Good afternoon. My name is Rob, and I'll be your conference call operator today. At this time, all participants are in a listen-only mode. After the speakers' formal remarks, there will be a question-and-answer session. As a reminder, this call is being recorded. I would now like to turn the conference over to Mariann Ohanesian, Senior Director of IR for Puma Biotechnology. You may begin your conference.

Thank you, Rob. Good afternoon and welcome to Puma's Conference Call to discuss our Financial Results for the First Quarter of 2018. Joining me on the call today are Alan Auerbach, Chief Executive Officer, President and Chairman of the Board of Puma Biotechnology; Steven Lo, Chief Commercial Officer; and Charles Eyler, our SVP of Finance and Treasurer. After market close today, Puma issued a news release detailing first quarter 2018 financial results. That news release, the slides that Steve will refer to and a webcast of this call are accessible via the home page and Investors sections of our website at pumabiotechnology.com. The webcast and presentation slides will be archived on our website and available for replay for the next 90 days. Before I turn the call over to Alan for an overview of our performance and operations, I would like to point out that during this conference call, we will make forward-looking statements within the meaning of federal securities laws. All statements other than historical facts are forward-looking statements and are based on our current expectations, forecasts and assumptions. Forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from the anticipated results and expectations expressed in these forward-looking statements. These risks and uncertainties are identified in our Annual Report on Form 10-K for the year ended 12/31/2017, our Quarterly Report on Form 10-Q for the quarter ended 03/31/2018 and any subsequent documents we file with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this live conference call, May 9, 2018. The company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as required by law. During today's call, we may refer to certain non-GAAP financial measures that involve adjustments to our GAAP figures. We believe these non-GAAP metrics may be useful to investors as a supplement to, but not a substitute for our GAAP financial measures. Please refer to our first quarter 2018 news release for a reconciliation of our GAAP and non-GAAP results. I will now turn the call over to Alan.

Thank you, Mariann, and thank you all for joining our call today. We are pleased to report that sales of NERLYNX, Puma's first approved product, have grown steadily since launch. NERLYNX was approved by the U.S. FDA in July 2017 for the treatment of patients with early stage HER2-positive breast cancer, who have previously been treated with a trastuzumab-containing regimen. Today, we reported NERLYNX net sales of $36 million for the first quarter of 2018, which represents a sequential increase from the $20.1 million in sales reported in the fourth quarter of 2017. In a moment, I will turn the call over to Steve Lo, Puma's Chief Commercial Officer, who will provide an update on NERLYNX launch-related activities and detail of our commercial progress in the U.S. to-date. In June 2016, we submitted a Marketing Authorization Application to the European Medicines Agency for neratinib for the extended adjuvant treatment of early stage HER2-positive breast cancer. As previously reported, the Committee for Medicinal Products for Human Use, also known as the CHMP, adopted a negative opinion on the NERLYNX MAA, recommending the refusal of Marketing Authorization for NERLYNX. In March, Puma requested a reexamination of that opinion, and we expect to receive a response from the CHMP around mid-year and more specifically in the late June, early July timeframe. We look forward to several additional clinical milestones for neratinib. We anticipate reporting updated Phase I/II data from the ongoing clinical trial of neratinib in combination with KADCYLA, also known as T-DM1, in HER2-positive metastatic breast cancer in the second quarter at the American Society of Clinical Oncology Annual Meeting. In addition, as investors are aware, we have an ongoing Phase III trial of neratinib in third-line HER2-positive metastatic breast cancer also known as the NALA trial. On last quarter's call, we…

Thank you, Alan. I am pleased to discuss the progress we have made with the launch of NERLYNX. We are now nine months into actively promoting NERLYNX. We had a very strong quarter and look forward to continuing this momentum. First of all, a reminder that during my presentation, I will be making forward-looking statements. As you may recall, we set up a network of six specialty pharmacies who provide NERLYNX directly to the patients. These specialty pharmacies conduct benefit investigations, obtain a prior authorization approval from the insurance company, and then arrange with the patient to ship NERLYNX to their home. We have also established a separate specialty distribution channel, where the prescription does not need to be sent to the specialty pharmacy. This helps to facilitate the ability for certain patients to obtain NERLYNX directly from their physician's office, integrated health systems and also the VA. Also, we have our Puma Patient Lynx services, which helps patients with co-pay and financial assistance and provides physician offices with reimbursement support. Later in the call, Charles will review the full financial results, but I will now provide you with the sales results since FDA approval. In slide 4, you see quarterly net sales of NERLYNX since FDA approval. As Alan mentioned, we had a very strong quarter with net revenue at $36 million, an increase of 79% from the prior quarter. This growth was the result of more patients being prescribed NERLYNX and refilling their prescriptions, along with the increase of prescribers becoming more aware of NERLYNX. This chart is both specialty pharmacy and specialty distribution channels. Furthermore, if you see in slide 5 the monthly and cumulative net sales of NERLYNX through the month of April, I have included the April's estimated net sales. We are pleased to see…

Thanks, Steve. Let me start with a quick summary of our financial results for the first quarter of 2018. Please note that I will make comparisons to Q3 and Q4 of 2017, which we believe is a better indication of our progress in becoming a commercial company than year-over-year comparisons. For more information, I recommend that you refer to our 10-Q, which will be filed tomorrow and includes our consolidated financial statements. In the first quarter of 2018, we reported a net loss based on GAAP of $24.3 million or $0.65 a share. Our GAAP net loss for Q4 and Q3 of 2017 were $64.1 million and $77.2 million, respectively. On a non-GAAP basis, we reported a net income of $1.1 million or $0.02 a share for the first quarter of 2018. As Alan and Steve mentioned, net revenue from NERLYNX sales were $36 million versus $20.1 million for the fourth quarter of 2017. Our cost of sales for the first quarter was $6.4 million, which included the amortization of milestone payments to licensor of approximately $0.9 million. Going forward, we will continue to recognize amortization of the milestone payment to the licensor of $0.9 million per quarter as cost of goods sold. In the first quarter of 2018, we also recognized aggregate sub-license revenue of $30.5 million. For the fiscal year 2018, Puma continues to anticipate that NERLYNX net revenues will be in the range of $175 million to $200 million. This guidance includes majority of the revenue coming from the currently approved extended adjuvant indication only. SG&A expenses based on GAAP were $36.6 million for the first quarter of 2018, compared to $30.9 million and $32.5 million for the fourth and third quarter of 2017, respectively. Non-GAAP SG&A expenses were $27.6 million for the first quarter compared to…

Thank you, Charles and Steve. Since we launched NERLYNX for the treatment of early stage HER2-positive breast cancer in the third quarter of 2017, we have continued to receive positive feedback from patients, prescribers and payers. We will continue to move forward with our plans to advance and expand our commercial activities for the balance of 2018 and beyond. This concludes today's presentation. We will now turn the floor back to the operator for Q&A. Operator?

Thank you. We will now begin the question-and-answer session. Our first question comes from Cory Kasimov with JPMorgan Chase. Please proceed with your question.

(20:29) questions. First one is, I wanted to ask about some of the dynamics that you reported in April. So, this was your best sales month to-date, but there was also a dip in new patient starts. I think you said you've seen a rebound in new prescriptions in May, but I'm hoping you can offer a little bit more color around this. And then, I have one follow-up.

Yeah. We're happy to do that. So, the first week of April was extraordinarily low for some reason. I don't know if that was an anomaly or if that was due to any fundamental dynamic. We then saw a trend back up the rest of the month. And to give you a little more color, I would say we just got the new patient – the new patients coming into the specialty pharmacy and NRxs for last week. Those were more in line with what we were seeing in March.

Okay. All right.

So, it appeared to be – at this point, I would say it appeared to be a one-time dip. We'll obviously be continuing to watch it to see whether or not – which direction it goes.

Okay. That's helpful. And then, one quick follow-up with regards to the NALA Phase III study. I'm curious what you based the assumed event rate on. Was that basically from the pivotal TYKERB study or something else?

Yeah. The event rate was based on historical controls, if you will, and what we've been seeing in the trial is, whereas we're expecting a lot of months to see a double-digit number of events – and again, the endpoint to unblind (22:06) trial is centrally confirmed progression-free survival. So, whereas we were expecting in some cases to be seeing a monthly event rate in double-digits, we're seeing one that's in the single-digits.

Okay. Thanks, Alan. I'll hop back in queue.

Sure.

The next question is from Ying Huang with Bank of America Merrill Lynch. Please proceed with your question.

Hi, good afternoon. Thanks for taking my questions as well. So maybe, Alan, can you shed a little bit more light on the 23.7% discontinuation? We understand that, on the comments, half was due to AE. But can you give a little bit more detail about the half – the other half discontinuation? And then, I was wondering if you can tell us a little bit more about the new rapporteur who was assigned to the reexam? Do we know which rapporteur that is?

Okay. So, let me answer your second question, and then I'll hand it over to Steve for the other one. So, we have been assigned new rapporteurs for the reexamination of the MAA. I don't remember which countries they're from. But I do remember that it's different rapporteurs from what we had before and a different country than we had before.

Great. Hi, this is Steve. I'll answer the discontinuation question. So, in answer to your question, yes, we do monthly audits on the discontinuations in our specialty pharmacy. So, only about half of those are attributed to adverse events such as diarrhea. The other half attributes to classifications that the specialty pharmacy will designate (23:46). So, if a patient moves to a different specialty pharmacy, they are technically discontinued at another specialty pharmacy. So, that will account for some of the numbers. There are also patients who will move to in-office dispensing at their physician's office, so that will be a discontinuation. And then finally, we have a very small amount of patients who are not extended adjuvant patients, they may be metastatic, and they discontinue for obvious reasons such as progression. So, those are the other reasons why patients would discontinue.

Okay. Thank you.

Our next question is from Kennen Mackay with RBC Capital Markets. Please proceed with your question.

Hey, thank you for taking the question. Wondering if there's any color you can provide about the potential gross to net in Q1 and to what extent you're seeing an impact from the donut hole there. And then, also I guess wondering about the 1,614 patients that are currently on active, that grew about 60% from what we'd seen at the end of January in the prior update. Wondering if that's sort of what we should be thinking about as sort of the run rate going forward, obviously, a big step-up in active treatment, or if there's any color you can help us with around maybe the discontinuation rate we should be expecting from those active patients given the, again, the bolus (25:19) of new patients there. Thank you.

Yeah. Hi, Kennen. So, let me answer the first two questions, and I need you to repeat the third one again. So, in terms of the gross to net, the gross to net in the quarter was 10.6%. And the reduction that you're seeing quarter-over-quarter in the gross to net is, as you know, we have a fixed payment that's in our cost of goods sold. So, obviously, as revenues increase, the hit from that cost obviously goes down. And turning to (25:56) your second question in terms of the Medicare patients, about 13% of our population is Medicare. So, I don't really know if we see much of an impact from donut hole. I don't know if we have any way to see that. And then, can you tell us again your third question?

Yeah. No, absolutely. Just looking at, I think, slide 6 here and comparing it to the specialty pharma enrollments or prescriptions from the prior update, it looks like the number of active prescriptions in the sort of yellow box there has increased to 1,600 from about 1,000 previously. And I'm wondering again if that's sort of what we should be anticipating is the sort of run rate of prescriptions going out to patients here or if, again, those prescriptions – those active prescriptions, that 60% increase, is something we should be anticipating to see a decent discontinuation rate from.

Okay. So, the number you see of the 1,600 active, as Steve mentioned that we're showing on that slide a 23.7% discontinuation rate. Not all of those are true discontinuations, because it could be that, for instance, you stopped getting the drug from one specialty pharmacy, you're getting it from a different one. So, one specialty pharmacy will say you discontinued, but you're actually getting it through a different one. Or we could have situations where patients, instead of getting it from the pharmacy, are now getting it from their doctor's office, right. So, they discontinued getting it through the pharmacy, so it shows up as a discontinuation. But they're getting it through what we call our specialty distribution, which is the in-office dispensing. The data you're seeing on this slide only covers the specialty pharmacies. It doesn't cover the in-office dispensing.

Got you. Okay (27:59).

So, to answer your question on the 1,600, yes, that is a good number to go forward with. As you know from NERLYNX, as Steve said, about 12% of the discontinuations are due – the discontinuation due to adverse events is about 12%. As you know from the clinical trials, those tend to occur in like the first – that tends to be the highest incidence is the first month that they're on the drug. So, I would say the 1,600 is a good number. But obviously, we have new ones coming in as well. So, we would expect that number to continue to grow.

Got you. Thanks for all the clarity on this.

Sure.

Our next question comes from Yigal Nochomovitz with Citigroup. Please proceed with your question.

Hi, Alan and team. Thanks for taking the question. Could you comment on where things stand with respect to stocking in the current quarter? Or where are those levels relative to the $14 million (28:59), I think, I saw that you pointed out in the April numbers? Thanks.

Yeah. Hi, this is Steve. We don't have any stocking whatsoever at this part of the launch. The only stocking occurred right at beginning. Let me give you some color on this. We primarily deal with the specialty pharmacies, and they have just-in-time stocking. So, when they dispense a patient, they can immediately order from our 3PL and it gets shipped to this pharmacy within a day or two. The same goes with the physician offices. They don't carry that much stock on hand. They really are once again just-in-time.

Oh, okay. That's actually very helpful clarification. Now, with regard to the pacing of the spend and revenues over the course of the rest of the year, can you just give us a little bit more clarity on, I think, how R&D will trend down to get to cash flow break-even by the end of the year and also whether the additional expected milestones to Pfizer will be – are assumed in that estimate of reaching cash flow break-even? Thanks.

Yeah. So, I would expect to have R&D expenses continuing to trend down quarter-over-quarter, I would say flat to down quarter-over-quarter. Obviously, we would expect revenues to increase. And in terms of milestone payments this year, I don't believe there's any milestone payments that are due this year.

Okay. And then, the final one just on the clinical front, are you able to say – well, actually, I have two. First on NALA quickly, are you able to say how many events you've actually generated so far relative to the 425 (30:56) and if you could answer that? And then, we also haven't heard much of anything about the I-SPY 3 neoadjuvant study. Is that – I assume that's still going on, but if you could just clarify where that stands. Thank you, Alan.

Yeah. In terms of the number of events, I don't have that number in front of me. So, I obviously don't want to be inaccurate in my statement. So, I would have to get back to you on what the numbers are. In terms of I-SPY 3, that's being handled by the I-SPY Group (31:27), and I believe they're in the planning stages of that. And I have not – I don't know what their current plans are for that initiation. So, I would need to get back to you on that.

Okay. Thank you.

Ladies and gentlemen, we have run out of time for this Q&A. I'd like to turn the conference back to Mariann for closing remarks.

Thanks, Rob. We appreciate your interest in Puma Biotechnology. As a reminder, this call may be accessed via replay of the webcast at pumabiotechnology.com beginning later today. Thank you again for your time and attention today.

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