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What changed in PUMA BIOTECHNOLOGY, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of PUMA BIOTECHNOLOGY, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+453 added−438 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-27)

Top changes in PUMA BIOTECHNOLOGY, INC.'s 2025 10-K

453 paragraphs added · 438 removed · 354 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

157 edited+36 added−30 removed440 unchanged
Biggest changeOnce the optimal alisertib dose is identified, we plan to engage with global regulatory agencies regarding the design of a pivotal Phase III trial, which we anticipate will be a randomized trial of alisertib plus investigator’s choice endocrine therapy versus placebo plus investigator’s choice endocrine therapy in patients with chemotherapy naïve HER2-negative, hormone receptor-positive metastatic breast cancer. 11 Table of Contents Clinical Testing of Our Drug Candidates Any drug candidates we seek to develop will require extensive pre-clinical and clinical testing to determine its safety and efficacy in the potential applications before seeking and obtaining regulatory approval.
Biggest changeDue to the larger number of patients in screening, we anticipate that the trial will enroll more than 150 patients. Clinical Testing of Our Drug Candidates Any drug candidates we seek to develop will require extensive pre-clinical and clinical testing to determine its safety and efficacy in the potential applications before seeking and obtaining regulatory approval.
In 2018, the EC granted marketing authorization for NERLYNX in the EU for the extended adjuvant treatment of adult patients with early stage hormone receptor positive HER2-overexpressed/amplified breast cancer and who are less than one year from the completion of prior adjuvant trastuzumab-based therapy. These approvals were obtained based on the two-year data obtained in our ExteNET trial.
In 2018, the EC granted marketing authorization for NERLYNX in the EU for the extended adjuvant treatment of adult patients with early stage hormone receptor-positive HER2-overexpressed/amplified breast cancer and who are less than one year from the completion of prior adjuvant trastuzumab-based therapy. These approvals were obtained based on the two-year data obtained in our ExteNET trial. Two-Year ExteNET Data.
The results of the ExteNET trial showed that after two years of follow-up, for patients with hormone receptor positive, HER2-positive early stage breast cancer patients who were treated within one year after the completion of trastuzumab based adjuvant therapy, iDFS was 95.3% in the patients treated with neratinib compared with 90.8% in those receiving placebo (hazard ratio = 0.49; 95% CI: (0.30, 0.78); p=0.002).
The results of the ExteNET trial showed that after two years of follow-up, for patients with hormone receptor-positive, HER2-positive early stage breast cancer who were treated within one year after the completion of trastuzumab based adjuvant therapy, iDFS was 95.3% in the patients treated with neratinib compared with 90.8% in those receiving placebo (hazard ratio = 0.49; 95% CI: (0.30, 0.78); p=0.002).
Inhibition of Aurora Kinase A leads to disruption of mitotic spindle apparatus assembly, disruption of chromosome segregation, and inhibition of cell proliferation.
Inhibition of Aurora Kinase A leads to disruption of mitotic spindle apparatus assembly, disruption of chromosome segregation, and inhibition of cell proliferation.
In clinical trials to date, alisertib had 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.
In clinical trials to date, alisertib had 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.
In December 2021, NERLYNX (neratinib) was included in the updated National Reimbursement Drug List (“NRDL”) by the China National Healthcare Security Administration for patients with early stage hormone receptor positive HER2-overexpressed/amplified breast cancer after adjuvant trastuzumab based therapy. The addition of NERLYNX to the China NRDL now enables broad access to neratinib to more women throughout China.
In December 2021, NERLYNX was included in the updated National Reimbursement Drug List (“NRDL”) by the China National Healthcare Security Administration for patients with early stage hormone receptor-positive HER2-overexpressed/amplified breast cancer after adjuvant trastuzumab based therapy. The addition of NERLYNX to the China NRDL now enables broad access to neratinib to more women throughout China.
The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU until 10 years have elapsed from the initial MA of the reference product in the EU.
The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU until 10 years have elapsed from the initial MA of the reference product in the EU.
The centralized procedure is optional for products containing a new active substance not yet authorized in the EU or for drug candidates which constitute a significant therapeutic, scientific or technical innovation, or for which the granting of an MA would be in the interest of public health in the EU. • “National MAs” – are issued by the competent authorities of the EU member states, and only cover their respective territory and are available for drug candidates not falling within the mandatory scope of the centralized procedure.
The centralized procedure is optional for products containing a new active substance not yet authorized in the EU or for drug candidates that constitute a significant therapeutic, scientific or technical innovation, or for which the granting of an MA would be in the interest of public health in the EU. • “National MAs” – are issued by the competent authorities of the EU member states, and only cover their respective territory and are available for drug candidates not falling within the mandatory scope of the centralized procedure.
Pursuant to the Pierre Fabre Agreement, we granted to Pierre Fabre under certain of our intellectual property rights relating to neratinib an exclusive, sub-licensable (under certain circumstances) license to develop, manufacture and commercialize any pharmaceutical product containing neratinib for therapeutic and prophylactic indications for human or veterinary use in European countries excluding Russia and Ukraine, along with countries in North Africa and francophone countries of West Africa (the “Pierre Fabre Territory”).
Pursuant to the Pierre Fabre Agreement, we granted to Pierre Fabre under certain of our intellectual property rights relating to neratinib an exclusive, sub-licensable (under certain circumstances) license to develop, manufacture and commercialize any pharmaceutical product containing neratinib for therapeutic and prophylactic indications for human or veterinary use in European countries (excluding Ukraine), along with countries in North Africa and francophone countries of West Africa (the “Pierre Fabre Territory”).
The following table shows the HER2-positive breast cancer approvals for NERLYNX by disease and country: Extended adjuvant Metastatic United States July 2017 United States February 2020 European Union August 2018 Argentina January 2021 Australia March 2019 Peru March 2021 Canada July 2019 Chile May 2021 Argentina August 2019 Canada June 2021 Hong Kong October 2019 Taiwan October 2021 Singapore November 2019 Israel July 2022 Switzerland March 2020 Ecuador August 2022 Brunei April 2020 Singapore September 2022 China April 2020 Colombia March 2023 Chile April 2020 Malaysia September 2023 New Zealand June 2020 Mexico October 2023 Taiwan June 2020 Brazil May 2024 Ecuador July 2020 Thailand December 2024 Malaysia July 2020 Peru March 2021 Macau August 2021 South Korea October 2021 Brazil December 2021 Mexico January 2022 Philippines June 2022 Israel July 2022 South Africa January 2023 Morocco February 2023 UAE September 2023 Syria January 2024 Saudi Arabia July 2024 Algeria July 2024 Turkey November 2024 Thailand December 2024 We currently have sub-licenses in each of these regions with third parties that are commercializing NERLYNX in their respective geography.
The following table shows the HER2-positive breast cancer approvals for NERLYNX by disease and country: Extended adjuvant Metastatic United States July 2017 United States February 2020 European Union August 2018 Argentina January 2021 Australia March 2019 Peru March 2021 Canada July 2019 Chile May 2021 Argentina August 2019 Canada June 2021 Hong Kong October 2019 Taiwan October 2021 Singapore November 2019 Israel July 2022 Switzerland March 2020 Ecuador August 2022 Brunei April 2020 Singapore September 2022 China April 2020 Colombia March 2023 Chile April 2020 Malaysia September 2023 New Zealand June 2020 Mexico October 2023 Taiwan June 2020 Brazil May 2024 Ecuador July 2020 Thailand December 2024 Malaysia July 2020 Peru March 2021 Macau August 2021 South Korea October 2021 Brazil December 2021 Mexico January 2022 Philippines June 2022 Israel July 2022 South Africa January 2023 Morocco February 2023 UAE September 2023 Syria January 2024 Saudi Arabia July 2024 Algeria July 2024 Turkey November 2024 Thailand December 2024 Iran August 2025 We currently have sub-licenses in each of these regions with third parties that are commercializing NERLYNX in their respective geography.
In small cell lung cancer, the study design involved the administration of alisertib to patients with small cell lung cancer who had previously received up to two prior cytotoxic regimens in the metastatic setting. Patients were administered alisertib monotherapy at a dose of 50 mg twice a day (“BID”) for seven days followed by a 14-day break.
In small cell lung cancer, the study design involved the administration of alisertib to patients who had previously received up to two prior cytotoxic regimens in the metastatic setting. Patients were administered alisertib monotherapy at a dose of 50 mg twice a day (“BID”) for seven days followed by a 14-day break.
We are currently a party to several sub-licenses in various regions outside the United States, including Europe (excluding Russia and Ukraine), Australia, Canada, China, Southeast Asia, Israel, South Korea, and various countries and territories in Central America, South America, Africa and the Middle East.
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.
An oral hearing was held December 8, 2017, wherein the patent was maintained as granted. Following an appeal filed by Hexal, the Board of Appeal of the European Patent Office rejected the claims as granted and all pending auxiliary requests during the oral hearing of September 2, 2021.
An oral hearing was held on December 8, 2017, wherein the patent was maintained as granted. Following an appeal filed by Hexal, the Board of Appeal of the European Patent Office rejected the claims as granted and all pending auxiliary requests during the oral hearing of September 2, 2021.
We are pursuing patent term extension in the form of patent term adjustment (PTA), in market approved jurisdictions where PTA is available. Where PTA requests require proceedings in a court setting, there is no guarantee that such PTA requests will be granted.
We are pursuing patent term extension in the form of patent term adjustment (“PTA”), in market approved jurisdictions where PTA is available. Where PTA requests require proceedings in a court setting, there is no guarantee that such PTA requests will be granted.
The opposition was rejected as inadmissible by the Board of Appeal of the European Patent Office on December 1, 2020, and the EP1848414 patent was upheld as originally granted. We have filed Supplemental Protection Certificate applications in the countries the EP1848414 patent was validated.
The opposition was rejected as inadmissible by the Board of Appeal of the European Patent Office on December 1, 2020, and the EP1848414 patent was upheld as originally granted. We have filed Supplemental Protection Certificate applications in the countries where the EP1848414 patent was validated.
Some states have enacted legislation creating so-called prescription drug affordability boards, which ultimately may attempt to impose price limits on certain drugs in these states. 26 Table of Contents Sales and Marketing The FDA regulates all advertising and promotion activities for products under its jurisdiction prior to and after approval, including standards and regulations for direct-to-consumer advertising, dissemination of off-label information, industry-sponsored scientific and educational activities and promotional activities involving the Internet.
Some states have enacted legislation creating so-called prescription drug affordability boards, which ultimately may attempt to impose price limits on certain drugs in these states. 27 Table of Contents Sales and Marketing The FDA regulates all advertising and promotion activities for products under its jurisdiction prior to and after approval, including standards and regulations for direct-to-consumer advertising, dissemination of off-label information, industry-sponsored scientific and educational activities and promotional activities involving the Internet.
Settlements often include significant civil sanctions, including fines and civil monetary penalties, and corporate integrity agreements. 27 Table of Contents There are also state and foreign law and regulations equivalents of each of the above federal laws, such as state anti-kickback and false claims laws, that may impose similar or more prohibitive restrictions, and may apply to items or services reimbursed by any non-governmental third-party payors, including private insurers.
Settlements often include significant civil sanctions, including fines and civil monetary penalties, and corporate integrity agreements. 28 Table of Contents There are also state and foreign law and regulations equivalents of each of the above federal laws, such as state anti-kickback and false claims laws, that may impose similar or more prohibitive restrictions, and may apply to items or services reimbursed by any non-governmental third-party payors, including private insurers.
The manuscript presented data focusing on HR+ patients who initiated treatment within a year of completing an adjuvant trastuzumab containing treatment (HR+ / In the HR+/ NERLYNX is included in the body of the National Comprehensive Cancer Network (“NCCN”) Practice Guidelines for Breast Cancer for the treatment of adjuvant HER2-positive Breast Cancer (BINV-16 & BINV-L) under the heading Useful in Certain Circumstances, with a recommendation for considering extended adjuvant neratinib for patients with HR-positive, HER2-positive disease with a perceived high risk of recurrence.
The manuscript presented data focusing on hormone receptor-positive patients who initiated treatment within a year of completing an adjuvant trastuzumab containing treatment (HR+ / In the HR+/ NERLYNX is included in the body of the National Comprehensive Cancer Network (“NCCN”) Practice Guidelines for Breast Cancer for the treatment of adjuvant HER2-positive Breast Cancer (BINV-16 & BINV-L) under the heading Useful in Certain Circumstances, with a recommendation for considering extended adjuvant neratinib for patients with HR-positive, HER2-positive disease with a perceived high risk of recurrence.
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare, with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); redesigns the Medicare Part D benefit (beginning in 2024); and replaces the Part D coverage gap discount program with a new manufacturer discount program (beginning in 2025).
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare, with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); redesigns the Medicare Part D benefit (beginning in 2024); and replaces the Part D coverage gap discount program with a new manufacturer discount program (which began in 2025).
Intellectual Property and License Agreements Neratinib Patent Portfolio We hold a worldwide exclusive license under our license agreement with Pfizer, as amended (the “Pfizer Agreement”) to 21 granted U.S. patents and three pending U.S. patent applications, as well as foreign counterparts thereof, and other patent applications and patents claiming priority therefrom to develop and commercialize certain compounds, including neratinib.
Intellectual Property and License Agreements Neratinib Patent Portfolio We hold a worldwide exclusive license under our license agreement with Pfizer, as amended (the “Pfizer Agreement”) to 21 granted U.S. patents and one pending U.S. patent applications, as well as foreign counterparts thereof, and other patent applications and patents claiming priority therefrom to develop and commercialize certain compounds, including neratinib.
In international markets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. 25 Table of Contents In the EU, potential reductions in prices and changes in reimbursement levels could be the result of different factors, including reference pricing systems, parallel distribution and parallel trade.
In international markets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. 26 Table of Contents In the EU, potential reductions in prices and changes in reimbursement levels could be the result of different factors, including reference pricing systems, parallel distribution and parallel trade.
As of December 31, 2024, NERLYNX has received approval for the treatment of certain patients with extended adjuvant and/or metastatic HER2-positive breast cancer in more than 40 countries outside the United States, including the European Union (“EU”), China, Latin America, Australia, Canada, and Hong Kong.
As of December 31, 2025, NERLYNX has received approval for the treatment of certain patients with extended adjuvant and/or metastatic HER2-positive breast cancer in more than 40 countries outside the United States, including the European Union (“EU”), China, Latin America, Australia, Canada, and Hong Kong.
Patients in the second cohort (n=5) represent patients who had brain metastases which were amenable to surgery and who were administered neratinib monotherapy prior to and after surgical resection. The third cohort (target enrollment=60) enrolled two sub-groups of patients (prior lapatinib-treated and no prior lapatinib) with progressive brain metastases who were administered neratinib in combination with the chemotherapy drug capecitabine.
Patients in the second cohort (n=5) represent patients who had brain metastases that were amenable to surgery and who were administered neratinib monotherapy prior to and after surgical resection. The third cohort (target enrollment=60) enrolled two sub-groups of patients (prior lapatinib-treated and no prior lapatinib) with progressive brain metastases who were administered neratinib in combination with the chemotherapy drug capecitabine.
The criteria are essentially the same, but have been tailored for the market, i.e., the prevalence of the condition in GB, rather than the EU, must not be more than five in 10,000. Should an orphan designation be granted, the period or market exclusivity will be set from the date of first approval of the product in GB.
The criteria are essentially the same, but have been tailored for the market, i.e., the prevalence of the condition in the UK, rather than the EU, must not be more than five in 10,000. Should an orphan designation be granted, the period or market exclusivity will be set from the date of first approval of the product in the UK.
As a secondary objective, we will evaluate each of these efficacy endpoints within biomarker subgroups in order to determine whether any biomarker subgroup correlates with more favorable efficacy results, such as through observed in preclinical and clinical studies in other cancers including breast cancer and small cell lung cancer.
As a secondary objective, we will evaluate each of these efficacy endpoints within biomarker subgroups in order to determine whether any biomarker subgroup correlates with more favorable efficacy results, such as those observed in preclinical and clinical studies in other cancers including breast cancer and small cell lung cancer.
The median cumulative duration of grade 3 diarrhea ranged from 2 – 2.5 days across the CONTROL DE study cohorts for the entire 12-month treatment period (compared with 5.0 days for ExteNET). The proportion of patients discontinuing neratinib because of diarrhea was decreased in both DE cohorts (DE1 3%; DE2 6%) compared with ExteNET (17%).
The median cumulative duration of grade 3 diarrhea ranged from 2 – 2.5 days across the CONTROL DE study cohorts for the entire 12-month treatment period (compared with 5.0 days for ExteNET). The proportion of patients discontinuing neratinib because of diarrhea was lower in both DE cohorts (DE1 3%; DE2 6%) compared with ExteNET (17%).
However, a sensitivity analysis which used the corrected stratification definition was also performed. The trial also incorporated an extensive biomarker analysis with a prespecified analysis of c-Myc expression an d an exploratory, retrospectiv e analysis of genetic alterations in circulating tumor DNA (“ctDNA”) with clinical outcome. The primary endpoint in the trial was PFS.
However, a sensitivity analysis that used the corrected stratification definition was also performed. The trial also incorporated an extensive biomarker analysis with a prespecified analysis of c-Myc expression an d an exploratory, retrospectiv e analysis of genetic alterations in circulating tumor DNA (“ctDNA”) with clinical outcome. The primary endpoint in the trial was PFS.
We elected to apply patent term extension to U.S. Patent No. 7,399,865. The U.S. Patent and Trademark Office (“USPTO”) has determined that U.S. Patent No. 7,399,865 is eligible for five years of patent term extension. U.S. Patent No. 7,399,865 Patent Term Extension (PTE) Certificate was issued on November 19, 2021. U.S. Patent No. 7,399,865 will expire December 29, 2030.
We elected to apply patent term extension to U.S. Patent No. 7,399,865. The U.S. Patent and Trademark Office (“USPTO”) has determined that U.S. Patent No. 7,399,865 is eligible for five years of patent term extension. U.S. Patent No. 7,399,865 Patent Term Extension (“PTE”) Certificate was issued on November 19, 2021. U.S. Patent No. 7,399,865 will expire December 29, 2030.
Our annual, quarterly and current reports, and any amendments to those reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 may be accessed free of charge through our website after we have electronically filed or furnished such material with the SEC.
Our annual, quarterly and current reports, and any amendments to those reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act may be accessed free of charge through our website after we have electronically filed or furnished such material with the SEC.
Any authorization which is not followed by the actual placing of the drug on the market in the UK within three years shall ease to be in force. There is no pre-MA orphan designation in the UK. Instead, the MHRA reviews applications for orphan designation in parallel to the corresponding MA application.
Any authorization which is not followed by the actual placing of the drug on the market in the UK within three years shall cease to be in force. There is no pre-MA orphan designation in the UK. Instead, the MHRA reviews applications for orphan designation in parallel to the corresponding MA application.
As a result of this transaction, Former Puma became our wholly owned subsidiary and subsequently merged with and into us, at which time we adopted Former Puma’s business plan and changed our name to “Puma Biotechnology, Inc.” 29 Table of Contents
As a result of this transaction, Former Puma became our wholly owned subsidiary and subsequently merged with and into us, at which time we adopted Former Puma’s business plan and changed our name to “Puma Biotechnology, Inc.” 30 Table of Contents
In Feb 2020, NERLYNX was also approved in the United States in combination with capecitabine for the treatment of adult patients with advanced or metastatic HER2-positive breast cancer who have received two or more prior anti-HER2 based regimens in the metastatic setting.
In February 2020, NERLYNX was also approved in the United States 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.
The specialty pharmacy network sells directly to patients and consists of Acaria Health, Accredo, CVS, ONCO 360, Optum and Biologics. Our specialty distributor network sells to hospitals, physician practices and other sites of care and consists of McKesson, ASD/Oncology Supply, Cardinal Health and DMS Pharmaceutical Group.
The specialty pharmacy network sells directly to patients and consists of Accredo, CVS, ONCO 360, Optum and Biologics. Our specialty distributor network sells to hospitals, physician practices and other sites of care and consists of McKesson, ASD/Oncology Supply, Cardinal Health, DMS Pharmaceutical Group and Bio Care.
Significant financial resources are invested in research, development and commercialization of new cancer products. We have faced and will likely continue to face considerable competition from major pharmaceutical, biotechnology and specialty cancer companies. Our competitors include, but are not limited to, Genentech, Novartis, Roche, Boehringer Ingelheim, Lilly, Amgen, Daiichi Sankyo, Jazz and Seagen.
Significant financial resources are invested in research, development and commercialization of new cancer products. We have faced and will likely continue to face considerable competition from major pharmaceutical, biotechnology and specialty cancer companies. Our competitors include, but are not limited to, Genentech, Novartis, Roche, Boehringer Ingelheim, Lilly, Merck, AbbVie, Pfizer, Amgen, Daiichi Sankyo, Jazz and Seagen.
Pursuant to the Specialised Therapeutics Agreement, we granted to STA, under certain of our intellectual property rights relating to neratinib, an exclusive, sublicensable (under certain circumstances) license to commercialize any pharmaceutical product containing neratinib in finished form for the extended adjuvant treatment of patients with early stage HER2-positive breast cancer and HER2-positive metastatic breast cancer in Australia, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, New Zealand, Papua New Guinea, Philippines, Singapore, Thailand, Timor-Leste and Vietnam, or the STA Territory.
Pursuant to the Specialised Therapeutics Agreement, we granted to STA, under certain of our intellectual property rights relating to neratinib, an exclusive, sublicensable (under certain circumstances) license to commercialize any pharmaceutical product containing neratinib in finished form for the extended adjuvant treatment of patients with early stage HER2-positive breast cancer and HER2-positive metastatic breast cancer in Australia, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, New Zealand, Papua New Guinea, Philippines, Singapore, Thailand, Timor-Leste and Vietnam (the ”STA Territory”).
The steps required before a drug may be marketed in the United States generally include the following: • completion of extensive pre-clinical laboratory tests, animal studies, and formulation studies, certain of which must be conducted in accordance with the FDA’s GLP requirements and other applicable regulations; • submission to the FDA of an IND for human clinical testing, which must become effective before human clinical trials may begin; • approval by an independent institutional review board (“IRB”) or ethics committee at each clinical site before each trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with GCP requirements to establish the safety and efficacy of the drug for each proposed indication; • submission to the FDA of an NDA after completion of all pivotal clinical trials; • satisfactory completion of an FDA advisory committee review, if applicable; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the active pharmaceutical ingredient (“API”) and finished drug product are produced and tested to assess compliance with current Good Manufacturing Practices (“cGMPs”) and potential inspection of clinical trial sites to assess compliance with GCP; and • FDA review and approval of the NDA prior to any commercial marketing or sale of the drug in the United States.
The steps required before a drug may be marketed in the United States generally include the following: • completion of extensive pre-clinical laboratory tests, animal studies, and formulation studies, certain of which must be conducted in accordance with the FDA’s GLP requirements and other applicable regulations; • submission to the FDA of an IND for human clinical testing, which must become effective before human clinical trials may begin; • approval by an independent institutional review board (“IRB”) or ethics committee at each clinical site before each trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with GCP requirements to establish the safety and efficacy of the drug for each proposed indication; • submission to the FDA of an NDA after completion of all pivotal clinical trials; • satisfactory completion of an FDA advisory committee review, if applicable; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the active pharmaceutical ingredient (“API”) and finished drug product are produced and tested to assess compliance with current Good Manufacturing Practices (“cGMPs”) and potential inspection of clinical trial sites to assess compliance with GCP; and • FDA review and approval of the NDA prior to any commercial marketing or sale of the drug in the United States. 18 Table of Contents Pre-clinical tests include laboratory evaluation of product chemistry, toxicity and formulation, as well as animal studies.
The main grade 3 or higher adverse events (“AEs”) seen in the trial were neutropenia, anemia, leukopenia and thrombocytopenia. Alisertib was also tested in a randomized Phase II trial of paclitaxel plus alisertib versus paclitaxel plus placebo in patients with second line small cell lung cancer, the results of which were published in the Journal of Thoracic Oncology in 2020.
The main grade 3 or higher adverse events (“AEs”) seen in the trial were neutropenia, anemia, leukopenia and thrombocytopenia. 9 Table of Contents Alisertib was also tested in a randomized Phase II trial of paclitaxel plus alisertib versus paclitaxel plus placebo in patients with second line small cell lung cancer, the results of which were published in the Journal of Thoracic Oncology in 2020.
The MHRA has introduced changes to national licensing procedures, including procedures to prioritize access to new medicines that will benefit patients, a 150-day assessment (subject to clock-stops) and a rolling review procedure. In addition, since January 1, 2024, the MHRA may rely on the International Recognition Procedure, or IRP, when reviewing certain types of MAAs.
The MHRA has introduced changes to national licensing procedures, including procedures to prioritize access to new medicines that will benefit patients, a 150-day assessment (subject to clock-stops) and a rolling review procedure. In addition, since January 1, 2024, the MHRA may rely on the International Recognition Procedure (“IRP”), when reviewing certain types of MAAs.
Under the IRA manufacturer discount program that replaced the coverage gap discount program as of January 1, 2025, manufacturers must give a 10 percent discount on Part D drugs in the initial coverage phase, and a 20 percent discount on Part D drugs in the so-called “catastrophic phase” (the phase after the patient incurs costs above the initial phase out-of-pocket threshold, which will be $2,000 beginning in 2025).
Under the IRA manufacturer discount program that replaced the coverage gap discount program as of January 1, 2025, manufacturers must give a 10 percent discount on Part D drugs in the initial coverage phase, and a 20 percent discount on Part D drugs in the so-called “catastrophic phase” (the phase after the patient incurs costs above the initial phase out-of-pocket threshold, which was $2,000 beginning in 2025).
These contracts contain standard terms for the type of services provided that contain cancellation clauses requiring between 30 and 45 days written notice and that obligate us to pay for any services previously rendered with prepaid, unused funds being returned to us. Competition The development and commercialization of new products to treat cancer is highly competitive.
These contracts contain standard terms for the type of services provided that contain cancellation clauses requiring between 30 and 45 days written notice and that obligate us to pay for any services previously rendered with prepaid, unused funds being returned to us. 11 Table of Contents Competition The development and commercialization of new products to treat cancer is highly competitive.
The IRP allows medicinal products approved by such trusted regulatory partners that meet certain criteria to undergo a fast-tracked MHRA review to obtain and/or update an MA in the UK or Great Britain.
The IRP allows medicinal products approved by such trusted regulatory partners that meet certain criteria to undergo a fast-tracked MHRA review to obtain and/or update an MA in the UK.
Coverage and Reimbursement In the United States and internationally, sales of NERLYNX and any other product(s) that we market in the future, and our ability to generate revenues on such sales, are dependent, in significant part, on the availability of adequate coverage and reimbursement from third-party payors, such as state and federal governments, managed care providers and private insurance plans.
Coverage and Reimbursement In the United States and internationally, sales of NERLYNX and any other products that we market in the future, and our ability to generate revenues on such sales, are dependent, in significant part, on the availability of adequate coverage and reimbursement from third-party payors, such as state and federal governments, managed care providers and private insurance plans.
This allows new rules to be introduced in the future by way of secondary legislation, which aims to allow flexibility in addressing regulatory gaps and future changes in the fields of human medicines, clinical trials and medical devices. 23 Table of Contents Since January 1, 2021, the Medicines and Healthcare products Regulatory Agency (“MHRA”) is the UK’s standalone medicines and medical devices regulator.
This allows new rules to be introduced in the future by way of secondary legislation, which aims to allow flexibility in addressing regulatory gaps and future changes in the fields of human medicines, clinical trials and medical devices. Since January 1, 2021, the Medicines and Healthcare products Regulatory Agency (“MHRA”) is the UK’s standalone medicines and medical devices regulator.
As a condition of having federal funds being made available for covered outpatient drugs under Medicaid and Medicare Part B, we have enrolled in the Medicaid Drug Rebate Program (“MDRP”), which requires us to pay a rebate to state Medicaid programs for each unit of our covered outpatient drugs dispensed to a Medicaid beneficiary and paid for by a state Medicaid program.
As a condition of having federal funds being made available for covered outpatient drugs under Medicaid and Medicare Part B, we have enrolled in the MDRP, which requires us to pay a rebate to state Medicaid programs for each unit of our covered outpatient drugs dispensed to a Medicaid beneficiary and paid for by a state Medicaid program.
Oppositions against EP3000467 were filed by Hexal AG (“Hexal”) on November 3, 2023, by Alfred E. Tiefenbacher (GmbH & Co. KG) on November 28, 2023 and by Generics (UK) Limited (“Generics”) on December 1, 2023.
Oppositions against EP3000467 were filed by Hexal on November 3, 2023, by Alfred E. Tiefenbacher (GmbH & Co. KG) on November 28, 2023 and by Generics (UK) Limited (“Generics”) on December 1, 2023.
Additionally, before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCPs. After the FDA evaluates an NDA, it will issue an approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the drug for specific indications.
Additionally, before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCPs. 19 Table of Contents After the FDA evaluates an NDA, it will issue an approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the drug for specific indications.
Based on information in this database, we believe alisertib has potential application in the treatment of range of different cancer types, including hormone receptor positive breast cancer, triple negative breast cancer, small cell lung cancer and head and neck cancer. We intend to pursue development of alisertib initially in small cell lung cancer and hormone receptor positive breast cancer.
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.
We currently market NERLYNX in the United States using our direct specialty sales force consisting of approxima tely 35 sales specialists as of December 31, 2024.
We currently market NERLYNX in the United States using our direct specialty sales force consisting of approxima tely 35 sales specialists as of December 31, 2025.
We also have a license to an issued U.S. patent for the use of neratinib in the treatment of breast cancer, which is currently set to expire on October 8, 2025, an issued patent for the use of neratinib in the extended adjuvant treatment of early stage HER2-positive breast cancer that has previously been treated with a trastuzumab containing regimen that expires in 2030, two issued patents for the use of neratinib in combination with capecitabine, the latter of which is set to expire in 2031, and two issued patents for the formulation of NERLYNX® that are set to expire in 2030, two issued patents for the polymorphic forms of neratinib which are set to expire in 2028, one issued patent for the preparation of the polymorphic forms of neratinib which is set to expire in 2028, and three issued patents for the use of the polymorphic forms of neratinib in the treatment of breast cancer which are set to expire in 2028.
We also have a license to an issued U.S. patent for the use of neratinib in the extended adjuvant treatment of early stage HER2-positive breast cancer that has previously been treated with a trastuzumab containing regimen that expires in 2030, two issued patents for the use of neratinib in combination with capecitabine, the latter of which is set to expire in 2031, and two issued patents for the formulation of NERLYNX® that are set to expire in 2030; two issued patents for the polymorphic forms of neratinib which are set to expire in 2028; one issued patent for the preparation of the polymorphic forms of neratinib which is set to expire in 2028; and three issued patents for the use of the polymorphic forms of neratinib in the treatment of breast cancer which are set to expire in 2028.
For the purposes of calculating royalties, sales of the licensed products in the Third Pierre Fabre Territory will be excluded from the sales of licensed products made in the Licensee Territory. Under the terms of the Pierre Fabre Agreement, as amended, we are obligated to supply Pierre Fabre with the licensed products in accordance with the related supply agreement.
For the purposes of calculating royalties, sales of the licensed products in the Third Pierre Fabre Territory will be excluded from the sales of licensed products made in the Licensee Territory. 17 Table of Contents Under the terms of the Pierre Fabre Agreement, as amended, we are obligated to supply Pierre Fabre with the licensed products in accordance with the related supply agreement.
More recently, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory Medicaid drug rebate cap, beginning January 1, 2024. The rebate was previously capped at 100% of a drug’s average manufacturer price. Most significantly, in August 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law.
More recently, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory Medicaid drug rebate cap, beginning January 1, 2024. The rebate was previously capped at 100% of a drug’s average manufacturer price. Most significantly, the Inflation Reduction Act (“IRA”) was enacted in 2022.
Two-Year ExteNET Data. In July 2014, we announced top line results from our ExteNET trial, a Phase III clinical trial of neratinib for the extended adjuvant treatment of early stage HER2-positive breast cancer.
In July 2014, we announced top line results from our ExteNET trial, a Phase III clinical trial of neratinib for the extended adjuvant treatment of early stage HER2-positive breast cancer.
Sales and Marketing United States We currently have an oncology sales force in the United States comprised of approximately 35 sales specialists, three clinical nurse educators, two strategic account managers and one national account director who are focused on promoting NERLYNX to oncologists and the oncology care team.
Sales and Marketing United States We currently have an oncology sales force in the United States comprised of approximately 35 sales specialists, four clinical nurse educators, five strategic account managers and one national strategic account director who are focused on promoting NERLYNX to oncologists and the oncology care team.
Among other provisions, the ACA included an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents and a new formula that increases the rebates a manufacturer must pay under the Medicaid Drug Rebate Program. Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA.
Among other provisions, the ACA included an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents and a new formula that increases the rebates a manufacturer must pay under the MDRP. Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA.
The reference to www.pumabiotechnology.com (including any other reference to such address in this Annual Report) is an inactive textual reference only, meaning that the information contained on or accessible from the website is not part of this Annual Report on Form 10-K and is not incorporated in this report by reference.
The reference to https://www.pumabiotechnology.com (including any other reference to such address in this Annual Report) is an inactive textual reference only, meaning that the information contained on or accessible from the website is not part of this Annual Report and is not incorporated in this report by reference.
We are currently commercializing NERLYNX, an oral version of neratinib, for the treatment of HER2-positive breast cancer. Additionally, we have in-licensed, and are responsible for global development and commercialization of, alisertib.
We are currently commercializing NERLYNX, an oral version of neratinib, for the treatment of certain HER2-positive breast cancers. Additionally, we have in-licensed, and are responsible for global development and commercialization of, alisertib.
Patients who received neratinib in this trial did not receive any prophylaxis with antidiarrheal agents to prevent the neratinib-related diarrhea. In October 2020, we announced that efficacy results of neratinib in HER2-positive, hormone receptor positive, or HR+, early stage breast cancer, (“eBC”) from the Phase III ExteNET trial were published in Clinical Breast Cancer .
Patients who received neratinib in this trial did not receive any prophylaxis with antidiarrheal agents to prevent the neratinib-related diarrhea. In October 2020, we announced that efficacy results of neratinib in HER2-positive, hormone receptor-positive (“HR+”), early stage breast cancer from the Phase III ExteNET trial were published in Clinical Breast Cancer .
After these five years, the authorization may be renewed for an unlimited period on the basis of a reevaluation of the risk-benefit balance. Under the centralized procedure, the maximum timeframe for the evaluation of an MAA by the EMA is 210 days.
MAs have an initial duration of five years. After these five years, the authorization may be renewed for an unlimited period on the basis of a reevaluation of the risk-benefit balance. Under the centralized procedure, the maximum timeframe for the evaluation of an MAA by the EMA is 210 days.
The following figure provides an overview of our commercial product and drug candidates. * EBC: Early breast cancer ** MBC: Metastatic breast cancer *** HRc+: Hormone receptor positive **** NSCLC: Non-small cell lung cancer Neratinib Breast cancer is the leading cause of cancer death among women worldwide, with approximately one million new cases reported each year and more than 400,000 deaths per year.
The following figure provides an overview of our commercial product and drug candidates. * EBC: Early breast cancer ** MBC: Metastatic breast cancer *** HRc+: Hormone receptor-positive **** NSCLC: Non-small cell lung cancer Neratinib Breast cancer is the leading cause of cancer death among women worldwide, with approximately 2.3 million new cases reported each year and more than 670,000 deaths globally per year.
The UK regulatory framework in relation to clinical trials is governed by the Medicines for Human Use (Clinical Trials) Regulations 2004, as amended, which is derived from existing EU legislation (as implemented into UK law, through secondary legislation).
The UK regulatory framework in relation to clinical trials is governed by the Medicines for Human Use (Clinical Trials) Regulations 2004, as amended, which is derived from existing EU legislation (as implemented into UK law, through secondary legislation). In April 2025, the UK adopted the Medicines for Human Use (Clinical Trials) Amendment Regulations.
In addition, we will receive double-digit royalties based on net sales of the licensed products in the Licensee Territory, on the one hand, and double-digit royalties based on net sales of the licensed products in the Third Pierre Fabre Territory, on the other hand.
In addition, we will receive double-digit royalties based on net sales of the licensed products in the Licensee Territory, and double-digit royalties based on net sales of the licensed products in the Third Pierre Fabre Territory.
EP3000467 is used as the basic patent for Supplementary Protection Certificate applications for the EMA-approved NERLYNX® product, 17 of which have been granted, three proceedings have been stayed, and eleven are in active prosecution.
EP3000467 is used as the basic patent for Supplementary Protection Certificate applications for the EMA-approved NERLYNX® product, of which 18 have been granted, three proceedings have been stayed, and 10 are in active prosecution.
In this trial alisertib was dosed at 40 mg BID on days 1-3, 8-10 and 15-17 on a 28-day cycle while paclitaxel was dosed at 60 mg/m2 on days 1, 8 and 15 of a 28-day cycle. In the control arm paclitaxel was dosed at 90 mg/m2 on days 1, 8 and 15 of a 28-day cycle.
In this trial alisertib was dosed at 40 mg BID on days 1-3, 8-10 and 15-17 on a 28-day cycle while paclitaxel was dosed at 60 mg/m2 on days 1, 8 and 15 of a 28-day cycle.
Amgen, Daiichi Sankyo and Jazz are developing their drugs for the treatment of small cell lung cancer. All of the other competitors are developing their drugs for the treatment of early stage and/or metastatic HER2-positive breast cancer and/or for cancers that have a HER2 mutation.
Merck, AbbVie, Amgen, Daiichi Sankyo and Jazz are developing their drugs for the treatment of small cell lung cancer. All of the other competitors are developing their drugs for the treatment of early stage and/or metastatic HER2-positive breast cancer and/or for cancers that have a HER2 mutation or HER2-negative, hormone receptor-positive metastatic breast cancer.
In February 2013, we reached agreement with the FDA under a Special Protocol Assessment (“SPA”) for our Phase III clinical trial (PUMA-NER-1301 or the NALA trial) of neratinib in patients with HER2-positive metastatic breast cancer who have failed two or more prior treatments (third-line disease).
This approval was based on the results from our NALA trial. NALA. In February 2013, we reached agreement with the FDA under a Special Protocol Assessment (“SPA”) for our Phase III clinical trial (PUMA-NER-1301 or the NALA trial) of neratinib in patients with HER2-positive metastatic breast cancer who have failed two or more prior treatments (third-line disease).
Alisertib In September 2022, we entered into an exclusive license agreement with a subsidiary of Takeda Pharmaceutical Company Limited (“Takeda”) to license the worldwide research and development and commercial rights to alisertib. Alisertib is an investigational, reversible, ATP-competitive inhibitor that is designed to be highly selective for Aurora Kinase A.
Alisertib In September 2022, we entered into an exclusive license agreement with 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.
The EU laws that have been transposed into United Kingdom law through secondary legislation remain applicable in the UK; however, new legislation such as the (EU) CTR is not applicable in Great Britain.
The EU laws that have been transposed into UK law through secondary legislation remain applicable in the UK; however, new legislation such as the (EU) CTR is not applicable in the UK.
For example, the Patient Protection and Affordable Care Act (the “ACA”), enacted in March 2010, substantially changed the way healthcare is financed by both governmental and private insurers.
For example, the Affordable Care Act (the “ACA”) was enacted in 2010 and substantially changed the way healthcare is financed by both governmental and private insurers.
Pursuant to the Knight Agreement, we granted to Knight, under certain of the our intellectual property rights relating to neratinib, an exclusive, sublicensable (under certain circumstances) license (i) to commercialize any product containing neratinib and certain related compounds in Canada (the “Knight Territory”), (ii) to seek and maintain regulatory approvals for the licensed products in the Knight Territory and (iii) to manufacture the licensed products anywhere in the world solely for the development and commercialization of the licensed products in the Knight Territory for human use, subject to the terms of the Knight Agreement and a supply agreement to be negotiated and executed by the parties. 16 Table of Contents Under the terms of the Knight Agreement, we will be solely responsible for the manufacturing and supply of the licensed products to Knight, but under limited circumstances Knight may obtain the right to manufacture the licensed products under the supply agreement.
Pursuant to the Knight Agreement, we granted to Knight, under certain of the our intellectual property rights relating to neratinib, an exclusive, sublicensable (under certain circumstances) license (i) to commercialize any product containing neratinib and certain related compounds in Canada (the “Knight Territory”), (ii) to seek and maintain regulatory approvals for the licensed products in the Knight Territory and (iii) to manufacture the licensed products anywhere in the world solely for the development and commercialization of the licensed products in the Knight Territory for human use, subject to the terms of the Knight Agreement and a supply agreement to be negotiated and executed by the parties.
Of these Supplemental Protection Certificate applications, seven have been granted, one is undergoing appeal proceedings, six have been abandoned, five proceedings have been stayed, and the remaining six are in active prosecution. An Opposition was filed by Hexal AG (“Hexal”) on August 3, 2016 against European Patent No.
Of these Supplemental Protection Certificate applications, seven have been granted, two are undergoing appeal proceedings, ten have been abandoned, two proceedings have been stayed, and the remaining four are in active prosecution. An opposition was filed by Hexal AG (“Hexal”) on August 3, 2016 against European Patent No.
There are two biomarkers of interest, c-Myc amplifications and RB1 mutations/deletions, that we intend to study with alisertib based on the previous clinical trial results which may provide differentiation from the other drugs in development.
There are two biomarkers of interest, c-Myc expression and RB1 mutations, that we intend to study with alisertib based on prior clinical trial results which may provide differentiation from other drugs in development.
As consideration for the license, we are required to make payments totaling $187.5 million upon the achievements of certain milestones if all such milestones are achieved. FDA approval of NERLYNX in July 2017 triggered a one-time milestone payment.
As consideration for the license, we are required to make payments upon the achievement of certain milestones totaling approximately $187.5 million if all such milestones are achieved. In connection with the FDA approval of NERLYNX in July 2017, we triggered a one-time milestone payment pursuant to the agreement.
If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same drug for the same disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity or inability to manufacture the product in sufficient quantities.
If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same drug for the same approved indication or use within such disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity within the relevant indication or inability to manufacture the product in sufficient quantities to meet the needs relating to the approved use or indication of patients with the relevant rare disease or condition.
A medicinal product can be designated as an orphan if its sponsor can establish that: (1) the product is intended for the diagnosis, prevention or treatment of a life threatening or chronically debilitating condition (2) either (a) such condition affects not more than five in 10,000 persons in the EU when the application is made, or (b) the product, without the benefits derived from the orphan status, would not generate sufficient return in the EU to justify the necessary investment; and (3) there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized for marketing in the EU or, if such method exists, the product will be of significant benefit to those affected by that condition. 22 Table of Contents Orphan designation must be requested before submitting an MAA.
A medicinal product can be designated as an orphan if its sponsor can establish that: (i) the product is intended for the diagnosis, prevention or treatment of a life threatening or chronically debilitating condition (ii) either (a) such condition affects not more than five in 10,000 persons in the EU when the application is made, or (b) the product, without the benefits derived from the orphan status, would not generate sufficient return in the EU to justify the necessary investment; and (iii) there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized for marketing in the EU or, if such method exists, the product will be of significant benefit to those affected by that condition.
Once the CTA is approved, clinical study development may proceed. The CTR transition period ended on January 31, 2025, and all clinical trials (and related applications) are now fully subject to the provisions of the CTR. Medicines used in clinical trials must be manufactured in accordance with GMP.
Once the CTA is approved, clinical study development may proceed. The CTR transition period ended on January 31, 2025, and all clinical trials (and related applications) are now fully subject to the provisions of the CTR. Medicines used in clinical trials must be manufactured in accordance with GMP. Other national and EU-wide regulatory requirements may also apply.
We believe that there are approximately 30,000 patients in the United States and 37,000 patients in the EU with early stage HER2-positive breast cancer that get treated with adjuvant treatment. We also believe that there are approximately 6,400 patients in the United States with third-line and 4,700 patients in the United States with fourth-line HER2-positive metastatic breast cancer.
We believe that there are approximately 30,000 patients in the United States and 37,000 patients in the EU with early stage HER2-positive breast cancer who are treated with adjuvant therapy. We also believe that there are approximately 6,400 patients in the United States with third-line HER2-positive metastatic breast cancer.
Orphan exclusivity also could block the approval of a competing product for seven years if a competitor obtains approval of the “same drug,” as defined by the FDA, or if a drug candidate is determined to be contained within the competitor’s product for the same disease or condition.
Orphan exclusivity also could block the approval of a competing product for seven years if a competitor obtains approval of the “same drug,” as defined by the FDA with respect to the relevant indication or use, or if a drug candidate is determined to be contained within a competitor’s product approved for the same indication or use.
Pursuant to the Pint Agreement, we granted to Pint, under certain of our intellectual property rights relating to neratinib, an exclusive, sublicensable (under certain circumstances) license to develop and commercialize any product containing neratinib and certain related compounds in Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru, Suriname, Uruguay, Venezuela, French Guiana, the Falkland Islands and Mexico (the “Pint Territory”).
Pursuant to the Pint Agreement, we granted to Pint, under certain of our intellectual property rights relating to neratinib, an exclusive, sublicensable (under certain circumstances) license to develop and commercialize any product containing neratinib and certain related compounds in Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru, Suriname, Uruguay, Venezuela, French Guiana, the Falkland Islands and Mexico (the “Pint Territory”). 16 Table of Contents The Pint Agreement sets forth the parties’ respective obligations with respect to the development, commercialization, and supply of the licensed product.
An EU orphan designation entitles a party to incentives such as reduction of fees or fee waivers, protocol assistance, and access to the centralized procedure.
Orphan designation must be requested before submitting an MAA. An EU orphan designation entitles a party to incentives such as reduction of fees or fee waivers, protocol assistance, and access to the centralized procedure.
The following table summarizes our workforce by location for the years ended December 31, 2024 and December 31, 2023: December 31, 2024 December 31, 2023 Los Angeles 58 60 South San Francisco 26 28 Field & Remote 88 97 172 185 We believe that the safety and health of our employees and their families are essential to our business.
The following table summarizes our workforce by location for the years ended December 31, 2025 and December 31, 2024: December 31, 2025 December 31, 2024 Los Angeles 52 58 South San Francisco 24 26 Field & Remote 103 88 179 172 We believe that the safety and health of our employees and their families are essential to our business.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe cannot predict with certainty what impact any federal or state health reforms will have on us, but such changes could impose new or more stringent regulatory requirements on our activities or result in reduced reimbursement for our products, any of which could adversely affect our business, results of operations and financial condition. 42 Table of Contents Individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
Biggest changeMoreover, individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access, marketing cost disclosure, drug price reporting and other transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
We are currently party to several sub-licenses in various regions outside the United States, including Europe (excluding Russia and Ukraine), Australia, Canada, China, Southeast Asia, Israel, South Korea, and various countries and territories in Central America, South America, the Middle East and Africa. We depend on these third parties for a significant portion of our total revenue.
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. We depend on these third parties for a significant portion of our total revenue.
The NCCN designated NERLYNX in combination with capecitabine as a category 2A treatment option and NERLYNX in combination with paclitaxel as a category 2B treatment option. In addition, in December 2024, we announced that NCCN Clinical Practice Guidelines in Oncology (NCCN Guidelines®) for Cervical Cancer were updated to include an addition involving neratinib.
The NCCN designated NERLYNX in combination with capecitabine as a category 2A treatment option and NERLYNX in combination with paclitaxel as a category 2B treatment option. In addition, in December 2024, we announced that NCCN Clinical Practice Guidelines in Oncology for Cervical Cancer were updated to include an addition involving neratinib.
We have entered into exclusive sub-license agreements with several third parties that provide these sub-licensees exclusive rights to the development and commercialization of NERLYNX in Europe (excluding Russia and Ukraine), Australia, Canada, China, Southeast Asia, Israel, South Korea, and various countries and territories in Central America, South America, the Middle East and Africa.
We have entered into exclusive sub-license agreements with several third parties that provide these sub-licensees exclusive rights to the development and commercialization of NERLYNX in 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.
Auerbach resigns or becomes unable to continue in his present role and is not adequately replaced, our business operations could be materially adversely affected. We do not maintain “key man” life insurance for Mr. Auerbach.
Auerbach resigns or becomes unable to continue in his present role and is not adequately replaced, our business operations could be materially adversely affected. We do not maintain “key man” life insurance for Mr.
Clinical trials can be delayed for a variety of reasons, including delays related to: • the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical studies; • obtaining regulatory authorizations to commence a trial or reaching a consensus with regulatory authorities on trial design; • any failure or delay in reaching an agreement with CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • obtaining approval or a positive opinion from one or more institutional review boards (“IRBs”) or ethics committees; • IRBs refusing to approve, suspending or terminating the trial at an investigational site, precluding enrollment of additional subjects, or withdrawing their approval of the trial; • changes to clinical trial protocol; • clinical sites deviating from trial protocol or dropping out of a trial; • manufacturing sufficient quantities of drug candidate or obtaining sufficient quantities of combination therapies for use in clinical trials; • subjects failing to enroll or remain in our trial at the rate we expect, or failing to return for post- treatment follow-up; • subjects choosing an alternative treatment for the indication for which we are developing our drug candidates, or participating in competing clinical trials; • lack of adequate funding to continue the clinical trial; • subjects experiencing severe or unexpected drug-related adverse effects; • occurrence of serious adverse events in trials of the same class of agents conducted by other companies; • selection of clinical end points that require prolonged periods of clinical observation or analysis of the resulting data; • a facility manufacturing our drug candidates or any of their components being ordered by the FDA or comparable foreign regulatory authorities to temporarily or permanently shut down due to violations of current good manufacturing practice (“cGMP”), regulations or other applicable requirements, or infections or cross-contaminations of drug candidates in the manufacturing process; • any changes to our manufacturing process that may be necessary or desired; • third-party clinical investigators losing the licenses or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, GCP, or other regulatory requirements; • third-party contractors not performing data collection or analysis in a timely or accurate manner; or • third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or other foreign government or regulatory authorities for violations of regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of the data produced by such contractors in support of our marketing applications. 36 Table of Contents Further, we, the FDA, foreign regulatory authorities, or an IRB may suspend our clinical trials at any time if it appears that we or our collaborators are failing to conduct a trial in accordance with regulatory requirements, that we are exposing participants to unacceptable health risks, or if the FDA or such other foreign regulator finds deficiencies in our IND or comparable submissions supporting the conduct of these trials.
Clinical trials can be delayed for a variety of reasons, including delays related to: • the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical studies; • obtaining regulatory authorizations to commence a trial or reaching a consensus with regulatory authorities on trial design; • any failure or delay in reaching an agreement with CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • obtaining approval or a positive opinion from one or more institutional review boards (“IRBs”) or ethics committees; • IRBs refusing to approve, suspending or terminating the trial at an investigational site, precluding enrollment of additional subjects, or withdrawing their approval of the trial; • changes to clinical trial protocol; • clinical sites deviating from trial protocol or dropping out of a trial; • manufacturing sufficient quantities of drug candidate or obtaining sufficient quantities of combination therapies for use in clinical trials; • subjects failing to enroll or remain in our trial at the rate we expect, or failing to return for post- treatment follow-up; • subjects choosing an alternative treatment for the indication for which we are developing our drug candidates, or participating in competing clinical trials; • lack of adequate funding to continue the clinical trial; • subjects experiencing severe or unexpected drug-related adverse effects; • occurrence of serious adverse events in trials of the same class of agents conducted by other companies; • selection of clinical end points that require prolonged periods of clinical observation or analysis of the resulting data; • a facility manufacturing our drug candidates or any of their components being ordered by the FDA or comparable foreign regulatory authorities to temporarily or permanently shut down due to violations of current good manufacturing practice (“cGMP”), regulations or other applicable requirements, or infections or cross-contaminations of drug candidates in the manufacturing process; • any changes to our manufacturing process that may be necessary or desired; • third-party clinical investigators losing the licenses or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, GCP, or other regulatory requirements; • third-party contractors not performing data collection or analysis in a timely or accurate manner; or • third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or other foreign government or regulatory authorities for violations of regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of the data produced by such contractors in support of our marketing applications. 37 Table of Contents Further, we, the FDA, foreign regulatory authorities, or an IRB may suspend our clinical trials at any time if it appears that we or our collaborators are failing to conduct a trial in accordance with regulatory requirements, that we are exposing participants to unacceptable health risks, or if the FDA or such other foreign regulator finds deficiencies in our IND or comparable submissions supporting the conduct of these trials.
We believe our ability to effectively increase product revenue from NERLYNX depends on our ability to, among other things: • achieve and maintain compliance with regulatory requirements; 30 Table of Contents • create and sustain market demand for NERLYNX through our marketing and sales activities and other arrangements established for the promotion of NERLYNX; • compete with other breast cancer drugs, including clinical trials (either in the present or in the future); • educate physicians and patients about the benefits, administration and use of NERLYNX; • train, deploy and support a qualified sales force; • ensure and maintain appropriate placement on formularies and pathways; • ensure that our third-party manufacturers manufacture NERLYNX in sufficient quantities, in compliance with requirements of the FDA and similar foreign regulatory agencies where NERLYNX is approved, and at acceptable quality and pricing levels in order to meet commercial demand; • ensure that our third-party manufacturers develop, validate and maintain commercially viable manufacturing processes that are compliant with current Good Manufacturing Practice (“cGMP”) or similar foreign regulations; • maintain agreements with wholesalers, distributors and group purchasing organizations on commercially reasonable terms; • ensure that our entire supply chain efficiently and consistently delivers NERLYNX to our customers; • maintain broad levels of coverage and reimbursement for NERLYNX from commercial health plans and governmental health programs; • continue to provide co-pay assistance to help qualified patients with out-of-pocket costs associated with their NERLYNX prescription and/or other programs to ensure patient access to our products; • maintain acceptance of NERLYNX as safe and effective by patients and the medical community; • influence the nature and volume of publicity relative to our competitors’ products; • obtain regulatory approvals for additional indications for the use of neratinib; and • maintain and defend our patent protection and regulatory exclusivity for NERLYNX and to comply with our obligations under, and otherwise maintain, our intellectual property license with Pfizer and our license agreements with third parties.
We believe our ability to effectively increase product revenue from NERLYNX depends on our ability to, among other things: • achieve and maintain compliance with regulatory requirements; • create and sustain market demand for NERLYNX through our marketing and sales activities and other arrangements established for the promotion of NERLYNX; 31 Table of Contents • compete with other breast cancer drugs, including clinical trials (either in the present or in the future); • educate physicians and patients about the benefits, administration and use of NERLYNX; • train, deploy and support a qualified sales force; • ensure and maintain appropriate placement on formularies and pathways; • ensure that our third-party manufacturers manufacture NERLYNX in sufficient quantities, in compliance with requirements of the FDA and similar foreign regulatory agencies where NERLYNX is approved, and at acceptable quality and pricing levels in order to meet commercial demand; • ensure that our third-party manufacturers develop, validate and maintain commercially viable manufacturing processes that are compliant with current Good Manufacturing Practice (“cGMP”) or similar foreign regulations; • maintain agreements with wholesalers, distributors and group purchasing organizations on commercially reasonable terms; • ensure that our entire supply chain efficiently and consistently delivers NERLYNX to our customers; • maintain broad levels of coverage and reimbursement for NERLYNX from commercial health plans and governmental health programs; • continue to provide co-pay assistance to help qualified patients with out-of-pocket costs associated with their NERLYNX prescription and/or other programs to ensure patient access to our products; • maintain acceptance of NERLYNX as safe and effective by patients and the medical community; • influence the nature and volume of publicity relative to our competitors’ products; • obtain regulatory approvals for additional indications for the use of neratinib; and • maintain and defend our patent protection and regulatory exclusivity for NERLYNX and to comply with our obligations under, and otherwise maintain, our intellectual property license with Pfizer and our license agreements with third parties.
Our future capital requirements will depend on many factors, including: • the costs and expenses of our United States sales and marketing infrastructure, and of manufacturing; • the degree of success we experience in commercializing NERLYNX; • the revenue generated by the sale of NERLYNX and any other products that may be approved; • the costs, timing and outcomes of clinical trials and regulatory reviews associated with developing neratinib for additional indications, alisertib and our other drug candidates; • the emergence of competing products; • the extent to which NERLYNX or any other drug candidates we develop are adopted by the physician community and patients; • the number and types of future drug candidates we develop and commercialize; • the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims; • the costs of operating as a public company and compliance with existing and future regulations; and • the extent and scope of our general and administrative expenses. 31 Table of Contents While our consolidated financial statements have been prepared on a going concern basis, we expect to incur significant losses for the foreseeable future and will continue to remain dependent on our ability to obtain sufficient funding to sustain operations and successfully commercialize NERLYNX and develop alisertib.
Our future capital requirements will depend on many factors, including: • the costs and expenses of our United States sales and marketing infrastructure, and of manufacturing; • the degree of success we experience in commercializing NERLYNX; • the revenue generated by the sale of NERLYNX and any other products that may be approved; • the costs, timing and outcomes of clinical trials and regulatory reviews associated with developing neratinib for additional indications, alisertib and our other drug candidates; • the emergence of competing products; • the extent to which NERLYNX or any other drug candidates we develop are adopted by the physician community and patients; • the number and types of future drug candidates we develop and commercialize; • the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims; • the costs of operating as a public company and compliance with existing and future regulations; and • the extent and scope of our general and administrative expenses. 32 Table of Contents While our consolidated financial statements have been prepared on a going concern basis, we expect to incur significant losses for the foreseeable future and will continue to remain dependent on our ability to obtain sufficient funding to sustain operations and successfully commercialize NERLYNX and develop alisertib.
Any of these occurrences may harm our business, financial condition and prospects significantly. 33 Table of Contents Additionally, if we or others later identify undesirable side effects caused by any approved product, including in combination with other approved products or investigational new drugs, a number of potentially significant negative consequences could result, including: • regulatory authorities may withdraw approvals of such product; • regulatory authorities may require additional warnings on the label; • we may be required to suspend marketing of a product, or we may decide to remove such product from the marketplace; • we may be required to create a medication guide outlining the risks of such side effects for distribution to patients; • we could be subject to fines, injunctions, or the imposition of criminal or civil penalties, or be sued and held liable for harm caused to patients; and • our reputation may suffer.
Any of these occurrences may harm our business, financial condition and prospects significantly. 34 Table of Contents Additionally, if we or others later identify undesirable side effects caused by any approved product, including in combination with other approved products or investigational new drugs, a number of potentially significant negative consequences could result, including: • regulatory authorities may withdraw approvals of such product; • regulatory authorities may require additional warnings on the label; • we may be required to suspend marketing of a product, or we may decide to remove such product from the marketplace; • we may be required to create a medication guide outlining the risks of such side effects for distribution to patients; • we could be subject to fines, injunctions, or the imposition of criminal or civil penalties, or be sued and held liable for harm caused to patients; and • our reputation may suffer.
Any potential future acquisitions or in-licensing transactions entail numerous risks, including but not limited to: • risks associated with satisfying the closing conditions relating to such transactions and realizing their anticipated benefits; • increased operating expenses and cash requirements; • difficulty integrating acquired technologies, products, operations, and personnel with our existing business; • the potential disruption of our historical core business; • diversion of management’s attention in connection with both negotiating the acquisition or license and integrating the business, technology or product; • retention of key employees; • difficulties in assimilating employees and corporate cultures of any acquired companies; • uncertainties in our ability to maintain key business relationships of any acquired companies; • strain on managerial and operational resources; • difficulty implementing and maintaining effective internal control over financial reporting at businesses that we acquire, particularly if they are not located near our existing operations; • exposure to unanticipated liabilities of acquired companies or companies in which we invest; • the potential need to write down assets or recognize impairment charges; and • potential costly and time-consuming litigation, including stockholder lawsuits.
Any potential future acquisitions or in-licensing transactions entail numerous risks, including but not limited to: • risks associated with satisfying the closing conditions relating to such transactions and realizing their anticipated benefits; • increased operating expenses and cash requirements; • difficulty integrating acquired technologies, products, operations, and personnel with our existing business; • the potential disruption of our historical core business; • diversion of management’s attention in connection with both negotiating the acquisition or license and integrating the business, technology or product; • retention of key employees; 52 Table of Contents • difficulties in assimilating employees and corporate cultures of any acquired companies; • uncertainties in our ability to maintain key business relationships of any acquired companies; • strain on managerial and operational resources; • difficulty implementing and maintaining effective internal control over financial reporting at businesses that we acquire, particularly if they are not located near our existing operations; • exposure to unanticipated liabilities of acquired companies or companies in which we invest; • the potential need to write down assets or recognize impairment charges; and • potential costly and time-consuming litigation, including stockholder lawsuits.
The degree of market acceptance of NERLYNX and will depend on a number of factors, including: • the timing of our receipt of any additional marketing approvals; • the terms of any approvals and the countries in which approvals are obtained; • the efficacy and safety and potential advantages and disadvantages compared to alternative treatments; • the prevalence and severity of any side effects associated with our products; • the additional indications for which our products are approved; • adverse publicity about our products or favorable publicity about competing products; • the approval of other products for the same indications as our products; • our ability to offer our products for sale at competitive prices; • the convenience and ease of administration compared to alternative treatments; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the success of our physician education programs; • the strength of our marketing and distribution support; • the availability of third-party coverage and adequate reimbursement, including patient cost-sharing programs such as copays and deductibles; and • any restrictions on the use of our products together with other medications.
The degree of market acceptance of NERLYNX and will depend on a number of factors, including: • the timing of our receipt of any additional marketing approvals; • the terms of any approvals and the countries in which approvals are obtained; • the efficacy and safety and potential advantages and disadvantages compared to alternative treatments; • the prevalence and severity of any side effects associated with our products; • the additional indications for which our products are approved; • adverse publicity about our products or favorable publicity about competing products; • the approval of other products for the same indications as our products; • our ability to offer our products for sale at competitive prices; • the convenience and ease of administration compared to alternative treatments; 40 Table of Contents • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the success of our physician education programs; • the strength of our marketing and distribution support; • the availability of third-party coverage and adequate reimbursement, including patient cost-sharing programs such as copays and deductibles; and • any restrictions on the use of our products together with other medications.
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare, with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); redesigns the Medicare Part D benefit (beginning in 2024); and replaces the Part D coverage gap discount program with a new manufacturer discount program (beginning in 2025).
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare, with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); redesigns the Medicare Part D benefit (beginning in 2024); and replaces the Part D coverage gap discount program with a new manufacturer discount program (which began in 2025).
There are numerous risks associated with our planned development alisertib, including, among others: • We have limited experience developing alisertib; 32 Table of Contents • The results of pre-clinical studies and early clinical studies of alisertib may not be predictive of later clinical studies, and success in previous stages cannot ensure positive outcome of future stages of clinical studies; • Alisertib may fail to show the desired pharmacological properties or safety and efficacy traits despite having progressed through pre-clinical studies and early clinical studies; • Even if we complete clinical development of alisertib, the results may not be sufficient to obtain regulatory approval in the United States or other countries; • Our license agreement with Takeda may be terminated by Takeda if we materially breach the agreement, in which case we would lose all rights to develop and commercialize alisertib; • We plan to rely on third party contractors to formulate and manufacture alisertib for clinical trials and these third-party contractors may be unable to formulate and manufacture alisertib in the volume and quality we require; • We plan to rely on third-party contractors to conduct our clinical trials of alisertib and if those parties fail to perform their services within expected timelines or fail to comply with regulatory requirements, our development efforts could be delayed; • Clinical trials are expensive, time-consuming and difficult to design and implement; and • Development of alisertib could distract management’s attention from other important aspects of our business.
There are numerous risks associated with our planned development alisertib, including the following: • We have limited experience developing alisertib; • The results of pre-clinical studies and early clinical studies of alisertib may not be predictive of later clinical studies, and success in previous stages cannot ensure positive outcome of future stages of clinical studies; • Alisertib may fail to show the desired pharmacological properties or safety and efficacy traits despite having progressed through pre-clinical studies and early clinical studies; 33 Table of Contents • Even if we complete clinical development of alisertib, the results may not be sufficient to obtain regulatory approval in the United States or other countries; • Our license agreement with Takeda may be terminated by Takeda if we materially breach the agreement, in which case we would lose all rights to develop and commercialize alisertib; • We plan to rely on third party contractors to formulate and manufacture alisertib for clinical trials and these third-party contractors may be unable to formulate and manufacture alisertib in the volume and quality we require; • We plan to rely on third-party contractors to conduct our clinical trials of alisertib and if those parties fail to perform their services within expected timelines or fail to comply with regulatory requirements, our development efforts could be delayed; • Clinical trials are expensive, time-consuming and difficult to design and implement; and • Development of alisertib could distract management’s attention from other important aspects of our business.
A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation.; 43 Table of Contents • federal false claims laws, including, without limitation, the False Claims Act, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other federal third-party payors that are false or fraudulent, such as engaging in improper promotion of products or submitting inaccurate price reports to the Medicaid Drug Rebate program.
A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation; • federal false claims laws, including, without limitation, the False Claims Act, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other federal third-party payors that are false or fraudulent, such as engaging in improper promotion of products or submitting inaccurate price reports to the Medicaid Drug Rebate program.
In addition to the FDA or foreign regulatory authorities approval required for new formulations, any new indication for an approved product also requires FDA or foreign regulatory authorities approval.
In addition to the FDA or foreign regulatory authorities approval required for new formulations, any new indication for an approved product also requires FDA or foreign regulatory authorities' approval.
As of December 31, 2024, NERLYNX has received approval for the treatment of certain patients with extended adjuvant and/or metastatic HER2-positive breast cancer in more th an 40 count ries outside the United States, including the EU, Australia, Canada, and Hong Kong.
As of December 31, 2025, NERLYNX has received approval for the treatment of certain patients with extended adjuvant and/or metastatic HER2-positive breast cancer in more th an 40 count ries outside the United States, including the EU, Australia, Canada, and Hong Kong.
While we experienced profitability in 2024, 2023 and 2022, we may incur operating losses in the future as we continue our efforts to commercialize NERLYNX in existing indications and to develop neratinib for additional indications, and as we commence development efforts for alisertib and any other drug candidates we may acquire.
While we experienced profitability in 2025, 2024 and 2023, we may incur operating losses in the future as we continue our efforts to commercialize NERLYNX in existing indications and to develop neratinib for additional indications, and as we commence development efforts for alisertib and any other drug candidates we may acquire.
Therefore, failure to obtain regulatory approval of alisertib or our other drug candidates will limit our commercial revenue. 34 Table of Contents In addition, FDA and foreign regulatory authorities may change their approval policies and new regulations may be enacted.
Therefore, failure to obtain regulatory approval of alisertib or our other drug candidates will limit our commercial revenue. 35 Table of Contents In addition, FDA and foreign regulatory authorities may change their approval policies and new regulations may be enacted.
In order to eliminate the burden, expense, distraction and uncertaintie s of litigation, we entered a settlement and license agreement in 2022 that would permit Sandoz to begin selling a generic version of neratinib in the United States on or around December 8, 2030. 53 Table of Contents We may not be able to protect our intellectual property rights throughout the world.
In order to eliminate the burden, expense, distraction and uncertaintie s of litigation, we entered a settlement and license agreement in 2022 that would permit Sandoz to begin selling a generic version of neratinib in the United States on or around December 8, 2030. We may not be able to protect our intellectual property rights throughout the world.
To the extent economic challenges result in fewer individuals pursuing or being able to afford our products once commercialized, our business, results of operations, financial condition and cash flows could be adversely affected. 51 Table of Contents We may incur substantial liabilities and may be required to limit commercialization of our products in response to product liability lawsuits and product recalls.
To the extent economic challenges result in fewer individuals pursuing or being able to afford our products once commercialized, our business, results of operations, financial condition and cash flows could be adversely affected. We may incur substantial liabilities and may be required to limit commercialization of our products in response to product liability lawsuits and product recalls.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or systems, or inappropriate disclosure of confidential or proprietary or personal information, we could incur liability, including litigation exposure, penalties and fines, we could become the subject of regulatory action or investigation, our competitive position could be harmed and the further development and commercialization of our products and services could be delayed.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or systems, or inappropriate disclosure of confidential or proprietary or personal information, we could incur liability, such as litigation exposure (including class actions), penalties and fines, we could become the subject of regulatory action or investigation, our competitive position could be harmed and the further development and commercialization of our products and services could be delayed.
Even if we successfully defend any such claims, we may incur substantial costs in such defense, and our management may be distracted by these claims. Risks Related to Owning our Common Stock The price of our common stock could be subject to volatility related or unrelated to our operations.
Even if we successfully defend any such claims, we may incur substantial costs in such defense, and our management may be distracted by these claims. 55 Table of Contents Risks Related to Owning our Common Stock The price of our common stock could be subject to volatility related or unrelated to our operations.
Additionally, we may decide to settle such lawsuits on similarly unfavorable terms, which could adversely affect our business, financial condition, results of operations or stock price. 55 Table of Contents Issuance of stock to fund our operations may dilute your investment and reduce your equity interest.
Additionally, we may decide to settle such lawsuits on similarly unfavorable terms, which could adversely affect our business, financial condition, results of operations or stock price. Issuance of stock to fund our operations may dilute your investment and reduce your equity interest.
GDPR imposes stringent data protection obligations for processors and controllers of personal data, and penalties and fines for failure to comply with GDPR are significant, including fines of up to €20 million or 4% of total worldwide annual turnover, whichever is greater.
The GDPR imposes stringent data protection obligations for processors and controllers of personal data, and penalties and fines for failure to comply with GDPR are significant, including fines of up to €20 million / £17.5 million or 4% of total worldwide annual turnover, whichever is greater.
Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques – including artificial intelligence – that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
If our products fail to capture and maintain market share, we may not achieve sufficient product revenue and our business will suffer. 50 Table of Contents We compete against fully integrated pharmaceutical companies and smaller companies that are collaborating with larger pharmaceutical companies, academic institutions, government agencies and other public and private research organizations.
If our products fail to capture and maintain market share, we may not achieve sufficient product revenue and our business will suffer. We compete against fully integrated pharmaceutical companies and smaller companies that are collaborating with larger pharmaceutical companies, academic institutions, government agencies and other public and private research organizations.
If we do not maintain sales, marketing and distribution capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our products. We are exposed to the risks associated with reliance on a direct sales force to commercialize NERLYNX in the United States.
If we do not maintain sales, marketing and distribution capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our products. 39 Table of Contents We are exposed to the risks associated with reliance on a direct sales force to commercialize NERLYNX in the United States.
There can be no assurances that we will be able to obtain such designations. Even if we, or any future collaborators, obtain orphan drug designation for a drug candidate, we, or they, may not be able to obtain or maintain orphan drug exclusivity for that drug candidate.
We may decide to seek Orphan Drug Designations for alisertib. There can be no assurances that we will be able to obtain such designations. Even if we, or any future collaborators, obtain orphan drug designation for a drug candidate, we, or they, may not be able to obtain or maintain orphan drug exclusivity for that drug candidate.
Moreover, potential changes in the tax law or in our projections could impact our assessment and valuation allowance estimates, which could have a material adverse effect on our business, financial condition and results of operations.
Moreover, potential changes in the tax law or in our projections could impact our assessment and valuation allowance estimates, which could have a material adverse effect on our business, financial condition and results of operations. 57 Table of Contents
Our internal computer systems and those of third parties with which we contract may be vulnerable to damage from cyberattacks, “phishing” attacks and other social engineering schemes, employee theft or misuse, human error, fraud, denial or degradation of service attacks, computer viruses, malware (e.g. ransomware), sophisticated nation-state and nation-state-supported actors, unauthorized access or use by persons inside our organization or persons with access to systems inside our organization, hacking, natural disasters, terrorism, war and telecommunication and electrical failures despite the implementation of security measures.
Our information technology systems and those of third parties with which we contract may be vulnerable to damage from diverse threat vectors, including cyberattacks, “phishing” attacks and other social engineering schemes, employee theft or misuse, human error, fraud, denial or degradation of service attacks, computer viruses, malware (e.g. ransomware), sophisticated nation-state and nation-state-supported actors, unauthorized access or use by persons inside our organization or persons with access to systems inside our organization, hacking, natural disasters, terrorism, war and telecommunication and electrical failures despite the implementation of security measures.
We had total revenue for N ERLYNX of $ 230.5 million, $ 235.6 million and $ 228.0 million for the years ended December 31, 2024, 2023 and 2022, respective ly. We cannot assure you that the sales of NERLYNX will continue at these levels or grow.
We had total revenue for N ERLYNX of $ 228.4 million, $ 230.5 million and $ 235.6 million for the years ended December 31, 2025, 2024 and 2023, respective ly. We cannot assure you that the sales of NERLYNX will continue at these levels or grow.
On January 2, 2013, the American Taxpayer Relief Act of 2012, among other things, also reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
The American Taxpayer Relief Act of 2012, among other things, also reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
While we have reported net income in the years ended December 31, 2024, 2023 and 2022, we cannot assure that we will continue to do so and will need to continue to generate significant revenue to sustain operations and successfully commercialize neratinib and develop alisertib.
While we have reported net income in recent years, including the years ended December 31, 2025, 2024 and 2023, we cannot assure that we will continue to do so and will need to continue to generate significant revenue to sustain operations and successfully commercialize neratinib and develop alisertib.
Further, even if we, or any future collaborators, obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs with different active ingredients may be approved for the same disease or condition.
Further, even if we, or any future collaborators, obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs with different active ingredients may be approved for the same indication or use within the same rare disease or condition.
If a third-party claims that we infringe its intellectual property rights, it could cause our business to suffer in a number of ways, including: • we may become involved in time-consuming and expensive litigation, even if the claim is without merit, the third party’s patent is ultimately invalid or unenforceable, or we are ultimately found to have not infringed; • we may become liable for substantial damages for past infringement if a court decides that our technologies infringe upon a third party’s patent; • we may be ordered by a court to stop making, using, selling, offering for sale, importing or licensing our products or technologies without a license from a patent holder, and such license may not be available on commercially acceptable terms, if at all, or may require us to pay substantial royalties or grant cross-licenses to our patents; and • we may have to redesign our products so that they do not infringe upon others’ patent rights, which may not be possible or could require substantial investment and/or time. 54 Table of Contents If any of these events occur, our business could suffer, and the market price of our common stock may decline.
If a third-party claims that we infringe its intellectual property rights, it could cause our business to suffer in a number of ways, including: • we may become involved in time-consuming and expensive litigation, even if the claim is without merit, the third party’s patent is ultimately invalid or unenforceable, or we are ultimately found to have not infringed; • we may become liable for substantial damages for past infringement if a court decides that our technologies infringe upon a third party’s patent; • we may be ordered by a court to stop making, using, selling, offering for sale, importing or licensing our products or technologies without a license from a patent holder, and such license may not be available on commercially acceptable terms, if at all, or may require us to pay substantial royalties or grant cross-licenses to our patents; and • we may have to redesign our products so that they do not infringe upon others’ patent rights, which may not be possible or could require substantial investment and/or time.
The IRA permits the Secretary of the Department of Health and Human Services (“HHS”) to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented, although the Medicare drug price negotiation program is currently subject to legal challenges.
The IRA permits the Secretary of the HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented, although the Medicare drug price negotiation program is currently subject to legal challenges.
Even after an orphan drug is approved, the FDA can subsequently approve the same drug for the same disease or condition if the FDA concludes that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care, or the manufacturer of the product with orphan exclusivity is unable to maintain sufficient product quantity.
Even after an orphan drug is approved, the FDA can subsequently approve the same drug for the same disease or condition if the FDA concludes that the later drug is clinically superior in the relevant indication, in that it is shown to be safer, more effective or makes a major contribution to patient care, or the manufacturer of the product with orphan exclusivity is unable to maintain sufficient product quantity to meet the needs of the approved indication or use for the patients with the relevant disease or condition.
The GDPR is directly applicable in each European Union and EEA member state and applies to companies established in the European Union and the EEA as well as companies that collect and use personal data to offer goods or services to, or monitor the behavior of, individuals in the European Union and the EEA.
The GDPR is directly applicable in each EU and EEA member state and the UK and applies to companies established in the EU and the EEA or UK as well as companies that collect and use personal data to offer goods or services to, or monitor the behavior of, individuals in the EU and the EEA or UK.
For example, we cannot predict: • the degree and range of protection any patents will afford us against competitors, including whether third parties will find ways to make, use, sell, offer to sell or import competitive products without infringing our patents; • if and when patents will issue; • whether or not others will obtain patents claiming inventions similar to those covered by our patents and patent applications; or • whether we will need to initiate litigation or administrative proceedings in connection with patent rights, which may be costly whether we win or lose, and the outcome of which is unpredictable.
For example, we cannot predict: • the degree and range of protection any patents will afford us against competitors, including whether third parties will find ways to make, use, sell, offer to sell or import competitive products without infringing our patents; • if and when patents will issue; • whether or not others will obtain patents claiming inventions similar to those covered by our patents and patent applications; or • whether we will need to initiate litigation or administrative proceedings in connection with patent rights, which may be costly whether we win or lose, and the outcome of which is unpredictable. 53 Table of Contents The patents we have licensed may be challenged by third parties and could be invalidated or rendered unenforceable.
In March 2010, the Affordable Care Act ( “ ACA ” ) became law in the U nited States. The ACA substantially changed the way healthcare is financed by both governmental and private insurers and significantly affects the pharmaceutical industry.
In March 2010, the ACA became law in the U nited States. The ACA substantially changed the way healthcare is financed by both governmental and private insurers and significantly affects the pharmaceutical industry.
Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, which could negatively impact our business.
Disruptions at the FDA and other government agencies caused by funding shortages, staffing limitations or policy changes could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, which could negatively impact our business.
We anticipate that these increased discounts will impact NERLYNX revenues over time, while also having an industry-wide impact on the patient out-of-pocket costs of Part D drugs.
We anticipate that these increased discounts will impact NERLYNX revenues over time, while also having an industry-wide impact on the cost of Part D drugs.
Risks Related to our Financial Condition and Capital Requirements While we have reported net income in the years ended December 31, 2024, 2023 and 2022, we cannot assure that we will continue to do so and may not be able to maintain profitability. We have incurred significant cumulative operating losses since our inception.
Risks Related to our Financial Condition and Capital Requirements While we have reported net income in recent years, we cannot assure that we will continue to do so and may not be able to maintain profitability. We have incurred significant cumulative operating losses since our inception.
Included in the omnibus bill is the Food and Drug Omnibus Reform Act of 2022, which among other things, provided FDA statutory authority to mitigate potential risks to patients from continued marketing of ineffective drugs previously granted accelerated approval.
In addition, the Food and Drug Omnibus Reform Act of 2022, among other things, provided the FDA with additional statutory authority to mitigate potential risks to patients from continued marketing of ineffective drugs previously granted accelerated approval.
If we are unable to obtain such approval, we may be required to conduct additional preclinical studies or clinical trials beyond those that we contemplate, which could increase the expense of obtaining, and delay the receipt of, necessary regulatory approvals.
We may attempt to secure approval from the FDA through the use of the accelerated approval pathway. If we are unable to obtain such approval, we may be required to conduct additional preclinical studies or clinical trials beyond those that we contemplate, which could increase the expense of obtaining, and delay the receipt of, necessary regulatory approvals.
If our third-party manufacturers are unable to produce the required commercial quantities of NERLYNX to meet market demand for NERLYNX on a timely basis or at all, or if they fail to comply with applicable laws for the manufacturing of NERLYNX, we will suffer damage to our reputation and commercial prospects and we will lose potential revenue. 46 Table of Contents We rely on third parties to conduct our pre-clinical studies and clinical trials.
If our third-party manufacturers are unable to produce the required commercial quantities of NERLYNX to meet market demand for NERLYNX on a timely basis or at all, or if they fail to comply with applicable laws for the manufacturing of NERLYNX, we will suffer damage to our reputation and commercial prospects and we will lose potential revenue.
In addition, if a drug candidate that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications, including an NDA, to market the same drug for the same disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or where the manufacturer is unable to assure sufficient product quantity. 41 Table of Contents We may decide to seek Orphan Drug Designations for alisertib.
In addition, if a drug candidate that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications, including an NDA, to market the same drug for the same approved indication or use within the same rare disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity in the relevant indication or use or where the manufacturer is unable to assure sufficient product quantity.
Engaging in international business inherently involves a number of difficulties and risks, including: • competition from established companies, many of which are well-positioned within their local markets with longer operating histories, more recognizable names and better established distribution networks; • the availability and level of coverage and reimbursement within prevailing foreign healthcare payment systems and the ability of patients to elect to privately pay for NERLYNX and, if approved, alisertib and our other products; • difficulties in enforcing intellectual property rights; • pricing pressure; • required compliance with existing and changing foreign regulatory requirements and laws; • laws and business practices favoring local companies; • longer sales and payment cycles; • difficulties in enforcing agreements and collecting receivables through certain foreign legal systems; • political and economic instability; • foreign currency risks that could adversely affect our financial results; • potentially adverse tax consequences, tariffs and other trade barriers; • exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S.
Engaging in international business inherently involves a number of difficulties and risks, including: • competition from established companies, many of which are well-positioned within their local markets with longer operating histories, more recognizable names and better established distribution networks; • the availability and level of coverage and reimbursement within prevailing foreign healthcare payment systems and the ability of patients to elect to privately pay for NERLYNX and, if approved, alisertib and our other products; • difficulties in enforcing intellectual property rights; • pricing pressure; • required compliance with existing and changing foreign regulatory requirements and laws; • laws and business practices favoring local companies; • longer sales and payment cycles; • difficulties in enforcing agreements and collecting receivables through certain foreign legal systems; • political and economic instability, including trade wars, the military conflicts between Russia and Ukraine, the conflicts between Israel and Hamas, recent inflation and disruptions in the capital and credit markets that may reduce our ability to raise additional capital when needed on acceptable terms, if at all; 48 Table of Contents • foreign currency risks that could adversely affect our financial results; • potentially adverse tax consequences, tariffs and other trade barriers; • exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S.
For the years ended December 31, 2024, 2023 and 2022, royalty revenue f rom these sub-licensees was $35.3 million, $32.5 million and $28.0 million, respectively, and represented 15% , 14% and 12% of total revenue, respectively.
For the years ended December 31, 2025, 2024 and 2023, royalty revenue f rom these sub-licensees was $24.3 million, $35.3 million and $32.5 million, respectively, and represented 11% , 15% and 14% of total revenue, respectively.
The IRA allows the 10 and 20 percent discounts to be phased in over time for certain drugs for “specified manufacturers.” In April 2024, CMS informed us that we are deemed a specified small manufacturer and the discount will be phased in over several years and will increase over time.
The IRA allows the 10 and 20 percent discounts to be phased in over time for certain drugs for manufacturers that CMS deems to meet specific criteria. In April 2024, CMS informed us that we are deemed a specified small manufacturer, and as a result, the discounts will be phased in over several years and will increase over time.
As of December 31, 2024, the aggregate principal amount outstanding under the notes sold pursuant to the Note Purchase Agreement (collectively, the “Athyrium Notes”) was $66.7 million.
As of December 31, 2025, the aggregate principal amount outstanding under the notes sold pursuant to the Note Purchase Agreement (collectively, the “Athyrium Notes”) was $22.5 million.
Royalty revenue obtained pursuant to these sub-license agreements was 15% , 14% and 12% of total revenue for the years ended December 31, 2024, 2023 and 2022, respectively.
Royalty revenue obtained pursuant to these sub-license agreements was 11% and 15% of total revenue for the years ended December 31, 2025 and 2024 , respectively.
If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval for our drug candidates.
We rely on third parties to conduct our pre-clinical studies and clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval for our drug candidates.
This risk is especially relevant for us because pharmaceutical companies have experienced significant stock price volatility in recent years. These types of lawsuits are subject to inherent uncertainties, and are expensive and time-consuming to investigate, defend and resolve. For instance, in Hsu v.
This risk is especially relevant for us because pharmaceutical companies have experienced significant stock price volatility in recent years. These types of lawsuits are subject to inherent uncertainties, and are expensive and time-consuming to investigate, defend and resolve, and in the past, we have been a defendant in such lawsuits.
There are risks with establishing, growing and maintaining our own sales and marketing capabilities, including: • the expense and time required to recruit and train a sales force; • our inability to recruit, retain or motivate adequate numbers of effective and qualified sales and marketing personnel; • the inability to provide adequate training to sales and marketing personnel; • the need to train our sales force to ensure that a consistent and appropriate message about NERLYNX is being delivered to our potential customers; • the inability of sales personnel to obtain access to physicians or convince adequate numbers of physicians to prescribe any product; • our inability to equip the sales force with effective materials, including medical and sales literature, to help them inform and educate physicians and patients about the benefits of NERLYNX and its proper administration; and • unforeseen costs and expenses associated with maintaining an independent sales and marketing organization. 38 Table of Contents If we are unable to effectively address these risks, our efforts to commercialize NERLYNX successfully could be harmed, which would negatively impact our ability to generate product revenue.
There are risks with establishing, growing and maintaining our own sales and marketing capabilities, including: • the expense and time required to recruit and train a sales force; • our inability to recruit, retain or motivate adequate numbers of effective and qualified sales and marketing personnel; • the inability to provide adequate training to sales and marketing personnel; • the need to train our sales force to ensure that a consistent and appropriate message about NERLYNX is being delivered to our potential customers; • the inability of sales personnel to obtain access to physicians or convince adequate numbers of physicians to prescribe any product; • our inability to equip the sales force with effective materials, including medical and sales literature, to help them inform and educate physicians and patients about the benefits of NERLYNX and its proper administration; and • unforeseen costs and expenses associated with maintaining an independent sales and marketing organization.
If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business. 35 Table of Contents Clinical trials are very expensive, time-consuming and difficult to design and implement.
If a prolonged government shutdown occurs, or if funding shortages, staffing limitations or similar factors hinder or prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, such events could significantly impact the ability of the FDA or other such regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business. 36 Table of Contents Clinical trials are very expensive, time-consuming and difficult to design and implement.
We also employ law firms and other reputable professionals to assist us in the event an inadvertent lapse can be cured by payment of a late fee or by other means according to the applicable jurisdictional laws and rules.
We have systems in place and employ third-party firms to monitor due dates and pay these fees. We also employ law firms and other reputable professionals to assist us in the event an inadvertent lapse can be cured by payment of a late fee or by other means according to the applicable jurisdictional laws and rules.
Similar laws have been passed in other states and are continuing to be proposed at the state and federal level, reflecting a trend toward more stringent privacy legislation in the United States. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging.
Similar laws have been passed in other states, reflecting a trend toward more stringent privacy legislation in the United States. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging.
Furthermore, the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval, which may lead to the FDA or comparable foreign regulatory authorities delaying, limiting or denying approval of our drug candidates. 37 Table of Contents We may attempt to secure approval from the FDA through the use of the accelerated approval pathway.
Furthermore, the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval, which may lead to the FDA or comparable foreign regulatory authorities delaying, limiting or denying approval of our drug candidates.
We are subject to federal, state and foreign healthcare fraud and abuse laws, false claims laws and physician payment transparency laws. Failure to comply with these laws may subject us to substantial penalties. We do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party payors.
Failure to comply with these laws may subject us to substantial penalties. We do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party payors.
If we are unable to hire additional qualified personnel, our ability to grow our business may be harmed As of December 31, 2024, we had 172 employees. Our future success depends on our ability to identify, attract, hire, train, retain and motivate other highly skilled scientific, technical, marketing, managerial and financial personnel.
Auerbach. 51 Table of Contents If we are unable to hire additional qualified personnel, our ability to grow our business may be harmed As of December 31, 2025, we h ad 179 emplo yees. Our future success depends on our ability to identify, attract, hire, train, retain and motivate other highly skilled scientific, technical, marketing, managerial and financial personnel.
If we fail to successfully secure and maintain adequate coverage and reimbursement for our products or are significantly delayed in doing so, we will have difficulty achieving market acceptance of our products and expected revenue and profitability which would have a material adverse effect on our business, results of operations and financial condition.
If we fail to successfully secure and maintain adequate coverage and reimbursement for our products or are significantly delayed in doing so, we will have difficulty achieving market acceptance of our products and expected revenue and profitability which would have a material adverse effect on our business, results of operations and financial condition. 44 Table of Contents We are subject to federal, state and foreign healthcare fraud and abuse laws, false claims laws and physician payment transparency laws.
As a result, you should not rely on an investment in our securities if you require dividend income. Capital appreciation, if any, of our shares may be your sole source of gain for the foreseeable future.
As a result, you should not rely on an investment in our securities if you require dividend income. Capital appreciation, if any, of our shares may be your sole source of gain for the foreseeable future. Moreover, you may not be able to re-sell your shares in us at or above the price you paid for them.
As of December 31, 2024, we had an accumulated deficit of approximately $1,314.9 million, outstanding indebtedness of approximately $67.0 million and cash and cash equivalents and marketable securities of approximately $101.0 million. We expect to continue to incur significant expenses and may incur net losses in the future.
As of December 31, 2025, we had an accumulated deficit of approximately $1,283.8 million, outstanding indebtedness of approximately $22.5 million and cash and cash equivalents and marketable securities of approximately $97.5 million. We expect to continue to incur significant expenses and may incur net losses in the future.
We have no experience in drug formulation or manufacturing and do not intend to establish our own manufacturing facilities. We lack the resources and expertise to formulate or manufacture NERLYNX, alisertib and other potential drug candidates. While our drug candidates were developed by Pfizer and Takeda, both the drug substance and drug product are manufactured by third-party contractors.
We lack the resources and expertise to formulate or manufacture NERLYNX, alisertib and other potential drug candidates. While our drug candidates were developed by Pfizer and Takeda, both the drug substance and drug product are manufactured by third-party contractors.
In the event that CMS were to terminate our Medicaid rebate agreement, no federal payments would be available under Medicaid or Medicare for our covered outpatient drugs. We cannot assure you that our submissions will not be found to be incomplete or incorrect.
In the event that CMS were to terminate our Medicaid rebate agreement, no federal payments would be available under Medicaid or Medicare for our covered outpatient drugs.
The patents we have licensed may be challenged by third parties and could be invalidated or rendered unenforceable. There is no guarantee that a court would agree that any of the patents we have licensed, and which are currently in force, are valid or enforceable.
There is no guarantee that a court would agree that any of the patents we have licensed, and which are currently in force, are valid or enforceable.
While physicians in the United States and outside the United States may choose, and are generally permitted, to prescribe drugs for uses that are not described in the product’s labeling and for uses that differ from those tested in clinical trials and approved by the regulatory authorities, our ability to promote the products is narrowly limited to those indications that are specifically approved by the FDA or foreign regulatory authorities.
If we are not able to obtain FDA approval for any desired future indications for our drugs and drug candidates, our ability to effectively market and sell our products may be reduced and our business may be adversely affected. 41 Table of Contents While physicians in the United States and outside the United States may choose, and are generally permitted, to prescribe drugs for uses that are not described in the product’s labeling and for uses that differ from those tested in clinical trials and approved by the regulatory authorities, our ability to promote the products is narrowly limited to those indications that are specifically approved by the FDA or foreign regulatory authorities.
Upon the exercise of our outstanding warrant, holders of our common stock may experience immediate dilution and the market price of our common stock may be adversely affected. Our founder, Chief Executive Officer and President, Alan H. Auerbach, holds a warrant for 2,116,250 shares with an exercise price of $16.00 per share.
Our founder, Chief Executive Officer and President, Alan H. Auerbach, holds a warrant for 2,116,250 shares with an exercise price of $16.00 per share.
As is common in the biotechnology and pharmaceutical industries, we employ individuals who were previously employed at other companies in these industries, including our competitors or potential competitors.
If any of these events occur, our business could suffer, and the market price of our common stock may decline. As is common in the biotechnology and pharmaceutical industries, we employ individuals who were previously employed at other companies in these industries, including our competitors or potential competitors.
If we fail to comply with our reporting and payment obligations under the Medicaid Drug Rebate Program or other governmental pricing programs in the United States, we could be subject to additional reimbursement requirements, penalties, sanctions and fines, which could have a material adverse effect on our business, results of operations and financial condition.
Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. 45 Table of Contents If we fail to comply with our reporting and payment obligations under the Medicaid Drug Rebate Program or other governmental pricing programs in the United States, we could be subject to additional reimbursement requirements, penalties, sanctions and fines, which could have a material adverse effect on our business, results of operations and financial condition.
For the year ended December 31, 2024, we released $7.1 million of our valuation allowance related to deferred tax assets, and recorded a valuation allowance of $343.5 million as of December 31, 2024. See Note 12–Income Taxes in the notes to the financial statements included in this Annual Report for further information.
For the year ended December 31, 2025, we recorded a partial release of $3.8 milli on of our valuation allowance related to deferred tax assets, resulting in a total valuation allowance o f $324.8 million as of December 31, 2025. See Note 12–Income Taxes in the notes to the financial statements included in this Annual Report for further information.
U.S. Centers for Medicare & Medicaid Services (“CMS”) has published the negotiated prices for the initial 10 drugs, which will first be effective in 2026, and has published the list of the subsequent 15 drugs that will be subject to negotiation.
The Centers for Medicare & Medicaid Services has published the negotiated prices for the initial ten drugs, which went into effect in January 2026, and the subsequent 15 drugs, which will first be effective in 2027. CMS has also published the next set of 15 drugs that will be subject to negotiation.
Depending on the facts and circumstances, we could be subject to criminal penalties if we knowingly obtain, use, or disclose individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA. 49 Table of Contents Certain states have also enacted data privacy and security laws and regulations, which govern the privacy, processing and protection of health-related and other personal information.
Depending on the facts and circumstances, we could be subject to criminal penalties if we knowingly obtain, use, or disclose individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA.
The majority of our revenue comes from a limited number of customers. In 2024, four customers individually comprised approximately 28.4%, 18.8%, 14.1% and 12.3% respectively, of our total product revenue. We expect that revenue from a limited number of customers will continue to account for a large portion of our revenue in the future.
The majority of our revenue comes from a limited number of customers. In 2025 , five customers individually comprised approximately 27.3%, 17.0%, 16.4%, 13.1% and 10.6%, respect ively, of our total product revenue. We expect that revenue from a limited number of customers will continue to account for a large portion of our revenue in the future.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and our research and development programs, and the development of our drug candidates could be delayed.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and our research and development programs, and the development of our drug candidates could be delayed. 49 Table of Contents If we or our third-party vendors were to experience a significant cybersecurity breach of our or their information systems or data, the costs associated with the investigation, remediation and potential notification of the breach to counterparties and data subjects could be material.
For example, in recent years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities. Separately, in response to the COVID-19 pandemic, the FDA postponed most inspections of domestic and foreign manufacturing facilities at various points.
For example, in recent years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities. In addition, the current U.S.
Failure to make necessary disclosures and/or to identify overpayments could result in allegations against us under the Federal False Claims Act and other laws and regulations. 44 Table of Contents Federal law requires that a manufacturer that participates in the MDRP also participate in the Public Health Service’s 340B drug pricing program (the “340B program”) in order for federal funds to be available for the manufacturer’s drugs under Medicaid and Medicare Part B.
Federal law requires that a manufacturer that participates in the MDRP also participate in the Public Health Service’s 340B drug pricing program (the “340B program”) in order for federal funds to be available for the manufacturer’s drugs under Medicaid and Medicare Part B.
We and certain of our service providers are from time to time subject to cyberattacks and security incidents.
We and certain of our service providers are from time to time subject to cyberattacks and security incidents that threaten the confidentiality, integrity and availability of our information technology systems and confidential information.
We anticipate that other healthcare reform measures that may be adopted in the future may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, new payment methodologies and additional downward pressure on the price that we receive for any approved product, and could seriously harm our business.
In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. 43 Table of Contents We anticipate that other healthcare reform measures that may be adopted in the future may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, new payment methodologies and additional downward pressure on the price that we receive for any approved product, and could seriously harm our business.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe rental amounts payable to us pursuant to both subleases increase approximately 3% and terminate in March 2026. We also lease approximately 29,470 square feet of office space in the building located at 701 Gateway Blvd, South San Francisco, California. The lease for the South San Francisco facility commenced in October 2012.
Biggest changeWe also lease approximately 29,470 square feet of office space in the building located at 701 Gateway Blvd, South San Francisco, California. The lease for the South San Francisco facility commenced in October 2012. The South San Francisco lease will terminate around March 2026.
We believe that our existing office space in Los Angeles, along with the additional office space in South San Francisco, is adequate to meet current and anticipated future requirements and that additional or substitute space will be available as needed to accommodate any expansions that our operations require.
We believe that our office space in Los Angeles is adequate to meet current and anticipated future requirements and that additional or substitute space will be available as needed to accommodate any expansions that our operations require.
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The lease will terminate around March 2026, with an option to extend for an additional five-year term.
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The rental amounts payable to us pursuant to both subleases increase approximately 3% and terminate in March 2026.
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In July 2025, we executed an amendment to our office space in Los Angeles, California to surrender certain suites effective March 31, 2026 and extend the lease term for the remaining 26,700 rentable square feet in suite 17 for an additional five years and five months through August 31, 2031.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeOn October 22, 2024, the NMPA approved Aosaikang’s ANDA to market a generic version of the Company’s NERLYNX® in China with the approval number of GuoYaoZhunZi H20249180. 59 Table of Contents Convalife China Litigation Convalife Pharmaceuticals (Shanghai) Co., Ltd (“Convalife”) filed an ANDA with NMPA in China seeking approval to market a generic version of the Company’s NERLYNX®.
Biggest changeConvalife China Litigation Convalife Pharmaceuticals (Shanghai) Co., Ltd (“Convalife”) filed an ANDA with NMPA in China seeking approval to market a generic version of the Company’s NERLYNX®. The ANDA application No. is CYHS2202095.
ZL200880118789.3 and ZL201710057547.9, alleging that the listed claims are not eligible for registration in the Chinese Orange Book on the ground that these pharmaceutical method-of-use claims fall within the scope of “patents of crystalline forms,” which are not eligible for listing in the Chinese Orange Book.
ZL200880118789.3 and ZL201710057547.9, alleging that the listed claims are not eligible for registration in the Chinese Orange Book on the ground that these pharmaceutical method-of-use claims fall within the scope of “patents of crystalline forms,” which are not eligible for listing in the Chinese Orange Book.
ZL200880118789.3 and ZL201710057547.9, alleging that the listed claims are not eligible for registration in the Chinese Orange Book on the ground that these pharmaceutical method-of-use claims fall within the scope of “patents of crystalline forms,” which are not eligible for listing in the Chinese Orange Book.
ZL200880118789.3 and ZL201710057547.9, alleging that the listed claims are not eligible for registration in the Chinese Orange Book on the ground that these pharmaceutical method-of-use claims fall within the scope of “patents of crystalline forms,” which are not eligible for listing in the Chinese Orange Book.
The Court found that AstraZeneca had not proved its claim that Wyeth’s asserted patents were invalid as indefinite, or that Wyeth had committed acts that would give rise to findings of unclean hands, implied waiver, or patent misuse. AstraZeneca has filed a motion challenging the jury’s verdict and requesting a new trial.
The Court found that AstraZeneca had not proved its claim that Wyeth’s asserted patents were invalid as indefinite, or that Wyeth had committed acts that would give rise to findings of unclean hands, implied waiver, or patent misuse. AstraZeneca filed a motion challenging the jury’s verdict and requesting a new trial.
Wyeth has filed a motion requesting supplemental damages for past infringement from January 1, 2024, through the date of judgment; pre-and-post judgment interest, and ongoing royalties through the remaining term of the patents. Briefing on these motions from both sides was completed on July 16, 2024.
Wyeth filed a motion requesting supplemental damages for past infringement from January 1, 2024, through the date of judgment; pre-and-post judgment interest, and ongoing royalties through the remaining term of the patents. Briefing on these motions from both sides was completed on July 16, 2024.
Convalife also alleged that Patents ZL200880118789.3 and ZL201710057547.9 are not eligible for Chinese Orange Book listing. On February 1, 2023, the Company submitted four Article 76 petitions against the Convalife ANDA with the CNIPA and requested administrative determination that Convalife’s generic neratinib tablet falls within the scope of the claims of the four Orange Book patents.
Convalife also alleged that Patents ZL200880118789.3 and ZL201710057547.9 are not eligible for Chinese Orange Book listing. 60 Table of Contents On February 1, 2023, the Company submitted four Article 76 petitions against the Convalife ANDA with the CNIPA and requested administrative determination that Convalife’s generic neratinib tablet falls within the scope of the claims of the four Orange Book patents.
The ANDA application No. is CYHS2202006. Aosaikang made Type 4.2 declarations against the four Orange Book Patents ZL201410082103.7, ZL201080060546.6, ZL200880118789.3 and ZL201710057547.9, alleging that its generic version of NERLYNX does not fall within the scope of the claims of the Orange Book patents. Aosaikang also alleged that Patents ZL200880118789.3 and ZL201710057547.9 are not eligible for Chinese Orange Book listing.
Aosaikang made Type 4.2 declarations against the four Orange Book Patents ZL201410082103.7, ZL201080060546.6, ZL200880118789.3 and ZL201710057547.9, alleging that its generic version of NERLYNX does not fall within the scope of the claims of the Orange Book patents. Aosaikang also alleged that Patents ZL200880118789.3 and ZL201710057547.9 are not eligible for Chinese Orange Book listing.
The ANDA application No. is CYHS2202095. On December 23, 2022, Convalife made Type 4.2 declarations against the four Orange Book Patents ZL201410082103.7, ZL201080060546.6, ZL200880118789.3 and ZL201710057547.9, alleging that its generic version of NERLYNX does not fall within the scope of the claims of the Orange Book patents.
On December 23, 2022, Convalife made Type 4.2 declarations against the four Orange Book Patents ZL201410082103.7, ZL201080060546.6, ZL200880118789.3 and ZL201710057547.9, alleging that its generic version of NERLYNX does not fall within the scope of the claims of the Orange Book patents.
The Company respectfully disagrees with the Court’s ruling regarding invalidity with respect to the particular claim limitation. Wyeth filed a notice of appeal on September 12, 2024, appealing the District Court’s judgment as a matter of law, as well as other rulings and opinions of the Court adverse to Wyeth.
The Company respectfully disagrees with the Court’s ruling regarding invalidity with respect to the particular claim limitation. Wyeth filed a notice of appeal on September 12, 2024, appealing the District Court’s judgment as a matter of law, as well as other rulings and opinions of the Court adverse to Wyeth. On December 18, 2024, Wyeth filed its opening brief.
Demai Litigation Zhengzhou Demai Pharmaceutical Co., Ltd (“Demai”) filed an ANDA with NMPA in China seeking approval to market a generic version of the Company’s NERLYNX®. The ANDA application No. is CYHS2402776.
On September 9, 2025, the NMPA approved Kelun’s ANDA to market a generic version of the Company’s NERLYNX® in China with the approval number of GuoYaoZhunZi H20255337. Demai Litigation Zhengzhou Demai Pharmaceutical Co., Ltd (“Demai”) filed an ANDA with NMPA in China seeking approval to market a generic version of the Company’s NERLYNX®. The ANDA application No. is CYHS2402776.
ZL201080060546.6 and on October 8, 2024, the Company filed a lawsuit against Demai at the BJIPC based on Nerlynx Patent No. ZL201410082103.7. 60 Table of Contents ITEM 4. MINE SAFETY DISCLOSURE Not applicable. PART II
ZL201080060546.6 and on October 8, 2024, the Company filed a lawsuit against Demai at the BJIPC based on Nerlynx Patent No. ZL201410082103.7.
ZL201410082103.7 and claims 1-4, 7 and 9-13 of Patent No. ZL201080060546.6. The two CNIPA administrative decisions on NERLYNX® Patents have lifted the stay of Aosaikang’s ANDA by NMPA.
ZL201410082103.7 and claims 1-4, 7 and 9-13 of Patent No. ZL201080060546.6. The two CNIPA administrative decisions on NERLYNX® Patents have lifted the stay of Aosaikang’s ANDA by NMPA. On October 22, 2024, the NMPA approved Aosaikang’s ANDA to market a generic version of the Company’s NERLYNX® in China with the approval number of GuoYaoZhunZi H20249180.
On December 16, 2024, the Court conducted an evidence exchange hearing. On January 10, 2025, the Court conducted a hearing of party experts on the evaluation of evidence. Aosaikang China Litigation On November 17, 2022, Jiangsu Aosaikang Pharmaceutical Co. Ltd. (“Aosaikang”) filed an ANDA with NMPA in China seeking approval to market a generic version of the Company’s NERLYNX®.
Aosaikang China Litigation On November 17, 2022, Jiangsu Aosaikang Pharmaceutical Co. Ltd. (“Aosaikang”) filed an ANDA with NMPA in China seeking approval to market a generic version of the Company’s NERLYNX®. The ANDA application No. is CYHS2202006.
The Superior Court Judge granted the motions to dismiss on March 20, 2024. The Company appealed this ruling to the North Carolina Court of Appeals.
The Superior Court Judge granted the motions to dismiss on March 20, 2024. The Company appealed this ruling to the North Carolina Court of Appeals. On September 3, 2025, the Court of Appeals reversed the dismissal of the Company’s claim for legal malpractice and remanded the case to the Superior Court for further proceedings.
Wyeth filed its opening brief on appeal to the Federal Circuit on December 18, 2024. 58 Table of Contents Acebright China Litigation On January 18, 2022, Shanghai Acebright Pharmaceuticals Group Co., Ltd.
Briefing on the appeal is now complete, and the parties await further order from the Court. 59 Table of Contents Acebright China Litigation On January 18, 2022, Shanghai Acebright Pharmaceuticals Group Co., Ltd.
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The defendants filed a petition for discretionary review of this decision by the North Carolina Supreme Court on October 8, 2025. The Supreme Court has not decided whether to accept the case for review.
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On March 13, 2025, AstraZeneca filed its response brief. On March 20, 2025, non-parties Regeneron Pharmaceuticals, Inc. and Sanofi-Aventis U.S. LLC filed a motion for leave to file an amicus curiae brief in the Federal Circuit. The motion was granted on May 16, 2025. On June 6, 2025, Wyeth filed its reply brief.
Added
On December 16, 2024, the Court conducted an evidence exchange hearing. On January 10, 2025, the Court conducted a hearing of party experts on the evaluation of evidence. On July 14, 2025, the Court conducted a hearing to examine evidence and debate merits of party arguments.
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On September 28, 2025, the Court issued a first-instance decision, deciding that Acebright’s product does not fall within the scope of the patent-in-suit, and Acebright did not infringe the NERLYNX® Patents; the Court also decided that the Company’s enforcement efforts were not malicious and did not amount to unfair competition.
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On February 13, 2025, the Company withdrew the lawsuits from BJIPC, filed an Article 76 petition with the CNIPA against the Demai ANDA and requested administrative determination that Demai’s generic neratinib maleate tablet falls within the scope of the claims of Nerlynx Patent No. ZL201080060546.6. On February 21, 2025, the CNIPA accepted the Company’s petition and started examination.
Added
On March 18, 2025, the Company filed a request with the NMPA to set up a nine-month stay on Demai’s ANDA. Hexal European Patent Opposition An opposition was filed by Hexal AG (“Hexal”) on August 3, 2016 against European Patent No.
Added
EP2416774 which was licensed from Pfizer in 2011, and which claims neratinib for use in a method for treating HER-2/neu overexpressed/amplified cancer and improving IDFS, wherein the method comprises delivering neratinib therapy to HER-2/neu overexpressed/amplified cancer patients following the completion of at least one year of trastuzumab adjuvant therapy, and wherein the neratinib therapy comprises treating the cancer patients with neratinib for at least twelve months.
Added
An oral hearing was held on December 8, 2017, wherein the patent was maintained as granted. Following an appeal filed by Hexal, the Board of Appeal of the European Patent Office rejected the claims as granted and all pending auxiliary requests during the oral hearing of September 2, 2021.
Added
Before issuance of a decision, we withdrew approval of the text in which the patent was granted and all pending auxiliary requests, thereby revoking the patent and concluding the appeal. One European divisional application, namely EP15188350.1, was granted with the European patent number EP3000467 on March 1, 2023.
Added
Oppositions against EP3000467 were filed by Hexal on November 3, 2023, by Alfred E. Tiefenbacher (GmbH & Co. KG) on November 28, 2023 and by Generics (UK) Limited (“Generics”) on December 1, 2023.
Added
EP3000467 is used as the basic patent for Supplementary Protection Certificate applications for the EMA-approved NERLYNX® product, 17 of which have been granted, three proceedings have been stayed, and 11 are in active prosecution.
Added
The patentee response to the notice of opposition was filed on April 15, 2024, following which, all three opponents filed additional arguments in reply to the patentee’s submission. On February 6, 2025, the Company filed its response to the summons to attend oral proceedings, including six auxiliary requests. Alfred E.
Added
Tiefenbacher and Hexal filed their responses to the summons to oral proceedings on February 6 and 7, 2025, respectively. Hexal filed a further brief on March 19, 2025. Oral proceedings took place on April 9 and 10, 2025.
Added
EP3000467 was upheld as amended after the first instance hearing based on Auxiliary Request 1, which covers the EMA approved indication for NERLYNX® as an extended adjuvant therapy for treating early stage hormone receptor-positive HER-2-overexpressed/amplified breast cancer. The first instance decision may be appealed.
Added
Hexal filed an appeal on June 6, 2025, Generics filed an appeal on June 20, 2025 and Wyeth filed an appeal on June 30, 2025. On September 5, 2025, Wyeth filed its grounds of appeal, including nine auxiliary requests. On the same day, Hexal filed its grounds of appeal.
Added
Generics filed its grounds of appeal on September 4, 2025, and Alfred E. Tiefenbacher filed its grounds of appeal on September 1, 2025. On December 16, 2025, Alfred E. Tiefenbacher withdrew its appeal. Wyeth responded to the opponents’ grounds of appeal on January 12, 2026. One European divisional application is pending in the same family, namely EP 23157078.8.
Added
A response to the European Search Opinion (ESO) for this application was filed February 14, 2024. The first office action was issued on January 28, 2025 with a response to the first office action filed on July 22, 2025. 61 Table of Contents ITEM 4. MINE SAFETY DISCLOSURE Not applicable. PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosure 61 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 61 Item 6. [Reserved] 62 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 63 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 73 Item 8.
Biggest changeItem 4. Mine Safety Disclosure 62 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 62 Item 6. [Reserved] 63 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 64 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 73 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−2 removed3 unchanged
Biggest changeCompared to the Nasdaq Biotechnology Index and Nasdaq Composite Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Puma Biotechnology, Inc. 100.00 117.26 34.74 48.34 49.49 34.86 NASDAQ Biotechnology Index 100.00 126.42 126.45 113.65 118.87 118.20 NASDAQ Composite Index 100.00 144.92 177.06 119.45 172.77 223.87 The material in this performance graph is not soliciting material, is not deemed filed with the SEC and is not incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made on, before or after the date of this filing and irrespective of any general incorporation language in such filing.
Biggest changeCompared to the Nasdaq Biotechnology Index and Nasdaq Composite Index 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 Puma Biotechnology, Inc. 100.00 29.63 41.23 42.20 29.73 57.99 NASDAQ Biotechnology Index 100.00 100.02 89.90 94.03 93.49 124.75 NASDAQ Composite Index 100.00 122.18 82.43 119.22 154.48 187.14 The material in this performance graph is not soliciting material, is not deemed filed with the SEC and is not incorporated by reference in any filing of the Company under the Exchange Act, whether made on, before or after the date of this filing and irrespective of any general incorporation language in such filing.
The comparison assumes investment of $100 on December 31, 2019, in our common stock and in each index and, for each index, assumes reinvestment of all dividends. The historical price performance included below is not necessarily indicative of future stock price performance. Puma Biotechnology, Inc. (PBYI) Stock Price Performance Graph Cumulative Total Return Puma Biotechnology, Inc.
The comparison assumes investment of $100 on December 31, 2020, in our common stock and in each index and, for each index, assumes reinvestment of all dividends. The historical price performance included below is not necessarily indicative of future stock price performance. Cumulative Total Return Puma Biotechnology, Inc.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. 61 Table of Contents Performance Graph The graph and table below compare the cumulative total return of Puma Biotechnology common stock from December 31, 2019, through December 31, 2024, with the cumulative total returns on (i) the NASDAQ Biotechnology Index and (ii) the NASDAQ Composite Index.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. 62 Table of Contents Performance Graph The graph and table below compare the cumulative total return of Puma Biotechnology common stock from December 31, 2020, through December 31, 2025, with the cumulative total returns on (i) the NASDAQ Biotechnology Index and (ii) the NASDAQ Composite Index.
Currently, we anticipate that we will retain all available funds for use in the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future.
Dividends We have never declared or paid any cash dividends on our capital stock. Currently, we anticipate that we will retain all available funds for use in the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future.
Prior to January 3, 2017, shares of our common stock had been listed on the New York Stock Exchange since October 19, 2012. Record Holders On February 20, 2025, we had nine holders of record of our common stock.
Prior to January 3, 2017, shares of our common stock had been listed on the New York Stock Exchange since October 19, 2012. Record Holders As of February 23, 2026, there were 9 holders of record of our common stock. This number does not include beneficial owners whose shares are held by nominees in street name.
Removed
The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.
Removed
We believe approximately 13,400 additional owners held our common stock in “Street Name” as of February 20, 2025. Dividends We have never declared or paid any cash dividends on our capital stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

66 edited+20 added−20 removed78 unchanged
Biggest changeThe decrease is primarily attributable to the following: • a decrease in payroll and related costs of approximately $1.9 million , primarily due to lower headcount, partially offset by annual salary increases; • a decrease in provision for credit loss (recovery) of approximately $1.4 million , due to an overdue receivable as of December 31, 2023 that was collected in 2024; • a decrease in professional fees and expenses of approximately $4.1 million, primarily due to a decrease in consultant and contractor expenses (primarily marketing related) of approximately $2.7 million, a decrease in legal fees of approximately $1.0 million and a decrease in insurance and other expense of approximately $0.4 million; • a decrease in stock-based compensation expense of approximately $1.3 million , primarily due to lower fair value on equity grants as a result of a lower market price for our common stock; and • a decrease in loss on impairment of asset expense of $0.6 million in connection with our decision to sublease a portion of our leased office space in 2023, which was recorded as an operating asset in accordance with ASC 842.
Biggest changeThe decrease is primarily attributable to the following: • an increase in payroll and related costs of approximately $3.1 million , due t o severance costs related to the departure of our Chief Commercial Officer, an increase in our commercial team compensation, merit increases and increases in our healthcare insurance premiums; • a decrease in provision for credit loss recovery of approximately $0.2 million , primarily related to the payment history of a customer receivable; • a decrease in professional fees and expenses of approximately $10.8 million, primarily related to legal fees associated with the AstraZeneca litigation in the prior year; and • a decrease in stock-based compensation expense of approximately $1.3 million due to the departure of an executive in 2025 and lower fair value on equity grants due to lower market price for our common stock.
We are currently party to several sub-licenses in various regions outside the United States, including Europe (excluding Russia and Ukraine), Australia, Canada, China, Southeast Asia, Israel, South Korea, and various countries and territories in Central America, South America, Africa and the Middle East.
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.
Investing Activities During the year ended December 31, 2024, cash used in investing activities was approximately $20.4 million. Cash used in investing activities was primarily due to the purchase of available-for-sale securities of approximately $76.2 million, partially offset by the maturities of available-for-sale securities of approximately $55.8 million.
During the year ended December 31, 2024, cash used in investing activities was approximately $20.4 million. Cash used in investing activities was primarily due to the purchase of available-for-sale securities of approximately $76.2 million, partially offset by the maturities of available-for-sale securities of approximately $55.8 million.
Financing Activities Cash used in financing activities for the year ended December 31, 2024 was approximately $33.8 million. Of this amount, $34.0 million related to the payment of principal, as well as exit fees, on our debt with Athyrium, partially offset by approximately $0.2 million of proceeds from employee stock options exercised.
Cash used in financing activities for the year ended December 31, 2024 was approximately $33.8 million. Of this amount, $34.0 million related to the payment of principal, as well as exit fees, on our debt with Athyrium, partially offset by approximately $0.2 million of proceeds from employee stock options exercised.
Deferred income tax benefit In 2024, we released a portion of our valuation allowance related to our deferred tax assets in the amount of $7.1 million, which significantly increased our net income for the year.
In 2024, we released a portion of our valuation allowance related to our deferred tax assets in the amount of $7.1 million, which significantly increased our net income for the year.
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 December 31 2024, NERLYNX has received approval for the treatment of certain patients with extended adjuvant and/or metastatic HER2-positive breast cancer in over 40 countries outside the United States.
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 December 31, 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 intend to satisfy our near-term liquidity requirements through a combination of our existing cash and cash equivalents and marketable securities as of December 31, 2024, and proceeds that will become available to us through product sales, royalties and sub-license milestone payments. However, this intention is based on assumptions that may prove to be wrong.
We intend to satisfy our near-term liquidity requirements through a combination of our existing cash and cash equivalents and marketable securities as of December 31, 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.
During the years ended December 31, 2024, 2023 and 2022, our R&D expenses consisted primarily of CRO fees, manufacturing of clinical materials, 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.
During the years ended December 31, 2025, 2024 and 2023, our R&D expenses consisted primarily of CRO fees, manufacturing of clinical materials, 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.
In regard to our contractual obligations in relation to the Pfizer in-license a greement, as consideration for the license, we are required to make substantial payments upon the achievement of certain milestones totaling approxim ately $187.5 million if all such milestones are achieved, of whi ch $102.5 million h ave been achieved as of December 31, 2024 .
In regard to our contractual obligations in relation to the Pfizer in-license a greement, as consideration for the license, we are required to make substantial payments upon the achievement of certain milestones totaling approxim ately $187.5 million if all such milestones are achieved, of whi ch $102.5 million h ave been achieved as of December 31, 2025 .
We believe that our existing cash and cash equivalents and marketable securities as of December 31, 2024, and proceeds that will become available to us through product sales and sub-license payments are sufficient to satisfy our operating cash and capital needs for at least one year after the filing of this Annual Report.
We believe that our existing cash and cash equivalents and marketable securities as of December 31, 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 Annual Report.
Non-refundable, up-front fees that are not contingent on any future performance and require no consequential continuing involvement by us, are recognized as revenue when the license term commences and the licensed data, technology or product is delivered. We defer recognition of non-refundable upfront license fees if the performance obligations are not satisfied.
Non-refundable, upfront fees that are not contingent on any future performance and require no consequential continuing involvement by us, are recognized as revenue when the license term commences and the licensed data, technology or product is delivered. We defer recognition of non-refundable upfront license fees if the performance obligations are not satisfied.
Each quarterly principal payment approximates $11.1 million, and each quarterly exit fee payment approximates $0.2 million. As of December 31, 2024, the effective interest rate for the loan was 12.99%. As of December 31, 2024, we may prepay the outstanding principal balance of the notes, in whole or in part, without premium or penalty.
Each quarterly principal payment approximates $11.1 million, and each quarterly exit fee payment approximates $0.2 million. As of December 31, 2025, the effective interest rate for the loan was 12.99%. As of December 31, 2025, we may prepay the outstanding principal balance of the notes, in whole or in part, without premium or penalty.
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 December 31, 2024, we were in compliance with such covenants.
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 December 31, 2025, we were in compliance with such covenants.
In regard to our contractual obligations with Takeda, as consideration for the license, we are required to make substantial payments upon the achievement of certain milestones totaling $287.3 million if all such milestones are achieved. As of December 31, 2024, no milestones had been achieved.
In regard to our contractual obligations with Takeda, as consideration for the license, we are required to make substantial payments upon the achievement of certain milestones totaling $287.3 million if all such milestones are achieved. As of December 31, 2025, no milestones had been achieved.
Total changes in cash flows from operations were due to a change in working capital related primarily to a decrease in accrued expenses of approximately $15.8 million, an increase in inventory of approximately $1.6 million (increase in inventory purchases), offset by a decrease in accounts receivable related to collection of royalties receivable.
Total changes in cash flows from operations were due to a change in working capital related primarily to a decrease in accrued expenses of approximately $15.8 million, an increase in inventory of approximately $1.6 million (increase in inventory purchases), offset by a decrease in accounts receivable of $16.3 million, primarily related to collection of royalties receivable.
Our contractual obligations result from leases for office space and office equipment and the principal and interest owed under our Note Purchase Agreement. We also have unrecognized tax benefits that, if recognized, would affect the effective tax rate at December 31, 2024.
Our contractual obligations result from leases for office space and office equipment and the principal and interest owed under our Note Purchase Agreement. We also have unrecognized tax benefits that, if recognized, would affect the effective tax rate at December 31, 2025.
See Note 12–Income Taxes and Note 13–Commitments and Contingencies in the accompanying notes to the financial statements for a summary of our uncertain tax positions and contracts held by us as of December 31, 2024.
See Note 12–Income Taxes and Note 13–Commitments and Contingencies in the accompanying notes to the financial statements for a summary of our uncertain tax positions and contracts held by us as of December 31, 2025 .
Net cash provided by operating activities for the year ended December 31, 2024 was $38.9 million which consisted of net income of $30.3 million, adjusted for non-cash items of approximately $19.3 million, including stock-based compensation of $8.2 million, and depreciation and amortization of $11.5 million and recovery of credit loss of $0.5 million.
Net cash provided by operating activities for the year ended December 31, 2024 was $38.9 million which consisted of net income of $30.3 million, adjusted for non-cash items of approximately $12.1 million, including stock-based compensation of $8.2 million, depreciation and amortization of $11.5 million and recovery of credit loss of $0.5 million.
Payor Rebates: We contract with certain private payor organizations, primarily insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products.
Payor Rebates: We contract with certain private payor organizations, primarily insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of our products.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Annual Report on Form 10-K contains forward-looking statements within the meanings of the federal securities laws. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those expressed or implied by such forward-looking statements.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Annual Report contains forward-looking statements within the meanings of the federal securities laws. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those expressed or implied by such forward-looking statements.
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 the fourth quarter of 2024.
We initiated the ALISertib in CAncer (ALISCA™ -Lung1) Phase II trial (PUMA-ALI-4201) of alisertib monotherapy for the treatment of patients with extensive stage small cell lung cancer in February 2024, and we commenced the ALISCA™ -Breast1 Phase II trial (PUMA-ALI-1201) in November 2024.
Our analyses also contemplated application of the constraint in accordance with the guidance, under which it determined a significant reversal of revenue would not occur in a future period for the estimates detailed below as of December 31, 2024 and, therefore, the transaction price was not reduced further during the year ended December 31, 2024.
Our analyses also contemplated application of the constraint in accordance with the guidance, under which we determined a significant reversal of revenue would not occur in a future period for the estimates detailed below as of December 31, 2025 and, therefore, the transaction price was not reduced further during the year ended December 31, 2025.
We may cancel these agreements with a 30 to 45 day written notice to the outside vendor. We would be obligated to pay for services rendered up to that point, which amounts to total contractual obligations of $42.3 million within the next twelve mo nths.
We may cancel these agreements with a 30 to 45 day written notice to the outside vendor. We would be obligated to pay for services rendered up to that point, which amounts to total contractual obligations of $54.9 million within the next twelve mo nths.
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.
We are currently commercializing NERLYNX, an oral version of neratinib, for the treatment of certain HER2-positive breast cancers. Additionally, we have in-licensed, and are responsible for global development and commercialization of, alisertib.
Our expenses to date have been related to hiring staff, commencing company-sponsored clinical trials and the build out of our corporate infrastructure and, since 2017, the commercial launch of NERLYNX. Going forward, we anticipate significant expenses as we continue to develop alisertib in 2025.
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.
For a detailed discussion of these risks and uncertainties, see the “Risk Factors” section in Item 1A of Part I of this Form 10-K. We caution the reader not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date of this Form 10-K.
For a detailed discussion of these risks and uncertainties, see the “Risk Factors” section in Item 1A of Part I of this Annual Report. We caution the reader not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date of this Annual Report.
We recorded in-process research and development expense of $7.0 million during the year ended December 31, 2022, in connection with the up-front payment related to the asset acquisition. As of December 31, 2024, no milestones had been accrued as the underlying contingencies were not probable or estimable.
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 December 31, 2025, no milestones had been accrued as the underlying contingencies were not probable or estimable.
We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Form 10-K. Overview We are a biopharmaceutical company that develops and commercializes innovative products to enhance cancer care and improve treatment outcomes for patients.
We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Annual Report. Overview We are a biopharmaceutical company that develops and commercializes innovative products to enhance cancer care and improve treatment outcomes for patients.
As of December 31, 2024, the amount of unrecognized tax benefit was $3.0 million, and is also not included in the table above as the timing of when or if these payments will be made is uncertain.
As of December 31, 2025 , the amount of unrecognized tax benefit was $3.4 million, and is also not included in the table above as the timing of when or if these payments will be made is uncertain.
The following table presents our net income and net income per share, as calculated in accordance with GAAP, as adjusted to remove the impact of stock-based compensation. For the year ended December 31, 2024, stock-based compensation represented approximately 6.1% of the total of SG&A and R&D expenses.
The following table presents our net income and net income per share, as calculated in accordance with GAAP, as adjusted to remove the impact of stock-based compensation. For the year ended December 31, 2025, stock-based compensation represented approximately 5.2% of the total of SG&A and R&D expenses.
As of December 31, 2024 , the principal balance outstanding under the Athyrium Notes was $66.7 million, representi ng all of our debt. Current and Future Financing Needs We did not receive or record any product revenue until the third quarter of 2017.
As of December 31, 2025 , the principal balance outstanding under the Athyrium Notes was $22.5 million, representi ng all of our debt. Current and Future Financing Needs We did not receive or record any product revenue until the third quarter of 2017.
Accordingly, the Third Amendment is accounted for as a debt modification. 68 Table of Contents 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.
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.
(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 48,648,701 and 47,134,331 weighted-average shares of common stock outstanding for the years ended December 31, 2024 and 2023, respectively.
(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 50,011,485 and 48,648,701 weighted-average shares of common stock outstanding for the years ended December 31, 2025 and 2024, respectively.
The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. We are currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures.
The amendments may be applied either (i) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (ii) retrospectively to all prior periods presented in the financial statements. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures. 72 Table of Contents
License revenue There was no license revenue for the years ended December 31, 2024 and December 31, 2023 . 64 Table of Contents Royalty revenue Royalty revenue was approximately $35.3 million for the year ended December 31, 2024 , compared to $32.5 million for the year ended December 31, 2023 .
License revenue There was no license revenue for the years ended December 31, 2025 and December 31, 2024 . 65 Table of Contents Royalty revenue Royalty revenue was approximately $24.3 million for the year ended December 31, 2025 , compared to $35.3 million for the year ended December 31, 2024 .
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.
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.
We recorded cash flows from operating activities of approximately $38.9 million for the year ended December 31, 2024 and recorded cash flows from operating activities of approximately $27.0 million for the year ended December 31, 2023 .
We recorded cash flows from operating activities of approximately $41.8 million for the year ended December 31, 2025 and recorded cash flows from operating activities of approximately $38.9 million for the year ended December 31, 2024 .
Total revenue Total revenue was approximately $230.5 million for the year ended December 31, 2024, compared to $235.6 million for the year ended December 31, 2023. This decrease in total revenue of $5.2 million was due to a decrease in product revenue, net of approximately $7.9 million, partially offset by an increase in royalty revenue of $2.8 million.
Total revenue Total revenue was approximately $228.4 million for the year ended December 31, 2025, compared to $230.5 million for the year ended December 31, 2024. This decrease in total revenue of $2.1 million was due to a decrease in royalty revenue of $11.0 million, partially offset by an increase in product revenue, net of approximately $8.9 million.
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”).
We incurred $1.9 million of deferred financing costs with the initial borrowing of the Athyrium Notes. 68 Table of Contents 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”).
For discussion related to the results of operations and changes in financial condition for the year ended December 31, 2023, compared to the year ended December 31, 2022, please refer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report for the Year Ended December 31, 2023, which was filed with the United States Securities and Exchange Commission on February 29, 2024.
For discussion related to the results of operations and changes in financial condition for the year ended December 31, 2024, compared to the year ended December 31, 2023, please refer to Item 7 of Part II, “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, which was filed with the SEC on February 27, 2025.
The $1.7 million increase was primarily due to the increase of product unit sales to our sub-licensees and the related cost of sales (primarily sales in China), partially offset by lower domestic sales.
The $6.2 million decrease was primarily due to the decrease of product unit sales to our sub-licensees and the related cost of sales (primarily sales in China), partially offset by higher domestic sales.
Additionally, the expected timing of payment of the obligations presented below is estimated based on current information. 69 Table of Contents The following table represents our contractual obligations as of December 31, 2024, aggregated by type (in thousands): Contractual Obligations Total Less than 1 year 1 - 3 years Operating Lease Obligations 7,491 5,983 1,508 Long Term Debt Obligations (principal and interest) 74,865 51,147 23,718 Total 82,356 57,130 25,226 We also engage with CROs and contract manufacturing organizations (“CMOs”) in addition to eng aging in contracts for the management of its ongoing clinical trials and pre-commercialization efforts.
Additionally, the expected timing of payment of the obligations presented below is estimated based on current information. 69 Table of Contents The following table represents our contractual obligations as of December 31, 2025, aggregated by type (in thousands): Contractual Obligations Total Less than 1 year 1 - 3 years 3 - 5 years Operating Lease Obligations 8,126 1,913 3,878 2,335 Long Term Debt Obligations (principal and interest) 23,719 23,719 — — Total 31,845 - 25,632 - 3,878 - 2,335 We also engage with CROs and contract manufacturing organizations (“CMOs”) in addition to eng aging in contracts for the management of our ongoing clinical trials and pre-commercialization efforts.
Product revenue, net Product revenue, net was approximately $195.2 million for the year ended December 31, 2024 , compared to $203.1 million for the year ended December 31, 2023 . The decrease in product revenue, net was primarily attributable to a volume decrease of approximately 8.7% in bottles of NERLYNX sold, partially offset by an increase in net selling price.
Product revenue, net Product revenue, net was approximately $204.1 million for the year ended December 31, 2025 , compared to $195.2 million for the year ended December 31, 2024 . The increase in product revenue, net was primarily attributable to a volume increase of approximately 5.5% in bottles of NERLYNX sold and an increase in net selling price.
Legal fees and expenses are expensed as incurred based on invoices or estimates provided by legal counsel. We periodically evaluate available information, both internal and external, relative to such contingencies and adjust the accrual as necessary. We determine whether a contingency should be disclosed by assessing whether a material loss is deemed reasonably possible.
We periodically evaluate available information, both internal and external, relative to such contingencies and adjust the accrual as necessary. We determine whether a contingency should be disclosed by assessing whether a material loss is deemed reasonably possible.
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. 63 Table of Contents Summary of Income and Expenses Product revenue, net Product revenue, net consists of revenue from sales of NERLYNX.
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.
These efforts will require funding in addition to the cash and cash equivalents totaling approximately $69.2 million and approximately $31.7 million in marketable securities available at December 31, 2024.
These efforts will require funding in addition to the cash and cash equivalents totaling approximately $29.6 million and approximately $67.9 million in marketable securities available at December 31, 2025.
The increase was due to increased product sales by our sub-licensees as they increased commercialization of NERLYNX in international territories, primarily in China. Cost of sales Cost of sales was approximately $64.4 million for the year ended December 31, 2024 , compared to $62.7 million for the year ended December 31, 2023 .
The decrease was due to decreased product sales by our sub-licensees in international territories, primarily in China. Cost of sales Cost of sales was approximately $58.2 million for the year ended December 31, 2025 , compared to $64.4 million for the year ended December 31, 2024 .
The remaining milestone amounts were not included in the table above as the timing of when or if these payments will be made is uncertain.
The remaining milestone amounts were not included in the table above as the timing of when or if these payments will be made is uncertain. As of December 31, 2025, our obligations for potential milestone payments totaled app roximately $15.7 million.
These non-GAAP financial measures are not, and should not be viewed as, substitutes for GAAP reporting measures. 66 Table of Contents Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP Net Income Per Share to Non-GAAP Adjusted Net Income Per Share (in thousands except share and per share data) For the Year Ended December 31, 2024 2023 GAAP net income $ 30,278 $ 21,591 Adjustments: Stock-based compensation - Selling, general and administrative (1) 5,566 6,908 Research and development (2) 2,679 3,339 Non-GAAP adjusted net income $ 38,523 $ 31,838 GAAP net income per share—basic $ 0.62 $ 0.46 Adjustment to net income (as detailed above) 0.17 0.22 Non-GAAP adjusted basic net income per share $ 0.79 (3) $ 0.68 (3) GAAP net income per share—diluted $ 0.62 $ 0.45 Adjustment to net income (as detailed above) 0.16 0.22 Non-GAAP adjusted diluted net income per share $ 0.78 (4) $ 0.67 (4) (1) To reflect a non-cash charge to operating expense for selling, general, and administrative stock-based compensation.
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and GAAP Net Income Per Share to Non-GAAP Adjusted Net Income Per Share (in thousands except share and per share data) For the Year Ended December 31, 2025 2024 GAAP net income $ 31,111 $ 30,278 Adjustments: Stock-based compensation - Selling, general and administrative (1) 4,283 5,566 Research and development (2) 2,661 2,679 Non-GAAP adjusted net income $ 38,055 $ 38,523 GAAP net income per share—basic $ 0.62 $ 0.62 Adjustment to net income (as detailed above) 0.14 0.17 Non-GAAP adjusted basic net income per share $ 0.76 (3) $ 0.79 (3) GAAP net income per share—diluted $ 0.61 $ 0.62 Adjustment to net income (as detailed above) 0.14 0.16 Non-GAAP adjusted diluted net income per share $ 0.75 (4) $ 0.78 (4) (1) To reflect a non-cash charge to operating expense for selling, general, and administrative stock-based compensation.
Net cash provided by operating activities for the year ended December 31, 2023 was $27.0 million which consisted of net income of $21.6 million, adjusted for non-cash items of approximately $23.3 million, including stock-based compensation of $10.2 million, and depreciation and amortization of $11.5 million, provision of credit loss of $0.9 million and loss on impairment of a right-of-use ( “ROU” ) asset of $0.6 million.
Net cash provided by operating activities for the year ended December 31, 2025 was $41.8 million which consisted of net income of $31.1 million, adjusted for non-cash items of approximately $20.6 million, including stock-based compensation of $6.9 million, depreciation and amortization of $10.9 million, deferred income taxes of $3.2 million and recovery of credit loss of $0.4 million.
We are currently evaluating the effect that adoption of ASU 2023-09 will have on our consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures: The ASU requires more detailed information about specified categories of expenses included in certain expense captions presented on the face of the income statement.
Recently Issued Accounting Standards In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures : The ASU requires more detailed information about specified categories of expenses included in certain expense captions presented on the face of the income statement.
As of December 31, 2024, our obligations for potential milestone payments totaled app roximately $16.3 million .This amount will be paid by us if all milestones are reached and would reduce the overall contractual obligation if one or more milestone is never reached.
This amount will be paid by us if all milestones are reached and would reduce the overall contractual obligation if one or more milestone is never reached.
We currently market NERLYNX in the United States using our direct specialty sales force consisting of approximately 35 sales specialists. Our sales specialists are supported by an experienced sales leadership team consisting of several regional business leaders and a VP of sales, as well as experienced professionals in marketing, managed markets, access and reimbursement, research, and sales planning and operations.
Our sales specialists are supported by an experienced sales leadership team consisting of five regional business leaders a Senior Vice President of Sales and a Senior Vice President of Marketing, as well as experienced professionals in marketing, managed markets, access and reimbursement, research, and sales planning and operations.
Reserves for variable consideration were approximately 19.5% and 17.9% of product revenue for the years ended December 31, 2024 and 2023, respectively. The increase in the variable consideration (gross-to-net reserve) was due to prior year adjustments related to lower Medicaid claims.
Reserves for variable consideration were approximately 24.3% and 19.5% of product revenue for the years ended December 31, 2025 and 2024, respectively. The increase in the variable consideration (gross-to-net reserve) was primarily due to government chargebacks and payor mix.
Total changes in cash flows from operations were due to changes in working capital and primarily related to an increase in inventory of approximately $2.6 million (increase in inventory purchases) and an increase in accounts receivable, net of approximately $8.4 million (increase and timing of fourth quarter total revenues) and a decrease in accrued expenses of approximately $7.6 million.
Total changes in cash flows from operations were due to a change in working capital related primarily to an increase in accrued expenses of approximately $13.2 million, a decrease in inventory of approximately $3.2 million, offset by an increase in accounts receivable of $21.3 million, a decrease in post-marketing commitment liability of $2.4 million and a decrease in operating lease assets and liabilities, net of $1.8 million.
Liquidity and Capital Resources The following table summarizes our liquidity and capital resources as of and for the years ended December 31, 2024 and 2023 and is intended to supplement the more detailed discussion that follows: As of As of Liquidity and capital resources (in thousands) December 31, 2024 December 31, 2023 Cash and cash equivalents $ 69,219 $ 84,585 Marketable securities $ 31,746 $ 11,354 Working capital $ 51,547 $ 56,803 Current portion of long-term debt $ 45,329 $ 33,997 Long-term debt $ 21,719 $ 65,659 Stockholders’ equity $ 92,125 $ 53,442 The following table summarizes our cash flows (uses) for the years ended December 31, 2024 and 2023 Year Ended Year Ended December 31, 2024 December 31, 2023 Cash provided by (used in): Operating activities $ 38,918 $ 27,009 Investing activities (20,438 ) (19,125 ) Financing activities (33,846 ) — Net (decrease) increase in cash, cash equivalents and restricted cash $ (15,366 ) $ 7,884 67 Table of Contents Operating Activities We recorded net income of approximately $30.3 million and $21.6 million for the years ended December 31, 2024 and 2023 , respectively.
(4) Non-GAAP adjusted diluted net income per share was calculated based on 50,653,283 and 49,100,433 weighted-average shares of common stock outstanding for the years ended December 31, 2025 and 2024, respectively. 67 Table of Contents Liquidity and Capital Resources The following table summarizes our liquidity and capital resources as of and for the years ended December 31, 2025 and 2024 and is intended to supplement the more detailed discussion that follows: As of As of Liquidity and capital resources (in thousands) December 31, 2025 December 31, 2024 Cash and cash equivalents $ 29,635 $ 69,219 Marketable securities $ 67,893 $ 31,746 Working capital $ 81,433 $ 51,547 Current portion of long-term debt $ 22,523 $ 45,329 Long-term debt $ — $ 21,719 Stockholders’ equity $ 130,340 $ 92,125 The following table summarizes our cash flows (uses) for the years ended December 31, 2025 and 2024 Year Ended Year Ended December 31, 2025 December 31, 2024 Cash provided by (used in): Operating activities $ 41,802 $ 38,918 Investing activities (36,188 ) (20,438 ) Financing activities (45,198 ) (33,846 ) Net decrease in cash, cash equivalents and restricted cash $ (39,584 ) $ (15,366 ) Operating Activities We recorded net income of approximately $31.1 million and $30.3 million for the years ended December 31, 2025 and 2024 , respectively.
To date, our major sources of working capital have been proceeds from produc t and license revenue, public offerings of our common stock, proceeds from our credit facility and sales of our common stock in private placements.
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.
Selling, general and administrative expenses: Selling, general, and administrative expenses For the Year Ended Change (in thousands) December 31, $ % 2024 2023 2024/2023 2024/2023 Payroll and related costs $ 31,555 $ 33,436 $ (1,881 ) -5.6 % Provision for credit loss (recovery) (519 ) 881 (1,400 ) -158.9 % Professional fees and expenses 29,873 34,011 (4,138 ) -12.2 % Travel and meetings 5,344 5,537 (193 ) -3.5 % Facilities and equipment costs 4,960 5,116 (156 ) -3.0 % Stock-based compensation 5,566 6,909 (1,343 ) -19.4 % Loss on impairment of asset — 625 (625 ) -100.0 % Other 3,384 3,418 (34 ) -1.0 % $ 80,163 $ 89,933 $ (9,770 ) -10.9 % Total SG&A expenses were approximately $80.2 million and $89.9 million for the years ended December 31, 2024 and December 31, 2023.
Selling, general and administrative expenses: Selling, general, and administrative expenses For the Year Ended Change (in thousands) December 31, $ % 2025 2024 2025/2024 2025/2024 Payroll and related costs $ 34,662 $ 31,555 $ 3,107 9.8 % Provision for credit loss recovery (362 ) (519 ) 157 -30.3 % Professional fees and expenses 19,060 29,873 (10,813 ) -36.2 % Travel and meetings 5,257 5,344 (87 ) -1.6 % Facilities and equipment costs 4,677 4,960 (283 ) -5.7 % Stock-based compensation 4,283 5,566 (1,283 ) -23.1 % Other 3,270 3,384 (114 ) -3.4 % $ 70,847 $ 80,163 $ (9,316 ) -11.6 % Total SG&A expenses were approximately $70.8 million and $80.2 million for the years ended December 31, 2025 and December 31, 2024.
We recognize royalty revenue when the performance obligations have been satisfied. Legal Contingencies and Expense For legal contingencies, we accrue a liability for an estimated loss if the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated.
Legal Contingencies and Expense For legal contingencies, we accrue a liability for an estimated loss if the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated. Legal fees and expenses are expensed as incurred based on invoices or estimates provided by legal counsel.
The $2.1 million increase in interest income was primarily the result of increased balances in cash equivalents and marketable securities. Interest expense For the year ended December 31, 2024 , we recognized approximately $12.5 million in interest expense compared to approximately $13.3 million of interest expense for the year ended December 31, 2023 .
The $0.6 million decrease in interest income was primarily the result of lower interest rates and timing of investments. Interest expense For the year ended December 31, 2025 , we recognized approximately $6.6 million in interest expense compared to approximately $12.5 million of interest expense for the year ended December 31, 2024 .
Royalty Revenue: For sub-license agreements that are within the scope of ASC 606, we recognize revenue when the related sales occur in accordance with the sales-based royalty exception under ASC 606-10-55-65. Royalty revenue consists of consideration earned related to international sales of NERLYNX made by our sub-licensees in their respective territories.
Revenue is recognized by measuring the progress toward complete satisfaction of the performance obligations using an input measure. Royalty Revenue: For sub-license agreements that are within the scope of ASC 606, we recognize revenue when the related sales occur in accordance with the sales-based royalty exception under ASC 606-10-55-65.
Other income and expenses: Other income (expenses) For the Year Ended Change (in thousands) December 31, $ % 2024 2023 2024/2023 2024/2023 Interest income $ 4,724 $ 2,605 $ 2,119 81.3 % Interest expense (12,452 ) (13,330 ) 878 -6.6 % Other income 862 759 103 13.6 % $ (6,866 ) $ (9,966 ) $ 3,100 -31.1 % Interest income For the year ended December 31, 2024, we recognized approximately $4.7 million in interest income compared to approximately $2.6 million of interest income for the year ended December 31, 2023.
Other income and expenses: Other income (expenses) For the Year Ended Change (in thousands) December 31, $ % 2025 2024 2025/2024 2025/2024 Interest income $ 4,078 $ 4,724 $ (646 ) -13.7 % Interest expense (6,622 ) (12,452 ) 5,830 -46.8 % Other income 1,027 862 165 19.1 % $ (1,517 ) $ (6,866 ) $ 5,349 -77.9 % 66 Table of Contents Interest income For the year ended December 31, 2025, we recognized approximately $4.1 million in interest income compared to approximately $4.7 million of interest income for the year ended December 31, 2024.
Research and development expenses: Research and development expenses For the Year Ended Change (in thousands) December 31, $ % 2024 2023 2024/2023 2024/2023 Clinical trial expense $ 17,091 $ 13,611 $ 3,480 25.6 % Internal R&D 32,248 30,731 1,517 4.9 % Consultant and contractors 2,917 2,701 216 8.0 % Stock-based compensation 2,679 3,339 (660 ) -19.8 % $ 54,935 $ 50,382 $ 4,553 9.0 % 65 Table of Contents Total R&D expenses increased approximately 9.0% to $54.9 million for the year ended December 31, 2024 from approximately $50.4 million for the year ended December 31, 2023.
Research and development expenses: Research and development expenses For the Year Ended Change (in thousands) December 31, $ % 2025 2024 2025/2024 2025/2024 Clinical trial expense $ 20,538 $ 17,091 $ 3,447 20.2 % Internal R&D 34,440 32,248 2,192 6.8 % Consultant and contractors 4,429 2,917 1,512 51.8 % Stock-based compensation 2,661 2,679 (18 ) -0.7 % $ 62,068 $ 54,935 $ 7,133 13.0 % Total R&D expenses were approximately $62.1 million and $54.9 million for the years ended December 31, 2025 and December 31, 2024.
Other income For the year ended December 31, 2024, we recognized approximately $0.9 million in other income, primarily due to increased income related to the termination of our sublease and resulting settlement payment of $0.5 million, partially offset by unfavorable exchange rates in Euro-denominated transactions.
Other income For the year ended December 31, 2025, we recognized approximately $1.0 million in other income, compared to $0.9 million in other income for the year ended December 31, 2024. The increase was primarily due to increased sublease income.
Cash used in investing activities was primarily due to the purchase of the intangible asset of $12.5 million we paid to Pfizer for meeting a commercial sales milestone and the purchase of available-for-sale securities of approximately $23.8 million, partially offset by the maturities of available-for-sale securities of approximately $17.3 million.
Investing Activities During the year ended December 31, 2025 , cash used in investing activities was approximately $36.2 million. Cash used in investing activities was primarily due to the purchase of available-for-sale securities of approximately $108.1 million, partially offset by the maturities of available-for-sale securities of approximately $72.0 million.
Accounting Pronouncements Adopted During the Current Year Segment Reporting Disclosures In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.
Accounting Pronouncements Adopted During the Current Year ASU 2023-09, Improvements to Income Tax Disclosures On December 14, 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures ( “ ASU 2023-09 ” ).
Removed
Accordingly, our success depends not only on the safety and efficacy of our drug candidates, but also on our ability to finance product development.
Added
We currently market NERLYNX in the United States using our direct specialty sales force consisting of approximately 35 sales specialists.
Removed
We expect R&D expenses to increase in 2025 as we conduct two Phase II clinical trials of alisertib. Acquired In-Process Research and Development Expense Acquired in-process research and development expense includes the rights to develop new drug candidates.
Added
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.
Removed
Payments to acquire a new drug candidate are immediately expensed as acquired in-process research and development provided that the drug candidate has not achieved regulatory approval for marketing and, absent obtaining such approval, has no alternative future use. Results of Operations The following summarizes our results of operations for the years ended December 31, 2024 and 2023.
Added
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.
Removed
The increase is primarily attributable to the following: • an increase in clinical trial expense of approximately $3.5 million, primarily due to the procurement of alisertib drug product as well as increased alisertib study activity, partially offset by fewer clinical milestones being achieved; and • an increase in internal R&D of approximately $1.5 million, primar ily due to higher compensation related to achieving company goals and one-time payroll and severance related expenses.
Added
Taxes On July 4, 2025, the “One Big Beautiful Bill” was signed into law, which includes significant changes to federal tax law and other regulatory provisions that may impact us.
Removed
The increases above were partially offset by: • a decrease in stock-based compensation of approximately $0.7 million , primarily due to lower fair value on equity grants as a result of a lower market price for our common stock .
Added
As of the date of these financial statements, we have evaluated the impact of the changes to Section 174 – Amortization of Research and Experimental Expenditures on the valuation allowance release. We intend to deduct the capitalized costs over two years.
Removed
The approximately $0.9 million decrease in interest expense was due to the pay down of debt in 2024 as well as ending imputed interest on $8.0 million related to the final installment payment on the Eshelman litigation settlement paid in October 2024.
Added
This deduction reduces the amount of net operating losses being utilized but results in a net zero change to th e deferred tax asset balance.
Removed
(4) Non-GAAP adjusted diluted net income per share was calculated based on 49,100,433 and 47,550,852 weighted-average shares of common stock outstanding for the years ended December 31, 2024 and 2023, respectively.
Added
In 2 025, we adjusted a portion of our valuation allowance related to our deferred tax assets in the amoun t of $3.8 million, w hich reduced our net income for the year. 64 Table of Contents Summary of Income and Expenses Product revenue, net Product revenue, net consists of revenue from sales of NERLYNX.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed3 unchanged
Biggest changeIf overall interest rates had increased by one hundred basis points during the year ended December 31, 2024, our interest expense would have increased by $0.7 million.
Biggest changeIf overall interest rates had increased by one hundred basis points during the year ended December 31, 2025, our interest expense would have increased by $0.2 million.
We invest our excess cash primarily in cash equivalents such as money market investments as of December 31, 2024. 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.
We invest our excess cash primarily in cash equivalents such as money market investments as of December 31, 2025. 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.
We also h ave interest rate exposure as a result of borrowings outstanding under the Athyrium Notes. As of December 31, 2024, the aggregate outstanding principal amounts of the Athyrium Note s was $66.7 million.
We also h ave interest rate exposure as a result of borrowings outstanding under the Athyrium Notes. As of December 31, 2025, the aggregate outstanding principal amounts of the Athyrium Note s was $22.5 million.

Other PBYI 10-K year-over-year comparisons