Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

Item 2.

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

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, 2024.

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 38 sales specialists. Our sales specialists are supported by an experienced sales leadership team consisting of several regional business leaders and a Vice President of sales, as well as experienced professionals in marketing, managed markets, access and reimbursement, research, and sales planning and operations. Outside the United States, we seek to enter into exclusive sub-license agreements with third parties to pursue regulatory approval, if necessary, and commercialize NERLYNX, if approved. As of June 30, 2025, NERLYNX has received approval for the treatment of certain patients with extended adjuvant or metastatic HER2-positive breast cancer in over 40 countries outside the United States. We are currently party to several sub-licenses in various regions outside the United States, including Europe, 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 of 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 June 30, 2025, no milestones had been accrued as the underlying contingencies were not probable or estimable.

Our expenses to date have been related to hiring staff, commencing company-sponsored clinical trials, 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 2025. 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 offerings of our common stock, proceeds from our credit facility and sales of our common stock in private placements. We intend to satisfy our near-term liquidity requirements through a combination of our existing cash and cash equivalents and marketable securities as of June 30, 2025, and proceeds that will become available to us through product sales, royalties and sub-license milestone payments. However, this intention is based on assumptions that may prove to be wrong. 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 six months ended June 30, 2025 from our accounting policies at December 31, 2024, as reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

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 and six months ended June 30, 2025 and 2024, 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 European Union 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.

Taxes:

On July 4, 2025, the One Big Beautiful Bill Act was signed into law, which includes significant changes to federal tax law and other regulatory provisions that may impact us. We are currently evaluating the provisions of the new law and the potential effects on our financial position, results of operations, and cash flows. As of the date of these financial statements, we have not completed our assessment, and therefore no adjustments have been made. Additional disclosures will be provided in future periods as the impact of the legislation is determined.

Results of Operations

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

Total revenue:

Total revenue for the three months ended June 30, 2025 was approximately $52.4 million, compared to $47.1 million for the three months ended June 30, 2024. This increase in total revenue was due to an increase in product revenue, net of approximately $4.8 million and an increase in royalty revenue of $0.6 million.

Product revenue, net:

Product revenue, net was approximately $49.2 million for the three months ended June 30, 2025, compared to $44.4 million for the three months ended June 30, 2024. This increase in product revenue, net, compared to the three months ended June 30, 2024, was attributable to a 4% increase in bottles of NERLYNX sold in the U.S. market and an increase in net selling price, partially offset by a slight increase in deductions to gross revenue for variable consideration, primarily related to government chargebacks.

Royalty revenue:

Royalty revenue was approximately $3.2 million for the three months ended June 30, 2025, compared to approximately $2.7 million for the three months ended June 30, 2024. The increase was primarily due to increased international sales made by our sub-licensees.

Cost of sales:

Cost of sales was approximately $12.3 million for the three months ended June 30, 2025, compared to approximately $10.7 million for the three months ended June 30, 2024. The increase was primarily due to higher royalty expense and product costs resulting from increased worldwide net sales.

Selling, general and administrative expenses:

SG&A expenses were approximately $18.0 million for the three months ended June 30, 2025, compared to approximately $25.0 million for the three months ended June 30, 2024. SG&A expenses for the three months ended June 30, 2025 and 2024 were as follows:

Selling, general, and administrative expenses		For the Three Months Ended								Change
(in thousands)		June 30,								$				%
		2025				2024				2025/2024				2025/2024
Payroll and related costs		$	9,064			$	7,596			$	1,468				19.3	%
Provision for credit loss recovery			(362	)			(183	)			(179	)			97.8	%
Professional fees and expenses			4,974				12,364				(7,390	)			-59.8	%
Travel and meetings			1,357				1,578				(221	)			-14.0	%
Facilities and equipment costs			1,132				1,234				(102	)			-8.3	%
Stock-based compensation			992				1,435				(443	)			-30.9	%
Other			890				948				(58	)			-6.1	%
		$	18,047			$	24,972			$	(6,925	)			-27.7	%

SG&A expenses decreased by approximately $6.9 million for the three months ended June 30, 2025, compared to the same period in 2024, primarily attributable to the following:

●

a decrease in provision for credit loss of approximately $0.2 million primarily related to the payment history of a customer receivable;

●

a decrease in professional fees and expenses of approximately $7.4 million primarily related to legal fees associated with the AstraZeneca litigation in the prior year;

●

a decrease in travel and meetings ofapproximately $0.2 million primarily related to the cost of sales meetings; and

●

a decrease in stock-based compensation expense of approximately $0.4 million, primarily due to newer awards at a lower grant price;

Partially offset by:

●

an increase in payroll and related costs of approximately $1.5 million primarily due to the severance costs related to the departure of our Chief Commercial Officer, increased headcount in our sales team as well as an increase in our healthcare insurance premiums.

Research and development expenses:

R&D expenses were approximately $15.5 million for the three months ended June 30, 2025, compared to approximately $13.6 million forthe three months ended June 30, 2024. R&D expenses for the three months ended June 30, 2025 and 2024, were as follows:

Research and development expenses		For the Three Months Ended								Change
(in thousands)		June 30,								$				%
		2025				2024				2025/2024				2025/2024
Clinical trial expense		$	5,647			$	4,304			$	1,343				31.2	%
Internal R&D			8,076				7,985				91				1.1	%
Consultant and contractors			1,093				716				377				52.7	%
Stock-based compensation			636				627				9				1.4	%
		$	15,452			$	13,632			$	1,820				13.4	%

R&D expenses increased by approximately $1.8 million for the three months ended June 30, 2025, compared to the same period in 2024, primarily attributable to the following:

●

an increase in clinical trial expense of approximately $1.3 million, primarily due to increased alisertib study activity; and

●

an increase in consultants and contractors expense of approximately $0.4 million, primarily due to increased alisertib study activity.

Other income (expenses):

Other income (expenses)		For the Three Months Ended								Change
(in thousands)		June 30,								$				%
		2025				2024				2025/2024				2025/2024
Interest income		$	956			$	1,244			$	(288	)			-23.2	%
Interest expense			(1,837	)			(3,372	)			1,535				-45.5	%
Other income			410				156				254				162.8	%
		$	(471	)		$	(1,972	)		$	1,501				-76.1	%

Interest income:

For the three months ended June 30, 2025, we recognized approximately $1.0 million in interest income, compared to approximately $1.2 million of interest income for the three months ended June 30, 2024. The decrease in interest income was primarily the result of lower investment balances and timing of investments.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Total revenue:

Total revenue for the six months ended June 30, 2025 was approximately $98.4 million, compared to $90.8 million for the six months ended June 30, 2024. This increase in total revenue was due to an increase in product revenue, net of approximately $7.6 million.

Product revenue, net:

Product revenue, net was approximately $92.3 million for the six months ended June 30, 2025, compared to $84.7 millionfor the six months ended June 30, 2024. This increase in product revenue, net, compared to the six months ended June 30, 2024, was attributable to an increase in net selling price, partially offset by a decrease of approximately 1.0% in deductions to gross revenue for variable consideration, primarily related fewer Medicaid charges.

Royalty revenue:

Royalty revenue was approximately $6.2 million for each of the sixmonths ended June 30, 2025 and June 30, 2024.

Cost of sales:

Cost of sales was approximately $22.9 million for the sixmonths ended June 30, 2025, compared to approximately $21.4 million for the sixmonths ended June 30, 2024. The increase was primarily due to higher royalty expense and product costs resulting from increased global sales.

Selling, general and administrative expenses:

SG&A expenses were approximately $35.7 million for the six months ended June 30, 2025, compared to approximately $46.7 million for the six months ended June 30, 2024. SG&A expenses for the six months ended June 30, 2025 and 2024 were as follows:

Selling, general, and administrative expenses		For the Six Months Ended								Change
(in thousands)		June 30,								$						%
		2025				2024				2025/2024				2025/2024
Payroll and related costs		$	17,304			$	16,057			$	1,247				7.8	%
Provision for credit loss recovery			(149	)			(73	)			(76	)			104.1	%
Professional fees and expenses			9,584				20,616				(11,032	)			-53.5	%
Travel and meetings			2,748				3,040				(292	)			-9.6	%
Facilities and equipment costs			2,341				2,483				(142	)			-5.7	%
Stock-based compensation			2,227				2,885				(658	)			-22.8	%
Other			1,596				1,714				(118	)			-6.9	%
		$	35,651			$	46,722			$	(11,071	)			-23.7	%

SG&A expenses decreased by approximately $11.1 million for the sixmonths ended June 30, 2025, compared to the same period in 2024, primarily attributable to the following:

●

a decrease in professional fees and expenses of approximately $11.0 million primarily related to legal fees associated with the AstraZeneca litigation in the prior year as well as some decrease in our insurance costs; and

●

a decrease in stock-based compensation expense of approximately $0.7 million, primarily due to newer awards at a lower grant price;

Partially offset by:

●

an increase in payroll and related costs of approximately $1.2 million primarily due to the severance costs related to the departure of our Chief Commercial Officer, increased headcount in our sales team as well as increases in our healthcare insurance premiums

Research and development expenses:

R&D expenses were approximately $29.3 million for the six months ended June 30, 2025, compared to approximately $27.2 million forthe six months ended June 30, 2024. R&D expenses for the six months ended June 30, 2025 and 2024, were as follows:

Research and development expenses		For the Six Months Ended								Change
(in thousands)		June 30,								$						%
		2025				2024				2025/2024				2025/2024
Clinical trial expense		$	9,279			$	7,689			$	1,590				20.7	%
Internal R&D			16,636				16,615				21				0.1	%
Consultant and contractors			1,973				1,361				612				45.0	%
Stock-based compensation			1,427				1,554				(127	)			-8.2	%
		$	29,315			$	27,219			$	2,096				7.7	%

R&D expenses increased by approximately $2.1 million compared to the sixmonths ended June 30, 2025, compared to the same period in 2024, primarily attributable to the follow:

●

an increase in clinical trial expense of approximately $1.6 million, primarily due to increased alisertib study activity; an

●

an increase in consultants and contractors expense of approximately $0.6 million, primarily due to increased alisertib study activity;

Other income (expenses):

Other income (expenses)		For the Six Months Ended								Change
(in thousands)		June 30,								$						%
		2025				2024				2025/2024				2025/2024
Interest income		$	2,057			$	2,216			$	(159	)			-7.2	%
Interest expense			(4,014	)			(6,731	)			2,717				-40.4	%
Other income			769				247				522				211.3	%
		$	(1,188	)		$	(4,268	)		$	3,080				-72.2	%

Interest income:

For the sixmonths ended June 30, 2025, we recognized approximately $2.1 million in interest income, compared to approximately $2.2 million of interest income for the sixmonths ended June 30, 2024. The decrease in interest income was primarily the result of lower investment balances and timing of investments.

Liquidity and Capital Resources

The following table, which summarizes our liquidity and capital resources as of June 30, 2025 and December 31, 2024 and for the six months ended June 30, 2025 and 2024, is intended to supplement the more detailed discussion that follows:

		As of				As of
Liquidity and capital resources (in thousands)		June 30, 2025				December 31, 2024
Cash and cash equivalents		$	54,662			$	69,219
Marketable securities		$	41,362			$	31,746
Working capital		$	57,479			$	51,547
Current portion of long-term debt		$	33,997			$	45,329
Long-term debt		$	10,869			$	21,719
Stockholders' equity		$	104,718			$	92,125

		Six Months Ended				Six Months Ended
		June 30, 2025				June 30, 2024
Cash provided by (used in):
Operating activities		$	17,694			$	12,273
Investing activities			(9,717	)			(18,377	)
Financing activities			(22,534	)			(11,332	)
Net decrease in cash, cash equivalents and restricted cash		$	(14,557	)		$	(17,436	)

On October 26, 2023, we implemented a reduction in our workforce of approximately 5% across the Company. We incurred approximately $0.4 million in related costs, which included severance payments and insurance premiums. These costs were recorded in the fourth quarter of 2023. All payments related to this plan were paid as of June 30, 2024.

Operating Activities:

Cash provided by operating activities for the six months ended June 30, 2025 was $17.7million and consisted of net income of approximately $8.8 million, adjusted for non-cash items of approximately $9.1 million, which included stock-based compensation of $3.7 million, depreciation and amortization of $5.6 million and provision for credit loss recovery of $0.1 million. Total changes in cash flows from operations were due to a slight decrease in working capital, primarily related to a decrease in accrued expenses and other of approximately $5.0 million, a decrease in operating lease assets and liabilities, net, of $0.9 million and a decrease of post-marketing commitment liability of $1.1 million, partially offset by a decrease in prepaid and other expenses of $0.5 million, a decrease in accounts receivable of approximately $6.3 million and a decrease in inventory of $0.1 million.

Cash provided by operating activities for the six months ended June 30, 2024 was $12.3 million and consisted of a net loss of approximately $9.3 million, adjusted for non-cash items of approximately $10.2 million, including stock-based compensation of $4.4 million, depreciation and amortization of $5.8 million and provision for credit loss recovery of $0.1 million. Total changes in cash flows from operations were due to an increase in working capital, primarily related to a decrease in accounts receivable of approximately $19.8 million, a decrease in prepaid expenses and other of $1.4 million and an increase in accounts payable of approximately $6.6 million, partially offset by a decrease in accrued expenses and other of approximately $13.7 million and an increase in inventory of approximately $2.0 million.

Investing Activities:

Cash used in investing activities for the six months ended June 30, 2025 was approximately $9.7million, compared to net cash used in investing activities of approximately $18.4 million for the same period in 2024. Cash used in investing activities for the six months ended June 30, 2025 was primarily due to the purchase of available-for-sale securities of approximately $34.4 million, partially offset by the maturity of available-for-sale securities of approximately $24.8 million.

Cash used in investing activities for the six months ended June 30, 2024 was approximately $18.4 million, compared to net cash used by investing activities of approximately $22.1 million for the same period in 2023. Cash used in investing activities was primarily due to the purchase of available-for-sale securities of approximately $44.9 million, offset by the maturity of available-for-sale securities of approximately $26.5 million.

Financing Activities:

Cash used in financing activities for the three months ended June 30, 2025 was approximately $22.5 million, including $22.2 million related to the payment of principal and $0.4 million related exit fees, on our debt with Athyrium, partially offset by $0.1 million in proceeds from shares issued under employee stock plans.

Cash used in financing activities for the three months ended June 30, 2024 was approximately $11.3 million, including $11.1 million related to the payment of principal and $0.2 million related 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 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 the Note Purchase Agreement dated as of September 16, 2022 (the "Third Amendment").

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, we 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 June 30, 2025, the effective interest rate for the loan was 12.99%.

As of June 30, 2025, we 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 us. The affirmative covenants include, among others, covenants requiring us to maintain our 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 our transferring collateral, incurring additional indebtedness, engaging in mergers or acquisitions, paying dividends or making other distributions, making investments, creating liens, selling assets and suffering a change in control, in each case subject to certain exceptions. We are also required to maintain minimum cash balances and achieve certain minimum product revenue targets, measured as of the last day of each fiscal quarter on a trailing year-to-date basis. As of June 30, 2025, we were in compliance with such covenants.

As of June 30, 2025, the principal balance outstanding under the Athyrium Notes was $44.5 million and represents all of our debt. We are in compliance with all applicable covenants under the Athyrium Notes.

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 $54.7 million and approximately $41.4 million in marketable securities available at June 30, 2025. While our consolidated financial statements have been prepared on a going concern basis, we may incur significant losses in the future and will need to generate significant revenue to sustain operations and successfully commercialize neratinib and develop alisertib. 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 June 30, 2025, and proceeds that will become available to us through product sales and sub-license payments are sufficient to satisfy our operating cash and capital needs for at least one year after the filing of this Quarterly Report.

In addition, we have based our estimate of capital needs on assumptions that may prove to be wrong. 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, acquisitions of additional drug candidates and changes in regulation. Potential sources of financing include strategic relationships, public or private sales of equity or debt and other sources of funds. We may seek to access the public or private equity markets when conditions are favorable due to our long-term capital requirements. If we raise funds by selling additional shares of common stock or other securities convertible into common stock, the ownership interests of our existing stockholders will be diluted. If we are not able to obtain financing when needed, we may be unable to carry out our business plan. As a result, we may have to significantly limit our operations, and our business, financial condition and results of operations would be materially harmed. In such an event, we will be required to undertake a thorough review of our programs, and the opportunities presented by such programs, and allocate our resources in the manner most prudent.

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 income (loss) and net income (loss) per share, as calculated in accordance with GAAP, as adjusted to remove the impact of stock-based compensation. For the three and six months ended June 30, 2025, stock-based compensation represented approximately 4.9% and 5.6% of our operating expenses, respectively, compared to 5.3% and 6.0% for the same respective periods in 2024, 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 Income (Loss) to Non-GAAP Adjusted Net Income (Loss) and

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

(in thousands except share and per share data)

		For the Three Months Ended June 30,										For the Six Months Ended June 30,
		2025					2024					2025					2024
GAAP net income (loss)		$	5,855				$	(4,529	)			$	8,829				$	(9,344	)
Adjustments:
Stock-based compensation -
Selling, general and administrative (1)			992					1,435					2,227					2,885
Research and development (2)			636					627					1,427					1,554
Non-GAAP adjusted net income (loss)		$	7,483				$	(2,467	)			$	12,483				$	(4,905	)
GAAP net income (loss) per share-basic		$	0.12				$	(0.09	)			$	0.18				$	(0.19	)
Adjustment to net income (loss) (as detailed above)			0.03					0.04					0.07					0.09
Non-GAAP adjusted basic net income (loss) per share		$0.15			(3)		$	(0.05	)	(4)		$	0.25		(3)		$	(0.10	)	(4)
GAAP net income (loss) per share-diluted		$	0.12				$	(0.09	)			$	0.18				$	(0.19	)
Adjustment to net income (loss) (as detailed above)			0.03					0.04					0.07					0.09
Non-GAAP adjusted diluted net income (loss) per share		$0.15			(5)		$	(0.05	)	(6)		$	0.25		(5)		$	(0.10	)	(6)

(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 income per share was calculated based on 49,700,217 and 49,648,246 weighted-average shares of common stock outstanding for the three and six months ended June 30, 2025, respectively.

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

(5) Non-GAAP adjusted diluted net income per share was calculated based on 50,144,704 and 50,003,709 weighted-average shares of common stock outstanding for the three and six months ended June 30, 2025, respectively.

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

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, 2024.