Shares of Puma Biotechnology (PBYI) rocketed to the moon on Wednesday, gaining over 300% at the intraday high. The stock popped on Puma’s PB272 (neratinib) clinical trials, a drug for the treatment of early stage HER2-positve breast cancer.
Puma studied 2,821 patients in 41 countries in a double blind, placebo controlled test. Patients with early-stage breast cancer either received neratinib or a placebo for a period of one year.
Puma announced that the results were overwhelmingly positive. “The results of the trial demonstrated that treatment with neratinib resulted in a 33% improvement in disease free survival versus placebo,” read Puma’s press release. The study yielded an impressive p-value of 0.0046, indicating that the drug increased its cancer free survival with statistical significance.
“Based on these results from the ExteNET study, Puma plans to file for regulatory approval of neratinib in the extended adjuvant setting in the first half of 2015,” read Puma’s statement. Puma also announced on Wednesday that if neratinib is commercialized, Puma is obligated to pay Pfizer (PFE) a fixed royalty rate in the low to mid teens. This is revised from the previously announced 10-20 percent, which increases Puma’s upside on neratinib’s commercialization.
Puma Shares Rebound, Biotech Rallies
The trial results have not only been met with applause from the medical community, but also from Puma’s investors, who lost around half their investment from January to June. The stock fell with most of the biotech sector as investors shifted out of risky, high-P/E stocks and into safer investments. Puma shares also plunged 25% on June 2 after neratinib indicated some negative side effects. Wednesday’s news has alleviated this concern.
The entire biotech sector jumped on Puma’s trial results and strong earnings from Biogen (BIIB) . Biogen increased earnings by 46% year-over-year, announcing $3.49 EPS versus the $2.83 estimate. Revenue came in at $2.4 billion, well above the $2.1 billion estimate.
Meanwhile, Celgene (CELG) gained 2.66% as investors anticipated a strong Thursday earnings report. During trading on Wednesday, theSPDR S&P Biotech ETF (XBI) rallied 6.4% andiShares NASDAQ Biotechnology Index (IBB) gained 2%, as biotech was the market’s best performer