat the reimbursed costs as “pass-through” expenses billable to the Licensor and as an offset to research and development expenses. Research and development expenses are recorded net of any excess cap costs billed to the Licensor. The Company recognized approximately $3.4 million and $13.1 million of excess cap costs during the three months and nine months ended September 30, 2013, respectively.

Stock-Based Compensation

Stock-Based Compensation:

Stock option awards:

ASC 718, Compensation-Stock Compensation, or ASC 718, requires the fair value of all share-based payments to employees, including grants of stock options, to be recognized in the statement of operations over the requisite service period. Under ASC 718, employee option grants are generally valued at the date of grant, or grant date, and those valuations do not change once they have been established. The fair value of each option award is estimated on the grant date using the Black-Scholes Option Pricing Method. As allowed by ASC 718 for companies with a short period of publicly traded stock history, the Company’s estimate of expected volatility is based on the average expected volatilities of a sampling of five companies with similar attributes to the Company, including industry, stage of life cycle, size and financial leverage. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant valuation. ASC 718 does not allow companies to account for option forfeitures as they occur; instead, estimated option forfeitures must be calculated when the option is granted to reduce the option expense to be recognized over the life of the award and updated upon receipt of further information as to the amount of options expected to be forfeited. Due to its limited history, the Company uses the simplified method to determine the expected life of the option grants.

Warrants:

Warrants granted to employees are normally valued at the fair value of the instrument on the grant date and are recognized in the statement of operations over the requisite service period. When the requisite service period precedes the grant date and a market condition exists in the warrant, the Company values the warrant using the Monte Carlo Simulation Method. When the terms of the warrant become fixed, the Company values the warrant using the Black-Scholes Option Pricing Method. As allowed by ASC 718 for companies with a short period of publicly traded stock history, the Company’s estimate of expected volatility is based on the average volatilities of a sampling of eight to nine companies with similar attributes to the Company, including industry, stage of life cycle, size and financial leverage. The risk-free rate for periods within the contractual life of the warrant is based on the U.S. Treasury yield curve in effect at the time of grant valuation. In determining the value of the warrant until the terms are fixed, the Company factors in the probability of the market condition occurring and several possible scenarios. When the requisite service period precedes the grant date and is deemed to be complete, the Company records the fair value of the warrant at the time of issuance as an equity stock-based compensation transaction. The warrant is revalued each reporting period up to the grant date when the final fair value of the warrant is established and recorded. The grant date is determined when all pertinent information, such as exercise price and quantity, is known.

Net Loss per Common Share

Net Loss per Common Share:

Basic net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding during the periods presented, as required by ASC 260, Earnings per Share. Diluted earnings per common share are the same as basic earnings per share because the assumed exercise of the Company’s outstanding options are anti-dilutive. For the three and nine months ended September 30, 2013, potentially dilutive securities excluded from the calculations were 2,373,309 shares issuable upon exercise of options and 2,116,250 shares issuable upon exercise of an outstanding warrant. For the three and nine months ended September 30, 2012, potentially dilutive securities excluded from the earnings per common share calculation were 1,422,500 shares issuable upon exercise of options.

Deferred Rent

Deferred Rent:

The Company has entered into operating lease agreements for its corporate offices in Los Angeles and South San Francisco that contain provisions for future rent increases, leasehold improvement allowances and rent abatements. The Company records monthly rent expense equal to the total of the payments due over the lease term, divided by the number of months of the lease term. The difference between the rent expense recorded and the amount paid is credited or charged to deferred rent, which is reflected as a separate line item in the accompanying condensed consolidated balance sheets. Additionally, the Company recorded as deferred rent the cost of the leasehold improvements paid by the landlord, which is amortized on a straight-line basis over the term of the lease.

Reclassifications

Reclassifications:

Certain amounts for 2012 have been reclassified to conform to the current year’s presentation.

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Condensed Consolidated Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended		36 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
Operating expenses:
General and administrative	$ 2,263	$ 8,094	$ 6,804	$ 11,149	$ 40,956
Research and development	12,068	17,779	32,040	41,354	82,502
Totals	14,331	25,873	38,844	52,503	123,458
Loss from operations	(14,331)	(25,873)	(38,844)	(52,503)	(123,458)
Other income (expenses):
Interest income	9	14	128	63	230
Other income (expense)	39		3		(77)
Totals	48	14	131	63	153
Net loss	(14,283)	(25,859)	(38,713)	(52,440)	(123,305)
Net loss applicable to common stock	$ (14,283)	$ (25,859)	$ (38,713)	$ (52,440)	$ (123,305)
Net loss per common share-basic and diluted	$ (0.50)	$ (1.29)	$ (1.35)	$ (2.62)
Weighted-average common shares outstanding-basic and diluted	28,682,055	20,040,000	28,678,439	20,040,000

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Significant Accounting Policies

9 Months Ended

Sep. 30, 2013

Significant Accounting Policies

Note 2—Significant Accounting Policies:

The significant accounting policies followed in the preparation of these condensed consolidated financial statements are as follows:

Use of Estimates:

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and reported amounts of expenses for the period presented. Accordingly, actual results could differ from those estimates. Significant estimates include the cost of services provided by consultants who manage clinical trials and conduct research and clinical trials on behalf of the Company that are billed on a delayed basis. As the actual costs become known, the Company adjusts its estimated cost in that period. The value of stock-based compensation includes estimates based on future events which are difficult to predict. It is at least reasonably possible that a change in the estimates will occur in the near term.

Principles of Consolidation:

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents:

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value.

Licensor Receivable:

Licensor receivable represents external “out of pocket” clinical trial costs in excess of an agreed upon “cap” for clinical trials that were ongoing at the time the licensing agreement with the Licensor was reached. The licensing agreement allows the Company to bill the Licensor for all external “out of pocket” costs in excess of the cap cost on a quarterly basis. The Licensor, per the license agreement, has 60 days to review the invoice and supporting documentation. Licensor receivable includes both invoiced and non-invoiced costs in excess of the cap. The Company has not established a reserve against this receivable (approximately $11.3 million at September 30, 2013).

Marketable Securities:

The Company classifies all investment securities (short-term and long-term) as available-for-sale, as the sale of such securities may be required prior to maturity to implement management’s strategies. These securities are carried at fair value, with the unrealized gains and losses, if material, reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis. A decline in the market value of any available-for-sale security below cost that is determined to be other than temporary results in a revaluation of its carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the straight-line method. Interest income is recognized when earned.

Assets Measured at Fair Value on a Recurring Basis:

Accounting Standards Codification, or ASC 820, Fair Value Measurement, provides a single definition of fair value and a common framework for measuring fair value as well as new disclosure requirements for fair value measurements used in financial statements. Under ASC 820, fair value is determined based upon the exit price that would be received by a company to sell an asset or paid by a company to transfer a liability in an orderly transaction between market participants, exclusive of any transaction costs. Fair value measurements are determined by either the principal market or the most advantageous market. The principal market is the market with the greatest level of activity and volume for the asset or liability. Absent a principal market to measure fair value, the Company uses the most advantageous market, which is the market from which the Company would receive the highest selling price for the asset or pay the lowest price to settle the liability, after considering transaction costs. However, when using the most advantageous market, transaction costs are only considered to determine which market is the most advantageous and these costs are then excluded when applying a fair value measurement. ASC 820 creates a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below, with Level 1 having the highest priority and Level 3 having the lowest.

Level 1:	Quoted prices in active markets for identical assets or liabilities.
Level 2:	Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.
Level 3:	Valuations derived from valuation techniques in which one or more significant inputs are unobservable.

Following are the major categories of assets measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012, using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3) (in thousands):

September 30, 2013	Level 1		Level 2		Level 3		Total
Cash equivalents	$	50,584	$	—	$	—	$	50,584
Corporate bonds		—		44,377		—		44,377
Total	$	50,584	$	44,377	$	—	$	94,961
December 31, 2012	Level 1		Level 2		Level 3		Total
Cash equivalents	$	134,867	$	—	$	—	$	134,867
Total	$	134,867	$	—	$	—	$	134,867

The Company’s investments in short-term investment securities are exposed to price fluctuations. The fair value measurements for short-term investment securities are based upon the quoted price in active markets multiplied by the number of securities owned, exclusive of any transaction costs and without any adjustments to reflect discounts that may be applied to selling a large block of securities at one time.

Concentration of Risk:

Financial instruments, which potentially subject the Company to concentrations of credit risk, principally consist of cash and cash equivalents. The Company’s cash and cash equivalents in excess of the Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation insured limits at September 30, 2013, were approximately $52.6 million. The Company does not believe it is exposed to any significant credit risk.

Property and Equipment:

Property and equipment are recorded at cost and depreciated over estimated useful lives ranging from three to five years using the straight-line method. Leasehold improvements are recorded at cost and amortized over the shorter of their useful lives or the term of the lease by use of the straight-line method. Maintenance and repair costs are charged to operations as incurred.

The Company assesses the impairment of long-lived assets, primarily property and equipment, whenever events or changes in business circumstances indicate that carrying amounts of the assets may not be fully recoverable. When such events occur, management determines whether there has been impairment by comparing the asset’s carrying value with its fair value, as measured by the anticipated undiscounted net cash flows of the asset. Should impairment exist, the asset is written down to its estimated fair value. The Company has not recognized any impairment losses through September 30, 2013.

Research and Development Expenses:

Research and development expenses are charged to operations as incurred. The major components of research and development costs include clinical manufacturing costs, clinical trial expenses, consulting and other third-party costs, salaries and employee benefits, stock-based compensation expense, supplies and materials, and allocations of various overhead costs. Clinical trial expenses include, but are not limited to, investigator fees, site costs, comparator drug costs, and clinical research organization, or CRO, costs. In the normal course of business, the Company contracts with third parties to perform various clinical trial activities in the ongoing development of potential products. The financial terms of these agreements are subject to negotiation and variations from contract to contract and may result in uneven payment flows. Payments under the contracts depend on factors such as the achievement of certain events, the successful enrollment of patients and the completion of portions of the clinical trial or similar conditions. The Company’s cost accruals for clinical trials are based on estimates of the services received and efforts expended pursuant to contracts with numerous clinical trial sites, cooperative groups and CROs. The objective of the Company’s accrual policy is to match the recording of expenses in the condensed consolidated financial statements to the actual services received and efforts expended. As actual costs become known, the Company adjusts its accruals in that period.

In instances where the Company enters into agreements with third parties for clinical trials and other consulting activities, upfront amounts are recorded to prepaid expenses and deposits in the accompanying condensed consolidated balance sheets and expensed as services are performed or as the underlying goods are delivered. If the Company does not expect the services to be rendered or goods to be delivered, any remaining capitalized amounts for non-refundable upfront payments are charged to expense immediately. Amounts due under such arrangements may be either fixed fee or fee for service, and may include upfront payments, monthly payments and payments upon the completion of milestones or receipt of deliverables.

Costs related to the acquisition of technology rights and patents for which development work is still in process are charged to operations as incurred and considered a component of research and development costs.

Research and Development Reimbursement:

The licensing agreement set a “cap” on the amount of external expenses the Company would incur, beginning January 1, 2012, in completing the clinical trials transferred from the Licensor to the Company. The license agreement stipulates that the Licensor would be responsible for all external expenses associated with the transferred clinical trials and that the Company would invoice for such costs on a quarterly basis. The Licensor has 60 days to review the invoice and supporting documentation. All amounts reimbursed from the Licensor represent charges for services provided by third parties and not the Company. Accordingly, the Company has elected to treat the reimbursed costs as “pass-through” expenses billable to the Licensor and as an offset to research and development expenses. Research and development expenses are recorded net of any excess cap costs billed to the Licensor. The Company recognized approximately $3.4 million and $13.1 million of excess cap costs during the three months and nine months ended September 30, 2013, respectively.

Stock-Based Compensation:

Stock option awards:

ASC 718, Compensation-Stock Compensation, or ASC 718, requires the fair value of all share-based payments to employees, including grants of stock options, to be recognized in the statement of operations over the requisite service period. Under ASC 718, employee option grants are generally valued at the date of grant, or grant date, and those valuations do not change once they have been established. The fair value of each option award is estimated on the grant date using the Black-Scholes Option Pricing Method. As allowed by ASC 718 for companies with a short period of publicly traded stock history, the Company’s estimate of expected volatility is based on the average expected volatilities of a sampling of five companies with similar attributes to the Company, including industry, stage of life cycle, size and financial leverage. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant valuation. ASC 718 does not allow companies to account for option forfeitures as they occur; instead, estimated option forfeitures must be calculated when the option is granted to reduce the option expense to be recognized over the life of the award and updated upon receipt of further information as to the amount of options expected to be forfeited. Due to its limited history, the Company uses the simplified method to determine the expected life of the option grants.

Warrants:

Warrants granted to employees are normally valued at the fair value of the instrument on the grant date and are recognized in the statement of operations over the requisite service period. When the requisite service period precedes the grant date and a market condition exists in the warrant, the Company values the warrant using the Monte Carlo Simulation Method. When the terms of the warrant become fixed, the Company values the warrant using the Black-Scholes Option Pricing Method. As allowed by ASC 718 for companies with a short period of publicly traded stock history, the Company’s estimate of expected volatility is based on the average volatilities of a sampling of eight to nine companies with similar attributes to the Company, including industry, stage of life cycle, size and financial leverage. The risk-free rate for periods within the contractual life of the warrant is based on the U.S. Treasury yield curve in effect at the time of grant valuation. In determining the value of the warrant until the terms are fixed, the Company factors in the probability of the market condition occurring and several possible scenarios. When the requisite service period precedes the grant date and is deemed to be complete, the Company records the fair value of the warrant at the time of issuance as an equity stock-based compensation transaction. The warrant is revalued each reporting period up to the grant date when the final fair value of the warrant is established and recorded. The grant date is determined when all pertinent information, such as exercise price and quantity, is known.

Net Loss per Common Share:

Basic net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding during the periods presented, as required by ASC 260, Earnings per Share. Diluted earnings per common share are the same as basic earnings per share because the assumed exercise of the Company’s outstanding options are anti-dilutive. For the three and nine months ended September 30, 2013, potentially dilutive securities excluded from the calculations were 2,373,309 shares issuable upon exercise of options and 2,116,250 shares issuable upon exercise of an outstanding warrant. For the three and nine months ended September 30, 2012, potentially dilutive securities excluded from the earnings per common share calculation were 1,422,500 shares issuable upon exercise of options.

Deferred Rent:

The Company has entered into operating lease agreements for its corporate offices in Los Angeles and South San Francisco that contain provisions for future rent increases, leasehold improvement allowances and rent abatements. The Company records monthly rent expense equal to the total of the payments due over the lease term, divided by the number of months of the lease term. The difference between the rent expense recorded and the amount paid is credited or charged to deferred rent, which is reflected as a separate line item in the accompanying condensed consolidated balance sheets. Additionally, the Company recorded as deferred rent the cost of the leasehold improvements paid by the landlord, which is amortized on a straight-line basis over the term of the lease.

Reclassifications:

Certain amounts for 2012 have been reclassified to conform to the current year’s presentation.

XML

Significant Accounting Policies - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Significant Accounting Policies [Line Items]
License Agreement, number of days to review the invoice and supporting documentation			60 days
Licensor receivable	$ 11,294,000		$ 11,294,000		$ 10,612,000
Cash and cash equivalents in excess of insured limits	52,600,000		52,600,000
Costs of excess cap billed to the licensor	$ 3,400,000		$ 13,100,000
Anti-dilutive securities excluded from the calculation of diluted earnings per share		1,422,500		1,422,500
Stock Options
Significant Accounting Policies [Line Items]
Anti-dilutive securities excluded from the calculation of diluted earnings per share	2,373,309		2,373,309
Warrants
Significant Accounting Policies [Line Items]
Anti-dilutive securities excluded from the calculation of diluted earnings per share	2,116,250		2,116,250
Maximum
Significant Accounting Policies [Line Items]
Cash equivalents, original maturity			3 months
Property and equipment, useful lives			5 years
Minimum
Significant Accounting Policies [Line Items]
Property and equipment, useful lives			3 years

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Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2013

Assets Measured at Fair Value on Recurring Basis

Following are the major categories of assets measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012, using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3) (in thousands):

September 30, 2013	Level 1		Level 2		Level 3		Total
Cash equivalents	$	50,584	$	—	$	—	$	50,584
Corporate bonds		—		44,377		—		44,377
Total	$	50,584	$	44,377	$	—	$	94,961
December 31, 2012	Level 1		Level 2		Level 3		Total
Cash equivalents	$	134,867	$	—	$	—	$	134,867
Total	$	134,867	$	—	$	—	$	134,867

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Accrued Expenses (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Schedule of Accrued Liabilities [Line Items]
Accrued CRO/licensor services	$ 5,887	$ 19,846
Accrued other clinical development	1,371	389
Accrued legal fees	294	121
Accrued compensation	1,866	787
Other	78	76
Totals	$ 9,496	$ 21,219

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Property and Equipment (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Property, Plant and Equipment [Line Items]
Leasehold improvements	$ 913	$ 910
Furniture and fixtures	513	276
Property, Plant and Equipment, Gross	2,193	1,755
Less: accumulated depreciation and amortization	(574)	(276)
Totals	1,619	1,479
Computer Equipment
Property, Plant and Equipment [Line Items]
Property and equipment other, gross	710	535
Telephone Equipment
Property, Plant and Equipment [Line Items]
Property and equipment other, gross	$ 57	$ 34

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Savings Plan - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Savings Plan [Line Items]
Employer matching contribution expenses	$ 97,000	$ 40,800	$ 200,600	$ 97,400
First Three Percent of Each Participant's Contributions
Savings Plan [Line Items]
Company's matching contributions to the 401(k)plan			100.00%
Second Two Percent Of Each Participant's Contributions
Savings Plan [Line Items]
Company's matching contributions to the 401(k)plan			50.00%

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Stock-Based Compensation Expense (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended		36 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
Share Based Compensation [Line Items]
Share-based compensation expense			$ 4,426	$ 820	$ 5,901
Total stock-based compensation expense	1,806	(6,226)	4,426	7,070
Impact on basic and diluted net loss per share	$ 0.06	$ (0.31)	$ 0.15	$ 0.35
Weighted average shares (basic and diluted)	28,682,055	20,040,000	28,678,439	20,040,000
Stock Options | Research and development
Share Based Compensation [Line Items]
Share-based compensation expense	1,333	248	3,072	530
Stock Options | General and administrative
Share Based Compensation [Line Items]
Share-based compensation expense	473	101	1,354	290
Warrants
Share Based Compensation [Line Items]
Share-based compensation expense		$ (6,575)		$ 6,250

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Assets Measured at Fair Value on Recurring Basis (Detail) (Fair Value, Measurements, Recurring, USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 50,584	$ 134,867
Total	94,961	134,867
Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Corporate bonds	44,377
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	50,584	134,867
Total	50,584	134,867
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	44,377
Level 2 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Corporate bonds	$ 44,377

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Condensed Consolidated Statements of Stockholders' Equity (USD $) In Thousands, except Share data	Total USD ($)	Private Placement USD ($)	Public Offering USD ($)	Common Stock USD ($)	Common Stock Cash	Common Stock Private Placement USD ($)	Common Stock Public Offering USD ($)	Additional Paid-in Capital USD ($)	Additional Paid-in Capital Private Placement USD ($)	Additional Paid-in Capital Public Offering USD ($)	Accumulated Other Comprehensive Loss USD ($)	Deficit Accumulated During the Development Stage USD ($)
Beginning Balance at Sep. 15, 2010
Issuance of common stock (in shares)					4,000,000
Paid-in capital	$ 7							$ 7
Net loss	(7)											(7)
Ending Balance at Dec. 31, 2010								7				(7)
Ending Balance (in shares) at Dec. 31, 2010				4,000,000
Issuance of common stock (in shares)						16,000,000
Paid-in capital	61							61
Issuance of common stock		56,741				2			56,739
Conversion of stockholder's note payable to equity (in shares)				40,000
Conversion of stockholder's note payable to equity	150							150
Stock option compensation	67							67
Anti-dilutive warrant	7,586							7,586
Net loss	(10,233)											(10,233)
Ending Balance at Dec. 31, 2011	54,372			2				64,610				(10,240)
Ending Balance (in shares) at Dec. 31, 2011				20,040,000
Issuance of common stock (in shares)							8,625,000
Issuance of common stock			129,214				1			129,213
Stock option compensation	1,408							1,408
Anti-dilutive warrant	18,222							18,222
Exercises of stock options (in shares)				11,666
Exercises of stock options	45							45
Net loss	(74,352)											(74,352)
Ending Balance at Dec. 31, 2012	128,909			3				213,498				(84,592)
Ending Balance (in shares) at Dec. 31, 2012				28,676,666
Unrealized loss on available for sale securities	(8)										(8)
Stock option compensation	4,426							4,426
Exercises of stock options (in shares)				12,638
Exercises of stock options	146							146
Net loss	(38,713)											(38,713)
Ending Balance at Sep. 30, 2013	$ 94,760			$ 3				$ 218,070			$ (8)	$ (123,305)
Ending Balance (in shares) at Sep. 30, 2013				28,689,304

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended		36 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
Operating activities:
Net loss	$ (38,713)	$ (52,440)	$ (123,305)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	298	187	574
Build-out allowance received from landlord		237	903
Stock option expense	4,426	820	5,901
Anti-dilutive warrant		6,250	25,808
Changes in operating assets and liabilities:
Licensor receivable	(682)		(11,294)
Prepaid expenses and other assets	(4,357)	(489)	(5,345)
Accounts payable	9,248	931	9,730
Accrued expenses	(11,723)	25,142	9,496
Accrual of deferred rent	34	159	220
Net cash used in operating activities	(41,469)	(19,203)	(87,312)
Investing activities:
Purchase of property and equipment	(435)	(437)	(1,280)
Expenditures for leasehold improvements	(3)	(236)	(913)
Purchase of marketable securities	(44,385)		(44,385)
Restricted cash	(1)	(159)	(1,213)
Net cash used in investing activities	(44,824)	(832)	(47,791)
Financing activities:
Proceeds from issuance of stockholder's convertible note payable			150
Net proceeds from issuance of common stock			185,955
Net proceeds from exercise of stock options	146		191
Capital contributions by stockholder			68
Net cash provided by financing activities	146		186,364
Net increase (decrease) in cash and cash equivalents	(86,147)	(20,035)	51,261
Cash and cash equivalents, beginning of period	137,408	53,382
Cash and cash equivalents, end of period	51,261	33,347	51,261
Supplemental disclosures of non-cash investing and financing activities:
Conversion of stockholder's note payable to common stock			$ 150

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Property and Equipment

9 Months Ended

Sep. 30, 2013

Property and Equipment

Note 3—Property and Equipment:

Property and equipment consisted of the following (in thousands):

	September 30,			December 31,
	2013			2012
Leasehold improvements	$	913		$	910
Computer equipment		710			535
Telephone equipment		57			34
Furniture and fixtures		513			276
		2,193			1,755
Less: accumulated depreciation and amortization		(574	)		(276	)
Totals	$	1,619		$	1,479

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Business and Basis of Presentation

9 Months Ended

Sep. 30, 2013

Business and Basis of Presentation

Note 1—Business and Basis of Presentation:

Business:

Puma Biotechnology, Inc., or Puma, is a development stage biopharmaceutical company based in Los Angeles, California that acquires and develops innovative products for the treatment of various forms of cancer. References in these Notes to Condensed Consolidated Financial Statements to the “Company” refer to Puma Biotechnology, Inc., a private Delaware company formed on September 15, 2010, for periods prior to the Merger (as defined below), which took place on October 4, 2011, and Puma Biotechnology, Inc., a Delaware company formed on April 27, 2007, and formerly known as Innovative Acquisitions Corp., for periods following the Merger. The Company focuses on in-licensing drug candidates that are undergoing or have already completed initial clinical testing for the treatment of cancer and then seeks to further develop those drug candidates for commercial use.

In November 2012, the Company established and incorporated Puma Biotechnology Ltd, a wholly owned subsidiary, for the sole purpose of serving as Puma’s legal representative in the United Kingdom and the European Union in connection with Puma’s clinical trial activity in those countries.

Basis of Presentation:

The Company is a development stage enterprise since it has not yet generated any revenue from the sale of products and, through September 30, 2013, its primary focus has been the transition of operational responsibility for its lead drug candidate, PB272 (neratinib (oral)), from Pfizer, Inc., or the Licensor, to the Company (see the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, for details of the license agreement) along with the initiation of a Phase III clinical trial in HER2-positive metastatic breast cancer, a Phase II clinical trial in non-small cell lung cancer and a Phase II clinical trial in HER2-mutation positive solid tumors. The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC, for interim financial information. Accordingly, the financial statements do not include all information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the accompanying unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation. Interim operating results are not necessarily indicative of results that may be expected for the year ending December 31, 2013, or for any subsequent period. These unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. The condensed consolidated balance sheet at December 31, 2012, has been derived from the audited financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

The Company has reported a net loss of approximately $14.3 million and $38.8 million and negative cash flows from operations of approximately $12.0 million and $41.5 million for the three and nine months ended September 30, 2013, respectively. The net loss from the date of inception, September 15, 2010, to September 30, 2013, amounted to approximately $123.3 million while the negative cash flows from operations from the date of inception amounted to approximately $87.3 million. Currently, the Company’s negative cash flows from operations are being adversely impacted by a timing difference related to the payment of “cap cost” expenses to vendors and receipt from the Licensor for said expenses (see Note 2—Significant Accounting Policies: Research and Development Reimbursement). Management believes that the Company will continue to incur net losses and negative net cash flows from operating activities through the drug development process.

The Company’s continued operations will depend on its ability to raise funds through various potential sources such as equity and debt financing. Through September 30, 2013, the Company’s financing was primarily through a public offering of Company common stock and private equity placements. Given the current and desired pace of clinical development of its three product candidates, management estimates that the Company has sufficient cash on hand to fund clinical development through 2014 and into 2015. The Company will need additional financing thereafter until it can achieve profitability, if ever. The Company may choose to raise additional capital before 2015 in order to fund its future development activities. There can be no assurance that such capital will be available on favorable terms, or at all, or that any additional capital that the Company is able to obtain will be sufficient to meet its needs. If it is unable to raise additional capital, the Company could likely be forced to curtail desired development activities, which will delay the development of its product candidates.

Merger with Public Company:

On September 29, 2011, the Company entered into an agreement and plan of merger, or the Merger Agreement, with Innovative Acquisitions Corp., or IAC, and IAC’s wholly-owned subsidiary, IAC Merger Corporation, or Merger Sub. On October 4, 2011, the Company completed a reverse merger in which Merger Sub merged with and into the Company and the Company became a wholly-owned subsidiary of IAC, or the Merger. At the effective time of the Merger, the Company’s then issued and outstanding 18,666,733 shares of common stock were exchanged for 18,666,733 shares of common stock of IAC and each share of the Company’s common stock that was outstanding immediately prior to the effective time was cancelled, with one share of the Company common stock issued to IAC. Concurrently, IAC redeemed all of its shares from its pre-Merger stockholders in exchange for aggregate consideration of $40,000 paid by the Company. The Company also paid $40,000 for IAC’s professional fees associated with the Merger directly to legal counsel for IAC’s former stockholders. Following the Merger and the redemption, the Company’s prior stockholders owned the same percentage of IAC’s common stock as they held of the Company’s common stock prior to the Merger.

Upon completion of the Merger, the Company merged with and into IAC, and IAC adopted the Company’s business plan and changed its name to “Puma Biotechnology, Inc.” Further, upon completion of the Merger, the existing officers and directors of IAC resigned and the existing officers and directors of the Company were appointed officers and directors of IAC.

The Merger was accounted for as a reverse acquisition, with the Company as the accounting acquirer and IAC as the accounting acquiree. The merger of a private operating company into a non-operating public shell corporation with nominal net assets is considered to be a capital transaction, in substance, rather than a business combination for accounting purposes. Accordingly, the Company treated this transaction as a capital transaction without recording goodwill or adjusting any of its other assets or liabilities. Consideration in the amount of $80,000 paid to the former stockholders of IAC and their attorney was recorded as an other expense item and included in the Company’s net loss for the year ended December 31, 2011.

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Stockholders Equity - Additional Information (Detail) (USD $)	1 Months Ended	3 Months Ended	9 Months Ended				9 Months Ended		12 Months Ended		1 Months Ended			1 Months Ended
	Oct. 31, 2011	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Dec. 31, 2011	Sep. 30, 2013 Stock Options	Sep. 30, 2013 Equity Incentive Plan Twenty Eleven	Dec. 31, 2012 Warrants	Sep. 30, 2012 Minimum	Oct. 31, 2011 Minimum Minimum gross proceed of first subsequent financing for warrants be exercisable	Sep. 30, 2012 Maximum	Sep. 30, 2013 Maximum Equity Incentive Plan Twenty Eleven	Oct. 31, 2011 President	Oct. 31, 2011 President Minimum
Stockholders Equity Note [Line Items]
Percentage of shares held by related party														21.00%
Outstanding shares														18,666,733
Minimum ownership percentage of outstanding shares of common stock the president need to maintain after issuance of warrants															20.00%
Term of Warrant	10 years
Gross cash proceeds from minimum first subsequent financing of warrants exercisable											$ 15,000,000
Warrant expiration date	Oct. 04, 2021
Shares of common stock that could be acquired by warrant			2,116,250
Common stock price			$ 16.00
Value of warrants	6,900,000	13,800,000		13,800,000	25,800,000	7,600,000
Adjustment to fair value of warrants		6,500,000		6,200,000
Fair value estimate assumption, projected equity raises										86,000,000		100,000,000
Adjustment to fair value of warrants									18,200,000
Stock options granted, term													10 years
Common stock shares reserved for issuance								3,529,412
Estimated unrecognized employee compensation cost related to non-vested stock options granted			19,000,000
Estimated unrecognized employee compensation cost related to non-vested stock options granted, Weighted-average period of recognition			2 years 4 months 24 days
Stock options exercised, intrinsic value							$ 486,000
Weighted-average grant date fair value of options granted			$ 25.95	$ 4.63

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Activity with Respect to Options Granted (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Shares
Beginning balance, shares	1,906,334
Granted, shares	499,475
Forfeited, shares	(19,862)
Exercised, shares	(12,638)
Ending balance, shares	2,373,309
Unvested, shares	1,615,623
Exercisable at June 30, 2013	757,686
Weighted Average Exercise Price
Beginning Balance, Weighted Average Exercise Price	$ 8.93
Granted, Weighted Average Exercise Price	$ 36.80
Forfeited, Weighted Average Exercise Price	$ 11.60
Exercised, Weighted Average Exercise Price	$ 11.60
Ending Balance, Weighted Average Exercise Price	$ 14.76
Unvested, Weighted Average Exercise Price	$ 19.42
Exercisable, Weighted Average Exercise Price	$ 4.82
Weighted Average Remaining Contractual Term (years)
Beginning balance, Weighted Average Remaining Contractual Term (years)	9 years 4 months 24 days
Ending balance, Weighted Average Remaining Contractual Term (years)	8 years 9 months 18 days
Unvested, Weighted Average Remaining Contractual Term (years)	9 years
Exercisable, Weighted Average Remaining Contractual Term (years)	8 years 4 months 24 days
Aggregate Intrinsic Value
Beginning balance, Aggregate Intrinsic Value	$ 18,966
Granted, Aggregate Intrinsic Value
Forfeited, Aggregate Intrinsic Value
Exercised, Aggregate Intrinsic Value
Ending balance, Aggregate Intrinsic Value	90,329
Unvested, Aggregate Intrinsic Value	64,490
Exercisable, Aggregate Intrinsic Value	$ 37,007

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Subsequent Events - Additional Information (Detail) (Phase Two Clinical Trial, Subsequent Event, USD $) In Millions, unless otherwise specified	1 Months Ended
	Oct. 31, 2013
Phase Two Clinical Trial | Subsequent Event
Subsequent Event [Line Items]
Service agreement, maximum life time payment amount	$ 2.2
Life of the agreement	37 months
Written notice of termination, period	30 days

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	28,689,304	28,676,666
Common stock, shares outstanding	28,689,304	28,676,666

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401(k) Savings Plan

9 Months Ended

Sep. 30, 2013

401(k) Savings Plan

Note 6—401(k) Savings Plan:

During 2012, the Company adopted a 401(k) savings plan for the benefit of its employees. The Company is required to make matching contributions to the 401(k) plan equal to 100% of the first 3% of wages deferred by each participating employee and 50% on the next 2% of wages deferred by each participating employee. The Company incurred expenses for employer matching contributions of approximately $97,000 and $200,600 for the three and nine months ended September 30, 2013, respectively. For the three and nine months ended September 30, 2012, the Company incurred expenses for employer matching contributions of approximately $40,800 and $97,400, respectively.

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Condensed Consolidated Statements of Comprehensive Loss (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		36 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
Net loss	$ (14,283)	$ (25,859)	$ (38,713)	$ (52,440)	$ (123,305)
Other comprehensive loss
Unrealized loss on available-for-sale securities	66		(8)		(8)
Comprehensive loss	$ (14,217)	$ (25,859)	$ (38,721)	$ (52,440)	$ (123,313)

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 51,261	$ 137,408
Marketable securities	44,377
Licensor receivable	11,294	10,612
Prepaid expenses and other assets	3,644	952
Total current assets	110,576	148,972
Property and equipment, net	1,619	1,479
Deposits	1,701	36
Restricted cash	1,213	1,212
Total assets	115,109	151,699
Current liabilities:
Accounts payable	9,730	482
Accrued expenses	9,496	21,219
Total current liabilities	19,226	21,701
Deferred rent	1,123	1,089
Total liabilities	20,349	22,790
Stockholders' equity:
Common stock - $.0001 par value; 100,000,000 shares authorized; 28,689,304 issued and outstanding at September 30, 2013 and 28,676,666 issued and outstanding at December 31, 2012	3	3
Additional paid-in capital	218,070	213,498
Accumulated other comprehensive loss	(8)
Deficit accumulated during the development stage	(123,305)	(84,592)
Total stockholders' equity	94,760	128,909
Total liabilities and stockholders' equity	$ 115,109	$ 151,699

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Fair Value of Warrants Determined Using Monte Carlo Simulation Method (Detail) (USD $)		3 Months Ended
	Sep. 30, 2013	Sep. 30, 2012 Monte Carlo Simulation Valuation Model
Class of Warrant or Right [Line Items]
Common stock price	$ 16.00	$ 15.00
Dividend yield		0.00%
Expected volatility		75.70%
Risk-free interest rate		1.65%
Warrant term in years		10 years

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Business and Basis of Presentation - Additional Information (Detail) (USD $)	1 Months Ended	3 Months Ended			9 Months Ended		12 Months Ended		36 Months Ended
	Sep. 30, 2011	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2010	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Dec. 31, 2011	Sep. 30, 2013	Sep. 29, 2011
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Net loss		$ (14,283,000)	$ (25,859,000)	$ (7,000)	$ (38,713,000)	$ (52,440,000)	$ (74,352,000)	$ (10,233,000)	$ (123,305,000)
Cash flows from operating activities		(12,000,000)			(41,469,000)	(19,203,000)			(87,312,000)
Merger agreement, shares Issued	18,666,733
Merger agreement, shares received in exchange	18,666,733
Merger agreement, shares exchange ratio										1
Share redeemed, aggregate consideration	40,000
Merger related Professional fees paid	40,000
Consideration paid for former Stockholders of IAC and their attorney								$ 80,000

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Marketable Securities - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2013
Schedule Of Marketable Securities [Line Items]
Weighted-average maturity of marketable securities	4 months

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Available-for-Sale Marketable Securities (Detail) (Corporate bonds, USD $) In Thousands, unless otherwise specified	Sep. 30, 2013
Corporate bonds
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 44,385
Unrealized Gains	4
Unrealized Losses	(12)
Fair Value	$ 44,377

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Stockholders' Equity

9 Months Ended

Sep. 30, 2013

Stockholders' Equity

Note 5—Stockholders’ Equity:

Warrants:

Following a private placement of the Company’s common stock in October 2011, Alan H. Auerbach, the Company’s founder, Chairman, Chief Executive Officer and President, held approximately 21% of the 18,666,733 outstanding shares of the Company’s common stock. Pursuant to the terms of the securities purchase agreement entered into in connection with this private placement, the Company issued an anti-dilutive warrant to Mr. Auerbach, as the Company’s founder. The warrant was issued to provide Mr. Auerbach with the right to maintain ownership of at least 20% of the Company’s common stock in the event that the Company raised capital through the sale of its securities in the future.

The warrant has a ten-year term and became exercisable upon the first subsequent financing, excluding certain types of financings set forth in the warrant, that resulted in gross cash proceeds to the Company of at least $15 million. The warrant’s exercise price equals the price per share in such financing and is exercisable for the number of shares of the Company’s common stock necessary for Mr. Auerbach to maintain ownership of at least 20% of the outstanding shares of Company common stock after such financing. The warrant may be exercised any time up to the ten-year expiration date of October 4, 2021. The Company determined that the warrant had an implied service requisite period in 2011 that was prior to its grant date. The Company also determined that a market condition subsequent to the implied service period exists as the exercise or partial exercise of the warrant could only occur if there is a subsequent financing.

In connection with the closing of a public offering of the Company’s common stock on October 24, 2012, the exercise price and number of shares underlying the warrant issued to Mr. Auerbach were established and, accordingly, the final value of the warrant became fixed. Pursuant to the terms of the warrant, Mr. Auerbach may exercise the warrant to acquire 2,116,250 shares of the Company’s common stock at $16.00 per share until October 4, 2021.

The warrant was valued at approximately $6.9 million at the time of issuance and $7.6 million at December 31, 2011, using the Monte Carlo Simulation Method, as both the exercise price per share and the number of shares were unknown at that time, and recorded to the consolidated statements of operations. The warrant was revalued at approximately $13.8 million on September 30, 2012, using the below Monte Carlo Simulation Method. The revaluation resulted in an adjustment to the fair value of approximately $6.5 million and $6.2 million, which was included in general and administrative expense in the accompanying condensed consolidated statement of operations for the three and nine months ended September 30, 2012, respectively.

The fair value of the warrant during the quarter ended September 30, 2012, was determined by the following assumptions using the Monte Carlo Simulation Method:

	September 30, 2012
Common stock price	$	15.00
Dividend yield		0.00	%
Expected volatility		75.70	%
Risk-free interest rate		1.65	%
Warrant term in years		10

The fair value of the warrant at September 30, 2012, was estimated based on an assumption that the Company would complete an equity financing between $86 million and $100 million during October or November 2012. In conjunction with a public offering that closed in October 2012, the warrant was deemed to be granted as the quantity and exercise price of the warrant were determined to be 2,116,250 shares of the Company’s common stock at a price of $16.00 per share.

Once the terms of the warrant became fixed, the fair value of the warrant as of October 24, 2012, using the Black-Scholes Option Pricing Method, was approximately $25.8 million and resulted in an adjustment to the fair value of the warrant of $18.2 million for the year ended December 31, 2012.

Stock-Based Compensation:

The Company’s 2011 Incentive Award Plan, or the 2011 Plan, was adopted by the Board of Directors on September 15, 2011. Pursuant to the 2011 Plan, the Company may grant incentive stock options and nonqualified stock options, as well as other forms of equity-based compensation. Incentive stock options may be granted only to employees, while consultants, employees, officers and directors are eligible for the grant of nonqualified options under the 2011 Plan. The maximum term of stock options granted under the 2011 Plan is 10 years. The exercise price of incentive stock options granted under the 2011 Plan must be at least equal to the fair value of such shares on the date of grant. Through September 30, 2013, a total of 3,529,412 shares of the Company’s common stock have been reserved for issuance under the 2011 Plan.

The fair value of options granted to employees was estimated using the Black-Scholes Option Pricing Method (see Note 2—Significant Accounting Policies) with the following weighted-average assumptions used during the nine months ended September 30, 2013 and 2012:

	Nine Months Ended September 30,
	2013			2012
Dividend yield		0.0	%		0.0	%
Expected volatility		85.4	%		85.4	%
Risk-free interest rate		1.3	%		1.0	%
Expected life in years		5.85			5.82

Employee stock-based compensation for the three and nine months ended September 30, 2013 and 2012, were as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2013		2012			2013		2012
	(in thousands except per share data)
Stock-based compensation:
Options:
Research and development	$	1,333	$	248		$	3,072	$	530
General and administrative, or G&A		473		101			1,354		290
Warrants: G&A		—		(6,575	)		—		6,250
Total stock-based compensation expense	$	1,806	$	(6,226	)	$	4,426	$	7,070
Impact on basic and diluted net loss per share	$	0.06	$	(0.31	)	$	0.15	$	0.35
Weighted average shares (basic and diluted)		28,682,055		20,040,000			28,678,439		20,040,000

Activity with respect to options granted under the 2011 Plan is summarized as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2012		1,906,334		$	8.93		9.4	$	18,966
Granted during the nine months ended September 30, 2013		499,475			36.80		—		—
Forfeited during the nine months ended September 30, 2013		(19,862	)		11.60		—		—
Exercised during the nine months ended September 30, 2013		(12,638	)		11.60		—		—
Outstanding at September 30, 2013		2,373,309			14.76		8.8	$	90,329
Nonvested at September 30, 2013		1,615,623		$	19.42		9.0	$	64,490
Exercisable at September 30, 2013		757,686		$	4.82		8.4	$	37,007

At September 30, 2013, total estimated unrecognized employee compensation cost related to non-vested stock options granted prior to that date was approximately $19.0 million, which is expected to be recognized over a weighted-average period of 2.4 years. The intrinsic value of stock options exercised during the nine months ended September 30, 2013 was approximately $486,000. The weighted-average grant date fair value of options granted during the nine months ended September 30, 2013 and 2012, was $25.95 per share and $4.63 per share, respectively.

Stock options	Shares			Weighted Average Grant-Date Fair Value
Nonvested shares at December 31, 2012		1,659,399		$	7.03
Granted		499,475			25.95
Vested/Issued		(523,389	)		3.86
Forfeited		(19,862	)		8.12
Nonvested shares at September 30, 2013		1,615,623

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Fair Value Options Weighted-Average Assumptions (Detail) (Stock Options)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	0.00%	0.00%
Expected volatility	85.40%	85.40%
Risk-free interest rate	1.30%	1.00%
Expected life in years	5 years 10 months 6 days	5 years 9 months 26 days

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Subsequent Events

9 Months Ended

Sep. 30, 2013

Subsequent Events

Note 8 – Subsequent Events:

During October 2013, the Company entered into an agreement with a clinical research organization, or CRO. This CRO will provide services for initiating, managing and conducting a new Phase II clinical trial for patients with HER2-mutated solid tumors using PB272. The Company shall pay the CRO up to approximately $2.2 million over the life of the agreement (approximately 37 months). The Company may cancel the agreement at any time with a 30-day written notice. The Company would be obligated to pay for any services previously rendered, with any prepaid, unused funds returned to the Company.

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Accrued Expenses

9 Months Ended

Sep. 30, 2013

Accrued Expenses

Note 4—Accrued Expenses:

Accrued expenses consisted of the following (in thousands):

	September 30,		December 31,
	2013		2012
Accrued CRO/licensor services	$	5,887	$	19,846
Accrued other clinical development		1,371		389
Accrued legal fees		294		121
Accrued compensation		1,866		787
Other		78		76
	$	9,496	$	21,219

Accrued CRO/licensor services represent the Company’s estimate of such costs as of September 30, 2013, and will be adjusted in the period the actual costs become known. Accrued compensation includes estimated bonus and earned but unused vacation for full-time employees. When actual performance bonuses are paid out to employees on the employee’s anniversary of hire, the bonus expense will be adjusted to reflect the actual expense for the year. Additionally, vacation is accrued at the rate the employee earns vacation and reduced as the vacation is used by the employee.

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Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $)	3 Months Ended	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2012	Dec. 31, 2011
Issuance of common stock, per share	$ 0.0001	$ 16.00	$ 3.75

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Stock Options (Detail) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Shares
Beginning balance, shares	1,906,334
Granted	499,475
Forfeited	(19,862)
Ending balance, shares	2,373,309
Weighted Average Grant-Date Fair Value
Granted	$ 25.95	$ 4.63
Non Vested Stock Options
Shares
Beginning balance, shares	1,659,399
Granted	499,475
Vested/Issued	(523,389)
Forfeited	(19,862)
Ending balance, shares	1,615,623
Weighted Average Grant-Date Fair Value
Beginning balance, Weighted Average Grant-Date Fair Value	$ 7.03
Granted	$ 25.95
Vested/Issued	$ 3.86
Forfeited	$ 8.12

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Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2013

Property and Equipment

Property and equipment consisted of the following (in thousands):

	September 30,			December 31,
	2013			2012
Leasehold improvements	$	913		$	910
Computer equipment		710			535
Telephone equipment		57			34
Furniture and fixtures		513			276
		2,193			1,755
Less: accumulated depreciation and amortization		(574	)		(276	)
Totals	$	1,619		$	1,479

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Marketable Securities

9 Months Ended

Sep. 30, 2013

Marketable Securities

Note 7—Marketable Securities:

Marketable securities consist primarily of corporate bonds and are classified as “available for sale.” Available for sale securities are reported at fair value based on quoted market prices, with unrealized gains and losses reported in accumulated other comprehensive income (loss) within stockholders’ equity. The cost of a security sold or the amount reclassified out of accumulated other comprehensive income (loss) into earnings is determined using specific identification. The Company may pay a premium or receive a discount upon the purchase of marketable securities. Interest earned and gains/losses realized on marketable securities and amortization of discounts received and accretion of premiums paid on the purchase of marketable securities are included in investment income/expense. The weighted-average maturity of the Company’s current marketable securities as of September 30, 2013 was approximately four months.

Available-for-sale marketable securities consisted of the following (in thousands):

	September 30, 2013
	Adjusted		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
	(In thousands)
Corporate bond investments—Current	$	44,385	$	4	$	(12	)	$	44,377

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Marketable Securities (Tables)

9 Months Ended

Sep. 30, 2013

Available-for-Sale Marketable Securities

Available-for-sale marketable securities consisted of the following (in thousands):

	September 30, 2013
	Adjusted		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
	(In thousands)
Corporate bond investments—Current	$	44,385	$	4	$	(12	)	$	44,377

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Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2013

Accrued Expenses

Accrued expenses consisted of the following (in thousands):

	September 30,		December 31,
	2013		2012
Accrued CRO/licensor services	$	5,887	$	19,846
Accrued other clinical development		1,371		389
Accrued legal fees		294		121
Accrued compensation		1,866		787
Other		78		76
	$	9,496	$	21,219

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Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 07, 2013
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Trading Symbol	PBYI
Entity Registrant Name	PUMA BIOTECHNOLOGY, INC.
Entity Central Index Key	0001401667
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		28,689,304

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Options Weighted-Average Assumptions

The fair value of options granted to employees was estimated using the Black-Scholes Option Pricing Method (see Note 2—Significant Accounting Policies) with the following weighted-average assumptions used during the nine months ended September 30, 2013 and 2012:

	Nine Months Ended September 30,
	2013			2012
Dividend yield		0.0	%		0.0	%
Expected volatility		85.4	%		85.4	%
Risk-free interest rate		1.3	%		1.0	%
Expected life in years		5.85			5.82

Recognized Expense of Share Based Compensation

Employee stock-based compensation for the three and nine months ended September 30, 2013 and 2012, were as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2013		2012			2013		2012
	(in thousands except per share data)
Stock-based compensation:
Options:
Research and development	$	1,333	$	248		$	3,072	$	530
General and administrative, or G&A		473		101			1,354		290
Warrants: G&A		—		(6,575	)		—		6,250
Total stock-based compensation expense	$	1,806	$	(6,226	)	$	4,426	$	7,070
Impact on basic and diluted net loss per share	$	0.06	$	(0.31	)	$	0.15	$	0.35
Weighted average shares (basic and diluted)		28,682,055		20,040,000			28,678,439		20,040,000

Activity with Respect to Options Granted

Activity with respect to options granted under the 2011 Plan is summarized as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2012		1,906,334		$	8.93		9.4	$	18,966
Granted during the nine months ended September 30, 2013		499,475			36.80		—		—
Forfeited during the nine months ended September 30, 2013		(19,862	)		11.60		—		—
Exercised during the nine months ended September 30, 2013		(12,638	)		11.60		—		—
Outstanding at September 30, 2013		2,373,309			14.76		8.8	$	90,329
Nonvested at September 30, 2013		1,615,623		$	19.42		9.0	$	64,490
Exercisable at September 30, 2013		757,686		$	4.82		8.4	$	37,007

Stock Options

Stock options	Shares			Weighted Average Grant-Date Fair Value
Nonvested shares at December 31, 2012		1,659,399		$	7.03
Granted		499,475			25.95
Vested/Issued		(523,389	)		3.86
Forfeited		(19,862	)		8.12
Nonvested shares at September 30, 2013		1,615,623

Monte Carlo Simulation Valuation Model

Warrant Fair Market Value Assumptions

The fair value of the warrant during the quarter ended September 30, 2012, was determined by the following assumptions using the Monte Carlo Simulation Method:

	September 30, 2012
Common stock price	$	15.00
Dividend yield		0.00	%
Expected volatility		75.70	%
Risk-free interest rate		1.65	%
Warrant term in years		10