Here's What Analysts Are Asking Puma Biotech Following Roche's Positive Perjeta Results

RBC Capital says the commercial opportunity for Puma Biotechnology Inc PBYI’s breast cancer drug neratinib in the extended adjuvant setting should be “considered as eliminated,” given Roche Holding Ltd. (ADR) RHHBY’s positive top-line data for Perjeta.

Analyst Commentary

“This is especially true given neratinib’s very difficult GI AE profile, an issue which investors initially believed to be somewhat under control with loperamide, until the data at SABCS 2016 were revealed,” analyst Simos Simeonidis wrote in a note.

Roche's Recent Success

Roche said its Phase III APHINITY study showed that Perjeta regimen helped people with an aggressive type of early breast cancer live longer without their disease returning versus Herceptin and chemotherapy.

The study also showed Perjeta plus Herceptin and chemotherapy showed a statistically significant improvement in invasive disease-free survival (iDFS) for people with HER2-positive early breast cancer (eBC) compared to Herceptin and chemotherapy alone.

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Puma's Plans

In fact, Puma said it plans to modify the summary of product characteristics (SmPC) of neratinib in its European Marketing Authorization Application (MAA). The company now plans to restrict the intended population to patients initiating neratinib treatment within one year after completion of adjuvant trastuzumab therapy.

Earlier, the proposed indication was for the "extended adjuvant treatment of adult patients with early-stage HER2-overexpressed/amplified breast cancer who have received prior adjuvant trastuzumab based therapy."

What Could Be Ahead?

Given Perjeta will be soon hitting the markets, the analyst believes “this active yet difficult to administer agent (neratinib) would have a very tough time being commercially relevant, even if it ended up being approved.”

As such, neratinib's value now mainly lies on the third-line metastatic breast cancer NALA trial. The analyst believes neratinib has a decent chance of beating lapatinib head to-head in NALA study.

Against this backdrop, the questions on Puma shifts to:

1. “Will NALA work in 1H17?”
2. “How big is the metastatic opportunity?”
3. “Do any of the prophylactic regimens tested work?”

Meanwhile, Simeonidis maintains Sector Perform rating on the shares, but slashed price target to $17 from $48.

Investors, too, became bearish on Puma Biotech shares, which plunged as much as 24 percent in the day. At last check, they were down 10.38 percent to $34.10. On the other hand, ADRs of Roche rose 6.37 percent to $32.49.