Puma Biotechnology, Inc.: Form 10-Q for the period ended Mar 31, 2026

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included in Item 1 in this Quarterly Report on Form 10-Q, (this “Quarterly Report”). The following discussion should also be read in conjunction with our audited consolidated financial statements and the notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Unless otherwise provided in this Quarterly Report, references to the “Company,” “we,” “us,” and “our” refer to Puma Biotechnology, Inc., a Delaware corporation, together with its wholly owned subsidiary.

Overview

We are a biopharmaceutical company that develops and commercializes innovative products to enhance cancer care and improve treatment outcomes for patients. We are currently commercializing NERLYNX, an oral version of neratinib, for the treatment of certain HER2-positive breast cancers. Additionally, in 2022, we in-licensed and became responsible for the global development and commercialization of alisertib. Alisertib is a selective, small-molecule inhibitor of Aurora Kinase A that is designed to disrupt mitosis leading to apoptosis of rapidly proliferating tumor cells that are dependent on Aurora Kinase A. Prior to our licensing alisertib from Takeda, alisertib was tested in over 1,300 patients who were treated across 22 company-sponsored trials resulting in a large, well-characterized clinical safety database. Based on information in this database, we believe 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. We intend to pursue development of alisertib initially in small cell lung cancer and hormone receptor-positive breast cancer.

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

We currently market NERLYNX in the United States using our direct specialty sales force consisting of approximately 35 sales specialists as of December 31, 2025. Our sales specialists are supported by an experienced sales leadership team consisting of regional managers and directors, as well as a commercial team of experienced professionals in marketing, access and reimbursement, managed markets, marketing research, commercial operations and sales force planning and management. Outside the United States, we seek to enter into exclusive sub-license agreements with third parties to pursue regulatory approval, if necessary, and commercialize NERLYNX, if approved. As of March 31, 2026, NERLYNX has received approval for the treatment of certain patients with extended adjuvant or metastatic HER2-positive breast cancer in over 60 countries outside the United States. We are currently party to several sub-licenses in various regions outside the United States, including Europe (excluding Ukraine), Australia, Canada, China, Southeast Asia, Israel, South Korea, Russia and various countries and territories in Central America, South America, Africa and the Middle East.

In September 2022, we entered into an exclusive license agreement with Takeda Pharmaceutical Company Limited (“Takeda”) to license the worldwide research and development and commercial rights to alisertib. Alisertib is an investigational, reversible, ATP-competitive inhibitor that is designed to be highly selective for Aurora Kinase A. Inhibition of Aurora Kinase A can lead to disruption of mitotic spindle apparatus assembly, disruption of chromosome segregation, and inhibition of cell proliferation. In clinical trials to date, alisertib has shown single agent activity and activity in combination with other cancer drugs in the treatment of many different types of cancers, including hormone receptor-positive breast cancer, triple-negative breast cancer, small cell lung cancer and head and neck cancer. We initiated the ALISertib in CAncer (ALISCA™ -Lung1) Phase II trial (PUMA-ALI-4201) of alisertib monotherapy for the treatment of patients with extensive stage small cell lung cancer in February 2024, and we commenced the ALISCA™ -Breast1 Phase II trial (PUMA-ALI-1201) in November 2024.

Under the terms of the exclusive license agreement, we assumed sole responsibility for the global development and commercialization of alisertib. We paid Takeda an upfront license fee of $7.0 million in October 2022, and it is eligible to receive potential future milestone payments of up to $287.3 million upon our 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. We recorded in-process research and development expense of $7.0 million during the year ended December 31, 2022 in connection with the upfront payment related to the asset acquisition. As of March 31, 2026, no milestones had been accrued as the underlying contingencies were not probable.

Our expenses to date have been related to hiring staff, commencing company-sponsored clinical trials, building out of our corporate infrastructure and, since 2017, the commercial launch of NERLYNX. Going forward, we anticipate significant expenses as we continue to develop alisertib in 2026. Accordingly, our success depends not only on the safety and efficacy of our drug candidates, but also on our ability to finance product development. To date, our major sources of working capital have been proceeds from product and license revenue, public and private offerings of our common stock, and proceeds from debt financings. We intend to satisfy our near-term liquidity requirements through a combination of our existing cash and cash equivalents and marketable securities as of March 31, 2026, and proceeds that we expect to become available to us through product sales, royalties and sub-license milestone payments. However, this intention is based on assumptions that may prove to be wrong. Changes may occur that would consume our available capital faster than anticipated, including changes in and progress of our development activities, the impact of commercialization efforts, acquisition of additional drug candidates and changes in regulation. Some of these developments have had and may continue to have an adverse effect on our revenue and thus could have an adverse effect on our ability to satisfy the minimum revenue and cash balance covenants contained in the Athyrium Notes.

Critical Accounting Policies

As of the date of the filing of this Quarterly Report, we believe there have been no material changes to our critical accounting policies and estimates during the three months ended March 31, 2026 from our accounting policies at December 31, 2025, as reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Summary of Income and Expenses

Product revenue, net:

Product revenue, net consists of revenue from sales of NERLYNX. We sell NERLYNX to a limited number of specialty pharmacies and specialty distributors in the United States. We record revenue at the net sales price, which includes an estimate for variable consideration for which reserves are established. Variable consideration consists of trade discounts and allowances, product returns, provider chargebacks and discounts, government rebates and other incentives.

Product revenue also consists of product sales under sub-license agreements to our sub-licensees, who then sell into their respective international territories.

License revenue:

License revenue consists of consideration earned for performance obligations satisfied pursuant to our sub-license agreements.

Royalty revenue:

Royalty revenue consists of consideration earned related to product sales made by our sub-licensees in their respective territories pursuant to our sub-license agreements.

Cost of sales:

Cost of sales consists of third-party manufacturing costs, freight, and indirect overhead costs associated with sales of NERLYNX. Cost of product sales also includes period costs related to royalty charges payable to Pfizer, the amortization of milestone payments made under our license agreement with Pfizer, certain inventory manufacturing services, inventory adjustment charges, unabsorbed manufacturing and overhead costs, and manufacturing variances. Cost of sales includes applicable license termination fees.

Selling, general and administrative expenses:

Selling, general and administrative expenses (“SG&A expenses”) consist primarily of salaries and payroll-related costs, stock-based compensation expense, professional fees, business insurance, rent, general legal activities, credit loss expense and other corporate expenses. We expense SG&A expenses as they are incurred.

Research and development expenses:

Research and development expenses (“R&D expenses”) include costs associated with services provided by consultants who conduct and perform clinical services on our behalf and contract organizations for the manufacturing of clinical materials. During the three months ended March 31, 2026 and 2025, our R&D expenses consisted primarily of clinical research organization (“CRO fees”); fees paid to consultants; salaries and related personnel costs; and stock-based compensation. We expense our R&D expenses as they are incurred. Internal R&D expenses primarily consist of payroll-related costs and also include equipment costs, travel expenses and supplies.

Tariffs

We do not believe that tariffs imposed or proposed to be imposed by the United States, particularly with the EU and China, will have a material impact on our product costs or results of operations. However, shifts in trade policies in the United States and other countries have been rapidly evolving and are difficult to

predict. The ultimate impact of any announced or future tariffs will depend on various factors, including what tariffs are ultimately implemented, the timing of implementation and the amount, scope and nature of such tariffs and potential exclusions from the application of those tariffs.

On April 2, 2026, the U.S. government issued a proclamation under Section 232 of the Trade Expansion Act of 1962, imposing new tariffs on imported patented pharmaceutical products and APIs. Any potential impact of the proclamation on the Company is uncertain and under review.

Results of Operations

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

Total revenue:

Total revenue for the three months ended March 31, 2026 was approximately $44.8 million, compared to $46.0 million for the three months ended March 31, 2025. This decrease in total revenue was due to a decrease in product revenue, net of approximately $1.1 million and a slight decrease in royalty revenue.

Product revenue, net:

Product revenue, net was approximately $42.0 million for the three months ended March 31, 2026, compared to $43.1 million for the three months ended March 31, 2025. This decrease in product revenue, net, compared to the three months ended March 31, 2025, was primarily attributable to a greater deduction to gross revenue for variable consideration, primarily related to government chargebacks and payor mix, partially offset by an increase in selling price.

Royalty revenue:

Royalty revenue was approximately $2.9 million for each of the three months ended March 31, 2026 and 2025 as sales were relatively consistent to our international partners.

Cost of sales:

Cost of sales was approximately $10.4 million for the three months ended March 31, 2026, compared to approximately $10.6 million for the three months ended March 31, 2025. Cost of sales was relatively consistent year-over-year as sales of our product bottles were relatively consistent.

Selling, general and administrative expenses:

SG&A expenses were approximately $18.4 million for the three months ended March 31, 2026, compared to approximately $17.6 million for the three months ended March 31, 2025. SG&A expenses for the three months ended March 31, 2026 and 2025 were as follows:

(in thousands)

SG&A expenses increased approximately $0.8 million the three months ended March 31, 2026, compared to the same period in 2025, primarily attributable to the following:

• an increase in payroll and related costs of $0.9 million due primarily to increases in employee compensation; and
• an increase in professional fees and expenses of approximately $0.4 million, primarily related to marketing and market access costs.

Partially offset by:

• a decrease in credit loss of approximately $0.2 million, primarily related to the payment history of a customer receivable.

Research and development expenses:

R&D expenses were approximately $19.8 million for the three months ended March 31, 2026, compared to approximately $13.9 million for the three months ended March 31, 2025. R&D expenses for the three months ended March 31, 2026 and 2025 were as follows:

(in thousands)

R&D expenses increased by approximately $5.9 million for the three months ended March 31, 2026, compared to the same period in 2025, primarily attributable to the following:

• an increase in clinical trial expense of approximately $5.2 million, primarily due to increased alisertib study activity; and
• an increase in internal R&D expense of approximately $0.7 million, primarily due to increased employee compensation.

Other income (expenses):

(in thousands)

26

Interest expense:

For the three months ended March 31, 2026 , we recognized approximately $0.7 million in interest expense, compared to approximately $2.2 million of interest expense for the three months ended March 31, 2025 . The decrease in interest expense was primarily related to a lower debt balance as we continue paying down our debt principal.

Other income:

For the three months ended March 31, 2026 , we recognized approximately $0.1 million in other income, compared to approximately $0.4 million of other income for the three months ended March 31, 2025 . The decrease in other income was primarily due to unfavorable exchange rates in Euro-denominated transactions.

Liquidity and Capital Resources

The following table, which summarizes our liquidity and capital resources as of March 31, 2026 and December 31, 2025 and for the three months ended March 31, 2026 and 2025, is intended to supplement the more detailed discussion that follows:

Operating Activities:

Cash provided by operating activities for the three months ended March 31, 2026 was $15.4 million and consisted of net loss of approximately $3.8 million, adjusted for non-cash items of approximately $4.5 million, which included stock-based compensation of $1.9 million and depreciation and amortization of $2.6 million. Total changes in cash flows from operations were due to an increase in working capital, primarily related to a decrease in accounts receivable of $27.3 million, primarily due to royalty receipts related to China sales and an increase in accounts payable of $3.1 million, partially offset by decrease in accrued expenses and other of approximately $11.7 million related primarily to the payment of royalties, an increase in inventory of $3.2 million related to a receipt of raw material inventory, a decrease in operating lease assets and liabilities, net, of $0.6 million and a decrease of post-marketing commitment liability of $0.5 million.

Cash provided by operating activities for the three months ended March 31, 2025 was $3.6 million and consisted of net income of approximately $3.0 million, adjusted for non-cash items of approximately $5.0 million, which included stock-based compensation of $2.0 million, depreciation and amortization of $2.8 million and provision for credit loss of $0.2 million. Total changes in cash flows from operations were due to an increase in working capital, primarily related to a decrease in accrued expenses and other of approximately $9.9 million, a decrease in operating lease assets and liabilities, net, of $0.4 million and a decrease of post-marketing commitment liability of $0.4 million and an increase in prepaid and other expenses of $0.8 million, partially offset by a decrease in accounts receivable of approximately $6.6 million and an increase in accounts payable of $0.5 million.

Investing Activities:

Cash provided by investing activities for the three months ended March 31, 2026 was approximately $2.5 million, compared to net cash provided by investing activities of approximately $1.5 million for the same period in 2025. Cash provided by investing activities for the three months ended March 31, 2026 was primarily due to the maturity of available-for-sale securities of approximately $27.3 million, partially offset by the purchase of available-for-sale securities of approximately $24.9 million.

Cash provided by investing activities for the three months ended March 31, 2025 was approximately $1.5 million. Cash provided by investing activities was primarily due to maturity of available-for-sale securities of approximately $14.1 million, partially offset by the purchase of available-for-sale securities of approximately $12.5 million.

Financing Activities:

Cash used in financing activities for the three months ended March 31, 2026 and 2025 was approximately $11.3 million, including $11.1 million related to the payment of principal and $0.2 million related to exit fees, on our debt with Athyrium.

Athyrium Note Purchase Agreement:

We issued senior notes for an aggregate principal amount of $100.0 million pursuant to the note purchase agreement dated July 23, 2021 by us, and our 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 our 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 our assets. We incurred $1.9 million of deferred financing costs with the initial borrowing of the Athyrium Notes.

Interest on the Athyrium Notes was 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 the Note Purchase Agreement dated as of September 16, 2022 (the “Third Amendment”).

Following the effectiveness of the Third Amendment, the Athyrium Notes bore 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. As of March 31, 2026, the effective interest rate for the loan was 12.99%.

As of March 31, 2026, we may prepay the outstanding principal balance of the notes, in whole or in part, without premium or penalty.

As of March 31, 2026, the principal balance outstanding under the Athyrium Notes was $11.1 million and represented all of our debt. We were in compliance with all applicable covenants under the Athyrium Notes as of March 31, 2026.

On May 4, 2026, we paid $11.5 million under the Note Purchase Agreement, ahead of the scheduled maturity date of July 23, 2026. This payment reduced the principal balance outstanding under the Athyrium Notes to zero and terminated all of our remaining obligations under the Note Purchase Agreement, other than customary continuing indemnification obligations.

Current and Future Financing Needs:

We have spent, and expect to continue to spend, substantial amounts in connection with implementing our business strategy, including our planned product development efforts, our clinical trials, our R&D efforts and our commercialization efforts.

We may choose to begin new R&D efforts, or we may choose to launch additional marketing efforts. For example, we in-licensed alisertib from Takeda in 2022 and assumed sole responsibility for its global development and commercialization. These efforts will require funding in addition to the cash and cash equivalents totaling approximately $36.2 million and approximately $65.4 million in marketable securities available at March 31, 2026. While our condensed consolidated financial statements have been prepared on a going concern basis, we may incur significant losses in the future and will need to generate significant revenue to sustain operations and successfully commercialize neratinib and develop alisertib. While we have been successful in raising financing in the past, there can be no assurance that we will be able to do so in the future. Our ability to obtain funding may be adversely impacted by uncertain market conditions, our success in commercializing neratinib, our success in developing alisertib, unfavorable decisions of regulatory authorities or adverse clinical trial results. The outcome of these matters cannot be predicted at this time. We believe that our existing cash and cash equivalents and marketable securities as of March 31, 2026, and proceeds that will become available to us through product sales and sub-license payments are sufficient to satisfy our operating cash and capital needs for at least one year after the filing of this Quarterly Report.

Non-GAAP Financial Measures

In addition to our operating results, as calculated in accordance with Generally Accepted Accounting Principles (“GAAP”) we use certain non-GAAP financial measures when planning, monitoring, and evaluating our operational performance. The following table presents our net (loss) income and net (loss) income per share, as calculated in accordance with GAAP, as adjusted to remove the impact of stock-based compensation. For the three months ended March 31, 2026, stock-based compensation represented approximately 5.0% of our operating expenses, compared to 6.4% for the same respective period in 2025, in each case excluding cost of sales. Our management believes that these non-GAAP financial measures are useful to enhance understanding of our financial performance, are more indicative of our operational performance and facilitate a better comparison among fiscal periods. These non-GAAP financial measures are not, and should not be viewed as, substitutes for GAAP reporting measures.

Reconciliation of GAAP Net (Loss) Income to Non-GAAP Adjusted Net (Loss) Income and

GAAP Net (Loss) Income Per Share to Non-GAAP Adjusted Net (Loss) Income Per Share

(in thousands except share and per share data)

(1) To reflect a non-cash charge to operating expense for selling, general, and administrative stock-based compensation.

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

(3) Non-GAAP adjusted basic net (loss) income per share was calculated based on 50,845,130 and 49,595,697 weighted-average shares of common stock outstanding for the three months ended March 31, 2026 and 2025, respectively.

(4) Potentially dilutive common stock equivalents (stock options restricted stock units and warrants) were not included in this non-GAAP adjusted diluted net loss per share for the three months ended March 31, 2026, as these shares would be considered anti-dilutive.

(5) Non-GAAP adjusted diluted net income per share was calculated based on 49,906,341 weighted-average shares of common stock outstanding for the three months ended March 31, 2025.

Off-Balance Sheet Arrangements

We do not have any “off-balance sheet arrangements,” as defined by SEC regulations.

Contractual Obligations

There have been no material changes outside the ordinary course of business to our contractual obligations and commitments as described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2025.

Some of the securities that we invest in have market risk in that a change in prevailing interest rates may cause the principal amount of the cash equivalents to fluctuate. Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash and cash equivalents. We invested our excess cash primarily in cash equivalents such as money market investments as of March 31, 2026. The primary objectives of our investment activities are to ensure liquidity and to preserve principal while at the same time maximizing the income we receive from our cash and cash equivalents without significantly increasing risk. Additionally, we established guidelines regarding approved investments and maturities of investments, which are designed to maintain safety and liquidity.

Because of the short-term maturities of our cash equivalents, we do not believe that a 10% increase in interest rates would have a material effect on the realized value of our cash equivalents.

We also have interest rate exposure as a result of borrowings outstanding under the Athyrium Notes. As of March 31, 2026, the aggregate outstanding principal amount of the Athyrium Notes was $11.1 million. The Athyrium Notes bear interest at a rate per annum equal to the sum of 8.00% plus the adjusted three-month term SOFR and the lesser of (a) the sum of (i) three-month term SOFR and (ii) 0.26161% (26.161 basis points) and (b) three and one-half of one percent (3.50%) per annum. If overall interest rates had increased by one hundred basis points during the quarter ended March 31, 2026, our interest expense would have increased by $0.2 million.

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 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 March 31, 2026. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures were effective as of March 31, 2026.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Under Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, we identified important factors that could affect our financial performance and could cause our actual results for future periods to differ materially from our anticipated results or other expectations, including those expressed in any forward-looking statements made in this Quarterly Report. Except as described below, there has been no material change in our risk factors subsequent to the filing of our prior reports referenced above. However, the risks described in our reports are not the only risks we face. Additional risks and uncertainties that we currently deem to be immaterial or not currently known to us, as well as other risks reported from time to time in our reports to the SEC, also could cause our actual results to differ materially from our anticipated results or other expectations.