Earnings call transcript: Puma Biotech Q3 2025 beats EPS, stock rises

Puma Biotechnology Inc. (PBYI) reported its third-quarter 2025 earnings, revealing a stronger-than-expected EPS of $0.21, surpassing forecasts by 31.25%. However, revenue came in at $54.5 million, missing expectations. Following the announcement, Puma's stock rose 5.36% in premarket trading, reflecting positive investor sentiment despite the revenue shortfall.

Key Takeaways

• EPS exceeded expectations by 31.25%, reaching $0.21.
• Revenue fell short of forecasts by 5.22%, totaling $54.5 million.
• Stock price increased by 5.36% in premarket trading.
• Strong operational performance with increased net product revenue.
• Positive outlook for Nerlynx demand and strategic growth in oncology.

Company Performance

Puma Biotechnology demonstrated resilience in Q3 2025, with a notable increase in net product revenue to $51.9 million, a $2.7 million rise from the previous quarter. The company achieved a net income of $8.8 million, translating to $0.18 per basic share. Despite the revenue miss, the company's operational improvements and strategic initiatives in cancer treatment indicate a robust performance.

Financial Highlights

• Revenue: $54.5 million (down from forecast)
• Earnings per share: $0.21 (up 31.25% from forecast)
• Net income: $8.8 million
• Cash and equivalents: $94 million as of September 30, 2025

Earnings vs. Forecast

Puma Biotechnology's EPS of $0.21 significantly exceeded the forecast of $0.16, marking a 31.25% surprise. However, the revenue of $54.5 million fell short of the $57.5 million forecast, a 5.22% miss. This mixed result highlights strong cost management and profitability despite sales challenges.

Market Reaction

Following the earnings announcement, Puma's stock price increased by 5.36% in premarket trading, reaching $5.21. This upward movement reflects investor confidence in the company's earnings performance, despite the revenue miss. The stock's performance is notable against its 52-week range, suggesting optimism about future growth.

Outlook & Guidance

Puma Biotechnology anticipates Q4 2025 Nerlynx product revenue between $54 million and $56 million, with full-year net income guidance of $27 million to $29 million. The company expects operating expenses to remain flat or slightly higher, maintaining a focus on profitability and strategic growth.

Executive Commentary

"We believe that the positive net income that the company achieved in Q3 2025 has resulted from the continued financial discipline across the company over the last few years," stated Mariann Ohanesian. CEO Alan Auerbach emphasized, "We are happy to stagger the indications to control the burn so that we can remain a profitable company."

Risks and Challenges

• Revenue miss could indicate sales momentum challenges.
• Ongoing trials and competitive pressures in the biotech sector.
• Potential impact of flat to slightly higher operating expenses on profitability.
• Market saturation and macroeconomic pressures could affect growth.

Q&A

During the earnings call, analysts inquired about potential pivotal phase 3 trials for alisertib and the company's commitment to maintaining profitability. Executives reiterated their focus on strategic growth and debt reduction plans, anticipating debt payoff by mid-next year.

Full transcript - Puma Biotechnology Inc (PBYI) Q3 2025:

Julian, Conference Call Operator: Good afternoon. My name is Julian, and I'll be your conference call operator today. At this time, all participants are in a listen-only mode. After the speaker's formal remarks, there will be a question-and-answer session. If you'd like to ask a question during that time, simply press the star key, then the number one, on your telephone keypad. If you'd like to withdraw your question, please press star two. If you should require operator assistance during the conference, please press star zero. As a reminder, this call is being recorded. I would now like to turn the conference call over to Mariann Ohanesian, Senior Director of Investor Relations for Puma Biotechnology. Thank you. You may begin.

Mariann Ohanesian, Senior Director of Investor Relations, Puma Biotechnology: Thank you, Julian. Good afternoon and welcome to Puma's conference call to discuss our earnings results for the third quarter of 2025. Joining me on the call today are Alan Auerbach, Chief Executive Officer, President and Chairman of the Board of Puma Biotechnology; Maximo F. Nougues, Chief Financial Officer; Heather Blaber, Senior Vice President of Marketing; and Roger Storms, Senior Vice President of Sales. After the close today, Puma issued a news release detailing earnings results for third quarter 2025. That news release, the slides that Roger will refer to, and a webcast of this call are accessible via the homepage and investor sections of our website at pumabiotechnology.com. The webcast and presentation slides will be archived on our website and available for replay for the next 90 days.

Today's conference call will include statements about Puma's future expectations, plans, and prospects that constitute forward-looking statements for purposes of federal securities laws. Such statements are subject to risks and uncertainties, and actual events and results may differ from those expressed in these forward-looking statements. For a full discussion of these risks and uncertainties, please review our periodic and current reports filed with the SEC from time to time, including our annual report on Form 10-K for the year ended December 31, 2024. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this live conference call, November 6, 2025. Puma undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as required by law.

During today's call, we may refer to certain non-GAAP financial measures that involve adjustments to our GAAP figures. We believe these non-GAAP metrics may be useful to investors as a supplement to, but not a substitute for, our GAAP financial measures. Please refer to our third quarter 2025 earnings release for reconciliation of our GAAP to non-GAAP results. I will now turn the call over to Alan.

Alan Auerbach, Chief Executive Officer, President and Chairman, Puma Biotechnology: Thank you, Mariann, and thank you all for joining our call today. Today, Puma reported total revenue for the third quarter of 2025 of $54.5 million. Total revenue includes product revenue net, which consists entirely of Nerlynx sales, as well as royalties from our sub-licensees. Product revenue net was $51.9 million in the third quarter of 2025, an increase from $49.2 million reported in Q2 2025 and a decrease from $56.1 million reported in Q3 2024. As a reminder to investors, Puma reported Nerlynx sales includes both U.S. net sales of Nerlynx and product supply revenues of Nerlynx to Puma's ex-U.S. partners. Please note that in Q3 2024, we reported product supply revenue to our international partners of about $7.4 million versus $0.1 million in Q3 2025. Therefore, U.S. net sales of Nerlynx in Q3 2025 were $51.8 million versus $48.8 million in Q3 2024.

Product revenue for the third quarter of 2025 was impacted by approximately $3.1 million of inventory billed at our specialty pharmacies and specialty distributors. Royalty revenue was $2.6 million in the third quarter of 2025, compared to $3.2 million in Q2 2025 and $24.4 million in Q3 2024. Q3 2024 royalty revenue included sales to China by our offshore partner, Pierre Fabre. We reported 2,949 bottles of Nerlynx sold in the third quarter of 2025, an increase of 341 from the 2,608 bottles sold in Q2 2025. In Q3 2025, we estimate that inventory increased by 172 bottles. In Q3 2025, new prescriptions were down approximately 3% compared to Q2 2025, and total prescriptions were down approximately 1% compared to Q2 2025. Roger will provide further details in his comments and slides.

I will now provide a clinical review of the quarter, then Heather Blaber and Roger Storms will add additional color on Nerlynx's commercial activities. Maximo F. Nougues will follow with highlights of the key components of our financial statements for the third quarter of 2025. As investors are aware, Puma currently has two ongoing phase 2 trials of our investigational drug, alisertib. Aliska Breast I, which is a phase 2 trial of alisertib in combination with endocrine treatment in patients with HER2-negative hormone receptor-positive breast cancer, and Aliska Lung I, a phase 2 trial looking at the efficacy of alisertib monotherapy in patients with small cell lung cancer. As a reminder, the Aliska Breast I trial investigates alisertib in combination with endocrine treatment, which consists of either anastrozole, exemestane, letrozole, fulvestrant, or tamoxifen in patients with HER2-negative, hormone receptor-positive, metastatic breast cancer.

Patients must be chemotherapy naive, have been previously treated with a CDK4/6 inhibitor, and received at least two prior lines of endocrine therapy in the recurrent or metastatic setting to be eligible for the trial. Patients are being dosed with alisertib given at either 30 milligrams, 40 milligrams, or 50 milligrams twice daily b.i.d. on days 1 to 3, 8 to 10, and 15 to 17 in a 28-day cycle in combination with the endocrine therapy of the investigator's choice. Patients must not have been previously treated with the endocrine treatment in the metastatic setting that will be given in combination with alisertib in the trial. The primary efficacy endpoints include objective response rate, duration of response, disease control rate, and progression-free survival. As a secondary objective, the company will be evaluating each of these efficacy biomarkers.

Within biomarker subgroups in order to determine whether any biomarker subgroup correlates with better efficacy and has been seen. In preclinical and clinical studies in other cancers, including breast cancer and small cell lung cancer. The company will then look to focus the future clinical development of alisertib in combination with endocrine therapy for patients with HER2-negative, hormone receptor-positive breast cancer with these biomarkers. The trial was initiated in late November 2024. There are currently 34 sites in the U.S. and 18 sites in Europe that have been activated for the trial, and the trial is rolling ahead of expectations. There are currently 98 patients enrolled in the trial and 14 additional patients in screening. Due to the faster-than-expected enrollment in the trial, the formal interim analysis was triggered sooner than expected.

We anticipate that the formal interim analysis will be completed in the first half of 2026 and look forward to sharing this with investors at that time. With respect to the Aliska Lung study, the Aliska Lung is a phase two study of our investigational drug, alisertib, to investigate the efficacy of alisertib monotherapy in patients with small cell lung cancer and to specifically look at the efficacy of the drug in patients with biomarkers where the aurora kinase pathway plays a role. The goal is to correlate the efficacy in these biomarker subgroups in the Aliska Lung I study to the efficacy that was previously seen in the biomarker subgroups from the randomized trial of paclitaxel plus alisertib versus paclitaxel plus placebo that was published in the Journal of Thoracic Oncology in 2020.

In that randomized trial, a progression-free survival benefit and overall survival benefit were seen in patients with biomarkers which correlate with the aurora kinase pathway. If the efficacy and biomarker data are comparable from the two studies, the company would look to engage the FDA to discuss the regulatory path further. As discussed on the recent earnings call, the company believes that the data obtained to date from the Aliska Lung I is providing a preliminary indication of potentially better activity in patients with biomarkers where the aurora kinase plays a role. The most recent analysis of the PK data from the Aliska Lung suggests that we're seeing lower PK of alisertib in the Aliska Lung I study compared to the previous phase two of alisertib monotherapy in small cell lung cancer patients that was published in Lancet Oncology. The company has amended the protocol.

For the trial to increase the dose of alisertib from 50 milligrams b.i.d. to 60 milligrams b.i.d., which the company believes will increase the PK of the drug to levels closer to what was seen in the prior phase two. The company is currently enrolling patients at the 60 milligram b.i.d. dose. There are currently 61 patients in the trial, with nine of these patients enrolled at the 60 milligram b.i.d. dose and an additional two patients in screening. Assuming the safety at the 60 milligram dose is acceptable, the company plans to meet with the FDA in order to amend the protocol to continue to dose escalate to 70 milligrams b.i.d. The company looks to have additional interim data from this trial in the first half of 2026.

As mentioned on prior earnings calls and in response to investor questions, Puma continues to evaluate several drugs to potential end license or acquire that would allow the company to diversify itself and leverage Puma's existing R&D, regulatory, and commercial infrastructure. The company will keep investors updated on this as it progresses. I will now turn the call over to Heather Blaber for an update on our marketing initiatives. Roger Storms will follow with a review of our commercial performance during the quarter.

Heather Blaber, Senior Vice President of Marketing, Puma Biotechnology: Thank you, Alan. I appreciate the opportunity to share some additional insights into our marketing strategy. The marketing team is focused on creating awareness of both clinical messaging for Nerlynx as well as recently published data that demonstrate the continued need to reduce the risk of recurrence in HER2-positive early breast cancer after treatment with adjuvant therapy. We continue to invest in market research to help us better understand risk factors that put a patient at high risk of recurrence in HER2-positive early-stage breast cancer, as well as garner insights on the Nerlynx clinical data in this patient population. Together with our marketing initiatives, our strategy is focused on increasing awareness of our broad indication of patients that are appropriate for treatment with Nerlynx.

We have adjusted our strategy based on our learnings and revised both personal and non-personal messaging with the goal of engaging physicians on a broader set of patients where the risk of recurrence still remains high and where we believe Nerlynx can play an important role in helping to reduce the risk of recurrence in patients with early-stage HER2-positive breast cancer. In addition to revising our messaging, we have a new resource to support patients throughout their recommended course of Nerlynx therapy. This educational resource is provided to patients on a monthly basis with the goal of improving patient adherence as they receive their refills. Lastly, year to date, we have reached 99.7% of oncologists through non-personal promotion and continue to expand our share of voice, working closely with the sales team to increase engagement with healthcare providers.

In summary, we are excited about our new marketing strategy and messaging, which we believe will continue to help educate and engage oncologists on the unmet need for those diagnosed with HER2-positive early breast cancer. I will now turn the call over to Roger Storms to provide an overview on the commercial performance for the third quarter.

Alan Auerbach, Chief Executive Officer, President and Chairman, Puma Biotechnology: Thank you, Heather, and thanks to everyone for joining our third quarter earnings call. Before I move into the commercial review, just a reminder that I'll be making forward-looking statements. The sales team remains focused on expanding overall HCP reach and frequency with a strong emphasis on driving engagement at key treatment decision points. In Q3 2025, call activity increased 22% year over year and increased 17% quarter over quarter. This is a direct result of continued emphasis put on executional excellence and increased accountability with the existing sales team. I expect call activity to continue to improve as we fill vacancies. The commercial team continues to prioritize increasing the use of Nerlynx with a main focus on patients at higher risk of recurrence.

They are also dedicated to enhancing clinical education and engagement through non-personal promotional efforts, as well as utilizing patient resources to support persistence and compliance during Nerlynx therapy. Let me now transition to some of the commercial slides where I'll provide some additional specifics around performance. Slide three is an illustration of our distribution model, which is broken out into the specialty pharmacy channel and the specialty distributor or in-office dispensing channel. In regards to overall distribution of our business, in Q3 2025, about 65% of our business was purchased through the SP channel, and the remaining 35% was purchased through the SD channel. We are seeing some stronger growth in the SD channel driven by two main factors: one, increased sales in the group purchasing organization segment, and two, increased 340B purchasing. Turning to slide four.

Nerlynx's net product revenue in Q3 2025 was $51.9 million, which represents an increase of $2.7 million from the $49.2 million we reported in Q2 2025 and a decrease of $4.2 million from the $56.1 million we reported in Q3 of 2024. As a reminder to investors, Puma's reported Nerlynx sales include both U.S. sales of Nerlynx and product supply revenues of Nerlynx to Puma's ex-U.S. partners. Please note that in Q3 2024, we reported product supply revenue to our international partners of about $7.4 million versus the $0.1 million in Q3 of 2025. Therefore, U.S. net sales of Nerlynx in Q3 2025 were $51.8 million versus the $48.8 million in Q3 of 2024. I will provide some more details around inventory changes, and Maximo will provide some additional specifics around gross-to-net expenses during his update.

In Q3 of 2025, we estimate that inventory increased by about $3.1 million. As a comparator, we estimate that inventory decreased by about $1.3 million in Q2 of 2025 and increased by about $0.7 million in Q3 of 2024. Slide five shows Q3 2025 X Factory Bottle sales and also provides both a year-over-year and a quarter-over-quarter comparison. In Q3 2025, Nerlynx X Factory Bottle sales were 2,949, which represents an approximate 13% increase quarter over quarter and an 8% increase year over year. Inventory declined for the first two quarters but increased in Q3 of 2025. Similar to the prior slide, let me specifically call out the inventory changes from a bottle perspective. In Q3 2025, we estimate that inventory increased by 172 bottles. As a comparator, we estimate that inventory decreased by 85 bottles in Q2 of 2025 and increased by 39 bottles in Q3 of 2024.

Let me take a moment to provide some additional metrics regarding our second quarter performance. In Q3, we saw enrollments increase by about 6% quarter over quarter and decline about 6% year over year. New patient starts or NRX follow a similar pattern, increasing 3% quarter over quarter and declining about 1% year over year. Turning to total prescriptions or TRX, we saw TRX decline about 1% quarter over quarter and decline about 4% year over year. Finally, let me share some specifics around demand. In Q3 2025, we saw demand increase by about 3% quarter over quarter and about 3% year over year. As mentioned earlier, we have seen stronger demand growth in the SD channel, where we saw SD demand grow by about 11% quarter over quarter and about 25% year over year. Slide six highlights the quarterly adoption of dose escalation since Nerlynx launch.

In Q3 2025, approximately 77% of patients started Nerlynx at a reduced dose. This is higher compared to the 71% we reported in Q2 2025. Continued messaging and adoption of dose escalation remains an important commercial priority. Patients who are started on Nerlynx utilizing dose escalation have better persistence and compliance. We believe dose escalation coupled with the new patient education resources will give patients better support throughout their Nerlynx therapy and ultimately help them reduce the risk of recurrence. Slide seven highlights the strategic collaborations we formed across the globe. We really appreciate the excellent work being done by our partners around the world and look forward to supporting their continued success moving forward. Let me close by expressing my heartfelt gratitude to the entire Puma team for their unwavering passion and dedication to supporting patients and families affected by breast cancer.

This disease can be devastating, and we recognize there is still more work to do and more that can be done. I will now turn the call over to Maximo for a review of our financial results.

Maximo F. Nougues, Chief Financial Officer, Puma Biotechnology: Thanks, Roger. I will begin with a brief summary of our financial results for the third quarter of 2025. Please note that I will make comparisons to Q2 2025, which we believe is a better indication of our progress as a commercial company than year-over-year comparisons. For more information, I recommend that you refer to our third quarter 2025 10-Q, which will be filed today and includes our consolidated financial statements. For the third quarter of 2025, we reported net income based on GAAP of $8.8 million, or $0.18 per basic share and $0.17 per diluted share. This compares to net income in Q2 2025 of $5.9 million, or $0.12 per share.

On a non-GAAP basis, which is adjusted to remove the impact of stock-based compensation expense, we reported net income of $10.5 million, or $0.21 per basic and diluted share for the third quarter of 2025. Gross revenue from Nerlynx sales was $70 million in Q3 2025 and $62.1 million in Q2 2025. As Alan mentioned, net product revenue from Nerlynx sales was $51.9 million, an increase from the $49.2 million reported in Q2 2025 and a decrease versus the $56.1 million reported in Q3 2024. As a reminder to investors, Puma reported Nerlynx sales include both U.S. net sales of Nerlynx and product supply revenue of Nerlynx to Puma's ex-U.S. partners. Please note that in Q3 2024, we reported product supply revenue to our international partners of about $7.4 million versus $0.1 million in Q3 2025. Therefore, U.S.

Net sales of Nerlynx in Q3 2025 were $51.8 million versus $48.8 million in Q3 2024. The increase in Q3 2025 net revenue versus Q2 2025 was driven primarily by an increase in Nerlynx bottles sold in the U.S. Inventory build of $3.1 million, offset by a higher gross-to-net expense. Inventory build by our distributors was approximately $3.1 million in Q3 versus drawdown of approximately $1.3 million in Q2 2025. Royalty revenue totaled $2.6 million in the third quarter of 2025 compared to $3.2 million in Q2 2025. Our gross-to-net adjustment in Q3 2025 was about 25.9% and 20.8% in Q2 2025. The increase on gross-to-net was driven mostly by a higher than expected Medicare rebate driven by the Inflation Reduction Act implemented in Q4 of 2022 and higher Medicaid share.

Cost of sales for Q3 2025 was $12.2 million and includes $2.4 million for the amortization of intangible assets related to our Nerlynx license. Cost of sales for Q2 2025 was $12.3 million. Going forward, we will continue to recognize amortization of the milestones to the licensor, about $2.4 million per quarter as cost of sales. For fiscal year 2025, Puma anticipates that net Nerlynx product revenue will be in the range of $198-$200 million, higher than our prior guidance. We also anticipate that our gross-to-net adjustment for the full year 2025 will be between 23%-23.5%.

In addition, for fiscal year 2025, we anticipate receiving royalties from our partners around the world in the range of $22 million-$23 million, lower than 2024 due to the fewer shipments expected to China as our partner works through regulatory transitions during the first several quarters of 2025. We do not expect any license revenue in 2025. We also expect that net income for the full year will be in the range of $27 million-$29 million. The current guidance does not include any potential release of any additional tax asset valuation allowance in our net income estimate. The company is reviewing its deferred tax assets as part of its ongoing tax valuation analysis and has not yet determined whether any adjustment will be required or, if so, the potential timing or size of such an adjustment. We will continue to keep investors updated on this as it progresses.

At this time, we do not believe the tariffs imposed or proposed to be imposed by the United States, particularly with other countries, will have a material impact on our product costs or results of operations. However, shifts in trade policies in the United States and other countries have been rapidly evolving and are difficult to predict. As a point of reference, our manufacturing product cost accounts for a mid to high single-digit % of our cost of goods sold. We anticipate that for Q4 2025, Nerlynx product revenue net will be in the range of $54 million-$56 million. Please note that Q4 net product revenue guidance includes almost $4.5 million of product sales to one of our global partners, as well as U.S. net revenue, which we expect to be in the range of $50 million-$52 million.

The sales to our global partners will also contribute to the large royalty revenue we expect in Q4. We expect Q4 royalty revenue will be in the range of $13 million-$14 million and no license revenue. We further estimate that the gross-to-net adjustment in Q4 2025 will be approximately 24%-25%. Puma anticipates Q4 net income between $9 million and $11 million. SG&A expenses were $16.8 million in the third quarter of 2025 compared to $18 million in the second quarter. SG&A expenses included non-cash charges for stock-based compensation of $1.1 million for Q3 and $1 million for Q2 2025. Research and development expenses were $15.9 million in the third quarter of 2025 and $15.5 million in the second quarter. R&D expenses included non-cash charges for stock-based compensation of $0.6 million in the third quarter of 2025, unchanged from the second quarter.

On the expense side, Puma anticipates flat to slightly higher total operating expenses in 2025 compared to 2024. More specifically, we anticipate SG&A expenses to decrease by 7-10%. R&D expenses to increase by 20-25% year over year. The higher increase in R&D is driven by faster enrollments in our clinical trials than previously expected. In the third quarter of 2025, Puma reported cash burn of approximately $1.6 million. This compares to cash earned of approximately $2.9 million in Q2. Please note that during Q3, we made our sixth quarterly principal loan payment of $11.1 million related to our obligation with Ethereum. As a result of this, our total outstanding principal debt balance decreased to approximately $33 million. On September 30, 2025, we had approximately $94 million in cash, cash equivalents, and marketable securities versus about $101 million at year-end 2024.

Our accounts receivables balance was $33.6 million. Our accounts receivable terms ranged between 10 and 68 days. While our day sales outstanding are about 50 days. We estimate that as of September 30, 2025, our distribution network maintained approximately 3.5 weeks of inventory. Overall, we continue to deploy our financial resources to focus on the commercialization of Nerlynx, the development of alisertib, and controlling our expenses.

Julian, Conference Call Operator: Thanks, Maximo. On past earnings calls, we have stressed that Puma's senior management, in cooperation with the board of directors, continues to remain focused on Nerlynx sales trends in 2025 and beyond and recognizes its fiscal responsibility to the shareholders to continue to maintain positive net income. We believe that this focus has contributed to our commercial execution in a positive way. As according to our current projections, 2025 will mark the first year-over-year demand increase for Nerlynx in the U.S. since 2018. We are pleased to report this demand-driven growth in Nerlynx sales for the first nine months of 2025. In addition, we believe that the positive net income that the company achieved in Q3 2025 and that the company is guiding to for the full year 2025 has resulted from the continued financial discipline across the company over the last few years.

The company remains committed to continuing to achieve this positive net income and will continue to reduce expenses if needed to achieve this. We look forward to updating investors on this in the future. There continues to remain a significant unmet need for patients battling breast cancer, lung cancer, and other solid tumors. We at Puma are committed and passionate about finding more effective ways of helping these patients during their journey, and we will continue to strive to achieve that goal. This concludes today's presentation. We will now turn the floor back to the operator for Q&A. Operator.

Mariann Ohanesian, Senior Director of Investor Relations, Puma Biotechnology: Thank you. With that, we will now be conducting a question-and-answer session. If you wish to ask a question, please press Star 1 on your telephone keypad. Confirmation will indicate that your line is in the question queue. If you choose to withdraw your request, please press Star 2. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the Star keys. One moment while we poll for questions. Our first question comes from the line of Mark Fram with TD Cowen. Please proceed with your question.

Alan Auerbach, Chief Executive Officer, President and Chairman, Puma Biotechnology: Should I make a question? Maybe just looking forward to the breast cancer interim. Just please remind us what the kind of bar you're going to be kind of evaluating that with in terms of willingness to continue to spend on that indication, particularly in light of your comments to kind of end the prepared remarks of remaining committed to staying profitable.

Julian, Conference Call Operator: Yeah, thanks, Mark. There have been two—this is going to be alisertib in combination with endocrine. You'll remember there was a previous trial, TBCRC41, of alisertib in combination with endocrine. I think that's probably going to be the gauge we're looking for to compare to those numbers. Right now, as you know, the standard of care for HER2-negative breast cancer is, first line, they get a CDK4/6 inhibitor. Second line, depending on which mutation they have, they may get a targeted therapy or may get a different type of a combination therapy. Third line is still kind of in a white space, if you will. That's where we're focusing is in that third line white space. All these patients are kind of third line endocrine, if you will.

Obviously, what we would look for in terms of continued spend would really be, number one, how the efficacy compares to what we would typically expect to be standard of care in third line. Also, assuming we're able to find a biomarker where it portends for or it predicts a better outcome to alisertib, that would obviously be quite compelling as well. We've gotten asked that question in the past, which is, okay, you have both the breast and the lung. You want to remain profitable. As we've said in the past, and I will say again, we're happy to stagger the indications to control the burn so that we can remain a profitable company.

Mariann Ohanesian, Senior Director of Investor Relations, Puma Biotechnology: Okay. That's helpful. I guess the next steps could ultimately involve a larger, pivotal program, which I think would strain—for any one of the indications might strain the ability to stay profitable. Would you be willing to go negative with the data and go back to a loss if the data supports it?

Julian, Conference Call Operator: Yeah. A couple things to remember.

Mariann Ohanesian, Senior Director of Investor Relations, Puma Biotechnology: Does that require a partner?

Julian, Conference Call Operator: Yeah. So a couple of things to remember from that perspective, Mark. If you look at our guidance for our full year in terms of net income, remember that includes us paying down our debt. The debt goes away mid next year, and we become a debt-free company. You start to see cash flow generation occurring because of that. Now, in terms of the pivotal phase three that you would need, based on the other phase threes I've seen in this space, I'm not anticipating this to be like a 1,000-patient trial or something. I think it would still be within a manageable number. Especially given that you're not going to hit all those expenses at once, you're going to see it spaced out over time. I think it's still possible to be able to do a pivotal phase three just based on.

The cash flow from Nerlynx and remaining committed to being net income positive.

Mariann Ohanesian, Senior Director of Investor Relations, Puma Biotechnology: Okay. Thanks. That's very helpful. Thank you. With that, this does conclude today's question and answer session. I'd like to turn the conference back to Mariann for closing remarks.

Heather Blaber, Senior Vice President of Marketing, Puma Biotechnology: Thank you for joining us today. As a reminder, this call may be accessed via replay at pumabiotechnology.com beginning later today. Have a good evening.

Mariann Ohanesian, Senior Director of Investor Relations, Puma Biotechnology: Thank you, ladies and gentlemen. Thank you for participating in today's conference call. This concludes our program. Everyone, have a great day. You may now disconnect your line.

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