Puma Biotech Shares Plunge After Nerlynx Update, Quarterly Report

Shares of small-cap oncology biotech Puma Biotechnology Inc PBYI are sinking to their lowest level since November following the release of its first-quarter results.

Nerlynx Numbers Disappoint

While Puma beat consensus earnings and revenue estimates, it appears to be an update on Nerlynx, its first commercial product, that's sending the stock into freefall.

Puma said its product revenues stem entirely from sales of the treatment, which has been approved for treating early stage, previously treated HER 2+ breast cancer.

The FDA approved the once-daily oral tablet in July 2017.

A Nerlynx sales miss in the third quarter of 2018 sent Puma's shares down by about 50 percent Nov. 2.

Nerlynx revenues, though increasing 27 percent year-over-year, represented a 25-percent drop from the $61.1 million reported for the fourth quarter of 2018.

"Puma experienced lower than expected net product revenue in the first quarter of 2019," Puma CEO Alan Auerbach said in a statement.

The decline was attributed to an increase in expenses charged against gross revenue and an increase in patients discontinuing Nerlynx treatment.

A string of downgrades followed the earnings announcement: Citigroup downgraded the stock from Buy to Neutral, while Cantor Fitzgerald downgraded the stock from Overweight to Neutral and reduced the price target to $20.