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

Thank you, Camilla. Good afternoon, and welcome to Puma's conference call to discuss our financial results for the first quarter of 2024. Joining me on the call today are Alan Auerbach, Chief Executive Officer, President and Chairman of the Board of Puma Biotechnology; Maximo Nougues, Chief Financial Officer; and Jeff Ludwig, Chief Commercial Officer. After market closed today, Puma issued a news release detailing first quarter 2024 financial results. That news release, the slides that Jeff will refer to and a webcast of this call are accessible via the homepage and Investors sections of our website at pumabiotechnology.com. The webcast and presentation slides will be archived on our website and available for replay for the next 90 days. Today's conference call will include statements about Puma'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 events and 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 our annual report on Form 10-K for the year ended December 31, 2023. 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 2, 2024. Puma 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 2024 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 first quarter of 2024 of $43.8 million. Total revenue includes product revenue net, which consists entirely of NERLYNX sales as well as royalties from our sublicensees. Product revenue net was $40.3 million in the first quarter of 2024, which was a decrease from the $53.2 million reported in Q4 2023 and below the $46.8 million reported in Q1 of 2023. Product revenue for the first quarter of 2024 was impacted by approximately $2 million of inventory drawdown in our specialty pharmacies and specialty distributors. Royalty revenue was $3.5 million in the first quarter of 2024 compared to $19 million in Q4 of 2023 and $6 million in Q1 of 2023. We reported 2,410 bottles of NERLYNX sold in the first quarter of 2024, a decrease of 471 bottles from the 2,881 bottles sold in Q4 2023. In Q1 2024, we estimate that inventory decreased by about 120 bottles. In Q1 2024, new prescriptions were up approximately 27% compared to Q4 2023 and total prescriptions were down approximately 3% compared to Q4 2023. Jeff will provide further details in his comments and slides. NERLYNX sales were negatively impacted by the decline in enrollments that we mentioned previously in our third and fourth quarter earnings calls. Jeff will discuss this further in his comments. We have continued to reduce our internal expenses to account for these factors as we recognize our fiscal responsibility to shareholders to continue to be net income-positive for 2024. I will now provide a clinical review of the quarter, then Jeff Ludwig will address color on NERLYNX commercial activities. Maximo Nougues will follow with highlights on the key components of our financial statements for the first quarter 2024. In…

Thanks, Alan. Appreciate it, and thanks to everyone for joining our first quarter earnings call. Before I move into the commercial review, just a reminder that I will be making forward-looking statements. The commercial team remains largely focused on the extended adjuvant indication where the majority of NERLYNX sales and opportunity exist. A significant portion of early-stage HER2-positive breast cancer patients are treated in a community setting so the sales and marketing teams are focused on increasing reach and frequency to targeted customers with both personal and nonpersonal promotion. HCP calls in the first quarter increased about 5% quarter-over-quarter with greater than 80% being live interactions. We continue to evaluate new data and partners to try and make our targeting and overall timing of calls more efficient and effective. We are looking for opportunities to increase the awareness and education around the unmet need that exists in the early-stage breast cancer setting and are trying to align with key customers to better identify patients at higher risk of reoccurrence. The commercial team is committed to becoming more efficient and effective with our resources and balancing the needs of NERLYNX with the broader goals of the organization. Let me now transition to some of the commercial slides where I will provide some additional specifics around performance. Once I have finished, I will turn the call over to Maximo for a more detailed review of our financial results. Slide 3 provides an overview of our distribution model. Now this model has not changed and remains separated into 2 distinct channels, the specialty pharmacy channel and the specialty distributor channel. We do typically see quarterly fluctuations, but the majority of our business flows through the specialty pharmacy channel. In Q1, about 74% of our business went through the specialty pharmacy channel and the…

Thanks, Jeff. I will begin with a brief summary of our financial results for the first quarter of 2024. Please note that I will make comparisons to Q4 2023, which we believe is a better indication of our progress as a commercial company than year-over-year comparisons. For more information, I recommend that you refer to our Q1 10-Q, which will be filed today and includes our consolidated financial statements. For the first quarter of 2024, we reported a net loss based on GAAP of $4.8 million or $0.10 per share. This compares to net income in Q4 2023 of $12.3 million or $0.26 per share. On a non-GAAP basis, which is adjusted to remove the impact of stock-based compensation expense, we reported a net loss of $2.4 million or $0.05 per share for the first quarter of 2024. Gross revenue from NERLYNX sales was $52.6 million in Q1 2024 and $64.9 million in Q4 2023. As Alan mentioned, net product revenue from NERLYNX sales was $40.3 million, a decline from $53.2 million reported in Q4 2023. Q1 net sales were impacted by lower enrollments in Q3 and Q4 as well as higher gross to net adjustment in Q1. Inventory drawdown by our distributors was approximately $2 million in Q1 versus approximately $2.1 million of buildup in Q4 2023. Royalty revenue totaled $3.5 million in the first quarter of 2024 compared to $19 million in Q4 2023. As expected, the lower royalties versus Q4 reflected timing of shipments to our partner in China, as we noted last quarter. Our gross to net adjustment in Q1 2024 was about 23.4% compared to the 18.1% gross to net adjustment reported in Q4 2023. Higher government chargebacks and higher copay were the main drivers of the increase versus Q4 2023. Cost of sales for…

Thanks, Maximo. Puma's senior management in cooperation with the Board of Directors continues to remain focused on NERLYNX sales trends in 2024 and beyond and recognizes its fiscal responsibility to its shareholders to continue to maintain positive net income. In the fourth quarter of 2021, we implemented a reduction in expenses with the goal of reducing expenses in order to maximize operational cash flows. We believe that the positive net income that was seen in 2023 resulted from these expense reductions. The expense reductions that we have previously performed and continue to perform are also a major contributor to the positive net income that the company is guiding to for the full year 2024. The company remains committed to continuing to achieve this positive net income and we'll continue to reduce expenses if needed to achieve this. We look forward to updating investors on this in the future. There continues to remain a significant unmet need for patients battling breast cancer, lung cancer and other solid tumors. We at Puma are committed and passionate about finding more effective ways at helping these patients during their journey, and we 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?

[Operator Instructions] Your first question comes from the line of Ed White with H.C. Wainwright.

So just a question on sales. A big picture strategy question, actually. You've said in the past, Alan and Jeff, that sales are promotional-sensitive and your SG&A is going to be -- expenses are going to be down for the year. I'm just wondering how you're becoming more efficient and able to target -- improve your promotion of the drug while also cutting costs.

Ed, yes, I appreciate it. We do believe this drug is promotionally sensitive. And so we're trying to find efficiencies and effectiveness as we talked about. One of the ways that we're able to do that is we've expanded nonpersonal promotion, which is a fairly cost-effective way of trying to generate our share of voice. We're also, as I mentioned in my opening, we're evaluating a large number of partners as well to find cost-effective, competitive ways of expanding our reach and frequency, both personal and nonpersonal, while paying attention to our costs associated with the goals of the organization.

Yes. And Ed, this is Alan. We did a recent analysis looking at both the personal and nonpersonal promotion aspects of the business and kind of which levers contribute more to sales, et cetera. And the nonpersonal promotion actually was quite effective in terms of its impact on enrollments and things like that. And as Jeff mentioned, it's much more cost effective as well. So I think as we increase nonpersonal promotion, we are increasing share of voice and increasing promotional sensitivity while also decreasing costs.

And Ed, I'd add a little bit more color. Even around the personal promotion, which is access is being monetized in many cases in the community. We've really worked hard to go back and evaluate those opportunities and try to make the right decisions that lend us to a much better ROI. So we're asking our field teams as leaders and owners of the business to make those trade-offs and choices to allow our dollars to go much farther than they have in the past. That's a big part of our efficiency.

Great. I just wanted to go back to the lower starting dose because you continually mention that by having the lower starting dose, lower side effects, there'll be a lower rate of discontinuation. Can you put any numbers around that as far as the length of time that patients are staying on drug or the number of refills that you're capturing that you wouldn't -- that you weren't capturing before when you're starting at a higher dose?

Ed, great question. I think there's a couple of things. One, I would say, overall, there's been a much better understanding of this molecule from customers now than in the past. So you can guess there's 2 ways of going about it. We believe starting low and moving up based on a controlled data is the right way to do that. And as we report, somewhere around 70% plus or minus 5%, we see new patient starts there. As I look at persistence curves around any given month, we have about a 5% to 10% more patients on drug if they start with a lower dose. Now we monitor those cohorts on a regular basis, so there is fluctuations, but we do see lower discontinuations on any given month for those that started low and increased as opposed to those that started high. I will say that customers -- there are customers that do start high and they do simply reduce the dose as well, and you can achieve the end the same way. But our data suggests the lower dose does add to a better persistence here.

And Ed, the other part I would add to this is, is there are a number of HCPs who feel that they're okay managing the side effects of the drug when they start at a high dose, so they don't need to do the low dose. So I think at this juncture, if I have to look at the roughly 70% who start a low dose versus the 30% who don't, the 30% who don't, they just have the feeling of I can manage it, I don't need to.

Okay. And my last question is just on for the last few quarters, you've mentioned potential in-licensing and business development. Can you just tell us what your benchmarks are, your hurdles are as you target potential partners or potential drugs to in-license?

Yes. Happy to do that, Ed. So look, we happen to have a commercial sales force that targets specifically breast cancer. And so that's kind of the focus, if you will. Obviously, anything we can add to that, that focuses on that channel obviously makes the most sense, both from a -- whether it's a clinical drug or one that's a commercial asset. We're casting a wide net from that perspective, obviously, adding in a commercial asset, if it's something that we can use our existing sales force to do to get the kind of economies of scale, if you will. Happy to look at things like that. And obviously, it can be EPS-accretive, which is what we would want it to do. Something that's more of an R&D molecule. Again, something focused on the breast space makes the most sense. So it's things that tend to be targeted on that. Now obviously, in the community setting, you do tend to see sometimes that they treat breast and also lung. So obviously, lung cancer assets make sense from that perspective as well.

Our next question comes from the line of Divya Rao with TD Cowen.

This is Divya on for Mark. I just had a quick question on the alisertib trials. Specifically on the metastatic breast cancer trial, are you guys planning to explore a biomarker strategy there for alisertib? Or are you planning on running the Phase II first and then kind of doing a post hoc to figure [indiscernible] option forward?

Yes, thank you for the question. We are definitely looking to employ a biomarker strategy. When we in-licensed alisertib, one of the things that we made very clear was that due to the aurora kinase pathway, we know that there are certain biomarkers involved like the ones that we've previously shown, such as c-Myc and RB-1, where we know that aurora kinase plays a role, and that's where in the small cell lung cancer trial, we saw the best efficacy of the drug. We are definitely looking to do that in the breast study in the HR-positive, HER2-negative indication. In terms of the clinical trial, right now, there's a biomarker analysis that's ongoing. We're still waiting for those results to finalize where we can get some clues from that. In the trial, what we would probably do is try to enrich for those types of biomarkers. So again, the ones I would say would be anything involved in the aurora kinase pathway. Admittedly, it's a very broad pathway. There's a lot of potential ones such as RB-1, c-Myc, et cetera. So it is likely we would enrich for those biomarkers and go after a biomarker-focused indication.

That's helpful. And then one quick question on the live interactions for NERLYNX. How would you, I guess -- how close do you think those live interactions are returning to the pre-COVID levels? And then kind of a follow-up on the previous question. Is that a focus for you guys in terms of increasing promotion primarily? Or are you more focused on the non-personal promotion?

Divya, I would say a great question. Both, so we want to increase both personal and nonpersonal, right? Oncology itself is a relatively restricted therapeutic area. And being a small company, it can be more restrictive for us as well. So we want to see an increase in both personal and nonpersonal. So let me give you some more color there. You asked about live versus virtual, we are about 81%, 82% live in this first quarter. We've been around that 80% to 85% live versus virtual. I think that mix is going to stay relatively the same. Prior to COVID, we were much higher in the high 90s in terms of live interactions with very limited virtual. We are a smaller company. So our sales teams have large territories. So that's part of the efficiencies we like. If you can have an effective and efficient virtual call, that's one of the ways that I know Ed asked me earlier about being more efficient with travel and spend. If we can have an effective engagement, we're good increasing both the virtual calls, and we're also working very hard to increase access around the live calls as well.

Divya, this is Alan. In terms of your question of pre-COVID, remember that pre-COVID, we really didn't have a lot of the technologies we now have and implementation of those technologies for virtual interactions. So things like Zoom or Teams and things like that, they just really weren't being used much, which is why Jeff mentioned, most of our pre- COVID interactions was 95%, 97% live. In terms of which one is the focus, as Jeff mentioned in his script, HCP calls live calls in the first quarter increased 5% quarter-over-quarter. We're hoping for that number to continue to increase. So in no way, shape or form, are we looking to decrease our live interactions or our personal promotion just looking at it from an investment perspective, which one is more effective and more efficient.

And the nonpersonal promotion really allows us to cast a very broad net with the hope that it pulls people into some of our live interactions in a very cost-effective manner.

And our next question comes from the line of Gena Wang with Barclays.

This is Tony on for Gena. Just one quick one on the data for the biomarkers. What should we expect or consider to be a positive signal? And how would this kind of be used in order to for the determined decisions in development.

Yes. Thanks for the question, Tony. You'll remember in the small cell lung cancer trial that was published in the Journal of Thoracic Oncology, specifically in the biomarkers, which was the RB-1, loss function mutation and the c-Myc amplified, it was a randomized trial, so you saw a statistically significant increase in PFS and OS and those biomarkers. That's something I would consider to be positive. Something where you're seeing that it differentiates from the rest of the patients. So I would say in this one, they're doing a much more vast biomarker analysis. So I would say anything that kind of rises up, if you will, in terms of either ORR or PFS, showing that you're getting better activity in patients where there is some biomarker that would suggest that aurora kinase is playing a role in driving that cancer. That's what we would look to see.

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

Thank you all for joining us today. As a reminder, this call may be accessed via replay of the webcast at pumabiotechnology.com beginning later today. Have a good evening.

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