PUMA BIOTECHNOLOGY, INC. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the timelines specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined under Exchange Act Rule 13a-15(e)) as of December 31, 2024. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures were effective as of December 31, 2024. Changes in Internal Control over Financial Reporting There was no change in our internal control over financial reporting that occurred during the year ended December 31, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 73 Table of Contents Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2024. Management based its assessment on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework - 2013 (COSO 2013 framework). Based on this evaluation, our management concluded that, as of December 31, 2024, our internal control over financial reporting was effective. Our internal control over financial reporting as of December 31, 2024 has been audited by KPMG LLP, our independent registered public accounting firm, as stated in their report, which expresses an unqualified opinion on the effectiveness of our internal control over financial reporting as of December 31, 2024. ITEM 9B. OTHER INFORMATION During the three months ended December 31, 2024, no director or officer (as defined in Rule 16a - 1 (f) under the Exchange Act) of the Company adopted or terminated a “Rule 10b5 - 1 trading arrangement” or “non-Rule 10b5 - 1 trading arrangement,” as each term is defined in Item 408 (a) of Regulation S-K. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. Part III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE We have adopted an insider trading policy applicable to our directors, officers and employees, that we believe is reasonably designed to promote compliance with insider trading laws and regulations and the Nasdaq stock exchange listing standards. A copy of our policy is filed with this Annual Report on Form 10-K as Exhibit 19.1. The other information required by this Item will be included in our 2025 Proxy Statement, which will be filed with the SEC, and is incorporated by reference herein. ITEM 11. EXECUTIVE COMPENSATION The information required by this Item will be included in our 2025 Proxy Statement, which will be filed with the SEC, and is incorporated by reference herein. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this Item will be included in our 2025 Proxy Statement, which will be filed with the SEC, and is incorporated by reference herein. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this Item will be included in our 2025 Proxy Statement, which will be filed with the SEC, and is incorporated by reference herein. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information required by this Item will be included in our 2025 Proxy Statement, which will be filed with the SEC, and is incorporated by reference herein. 74 Table of Contents Part IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES Reference is made to the Index to Consolidated Financial Statements beginning on Page F-1 hereof. Consolidated Financial Statement Schedules (a) Documents Filed as Part of Report (1) Consolidated Financial Statements • Report of Independent Registered Public Accounting Firm F-2 • Consolidated Balance Sheets at December 31, 2024 and 2023 F-4 • Consolidated Statements of Operations for the Years Ended December 31, 2024, 2023 and 2022 F-5 • Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2024, 2023 and 2022 F-6 • Consolidated Statements of Stockholders’ Equity (Deficit) for the Years Ended December 31, 2024, 2023 and 2022 F-7 • Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022 F-8 • Notes to Consolidated Financial Statements F-9 (2) Consolidated Financial Statement Schedules Consolidated Financial Statement Schedules have been omitted because they are either not required or not applicable, or because the information required to be presented is included in the consolidated financial statements or the notes thereto included in this Annual Report. (3) Exhibits The exhibits listed on the accompanying Exhibit Index are filed or incorporated by reference as part of this Annual Report and such Exhibit Index is incorporated by reference herein. ITEM 16. Form 10-K SUMMARY None. 75 Table of Contents EXHIBIT INDEX Exhibit Number Description 2.1 Agreement and Plan of Merger, dated September 29, 2011, by and among Innovative Acquisitions Corp., IAC Merger Corporation, a Delaware corporation and wholly-owned subsidiary of the Company, and Puma Biotechnology, Inc., a Delaware corporation (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 4, 2011 and incorporated herein by reference) 3.1 Certificate of Merger relating to the merger of IAC Merger Corporation with and into Puma Biotechnology, Inc., filed with the Secretary of State of Delaware on October 4, 2011 (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 11, 2011 and incorporated herein by reference) 3.2 Certificate of Ownership and Merger relating to the merger of Puma Biotechnology, Inc. with and into Innovative Acquisitions Corp., filed with the Secretary of State of the State of Delaware on October 4, 2011 (filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on October 11, 2011 and incorporated herein by reference) 3.3 Second Amended and Restated Certificate of Incorporation of the Company, as filed with the Secretary of State of the State of Delaware on June 14, 2016 (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 15, 2016 and incorporated herein by reference) 3.4 Fourth Amended and Restated Bylaws of the Company (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 18, 2023 and incorporated herein by reference) 4.1 Form of Common Stock Certificate (filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-1/A filed with the SEC on February 1, 2012 and incorporated herein by reference) 4.2# Warrant to Purchase Shares of Common Stock of Puma Biotechnology, Inc., dated October 4, 2011, issued to Alan H. Auerbach (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on October 11, 2011 and incorporated herein by reference) 4.2(a)# Amendment to Warrant to Purchase Shares of Common Stock of Puma Biotechnology, Inc., dated April 1, 2021, by and between the Company and Alan H. Auerbach (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 17, 2021 and incorporated herein by reference) 4.3 Description of the Company’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (filed as Exhibit 4.3 to the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2020 and incorporated herein by reference) 10.1(a)* License Agreement, dated August 18, 2011, by and between the Company, as successor to Puma Biotechnology, Inc., and Pfizer Inc. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K/A filed with the SEC on December 16, 2011 and incorporated herein by reference) 10.1(b)* Amendment No. 1 to License Agreement dated July 18, 2014, between the Company and Pfizer Inc. (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 10, 2014 and incorporated herein by reference) 10.1(c)** Pfizer Letter Agreement dated June 8, 2020, by and between the Company and Pfizer Inc. (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 6, 2020 and incorporated herein by reference) 10.1(d)** Amendment No. 2 to License Agreement dated October 29, 2020, between the Company and Pfizer Inc. (filed as Exhibit 10.1(d) to the Company's Annual Report on Form 10-K filed with the SEC on March 1, 2021 and incorporated by reference) 10.2(a)# Puma Biotechnology, Inc. 2011 Incentive Award Plan (filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on October 11, 2011 and incorporated herein by reference) 10.2(b)# First Amendment to Puma Biotechnology, Inc. 2011 Incentive Award Plan (filed as Appendix A to the Company’s Proxy Statement on Form DEFR14A filed with the SEC on June 4, 2014 and incorporated herein by reference) 10.2(c)# Second Amendment to Puma Biotechnology, Inc. 2011 Incentive Award Plan (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 10, 2015 and incorporated herein by reference) 10.2(d)# Third Amendment to Puma Biotechnology, Inc. 2011 Incentive Award Plan (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 14, 2017 and incorporated herein by reference) 10.2(e)# Fourth Amendment to Puma Biotechnology, Inc. 2011 Incentive Award Plan (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on June 14, 2017 and incorporated herein by reference) 76 Table of Contents 10.2(f)# Fifth Amendment to Puma Biotechnology, Inc. 2011 Incentive Award Plan (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 17, 2021 and incorporated herein by reference) 10.2(g)# Sixth Amendment to Puma Biotechnology, Inc. 2011 Incentive Award Plan (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 24, 2024 and incorporated herein by reference) 10.2(h)# Puma Biotechnology, Inc. 2017 Employment Inducement Incentive Award Plan (filed as Exhibit 99.1 to the Company’s Registration Statement on Form S-8 filed with the SEC on February 28, 2020 and incorporated herein by reference) 10.2(i)# First Amendment to Puma Biotechnology, Inc. 2017 Employment Inducement Incentive Award Plan (filed as Exhibit 99.2 to the Company’s Registration Statement on Form S-8 filed with the SEC on February 28, 2020 and incorporated herein by reference) 10.2(j)# Second Amendment to Puma Biotechnology, Inc. 2017 Incentive Award Plan (filed as Exhibit 99.12 to the Company's Current Report on Form S-8 filed with the SEC on September 16, 2021 and incorporated herein by reference) 10.2(k)# Form of Stock Option Grant Notice and Stock Option Agreement, issued pursuant to the 2011 Incentive Award Plan (filed as Exhibit 10.5 to the Company’s Annual Report on Form 10-K filed with the SEC on March 29, 2012 and incorporated herein by reference) 10.2(l)# Form of Restricted Stock Unit Award Agreement, issued pursuant to the 2011 Incentive Award Plan (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 17, 2016 and incorporated herein by reference) 10.2(m)# Form of Stock Option Grant Notice and Stock Option Agreement, issued pursuant to the 2017 Employment Inducement Incentive Award Plan (filed as Exhibit 10.2(k) to the Company’s Annual Report on Form 10-K filed with the SEC on March 1, 2019 and incorporated herein by reference) 10.2(n)#+ Form of Restricted Stock Unit Award Agreement, issued pursuant to the 2017 Employment Inducement Award Plan 10.3(a) Office Lease by and between the Company and CA - 10880 Wilshire Limited Partnership, executed on December 7, 2011 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 13, 2011 and incorporated herein by reference) 10.3(b) First Amendment to the Office Lease, dated as of November 28, 2012, by and between the Company and CA - 10880 Wilshire Limited Partnership (filed as Exhibit 10.13(b) to the Company’s Annual Report on Form 10-K filed with the SEC on April 1, 2013 and incorporated herein by reference) 10.3(c) Second Amendment to the Office Lease, dated as of December 3, 2013, by and between the Company and CA - 10880 Wilshire Limited Partnership (filed as Exhibit 10.6(c) to the Company’s Annual Report on Form 10-K filed with the SEC on March 3, 2014 and incorporated herein by reference) 10.3(d) Third Amendment to the Office Lease, dated as of March 18, 2014, by and between the Company and CA - 10880 Wilshire Limited Partnership (filed as Exhibit 10.5(d) to the Company’s Annual Report on Form 10-K filed with the SEC on March 2, 2015 and incorporated herein by reference) 10.3(e) Fourth Amendment to the Office Lease, dated as of July 31, 2015, by and between the Company and CA - 10880 Wilshire Limited Partnership (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 9, 2015 and incorporated herein by reference) 10.4# Employment Agreement, dated January 19, 2012, by and between the Company and Alan H. Auerbach (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 24, 2012 and incorporated herein by reference) 10.5(a) Office Lease by and between DWF III Gateway, LLC and the Company, executed June 7, 2012 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 13, 2012 and incorporated herein by reference) 10.5(b) First Amendment to Lease, dated as of May 19, 2014, by and between DWF III Gateway, LLC and Puma Biotechnology, Inc. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 23, 2014 and incorporated herein by reference) 10.5(c) Second Amendment to Lease, dated as of June 10, 2014, by and between DWF III Gateway, LLC and Puma Biotechnology, Inc. (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 10, 2015 and incorporated herein by reference) 10.5(d) Third Amendment to Lease, dated as of July 21, 2015, by and between PR 707 Gateway, LLC (as successor in interest to DWF III Gateway, LLC) and the Company (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 9, 2015 and incorporated herein by reference) 77 Table of Contents 10.6# Form of Indemnification Agreement (filed as Exhibit 10.17 to the Company’s Registration Statement on Form S-1/A filed with the SEC on October 15, 2012 and incorporated herein by reference) 10.7# Amended Non-Employee Director Compensation Program, dated April 27, 2022 (filed as Exhibit 10.1 to the Company’s Current Report on Form 10-Q filed with the SEC on May 5, 2022 and incorporated herein by reference) 10.8(a)* License Agreement, dated November 20, 2017, by and between the Company and Specialised Therapeutics Asia Pte Ltd. (filed as Exhibit 10.13 to the Company’s Annual Report on Form 10-K filed with the SEC on March 9, 2018 and incorporated herein by reference) 10.8(b)* Amendment No. 1, dated April 20, 2018, to the License Agreement by and between the Company and Specialised Therapeutics Asia Pte Ltd. (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 9, 2018 and incorporated herein by reference) 10.9# Letter Agreement, dated December 8, 2017, between the Company and Douglas Hunt (filed as Exhibit 10.15 to the Company’s Annual Report on Form 10-K filed with the SEC on March 9, 2018 and incorporated herein by reference) 10.10(a)* Collaboration and License Agreement, dated January 30, 2018, between the Company and CANbridge Biomed Limited (as successor in interest to CANbridgepharma Limited) (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 10, 2018 and incorporated herein by reference) 10.10(b)* Side Letter Agreement, dated November 19, 2018, between the Company and CANbridge Biomed Limited (as successor in interest to CANbridgepharma Limited) (filed as Exhibit 10.15(b) to the Company’s Annual Report on Form 10-K filed with the SEC on March 1, 2019 and incorporated herein by reference) 10.10(c)** Termination Agreement, dated February 24, 2021, by and between the Company and CANbridge BIOMED Limited (filed as Exhibit 10.3 to the Company ’ s Quarterly Report on Form 10-Q filed with the SEC on May 6, 2021 and incorporated herein by reference) 10.11* License Agreement, dated March 30, 2018, between the Company and Pint Pharma International SA (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 10, 2018 and incorporated herein by reference) 10.12* Supply Agreement, dated April 20, 2018, by and between the Company and Specialised Therapeutics Asia Pte. Ltd. (filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 9, 2018 and incorporated herein by reference) 10.13# Letter Agreement, dated September 28, 2018, between the Company and Maximo F. Nougues (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 9, 2018 and incorporated herein by reference) 10.14(a)* License Agreement, dated January 9, 2019, by and between the Company and Knight Therapeutics Inc. (filed as Exhibit 10.19 to the Company’s Annual Report on Form 10-K filed with the SEC on March 1, 2019 and incorporated herein by reference) 10.14(b)** Amendment to the License Agreement, dated December 18, 2019, by and between the Company and Knight Therapeutics, Inc. (filed as Exhibit 10.17(b) to the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2020 and incorporated herein by reference) 10.15(a)** License Agreement, dated March 29, 2019, by and between the Company and Pierre Fabre Medicament SAS (filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 10, 2019 and incorporated herein by reference) 10.15(b)** First Amendment to the License Agreement, dated September 17, 2019, by and between the Company and Pierre Fabre Medicament SAS (filed as Exhibit 10.18(b) to the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2020 and incorporated herein by reference) 10.15(c)** Second Amendment to the License Agreement, dated November 25, 2019, by and between the Company and Pierre Fabre Medicament SAS (filed as Exhibit 10.18(c) to the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2020 and incorporated herein by reference) 10.15(d)** Amendment No. 3 to the License Agreement, dated February 24, 2021, by and between the Company and Pierre Fabre Medicament SAS (filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 6, 2021 and incorporated herein by reference) 10.16# Letter Agreement, dated February 13, 2020, by and between the Company and Jeff J. Ludwig (filed as Exhibit 10.19 to the Company's Annual Report on Form 10-K filed with the SEC on March 1, 2021 and incorporated herein by reference) 10.17(a)** Note Purchase Agreement, dated July 23, 2021, by and between the Company and Athyrium Opportunities IV Co-Invest 1 LP, as Administrative Agent (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 4, 2021 and incorporated herein by reference) 10.17(b)** First Amendment to Note Purchase Agreement, dated February 8, 2022, by and between the Company and Athyrium Opportunities IV CO-Invest 1 LP, as Administrative Agent (filed as Exhibit 10.18(b) to the Company’s Annual Report on Form 10-K filed with the SEC on March 3, 2022 and incorporated herein by reference) 10.17(c) Second Amendment to Note Purchase Agreement, dated May 18, 2022, by and between the Company and Athyrium Opportunities IV CO-Invest 1 LP, as Administrative Agent (filed as Exhibit 10.17(c) to the Company’s Annual Report on Form 10-K filed with the SEC on March 2, 2023 and incorporated herein by reference) 78 Table of Contents 10.17(d) Third Amendment to Note Purchase Agreement, dated September 16, 2022, by and between the Company and Athyrium Opportunities IV CO-Invest 1 LP, as Administrative Agent (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 3, 2022 and incorporated herein by reference) 10.17(e)** Fourth Amendment to Note Purchase Agreement, dated November 29, 2022, by and between the Company and Athyrium Opportunities IV CO-Invest 1 LP, as Administrative Agent (filed as Exhibit 10.17(e) to the Company’s Annual Report on Form 10-K filed with the SEC on March 2, 2023 and incorporated herein by reference) 10.17(f) Limited Waiver and Fifth Amendment to Note Purchase Agreement, dated July 7, 2023, by and between the Company and Athyrium Opportunities IV CO-Invest 1 LP, as Administrative Agent (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 3, 2023, and incorporated herein by reference) 10.17(g) Sixth Amendment to Note Purchase Agreement, dated September 8, 2023, by and between the Company and Athyrium Opportunities IV CO-Invest 1 LP, as Administrative Agent (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 2, 2023, and incorporated herein by reference) 10.17(h) Seventh Amendment to Note Purchase Agreement and Third Amendment to Disclosure Letter, dated April 12, 2024, by and between the Company and Athyrium Opportunities IV CO-Invest 1 LP, as Administrative Agent (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 2, 2024, and incorporated herein by reference) 10.18 Open Market Sale Agreement SM , dated November 4, 2021, by and between the Company and Jeffries LLC (filed as Exhibit 1.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 4, 2021 and incorporated herein by reference) 10.19** Exclusive License Agreement, dated September 16, 2022, by and between the Company and Millennium Pharmaceuticals, Inc., a wholly owned subsidiary of Takeda Pharmaceutical Company Limited (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 3, 2022 and incorporated herein by reference) 19.1+ Insider Trading and Compliance Policy 21.1+ Subsidiary 23.1+ Consent of KPMG LLP 24.1+ Power of Attorney (included on signature page) 31.1+ Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2+ Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1++ Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2++ Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 97.1 Puma Biotechnology, Inc. Policy for Recovery of Erroneously Awarded Compensation (filed as Exhibit 97.1 to the Company’s Annual Report on Form 10-K filed with the SEC on February 29, 2024 and incorporated herein by reference) 101.INS+ Inline XBRL Instance Document 101.SCH+ Inline XBRL Taxonomy Extension Schema Document 101.CAL+ Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF+ Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB+ Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE+ Inline XBRL Taxonomy Extension Linkbase Document 104+ Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) + Filed herewith ++ Furnished herewith * Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934. ** Portions of this exhibit (indicated by asterisks) have been omitted pursuant to Regulation S-K, Item 601(b)(10) or certain schedules and attachments to this exhibit have been omitted pursuant to Regulation S-K, Item 601(a)(5). Such omitted information is not material and would likely cause competitive harm to the registrant if publicly disclosed. # Management contract or compensatory plan or arrangement. 79 Table of Contents Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 27, 2025. PUMA BIOTECHNOLOGY, INC. By: /s/ Alan H. Auerbach Alan H. Auerbach President & Chief Executive Officer Power of Attorney KNOWN BY ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Alan H. Auerbach and Maximo Nougues, or either of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K and any documents related to this report and filed pursuant to the Securities Exchange Act of 1934, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes may lawfully do or cause to be done by virtue hereof. This power of attorney shall be governed by and construed with the laws of the State of Delaware and applicable federal securities laws. 80 Table of Contents Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Date /s/ Alan H. Auerbach February 27, 2025 Alan H. Auerbach (Principal Executive Officer) /s/ Maximo Nougues February 27, 2025 Maximo Nougues (Principal Financial Officer and Principal Accounting Officer) /s/ Alessandra Cesano February 27, 2025 Alessandra Cesano /s/ Allison Dorval February 27, 2025 Allison Dorval /s/ Michael P. Miller February 27, 2025 Michael P. Miller /s/ Jay M. Moyes February 27, 2025 Jay M. Moyes /s/ Adrian M. Senderowicz February 27, 2025 Adrian M. Senderowicz /s/ Brian M. Stuglik February 27, 2025 Brian M. Stuglik /s/ Troy E. Wilson February 27, 2025 Troy E. Wilson 81 Table of Contents PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARY INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (KPMG LLP, Los Angeles, CA Auditor Firm ID: 185 ) F-2 Consolidated Balance Sheets at December 31, 2024 and 2023 F-4 Consolidated Statements of Operations for the Years Ended December 31, 2024, 2023 and 2022 F-5 Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2024, 2023 and 2022 F-6 Consolidated Statements of Stockholders’ Equity (Deficit) for the Years Ended December 31, 2024, 2023 and 2022 F-7 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022 F-8 Notes to Consolidated Financial Statements F-9 F-1 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Puma Biotechnology, Inc.: Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting We have audited the accompanying consolidated balance sheets of Puma Biotechnology, Inc. and subsidiary (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, stockholders’ equity (deficit), and cash flows for each of the years in the three-year period ended December 31, 2024 and the related notes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. F-2 Table of Contents Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Estimate of certain variable consideration related to product revenue, net As discussed in Note 2 to the consolidated financial statements, the Company recognizes product revenue, net that includes estimates of variable consideration. For the year ended December 31, 2024, the Company recorded product revenue, net of $195.2 million. The components of variable consideration include trade discounts and allowances, product returns, provider chargebacks and discounts, government rebates, payor rebates, and other incentives. These estimates take into consideration a range of possible outcomes that are probability-weighted in accordance with the expected value method in Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers. The range of possible outcomes is driven by relevant factors such as current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns. We identified the estimate of variable consideration for provider chargebacks and government rebates, including consideration of the constraint on variable consideration, related to product revenue, net as a critical audit matter. Evaluating the key assumptions of forecasted patient buying and payment patterns underlying the estimate for provider chargebacks and government rebates involved especially challenging auditor judgment due to their measurement uncertainty. We performed a sensitivity analysis in order to identify the key assumptions used to estimate the Company’s variable consideration. These key assumptions relate to estimating which of the Company’s revenue transactions will ultimately be subject to a related provider chargeback or government rebate. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the development of the key assumptions used to determine variable consideration for provider chargebacks and government rebates, including consideration of the constraint on variable consideration. We evaluated the forecasted patient buying and payment patterns used to determine the provider chargebacks and government rebates by comparing them to the Company’s historical data, statutory information, and executed third-party contracts. We assessed the Company’s assumed patient buying and payment patterns by (1) independently recalculating historical actual patient buying and payment pattern rates based on historical actual claim data, and (2) comparing current period forecasts to historical actual rates. We evaluated the Company’s ability to accurately estimate provider chargebacks and government rebates, including consideration of the constraint on variable consideration, by comparing historically recorded accruals to the actual amount that was ultimately paid by the Company. /s/ KPMG LLP We have served as the Company’s auditor since 2017. Los Angeles, California February 27, 2025 F-3 Table of Contents PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) December 31, 2024 December 31, 2023 ASSETS Current assets: Cash and cash equivalents $ 69,219 $ 84,585 Marketable securities 31,746 11,354 Accounts receivable, net of allowance for credit loss of $ 362 and $ 881 32,011 47,837 Inventory 8,724 7,080 Prepaid expenses, current 5,867 4,417 Other assets, current 91 912 Total current assets 147,658 156,185 Lease right-of-use assets, net 4,579 7,792 Property and equipment, net 515 855 Intangible assets, net 51,131 60,871 Restricted cash, long-term 2,091 2,091 Deferred tax assets 7,075 — Prepaid expenses and other, long-term 284 2,734 Total assets $ 213,333 $ 230,528 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 5,509 $ 6,889 Accrued expenses, current 36,898 52,721 Post-marketing commitment liability 2,835 975 Lease liabilities, current 5,540 4,800 Current portion of long-term debt 45,329 33,997 Total current liabilities 96,111 99,382 Other liabilities, long-term 121 121 Lease liabilities, long-term 1,494 7,034 Post-marketing commitment liability, long-term 1,763 4,890 Long-term debt, net 21,719 65,659 Total liabilities 121,208 177,086 Commitments and contingencies (Note 13) Stockholders’ equity: Common stock - $ .0001 par value per share; 100,000,000 shares authorized; 49,105,834 shares issued and outstanding at December 31, 2024 and 47,646,787 issued and outstanding at December 31, 2023 5 5 Additional paid-in capital 1,407,000 1,398,605 Accumulated other comprehensive income (loss) 6 ( 4 ) Accumulated deficit ( 1,314,886 ) ( 1,345,164 ) Total stockholders’ equity 92,125 53,442 Total liabilities and stockholders’ equity $ 213,333 $ 230,528 See Accompanying Notes to the Consolidated Financial Statements F-4 Table of Contents PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) For the Year Ended December 31, 2024 2023 2022 Revenues: Product revenue, net $ 195,186 $ 203,107 $ 200,023 Royalty revenue 35,282 32,530 28,008 Total revenue 230,468 235,637 228,031 Operating costs and expenses: Cost of sales 64,404 62,682 55,093 Selling, general and administrative 80,163 89,933 89,978 Research and development 54,935 50,382 52,240 Acquired in-process research and development — — 7,000 Total operating costs and expenses 199,502 202,997 204,311 Income from operations 30,966 32,640 23,720 Other income (expenses): Interest income 4,724 2,605 813 Interest expense ( 12,452 ) ( 13,330 ) ( 11,592 ) Legal verdict expense — — ( 12,456 ) Other income (expense) 862 759 ( 28 ) Total other expenses, net ( 6,866 ) ( 9,966 ) ( 23,263 ) Net income before income taxes $ 24,100 $ 22,674 $ 457 Income tax expense ( 897 ) ( 1,083 ) ( 455 ) Deferred income tax benefit 7,075 — — Net income $ 30,278 $ 21,591 $ 2 Net income per share of common stock—basic $ 0.62 $ 0.46 $ - Net income per share of common stock—diluted $ 0.62 $ 0.45 $ - Weighted-average shares of common stock outstanding—basic 48,648,701 47,134,331 44,674,501 Weighted-average shares of common stock outstanding—diluted 49,100,433 47,550,852 44,929,998 See Accompanying Notes to the Consolidated Financial Statements F-5 Table of Contents PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) For the Year Ended December 31, 2024 2023 2022 Net income $ 30,278 $ 21,591 2 Other comprehensive income (loss): Unrealized income (loss) on available-for-sale securities, net of tax of $ 0 10 ( 4 ) 2 Comprehensive income $ 30,288 $ 21,587 $ 4 See Accompanying Notes to the Consolidated Financial Statements F-6 Table of Contents PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (in thousands, except share and per share data) Accumulated Additional Other Common Stock Paid-in Comprehensive Accumulated Shares Amount Capital Income (Loss) Deficit Total Balance at December 31, 2021 41,175,507 $ 4 $ 1,364,309 $ ( 2 ) $ ( 1,366,757 ) $ ( 2,446 ) Stock-based compensation — — 11,826 — — 11,826 Shares issued or restricted stock units vested under employee stock plans 1,017,744 — — — — — Shares issued under private investments in public equity, net of issuance costs of approximately $ 0.2 M 4,152,409 1 12,223 — — 12,224 Unrealized gain on available-for-sale securities — — — 2 — 2 Net income — — — — 2 2 Balance at December 31, 2022 46,345,660 $ 5 $ 1,388,358 $ — ( 1,366,755 ) $ 21,608 Stock-based compensation — — 10,247 — — 10,247 Shares issued or restricted stock units vested under employee stock plans 1,301,127 — — — — — Unrealized loss on available-for-sale securities — — — ( 4 ) — ( 4 ) Net income — — — — 21,591 21,591 Balance at December 31, 2023 47,646,787 $ 5 $ 1,398,605 $ ( 4 ) ( 1,345,164 ) $ 53,442 Stock-based compensation — — 8,245 — — 8,245 Shares issued or restricted stock units vested under employee stock plans 1,459,047 — 150 — — 150 Unrealized gain on available-for-sale securities — — — 10 — 10 Net income — — — — 30,278 30,278 Balance at December 31, 2024 49,105,834 $ 5 $ 1,407,000 $ 6 $ ( 1,314,886 ) $ 92,125 See Accompanying Notes to the Consolidated Financial Statements F-7 Table of Contents PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) For the Year Ended December 31, 2024 2023 2022 Operating activities: Net income $ 30,278 $ 21,591 $ 2 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 11,524 11,519 9,840 In-process research and development expenses — — 7,000 Stock-based compensation 8,245 10,247 11,826 Provision for credit loss (recovery) ( 519 ) 881 — Disposal of property and equipment — — 1 Loss on impairment of asset — 625 — Changes in operating assets and liabilities: Accounts receivable, net 16,345 ( 8,368 ) ( 7,824 ) Inventory, net ( 1,644 ) ( 2,554 ) 2,583 Prepaid expenses and other 1,000 820 2,367 Other current assets 821 1,517 ( 1,982 ) Accounts payable ( 1,380 ) 449 ( 4,734 ) Operating lease assets and liabilities, net ( 1,587 ) ( 1,195 ) ( 920 ) Accrued expenses and other ( 15,823 ) ( 7,583 ) ( 33,065 ) Deferred tax assets ( 7,075 ) — — Post-marketing commitment liability ( 1,267 ) ( 940 ) ( 921 ) Net cash provided by operating activities 38,918 27,009 ( 15,827 ) Investing activities: Purchase of property and equipment ( 56 ) ( 140 ) — Acquired in-process research and development — — ( 7,000 ) Purchase of available-for-sale securities ( 76,230 ) ( 23,813 ) ( 4,836 ) Maturity of available-for-sale securities 55,848 17,328 18,940 Purchase of intangible assets — ( 12,500 ) — Net cash (used in) provided by investing activities ( 20,438 ) ( 19,125 ) 7,104 Financing activities: Net proceeds from shares issued under employee stock plans 150 — — Gross proceeds from private investments in public equity — — 12,500 Issuance costs associated with private investments in public equity — — ( 277 ) Payment of debt ( 33,330 ) — — Payment of exit costs ( 666 ) — — Net cash (used in) provided by financing activities ( 33,846 ) — 12,223 Net (decrease) increase in cash, cash equivalents and restricted cash ( 15,366 ) 7,884 3,500 Cash, cash equivalents and restricted cash, beginning of period 86,676 78,792 75,292 Cash, cash equivalents and restricted cash, end of period 71,310 86,676 78,792 Supplemental disclosures of non-cash investing and financing activities: Intangibles in accrued in-license rights $ — — $ 12,500 Property and equipment purchases in accounts payable $ — $ 26 $ — Supplemental disclosure of cash flow information: Interest paid $ 10,769 $ 11,628 $ 10,319 Income taxes paid $ 1,218 $ 737 $ 384 See Accompanying Notes to the Consolidated Financial Statements F-8 Table of Contents PUMA BIOTECHNOLOGY, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1—Business and Basis of Presentation Puma Biotechnology, Inc., (the “Company”) is a biopharmaceutical company based in Los Angeles, California that develops and commercializes innovative products to enhance cancer care and improve treatment outcomes for patients. The Company is currently commercializing NERLYNX®, an oral version of neratinib (“NERLYNX”), for the treatment of HER2 -positive breast cancer. Additionally, the Company in-licensed, and is responsible for 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. The Company believes alisertib has potential application in the treatment of a range of different cancer types, including hormone receptor positive breast cancer, triple-negative breast cancer and small cell lung cancer. The Company has one subsidiary, Puma Biotechnology, B.V., a Netherlands company. This subsidiary was established for the purpose of legal representation in the European Union. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated. The accompanying consolidated financial statements of the Company and its subsidiary has been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”). The Company has incurred significant operating losses since its inception. While the Company has reported net income, the Company cannot assure that it will continue to do so and will need to continue to generate significant revenue to sustain operations and successfully commercialize neratinib. In 2017, the Company received U.S. Food and Drug Administration (“FDA”) approval for its first product, NERLYNX® (neratinib)(“NERLYNX”), formerly known as PB272 (neratinib, oral), for the extended adjuvant treatment of adult patients with early stage HER2 -overexpressed/amplified breast cancer following adjuvant trastuzumab-based therapy. Following FDA approval in July 2017, NERLYNX became available by prescription in the United States, and the Company commenced commercialization. In February 2020, NERLYNX was also approved by the FDA 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. In 2018, the European Commission (“EC”) granted marketing authorization for NERLYNX in the European Union (“EU”) for the extended adjuvant treatment of adult patients with early stage hormone receptor positive HER2 -overexpressed/amplified breast cancer and who are less than one year from the completion of prior adjuvant trastuzumab-based therapy. 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 America, South America, Africa and the Middle East. 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 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. Alisertib is an adenosine triphosphate–competitive and reversible inhibitor of Aurora Kinase A and results in disruption of mitosis leading to apoptosis of rapidly proliferating tumor cells that are dependent on Aurora Kinase A. Alisertib has been tested in clinical trials in patients with metastatic cancers including breast cancer, small cell lung cancer, head and neck cancer, ovarian cancer, peripheral T cell lymphoma and acute myeloid leukemia. Under the terms of the exclusive license agreement, the Company assumed sole responsibility for the global development and commercialization of alisertib. The Company paid Takeda an upfront license fee of $ 7.0 million in October 2022 and Takeda is eligible to receive potential future milestone payments of up to $ 287.3 million upon the Company’s achievement of certain regulatory and commercial milestones over the course of the exclusive license agreement, as well as tiered royalty payments for any net sales of alisertib. The Company 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 December 31, 2024 , no milestones had been accrued as the underlying contingencies were not probable or estimable. The Company has reported net income of appro ximately $ 30.3 million and c ash provided by operations of approximately $ 38.9 million for the year ended December 31, 2024 . The Company’s commercialization, research and development or marketi ng efforts may require funding in addition to the cash and cash equivalents and marketable securities totaling approximately $ 101.0 million at December 31, 2024 . The Company believes that its existing cash and cash equivalents and marketable securities as of December 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, for at least one year after the filing of the Annual Report on Form 10 -K 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. While the Company has been successful in raising capital in the past, there can be no assurance that it will be able to do so in the future. The Company’s ability to obtain funding may be adversely impacted by uncertain market and economic conditions, the Company’s success in commercializing neratinib, unfavorable decisions of regulatory authorities or adverse clinical trial results. The outcome of these matters cannot be predicted at this time. 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 December 31, 2024 , the Company’s financing has primarily been proceeds from product, royalty, and license revenue, public offerings of its common stock, private equity placements, and various debt instruments. F- 9 Table of Contents Note 2—Significant Accounting Policies The significant accounting policies followed in the preparation of these consolidated financial statements are as follows: Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation. Segment Reporting Management has determined that the Company operates in one reporting segment, which is the development and commercialization of innovative products to enhance cancer care. We derive our global product, license and royalty revenue through the sales of NERLYNX®. The majority of our royalty revenue is derived from our sub-licensee sales into China. The accounting policies of this operating segment are the same as those described below in Note 2–Significant Accounting Policies. Our Chief Operating Decision Maker (“CODM”) is our President, Chief Executive Officer and Chairman of the Board, Alan Auerbach. The CODM primarily uses our Consolidated Statement of Operations and related revenues, expenses and net income in evaluating the performance of the single operating segment and determining how to allocate resources of the Company as a whole, including our sales force and related marketing, research and development programs, including alisertib, and licensing strategy. Consolidated revenue, expenses and net income are also used to monitor budget versus actual results. The CODM does not typically review total asset amounts in evaluating the results of the operating segment. In addition to the significant expense categories included within consolidated net income presented on the Company's Consolidated Statements of Operations, see below for disaggregated amounts that comprise operating expenses: For the Year Ended December 31, 2024 2023 2022 Cost of sales $ 64,404 $ 62,682 $ 55,093 General and administrative 36,749 37,892 38,671 Commercialization 37,849 45,132 43,261 Research and development: Clinical research and development 24,715 17,784 19,967 Medical affairs 4,605 6,751 7,821 Other research and development (1) 22,935 22,508 20,673 Acquired in-process research and development — — 7,000 Operating costs and expenses 191,257 192,750 192,485 Stock based compensation 8,245 10,247 11,826 Total operating costs and expenses $ 199,502 $ 202,997 $ 204,311 ( 1 ) Other research and development expense include regulatory affairs, pharmacovigilance, quality assurance, chemical manufacturing and other costs. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the balance sheet, and reported amounts of revenues and expenses for the period presented. Accordingly, actual results could differ from those estimates. Significant estimates include estimates for variable consideration for which reserves were established. These estimates are included in the calculation of net revenues and include trade discounts and allowances, product returns, provider chargebacks and discounts, government rebates, payor rebates, and other incentives, such as voluntary patient assistance, and other allowances that are offered within contracts between the Company and its customers, payors, and other indirect customers relating to the Company’s sale of its products. Other significant estimates also include those related to legal and other expense accruals. Net Income per Share of Common Stock Basic net income per share of common stock is computed by dividing net income applicable to common stockholders by the weighted average number of shares of common stock outstanding during the periods presented, as required by ASC 260, Earnings per Share . For purposes of calculating diluted 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. The following potentially dilutive outstanding common stock equivalents were excluded from diluted net income per share because of their anti-dilutive effect: For the Year Ended December 31, 2024 2023 Options outstanding 3,533,693 3,836,328 Warrant outstanding 2,116,250 2,116,250 Unvested restricted stock units 734,236 977,392 Totals 6,384,179 6,929,970 F- 10 Table of Contents Revenue Recognition Under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606” ) the Company recognizes revenue when its customer obtains control of the promised goods or services, in an amount that reflects the consideration that the entity expects to be entitled in exchange for those goods or services. The Company had no contracts with customers until the FDA approved NERLYNX on July 17, 2017. Subsequent to receiving FDA approval, the Company entered into a limited number of arrangements with specialty pharmacies and specialty distributors in the United States to distribute NERLYNX. These arrangements are the Company’s initial contracts with customers. The Company has determined that these sales channels with customers are similar. Product Revenue, Net The Company sells NERLYNX to a limited number of specialty pharmacies and specialty distributors in the United States. These customers subsequently resell the Company’s products to patients and certain medical centers or hospitals. In addition to distribution agreements with these customers, the Company enters into arrangements with healthcare providers and payors that provide for government mandated and/or privately negotiated rebates, chargebacks and discounts with respect to the purchase of the Company’s products. The Company recognizes revenue on product sales when the specialty pharmacy or specialty distributor, as applicable, obtains control of the Company's product, which occurs at a point in time (upon delivery). Product revenue is recorded net of applicable reserves for variable consideration, including discounts and allowances. The Company’s payment terms range between 10 and 68 days. Product revenue also consists of product sales under sub-license agreements to our sub-licensees, who then sell into their respective international territories. Shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods and are recorded in cost of sales. If taxes relating to product sales should be collected from customers and remitted to governmental authorities, they will be excluded from revenue. 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 year ended December 31, 2024 . For the year ended December 31, 2024 , fou r customers individually comprised approximately 28.4 %, 18.8 %, 14.1 % and 12.3 % respec tively, of the Company’s total product revenue. For the year ended December 31, 2023 , four customers individually comprised approximately 31.4 %, 17.2 %, 15.2 % and 11.9 %, respectively, of the Company’s total product revenue. For the year ended December 31, 2022 , two major customers accounted for approximately 35 % and 20 %, respectively, of the Company’s total product revenue. Reserves for Variable Consideration Revenue from product sales is recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established. Components of variable consideration include trade discounts and allowances, product returns, provider chargebacks and discounts, government rebates, payor rebates, and other incentives, such as voluntary patient assistance, and other allowances that are offered within contracts between the Company and its customers, payors, and other indirect customers relating to the Company’s sale of its products. These reserves, as detailed below, are based on the related sales, and are classified as reductions of accounts receivable, net when the right of offset exists in accordance with ASU 2013 - 1, Balance Sheet (Topic 210 ): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities , or as a current liability. These estimates take into consideration a range of possible outcomes that are probability-weighted in accordance with the expected value method in ASC 606 for relevant factors such as current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the respective underlying contracts. 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 analysis also contemplated application of the constraint in accordance with the guidance, under which it determined a significant reversal of revenue would not occur in a future period for the estimates detailed below as of December 31, 2024 and, therefore, the transaction price was not reduced further during the year ended December 31, 2024 . Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. Trade Discounts and Allowances The Company generally provides customers with discounts, which include incentive fees that are explicitly stated in the Company’s contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized. The reserve for discounts is established in the same period that the related revenue is recognized, together with reductions to accounts receivables, net on the consolidated balance sheets. In addition, the Company compensates its customers for sales order management, data, and distribution services. The Company has determined such services received to date are not distinct from the Company’s sale of products to its customers and, therefore, these payments have been recorded as a reduction of revenue within the statement of operations. Product Returns Consistent with industry practice, the Company offers the specialty pharmacies and specialty distributors that are its customers limited product return rights for damaged and expiring product, provided it is within a specified period around the product expiration date as set forth in the applicable individual distribution agreement. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized, as well as a reduction to accounts receivables, net on the consolidated balance sheets. The Company currently estimates product returns using its own sales information, including its visibility into the inventory remaining in the distribution channel. The Company has an insignificant number of returns to date and believes that returns of its products will continue to be minimal. F- 11 Table of Contents Provider Chargebacks and Discounts Chargebacks for fees and discounts to providers represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices charged to its customers who directly purchase the product from the Company. Customers charge the Company for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers. The reserve for chargebacks is established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and a reduction to accounts receivable, net on the consolidated balance sheets. Chargeback amounts are generally determined at the time of resale to the qualified healthcare provider by customers, and the Company generally issues credits for such amounts within a few weeks of the customer’s notification to the Company of the resale. Chargebacks consist of credits the Company expects to issue for units that remain in the distribution channel at each reporting period end that the Company expects will be sold to qualified healthcare providers and chargebacks that customers have claimed, but for which the Company has not yet issued a payment. Government Rebates The Company is subject to discount obligations under state Medicaid programs and Medicare. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability, which is included in accrued expenses on the consolidated balance sheets. The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter, and estimates of future claims that will be made for product that has been recognized as revenue, but which remains in the distribution channel at the end of each reporting period. Payor Rebates The Company contracts with certain private payor organizations, primarily insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products. The Company estimates these rebates and records such estimates in the same period the related revenue is recognized, resulting in a reduction of product revenue, net and the establishment of a current liability, which is included in accrued expenses on the consolidated balance sheets. Other Incentives Other incentives the Company offers include voluntary patient assistance programs, such as the co-pay assistance program, which are intended to provide financial assistance to qualified commercially insured patients with prescription drug co-payments required by payors. The calculation of the accrual for co-pay assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with product that has been recognized as revenue, but remains in the distribution channel at the end of each reporting period. The adjustments are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability, which is included as a component of accrued expenses on the consolidated balance sheets. License Revenue The Company also recognizes license revenue under certain of the Company’s sub-license agreements that are within the scope of ASC 606. The terms of these agreements may contain multiple performance obligations, which may include licenses and research and development activities. The Company evaluates these agreements under ASC 606 to determine the distinct performance obligations. Non-refundable, upfront fees that are not contingent on any future performance and require no consequential continuing involvement by the Company, are recognized as revenue when the license term commences and the licensed data, technology or product is delivered. The Company defers recognition of non-refundable upfront license fees if the performance obligations are not satisfied. The Company’s payment terms range between the execution date of the sub-license agreement and 45 days. Prior to recognizing revenue, the Company makes estimates of the transaction price, including variable consideration that is subject to a constraint. Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved. If there are multiple distinct performance obligations, the Company allocates the transaction price to each distinct performance obligation based on its relative standalone selling price. The standalone selling price is generally determined based on the prices charged to customers or using expected cost-plus margin. Revenue is recognized by measuring the progress toward complete satisfaction of the performance obligations using an input measure. Since 2018, the Company has entered into sub-license agreements with certain sub-licensees in territories outside of the United States. These sub-licensing agreements grant certain intellectual property rights and set forth various respective obligations with respect to actions such as development, pursuit and maintenance of regulatory approvals, commercialization and supply of NERLYNX in the sub-licensees’ respective territories. 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 December 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. At this time, the Company cannot estimate if or when these milestone-related performance obligations might be achieved. In September 2024, the Pharmacovigilance Risk Assessment Committee approved a change in existing post approval requirements for overall results and a reduction in sample size for the Pierre Fabre NERLYFE post-marketing study in Europe. As of December 31, 2024, there is a post-marketing liability of $ 4.6 million, and the final costs of the study are being assessed. Any adjustment to the liability will be recorded as license revenue as the original $ 9.0 million estimate in study costs were recorded as a reduction to license revenue. F- 12 Table of Contents Royalty Revenue For sub-license agreements that are within the scope of ASC 606, the Company recognizes revenue when the related sales occur in accordance with the sales-based royalty exception under ASC 606 - 10 - 55 - 65. Royalty revenue consists of consideration earned related to international sales of NERLYNX made by the Company’s sub-licensees in their respective territories. The Company recognizes royalty revenue when the performance obligations have been satisfied. The Company’s payment terms range between 10 and 45 days. Legal Contingencies and Expense For legal contingencies, the Company accrues a liability for an estimated loss if the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated. Legal fees and expenses are expensed as incurred based on invoices or estimates provided by legal counsel. The Company periodically evaluates available information, both internal and external, relative to such contingencies and adjusts the accrual as necessary. The Company determines whether a contingency should be disclosed by assessing whether a material loss is deemed reasonably possible. In determining whether a loss should be accrued, the Company evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of the loss (see Note 13 -Commitments and Contingencies). Royalty Expenses Royalties incurred in connection with the Company’s license agreement with Pfizer, as disclosed in Note 13–Commitments and Contingencies, are expensed to cost of sales as revenue from product sales is recognized. Research and Development Expenses Research and development (“R&D”) expenses are charged to operations as incurred. The major components of research and development costs include clinical manufacturing costs, clinical trial expenses, consulting and other third -party costs, salaries and employee benefits, stock-based compensation expense, supplies and materials, and allocations of various overhead costs. Clinical trial expenses include, but are not limited to, investigator fees, site costs, comparator drug costs, and clinical research organization (“CRO”) costs. In the normal course of business, the Company contracts with third parties to perform various clinical trial activities in the ongoing development of potential products. The financial terms of these agreements are subject to negotiation and variations from contract to contract and may result in uneven payment flows. Payments under the contracts depend on factors such as the achievement of certain events, the successful enrollment of patients and the completion of portions of the clinical trial or similar conditions. The Company’s accruals for clinical trials are based on estimates of the services received and efforts expended pursuant to contracts with numerous clinical trial sites, cooperative groups and CROs. As actual costs become known, the Company adjusts its accruals in that period. In instances where the Company enters into agreements with third parties for clinical trials and other consulting activities, upfront amounts are recorded to prepaid expenses and other in the accompanying consolidated balance sheets and expensed as services are performed or as the underlying goods are delivered. If the Company does not expect the services to be rendered or goods to be delivered, any remaining capitalized amounts for non-refundable upfront payments are charged to expense immediately. Amounts due under such arrangements may be either fixed fee or fee for service, and may include upfront payments, monthly payments and payments upon the completion of milestones or receipt of deliverables. Costs related to the acquisition of technology rights and patents for which development work is still in process are charged to operations as incurred and considered a component of research and development costs. Acquired In-Process Research and Development Expense The Company has acquired, and may continue to acquire, the rights to develop new drug candidates. Payments to acquire a new drug candidate are immediately expensed as acquired in-process research and development provided that the drug candidate has not achieved regulatory approval for marketing and, absent obtaining such approval, has no alternative future use. Stock-Based Compensation Stock option awards ASC Topic 718, Compensation-Stock Compensation (“ASC 718” ) requires the fair value of all share-based payments to employees and non-employees, including grants of stock options, to be recognized in the statement of operations over the requisite service period. Under ASC 718, employee and non-employee option grants are generally valued at the grant date and those valuations do not change once they have been established. The fair value of each option award is estimated on the grant date using the Black-Scholes Option Pricing Method. As allowed by ASC 718, the Company’s estimate of expected volatility is based on its average volatilities using its expected life, or approximately the past six years of publicly traded history. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant valuation. Option forfeitures are estimated when the option is granted to reduce the option expense to be recognized over the life of the award. The estimated forfeiture rate considers historical employee turnover rates stratified into employee pools, actual forfeiture experience and other factors. The option expense is adjusted upon the actual forfeiture of a stock option grant and the Company periodically revises the estimated forfeiture rate in subsequent periods if actual forfeitures differ from those estimates. Due to its limited history of stock option exercises, the Company uses the simplified method to determine the expected life of the option grants. Compensation expense related to modified stock options is measured based on the fair value for the awards as of the modification date. Any incremental compensation expense arising from the excess of the fair value of the awards on the modification date compared to the fair value of the awards immediately before the modification date is recognized at the modification date or ratably over the requisite service period, as appropriate. F- 13 Table of Contents Restricted stock units RSUs are valued on the grant date and the fair value of the RSUs is equal to the market price of the Company’s common stock on the grant date. RSU expense is recognized over the requisite service period in the statement of operations. When the requisite service period begins prior to the grant date (because the service inception date occurs prior to the grant date), the Company is required to begin recognizing compensation cost before there is a measurement date (i.e., the grant date). The service inception date is the beginning of the requisite service period. If the service inception date precedes the grant date, accrual of compensation cost for periods before the grant date shall be based on the fair value of the award at the reporting date. In the period in which the grant date occurs, cumulative compensation cost shall be adjusted to reflect the cumulative effect of measuring compensation cost based on fair value at the grant date rather than the fair value previously used at the service inception date (or any subsequent reporting date). RSU forfeitures are estimated when the RSU is granted to reduce the RSU expense to be recognized over the life of the award. The estimated forfeiture rate considers historical employee turnover rates stratified into employee pools, actual forfeiture experience and other factors. The RSU expense is “trued-up” upon the actual forfeiture of a RSU grant and the Company periodically revises the estimated forfeiture rate in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to modified restricted stock units is measured based on the fair value for the awards as of the modification date. Any incremental compensation expense arising from the excess of the fair value of the awards on the modification date compared to the fair value of the awards immediately before the modification date is recognized at the modification date or ratably over the requisite service period, as appropriate. Warrants Warrants (see Note 10–Stockholders’ Equity (Deficit) for further details) granted to employees and non-employees are normally valued at the fair value of the instrument on the grant date and are recognized in the statement of operations over the requisite service period. When the requisite service period precedes the grant date and a market condition exists in the warrant, the Company values the warrant using the Monte Carlo Simulation Method. When the terms of the warrant become fixed, the Company values the warrant using the Black-Scholes Option Pricing Method. As allowed by ASC 718, the Company’s estimate of expected volatility is based on its average volatilities using its past nine years of publicly traded history. The risk-free rate for periods within the contractual life of the warrant is based on the U.S. Treasury yield curve in effect at the time of grant valuation. In determining the value of the warrant until the terms are fixed, the Company factors in the probability of the market condition occurring and several possible scenarios. When the requisite service period precedes the grant date and is deemed to be complete, the Company records the fair value of the warrant at the time of issuance as an equity stock-based compensation transaction. The grant date is determined when all pertinent information, such as exercise price and quantity are known. Income Taxes The Company follows ASC Topic 740, Income Taxes (“ASC 740” ) which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the consolidated financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the asset will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The standard addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740 also provides g uidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. As of December 31, 2024 , the Company’s uncertain tax positions include a reserve for its R&D credits. Financial Instruments The carrying value of financial instruments, such as cash equivalents, accounts receivable and accounts payable, approximate their fair value because of their short-term nature. The carrying value of long-term debt approximates its fair value as the principal amounts outstanding are subject to variable interest rates that are based on market rates that are regularly reset. Cash and Cash Equivalents The Company classifies all highly liquid instruments with an original maturity of three months or less as cash equivalents. Restricted Cash Restricted cash represents cash held at financial institutions that is pledged as collateral for stand-by letters of credit for lease and legal verdict commitments. The lease related letters of credit will expire at the end of the respective lease terms through 2026. At December 31, 2024 and 2023 , the Company had restricted cash in the amount of $ 2.1 million. Investment Securities The Company classifies all investment securities (short-term and long-term) as available-for-sale, as the sale of such securities may be required prior to maturity to implement management’s strategies. These securities are carried at fair value, with the unrealized gains and losses, reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity (deficit) until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis. In accordance with ASU 2016 - 13, Financial Instruments – Credit Losses (Topic 326 ): Measurement of Credit Losses on Financial Instruments , credit losses on available-for-sale securities are reported using an expected loss model and recorded to an allowance. No material credit losses on available-for-sale securities were recognized in the years ending December 31, 2024 , Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the straight-line method. Interest income is recognized when earned. F- 14 Table of Contents Assets Measured at Fair Value on a Recurring Basis ASC Topic 820, Fair Value Measurement (“ ASC 820” ) provides a single definition of fair value and a common framework for measuring fair value as well as disclosure requirements for fair value measurements used in financial statements. Under ASC 820, fair value is determined based upon the exit price that would be received by a company to sell an asset or paid by a company to transfer a liability in an orderly transaction between market participants, exclusive of any transaction costs. Fair value measurements are determined by either the principal market or the most advantageous market. The principal market is the market with the greatest level of activity and volume for the asset or liability. Absent a principal market to measure fair value, the Company uses the most advantageous market, which is the market from which the Company would receive the highest selling price for the asset or pay the lowest price to settle the liability, after considering transaction costs. However, when using the most advantageous market, transaction costs are only considered to determine which market is the most advantageous and these costs are then excluded when applying a fair value measurement. ASC 820 creates a three -level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below, with Level 1 having the highest priority and Level 3 having the lowest. Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. Level 3: 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 December 31, 2024 and 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): December 31, 2024 Level 1 Level 2 Level 3 Total Cash equivalents $ 16,996 $ 38,102 $ — $ 55,098 U.S. Government 17,568 — — 17,568 Commercial paper — 14,178 — 14,178 $ 34,564 $ 52,280 $ — $ 86,844 December 31, 2023 Level 1 Level 2 Level 3 Total Cash equivalents $ 29,068 $ 8,490 $ — $ 37,558 U.S. Government $ 3,444 $ — $ — $ 3,444 Commercial paper — 7,910 — 7,910 Totals $ 32,512 $ 16,400 $ — $ 48,912 The Company’s investments in commercial paper, corporate bonds and U.S. government securities are exposed to price fluctuations. The fair value measurements for commercial paper, corporate bonds 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 short-term investments (in thousands): Maturity Amortized Unrealized Estimated December 31, 2024 (in years) Cost Gains Losses Fair Value Cash equivalents $ 55,095 $ 3 $ — $ 55,098 U.S. Government Less than 1 17,564 6 ( 2 ) 17,568 Commercial paper Less than 1 14,179 7 ( 8 ) 14,178 Totals $ 86,838 $ 16 $ ( 10 ) $ 86,844 Maturity Amortized Unrealized Estimated December 31, 2023 (in years) Cost Gains Losses Fair Value Cash equivalents $ 37,561 $ — $ ( 3 ) $ 37,558 U.S. Government $ 3,443 $ 1 $ — $ 3,444 Commercial paper Less than 1 7,912 1 ( 3 ) 7,910 Totals $ 48,916 $ 2 $ ( 6 ) $ 48,912 F- 15 Table of Contents Concentration of Risk 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 December 31, 2024 , were approximately $ 70.5 million. The Company does not believe it is exposed to any significant credit risk due to the quality nature of the financial instruments in which the money is held. Pursuant to the Company’s internal investment policy, investments must be rated A- 1/P - 1 or better by Standard and Poor’s Rating Service and Moody’s Investors Service at the time of purchase. The Company sells its products in the United States primarily through specialty pharmacies and specialty distributors. Therefore, wholesale distributors and large pharmacy chains account for a large portion of its accounts receivables, net and product revenues, net. The creditworthiness of its customers is continuously monitored, and the Company has internal policies regarding customer credit limits. The Company estimates an allowance for credit loss primarily based on the credit worthiness of its customers, historical payment patterns, aging of receivable balances and general economic conditions. The Company recorded $ 0.5 million credit loss recovery in the year ended December 31, 2024. The Company recorded $ 0.9 million credit loss expense in the year ended December 31, 2023, and no such expense in the year ended December 31, 2022. As of December 31, 2024 and 2023, accounts receivable from individual customers with balances due in exc ess of 10% of total accounts receivable totaled $ 22.9 million and $ 32.3 million, respectivel y. The Company’s success depends on its ability to successfully commercialize NERLYNX. The Company currently has a single product with limited commercial sales experience, which makes it difficult to evaluate its current business, predict its future prospects and forecast financial performance and growth. The Company has invested a significant portion of its efforts and financial resources in the development and commercialization of the lead product, NERLYNX, and expects NERLYNX to constitute the vast majority of product revenue for the foreseeable future. The Company relies exclusively on third parties to formulate and manufacture NERLYNX and its drug candidates. The commercialization of NERLYNX and any other drug candidates, if approved, could be stopped, delayed or made less profitable if those third parties fail to provide sufficient quantities of product or fail to do so at acceptable quality levels or prices. The Company has no experience in drug formulation or manufacturing and does not intend to establish its own manufacturing facilities. The Company lacks the resources and expertise to formulate or manufacture NERLYNX and other drug candidates. While the drug candidates were developed by Pfizer, both the drug substance and drug product are manufactured by third -party contractors. The Company is using the same third -party contractors to manufacture, supply, store and distribute drug supplies for clinical trials and the commercialization of NERLYNX. If the Company is unable to continue its relationships with one or more of these third -party contractors, it could experience delays in the development or commercialization efforts as it locates and qualifies new manufacturers. The Company intends to rely on one or more third -party contractors to manufacture the commercial supply of drugs. Inventory The Company values its inventories at the lower of cost and estimated net realizable value. The Company determines the cost of its inventories, which includes amounts related to materials and manufacturing overhead, on a first -in, first -out basis and uses standard costing. The Company performs an assessment of the recoverability of capitalized inventory during each reporting period, and it writes down any excess and obsolete inventories to their estimated realizable value in the period in which the impairment is first identified. Such impairment charges, should they occur, are recorded within the cost of sales in the consolidated statements of operations. The determination of whether inventory costs will be realizable requires estimates by management. If actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required, which would be recorded as a cost of sales in the consolidated statements of operations. F- 16 Table of Contents The Company capitalizes inventory costs associated with the Company’s products after regulatory approval, if any, when, based on management’s judgment, future commercialization is considered probable, and the future economic benefit is expected to be realized. Inventory that can be used in either the production of clinical or commercial product is recorded as research and development expense when selected for use in a clinical trial. Starter kits, provided to patients prior to insurance approval, are expensed by the Company to selling, general and administrative expense as incurred. The Company’s inventory balances are as follows: December 31, 2024 December 31, 2023 Raw materials $ 7,183 $ 5,693 Work-in-process (materials, labor and overhead) 758 820 Finished goods (materials, labor and overhead) 783 567 Total inventories $ 8,724 $ 7,080 Property and Equipment, Net Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the useful lives of the assets, which is generally three years for computer hardware and software, three years for phone equipment, and seven years for furniture and fixtures. Leasehold improvements are amortized using the straight-line method over the lesser of the useful life or the lease term. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is credited or charged to operations. Repairs and maintenance costs are expensed as incurred. The Company reviews its long-lived assets used in operations for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, as required by ASC Topic 360, Property, Plant, and Equipment (“ASC 360” ). The Company performs a recoverability test by comparing the sum of the estimated undiscounted cash flows over the life of the asset to its carrying value on the consolidated balance sheet. If the undiscounted cash flows used in the recoverability test are less than the carrying value, the Company would then determine the fair value of the long-lived asset and recognize an impairment loss for the amount in excess of the carrying value. No impairments were recorded during the year ended December 31, 2024 and an impairment charge of $ 0.6 million was recorded during the year ended 2023 related to a sublease. Leases ASC Topic 842, Leases , as adopted in the first quarter of 2019, requires lessees to recognize most leases on the balance sheet with a corresponding right-of-use asset (“ROU asset”). ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of fixed lease payments over the lease term. ROU assets are evaluated for impairment using the long-lived assets impairment guidance, as required by ASC 360. A significant indication of impairment of an ROU asset would include a change in the extent or manner in which the asset is being used. The Company must make assumptions that underlie the most significant and subjective estimates in determining whether any impairment exists. Those estimates, and the underlying assumptions, include estimates of future cash flow utilizing market lease rates and determination of fair value. If an ROU asset related to an operating lease is impaired, the carrying value of the ROU asset post-impairment should be amortized on a straight-line basis through the earlier of the end of the useful life of the ROU asset or the end of the lease term. Post impairment, a lessee must calculate the amortization of the ROU asset and interest expense on the lease liability separately, although the sum of the two continues to be presented as a single lease cost. If a lease is planned to be abandoned with no intention of subleasing, the ROU asset should be assessed for impairment. Leases are classified as financing or operating, which will drive the expense recognition pattern. The Company elects to exclude short-term leases if and when the Company has them. For additional information, see Note 6–Leases. The Company leases office space and copy machines, all of which are operating leases. Most leases include the option to renew, and the exercise of the renewal options is at the Company’s sole discretion. Options to extend or terminate a lease are considered in the lease term to the extent that the option is reasonably certain of exercise. The leases do not include options to purchase the leased property. The depreciable life of assets and leasehold improvements is limited by the expected lease term. Covenants imposed by the leases include letters of credit required to be obtained by the lessee. The incremental borrowing rate (“IBR”) represents the rate of interest the Company would expect to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. As the implicit rate on the Company’s leases are not readily determinable, the Company uses its IBR 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 December 31, 2024 was 10.9 %. The Company decided to cease the use of a portion of its leased office space in 2023. In connection with the decreased need for the right to use the ROU asset, the Company entered into a sublease for the underlying asset, in which the sublease income is less than the original lease payments, indicating impairment. In performing the recoverability test on the effective date, the undiscounted future estimated cash flows and carrying value were identified for the subleased portion of the leased building, as an individual asset group, defined under ASC 360. A reduction to the carrying value of the ROU asset of approximate ly $ 0.6 million was recorded, representing the fair value amount in excess of the carrying value, with a corresponding impairment charge recorded as selling, general and administration expense, in the consolidated statements of operations for the year ended December 31, 2023. F- 17 Table of Contents License Fees and Intangible Assets The Company expenses amounts paid to acquire licenses associated with products under development when the ultimate recoverability of the amounts paid is uncertain and the technology has no alternative future use when acquired. Acquisitions of technology licenses are charged to expense or capitalized based upon the asset achieving technological feasibility in accordance with management’s assessment regarding the ultimate recoverability of the amounts paid and the potential for alternative future use. The Company has determined that technological feasibility for its drug candidates is reached when the requisite regulatory approvals are obtained to make the product available for sale. The Company capitalizes technology licenses upon reaching technological feasibility. The Company maintains definite-lived intangible assets related to the license agreement with Pfizer. These assets are amortized over their remaining useful lives, which are estimated based on the shorter of the remaining patent life or the estimated useful life of the underlying product. Intangible assets are amortized using the economic consumption method if anticipated future revenues can be reasonably estimated. The straight-line method is used when future revenues cannot be reasonably estimated. Amortization costs are recorded as part of cost of sales. In September 2022, the Company entered into an exclusive license agreement with 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 up-front payment of $ 7.0 million was expensed as acquired in-process research and development as the drug candidate has not achieved regulatory approval for marketing and has no alternative future use. The Company assesses its intangible assets for impairment if indicators are present or changes in circumstance suggest that impairment may exist. Events that could result in an impairment, or trigger an interim impairment assessment, include the receipt of additional clinical or non-clinical data regarding one of the Company’s drug candidates or a potentially competitive drug candidate, changes in the clinical development program for a drug candidate, or new information regarding potential sales of the drug. If impairment indicators are present or changes in circumstance suggest that impairment may exist, the Company performs a recoverability test by comparing the sum of the estimated undiscounted cash flows of each asset group to its carrying value on the consolidated balance sheet. If the undiscounted cash flows used in the recoverability test are less than the carrying value, the Company would determine the fair value of the intangible asset and recognize an impairment loss if the carrying value of the intangible asset exceeds its fair value. In connection with the FDA approval of NERLYNX in July 2017, the Company triggered a one -time milestone payment pursuant to its license agreement with Pfizer. In June 2020, the Company entered into a letter agreement with Pfizer relating to the method of payment associated with a milestone payment under the Company’s license agreement with Pfizer (see Note 13–Commitments and Contingencies). The Company capitalized the mil estone payments as an intangible asset and is amortizing the asset to cost of sales on a straight-line basis over the estimated useful life of the licensed patent through 2030. In addition, the Company reached a commercial milestone by achieving aggregate worldwide net sales of $ 250 million in calendar year 2022, resulting in a payable to Pfizer of $ 12.5 million as of December 31, 2022. The Company capitalized this milestone as an intangible asset and accrued in-licensed rights on the accompanying consolidated balance sheets and payment was made in the first quarter of 2023. The Company recorded amortization expense related to its intangible assets of $ 9.7 million, $ 9.7 million, and $ 8.0 million for the years ended December 31, 2024, 2023 and 2022 , respectively. As of December 31, 2024 , estimated future amortization expense related to the Company’s intangible asset was approximately $ 9.7 million for each year from 2025 through 2029, and $ 2.4 million for 2030. Recently Issued Accounting Standards In October 2023, the FASB issued ASU 2023 - 06, Disclosure Improvements – Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. The ASU modifies the disclosure or presentation requirements of a variety of Topics in the Codification to align with the SEC’s regulations. The ASU also makes those requirements applicable to entities that were not previously subject to the SEC’s requirements. The ASU is effective for the Company two years after the effective date to remove the related disclosure from Regulation S- X or S-K. As of the date these financial statements have been made available for issuance, the SEC has not yet removed any related disclosure. The Company does not expect the adoption of ASU 2023 - 06 to have a material effect on its consolidated financial statements. In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures. The ASU requires the annual financial statements to include consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction. ASU 2023 - 09 is effective for the Company’s annual reporting periods beginning after December 15, 2025. Adoption is either with a prospective method or a fully retrospective method of transition. Early adoption is permitted. The Company is currently evaluating the effect that adoption of ASU 2023 - 09 will have on its consolidated financial statements. In November 2024, the FASB issued ASU 2024 - 03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures: The ASU requires more detailed information about specified categories of expenses included in certain expense captions presented on the face of the income statement. This ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either ( 1 ) prospectively to financial statements issued for reporting periods after the effective date of this ASU or ( 2 ) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. Accounting Pronouncements Adopted During the Current Year Segment Reporting Disclosures In November 2023, the FASB issued ASU 2023 - 07, Segment Reporting (Topic 280 ): Improvements to Reportable Segment Disclosures. The standard expands reportable segment disclosure requirements for public business entities primarily through enhanced disclosures about significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit (referred to as the “significant expense principle”). We have adopted this standard for our fiscal year 2024 annual financial statements and interim financial statements thereafter and have applied this standard retrospectively for all prior periods presented in the financial statements. See Segment Reporting in Note 2–Significant Accounting Policies above for further information. F- 18 Table of Contents Note 3—Accounts Receivable Accounts receivable, net consisted of the following (in thousands): December 31, 2024 December 31, 2023 Trade accounts receivable $ 26,362 $ 27,669 Royalty revenue receivable 6,011 21,049 Total accounts receivable $ 32,373 $ 48,718 Allowance for credit losses ( 362 ) ( 881 ) Total accounts receivable, net $ 32,011 $ 47,837 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 years ended December 31, 2024 and 2023 . For all accounts receivable, the Company recognized credit losses based on lifetime expected losses. In determining estimated credit losses, the Company evaluated its historical loss rates, current economic conditions and reasonable and supportable forecasts of future economic conditions. The Compan y recorded a recovery of credit loss expense of $ 0.5 million in year ended December 31, 2024. The Company recorded $ 0.9 million credit loss expense in the year ended December 31, 2023, and no such expense in the year ended December 31, 202 2. Note 4—Prepaid Expenses and Other Prepaid expenses and other consisted of the following at December 31 (in thousands): December 31, 2024 December 31, 2023 Current: CRO services $ 81 $ 6 Other clinical development 347 534 Insurance 1,078 1,403 Professional fees 731 1,081 Prepaid Taxes 21 Other 3,609 1,393 5,867 4,417 Long-term: CRO services 52 — Insurance 11 — Other clinical development 102 210 Other 119 2,524 284 2,734 Totals $ 6,151 $ 7,151 Other current prepaid amounts consist primarily of deposits, signing bonuses, licenses, subscriptions and software, and prefunding of reimbursement claims. Note 5—Property and Equipment Property and equipment consisted of the following at December 31 (in thousands): December 31, 2024 December 31, 2023 Leasehold improvements $ 3,779 $ 3,779 Computer equipment 2,150 2,095 Telephone equipment 95 302 Furniture and fixtures 2,359 2,359 Total property and equipment 8,383 8,535 Less: accumulated depreciation ( 7,868 ) ( 7,680 ) Property and equipment, net $ 515 $ 855 For the years ended December 31, 2024 , 2023 and 2022 , the Company incurred depreciation expense of $ 0.4 millio n, $ 0.4 million, and $ 0.6 million, respectively. F- 19 Table of Contents Note 6—Leases In December 2011, the Company entered into a non-cancelable operating lease for office space in Los Angeles, California, which lease was subsequently amended in November 2012, December 2013, March 2014, July 2015, and December 2017. The initial term of the lease was for seven years and commenced on December 10, 2011. As amended, the Company rents approximately 65,656 square feet. The term of the lease runs until March 2026, and rent amounts payable by the Company increase approximately 3 % per year. Concurrent with the execution of the lease, the Company provided the landlord an automatically renewable stand-by letter of credit in the amount of $ 1.0 million. 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. In June 2012, the Company entered into a long-term lease agreement for office space in South San Francisco, California, which was subsequently amended in May 2014 and July 2015. As amended, the Company rents approximately 29,470 square feet. The term of this lease runs until March 2026, with the option to extend for an additional five -year term, and rents payable by the Company increase approximately 3 % per year. The Company provided the landlord an automatically renewable stand-by letter of credit in the amount of $ 1.1 million. 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. The Company also leases copier equipment for use in the office spaces. Components of copier lease expense include both fixed and variable lease expenses. Total rent expense for years ended December 31, 2024 , 2023 and 2022 was approxi mately $ 4.9 mill ion for each year . Fo r purposes of determining straight-line rent expense, the lease term is calculated from the date the Company first obtains control 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 and equipment leases generally have contractually specified minimum rent and annual rent increases are included in the measurement of the ROU asset and related lease liability. Additionally, under these lease arrangements, the Company may be required to pay directly, or reimburse the lessors, for real estate taxes, insurance, utilities, maintenance and other operating costs. 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 consolidated statements of operations when they are incurred. Variable lease payments not included in the lease liability were $ 0.7 million and $ 0.5 million for the years ended December 31, 2024 and 2023, respectively. The future minimum lease payments under ASC 842 as of December 31, 2024 were as follows (in thousands): Amount 2025 5,983 2026 1,508 Total minimum lease payments $ 7,491 Less: imputed interest ( 457 ) Total lease liabilities $ 7,034 In February 2019, the Company entered into a long-term sublease agreement for 12,429 square feet of the office space in Los Angeles, California. Also, in August 2023 , the Company entered into a long-term sublease agreement for an additional 13,916 square feet of the office space in Los Angeles, California, which commenced in November 2023 . As a result of the long-term sublease entered during 2023, the Company recorded an impairment expense on the right-of-use asset of approximately $ 0.6 million. For both subleases, the term of the leases were to run until March 2026 and the rent amounts payable to the Company increase approximately 3 % per year . The February 2019 sublease was terminated in December 2024. As a result, the Company received $ 0.7 million, which approximated the sublease rental payments on the remaining lease term. The Company recorded sublease income of $ 1.4 million, $ 0.5 million and $ 0.5 million for the years ended December 31, 2024 , 2023 and 2022 , respectively, in other income (expenses) in the consolidated statements of operations. The future minimum lease payments to be received as of December 31, 2024 were as follows (in thousands): Amount 2025 519 2026 132 Total $ 651 Supplemental cash flow information related to leases for the year ended December 31, 2024 : Supplemental cash flow information related to leases for the twelve months ended December 31, 2024: Operating cash flows used for operating leases (in thousands) $ 6,473 Right-of-use assets obtained in exchange for new operating lease liabilities — Weighted-average remaining lease term (in years) 1.2 Weighted average discount rate 10.9 % F- 20 Table of Contents Note 7—Intangible Assets Intangible assets consisted of the following at December 31 (in thousands): December 31, 2024 December 31, 2023 Acquired and in-licensed rights $ 102,500 $ 102,500 Less: accumulated amortization ( 51,369 ) ( 41,629 ) Total intangible assets, net $ 51,131 $ 60,871 Estimated future intangible amortization expense as of December 31, 2024 is as follows (in thousands): 2025 9,739 2026 9,739 2027 9,739 2028 9,739 2029 9,739 Thereafter 2,436 Totals $ 51,131 Note 8—Accrued Expenses Accrued expenses consisted of the following at December 31 (in thousands): December 31, 2024 December 31, 2023 Current: Accrued legal verdict expense $ — $ 7,706 Accrued royalties 10,169 16,496 Accrued CRO services 1,035 940 Accrued variable consideration 10,829 9,388 Accrued bonus 7,976 5,900 Accrued compensation 4,368 4,379 Accrued other clinical development 935 1,044 Accrued professional fees 341 245 Accrued legal fees 1,095 1,589 Accrued manufacturing costs 39 4,521 Other 111 513 36,898 52,721 Long-term: Accrued other liabilities 121 121 121 121 Totals $ 37,019 $ 52,842 Included in accrued liabilities is approximately $ 7.7 million ($ 8.0 million net of imputed interest) as of December 31, 2023 that was related to Eshelman v. Puma Biotechnology, Inc., et al. On November 10, 2022, the Company announced the parties entered into a settlement agreement. Pursuant to the settlement agreement, Dr. Eshelman filed a Stipulation of Voluntary Dismissal with Prejudice on November 7, 2022, and the Company agreed to pay Dr. Eshelman $ 16.0 million. The settlement amount was paid in two separate payments. The first payment of $ 8.0 million was paid in January 2023, and the second payment of $ 8.0 million was paid in October 2024. Accrued variable consideration represents estimates of adjustments to product revenue, net for which reserves are established. Accrued royalties represent royalties incurred in connection with the Company’s license agreement with Pfizer. Accrued CRO services, accrued other clinical development expenses, and accrued legal fees represent the Company’s estimates of such costs and are recognized as incurred. Accrued compensation includes commissions and vacation. Other accrued expenses consist primarily of grants, software and taxes. F- 21 Table of Contents Note 9—Debt Long-term debt consisted of the following at December 31, 2024 (in thousands): December 31, 2024 Maturity Date Total debt, inclusive of $ 2.0 million exit payment $ 102,000 July 23, 2026 Less: unamortized debt issuance costs and discounts ( 956 ) Less: current portion ( 45,329 ) Less: debt repayment ( 33,996 ) Total long-term debt, net $ 21,719 Athyrium Note Purchase Agreement The Company issued senior notes for an aggregate principal amount of $ 100.0 million pursuant to a note purchase agreement dated July 23, 2021 by the Company, and its subsidiary, and Athyrium, as Administrative Agent, and certain other investor parties (the “Note Purchase Agreement”), with an initial maturity date of July 23, 2026 ( the “Athyrium Notes”). The Athyrium Notes were issued for face amount of $ 100.0 million net of an original issue discount of $ 1.5 million. The Athyrium Notes also require a 2.0 % exit payment to be made on each payment of principal. The borrowings under the Athyrium Notes, together with cash on hand, were used to repay the Company’s outstanding indebtedness, including the applicable exit and prepayment fees owed to lenders under our prior credit facility with Oxford. The Athyrium Notes are secured by substantially all of the Company’s assets. The Company incurred $ 1.9 million of deferred financing costs with the borrowing. Interest on the Athyrium Notes is calculated in part based on the Secured Overnight Financing Rate (“SOFR”), which replaced the “London Interbank Offering Rate” as the floating benchmark for interest rate calculations applicable to the Athyrium Notes pursuant to the terms of the Third Amendment to Note Purchase Agreement dated as of September 16, 2022 ( the “Third Amendment”). The modification of the Note Purchase Agreement pursuant to the Third Amendment did not meet the requirements of a debt extinguishment under ASC Topic 470 - 50 - Debt Modifications and Exchanges and no gain or loss was recognized. The Company performed a quantitative analysis and determined that the terms of the new debt and original debt instrument were not substantially different. Accordingly, the Third Amendment is accounted for as a debt modification. Following the effectiveness of the Third Amendment, the Athyrium Notes bear interest at an annual rate equal to the sum of (a) eight percent ( 8.00 %) plus (b) the lesser of (i) the sum of ( x ) three -month term SOFR for an interest period of three months plus (y) 0.26161 % ( 26.161 basis points) and (ii) three and one -half of one percent ( 3.50 %) per annum. Interest is payable quarterly on the last business day of March, June, September and December each year. In the second quarter of 2024, the Company began paying the principal payments required to be made quarterly at 11.11 % of the original face amount. The remaining balance will be 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 December 31, 2024, the effective interest rate for the loan was 12.99 %. As of December 31, 2024, the Company may prepay the outstanding principal balance of the notes, in whole or in part, without premium or penalty. The Athyrium Notes include affirmative and negative covenants applicable to the Company. The affirmative covenants include, among others, covenants requiring the Company to maintain its legal existence and governmental approvals, deliver certain financial reports, maintain insurance coverage, and satisfy certain requirements regarding deposit accounts. The negative covenants include, among others, restrictions on the Company’s 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. 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 December 31, 2024, the Company was in compliance with such covenants. As of December 31, 2024 , the principal balance outstanding under the Athyrium Notes w as $ 66.7 million, representing all of the Company’s debt. The future minimum principal and exit payments under the Athyrium Notes as of December 31, 2024 , were as follows (in thousands): Amount 2025 45,329 2026 22,674 Total $ 68,003 F- 22 Table of Contents Debt Issuance Costs and Discounts Debt issuance costs and discounts consist of the following (in thousands): December 31, 2024 December 31, 2023 Debt issuance costs and discounts (Athyrium Notes) $ 5,410 $ 5,410 Less: accumulated amortization ( 4,454 ) ( 3,066 ) Included in long-term debt $ 956 $ 2,344 Debt issuance costs and discounts are financing costs related to the Company’s outstanding debt. Amortization of debt issuance costs is expensed using the effective interest method and is included in interest expense in the consolidated statements of operations. For the years ended December 31, 2024, 2023 and 2022 , the Company recorded app roximately $ 1.4 million, $ 1.3 million and $ 1.2 million, respe ctively, of interest expense related to the amortization of debt issuance costs, discounts and exit fees in the consolidated statements of operations. Note 10—Stockholders’ Equity (Deficit) Common Stock The Company issued 64,118 shares of common stock upon exercise of stock options for the year ended December 31, 2024 and did not issue any shares of common stock in 2023 or 2022. The Company issued 1,394,929 , 1,301,127 and 1,017,744 shares of common stock upon vesting of RSUs during the years ended December 31, 2024, 2023 and 2022 , respectively. Alan H. Auerbach, the Company’s President, Chief Executive Officer and Chairman of the Board purchased 2,360,295 shares of the Company's common stock for aggregate gross proceeds of approximately $ 7.5 million before deducting any offering expenses under two separate purchase agreements in the year ended December 31, 2022. The first purchase took place on March 8, 2022 for 1,792,114 shares for a purchase price $ 2.79 per share and the second purchase took place on December 9, 2022 for 568,181 shares for a purchase price $ 4.40 . Each purchase price was equal to the closing price of the Company’s common stock on NASDAQ on the date of each purchase. Authorized Shares The Company has 100,000,000 shares of stock authorized for issuance, all of which are common stock, par value $ 0.0001 per share. Warrants In October 2011, the Company issued an anti-dilutive warrant to Mr. Auerbach. The warrant was issued to provide Mr. Auerbach with the right to maintain ownership of at least 20 % of the Company’s common stock in the event that the Company raised capital through the sale of its securities in the future. In connection with the closing of a public offering in October 2012, the exercise price and number of shares underlying the warrant issued to Mr. Auerbach were established and, accordingly, the final value of the warrant became fixed. Pursuant to the terms of the warrant, Mr. Auerbach was able to exercise the warrant to acquire 2,116,250 shares of the Company’s common stock at $ 16 per share until October 4, 2021. On April 1, 2021, the Company's Board of Directors approved an amendment to the terms of the warrant by extending the term until October 4, 2026. The amendment was approved by the Company's stockholders on June 15, 2021. As a result of this amendment, the Company recorded additional stock-based compensation in the amount of $ 13.6 million which was included in selling, general and administrative expense for the year ended December 31, 2021. The fair value of the additional stock-based compensation was estimated using the Black-Scholes Option Pricing Method (see Note 2 – Significant Accounting Policies) with the following assumptions as of June 15, 2021, the date of the modification. Dividend yield 0.0 % Expected volatility 87.0 % Risk-free interest rate 0.8 % Expected life in years 5.31 Stock Options and Restricted Stock Units The Company’s 2011 Incentive Award Plan ( “2011 Plan”) was adopted by the Company’s Board of Directors on September 15, 2011. Pursuant to the 2011 Plan, the Company may grant incentive stock options and nonqualified stock options, as well as other forms of equity-based compensation. Incentive stock options may be granted only to employees, while consultants, employees, officers and directors are eligible for the grant of nonqualified options under the 2011 Plan. The maximum term of stock options granted under the 2011 Plan is 10 years and the awards generally vest over a three -year period. 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. On April 1, 2021, the Board of Directors adopted an amendment to the 2011 Plan to increase the number of shares of the Company's common stock reserved for issuance thereunder by 2,000,000 shares. The amendment was approved by the Company's stockholders on June 15, 2021. On June 18, 2024, the stockholders of the Company approved an amendment to the Company’s 2011 Plan, increasing the number of authorized shares of the Company’s common stock that may become issuable under the 2011 Plan by 3,000,000 shares and extending the period during which incentive stock options may be granted. As of December 31, 2024 , a total of 17,529,412 shares of the Company’s common stock have been reserved for issuance under the 2011 Plan. F- 23 Table of Contents As of December 31, 2024 , 4,701,229 shares of the Company’s common stock are issuable upon the exercise of outstanding awards granted under the 2011 Plan and 4,332,622 s hares of the Company’s common stock are available for future issuance under the 2011 Plan. The Company awarded only “plain vanilla options” as determined by the SEC Staff Accounting Bulletin 107, or Share Based Payment . The fair value of options granted to employees and non-employees was estimated using the Black-Scholes Option Pricing Method (see Note 2–Significant Accounting Policies) with the following weighted-average assumptions used during the years ended December 31: 2024 2023 Dividend yield 0.0 % 0.0 % Expected volatility 85.8 % 85.5 % Risk-free interest rate 4.1 % 3.9 % Expected life in years 5.55 5.63 The Company’s 2017 Employment Inducement Incentive Award Plan ( “2017 Plan”) was adopted by the Company’s Board of Directors on April 27, 2017. Pursuant to the 2017 Plan, the Company may grant stock options and restricted stock units, as well as other forms of equity-based compensation to employees, as an inducement to join the Company. The maximum term of stock options granted under the 2017 Plan is 10 years and the awards generally vest over a three -year period. The exercise price of stock options granted under the 2017 Plan must be at least equal to the fair market value of such shares on the date of grant. 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 December 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 December 31, 2024 , 640,148 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 1,156,921 shares of the Company’s common stock are available for future issuance under the 2017 Plan. Stock-based compensation expense was as follows for the years ended December 31 (in thousands): For the Year Ended December 31, 2024 2023 2022 Stock-based compensation: Options: Selling, general, and administrative $ 1,625 $ 2,510 $ 2,993 Research and development 290 611 553 Restricted stock units: Selling, general, and administrative 3,941 4,398 5,054 Research and development 2,389 2,728 3,226 Total stock-based compensation expense $ 8,245 $ 10,247 $ 11,826 Stock Option Rollforward Activity with respect to options granted under the 2011 Plan and 2017 Plan is summarized as follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2023 4,418,681 $ 51.70 5.2 $ 1,105 Granted 441,430 $ 6.33 7.9 — (Forfeited) ( 105,646 ) $ 5.78 — — (Exercised) ( 64,118 ) $ 2.33 — — (Expired) ( 638,419 ) $ 146.47 — — Outstanding at December 31, 2024 4,051,928 $ 33.80 5.0 $ 313 Vested and expected to vest at December 31, 2024 4,051,928 $ 33.80 5.0 $ 313 Exercisable 3,621,314 $ 37.16 4.5 $ 311 At December 31, 2024 , total estimated unrecognized compensation cost related to non-vested stock options granted prior to that date was approximately $ 0.9 million, which is expected to be recognized over a weighted-average period of 1.0 years. At December 31, 2024 , the total estimated unrecognized compensation cost related to non-vested RSUs was approximately $ 4.0 million, which is expected to be recognized over a weighted-a verage period of 1.0 years . The wei ghted-average grant date fair value of options granted during th e years ended December 31, 2024, 2023 and 2022 , was $ 4.57 , $ 3.17 and $ 1.72 per share, respectively. The weighted-average grant date fair value of RSUs awarded during the year ended December 31, 2024, 2023 and 2022 was $ 5.86 , $ 3.96 and $ 2.49 , respectively. F- 24 Table of Contents Restricted Stock Unit Rollforward Shares Weighted Average Grant-Date Fair Value Nonvested shares at December 31, 2023 1,624,972 $ 3.96 Granted 1,268,570 $ 5.86 (Forfeited) ( 209,164 ) $ 4.89 (Vested) ( 1,394,929 ) $ 4.46 Nonvested shares at December 31, 2024 1,289,449 $ 5.14 Note 11—401 (k) Savings Plan During 2012, the Company adopted a 401 (k) savings plan for the benefit of its employees. 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. The Company incurred expenses for employer matching contributions of a pproximately $ 1.6 million, $ 1.6 million, and $ 1.5 million for th e years e nded December 31, 2024, 2023 and 2022 , respectively. Note 12—Income Taxes The Company uses the asset and liability method of accounting for income taxes in accordance with Accounting Standards Codification Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. The components of income before income taxes for the years ended December 31 ( in thousands) are as follows: 2024 2023 2022 Domestic $ 24,100 $ 22,674 $ 457 Foreign — — — Income Before Income Taxes $ 24,100 $ 22,674 $ 457 The provisions of income taxes are summarized as follows (in thousands): 2024 2023 2022 Current: Federal $ — $ — $ — State 722 905 363 Foreign 175 178 92 897 1,083 455 Deferred: Federal ( 6,632 ) — — State ( 443 ) — — ( 7,075 ) — — Total $ ( 6,178 ) $ 1,083 $ 455 F- 25 Table of Contents The provision for income taxes in the accompanying consolidated statements of operations differs from the amount calculated by applying the statutory income tax rate to income (loss) from continuing operations before income taxes. Approximately $ 7.1 million of the $ 25.3 million change in valuation allowance is attributable to a partial valuation allowance release (see further discussion within the tax footnotes below). Approximately $ 12.2 million of tax expense is due to stock-based compensation expense shortfall, the expiration of vested stock options, and non-deductible stock-based compensation. Approximately $ 1.5 million of the tax benefits are due to R&D tax credits, net of a $ 0.4 million reserve related to unrecognized tax benefits for the method of allocation of expenses used in the R&D credit calculation. The primary components of such differences are as follows as of December 31 ( in thousands): 2024 2023 2022 Tax computed at the federal statutory rate $ 5,061 $ 4,488 $ 96 State taxes 744 1,312 485 Foreign taxes 175 178 92 Permanent items 12,946 4,837 6,864 R&D credits ( 1,532 ) ( 1,806 ) ( 1,490 ) Prior year adjustment 1,697 ( 1,715 ) ( 455 ) Change in valuation allowance ( 25,269 ) ( 6,211 ) ( 5,137 ) Total provision $ ( 6,178 ) $ 1,083 $ 455 Temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes give rise to the Company’s deferred income taxes. The components of the Company’s net deferred tax assets as of December 31, 2024 and 2023 are as follows (in thousands): 2024 2023 2022 Deferred tax assets: Net operating loss carryforwards $ 232,184 $ 240,960 $ 253,544 Business credit carryforwards 63,175 62,051 59,726 Compensation 26,081 37,946 37,876 Sec 174 R&D expenses 23,933 19,882 10,371 Accrued expenses 90 261 3,878 Carryforward of disallowed interest — 1,477 4,761 Accrued legal verdict — 1,976 50 Other deferred tax assets 4,745 4,231 3,560 Lease liabilities 1,764 3,034 4,035 Gross deferred tax assets 351,972 371,818 377,801 Valuation allowance ( 343,482 ) ( 368,751 ) ( 374,962 ) Net deferred tax assets 8,490 3,067 2,940 Deferred tax liabilities: Other deferred tax liabilities ( 70 ) ( 149 ) ( 211 ) Right of use assets ( 1,148 ) ( 1,997 ) ( 2,870 ) Inventory ( 197 ) ( 921 ) 141 Total deferred tax liabilities ( 1,415 ) ( 3,067 ) ( 2,940 ) Net deferred tax assets (liability) $ 7,075 $ — $ — As of December 31, 2023, the Company had deferred tax assets totaling $ 371.8 million, primarily attributable to net operating loss (NOL) carryforwards and R&D tax credit carryforwards. A valuation allowance of $ 368.8 million had been established in prior periods as the management concluded it was more likely than not that the asset will not be realized. During the year ended December 31, 2024, the Company has recorded a net decrease in the valuation allowance of $ 25.3 million. The decrease is attributable to recognizing $ 18.2 million of net deferred tax assets primarily related to utilization of net operating losses and stock based compensation. The remaining change is attributable to a partial valuation allowance release of $ 7.1 million driven by forecasted earnings in 2025. The remaining valuation allowance of $ 343.5 million reserves against deferred tax assets that are more likely than not to not be recognized, as the Company's forecasted profitability is uncertain beyond 2025 due to various risks which are further outlined in ITEM 1A. RISK FACTORS. Management’s decision to release a portion of the valuation allowance was based on an assessment of both positive and negative evidence, as required under ASC 740. Positive evidence supporting the partial release included: • Three consecutive years of cumulative pretax income, indicating a trend of profitability. • Projected earnings in 2025, increasing the likelihood of realizing certain deferred tax assets. Negative evidence that led to retaining a portion of the valuation allowance included: • Competitive pressure and risks of alternative treatments, potential impacting market share on our commercial product, NERLYNX. • Future profits are contingent on the successful clinical development and approval of pipeline products. • Future limitations on the utilization of NOL and R&D tax credits. • The Company does not have material deferred tax liabilities (DTLs) to offset deferred tax assets (DTAs). F- 26 Table of Contents As of December 31, 2024, the remaining valuation allowance of $ 343.5 million continues to reflect management’s assessment of uncertainties related to the realization of certain net operating losses and R&D tax credit carryforwards, which remain subject to expiration or utilization limitations. The decision to retain the remaining valuation allowance was based on inherent uncertainty in future taxable income. The partial release of the valuation allowance decreased the effective tax rate by 29.36 %. Management will continue to evaluate the realizability of deferred tax assets on a quarterly basis. At December 31, 2024, the Company had federal and state net operating loss carryforwards respectively of approximately $ 834.5 million and $ 833.8 million, respectively, which will begin to expire respectively in 2035 and 2036. At December 31, 2024, the Company also has federal research and development credit carryforwards of approximately $ 40.5 million. If not utilized, the research and development credit carryforwards will begin expiring in 2033. The Company has state research and development credit carryforwards of approximately $ 25.7 million which do not expire. Pursuant to the Internal Revenue Code, Sections 382 and 383, use of the Company’s net operating loss and credit carryforwards could be limited if a cumulative change in ownership of more than 50% occurs within a three -year period. The Company performed an assessment of the potential limitation on net operating loss and credit carryforwards, and concluded that there will be no limitation for the tax year 2024 for federal purposes. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits at December 31 ( in thousands): 2024 2023 2022 Unrecognized tax benefits - January 1 $ 2,811 $ 2,522 $ 4,261 Gross decreases - tax positions in a prior period ( 143 ) ( 163 ) ( 2,113 ) Gross increases - tax positions in a current period 377 452 374 Unrecognized tax benefits - December 31 $ 3,045 $ 2,811 $ 2,522 During prior period we completed research and development credit study. As a result of the study, we computed our credit under safe harbor rules which when applied consistently result in more conservative approach of calculating the amount of credit. We concluded that a release of uncertain tax benefits for the portion of the R&D credit attributable to safe harbor was appropriate and released a portion of previously recorded uncertain tax positions reserve. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by the federal and state jurisdictions where applicable. The Company is currently pending a federal income tax examination for the fiscal year ended December 31, 2022. The Company’s tax years for 2012 and forward are subject to examination by the federal and California tax authorities due to the carryforward of unutilized net operating losses and research and development credits. Note 13—Commitments and Contingencies License Agreements Pfizer License Agreement In August 2011, the Company entered into an agreement pursuant to which Pfizer agreed to grant it a worldwide license for the development, manufacture and commercialization of PB272 (neratinib, oral), PB272 (neratinib, intravenous) and PB357, and certain related compounds. The license is exclusive with respect to certain patent rights owned by or licensed to Pfizer. Under the agreement, the Company is obligated to commence a new clinical trial for a product containing one of these compounds within a specified period of time and to use commercially reasonable efforts to complete clinical trials and to achieve certain milestones as provided in a development plan. From the closing date of the agreement through December 31, 2011, Pfizer continued to conduct the existing clinical trials on behalf of the Company at the licensor’s sole expense. At the Company’s request, Pfizer agreed to continue to perform certain services in support of the existing clinical trials at the Company’s expense. These services will continue through the completion of the transitioned clinical trials. The license agreement “capped” the out of pocket expense the Company would be responsible to complete the then existing clinical trials. All agreed upon costs incurred by the Company above the “cost cap” would be reimbursed by Pfizer. The Company exceeded the “cost cap” during the fourth quarter of 2012. In accordance with the license agreement, the Company billed Pfizer for agreed upon costs above the “cost cap” until December 31, 2013. On July 18, 2014, the Company entered into an amendment to the license agreement with Pfizer. The amendment amends the agreement to (i) reduce the royalty rate payable by the Company to Pfizer on sales of licensed products; (ii) release Pfizer from its obligation to pay for certain out-of-pocket costs incurred or accrued on or after January 1, 2014 to complete certain ongoing clinical studies; and (iii) provide that Pfizer and the Company will continue to cooperate to effect the transfer to the Company of certain records, regulatory filings, materials and inventory controlled by Pfizer as promptly as reasonably practicable. As consideration for the license, the Company is required to make substantial payments upon the achievement of certain milestones totaling approximately $ 187.5 million if all such milestones are achieved, of which $ 102.5 million have been achieved as of December 31, 2024 . In connection with the FDA approval of NERLYNX in July of 2017, the Company triggered a one -time milestone payment pursuant to the agreement. In June 2020, the Company entered into a letter agreement (the “Letter Agreement”), with Pfizer relating to the method of payment associated with a one -time milestone payment under the license agreement with Pfizer. The Letter Agreement permitted the Company to make the milestone payment in installments with the remaining amount payable to Pfizer (including interest). The milestone payment accrued interest at 6.25 % per annum. The milestone payment including accrued interest of $ 1.8 million was paid in full in September 2021. In addition, the company reached a commercial milestone by achieving aggregate worldwide net sales of $ 250 million in calendar year 2022, resulting in a payable to Pfizer of $ 12.5 million as of December 31, 2022. The commercial milestone payable is included in accrued in-licensed rights on the accompanying consolidated balance sheets and was paid in February 2023. F- 27 Table of Contents The Company may trigger additional milestone payments in the future. Should the Company commercialize any more of the compounds licensed from Pfizer or any products containing any of these compounds, the Company will be obligated to pay to Pfizer annual royalties at a fixed rate in the low to mid-teens of net sales of all such products, subject to certain reductions and offsets in some circumstances. The Company’s royalty obligation continues, on a product-by-product and country-by-country basis, until the later of (i) the last to expire licensed patent covering the applicable licensed product in such country, or (ii) the earlier of generic competition for such licensed product reaching a certain level in such country or expiration of a certain time period after first commercial sale of such licensed product in such country. In the event that the Company sublicenses the rights granted to the Company under the license agreement with Pfizer to a third party, the same milestone and royalty payments are required. The Company can terminate the license agreement at will, or for safety concerns, in each case upon specified advance notice. Takeda License Agreement In September 2022, the Company entered into an exclusive license agreement with Takeda to license the worldwide research and development and commercial rights to alisertib, a selective, small-molecule, orally administered inhibitor of Aurora Kinase A. Under the terms of the exclusive license agreement, the Company assumed sole responsibility for the global development and commercialization of alisertib. The Company paid Takeda an upfront license fee of $ 7.0 million in October 2022 and is eligible to receive potential future milestone payments of u p to $ 287.3 million upon the Company’s achievement of certain regulatory and commercial milestones over the course of the exclusive license agreement, as well as tiered royalty payments for any net sales of alisertib. The Company recorded in-process research and development expense of $ 7.0 million in connection with the up-front payment related to the asset acquisition. As of December 31, 2024 , no milestones had been accrued as the underlying contingencies were not considered probable. Clinical Trial Contracts The Company engages with CROs and contract manufacturing organizations (“CMOs”) in addition to eng aging in contracts for the management of its ongoing clinical trials and pre-commercialization efforts. The Company may cancel these agreements with a 30 to 45 day written notice to the outside vendor. The Company would be obligated to pay for services rendered up to that point, which amounts to total contractual obligations of approximately $ 42.3 million w ithin the next twelve months. Th e contracts also contain variable costs that are hard to predict as they are based on such things as patients enrolled and clinical trial sites, which can vary, and therefore, are not included in the total obligations amount. Included in the total contractual obligations amount above are payments to be made when milestones are reached. As of December 31, 2024 , the Company's obligations for potential milestone payments total ed approximately $ 16.3 million. This amount will be paid by the Company if all milestones are reached and would reduce the overall contractual obligation if one or more milestone is never reached. Legal Proceedings The Company and certain of its executive officers were named as defendants in the lawsuits detailed below. The Company records a liability in the consolidated financial statements for loss contingencies when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is reasonably possible but not known or probable, and can be reasonably estimated, the estimated loss or range of loss is disclosed. When determining the estimated loss or range of loss, significant judgment is required to estimate the amount and timing of a loss to be recorded. Legal Malpractice Suit On September 17, 2020, the Company filed a lawsuit against Hedrick Gardner Kincheloe & Garofalo, L.L.P. and David L. Levy, the attorneys who previously represented the Company in Eshelman v. Puma Biotechnology, Inc., et al . in the Superior Court of Mecklenburg County, North Carolina. The Company is alleging legal malpractice based on the defendants’ negligent handling of the defense of the Company in Eshelman v. Puma Biotechnology, Inc., et al . The Company is seeking recovery of the entire amount awarded in Eshelman v. Puma Biotechnology, Inc., et al . and all legal fees and expenses incurred in appealing from the judgment and retrying the damages phase of the trial. On November 23, 2020, the defendant filed an answer to the complaint denying the allegations of negligence. On August 19, 2022, the Company filed a voluntary dismissal of the legal malpractice action, without prejudice, to allow the Eshelman v. Puma Biotechnology, Inc., et al . to conclude before proceedings. On June 2, 2023, the Company re-filed the lawsuit against Hedrick Gardner Kincheloe & Garofalo, L.L.P. and David L. Levy, the attorneys who previously represented the Company in Eshelman v. Puma Biotechnology, Inc., et al. in the Superior Court of Mecklenburg County, North Carolina. On August 22, 2023, the defendants filed motions to dismiss the case. These motions were presented at a hearing on February 20, 2024. The Superior Court Judge granted the motions to dismiss on March 20, 2024. The Company appealed this ruling to the North Carolina Court of Appeals. F- 28 Table of Contents Patent-Related Proceedings AstraZeneca Litigation On September 22, 2021, the Company filed suit against AstraZeneca Pharmaceuticals, LP, AstraZeneca AB, and AstraZeneca PLC for infringement of United States Patent Nos. 10,603,314 (“the ‘314 patent”) and 10,596,162 (“the ‘162 patent”) ( Puma Biotechnology, Inc. et al. v. AstraZeneca Pharmaceuticals LP et al ., 1:21CV01338 (D. Del. Sep. 22, 2021)). The Company’s complaint alleges that AstraZeneca’s commercial manufacture, use, offer for sale, sale, distribution, and/or importation of Tagrisso® (osimertinib) products for the treatment of gefitinib and/or erlotinib-resistant non-small cell lung cancer infringes the ‘314 and ‘162 patents. The Company is an exclusive licensee of the ‘314 and ‘162 patents under the Pfizer Agreement. Wyeth is a co-plaintiff. Plaintiffs seek a judgment that AstraZeneca’s product infringes the asserted patents and an award of monetary damages in an amount to be proven at trial. AstraZeneca AB and AstraZeneca Pharmaceuticals LP filed an answer and counterclaims on November 5, 2021, including claims challenging the asserted patents as not infringed and/or invalid, and accusing plaintiffs of unclean hands and patent misuse. The parties stipulated to dismiss AstraZeneca PLC as a defendant and Pfizer as a Counterclaim Defendant on December 10, 2021, which the Court so ordered on December 13, 2021. The Company filed its answer to AstraZeneca’s counterclaims on December 17, 2021, denying those claims. The case was reassigned to visiting Judge Matthew Kennelly of the Northern District of Illinois. A Markman Hearing was conducted on March 17, 2023, and the Court issued its claim construction decision on March 29, 2023. Fact discovery closed on May 19, 2023, and expert discovery closed on November 17, 2023. 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 the Company, which removed the Company from the case. Wyeth remained in the case as a Plaintiff and counterclaim-defendant. Under the Company’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 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. On August 6, 2024, Judge Kennelly issued his ruling on the issues that were tried in the bench trial, finding for Wyeth and against AstraZeneca on all claims and defenses. The Court found that AstraZeneca had not proved its claim that Wyeth’s asserted patents were invalid as indefinite, or that Wyeth had committed acts that would give rise to findings of unclean hands, implied waiver, or patent misuse. 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. On August 14, 2024, Judge Kennelly ruled on AstraZeneca’s motion challenging the jury’s verdict, granting it in part and denying it in part. The Court granted AstraZeneca’s motion for judgment as a matter of law that the '314 and '162 patents are invalid under 35 U.S.C. § 112 for lacking enablement and adequate written description as to a particular claim limitation. In all other respects, the Court denied AstraZeneca’s motion. The Court entered its final and appealable judgment accordingly. The Company respectfully disagrees with the Court’s ruling regarding invalidity with respect to the particular claim limitation. Wyeth filed a notice of appeal on September 12, 2024 appealing the District Court’s judgment as a matter of law, as well as other rulings and opinions of the Court adverse to Wyeth. Wyeth filed its opening brief on appeal to the Federal Circuit on December 18, 2024. Acebright China Litigation On January 18, 2022, Shanghai Acebright Pharmaceuticals Group Co., Ltd. (“Acebright”) filed an abbreviated new drug application (“ANDA”) with the National Medical Products Administration in China (“NMPA”) seeking approval to market a generic version of the Company’s NERLYNX® (neratinib) tablet, 40mg in China. Acebright seeks approval prior to the expiration of three patents listed on the China Patent Information Registration Platform for Marketed Drugs (“Chinese Orange Book”), namely, Chinese Patent Nos. ZL201410082103.7, ZL201080060546.6, and ZL200880118789.3 (the “’789 patent” and collectively, the “NERLYNX® Patents”), alleging in a Type 4.2 patent declaration that its generic version of NERLYNX does not fall within the scope of the claims of NERLYNX® Patents listed in the Chinese Orange Book. The patent declaration of Acebright was published in the Chinese Orange Book on January 19, 2022. On March 2, 2022, the Company filed petitions with the China National Intellectual Property Administration (“CNIPA”) and requested administrative determination that Acebright’s generic neratinib tablet falls within the scope of the claims of NERLYNX® Patents listed in the Chinese Orange Book. The Company’s request for administrative determination was accepted by CNIPA on March 18, 2022. The Company has notified NMPA of the acceptance of the request for administrative determination for NMPA to institute a stay of Acebright’s ANDA for nine months. On July 11, 2022, CNIPA decided that claims 5 and 6 of Patent No. ZL200880118789.3 are not eligible for registration in the Chinese Orange Book on the ground that these two pharmaceutical method-of-use claims fall within the scope of “patents of crystalline forms,” which are not eligible for listing in the Chinese Orange Book. On September 9, 2022, CNIPA decided that the generic drug in Acebright’s ANDA does not fall within the protection scope of claims 1, 3, 5 and 6 of Patent No. ZL201410082103.7 and claims 1 - 4, 7 and 9 - 13 of Patent No. ZL201080060546.6. The three CNIPA administrative decisions on NERLYNX® Patents have lifted the stay of Acebright’s ANDA by NMPA. The Company has appealed each CNIPA administrative decision in January 2023 at the Beijing Intellectual Property Court (“BJIPC”). The three appeals were accepted by BJIPC on February 20, 2023. The Company also filed three civil complaints based on the three NERLYNX® Patents against Acebright with the BJIPC in July 2022 and requested court determination that Acebright’s generic neratinib tablet falls within the scope of the claims of NERLYNX® Patents. On May 6, 2023, the Company withdrew two civil lawsuits and two appeals in relation to Chinese Patent Nos. ZL201410082103.7 and ZL201080060546.6 at the BJIPC. On May 24, 2023, the BJIPC accepted the Company’s withdrawal request. On July 24, 2023, the Company withdrew the one remaining civil lawsuit and one appeal in relation to Chinese Patent No. ZL200880118789.3 at the BJIPC. On August 15, 2023, the BJIPC accepted the Company’s withdrawal request. On September 12, 2023, the NMPA approved Acebright’s ANDA to market a generic version of the Company’s NERLYNX® in China with the approval number of GuoYaoZhunZi H20234141. On December 28, 2023, the Company filed a civil lawsuit against Acebright for infringement of the ’789 patent under Article 11 of the Chinese Patent Law before Jiangsu Nanjing Intermediate People’s Court. The Company’s complaint alleges that Acebright’s offer for sale of a generic version of the Company’s NERLYNX® product infringes the ’789 patent. 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. 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. On July 24, 2024, the Company submitted a request to withdraw the lawsuit. On August 8, 2024, Jiangsu Nanjing Intermediate People’s Court accepted the withdrawal request. On September 27, 2024, the Company filed an additional patent infringement claim against Acebright at Jiangsu Nanjing Intermediate People’s Court. On October 14, 2024, the Court accepted the complaint and designated case number ( 2024 ) Su 01 Min Chu 2192 to this case. On December 16, 2024, the Court conducted an evidence exchange hearing. On January 10, 2025, the Court conducted a hearing of party experts on the evaluation of evidence. F- 29 Table of Contents Aosaikang China Litigation On November 17, 2022, Jiangsu Aosaikang Pharmaceutical Co. Ltd. (“Aosaikang”) filed an ANDA with NMPA in China seeking approval to market a generic version of the Company’s NERLYNX®. The ANDA application No. is CYHS2202006. Aosaikang made Type 4.2 declarations against the four Orange Book Patents ZL201410082103.7, ZL201080060546.6, ZL200880118789.3 and ZL201710057547.9, alleging that its generic version of NERLYNX does not fall within the scope of the claims of the Orange Book patents. Aosaikang also alleged that Patents ZL200880118789.3 and ZL201710057547.9 are not eligible for Chinese Orange Book listing. On December 28, 2022, the Company submitted four Article 76 petitions against the Aosaikang ANDA with the CNIPA and requested administrative determination that Aosaikang’s generic neratinib tablet falls within the scope of the claims of the four Orange Book patents. On January 6, 2023, the CNIPA accepted the Company’s request for administrative determination in relation to Patent Nos. ZL201410082103.7 and ZL201080060546.6. Also on January 6, 2023, the CNIPA declined to accept the Company’s request for administrative determination in relation to Patent Nos. ZL200880118789.3 and ZL201710057547.9, alleging that the listed claims are not eligible for registration in the Chinese Orange Book on the ground that these pharmaceutical method-of-use claims fall within the scope of “patents of crystalline forms,” which are not eligible for listing in the Chinese Orange Book. On January 28, 2023, the Company requested the NMPA to institute a nine -month stay against Aosaikang ANDA starting from the CNIPA’s acceptance of the Company’s request for administrative determination. On June 2, 2023, CNIPA decided that the generic drug in Aosaikang’s ANDA does not fall within the protection scope of claims 1, 3, 5 and 6 of Patent No. ZL201410082103.7 and claims 1 - 4, 7 and 9 - 13 of Patent No. ZL201080060546.6. The two CNIPA administrative decisions on NERLYNX® Patents have lifted the stay of Aosaikang’s ANDA by NMPA. On October 22, 2024, the NMPA approved Aosaikang’s ANDA to market a generic version of the Company’s NERLYNX® in China with the approval number of GuoYaoZhunZi H20249180. Convalife China Litigation Convalife Pharmaceuticals (Shanghai) Co., Ltd (“Convalife”) filed an ANDA with NMPA in China seeking approval to market a generic version of the Company’s NERLYNX®. The ANDA application No. is CYHS2202095. On December 23, 2022, Convalife made Type 4.2 declarations against the four Orange Book Patents ZL201410082103.7, ZL201080060546.6, ZL200880118789.3 and ZL201710057547.9, alleging that its generic version of NERLYNX does not fall within the scope of the claims of the Orange Book patents. Convalife also alleged that Patents ZL200880118789.3 and ZL201710057547.9 are not eligible for Chinese Orange Book listing. On February 1, 2023, the Company submitted four Article 76 petitions against the Convalife ANDA with the CNIPA and requested administrative determination that Convalife’s generic neratinib tablet falls within the scope of the claims of the four Orange Book patents. On February 3, 2023, the CNIPA accepted the Company’s request for administrative determination in relation to Patent Nos. ZL201410082103.7 and ZL201080060546.6. Also on February 3, 2023, the CNIPA declined to accept the Company’s request for administrative determination in relation to Patent Nos. ZL200880118789.3 and ZL201710057547.9, alleging that the listed claims are not eligible for registration in the Chinese Orange Book on the ground that these pharmaceutical method-of-use claims fall within the scope of “patents of crystalline forms,” which are not eligible for listing in the Chinese Orange Book. On February 24, 2023, the Company requested the NMPA to institute a nine -month stay against Convalife ANDA starting from the CNIPA’s acceptance of the Company’s request for administrative determination. On June 2, 2023, CNIPA decided that the generic drug in Convalife’s ANDA does not fall within the protection scope of claims 1, 3, 5 and 6 of Patent No. ZL201410082103.7 and claims 1 - 4, 7 and 9 - 13 of Patent No. ZL201080060546.6. The two CNIPA administrative decisions on NERLYNX® Patents have lifted the stay of Convalife’s ANDA by NMPA. On June 28, 2024, the NMPA approved Convalife’s ANDA to market a generic version of the Company’s NERLYNX® in China with the approval number of GuoYaoZhunZi H20244222. Kelun China Litigation Hunan Kelun Pharmaceutical Co., Ltd. (“Kelun”) filed an ANDA with NMPA in China seeking approval to market a generic version of the Company’s NERLYNX®. The ANDA application No. is CYHS2300221. On January 28, 2023, Kelun made Type 4.2 declarations against the four Orange Book Patents ZL201410082103.7, ZL201080060546.6, ZL200880118789.3 and ZL201710057547.9, alleging that its generic version of NERLYNX does not fall within the scope of the claims of the Orange Book patents. Kelun also alleged that Patents ZL200880118789.3 and ZL201710057547.9 are not eligible for Chinese Orange Book listing. On March 13, 2023, the Company submitted four Article 76 petitions against the Kelun ANDA with the CNIPA and requested administrative determination that Kelun’s generic neratinib tablet falls within the scope of the claims of the four Orange Book patents. On March 21, 2023, the CNIPA declined to accept the Company’s request for administrative determination in relation to Patent Nos. ZL200880118789.3 and ZL201710057547.9, alleging that the listed claims are not eligible for registration in the Chinese Orange Book on the ground that these pharmaceutical method-of-use claims fall within the scope of “patents of crystalline forms,” which are not eligible for listing in the Chinese Orange Book. On March 24, 2023, the CNIPA accepted the Company’s request for administrative determination in relation to Patent Nos. ZL201410082103.7 and ZL201080060546.6. On April 17, 2023, the Company requested the NMPA to institute a nine -month stay against Kelun’s ANDA starting from the CNIPA’s acceptance of the Company’s request for administrative determination. On September 14, 2023, the Company withdrew the two requests for administrative determination in relation to Chinese Patent Nos. ZL201410082103.7 and ZL201080060546.6 at the CNIPA. On September 25, 2023, the CNIPA accepted the Company’s withdrawal request. Demai Litigation Zhengzhou Demai Pharmaceutical Co., Ltd (“Demai”) filed an ANDA with NMPA in China seeking approval to market a generic version of the Company’s NERLYNX®. The ANDA application No. is CYHS2402776. On August 26, 2024, Demai made a Type 4.2 declaration against Orange Book Patent ZL201410082103.7, alleging that its generic version of NERLYNX does not fall within the scope of the claims of this Orange Book patent. On September 30, 2024, the Company filed a lawsuit against Demai at the BJIPC based on Nerlynx Patent No. ZL201080060546.6 and on October 8, 2024, the Company filed a lawsuit against Demai at the BJIPC based on Nerlynx Patent No. ZL201410082103.7. F-30