Good afternoon. My name is Kaley, and I will be your conference call operator today. [Operator Instructions]. As a reminder, this call is being recorded. I would now like to turn the conference over to Mariann Ohanesian, Senior Director of IR for Puma Biotechnology. You may begin your conference.

Thank you, Kaley. Good afternoon, and welcome to Puma's conference call to discuss our financial results for the second quarter of 2021. Joining me on the call today are Alan Auerbach, Chief Executive Officer, President and Chairman of the Board of Puma Biotechnology; Maximo Nougues, Chief Financial Officer; and Jeff Ludwig, Chief Commercial Officer. After market closed today, Puma issued a news release detailing second quarter 2021 financial results. That news release, the slides that Jeff will refer to and a webcast of this call are accessible via the home page and Investors sections of our website at pumabiotechnology.com. The webcast and presentation slides will be archived on our website and available for replay for the next 90 days. Today's conference call will include statements about the company's future expectations, plans and prospects that constitute forward-looking statements for purposes of federal securities laws. Such statements are subject to risks and uncertainties and actual results may differ from those expressed in these forward-looking statements. For a full discussion of these risks and uncertainties, please review our periodic and current reports filed with the Securities and Exchange Commission from time to time, including our annual report on Form 10-K for the year ended December 31, 2020. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this live conference call, August 5, 2021. The company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as required by law. During today's call, we may also refer to certain non-GAAP financial measures that involve adjustments to our GAAP figures. We believe these non-GAAP metrics may be useful to investors as a supplement to but not a substitute for our GAAP financial measures. Please refer to our second quarter 2021 news release for a reconciliation of our GAAP to non-GAAP results. I will now turn the call over to Alan.

Thank you, Mariann, and thank you all for joining our call today. Today, Puma reported total revenue for the second quarter of 2021 of $53.4 million. Total revenue includes U.S. net NERLYNX sales as well as license fees and royalties from our sublicensees. Net NERLYNX sales were $48.9 million in the second quarter of 2021, representing an increase from the $45.8 million in net sales reported in the first quarter of 2021 and $48.8 million reported in Q2 of 2020. Royalty revenue was $4.3 million in the second quarter of 2021 versus $2.4 million in Q1 of 2021 and $1.1 million in Q2 of 2020. During the second quarter of 2021, we continue to experience challenges brought on as a result of the COVID-19 pandemic, and more recently, the Delta variant. As Jeff will show in his presentation, we are therefore pleased to report that NERLYNX bottles sold in the second quarter increased to 3,354, which represented a 3.3% increase from the 3,247 bottles sold in Q1 of 2021. As Jeff will show in the slides, this represents the first sequential growth in NERLYNX bottles sold that Puma has seen since Q4 of 2019. I will begin with a review of some of the highlights of the quarter, then Jeff Ludwig will provide more details on NERLYNX' commercial activities. Maximo Nougues will then follow with highlights of the key components of our financial statements for the second quarter of 2021. As investors are aware, Puma has an ongoing basket trial of neratinib in HER2-mutated cancers referred to as the SUMMIT trial. In the fourth quarter of 2019, Puma met with the FDA to discuss the regulatory path for neratinib in patients with hormone receptor positive HER2-negative breast cancer who have a HER2 mutation. At that time, Puma had data on…

Thanks, Alan. Appreciate it, and thanks to everyone for joining our second quarter earnings call. Before I move into the commercial review, just a reminder that I will be making forward-looking statements. The commercial organization remains focused on improving the position of NERLYNX in early-stage breast cancer with the goal of strengthening the risk-benefit perception with clinicians, developing and rolling out a new campaign to better educate and empower patients to ask for NERLYNX and ultimately drive a consistent increase in new patient starts in this underpenetrated market. As mentioned in previous calls, we believe that NERLYNX can play an important role in the treatment of metastatic breast cancer, but our focus is on extended adjuvant with the goal of preventing or delaying patients from becoming metastatic. We take this goal very seriously and know that more must be done to help patients who are at increased risk of reoccurrence in their battle with early-stage breast cancer. I am pleased with the previous work that has been completed and largely came to fruition a few months ago. We look forward to seeing the impact of this work, coupled with our ongoing and future efforts. The goal remains the same - to help more patients who are battling early-stage breast cancer. I do want to take a few minutes to talk about the previous clinical updates that have been published and communicated as well as highlight some recent clinical updates that we believe are important and can further strengthen the risk-benefit perceptions of NERLYNX in early-stage HER2-positive breast cancer. First, as a reminder of the previous clinical updates. The interim results of the CONTROL study were published in the September 2020 edition of Annals of Oncology and the final efficacy results from the ExteNET trial were published in the October 2020…

Thanks, Jeff. I will begin with a brief summary of our financial results for the second quarter of 2021. Please note that I will make comparisons to Q1 2021 and Q4 2020, which we believe are better indications of our progress as a commercial company than year-over-year comparisons. For more information, I recommend that you refer to our 10-Q, which will be filed today and includes our consolidated financial statements. For the second quarter of 2021, we reported a net loss based on GAAP of $5.1 million or $0.13 per share. In Q1 2021, we reported net income of $16.5 million. And in Q4 2020, our GAAP net loss was $15 million. On a non-GAAP basis, which is adjusted to remove the impact of stock-based compensation, we reported net income of $13.1 million or $0.32 per diluted share for the second quarter of 2021. Gross revenue from NERLYNX sales was $59.3 million in Q2 2021 versus $56.5 million in Q1 2021. As Alan mentioned, net revenue from NERLYNX sales was $48.9 million, an increase of 6.6% from the $45.8 million we reported in the first quarter of 2021. In Q1 2021, we also recognized $50 million in license revenue related to an upfront fee to include Greater China in our sublicense agreement with Pierre Fabre. Royalty revenue increased to $4.3 million in the second quarter of 2021 versus $2.4 million in Q1 2021. Our gross-to-net adjustment in Q2 2021 was about 17.7%, a decrease from the 18.9% gross-to-net adjustment in Q1 2021. The decrease was driven mostly by lower co-pay and coverage gap expenses, largely driven by seasonality. Cost of sales for Q2 2021 was $12 million, including $2 million for the amortization of intangible assets related to our neratinib license. Of those sales for Q1 2021 was $29.6 million…

Thanks, Maximo. While the COVID-19 pandemic has presented commercial challenges to Puma, we are hopeful that the vaccinations that have been occurring in 2021 and will continue to occur throughout the year will reduce these barriers, which should improve the ability of our commercial team to access and interact with health care providers to increase their awareness of NERLYNX data. As we mentioned previously, in Q2, we did see improvements in our access to HCPs. However, this improvement is incurring - this improvement is occurring at a slower rate than we originally anticipated. We also recognize the more recent risks posed by the COVID-19 Delta variant, which may pose additional restrictions to access to HCPs, and we are remaining conservative in our outlook for improvements in access for the remainder of the year. Puma's senior management, in cooperation with the Board of Directors, continues to remain focused on NERLYNX' revenue and sales growth in 2021 and beyond. We look forward to updating investors on this in the future. There continues to remain a significant unmet need for our patients battling breast cancer, lung cancer and other solid tumors. We at Puma are committed and passionate about finding more effective ways at helping these patients during their journey, and we'll continue to strive to achieve that goal. This concludes today's presentation. We will now turn the floor back to the operator for questions and answers. Kaley?

[Operator Instructions]. Your first question comes from Yigal Nochomovitz with Citi.

This is Carly on for Yigal. First, can you comment on sort of what you're seeing with respect to utilization of the dose titration regimen following the label update last month? I guess, just given the data you've presented from CONTROL, it's interesting that still only about 39% of patients are starting at a reduced dose, so curious why you think some physicians have been slower to adopt the dose titration strategy versus others.

Jeff, do you want to handle that?

Yes, sure. Happy to chat about that. So one, just a confirmation. The dose escalation label was approved at the end of June, right at the end. So we're in the midst of updating all of our promotional materials and working with our SPs and SDs to communicate this out, and also obviously release the new materials to the sales force to enhance that message as well. We have seen, as you see from the slide, that we do see an increase in dose escalation going across the board. We've seen that essentially quarter-over-quarter with some slight variations. So we are happy that we're seeing that increase. Prior to it being officially in the FDA label, there's a lot of dosing compendia that refer to the FDA label. And also we are not able to fully engage our SP partners in helping us educate around dose escalation as well. So going forward, we do expect to see an acceleration with the new label approved by the FDA as well as the 133 bottle count. So I'd expect that you'll see this accelerate moving forward in the coming quarters.

And Carly, this is Alan. The other thing we do hear, and we hear this actually not infrequently, is that the physician will say, "I wrote the prescription for the dose escalation, but the pharmacy didn't put it on the bottle because it's not in the label." So as Jeff mentioned, look, it got approved late June, so I don't think we would have seen an impact in Q2, but we will certainly be looking for that Q3, Q4, et cetera. And our anticipation is we would like to see that increase.

Okay, great. That's helpful. And then just one quick clarifying question on the ER-positive HER2-negative breast cancer cohort first on it. When you report data in the fourth quarter of this year, will that also include data from the Stage 2 portion, the additional patients you're enrolling into the neratinib arm? Or will that just be the Stage 1 data?

Yes. So the presentation, if I'm remembering this correctly, the abstract that has been submitted for San Antonio for - so let me answer that in a more larger way here. The abstracts submitted for San Antonio was from the breast cancer cohort of SUMMIT. So these are patients with the HER2 mutation. There's ER-positive patients, and there's also triple-negative patients. So there's a separate cohort of triple-negative patients, who have triple-negative breast cancer treated with neratinib monotherapy. On the ER-positive, which is your question, which is the ER-positive of the HER2 mutation, we would probably be the Stage 1 and the Stage 2s as well. We have noticed that when we first went to enroll the trial, we had a lot of sites who were reticent to put patients on either the trastuzumab plus fulvestrant or fulvestrant alone arms because they were uncertain if there would be a benefit but they were eager to put it on the triplet, the neratinib plus trastuzumab plus fulvestrant arm, because they knew that, that had benefit. Since we've communicated to the sites that we've paused the enrollment of the doublet and singlet arms, so the fulvestrant alone and the trastuzumab fulvestrant, we have seen sites more eager to put patients on the trial because now they know that they're getting the triplet and there's 100% certainty they're getting it. So I would imagine it would be both the Stage 1, for the triplet arm, for the neratinib plus fulvestrant plus trastuzumab in the ER-positive. It should be the Stage 1s and the Stage 2s as well.

Our next question comes from Marc Frahm with Cowen and Co.

Just following up on that presentation. There's also the guidance for the regulatory update. Do you think you'll have that - those meetings in advance of San Antonio, so you can show us the data and have kind of what the regulatory approach is going to be? Or should - at the same time, or should we think of those as separate updates?

Well, the meeting will obviously be separate from San Antonio. I don't recall off the top of my head when the meeting is. So I would anticipate - look, when we present the data at San Antonio, we will present the data. I don't remember when the meeting is, if it's like a couple of days before or something, then it would make sense to combine both. I would anticipate that we would communicate both items as rapidly as we can.

Okay. Great. That's helpful. And then just on the gross and net trends, I mean, I guess, we typically see gross has come down a little bit after Q1 just because of all the kind of changeovers of plans, donut hole, all those types of things. Can you just give a little bit more detail on kind of what the dynamics are that are going on there driving the increase on a Q-over-Q basis?

Yes. So on the quarter-over-quarter basis, we have seen a decline on the gross to net impact. As just mentioned, in Q1 usually is higher. However, the decline was not as big as in prior years. Again, some of the dynamics, what I mentioned is we have seen an increase on Medicaid and also on government pricing.

And Marc, also to add, we're also seeing that we're - because the Medicare foundations don't have support, we're kind of getting an increase in free drug due to that.

Your next question comes from Geoff Meacham with Bank of America.

You have Alex Hammond on for Geoff Meacham. So for the SUMMIT basket trials for the EGFR exon 18 mutant non-small cell lung cancer indication, how many patients are currently undergoing treatment? And what data should we expect to be released in the first half of '22? And lastly, where do you see NERLYNX fitting into the current treatment paradigm?

Alex, thanks for the question. I'm searching for that information as we speak. My recollection is we're somewhere around 20 or 25 patients that we've treated so far. Ballpark, I think that number's correct. We have definitely been seeing an increase more recently. We would be looking to report the typical metrics, [indiscernible] response rate, PFS, et cetera. The cohort from a commercial perspective that we're really focusing on is the one that is - the ones who already received prior treatment with an EGFR tyrosine kinase inhibitor because the exon 18 EGFR mutation is sensitive to the first- and second-generation EGFR inhibitors. So this is gefitinib, erlotinib, osimertinib and afatinib. The only drug that actually has the exon 18 mutation in the label is afatinib, and in terms of patients who've already been treated with an EGFR tyrosine kinase inhibitor, the efficacy of afatinib is quite low. I believe the response rate is somewhere around 10%. So it's a pretty easy bar for us to be able to get over, given where we feel the data is. And I think that's really where we would see it fitting in.

Your next question comes from Gena Wang with Barclays.

This is Sheldon Fan for Gena. So first, I want to add my congrats on the encouraging initial data from the breast cancer cohort from SUMMIT. So I want to follow up the regulatory progress for non-small cell lung cancer cohort. So the cervical cancer, it seems like that was removed from the plan. Could you confirm that? Is that still in the potential agenda to discuss with the FDA in the pre-NDA meeting? And for non-small cell lung cancer, it seems like the - both that data presentation and the FDA meeting was somewhat pushed to 2022. Is that because of any COVID-19 impact on your clinical trial progress? Or do you think you need more mature data to meet with the FDA?

Yes. Thank you for the question. So you'll notice in the press release that we put out, we did mention both the cervical data and the exon 18 lung data. So both are still enrolling. The presentation of the cervical data is, because that's when the SGO meeting is, which in the first half of '22. So I presume that would be where we'd be submitting the data to. For the exon 18 mutated lung, we did certainly see interruptions due to COVID-19 in 2020, but we have definitely been seeing a much more rapid enrollment in 2021. So I think a lot of it was just getting more mature data. And because we were getting so many new patients coming in, that our feeling was just that was the time to wait, because our feeling was the more patients we had, the more fruitful discussions you can have with FDA. So that was kind of the basis, and the same with the cervical as well.

Your next question comes from Kennen MacKay with RBC Capital Markets.

It's Jackie [ph] for Kennen. Could you maybe elaborate a bit on the drivers of the return to bottle growth in the second quarter? Was this a gain in share or primarily a result of the easing up of the COVID-19 pandemic, and hence, the increased office basis?

Great. Thanks for the question. I appreciate it. I would say a couple of things that contribute to that growth. As we've mentioned prior that we see a phenomenon in Q4 where you do see some patients that push out therapy to the beginning of Q1 because of holidays, Thanksgiving, Christmas, New Year. So you see a slight dampening of that. With that said, we did see a nice increase in Q1, and we did see those bottle growth occur in Q2 as well. So the way I would attribute that growth would be a couple of things. One is the continued evolving clinical data that we feel is good as we continue to further embed dose escalation as well as highlight the benefits of neratinib in those patients that increase risk of recurrence. Also, I would tell you that the increased access to customers plays a very significant role in our success. This is a promotionally sensitive product, so as our sales team gets in front of customers and are able to have strong clinical discussions, we do see a correlation between those discussions and growth as well. So hopefully, that's helpful.

Yes. And if I can add to that, early-stage HER2-positive breast cancer tends to be a treatment that's entered the community setting. And a lot of times these are not physicians who just do breast. They do a lot of other tumors as well. And so as Jeff said, it's very promotionally sensitive. And so the opportunity to interact with those physicians and make them aware of the data, we know this can certainly be helpful. We did see in Q2 that month-over-month, there was an increase in visits - meetings with HCPs. And that was happening - every month was kind of higher than the previous. And a larger percentage of those meetings were in-person rather than virtual. And so I think that the combination of those 2 just made for a more effective sale, if you will. And that would be the driver we would hope to continue in the future quarters.

Your next question comes from Paul Choi with Goldman Sachs.

My first question is just with regard to utilization trends right now. And could you maybe just sort of comment on what you're seeing from the field with regard to the mix between the extended adjuvant and early metastatic use? And just with regard to the latter and promoting metastatic use, can you just - is that largely a function in your mind in the second half of this year of increased health care access or potential prescribers looking for additional information or other clarity on the indication?

Yes. So Paul, this is Alan. You had said used in extended adjuvant versus early metastatic. Just to be clear, our approval in the metastatic is in the third line and beyond, so it's a much later line of metastatic treatment. In terms of the utilization, we have seen in prior quarters and continue to see that roughly 95% of the use of the drug is in the early stage and about 5% is in the metastatic. We do not get a breakdown in metastatic, whether it's third line HER2 positive, whether it's patients with HER2 mutations, whether it's patients with HER2-positive brain mets because remember, we're in the NCCN guidelines. So it's difficult to say exactly where exactly that's being treated. We just know that it's in the metastatic setting.

Okay. Great. And just the second part of my question with regard to driving awareness and promotion here. And is that largely a function of increased access or just awareness of the - of NERLYNX as an option in the third line plus setting here?

So for the metastatic side, yes, a big function of this will be the continued promotion and communication of the data in the metastatic setting, and that is largely a function of access and access to HCPs as well as you can guess, we're looking for as many options as we can to enhance the nonpersonal promotion as well given some of the restrictions with COVID and the potential Delta variant rise.

Okay. Great. Then my second question is just with regard to the new bottle that are available in the SKU. I guess over time, how do you see that driving the mix? And would that SKU have any incremental revenue flow-through as you think about the number of bottles going out the door ex-factory?

No, Paul, I think the question is, one, we would expect to see an increase in the number of the 133 bottle count SKU going out. We are fully supportive, as earlier question came up, we really want to further embed dose escalation into new patient starts in both early-stage breast cancer as well as the metastatic setting. That by itself can be done with both the 180 bottle counts as well as the 133 bottle count, but the 133 bottle count has the added incentive of perfectly aligning for 4 weeks with that dose escalation. So we are trying to promote both of those as a convenient way of further embedding dose escalation into all new patient starts. In terms of revenue impact, what we really would like to see happen is, again, as patients start with dose escalation, all of the data suggests that they have an increased length of therapy, a longer duration. And ultimately, we expect to have better benefits to the patients. And that's where we hope to see the overall positive in embedding dose escalation.

Okay, great. And last one for us is just with regard to the ongoing combination trial with Kadcyla for patients with brain mets that you plan to report either later this year or early next year. Can you maybe just remind us, is there any potential regulatory discussions here that might follow from this trial and just sort of what the path and opportunity here might be for NERLYNX to differentiate?

Yes, sure. Happy to talk about the combination of NERLYNX with Kadcyla. So the genesis of the interest in this study was that there was preclinical data presented at the San Antonio Breast Cancer meeting last year that showed that NERLYNX neratinib was differentiated from the other EGFR TKIs in HER2-positive breast cancer because of the fact that neratinib is an irreversible inhibitor, and the other drug, the other approved HER2-positive breast TKIs are reversible inhibitors. The main difference between those is that neratinib being an irreversible inhibitor has the ability to internalize the HER2 receptor, whereas the ones that are reversible inhibitors do not. So by increasing the internalization of the HER2 receptor, you're essentially taking the receptor and bringing it inside the cell. Well, when you have an ADC, that's the mechanism of action, right? It attaches to the outside of the cell, it gets internalized and that's when it dumps out its payload, which is sometimes cytotoxic. So when you combine neratinib with an ADC, you end up increasing the intratumoral concentration of the ADCs. You're bringing more of the ADC into the cell. Now we had the FB-10 study, which was neratinib with Kadcyla. This was owned by the NSABP, in patients without brain mets. And we've certainly seen a much higher response rate than one would have expected, which is what made us interested in looking at neratinib in patients - with Kadcyla patients with brain mets. So the cohort of patients that has been enrolling the strongest in that trial is a cohort which is patients who've already had prior Kadcyla, and they're being given neratinib with Kadcyla in patients with HER2-positive breast cancer with brain mets. So this will obviously be a very interesting test of this internalization because, obviously, if neratinib can increase the intratumoral concentration of Kadcyla in patients with brain mets, who've already seen Kadcyla, that could certainly be of a pretty strong therapeutic advantage to the patients. So I don't think we can comment on any regulatory discussions until we get the data, but I will remind you that neratinib is in the NCCN guidelines for brain mets. So assuming the data is positive, we could certainly update the guidelines to include that data, which would increase awareness of it among physicians who would be interested in prescribing it.

This concludes our question-and-answer session. I would like to turn the conference back to Mariann for closing remarks.

Thank you for your interest in Puma Biotechnology. As a reminder, this call may be accessed via replay of the webcast at pumabiotechnology.com beginning later today. Have a good evening.

Ladies and gentlemen, thank you for participating in today's conference call. This concludes our program. Everyone have a great day. You may disconnect.