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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

For the quarterly period ended September 30, 2020

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)

 

Securities registered pursuant to Section 12(b) of the Exchange Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

 

 

 

 

 

Common Stock, par value $0.0001 per share

 

PBYI

 

The NASDAQ Stock Market LLC

(NASDAQ Global Select Market)

 

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      No  .

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 files).    Yes      No  

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

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act

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

 

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 39,762,431 shares of Common Stock, par value $0.0001 per share, were outstanding as of October 30, 2020.

 

 

 


PUMA BIOTECHNOLOGY, INC.

- INDEX -

 

 

Page

PART I – FINANCIAL INFORMATION:

1

 

Item 1.

 

Financial Statements (Unaudited):

1

 

 

 

Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019

1

 

 

 

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2020 and 2019

2

 

 

 

Condensed Consolidated Statements of Comprehensive (Loss) Income for the Three and Nine Months Ended September 30, 2020 and 2019

3

 

 

 

Condensed Consolidated Statements of Stockholders’ (Deficit) Equity for the Three and Nine Months Ended September 30, 2020 and 2019

4

 

 

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019

6

 

 

 

Notes to the Unaudited Condensed Consolidated Financial Statements

7

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

28

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

39

 

Item 4.

 

Controls and Procedures

39

 

PART II – OTHER INFORMATION:

40

 

Item 1.

 

Legal Proceedings

40

 

 

 

 

Item 1A.

 

Risk Factors

41

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

41

 

Item 3.

 

Defaults Upon Senior Securities

41

 

Item 4.

 

Mine Safety Disclosures

41

 

Item 5.

 

Other Information

41

 

Item 6.

 

Exhibits

42

 

Signatures

43

 

 

 


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or this Quarterly Report, contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Any statements about our expectations, beliefs, plans, objectives, assumptions, 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 commercialization of NERLYNX® (neratinib);

 

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

 

the impact of the global COVID-19 pandemic, and measures to control the spread of COVID-19, on our business, financial condition, results of operations and ongoing clinical trials;

 

the anticipated timing of regulatory filings;

 

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;

 

efforts of our sub-licensees to obtain regulatory approval and commercialize NERLYNX in areas outside the United States;

 

our ability to market any of our products;

 

our expectations regarding our costs and expenses;

 

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

 

our ability to maintain compliance with the terms of our loan and security agreement;

 

our ability to compete against other companies and research institutions;

 

our ability to secure adequate protection for our intellectual property;

 

our intention and ability to vigorously defend against any litigation to which we are or may become party;

 

our estimates for damages that we may be required to pay in connection with the class action lawsuit to which we are a party;

 

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, 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, 2019 and in Part II, Item 1A, “Risk Factors” of our Quarterly Report on Form 10-Q for the Quarter ended March 31, 2020 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 SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

 

 

 

 

September 30, 2020

 

 

December 31, 2019

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

90,082

 

 

$

60,037

 

Marketable securities

 

 

18,942

 

 

 

51,607

 

Accounts receivable, net

 

 

27,137

 

 

 

28,896

 

Inventory, net

 

 

3,144

 

 

 

3,170

 

Prepaid expenses, current

 

 

8,025

 

 

 

13,259

 

Deferred rent

 

 

198

 

 

 

154

 

Restricted cash, current

 

 

8,850

 

 

 

8,850

 

Other current assets

 

 

3,426

 

 

 

323

 

Total current assets

 

 

159,804

 

 

 

166,296

 

Lease right-of-use assets, net

 

 

16,957

 

 

 

18,522

 

Property and equipment, net

 

 

2,659

 

 

 

3,304

 

Intangible assets, net

 

 

76,144

 

 

 

40,461

 

Restricted cash, long-term

 

 

3,311

 

 

 

4,323

 

Prepaid expenses and other, long-term

 

 

2,820

 

 

 

1,999

 

Total assets

 

$

261,695

 

 

$

234,905

 

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

12,528

 

 

$

19,183

 

Accrued expenses, current

 

 

63,471

 

 

 

69,030

 

Accrued in-licensed rights, current

 

 

31,017

 

 

 

 

Post-marketing commitment liability, current

 

 

2,496

 

 

 

 

Lease liabilities, current

 

 

2,971

 

 

 

2,624

 

Current portion of long-term debt

 

 

5,714

 

 

 

 

Total current liabilities

 

 

118,197

 

 

 

90,837

 

Accrued expenses, long-term

 

 

25,493

 

 

 

 

Lease liabilities, long-term

 

 

20,365

 

 

 

22,643

 

Post-marketing commitment liability, long-term

 

 

6,379

 

 

 

9,000

 

Long-term debt

 

 

91,714

 

 

 

94,962

 

Total liabilities

 

 

262,148

 

 

 

217,442

 

Commitments and contingencies (Note 13)

 

 

 

 

 

 

 

 

Stockholders' (deficit) equity:

 

 

 

 

 

 

 

 

Common stock - $.0001 par value per share; 100,000,000 shares authorized;  39,720,931 shares issued and outstanding at September 30, 2020 and 39,203,304 issued and outstanding at December 31, 2019

 

 

4

 

 

 

4

 

Additional paid-in capital

 

 

1,322,180

 

 

 

1,295,033

 

Accumulated other comprehensive income

 

 

 

 

 

62

 

Accumulated deficit

 

 

(1,322,637

)

 

 

(1,277,636

)

Total stockholders' (deficit) equity

 

 

(453

)

 

 

17,463

 

Total liabilities and stockholders' (deficit) equity

 

$

261,695

 

 

$

234,905

 

 

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements

 

1


 

PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(unaudited)

 

 

 

For the Three Months Ended

September 30,

 

 

For the Nine Months Ended

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product revenue, net

 

$

49,333

 

 

$

53,482

 

 

$

146,713

 

 

$

152,913

 

License revenue

 

 

 

 

 

2,750

 

 

 

22,700

 

 

 

56,250

 

Royalty revenue

 

 

1,421

 

 

 

120

 

 

 

3,140

 

 

 

175

 

Total revenue

 

 

50,754

 

 

 

56,352

 

 

 

172,553

 

 

 

209,338

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

9,943

 

 

 

9,371

 

 

 

28,434

 

 

 

26,673

 

Selling, general and administrative

 

 

29,598

 

 

 

31,402

 

 

 

89,882

 

 

 

110,435

 

Research and development

 

 

23,344

 

 

 

30,027

 

 

 

73,490

 

 

 

102,610

 

Total operating costs and expenses

 

 

62,885

 

 

 

70,800

 

 

 

191,806

 

 

 

239,718

 

Loss from operations

 

 

(12,131

)

 

 

(14,448

)

 

 

(19,253

)

 

 

(30,380

)

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

22

 

 

 

569

 

 

 

474

 

 

 

2,349

 

Interest expense

 

 

(3,627

)

 

 

(3,052

)

 

 

(10,479

)

 

 

(11,943

)

Legal verdict expense

 

 

(15,855

)

 

 

 

 

 

(16,041

)

 

 

(16,350

)

Loss on debt extinguishment

 

 

 

 

 

 

 

 

 

 

 

(8,103

)

Other income

 

 

128

 

 

 

46

 

 

 

298

 

 

 

31

 

Total other expenses

 

 

(19,332

)

 

 

(2,437

)

 

 

(25,748

)

 

 

(34,016

)

Net loss

 

$

(31,463

)

 

$

(16,885

)

 

$

(45,001

)

 

$

(64,396

)

Net loss applicable to common stockholders

 

$

(31,463

)

 

$

(16,885

)

 

$

(45,001

)

 

$

(64,396

)

Net loss per share of common stock—basic

 

$

(0.79

)

 

$

(0.44

)

 

$

(1.14

)

 

$

(1.67

)

Weighted-average shares of common stock outstanding—basic

 

 

39,695,444

 

 

 

38,893,757

 

 

 

39,473,691

 

 

 

38,675,961

 

 

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements

 

2


 

PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in thousands)

(unaudited)

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net loss

 

$

(31,463

)

 

$

(16,885

)

 

$

(45,001

)

 

$

(64,396

)

Other comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (loss) gain on available-for-sale securities, net of tax

   of $0

 

 

(1

)

 

 

15

 

 

 

(65

)

 

 

115

 

Reclassifications of gain (loss) on available-for-sale securities,

   included in “Other income”, net of tax of $0

 

 

 

 

 

(10

)

 

 

3

 

 

 

12

 

Comprehensive loss

 

$

(31,464

)

 

$

(16,880

)

 

$

(45,063

)

 

$

(64,269

)

 

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements

 

3


 

PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

(in thousands, except share data)

(unaudited)

 

For the Three Months Ended

September 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Total

 

Balance at June 30, 2020

 

 

39,626,917

 

 

$

4

 

 

$

1,314,572

 

 

$

1

 

 

$

(1,291,174

)

 

$

23,403

 

Stock-based compensation

 

 

 

 

 

 

 

 

7,565

 

 

 

 

 

 

 

 

 

7,565

 

Shares issued or restricted stock

   units vested under employee

   stock plans

 

 

94,014

 

 

 

 

 

 

43

 

 

 

 

 

 

 

 

 

43

 

Unrealized loss on available-

   for-sale securities

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(31,463

)

 

 

(31,463

)

Balance at September 30, 2020

 

 

39,720,931

 

 

$

4

 

 

$

1,322,180

 

 

$

 

 

$

(1,322,637

)

 

$

(453

)

 

For the Three Months Ended

September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Total

 

Balance at June 30, 2019

 

 

38,738,707

 

 

$

4

 

 

$

1,271,209

 

 

$

110

 

 

$

(1,249,552

)

 

$

21,771

 

Stock-based compensation

 

 

 

 

 

 

 

 

12,213

 

 

 

 

 

 

 

 

 

12,213

 

Shares issued or restricted stock

   units vested under employee

   stock plans

 

 

205,067

 

 

 

 

 

 

76

 

 

 

 

 

 

 

 

 

76

 

Reclassification of loss on

   available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

(10

)

 

 

 

 

 

(10

)

Unrealized gain on available-for-sale

   securities

 

 

 

 

 

 

 

 

 

 

 

15

 

 

 

 

 

 

15

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(16,885

)

 

 

(16,885

)

Balance at September 30, 2019

 

 

38,943,774

 

 

$

4

 

 

$

1,283,498

 

 

$

115

 

 

$

(1,266,437

)

 

$

17,180

 

 

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements

 

 

4


 

PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

(in thousands, except share data)

(unaudited)

 

For the Nine Months Ended

September 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Total

 

Balance at December 31, 2019

 

 

39,203,304

 

 

$

4

 

 

$

1,295,033

 

 

$

62

 

 

$

(1,277,636

)

 

$

17,463

 

Stock-based compensation

 

 

 

 

 

 

 

 

27,102

 

 

 

 

 

 

 

 

 

27,102

 

Shares issued or restricted stock

   units vested under employee

   stock plans

 

 

517,627

 

 

 

 

 

 

45

 

 

 

 

 

 

 

 

 

45

 

Reclassification of gain on

   available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

3

 

 

 

 

 

 

3

 

Unrealized loss on available-

   for-sale securities

 

 

 

 

 

 

 

 

 

 

 

(65

)

 

 

 

 

 

(65

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(45,001

)

 

 

(45,001

)

Balance at September 30, 2020

 

 

39,720,931

 

 

$

4

 

 

$

1,322,180

 

 

$

 

 

$

(1,322,637

)

 

$

(453

)

 

For the Nine Months Ended

September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Total

 

Balance at December 31, 2018

 

 

38,325,037

 

 

$

4

 

 

$

1,236,355

 

 

$

(12

)

 

$

(1,202,041

)

 

$

34,306

 

Stock-based compensation

 

 

 

 

 

 

 

 

45,791

 

 

 

 

 

 

 

 

 

45,791

 

Shares issued or restricted stock

   units vested under employee

   stock plans

 

 

618,737

 

 

 

 

 

 

1,352

 

 

 

 

 

 

 

 

 

1,352

 

Reclassification of gain on

   available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

12

 

 

 

 

 

 

12

 

Unrealized gain on available-for-sale

   securities

 

 

 

 

 

 

 

 

 

 

 

115

 

 

 

 

 

 

115

 

Net loss