What You Need to Know About Puma Biotech's 25% Slide

Shares of Puma Biotechnology Inc PBYI, a development stage biotech company focusing on cancer treatment, are down over 25 percent in pre-market trading.

What You Need to Know

Puma Biotech announced Tuesday afternoon the Committee for Medicinal Products for Human Use of the European Medicines Agency indicated a negative trend vote following its meeting with the company over Nerlynx, or neratinib, approval in Europe.

Neratinib is meant for extended adjuvant treatment for HER2-positive early stage breast cancer in the United States. It's indicated to treat patients who were previously treated with Roche Holding Ltd. (ADR) RHHBY's breast cancer drug Herceptin.

The CHMP's contention is that the benefit risk assessment for neratinib is negative, given that the study results are based on evidence from a single pivotal trial and the 2- and 5-year invasive disease-free survival benefits observed lack sufficient clinical relevance.

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Why It's Important?

The stock has had a strong run up over the past year, more than doubling during the period following FDA approval for neratinib.

Neratinib was launched in the U.S. in August 2017 following vetting by the FDA, and fetched the company revenues of $6.1 million in the third quarter.

The company is currently testing the product for other cancers, including non-small cell lung cancer and other tumors having the HER2 mutation.

"A negative trend vote means it is unlikely that CHMP will provide a positive opinion related to the Company's MAA at the formal CHMP decision vote scheduled in February 2018, and that additional steps would need to be taken to gain marketing approval in Europe," the company said in the release.

What's Next?

The development means the company may have to wait longer for selling neratinib in Europe even as it continues to market it in the U.S. The CHMP's communication was based on results from the Phase III Ex-teNET and Phase II CONTROL trial.

In pre-market trading, PBYI shares were trading down more than 25 percent at $68.05