Puma Biotechnology (PBYI) risk factors, FY2024 10-K

Risks Related to our Financial Condition and Capital Requirements

1. 01While we have reported net income in the years ended December 31, 2024, 2023 and 2022, we cannot assure that we will continue to do so and may not be able to maintain profitability
2. 02implementing additional internal systems and infrastructure
3. 03We are currently a single product company with limited commercial sales experience
4. 04We may not be able to successfully commercialize NERLYNX in the future
5. 05maintain and defend our patent protection and regulatory exclusivity for NERLYNX and to comply with our obligations under, and otherwise maintain, our intellectual property license with Pfizer and our license agreements with third parties
6. 06the extent and scope of our general and administrative expenses
7. 07The terms of our Note Purchase Agreement place restrictions on our ability to operate our business and on our financial flexibility, and we may be unable to achieve the revenue necessary for us to incur additional borrowings under the Note Purchase Agreement or to satisfy the minimum revenue and cash balance covenants

Risks Related to the Discovery and Development of our Products and Drug Candidates

1. 08Development of alisertib could distract management’s attention from other important aspects of our business
2. 09Interim, “topline” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data
3. 10our reputation may suffer
4. 11We are in the early stages of development of alisertib, and we cannot be certain that we will be successful if we seek regulatory approvals for our drug candidates
5. 12If we do not obtain regulatory approval of alisertib or our other drug candidates in a particular jurisdiction, we will not be able to market such drug candidate in that jurisdiction. Therefore, failure to obtain regulatory approval of alisertib or our other drug candidates will limit our commercial revenue
6. 13injunctions or the imposition of civil or criminal penalties
7. 14Separately, in response to the COVID-19 pandemic, the FDA postponed most inspections of domestic and foreign manufacturing facilities at various points
8. 15Clinical trials are very expensive, time-consuming and difficult to design and implement
9. 16third-party contractors not performing data collection or analysis in a timely or accurate manner; or
10. 17Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control
11. 18The results of our clinical trials may not support our drug candidate claims

Risks Related to Commercialization of our Drug Candidates

1. 19We have limited experience as a company in marketing or distributing pharmaceutical products. If we are unable to expand our marketing and sales capabilities in the commercialization of NERLYNX, our business, results of operations and financial condition may be materially adversely affected
2. 20If we are unable to effectively address these risks, our efforts to commercialize NERLYNX successfully could be harmed, which would negatively impact our ability to generate product revenue
3. 21We are exposed to the risks associated with reliance on a direct sales force to commercialize NERLYNX in the United States
4. 22If we are unable to effectively address these risks, our efforts to commercialize NERLYNX, or any additional drug candidates that we develop, could be harmed, which would negatively impact our ability to generate product revenue
5. 23Our NERLYNX commercialization efforts may fail to achieve the degree of market acceptance by patients and physicians necessary for commercial success
6. 24We depend on a limited number of customers for a significant amount of our total revenue, and if we lose any of our significant customers, our business could be harmed
7. 25Outside the United States we rely primarily on third-parties to pursue regulatory approval, if necessary, and to commercialize NERLYNX and they may not commit sufficient time or resources to marketing NERLYNX
8. 26We may fail to obtain orphan drug designations from the FDA for our drug candidates, and even if we obtain such designations, we may be unable to maintain the benefits associated with orphan drug designation, including the potential for market exclusivity
9. 27Health care reform measures may hinder or prevent our products’ and drug candidates’ commercial success
10. 28The IRA manufacturer discount program also increases financial obligations of Part D prescription drug plans with respect to beneficiaries in the catastrophic coverage phase. This may incentivize Part D prescription drug plans to seek greater price concessions from us in order to include NERLYNX on their formularies
11. 29Failure to obtain or maintain adequate coverage and reimbursement for our products or drug candidates, if approved, could limit our ability to market those products and decrease our ability to generate revenue
12. 30We are subject to federal, state and foreign healthcare fraud and abuse laws, false claims laws and physician payment transparency laws. Failure to comply with these laws may subject us to substantial penalties
13. 31European and other foreign law equivalents of each of these laws, including reporting requirements detailing interactions with and payments to healthcare providers

Risks Related to Third Parties

1. 32We are dependent on international third-party sub-licensees for the development and commercialization of NERLYNX in several countries outside the United States. The failure of these sub-licensees to meet their contractual, regulatory or other obligations could adversely affect our business
2. 33We have no experience in drug formulation or manufacturing and rely exclusively on third parties to formulate and manufacture NERLYNX, alisertib and our other drug candidates, and any disruption or loss of these relationships could delay our development and commercialization efforts
3. 34Our future contract manufacturers may not perform as agreed or may not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store and distribute our products for commercialization, as applicable
4. 35If our third-party manufacturers fail to manufacture NERLYNX in sufficient quantities and at acceptable quality and pricing levels, or fail to fully comply with cGMP or similar foreign regulations, we may face delays in commercialization or be unable to meet market demand, and may lose potential revenues
5. 36We rely on third parties to conduct our pre-clinical studies and clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval for our drug candidates

Risks Related to our Business Operations

1. 37Our business, financial condition, results of operations and ongoing clinical trials have been, and could continue to be, harmed by the effects of public health emergencies or outbreaks of epidemics, pandemics or contagious diseases
2. 38Engaging in international business subjects us to additional business and regulatory risks, and there can be no assurance that our products will be accepted in those markets
3. 39The failure to comply with anti-bribery, anti-corruption, and anti-money laundering laws, including the FCPA and similar laws associated with our activities outside of the United States, could subject us to penalties and other adverse consequences
4. 40If we fail to comply with United States export control and economic sanctions or fail to expand and maintain an effective sales force or successfully develop our international distribution network, our business, financial condition and operating results may be adversely affected
5. 41We rely significantly on information technology and any failure, inadequacy, interruption or security lapse of that technology, including any cybersecurity incidents, could harm us
6. 42If we cannot compete successfully for market share against other drug companies, we may not achieve sufficient product revenue and our business will suffer
7. 43We may be exposed to liability claims associated with the use of hazardous materials and chemicals
8. 44The loss of one or more key members of our management team could adversely affect our business
9. 45If we are unable to hire additional qualified personnel, our ability to grow our business may be harmed
10. 46We may not successfully manage our growth
11. 47We may be adversely affected by the current economic environment
12. 48We may incur substantial liabilities and may be required to limit commercialization of our products in response to product liability lawsuits and product recalls
13. 49We may in the future engage in strategic transactions that increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities and subject us to other risks
14. 50potential costly and time-consuming litigation, including stockholder lawsuits

Risks Related to our Intellectual Property

1. 51We depend significantly on in-licensed intellectual property, and the termination of these licenses would significantly harm our business and future prospects
2. 52Our proprietary rights may not adequately protect our intellectual property and potential products, and if we cannot obtain adequate protection of our intellectual property and potential products, we may not be able to successfully market our potential products
3. 53whether we will need to initiate litigation or administrative proceedings in connection with patent rights, which may be costly whether we win or lose, and the outcome of which is unpredictable
4. 54We may not be able to protect our intellectual property rights throughout the world
5. 55If any of these events occur, our business could suffer, and the market price of our common stock may decline

Risks Related to Owning our Common Stock

1. 56The price of our common stock could be subject to volatility related or unrelated to our operations
2. 57general economic conditions and slow or negative growth of our markets
3. 58We have been subject to securities litigation in the past, and volatility in the price of our common stock may subject us to securities litigation in the future
4. 59Issuance of stock to fund our operations may dilute your investment and reduce your equity interest
5. 60Upon the exercise of our outstanding warrant, holders of our common stock may experience immediate dilution and the market price of our common stock may be adversely affected
6. 61We incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies
7. 62If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, our ability to operate our business and investors’ views of us
8. 63If securities or industry analysts do not publish, or cease publishing, research reports about us, our business or our market, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline
9. 64We do not foresee paying cash dividends in the foreseeable future
10. 65Our ability to use our net operating losses and research and development credit carryforwards to offset future taxable income may be subject to certain limitations