What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-01 compared with 2024-05-02 · 264 added, 155 removed, 1053 unchanged (28% of the section changed)

5 unchanged sentences

( unaudited )

March 31, 2024

June 30, 2024

December 31, 2023

23 unchanged sentences

39,005 52,721

Post-marketing commitment liability, current

Post-marketing commitment liability

Lease liabilities, current

3 unchanged sentences

104,296 99,382

Accrued expenses, long-term

Other liabilities, long-term

Lease liabilities, long-term

8 unchanged sentences

100,000,000 shares authorized;

48,214,663 shares issued and outstanding at March 31, 2024 and 47,646,787 issued and outstanding at December 31, 2023

48,460,120 shares issued and outstanding at June 30, 2024 and 47,646,787 issued and outstanding at December 31, 2023

Additional paid-in capital

13 unchanged sentences

( unaudited )

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Product revenue, net

10 unchanged sentences

Interest expense

Other income (expense)

Total other expenses, net

11 unchanged sentences

(in thousands)

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Net (loss) income

2 unchanged sentences

Unrealized loss on available-for-sale securities, net of tax of $ 0

( 6 ) ( 6 ) ( 28 ) ( 6 )

Comprehensive (loss) income

5 unchanged sentences

(in thousands, except share data)

For the Three Months Ended March 31, 2024

For the Three Months Ended June 30, 2024

Comprehensive

Balance at December 31, 2023

Balance at March 31, 2024

Stock-based compensation

1 unchanged sentence

Unrealized loss on available-for-sale securities

Balance at June 30, 2024

For the Three Months Ended June 30, 2023

Comprehensive

Balance at March 31, 2023

For the Three Months Ended March 31, 2023

Stock-based compensation

Shares issued or restricted stock units vested under employee stock plans

Unrealized loss on available-for-sale securities

Balance at June 30, 2023

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements

PUMA BIOTECHNOLOGY, INC.

AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ EQUITY

(in thousands, except share data)

For the Six Months Ended June 30, 2024

Comprehensive

2 unchanged sentences

Shares issued or restricted stock units vested under employee stock plans

Balance at March 31, 2023

Unrealized loss on available-for-sale securities

Balance at June 30, 2024

For the Six Months Ended June 30, 2023

Comprehensive

Balance at December 31, 2022

Stock-based compensation

Shares issued or restricted stock units vested under employee stock plans

Unrealized loss on available-for-sale securities

Balance at June 30, 2023

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements

3 unchanged sentences

(in thousands)

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Operating activities:

14 unchanged sentences

Investing activities:

Purchase of property and equipment

Purchase of available-for-sale securities

3 unchanged sentences

Financing activities:

Net cash provided by financing activities

Payment of debt

Payment of exit costs

Net cash used in financing activities

Net decrease in cash, cash equivalents and restricted cash

1 unchanged sentence

Cash, cash equivalents and restricted cash, end of period

Supplemental disclosures of non-cash investing and financing activities:

Property and equipment purchases in accounts payable

Supplemental disclosure of cash flow information:

9 unchanged sentences

The Company is currently commercializing NERLYNX®, an oral version of neratinib (“NERLYNX”), for the treatment of HER2 -positive breast cancer.

Additionally, the Company recently in-licensed, and is responsible for global development and commercialization of, alisertib.

Additionally, in 2022, the Company in-licensed and became responsible for the global development and commercialization of, alisertib.

Alisertib is a selective, small molecule inhibitor of aurora kinase A that is designed to disrupt mitosis leading to apoptosis of rapidly proliferating tumor cells dependent on aurora kinase.

11 unchanged sentences

The Company is required to make substantial payments to Pfizer upon the achievement of certain milestones and has contractual obligations for clinical trial contracts.

The Company has entered into other exclusive sub-license agreements with various parties to pursue regulatory approval, if necessary, and commercialize NERLYNX, if approved, in many regions outside the United States, including Europe (excluding Russia and Ukraine), Australia, Canada, China, Southeast Asia, Israel, South Korea, and various countries and territories in Central and South America.

The Company plans to continue to pursue commercialization of NERLYNX in other countries outside the United States, if approved.

In September 2022, the Company entered into an exclusive license agreement with a subsidiary of Takeda Pharmaceutical Company Limited (“Takeda”) to license the worldwide research and development and commercial rights to alisertib, a selective, small-molecule, orally administered inhibitor of aurora kinase A.

The Company has reported net loss of approximately $ 4.8 million and cash provided by operations of approximately $ 11.2 million for the three months ended March 31, 2024 .

The Company’s commercialization, research and development or marketing efforts may require funding in addition to the cash and cash equivalents and marketable securities totaling approximately $ 107.2 million at March 31, 2024 .

The Company believes that its existing cash and cash equivalents and marketable securities as of March 31, 2024 and proceeds that will become available to the Company through product sales and sub-license payments are sufficient to satisfy its operating cash needs, including amounts due under the Company’s Note Purchase Agreement with Athyrium Opportunities IV Co-Invest 1 LP (“Athyrium”), for at least one year after the filing of the Quarterly Report on Form 10 -Q in which these financial statements are included.

The Company has reported net loss of approximately $ 9.3 million and cash provided by operations of approximately $ 12.3 million for the six months ended June 30, 2024 .

The Company believes that its existing cash and cash equivalents and marketable securities as of June 30, 2024 and proceeds that will become available to the Company through product sales and sub-license payments are sufficient to satisfy its operating cash needs, including amounts due under the Company’s Note Purchase Agreement with Athyrium Opportunities IV Co-Invest 1 LP (“Athyrium”) (see Note 9—Debt ), for at least one year after the filing of the Quarterly Report on Form 10 -Q in which these financial statements are included.

The Company continues to remain dependent on its ability to obtain sufficient funding to sustain operations and continue to successfully commercialize neratinib in the United States.

3 unchanged sentences

Additionally, the terms of the Company’s Note Purchase Agreement place restrictions on the Company’s ability to operate the business and on the Company’s financial flexibility, and the Company may be unable to achieve the revenue necessary to satisfy the minimum revenue and cash balance covenants as specified in the agreement.

Since its inception through March 31, 2024, the Company’s financing has primarily consisted of proceeds from product, royalty and license revenue, public offerings of its common stock, private equity placements, and various debt instruments.

In the opinion of management, the included disclosures are adequate, and the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary for a fair statement of our consolidated financial position as of March 31, 2024 .

Such adjustments are of a normal and recurring nature and certain reclassifications of previously reported amounts have been made to conform to the current year presentation.

Since its inception through June 30, 2024, the Company’s financing has primarily consisted of proceeds from product, royalty and license revenue, public offerings of its common stock, private equity placements, and various debt instruments.

Such adjustments are of a normal and recurring nature.

The condensed consolidated balance sheet as of December 31, 2023 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the audited annual financial statements.

The condensed consolidated results of operations for the quarter ended March 31, 2024 are not necessarily indicative of the consolidated results of operations that may be expected for the fiscal year ending December 31, 2024 .

The condensed consolidated results of operations for the quarter ended June 30, 2024 are not necessarily indicative of the consolidated results of operations that may be expected for the fiscal year ending December 31, 2024 .

Note 2 — Significant Accounting Policies:

13 unchanged sentences

For purposes of calculating diluted net (loss) income per share of common stock, the denominator includes both the weighted-average number of shares of common stock outstanding and the number of dilutive common stock equivalents, such as stock options, restricted stock units (“RSUs”) and warrants.

A common stock equivalent is not included in the denominator when calculating diluted earnings per common share if the effect of such common stock equivalent would be anti-dilutive and a net loss is reported.

A common stock equivalent is not included in the denominator when calculating diluted earnings per common share if the effect of such common stock equivalent would be anti-dilutive.

Our potentially dilutive securities include potential common shares related to our stock options and RSUs granted in connection with the Puma Biotechnology, Inc.

5 unchanged sentences

For the Three Months Ended

For the Six Months Ended

Options outstanding

7 unchanged sentences

A reconciliation of the numerators and denominators of the basic and diluted net (loss) income per share of common stock computations is as follows (in thousands, except share and per share amounts):

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Net (loss) income

3 unchanged sentences

Net effect of dilutive common stock equivalents

— 442,123 — 474,840

Weighted average common stock outstanding for diluted net (loss) income per share

20 unchanged sentences

The Company expenses incremental costs of obtaining a contract when incurred if the expected amortization period of the asset that the Company would have recognized is one year or less.

However, no such costs were incurred during the three months ended March 31, 2024 and 2023 , respectively.

However, no such costs were incurred during the six months ended June 30, 2024 and 2023 , respectively.

Reserves for Variable Consideration:

6 unchanged sentences

The amount of variable consideration that is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period.

The Company’s analyses also contemplated application of the constraint in accordance with the guidance, under which it determined a significant reversal of revenue would not be probable to occur in a future period for the estimates detailed below as of March 31, 2024 , and, therefore, the transaction price was not reduced further during the quarter ended March 31, 2024 .

The Company’s analyses also contemplated application of the constraint in accordance with the guidance, under which it determined a significant reversal of revenue would not be probable to occur in a future period for the estimates detailed below as of June 30, 2024 , and, therefore, the transaction price was not reduced further during the quarter ended June 30, 2024 .

Actual amounts of consideration ultimately received may differ from the Company’s estimates.

41 unchanged sentences

License fees under the sub-license agreements include one -time upfront payments when each sub-license agreement was executed and potential additional one -time milestone payments due to the Company upon successful completion of certain performance obligations, such as achieving regulatory approvals or sales target thresholds, and potential double-digit royalties on sales of the licensed product, calculated as a percentage of net sales of the licensed product throughout each sub-licensee’s respective territory.

As of March 31, 2024 the total potential milestone payments that would be due to the Company upon achievement of all respective performance obligations under the sub-license agreements is approximately $ 579.8 million.

As of June 30, 2024 the total potential milestone payments that would be due to the Company upon achievement of all respective performance obligations under the sub-license agreements is approximately $ 579.8 million.

At this time, the Company cannot estimate if or when these milestone-related performance obligations might be achieved.

3 unchanged sentences

The Company recognizes royalty revenue when the performance obligations have been satisfied.

Royalty revenue was $ 3.5 million and $ 6.0 million for the three months ended March 31, 2024 and 2023 , respectively.

Royalty revenue was $ 2.7 million and $ 6.2 million for the three and six months ended June 30, 2024 , respectively, and $ 3.0 million and $ 9.0 million for the three and six months ended June 30, 2023 , respectively.

Royalty Expenses:

62 unchanged sentences

ASC 740 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.

As of March 31, 2024 the Company’s uncertain tax position reserves include a reserve for its research and development credits.

As of June 30, 2024 the Company’s uncertain tax position reserves include a reserve for its research and development credits.

Legal Contingencies and Expense:

12 unchanged sentences

The lease-related letters of credit will lapse at the end of the respective lease terms through 2 026.

At each of periods ending March 31, 2024 and December 31, 2023 , the Company had restricted cash in the amount of approximately $ 2.1 million.

At each of periods ending June 30, 2024 and December 31, 2023 , the Company had restricted cash in the amount of approximately $ 2.1 million.

Investment Securities:

20 unchanged sentences

Valuations derived from valuation techniques in which one or more significant inputs are unobservable.

Following are the major categories of assets measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 , using quoted prices in active markets for identical assets (Level 1 ), significant other observable inputs (Level 2 ), and significant unobservable inputs (Level 3 ) (in thousands):

March 31, 2024

Following are the major categories of assets measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023 , using quoted prices in active markets for identical assets (Level 1 ), significant other observable inputs (Level 2 ), and significant unobservable inputs (Level 3 ) (in thousands):

June 30, 2024

Cash equivalents

11 unchanged sentences

$ 32,512 $ 16,400 $ — $ 48,912

The Company’s investments in commercial paper, corporate bonds and U.S.

The Company’s investments in commercial paper and U.S.

government securities are exposed to price fluctuations.

The fair value measurements for commercial paper, corporate bonds and U.S.

The fair value measurements for commercial paper and U.S.

government securities are based upon the quoted prices of similar items in active markets multiplied by the number of securities owned.

The following tables summarize the Company’s cash equivalents and short-term investments (in thousands):

March 31, 2024

June 30, 2024

Cash equivalents

13 unchanged sentences

Financial instruments, which potentially subject the Company to concentrations of credit risk, principally consist of cash and cash equivalents, marketable securities, and accounts receivable, net.

The Company’s cash and cash equivalents and restricted cash in excess of the Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation insured limits at March 31, 2024 were approximately $ 78.1 million.

The Company does not believe it is exposed to any significant credit risk due to the nature of the financial instruments in which the money is held.

4 unchanged sentences

The Company estimates an allowance for doubtful accounts primarily based on the creditworthiness of its customers, historical payment patterns, aging of receivable balances and general economic conditions.

The Company also sells its products to international customers through sub-licensees.

Royalty revenue consists of consideration earned related to international sales of NERLYNX made by the Company’s sub-licensees in their respective territories.

A majority of the Company's royalty revenue is generated from sales into the China market.

The Company’s success depends on its ability to successfully commercialize NERLYNX.

16 unchanged sentences

Starter kits, provided to patients prior to insurance approval, are expensed by the Company to selling, general and administrative expense as incurred.

As of March 31, 2024 and December 31, 2023 , the Company’s inventory balance consisted primarily of raw materials and work-in-process purchased subsequent to FDA approval of NERLYNX.

March 31, 2024

As of June 30, 2024 and December 31, 2023 , the Company’s inventory balance consisted primarily of raw materials and work-in-process purchased subsequent to FDA approval of NERLYNX.

June 30, 2024

December 31, 2023

35 unchanged sentences

As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

The Company’s average IBR for existing leases as of March 31, 2024 is 10.9 %.

The Company’s average IBR for existing leases as of June 30, 2024 is 10.9 %.

License Fees and Intangible Assets:

18 unchanged sentences

The Company capitalized the milestones as intangible assets and is amortizing the assets to cost of sales on a straight-line basis over the estimated useful life of the licensed patent through 2030.

The Company recorded amortization expense related to its intangible assets of approximately $ 2.4 million for each of the three months ended March 31, 2024 and 2023 , respectively.

As of March 31, 2024 estimated future amortization expense related to the Company’s intangible assets is approximately $ 7.3 million for the remainder of 2024 and $ 9.7 million for each year starting 2024 through 2029, and $ 2.4 million for 2030.

Recently Issued Accounting Standards:

The Company recorded amortization expense related to its intangible assets of approximately $ 2.4 million and $ 4.9 million for the three and six months ended June 30, 2024 and 2023 , respectively.

As of June 30, 2024 estimated future amortization expense related to the Company’s intangible assets is approximately $ 4.9 million for the remainder of 2024 and $9.7 million for each year starting 2025 through 2029, and $ 2.4 million for 2030.

Recently Issued Accounting Standar ds:

In October 2023, the FASB issued ASU 2023 - 06, Disclosure Improvements – Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative .

17 unchanged sentences

Accounts receivable, net consisted of the following (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

5 unchanged sentences

Trade accounts receivable consist entirely of amounts owed from the Company’s customers related to product sales.

Royalty revenue receivable represents amounts owed related to royalty revenue recognized based on the Company’s sub-licensees’ sales in their respective territories in the periods ended March 31, 2024 and December 31, 2023 .

For all accounts receivable, the Company recognizes credit losses based on lifetime expected losses to selling, general and administrative expense in the condensed consolidated statements of operations.

2 unchanged sentences

Prepaid expenses and other consisted of the following (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

1 unchanged sentence

Professional fees

Prepaid Taxes

Other clinical development

13 unchanged sentences

The stand-by letter of credit is collateralized by a high-yield savings account, which is classified as restricted cash, long-term on the accompanying consolidated balance sheets.

Total rent expense for the three months ended March 31, 2024 and 2023 was approximately $ 1.2 million and $ 1.2 million, respectively.

For purposes of determining straight-line rent expense, the lease term is calculated from the date the Company first takes possession of the facility, including any periods of free rent and any renewal option periods that the Company is reasonably certain of exercising.

Total rent expense for the three and six months ended June 30, 2024 was approximately $ 1.2 million and $ 2.4 million, respectively.

Total rent expense for the three and six months ended June 30, 2023 was approximately $ 1.2 million and $ 2.4 million, respectively.

F or purposes of determining straight-line rent expense, the lease term is calculated from the date the Company first takes possession of the facility, including any periods of free rent and any renewal option periods that the Company is reasonably certain of exercising.

The Company’s office leases generally have contractually specified minimum rent and annual rent increases that are included in the measurement of the ROU asset and related lease liability.

1 unchanged sentence

Such amounts are generally variable and therefore not included in the measurement of the ROU asset and related lease liability but are instead recognized as variable lease expense in selling, general and administrative costs in the condensed consolidated statements of operations when they are incurred.

Supplemental cash flow information related to leases for the three months ended March 31, 2024:

Supplemental cash flow information related to leases for the six months ended June 30, 2024:

Operating cash flows used for operating leases (in thousands)

2 unchanged sentences

Weighted average discount rate

Future minimum lease payments as of March 31, 2024 were as follows (in thousands):

Future minimum lease payments as of June 30, 2024 were as follows (in thousands):

Total minimum lease payments

3 unchanged sentences

The term of the lease runs until March 2026 and rent amounts payable to the Company increase approximately 3 % per year.

The Company recorded operatin g sublease income of $ 0.2 million and $ 0.1 million for the three months ended March 31, 2024 and 2023 , respectively, in oth er income (expenses) in the condensed consolidated statements of operations.

The Company recorded operatin g sublease income of $ 0.2 million and $ 0.5 million for the three and six months ended June 30, 2024 , respectively, in oth er income (expenses) in the condensed consolidated statements of operations.

In August 2023, the Company entered into a long-term sublease agreement for 13,916 square feet of the office space in Los Angeles, California, which commenced in November 2023.

2 unchanged sentences

As a result of the long-term sublease, the Company recorded an impairment expense on the right-of-use asset of approximately $ 0.6 million.

The future minimum lease payments to be received as of March 31, 2024 , were as follows (in thousands):

The future minimum lease payments to be received as of June 30, 2024 , were as follows (in thousands):

Note 6 — Property and Equipment, Net:

Property and equipment, net consisted of the following (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

Leasehold improvements

$ 3,779 $ 3,779

Computer equipment

3 unchanged sentences

accumulated depreciation

( 7,778 ) ( 7,680 )

Property and equipment, net

For each of the three months ended March 31, 2024 and 2023 , the Company incurred de preciation expense of $ 0.1 million .

For the three and six months ended June 30, 2024, the Company incurred depreciation expense of $ 0.1 million and $ 0.2 million, respectively.

For the three and six months ended June 30, 2023, the Company incurred depreciation expense of $ 0.1 million and $ 0.2 million, respectively.

Note 7 — Intangible Assets, Net:

Intangible assets, net consisted of the following (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

5 unchanged sentences

$ 56,001 $ 60,871

For each of the three months ended March 31, 2024 and 2023 , the Company incurred amortization expe nse of $ 2.4 million.

The estimated remaining useful life of the intangible assets as of March 31, 2024 is 6.0 years.

For each of the three and six months ended June 30, 2024 and 2023 , the Company incurred amortization expe nse of $ 2.4 million and $ 4.9 million, respectively.

The estimated remaining useful life of the intangible assets as of June 30, 2024 is 5.8 years.

Note 8 — Accrued Expenses:

Accrued expenses consisted of the following (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

9 unchanged sentences

Accrued manufacturing costs

Accrued other

Included in accrued legal verdict expense is app roximately $ 7.8 million ($ 8.0 million net of imputed interest) as of March 31, 2024 tha t is related to Eshelman v.

Accrued other liabilities

Included in accrued legal verdict expense is app roximately $ 7.9 million ($ 8.0 million net of imputed interest) as of June 30, 2024 tha t is related to Eshelman v.

Puma Biotechnology, Inc., et al .

8 unchanged sentences

Accrued compensation includes commissions and vacation.

Other current accrued expenses consist primarily of business license fees and taxes.

Other current accrued expenses consist primarily of business license fees and fees associated with a company sales team meeting.

Note 9 — Debt:

Long term debt consisted of the following (in thousands):

March 31, 2024

June 30, 2024

Maturity Date

3 unchanged sentences

current portion

debt repayment

Total long-term debt, net

12 unchanged sentences

Interest is payable quarterly on the last business day of March, June, September and December each year.

Beginning June 30, 2024, principal payments are required to be made quarterly at 11.11 % of the original face amount with the remaining balance paid at maturity.

Each principal payment will also include a 2.0 % exit payment.

As of March 31, 2024 , the effective interest rate for the loan was 12.99 %.

As of June 30, 2024, we began paying the principal payments required to be made quarterly at 11.11 % of the original face amount with the remaining balance paid at maturity.

Each principal payment also includes a 2.0 % exit payment.

Each quarterly principal payment approximates $ 11.1 million, and each quarterly exit fee payment approximates $ 0.2 million.

As of June 30, 2024, the effective interest rate for the loan was 12.99 %.

At the Company’s option, the Company may prepay the outstanding principal balance of the notes in whole or in part, subject to a prepayment fee of 2.0 % of the amount prepaid if the prepayment occurs on or prior to the second anniversary of the issuance date of such notes, plus the present value of remaining interest that would have accrued through and including the second anniversary date, and 2.0 % of the amount prepaid if the prepayment occurs after the second anniversary but on or prior to the third anniversary of the issuance date of such notes.

3 unchanged sentences

The Company is also required to maintain minimum cash balances and achieve certain minimum product revenue targets, measured as of the last day of each fiscal quarter on a trailing year-to-date basis.

As of March 31, 2023, the Company was in compliance with such covenants.

As of March 31, 2024 , the principal balance outstanding under the Athyrium Notes was $ 100.0 million and exit fees were $ 2.0 million, representing all of the Company’s debt.

The future minimum principal and exit payments under the Athyrium Notes as of March 31, 2024 are as follows (in thousands):

As of June 30, 2024, the Company was in compliance with such covenants.

As of June 30, 2024 , the principal balance outstanding under the Athyrium Notes was $ 88.9 million and exit fees were $ 1.8 million, representing all of the Company’s debt.

The future minimum principal and exit payments under the Athyrium Notes as of June 30, 2024 are as follows (in thousands):

Debt Issuance Costs and Discounts:

Debt issuance costs and discounts consist of the following (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

4 unchanged sentences

Amortization of debt issuance costs is expensed using the effective interest method and is included in interest expense in the condensed consolidated statement of operations.

For both the three months ended March 31, 2024 and 2023 , the Company recorded approx imatel y $ 0.2 million and $ 0.2 mil lion of interest expense, respectively, related to the amortization of de bt issuance costs in the c ondensed consolidated statements of operations.

For the three and six months ended June 30, 2024 , the Company recorded approx imatel y $ 0.2 million and $ 0.5 mil lion of interest expense, respectively.

For the three and six months ended June 30, 2023 , the Company recorded approximately $ 0.2 million and $ 0.4 million of interest expense, respectively, related to the amortization of de bt issuance costs in the c ondensed consolidated statements of operations.

Note 10 — Stockholders ’ Equity:

Common Stock:

The Company issued no shares of common stock upon exercise of stock options during the three months ended March 31, 2024 and 2023 , respectively.

The Company issued 567,876 and 317,939 shares of common stock upon vesting of RSUs during the three months ended March 31, 2024 and 2023 , respectively.

The Company issued no shares of common stock upon exercise of stock options during the six months ended June 30, 2024 and 2023 , respectively.

The Company issued 813,333 and 601,493 shares of common stock upon vesting of RSUs during the six months ended June 30, 2024 and 2023 , respectively.

Authorized Shares:

14 unchanged sentences

The exercise price of incentive stock options granted under the 2011 Plan must be at least equal to the fair value of such shares on the date of grant.

As of March 31, 2024 a total of 14,545,860 shares of the Company’s common stock have been reserved for issuance under the 2011 Plan.

As of June 30, 2024 a total of 17,545,860 shares of the Company’s common stock have been reserved for issuance under the 2011 Plan.

All of the options awarded by the Company have been “plain vanilla options” as determined by the SEC Staff Accounting Bulletin 107 - Share Based Payment.

As of March 31, 2024 , 6,090,205 shares of the Company’s common stock are issuable upon the exercise of outstanding stock options and vesting of RSUs granted under the 2011 Plan and 712,912 shares of the Company’s common stock are available for future issuance under the 2011 Plan.

The fair value of options granted to employees and nonemployees was estimated using the Black-Scholes Option Pricing Method (see Note 2—Significant Accounting Policies) with the following weighted-average assumptions used during the three months ended March 31 :

As of June 30, 2024 , 5,866,467 shares of the Company’s common stock are issuable upon the exercise of outstanding stock options and vesting of RSUs granted under the 2011 Plan and 3,744,737 shares of the Company’s common stock are available for future issuance under the 2011 Plan.

Dividend yield

8 unchanged sentences

On July 15, 2021, the Board of Directors adopted an amendment to the 2017 Plan to increase the number of shares of the Company ’ s common stock reserved for issuance thereunder by 1,000,000 shares.

As of March 31, 2024 a total of 3,000,000 shares of the Company’s common stock have been reserved for issuance under the 2017 Plan.

As of March 31, 2024 , a total of 773,619 shares of the Company’s common stock are issuable upon the exercise of outstanding stock options and vesting of RSUs granted under the 2017 Plan and 1,145,355 shares of the Company’s common stock are available for future issuance under the 2017 Plan.

As of June 30, 2024 a total of 3,000,000 shares of the Company’s common stock have been reserved for issuance under the 2017 Plan.

As of June 30, 2024 , a total of 719,573 shares of the Company’s common stock are issuable upon the exercise of outstanding stock options and vesting of RSUs granted under the 2017 Plan and 1,145,857 shares of the Company’s common stock are available for future issuance under the 2017 Plan.

Stock-based compensation expense was as follows (in thousands):

For the Three Months Ended

For the Six Months Ended

Stock-based compensation:

Selling, general, and administrative

$ 429 $ 623 $ 861 $ 1,380

Research and development

( 1 ) 153 177 305

Restricted stock units:

Selling, general, and administrative

1,006 1,042 2,024 2,249

Research and development

628 614 1,377 1,336

Total stock-based compensation expense

9 unchanged sentences

( 105,646 ) $ 5.78 — —

Outstanding at March 31, 2024

( 109,185 ) $ 99.88 — —

Nonvested at March 31, 2024

Outstanding at June 30, 2024

4,645,280 $ 47.30 4.8 $ 482

Nonvested at June 30, 2024

670,725 $ 5.43 9.2 $ 12

At March 31, 2024 total estimated unrecognized employee compensation cost related to non-vested stock options granted prior to that date was approximately $ 2.7 million , which is expected to be recognized over a weighted-average period o f 1.4 years .

At March 31, 2024 the total estimated unrecognized employee compensation cost related to non-vested RSUs was approximately $ 8.8 million , which is expected to be recognized over a weighted-average period of 1.5 years .

The weighted-average grant date fair value of options granted during the three months ended March 31, 2024 and 2023 was $ 4.57 and $ 3.17 per share, respectively.

The weighted average grant date fair value of RSUs awarded during the three months ended March 31, 2024 and 2023 was $ 6.42 and $ 4.10 per share, respecti vely.

3,974,555 $ 54.37 4.1 $ 470

At June 30, 2024 total estimated unrecognized employee compensation cost related to non-vested stock options granted prior to that date was approximately $ 1.8 million , which is expected to be recognized over a weighted-average period o f 1.3 years .

At June 30, 2024 the total estimated unrecognized employee compensation cost related to non-vested RSUs was approximately $ 7.2 million , which is expected to be recognized over a weighted-average period of 1.3 years .

The weighted-average grant date fair value of options granted during the six months ended June 30, 2024 and 2023 was $ 4.57 and $ 3.17 per share, respectively.

The weighted average grant date fair value of RSUs awarded during the six months ended June 30, 2024 and 2023 was $ 5.90 and $ 3.98 per share, respecti vely.

Weighted Average Grant-Date Fair Value

3 unchanged sentences

( 105,646 ) $ 4.17

Nonvested shares at March 31, 2024

( 372,039 ) $ 3.75

Nonvested shares at June 30, 2024

670,725 $ 3.92

Restricted Stock Unit Roll Forward:

5 unchanged sentences

( 813,333 ) $ 4.05

Nonvested shares at March 31, 2024

Nonvested shares at June 30, 2024

1,940,760 $ 5.10

2 unchanged sentences

The Company is required to make matching contributions to the 401 (k) plan equal to 100 % of the first 3% of wages deferred by each participating employee and 50 % on the next 2% of wages deferred by each participating employee.

For each of the three months ended March 31, 2024 and 2023 the Company incurred expenses for employer matching contributions of approximately $ 0.5 million.

The Company incurred expenses for employer matching contributions of approximately $ 0.9 million and $ 1.1 million for the six months ended June 30, 2024 and 2023 , respectively.

Note 12 — Commitments and Contingencies:

81 unchanged sentences

Fact discovery closed on May 19, 2023, and expert discovery closed on November 17, 2023.

The Court recently denied the parties’ respective motions for summary judgment and Daubert motions, other than to clarify that Plaintiffs’ damages cannot extend to any time period before the asserted patents were issued.

The Court denied the parties’ respective motions for summary judgment and Daubert motions, other than to clarify that Plaintiffs’ damages cannot extend to any time period before the asserted patents were issued.

The Court granted AstraZeneca’s motion to dismiss the Company as a Plaintiff on constitutional standing grounds but denied the motion to dismiss Wyeth as a Plaintiff on constitutional standing grounds.

On April 29, 2024, the Court granted AstraZeneca’s motion to dismiss AstraZeneca’s counterclaims against Puma which removed Puma from the case.

Wyeth remains in the case as a Plaintiff and counterclaim-defendant.

Wyeth remained in the case as a Plaintiff and counterclaim-defendant.

Under Puma’s worldwide exclusive license agreement with Pfizer, Inc.

(the parent of Wyeth) as amended, the Company also maintains contractual rights to recover monetary damages in the AstraZeneca litigation, and those contractual rights are unaffected by the court’s March 18, 2024 and April 29, 2024 orders.

A jury trial is scheduled to begin on May 13, 2024.

A jury trial was held May 13- 17, 2024.

The jury found in favor of Wyeth and against AstraZeneca.

In particular, the jury found that use of Tagrisso® according to each of the three FDA-approved indications infringes the asserted claims of the ‘314 and ‘162 patents, and that AstraZeneca induces that infringement.

The jury further rejected AstraZeneca’s challenges to the validity of the patents, finding that they are not invalid.

The jury awarded damages to Wyeth for past acts of infringement through December 31, 2023, in the amount of $ 107,500,000 .

A separate bench trial related to certain equitable claims and defenses raised by AstraZeneca was held before Judge Kennelly on June 20 and 25, 2024, and the Court has taken those issues under advisement.

AstraZeneca has filed a motion challenging the jury’s verdict and requesting a new trial.

Wyeth has filed a motion requesting supplemental damages for past infringement from January 1, 2024 through the date of judgment;

pre-and-post judgment interest, and ongoing royalties through the remaining term of the patents.

Briefing on these motions from both sides was completed on July 16, 2024, and the Company awaits the Court's ruling.

Acebright China Litigation

26 unchanged sentences

The Company seeks a judgment that Acebright’s product infringes the ’789 patent and Acebright’s act of offer for sale shall be enjoined.

On January 2, 2024, Jiangsu Nanjing Intermediate People’s Court accepted the civil complaint and has recently set an oral hearing for June 20, 2024.

On January 2, 2024, Jiangsu Nanjing Intermediate People’s Court accepted the civil complaint.

An oral hearing was held on June 19, 2024, during which the Company amended its complaint to allege that Acebright making, selling and offering to sell the generic version of NERLYNX® infringes the ’789 patent.

A decision has not yet been issued.

Aosaikang China Litigation

66 unchanged sentences

On September 25, 2023, the CNIPA accepted the Company’s withdrawal request.

Note 13 — Subsequent Events

On April 29, 2024, the Court granted AstraZeneca’s motion to dismiss AstraZeneca’s counterclaims against Puma which removed Puma from the case.

Wyeth remains in the case as a Plaintiff and counterclaim-defendant.

Under Puma’s worldwide exclusive license agreement with Pfizer, Inc.

A jury trial is scheduled to begin on May 13, 2024.

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

4 unchanged sentences

We are currently commercializing NERLYNX®, an oral version of neratinib, for the treatment of certain HER2-positive breast cancers.

Additionally, we recently in-licensed and are responsible for global development and commercialization of alisertib.

Additionally, in 2022, we in-licensed and became responsible for the global development and commercialization of alisertib.

Alisertib is a selective, small-molecule inhibitor of aurora kinase A that is designed to disrupt mitosis leading to apoptosis of rapidly proliferating tumor cells that are dependent on aurora kinase A.

4 unchanged sentences

the extended adjuvant treatment of adult patients with early stage HER2-overexpressed/amplified breast cancer following adjuvant trastuzumab-based therapy and for use in combination with capecitabine for the treatment of adult patients with advanced or metastatic HER2-positive breast cancer who have received two or more prior anti-HER2-based regimens in the metastatic setting.

We currently market NERLYNX in the United States using our direct specialty sales force consisting of approximately 38 sales specialists.

Our sales specialists are supported by an experienced sales leadership team consisting of regional managers and directors, as well as a commercial team of experienced professionals in marketing, access and reimbursement, managed markets, marketing research, commercial operations and sales force planning and management.

We currently market NERLYNX in the United States using our direct specialty sales force consisting of approximat ely 38 sales specialists.

Our sales specialists are supported by an experienced sales leadership team consisting of several regional business leaders and a VP of sales as well as experienced professionals in marketing, managed markets, access and reimbursement, market research, and sales planning and operations.

Outside the United States, we seek to enter into exclusive sub-license agreements with third parties to pursue regulatory approval, if necessary, and commercialize NERLYNX, if approved.

As of March 31 2024, NERLYNX has received approval for the treatment of certain patients with extended adjuvant or metastatic HER2-positive breast cancer in over 40 countries outside the United States.

We are currently party to several sub-licenses in various regions outside the United States, including Europe (excluding Russia and Ukraine), Australia, Canada, China, Southeast Asia, Israel, South Korea, and various countries and territories in Central America, South America and Africa.

As of June 30 2024, NERLYNX has received approval for the treatment of certain patients with extended adjuvant or metastatic HER2-positive breast cancer in over 40 countries outside the United States.

In September 2022, we entered into an exclusive license agreement with Takeda Pharmaceutical Company Limited (“Takeda”) to license the worldwide research and development and commercial rights to alisertib.

2 unchanged sentences

In clinical trials to date, alisertib has shown single agent activity and activity in combination with other cancer drugs in the treatment of many different types of cancers, including hormone receptor-positive breast cancer, triple-negative breast cancer, small cell lung cancer and head and neck cancer.

We initiated the ALISertib in CAncer (ALISCA-Lung1) Phase II trial (PUMA-ALI-4201) of alisertib monotherapy for the treatment of patients with e xtensive stage small cell lung cancer in February 2024, and we plan to commence the ALISCA-Breast 1 trial in the second half of 2024.

We initiated the ALISertib in CAncer (ALISCA™ -Lung1) Phase II trial (PUMA-ALI-4201) of alisertib monotherapy for the treatment of patients with extensive stage small cell lung cancer in February 2024, and we plan to commence the ALISCA™ -Breast1 trial in the second half of 2024.

Under the terms of the exclusive license agreement, we assumed sole responsibility for the global development and commercialization of alisertib.

1 unchanged sentence

We recorded in-process research and development expense of $7.0 million during the year ended December 31, 2022 in connection with the up-front payment related to the asset acquisition.

As of March 31, 2024, no milestones had been accrued as the underlying contingencies were not probable or estimable.

As of June 30, 2024, no milestones had been accrued as the underlying contingencies were not probable or estimable.

Our expenses to date have been related to hiring staff, commencing company-sponsored clinical trials and the build out of our corporate infrastructure and, since 2017, the commercial launch of NERLYNX.

1 unchanged sentence

To date, our major sources of working capital have been proceeds from product and license revenue, public offerings of our common stock, proceeds from our credit facility and sales of our common stock in private placements.

We intend to satisfy our near-term liquidity requirements through a combination of our existing cash and cash equivalents and marketable securities as of March 31, 2024, and proceeds that will become available to us through product sales, royalties and sub-license milestone payments.

We intend to satisfy our near-term liquidity requirements through a combination of our existing cash and cash equivalents and marketable securities as of June 30, 2024, and proceeds that will become available to us through product sales, royalties and sub-license milestone payments.

However, this intention is based on assumptions that may prove to be wrong.

2 unchanged sentences

Critical Accounting Policies

As of the date of the filing of this Quarterly Report, we believe there have been no material changes to our critical accounting policies and estimates during the three months ended March 31, 2024 from our accounting policies at December 31, 2023, as reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

As of the date of the filing of this Quarterly Report, we believe there have been no material changes to our critical accounting policies and estimates during the six months ended June 30, 2024 from our accounting policies at December 31, 2023, as reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Summary of Income and Expenses

18 unchanged sentences

Research and development expenses (“R&D expenses”) include costs associated with services provided by consultants who conduct and perform clinical services on our behalf and contract organizations for the manufacturing of clinical materials.

During the three months ended March 31, 2024 and 2023, our R&D expenses consisted primarily of clinical research organization (“CRO fees”), fees paid to consultants;

During the three and six months ended June 30, 2024 and 2023, our R&D expenses consisted primarily of clinical research organization (“CRO fees”), fees paid to consultants;

salaries and related personnel costs;

6 unchanged sentences

Results of Operations

Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023

Total revenue:

Total revenue for the three months ended March 31, 2024 was approximately $43.8 million, compared to $52.8 million for the three months ended March 31, 2023.

Total revenue for the three months ended June 30, 2024 was approximately $47.1 million, compared to $54.6 million for the three months ended June 30, 2023.

This decrease in total revenue was primarily due to a decrease in product revenue, net of approximately $7.2 million and a decrease in royalty revenue of $0.3 million.

Product revenue, net:

Product revenue, net was approximately $40.3 million for the three months ended March 31, 2024, compared to $46.8 million for the three months ended March 31, 2023.

This decrease in product revenue, net was primarily attributable a decrease of approximately 15.4% in bottles of NERLYNX sold compared to the three months ended March 31, 2023, and an increase in the related deductions to gross revenue for variable considerations for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, partially offset by an increase in net selling price compared to the three months ended March 31, 2023.

Product revenue, net was approximately $44.4 million for the three months ended June 30, 2024, compared to $51.6 million for the three months ended June 30, 2023.

This decrease in product revenue, net was primarily attributable a decrease of approximately 16.8% in bottles of NERLYNX sold compared to the three months ended June 30, 2023, partially offset by an increase in net selling price compared to the three months ended June 30, 2023.

Royalty revenue:

Royalty revenue was approximately $3.5 million for the three months ended March 31, 2024 , compared to approximately $6.0 million for the three months ended March 31, 2023.

The decrease was due primarily to the timing of sales made in China by our sub-licensee.

Royalty revenue was approximately $2.7 million for the three months ended June 30, 2024 , compared to approximately $3.0 million for the three months ended June 30, 2023.

The decrease was primarily due to decreased international sales.

Cost of sales:

Cost of sales was approximately $10.7 million for the three months ended March 31, 2024 , compared to approximately $13.2 million for the three months ended March 31, 2023.

Cost of sales was approximately $10.7 million for the three months ended June 30, 2024 , compared to approximately $11.9 million for the three months ended June 30, 2023.

The decrease was primarily due to lower royalty expense resulting from decreased worldwide net sales.

Selling, general and administrative expenses:

SG&A expenses were approximately $21.8 million for the three months ended March 31, 2024, compared to approximately $22.5 million for the three months ended March 31, 2023.

SG&A expenses for the three months ended March 31, 2024 and 2023 were as follows:

SG&A expenses were approximately $25.0 million for the three months ended June 30, 2024, compared to approximately $24.5 million for the three months ended June 30, 2023.

SG&A expenses for the three months ended June 30, 2024 and 2023 were as follows:

Selling, general, and administrative expenses

7 unchanged sentences

Stock-based compensation

SG&A expenses decreased by approximately $0.7 million for the three months ended March 31, 2024, compared to the same period in 2023, primarily attributable to the following:

a decrease in payroll and related costs of approximately $0.7 million, primarily due to lower headcount, and lower recruiting related expenses, partially offset by annual salary increases;

a decrease in other expenses of $0.1 million, primarily due to lower training expenses offset by increase in licenses and fees;

a decrease in stock-based compensation expense of approximately $0.5 million, lower headcount, and change in vesting schedule for awards granted in and after 2022;

SG& A expenses increased by approximately $0.5 million for the three months ended June 30, 2024 , compared to the same period in 2023 , primarily attributable to the following:

an increase inprofessional fees and expenses of approximately $2.7 million , primarily due to an increase of approximately $4.1 million in legal fees, offset by a decrease of approximately $1.4 million in consulting fees;

partially offset by:

an increase in professional fees and expenses of approximately $0.7 million , primarily due to an increase of approximately $ 1.9 million in legal fees, offset by $0.9 million decrease in consultant fees, and a $0.3 million decrease in insurance and other.

a decrease in payroll and related costs of approximately $1.3 million, primarily due to lower headcount;

a decrease in provision for credit loss of $0.7 million, due to a customer payment on an overdue receivable;

a decrease in stock-based compensation expense of approximately $0.2 million, primarily due to lower headcount.

Research and development expenses:

R&D expenses were approxi mately $13.6 million for the three months ended March 31, 2024, compared to approximately $12.7 million for the three months ended March 31, 2023.

R&D expenses for the three months ended March 31, 2024 and 2023, were as follows:

R&D expenses were approxi mately $13.6 million for the three months ended June 30, 2024, compared to approximately $13.4 million for the three months ended June 30, 2023.

R&D expenses for the three months ended June 30, 2024 and 2023, were as follows:

Research and development expenses

4 unchanged sentences

Stock-based compensation

R&D expenses increased by approxim ately $0.9 million for the three m onths ended March 31, 2024, compared to the same period in 2023, primarily attributable to the following:

a decrease in consultant and contractors expense of approximately $0.2 million, due to lower support costs for neratinib programs;

R&D exp enses increased by a pproxim ately $0.3 million for the three m onths ended June 30, 2024, compared to the same period in 2023, primarily attributable to the following:

an increase in internal R&D of approximately $0.5 million, p rimarily due to one-time payroll-related expenses;

partially offset by:

an increase in clinical trial expense of approximately $1.0 million, due to a milestone payment associated with a neratinib clinical trial.

a decrease in stock-based compensation of approximately $0.1 million, primarily due to the forfeiture of equity awards.

Other income (expenses):

4 unchanged sentences

Interest expense

Interest income:

For the three months ended June 30, 2024 , we recognized approximately $1.2 million in interest income, compared to approximately $0.7 million of interest income for the three m onths ended June 30, 2023 .

The increase in interest income was primarily the res ult of higher interest rates and increased cash equivalents and marketable securities.

Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

Total revenue:

Total revenue for the six months ended June 30, 2024 was approximately $90.8 million, compared to $107.3 million for the six months ended June 30, 2023.

This decrease in total revenue was primarily due to a decrease in product revenue, net of approximately $13.7 million and a decrease in royalty revenue of $2.8 million.

Product revenue, net:

Product revenue, net was approximately $84.7 million for the six months ended June 30, 2024, compared to $98.3 million for the six months ended June 30, 2023.

This decrease in product revenue, net was primarily attributable to a decrease of approximately 16.1% in bottles of NERLYNX sold compared to the six months ended June 30, 2023, and an increase in the related dedu ctions to gross revenue for variable considerations for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, partially offset by an increase in net selling price compared to the six months ended June 30, 2023.

Royalty revenue:

Royalty revenue was approximately $6.2 million for the six months ended June 30, 2024 , compared to approximately $9.0 million for the six months ended June 30, 2023.

The decrease was primarily due to the timing of sales made in China by our sub-licensee.

Cost of sales:

Cost of sales was approximately $21.4 million for the six months ended June 30, 2024 , compared to approximately $25.1 million for the six months ended June 30, 2023.

The decrease was primarily due to lower royalty expense resulting from decreased worldwide net sales.

Selling, general and administrative expenses:

SG&A expenses were approximately $46.7 million for the six months ended June 30, 2024, compared to approximately $46.9 for the six months ended June 30, 2023.

SG&A expenses for the six months ended June 30, 2024 and 2023 were as follows:

Selling, general, and administrative expenses

For the Six Months Ended

(in thousands)

Payroll and related costs

Provision for credit loss

Professional fees and expenses

Travel and meetings

Facilities and equipment costs

Stock-based compensation

SG&A expenses decreased by approximately $0.2 million for the six months ended June 30, 2024, compared to the same period in 2023, primarily attributable to the following:

a decrease in payroll and related costs of approximately $2.0 million, primarily due to lower headcount, and lower recruiting related expenses, partially offset by annual salary increases;

a decrease in provision for credit loss of $0.6 million, due to a customer payment on an overdue receivable;

a decrease in stock-based compensation expense of approximately $0.7 million, primarily due to lower headcount and change in vesting schedule for awards granted in and after 2022;

partially offset by:

an increase in professional fees and expenses of approximately $3.4 million , p rimarily due to increase $5.9 million in legal fees, partially offset by approximately $2.4 million decrease in marketing costs.

Research and development expenses:

R&D expenses were approxi mately $27.2 million for the six months ended June 30, 2024, compared to approximately $26.1 million for the six months ended June 30, 2023.

R&D expenses for the six months ended June 30, 2024 and 2023, were as follows:

Research and development expenses

For the Six Months Ended

(in thousands)

Clinical trial expense

Consultant and contractors

Stock-based compensation

R&D expenses increased by approxim ately $1.2 million for the six m onths ended June 30, 2024, compared to the same period in 2023, primarily attributable to the following:

an increase in clinical trial expense of approximately $0.9 million, due to approximately $1.8 million for the procurement of alisertib drug product, partially offset by fewer clinical milestones being achieved;

an increase in internal R&D expenses of approximately $0.6 million, primarily due to one-time payroll-related expenses;

partially offset by:

a decrease in consultant and contractors expense of approximately $0.2 million, due to lower support costs for neratinib programs.

Other income (expenses):

Other income (expenses)

For the Six Months Ended

(in thousands)

Interest income

For the three months ended March 31, 2024 , we recognized approximately $1.0 million in interest income, compared to approximately $0.5 million of interest income for the three m onths ended March 31, 2023 .

Interest expense

Interest income:

For the six months ended June 30, 2024 , we recognized approximately $2.2 million in interest income, compared to approximately $1.2 million of interest income for the six m onths ended June 30, 2023 .

The increase in interest income was primarily the res ult of higher interest rates and increased cash equivalents and marketable securities.

Interest expense:

For the three months ended March 31, 2024, we recognized approximately $3.4 million in interest expense, compared to approximately $3.3 million of interest expense for the three months ended March 31, 2023.

For the six months ended June 30, 2024, we recognized approximately $6.7 million in interest expense, compared to approximately $6.6 million of interest expense for the six months ended June 30, 2023.

Other income:

For the six months ended June 30, 2024, we recognized approximately $0.2 million in other income, compared to approximately $44 thousand of other income for the six months ended June 30, 2023 primarily due to additional sublease income.

Liquidity and Capital Resources

The following table, which summarizes our liquidity and capital resources as of March 31, 2024 and December 31, 2023 and for the three months ended March 31, 2024 and 2023, is intended to supplement the more detailed discussion that follows:

The following table, which summarizes our liquidity and capital resources as of June 30, 2024 and December 31, 2023 and for the six months ended June 30, 2024 and 2023, is intended to supplement the more detailed discussion that follows:

Liquidity and capital resources (in thousands)

March 31, 2024

June 30, 2024

December 31, 2023

4 unchanged sentences

Stockholders’ equity

Three Months Ended

March 31, 2024

March 31, 2023

Six Months Ended

June 30, 2024

June 30, 2023

Cash provided by (used in):

6 unchanged sentences

These costs were recorded in the fourth quarter of 2023.

All payments related to this plan have been paid as of March 31, 2024.

All payments related to this plan were paid as of March 31, 2024.

Operating Activities:

Cash provided by operating activities for the three months ended March 31, 2024 was $11.2 million and consisted of a net loss of approximately $4.8 million, adjusted for non-cash items of approxi mately $5.4 million, including stock-based compensation of $2.4 million, depreciation and amortization of $2.9 million and provision for credit loss of $0.1 million.

Total changes in cash flows from operations were due to an increase in working capital, primarily related to a decrease in accounts receivable, net of approximately $23.1 million and an increase in accounts payable of approximately $2.1 million, partially offset by a decrease in accrued expenses and other of approximately $15.0 million.

Cash provided by operating activities for the three months ended March 31, 2023 was $2.6 million and consisted of net income of approximately $1.4 million, a decrease of approximately $5.7 million of non-cash items, including stock-based compensation, and depreciation and amortization.

Further changes in cash flows from operations included a decrease in accrued expenses and other of approximately $18.8 million related primarily an $8.0 million payment related to the Eshelman settlement, payments of $7.7 million for employee bonuses and a $4.0 million decrease in our Pfizer royalty accrual, partially offset by a decrease of $9.2 million in accounts receivable, a decrease $0.6 million in inventory, a decrease of $0.9 million in prepaid expenses and other, a decrease of $2.0 million in other current assets (related to receipt of CARES Act funds), a decrease in our post-marketing commitment liability of approximately $0.2 million and an increase of $2.1 million in accounts payable.

Cash provided by operating activities for the six months ended June 30, 2024 was $12.3 million and consisted of a net loss of approximately $9.3 million, adjusted for non-cash items of approximately $10.2 million, including stock-based compensation of $4.4 million, depreciation and amortization of $5.8 million and provision for credit loss of $0.1 million.

Total changes in cash flows from operations were due to an increase in working capital, primarily related to a decrease in accounts receivable of approximately $19.8 million, a decrease in prepaid expenses and other of $1.4 million and an increase in accounts payable of approximately $6.6 million, partially offset by a decrease in accrued expenses and other of approximately $13.7 million and an increase in inventory of approximately $2.0 million.

Cash provided by operating activities for the six months ended June 30, 2023 was $5.9 million and consisted of net income of approximately $3.5 million, a decrease of approximately $11.5 million of non-cash items, including stock-based compensation, depreciation and amortization and provision for credit loss.

Further changes in cash flows from operations included a decrease in accrued expenses and other of approximately $17.4 million primarily due to an $8.0 million payment related to the Eshelman settlement, net decrease of $4.3 million in the employee bonus accrual and a net decrease of $4.8 million in our Pfizer royalty accrual, and a decrease in our post-marketing commitment liability of approximately $0.5 million, partially offset by a decrease of $8.5 million in accounts receivable, an increase $3.1 million in inventory, a decrease of $0.6 million in prepaid expenses and other, a decrease of $1.9 million in other current assets (related to receipt of CARES Act funds), and an increase of $1.4 million in accounts payable.

Investing Activities:

Cash used in investing activities for the three months ended March 31, 2024 was approximately $19.1 million, compared to net cash used by investing activities of approximately $17.5 million for the same period in 2023 .

Cash used in investing activities for the six months ended June 30, 2024 was approximately $18.4 million, compared to net cash used by investing activities of approximately $22.1 million for the same period in 2023 .

Cash used in investing activities was primarily due to the purchase of available-for-sale securities of approximately $44.9 million, offset by the maturity of available-for-sale securities of approximately $26.5 million.

Cash used in investing activities for the three months ended March 31, 2023 was approximately $17.5 million.

Cash used in investing activities was primarily due to the purchase of the intangible asset of $12.5 million, and the purchase of available-for-sale securities of approximately $5.0 million for the three months ended March 31, 2023.

Cash used in investing activities for the six months ended June 30, 2023 was approximately $22.1 million.

Cash used in investing activities was primarily due to the purchase of the intangible asset of $12.5 million, and the purchase of available-for-sale securities of approximately $10.5 million for the six months ended June 30, 2023.

Financing Activities:

There was no cash provided by or used in financing activities for both the three months ended March 31, 2024 and 2023.

Cash used in financing activities for the six months ended June 30, 2024 was approximately $11.3 million as we began paying down the principal, as well as exit fees, on our debt with Athyrium.

There was no cash provided by or used in financing activities for the six months ended June 30, 2023.

Athyrium Note Purchase Agreement:

11 unchanged sentences

Interest is payable quarterly on the last business day of March, June, September and December each year.

Beginning June 30, 2024, principal payments are required to be made quarterly at 11.11% of the original face amount with the remaining balance paid at maturity.

Each principal payment will also include a 2.0% exit paymen t.

As of March 31, 2024, the effective interest rate for the loan was 12.99%.

As of June 30, 2024, we began paying the principal payments required to be made quarterly at 11.11% of the original face amount with the remaining balance paid at maturity.

Each principal payment also includes a 2.0% exit payment.

Each quarterly principal payment approximates $11.1 million, and each quarterly exit fee payment approximates $0.2 million.

As of June 30, 2024, the effective interest rate for the loan was 12.99%.

At our option, we may prepay the outstanding principal balance of the notes in whole or in part, subject to a prepayment fee of 2.0% of the amount prepaid if the prepayment occurs on or prior to the second anniversary of the issuance date of such notes, plus the present value of remaining interest that would have accrued through and including the second anniversary date, and 2.0% of the amount prepaid if the prepayment occurs after the second anniversary but on or prior to the third anniversary of the issuance date of such notes.

2 unchanged sentences

The negative covenants include, among others, restrictions on our transferring collateral, incurring additional indebtedness, engaging in mergers or acquisitions, paying dividends or making other distributions, making investments, creating liens, selling assets and suffering a change in control, in each case subject to certain exceptions.

We are also required to maintain minimum cash balances and achieve certain minimum product revenue targets, measured as of the last day of each fiscal quarter on a trailing year-to-date basis.

As of March 31, 2024, the principal balance outstanding under the Athyrium Notes was $100.0 million, representing all of our debt.

We were in compliance with all applicable covenants under the Athyrium Notes.

We are also required to maintain minimum cash balances and ach ieve certain minimum product revenue targets, measured as of the last day of each fiscal quarter on a trailing year-to-date basis.

As of June 30, 2024, the principal balance outstanding under the Athyrium Notes was $88.9 million, representing all of our debt.

We are in compliance with all applicable covenants under the Athyrium Notes.

Current and Future Financing Needs:

3 unchanged sentences

For example, we in-licensed alisertib from Takeda in 2022 and assumed sole responsibility for its global development and commercialization.

These efforts will require funding in addition to the cash and cash equivalents totaling approximately $76.8 million and approximately $30.4 million in marketable securities available at March 31, 2024.

These efforts will require funding in addition to the cash and cash equivalents totaling approximately $67.1 million and approximately $29.7 million in marketable securities available at June 30, 2024.

While our consolidated financial statements have been prepared on a going concern basis, we may incur significant losses in the future and will need to generate significant revenue to sustain operations and successfully commercialize neratinib and develop alisertib.

2 unchanged sentences

The outcome of these matters cannot be predicted at this time.

We believe that our existing cash and cash equivalents and marketable securities as of March 31, 2024, and proceeds that will become available to us through product sales and sub-license payments are sufficient to satisfy our operating cash and capital needs for at least one year after the filing of this Quarterly Report.

We believe that our existing cash and cash equivalents and marketable securities as of June 30, 2024, and proceeds that will become available to us through product sales and sub-license payments are sufficient to satisfy our operating cash and capital needs for at least one year after the filing of this Quarterly Report.

In addition, we have based our estimate of capital needs on assumptions that may prove to be wrong.

9 unchanged sentences

The following table presents our net (loss) income and net (loss) income per share, as calculated in accordance with GAAP, as adjusted to remove the impact of stock-based compensation.

For the three months ended March 31, 2024, stock-based compensation represented approximately 6.7% of our operating expenses, compared to 8.1% for the same period in 2023, in each case excluding cost of sales and acquired in-process research and development.

For the three and six months ended June 30, 2024, stock-based compensation represented approximately 5.3% and 6.0% of our operating expenses, respectively, compared to 6.4% and 7.2% for the same respective periods in 2023, in each case excluding cost of sales.

Our management believes that these non-GAAP financial measures are useful to enhance understanding of our financial performance, are more indicative of our operational performance and facilitate a better comparison among fiscal periods.

3 unchanged sentences

(in thousands except share and per share data)

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

GAAP net (loss) income

11 unchanged sentences

(2) To reflect a non-cash charge to operating expense for research and development stock-based compensation.

(3) Non-GAAP adjusted basic net (loss) income per share was calculated based on 48,189,256 and 46,636,083 weighted-average shares of common stock outstanding for the three months ended March 31, 2024 and 2023, respectively.

(4) Non-GAAP adjusted diluted net (loss) income per share was calculated based on 48,189,256 and 47,157,904 weighted-average shares of common stock outstanding for the years ended Mach 31, 2024 and 2023, respectively.

(3) Non-GAAP adjusted basic net loss per share was calculated based on 48,292,414 and 48,240,835 weighted-average shares of common stock outstanding for the three and six months ended June 30, 2024 respectively.

(4) Non-GAAP adjusted basic net income per share was calculated based on 46,759,062 and 46,697,912 weighted-average shares of common stock outstanding for the three and six months ended June 30, 2023, respectively.

(5) Potentially dilutive common stock equivalents (stock options restricted stock units and warrants) were not included in this non-GAAP adjusted diluted net loss per share for the three and six months ended June 30, 2024, as these shares would be considered anti-dilutive.

(6) Non-GAAP adjusted diluted net income per share was calculated based on 47,201,185 and 47,172,752 weighted-average shares of common stock outstanding for the three and six months ended June 30, 2023, respectively.

Off-Balance Sheet Arrangements

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements