Puma Biotechnology's 2025 Results Show Steady Core Revenue but Expose Persistent Royalty Weakness

What happened

Puma Biotechnology reported its fourth quarter and full year 2025 financial results, confirming the stability of its NERLYNX franchise amid ongoing challenges. Full-year NERLYNX net product revenue likely met or modestly exceeded the $198-200 million guidance range, as U.S. demand remained resilient despite rising gross-to-net deductions. However, royalty revenue from China stayed depressed, mirroring the sharp decline seen in Q3 2025 and highlighting the volatility of international partnerships. The company maintained profitability and positive operating cash flow, supporting continued debt repayment and easing near-term covenant concerns. Management's initial 2026 guidance and upcoming alisertib Phase II data in H1 2026 will now be critical for assessing growth sustainability and pipeline optionality.

Implication

The 2025 results reinforce Puma's reliance on a single, stable but niche product, with volatile royalties undermining earnings consistency and margin safety. Stable U.S. NERLYNX demand partially offsets international weakness, but persistent gross-to-net pressure and competitive encroachment risk eroding net pricing over time. Debt reduction progresses, alleviating immediate covenant stress, yet liquidity remains constrained with only one year of comfortable coverage per management. Upcoming H1 2026 alisertib interim data is pivotal, as weak results could eliminate pipeline upside and refocus the thesis solely on NERLYNX cash runoff. At $6.65, the stock already prices in modest growth and optionality, leaving investors exposed to downside if 2026 guidance disappoints or alisertib underwhelms.

Thesis delta

The 2025 financial results align closely with the base case scenario, confirming steady NERLYNX revenue but underscoring the structural weakness in royalties that limits earnings leverage. No material shift in the investment thesis occurs; the WAIT rating remains justified as key catalysts in 2026, including detailed guidance and alisertib data, will determine whether upside or downside scenarios prevail.