Puma Biotechnology, Inc. (PBYI) Q4 2020 Earnings Report, Transcript and Summary

Good afternoon. My name is Dona, and I’ll be your conference operator today. Welcome to the Puma Biotechnology conference call. At this time, all participants are in a listen-only mode. After the speakers’ formal remarks, there will be a question-and-answer session. [Operator Instructions] And as a reminder, this conference is being recorded. I would now like to turn the conference over to Ms. Mariann Ohanesian, Senior Director of IR for Puma Biotechnology. Thank you. Please go ahead.

Thank you, Dona. Good afternoon, and welcome to Puma’s Conference Call to discuss our Financial Results for the Fourth Quarter of 2020. Joining me on the call today are Alan Auerbach, Chief Executive Officer, President, and Chairman of the Board of Puma Biotechnology; Maximo Nougues, Chief Financial Officer; and Jeff Ludwig, Chief Commercial Officer. After market close today, Puma issued a news release detailing fourth quarter 2020 financial results. That news release, the slides that Jeff will refer to, and a webcast of this call are accessible via the homepage and Investor sections of our website at pumabiotechnology.com. The webcast and presentation slides will be archived on our website and available for replay for the next 90 days. Today’s conference call will include statements about the company’s future expectations, plans, and prospects that constitute forward-looking statements for purposes of federal securities laws. Such statements are subject to risks and uncertainties, and actual results may differ from those expressed in these forward-looking statements. For a full discussion of these risks and uncertainties, please review our periodic and current reports filed with the SEC from time to time including once filed our Annual Report on Form 10-K for the year ended December 31, 2020. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this live conference call, February 25, 2021. The company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as required by law. During today’s call, we may also refer to certain non-GAAP financial measures that involve adjustments to our GAAP figures. We believe these non-GAAP metrics may be useful to investors as a supplement to, but not a substitute for, our GAAP financial measures. Please refer to our fourth quarter 2020 news release for a reconciliation of our GAAP to non-GAAP results. I will now turn the call over to Alan.

Thank you, Mariann, and thank you all for joining our call today. Today, Puma reported total revenue for the fourth quarter of 2020 of $52.6 million. Total revenue includes net U.S. NERLYNX sales, as well as royalty fees from our sublicensees. Net NERLYNX sales were $50 million in the fourth quarter of 2020, representing a slight increase from the $49.3 million in net sales reported in the third quarter of 2020, and a decrease from the $58.7 million reported in Q4 of 2019. Our fourth quarter results also include royalty revenue of $2.6 million versus $200,000 in Q4 of 2019. During the fourth quarter of 2020, we continued to experience challenges brought on as a result of the COVID-19 pandemic. I will begin with a review of some of the highlights of the quarter and then Jeff Ludwig will provide more details on NERLYNX commercial activities. Maximo Nougues will follow with highlights of the key components of our financial statements for the fourth quarter of 2020. During the fourth quarter of 2020, there were several clinical updates for the company that were meaningful for investors. In early October, we announced that efficacy results of neratinib in HER2 positive, HR-positive early stage breast cancer from our Phase III ExteNET clinical trial were published in the journal Clinical Breast Cancer. We believe that this publication will also increase awareness of NERLYNX and its benefit in this patient population. We also presented updated data for the ExteNET trial and from our ongoing CONTROL trial, which is investigating ways to reduce the side effects of NERLYNX and improve the tolerability of the drug at the San Antonio Breast Cancer Symposium in December. As investors are also aware, Puma has an ongoing basket trial of neratinib in HER2-mutated cancers, referred to as the SUMMIT trial. The SUMMIT trial was modified in early 2020, such that ER-positive HER2-negative breast cancer patients who have a HER2 mutation were randomized to receive either fulvestrant alone, fulvestrant plus trastuzumab, or the combination of neratinib plus fulvestrant plus trastuzumab. Under the initial Simon’s two-stage design, each arm of the amended study will enroll seven patients during Stage 1, and if no patient in a given arm responds, that arm will be closed for further enrollment. If in the first stage, one or more patients respond, the arm will be expanded up to 18 patients. If less than four patients in the expanded arm respond, that arm will be closed to further enrollment. If more than four patients respond, the arm will be expanded and additional patients will be enrolled. Enrollment in this trial is continuing in 2021 and our current estimate is that we will reach the initial enrollment of 21 patients, which would be seven patients per arm in early Q2 of 2021. The timing of this enrollment may be impacted by COVID-19 or the recent weather conditions in certain parts of the U.S. Once enrollment in this trial is complete, we would look forward to being able to perform a top line analysis of the response data, which would determine whether or not to expand the respective arms under the Simon’s two-stage design that was previously described. The timing of this is obviously dependent on enrollment and whether or not patients in a given arm response. We would expect to have this top line analysis completed somewhere between mid-2021 and late 2021. As we have noted previously, we would further anticipate that this top line analysis would form the basis for a pre-NDA meeting with the FDA to discuss the potential for accelerated approval. As investors are also aware in November, we announced interim data from another cohort from the SUMMIT trial, and more specifically the cohort of patients with metastatic non-small cell lung cancer with epidermal growth factor or EGFR excellent 18 mutations who have been previously treated with an EGFR tyrosine kinase inhibitor. In late January, 2021, we presented additional data from this cohort of patients in an oral discussion at the world conference on lung cancer presented by the International Association for the Study of Lung Cancer. We are continuing to enroll this cohort of patients and anticipate that we will have additional data from this cohort to report in the second half of 2021. Moving on to other developments in the fourth quarter, we were pleased to announce that Puma prevailed in the final appeal proceedings brought against its licensed European patent, EP patent 1848414, which covers the use of irreversible EGFR inhibitors in treating gefitinib and/or erlotinibresistant cancer and cancer with a T790M EGFR mutation. The European Board of Appeal announced its decision at a final hearing on December 1 concluding that the opposition of the patent initiated by a Boehringer Ingelheim entity was inadmissible and reversing the European opposition decision issued in 2014, thereby upholding patent as originally granted. In addition, today after the close Puma announced that Puma and Pierre Fabre have agreed to extend the terms of their existing licensing agreement to include granting Pierre Fabre commercialization rights for NERLYNX to Greater China, which includes Mainland China, Taiwan, Hong Kong, and Macau, under the terms of the agreements who will receive an upfront payment of $50 million as well as additional regulatory and sales-based milestone payments that could add up to an additional $240 million. These milestones will be based solely on regulatory and sales achievements in Greater China. In addition, Puma will receive significant double-digit tiered royalties on the sales of NERLYNX in Greater China. In addition, Puma and CANbridge Pharmaceuticals have mutually agreed to terminate their license agreement to commercialize NERLYNX in Greater China. Puma has agreed to pay CANbridge a one-time fee of $20 million in return – to return all rights to neratinib in Greater China back to Puma. We are pleased to extend our relationship with Pierre Fabre into the Greater China region. Pierre Fabre currently markets the drug Navelbine also known as vinorelbine, which is one of the common chemotherapy drugs used in the treatment of breast cancer in China, and is therefore well-equipped with an existing commercial infrastructure in China to make NERLYNX success in Mainland China. We anticipate that Pierre Fabre plans to make NERLYNX available to breast cancer patients in Mainland China in the second quarter of this year. I will now turn the call over to Jeff Ludwig, Puma’s Chief Commercial Officer, for a review of our commercial performance during the quarter.

Thanks, Alan. Appreciate it, and thanks to everyone for joining our fourth quarter earnings call. The commercial organization continues to work very hard to reposition NERLYNX with the goal of strengthening the risk benefit perception, increasing our promotional interactions with customers and deploying resources in an innovative and efficient manner. We believe the NERLYNX can play an important role in the treatment of metastatic breast cancer, but our focus is on extended adjuvant with a goal of preventing patients from becoming metastatic. This market is significantly underpenetrated and more must be done to help patients and their families in this battle with early stage breast cancer. I am pleased with the foundational work that has been put in place, and we are increasing our emphasis around focus and execution moving forward. Before I move into the commercial review, just a reminder that I will be making forward-looking statements. As you may recall, we have two channels that provide NERLYNX to patients. We refer to these as our specialty pharmacy channel and our specialty distributor channel or in-office dispensing channel. The majority of our business flows through the specialty pharmacy channel. More specifically, in Q4, approximately 79% of our business went through this channel, with the remaining 21% flowing through the specialty distributor channel. This is in line with what we reported during our Q3 earnings call as well. Now later in this call, Maximo will review the full financial results, but I will now provide you with the current U.S. sales results. Slide 4 shows U.S. quarterly net sales of NERLYNX since FDA approval. As Alan noted, our net U.S. product sales were $50 million in the fourth quarter of 2020. This is a slight increase over the $49.3 million we reported in Q3 of 2020. As mentioned on prior Q4 earnings calls, we tend to see a decline in new patients starts in the fourth quarter each year as some patients decide not to initiate new therapies around the Thanksgiving, Christmas, and New Year’s holidays. In addition, these results continue to be impacted by the COVID-19 pandemic. As you are likely aware COVID-19 infection rates and that’s increased significantly in the fourth quarter to levels not seen previously and we have only recently begun to see these decline. These spikes have caused continued challenges with live face-to-face interactions with customers and virtual interactions remained the norm. The field team is working very hard to adapt to this new environment and we have increased our non-personal promotional efforts. With that said overall promotional interactions remain below our pre-COVID baseline. In addition, these spikes can cause a disruption in overall patient flow and this is more likely to occur in the early stage breast cancer setting. Combining the Q4 holidays along with these significant increase in COVID-19 infections, we did see some softening in both the specialty pharmacy channel and the specialty distributor channel in Q4. Now Slide 5, shows the bottles of NERLYNX sold by quarter since launch. We sold 3,585 bottles of NERLYNX in Q4 2020, which is a very slight decrease from our Q3 2020 bottle sales of 3,611. The focus of the commercial organization is to grow NERLYNX quarter-over-quarter, which did not happen in Q4. With that said, I mentioned previously that I am happy with some of the foundational work that has been put in place to change the risk benefit perception of NERLYNX. Key elements of this strategy include the following. First, the publication of the interim results of the control study in the September edition of Annals of Oncology. This was important because it highlighted that antidiarrheal strategies, including dose escalation can significantly reduce the incidence of grade 3 diarrhea and improve overall tolerability of NERLYNX. The second key element was the publication of the final efficacy results from the ExteNET trial in the October edition of Clinical Breast Cancer. This was important because it highlighted the benefits seen in a descriptive analysis of patients at heightened risk of disease recurrence. These patients were HER2-positive HR-positive with residual disease receiving NERLYNX within one year following their trastuzumab-based therapy. This descriptive analysis demonstrated a consistent benefit in invasive disease-free survival, overall survival and CNS events. We believe that NERLYNX can play an expanded role in the broader extended adjuvant setting, but it’s important to note that there remains significant opportunity even in this high risk group. And finally good representation of NERLYNX during December San Antonio’s Breast Cancer Symposium with 10 accepted posters, including a spotlight poster on the ExteNET OS data and a poster highlighting the benefits of dose escalation from the control study. We believe that this information combined with additional supporting initiatives can play an important role in changing the perception of the risk benefit profile of NERLYNX going forward. An early indicator of the impact of the control publication can be seen on Slide 6, which shows that in Q4, approximately 38% of all new patients starts were initiated at a reduced dose. This is an increase over the 33% we reported in Q3. As a reminder, this is very important since the control data showed that utilizing a dose escalation strategy in the extended adjutant setting, coupled with PRM loperamide, showed a greater than 60% reduction in grade 3 diarrhea, a 60% reduction in median cumulative days of grade 3 diarrhea and an approximate 80% reduction in discontinuation. We believe that the increasing adoption of dose escalation will improve the overall tolerability of NERLYNX and increase the average length of therapy with the end result, benefiting more patients battling breast cancer. Slide 7, highlights the strategic collaborations we have formed across the globe with the goal of making NERLYNX available to more patients around the world. Key highlights in Q4, include the launch of NERLYNX in Finland and Switzerland, as well as the most recent metastatic approval in Argentina that incurred in January of 2021. In addition, as Alan highlighted in his opening remarks, we have extended our partnership with Pierre Fabre to greater China, which will now include mainland China, Taiwan, Hong Kong and Macau. We are continuing to work closely with our partners and look forward to the potential for NERLYNX to be approved in additional countries in Europe, Latin America, Asia and the Middle East. In summary, I’m proud of the foundational work that has been done by the team and believe that we are well positioned to increase the impact we are having on patients battling HER2-positive breast cancer. I will now turn the call over the Maximo for a review of our financial results. Maximo?

Thanks, Jeff. I will begin with a brief summary of our financial results for the fourth quarter of 2020. Please note that I will make comparisons to Q3 and Q2 2020, which we believe are better indications of our progress as a commercial company than year-over-year comparisons. The more information I recommend that you refer to our 10-K, which will be filed in early March and includes our consolidated financial statements. For the fourth quarter of 2020, we reported a net loss based on GAAP of $15 million or $0.38 per share. Our GAAP net loss for Q3 2020 was $31.5 million and our GAAP net income for Q2 2020 was $3.4 million. On a non-GAAP basis, which is adjusted to remove the impact of stock-based compensation, we reported a net loss of $5.5 million or $0.14 per share for the fourth quarter of 2020. Gross revenue from NERLYNX sales was $60.1 million in Q4 2020 versus $58.6 million in Q3. As Alan mentioned it, net revenue from NERLYNX sales was $50 million, a slight increase from net sales of $49.3 million in the third quarter of 2020. In Q4 2020, we also recognize $2.6 million in royalty revenue from our global partners versus $1.5 million in Q3. Our gross to net adjustment in Q4 was about 16.8%, an increase from the 15.8% gross-to-net adjustment in Q3. The increase was driven mostly by higher rebates, due to our price increase cost in August. Cost of sales for the fourth quarter was $10.9 million, which included the amortization of intangible assets related to our license of neratinib of approximately $2 million. Going forward, we will continue to recognize amortization of the milestone payments to the licensor of about $2 million per quarter as cost of sales. For fiscal year 2021, Puma anticipates that NERLYNX net sales will be in the range of $205 million to $210 million. We also anticipate that our gross to net adjustment in 2021 will be between 18.5% and 19.5%. Furthermore, for fiscal year 2021, we anticipate receiving royalties from our partners around the world in the range of $16 million to $17 million and potential license revenue in the range of $30 million to $32 million. We recognize there is a great deal of uncertainty regarding the impact of COVID-19. And this may continue to negatively impact ourselves royalties and license revenue. Historically, the first quarter represents the lowest net product sales quarter of a year, due to a number of factors, including the decline in new patients, starting NERLYNX during the holidays in the fourth quarter of the prior year, which carries over to [indiscernible] in Q1. Also the recent weather conditions in certain parts of the U.S. created some disruptions to our segment and enrollment. We are tracking the recovery closely. We anticipate that Q1 2021 NERLYNX net sales will be in the range of $42 million to $43 million. Royalty revenues will be in the range of $2 million to $3 million. And license revenue will be $30 million. Also, we anticipate that the gross to net in Q1 2021 will be approximately 20% to 21%. SG&A expenses were $28.8 million in the fourth quarter of 2020 compared to $29.6 million and $29.4 million for Q3 and Q2 2020 respectively. SG&A expenses include a non-cash charges for stock-based compensation of $4.3 million for the fourth quarter of 2020, compared to $4.1 million for Q3 and $4.7 million for Q2. Research and development expenses were $24.2 million in the fourth quarter compared to $23.3 million and $24.7 million for Q3 and Q2 2020 respectively. R&D expenses, including non-cash charges for stock-based compensation of $5.3 million in Q4 compared to $3.5 million and $5.9 million for Q3 and Q2 2020 respectively. In the fourth quarter of 2020, Puma reported cash burn of $15.6 million, which included a $10.1 million milestone payment to Pfizer compared to cash earned of $1.8 million in Q3 and $6.2 million in Q2 2020. For the full fiscal year, our cash burn was $19.3 million, which included $20.6 million of payment to the licensor of neratinib. We ended the fourth quarter of 2020 with $93.4 million in cash, cash equivalent, and marketable securities. Our accounts receivables balance at December 31 was $25.5 million. Our accounts receivables terms range between 10 and 68 days, while our days sales outstanding are about 46 days. We estimate that as of year-end 2020, our distribution network maintained approximately three weeks of inventory. Overall, we continue to deploy our financial resources to focus on their balances of neratinib through ongoing clinical trials and the commercialization on NERLYNX.

Thanks, Maximo. We continue to recognize that we need to improve NERLYNX sales growth and that the COVID-19 pandemic is presenting challenges to us with respect to achieving that growth. Puma’s senior management in cooperation with the Board of Directors, continues to remain focused on NERLYNX revenue and sales growth in 2021 and beyond. We are continuing to adapt to the virtual environment that we have needed to pivot toward due to the COVID-19 pandemic, and we are hopeful that changes to our commercial infrastructure will make a positive contribution to NERLYNX sales growth. We look forward to updating investors on this in the future. There continues to be a significant unmet need for women battling breast cancer. We at Puma are committed and passionate about finding more effective ways of helping these patients during their journey, and we will continue to strive to achieve that goal. This concludes today’s presentation. We will now turn the floor back to the operator for Q&A. Operator?

Ladies and gentlemen, the floor is now open for questions. [Operator Instructions] Our first question today is coming from Kennen MacKay of RBC Capital Markets. Please go ahead.

Hi, thanks for taking the question. Maybe twofold question. I’m wondering first off, sort of next steps on the ongoing litigation on T790M on their IP in the EU, and then beyond that, as it relates to sales of NERLYNX. Just wondering in the metastatic setting, what the feedback has been from reps around competition with to tie then HER2-positive space again, metastatic setting. Thank you.

Thank you for the question, Kennen. So with regard to our T790M patent, I’m sure you can imagine that topic is one that’s a very sensitive legal matter. And so therefore there’s not much common that we can provide on it. And your second question with regard to the metastatic Jeff, if you’d like to take that.

Sure. Happy to. So Kennen, as I mentioned in the opening remarks, we’re excited that NERLYNX was approved in the metastatic setting in February. As you mentioned to Kaiser was approved soon thereafter in April, and we feel very good. And quite honestly, another agent was approved in late December. So that’s very good for patients in the metastatic setting, where there’s many more options. We’re still watching to see how that sequencing plays out, but I can tell you that our focus is really in extended adjuvant trying to do everything we can to prevent patients from becoming metastatic. In the metastatic setting, we expect to see some sequencing of agents as unfortunately patients’ progress, but in the extended adjuvant setting, we do not seen the same type of competitive environment and we believe that market is significantly under-penetrated. So our focus is really in the earlier lines of therapy.

And Kennen, I can add to that. Look, in the metastatic setting, especially, kind of that third line and beyond, there’s been four drugs approved within 2020 timeframe. You had HER2 to Kaiser, NERLYNX and then Margenza. And as Jeff said, from a commercial standpoint, that’s an extremely competitive area. So it’s much wiser for us to maintain our focus on the extended adjuvant, where there is no competition for us where the only drug approved is that tends to be where we have the very large majority of our focus.

Does that answer your questions?

Yes. Thank you very much.

Thank you. Our next question is coming from Kenneth Atkins of Cowen. Please go ahead.

Hi, guys. Thanks for taking my question. As we look forward to the update in the second half, could you remind us what you think the bar for successes in EGFR exon 18 lung cancer? What profile do you think you need to achieve there to be successful?

Hi. Thanks for that question. That is a good question. I don’t know the answer to quote what the bar is to be successful if you will. We are focusing on patients who have an EGFR exon 18 mutation and specifically those who’ve already been treated with an EGFR TKI. The only data that’s out there in that space would be the data with afatinib, which showed a roughly 10%-ish response rates So using that as a bar – using that as kind of a comp, if you will, that’s where I think the bar is. Obviously, I can’t answer that from a regulatory standpoint until we’ve actually had a discussion with them. But from our perspective, our interim data showed a 40% response rate. We think that compares very, very favorably to the data with afatinib. I think the best comp I can give and the only one that’s out there for that niche if you will, is the afatinib data, that’s the best parameter I can give you.

Got it. Okay. And then just one question on the guidance, what kind of assumptions that are built into the guidance for NERLYNX sales in 2021, in terms of what happens with the pandemic. And how should we think about trends through the year.

Jeff, you’d like take that.

In terms of guidance for NERLYNX, especially, focused on the U.S., we are thinking about the COVID pandemic, obviously, you’re aware of what’s happening here. We believe a lot of folks are beginning to get vaccinated and ultimately we believe the second half of 2021 will be very different than the first half of 2021 from a commercial promotional perspective as we start to see, hopefully, knock on wood offices begin to open up, travel resume in a little bit more normal fashion. And ultimately, from NERLYNX commercial standpoint, this is a very promotionally sensitive product. And we obviously have some very good data that came out in the latter half of 2020. And so having those channels open up for more promotional activity should allow us to build growth quarter-over-quarter moving forward.

Okay. Thank you. That’s helpful.

[Operator Instructions] Thank you. Our next question is coming from Cory Kasimov of J.P. Morgan. Please go ahead.

Hey, this is Turner on for Cory. Thanks for taking my question. So it sounds like the pre-NDA meeting to discuss accelerated approval of the HER2-mutant hormone receptor positive breast cancer cohort of the SUMMIT trial with occur later this year. Can you just talked about the pushes and pulls of getting accelerated pure approval. And perhaps just what do you think you need to show in the data to achieve it?

Yes, just to clarify, you’re talking about the HER2-mutant breast, correct?

Yes, correct? Yes.

Yes. Okay. So if you don’t mind, I’m going to kind of a long-winded explanation here. When we started the SUMMIT trial, we were first treating with neratinib as a single agent in that study. So these were patients who were HER2-negative ER-positive and had a HER2 mutation. We treated with neratinib, we were getting responses, but the duration of them was very short. And what we found was looking at pre and post-treatment biopsies, we were finding that when you gave neratinib to inhibit the mutation, the estrogen receptor transcription was upregulated quite high. So it was clear that what the mechanism of escape there was the estrogen receptor. So we then move forward with combining neratinib with fulvestrant, so that we’re hitting the HER2 mutation and hitting the estrogen receptor. We’re getting a higher response rate. We were getting a longer duration of response, but it wasn’t, kind of that, nine, 10 months types of directions we were looking for. We again did pre and post-treatment biopsies and we found was, although we were hitting the estrogen receptor and we were hitting mutation and the tumor was HER2 negative. The mechanism of escape with it was upregulating the HER2 receptor. So it’s flipping from being HER2-negative to HER2-positive. So we then gave neratinib to hit the mutation. We gave a fulvestrant to hit the estrogen receptor, and then we were getting Herceptin trastuzumab to prevent the tumor from trying to go to become HER2-positive. That’s when we started getting much higher response rates, longer durations. We went to the FDA and we had a meeting with them to discuss the path forward. And they acknowledged that the science was very well thought out, and they even acknowledged to us that they have had a lot of meetings with companies, where it was some involving kind of smaller targeted populations or you needed more than one drug to try to treat – effectively treat the tumor. What they asked us to do was to try to isolate the contribution of neratinib to that triplet – to the neratinib Herceptin fulvestrant triplets. And that’s where the assignment two-stage came in, which was the triplet in one arm Herceptin fulvestrant in the other, fulvestrant alone in the other. It’s going to really depend on what we see in that data. I mean if you see what you would hope to see, which is the clear advantage of the triplet over the others, I’m hopeful that will be what the FDA was looking for. Now we obviously have a very large body of data on the triplet on neratinib Herceptin fulvestrant, and that would obviously form a very significant basis of an accelerated approval filing. But we’re hopeful if you see that clean separation that’s exactly the question the FDA would like answered. So I can’t kind of give you any metrics or numbers. All I can say is that that appears to be what they’ve asked us to do, that’s what we are doing. And so we will know more after we’ve seen the data and had discussion with the FDA.

Got it. That’s helpful. Thanks.

Thank you. Our next question is coming from Jeff Meacham of Bank of America. Please go ahead.

Hey guys, this is Alec on for Jeff. Thanks for taking our questions. I think Jeff touched on this a little bit, but on your new partnership with Pierre Fabre in Asia, and how do you view the market for neratinib in these geographies versus what you’ve seen in the U.S. And I guess what is your sense as to Pierre Fabre’s commitment to pushing neratinib in these markets versus your prior partner. And secondly, I guess related to that what will be your go-to-market strategy in additional geographies, whether we could expect additional partnerships announced over the course of 2021. Thanks.

Okay. So talk about Pierre Fabre has been a great partner to us in Europe. We expanded the partnership wants to include some other countries in addition to Europe, and this is the second expansion of it. Their execution has been excellent in Europe. And they’ve been a wonderful partner to us. One of the things that’s very attractive about them is the fact that they have been selling the drug Navelbine, which is vinorelbine, which is one of the main chemotherapy drugs used in breast cancer. So there is an existing channel that’s in place to breast cancer physicians in their territories. In terms of in China, they’re trained – they’ve already been training their people and we’re scheduled to launch the drug in China in the second quarter, so in a few months. They have a very large commercial infrastructure there. It’s on par with the other companies in the area. So we have a very optimistic view of it. In terms of the actual dollar amounts, I would say that the U.S. is probably the biggest market for the drug. Europe is probably second. And I would say China is close behind in that second place. And it may actually be a tie between Europe and China. So I think it’s going to be a very significant opportunity for us. And we’re looking forward to their launch there. Now in terms of your question on other territories, as Jeff went over in his slide, we’ve got pretty much partnerships across the Board. I think there’s a few more countries out there, but the main ones, which is obviously now Europe, the Middle East, Northwest Africa, South Africa, Latin America, Canada, Israel, Australia with all we partnered those. So we’ve got, I think the main large country that we still haven’t partnered is Japan. And then I think there’s a few smaller ones as well.

All right, great. Thanks.

Thank you. Our next question is coming from Paul Choi with Goldman Sachs. Please go ahead.

Hi everyone, thank you for the updates. This is Charlie on for Paul. So I’ve just got a quick question. It’s great to see the uptake of the dose titration increase with the Q4 patients that you showed there. I’m just wondering, or we’re just wondering what is being done in terms of expanding making sure that patients continue that uptake of this dose titration regimen from the control study, in addition to publication of the control study results what’s being done to promote this sort of regimen to increase NERLYNX uptake. Thank you so much.

Yes, appreciate it. Very good question. We believe that is a very important foundational part of our strategy. As we believe the embedding or operationalizing of dose – a dose escalation can change the profile of risk benefit and tolerability. So clearly a significant message for the field force commercially both directly, as well as non-personal promotion is to highlight the benefits of the control study. We have also submitted the control study to the FDA for a label update, potential label update coming forward. And we are working with many of the pathways and guidelines committees as well to ensure that this becomes embedded as part of the standard of care for extended adjuvant patients there as well. One other piece that we’re moving forward with is we have actually received approval for a new bottle size. That is a 133 count bottle size that supports the adoption of dose escalation for the first month of therapy. That bottle size obviously supports the three pills per week, four pills per week, and then six pills for the remaining two weeks. So that it will also be launched in the foreseeable future as well to further embed dose escalation.

All right, great. That’s excellent color. Thank you so much.

Thank you. Our next question is coming from Gena Wang of Barclays. Please go ahead.

Hi, this is Sheldon on for Gena. Thanks for taking all the questions. The first – could you comment on your current revenue breakdown from the extended adjuvant setting versus metastatic and also your expectation about these breakdowns – the evolution of this breakdown going forward. Can we assume that vast majority will do come from extended adjuvant? And second is on the EGFR exon 18 mutated non-small cell lung cancer on, do you have any idea about the current penetration of genetic testing for these specific mutations? Is it bundled in the EGFR testing already?

Okay. On your first question Jeff, you’d like to handle that.

Yes.

I believe you are asking is the breakdown of metastatic versus extended adjuvant.

Yes, we estimate currently you’re saying the fourth quarter about 6% of our new patients starts are in the metastatic setting. And I would suggest that that expectation or a breakout will be consistent for at least the next several quarters. As I mentioned before, our focus is really heavily on the extended adjuvant in early stage breast cancer, where there’s an awful lot of patients that are not being treated there. And we think we can make a bigger impact on patient’s lives and with the goal of preventing them or hopefully helping them prevent a recurrence in the metastatic setting.

And then on your second question, which is on the EGFR exon 18, in lung cancer, they’re very good about doing mutation screening. I would venture to guess that it’s pretty much done for every patients and the EGFR exon 18 mutation is already on the lung cancer panel that everybody runs. So there’s no special test that anyone has to run. It’s being picked up on the existing panels.

That’s very helpful. Thank you so much.

Thank you. At this time, I’d like to turn the floor back over to Mariann for closing comments.

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

Ladies and gentlemen, thank you for your participation and interest in Puma Biotechnology. You may disconnect your lines at this time and have a wonderful day.