Puma tanks on a fresh setback for its breast cancer drug

Puma Biotechnologies ($PBYI) is walking back some bullish prognostications for its breast cancer treatment, delaying its planned FDA submission by as much as a year and lending weight to some creeping doubts about its top prospect.

Over the summer, after announcing positive late-stage data on neratinib, Puma said it was on track to file the HER2-targeting breast cancer treatment in the first half of next year. Now, however, the company has altered its desired indication from treating HER2-positive breast cancer that has already spread to serving as a follow-on therapy for patients with early stage breast cancer, Puma said. And, after meeting with the FDA, the company has learned that it'll need to submit results from preclinical carcinogenicity studies alongside its pivotal data to support its new goal, a process that will delay neratinib's filing until the first quarter of 2016, Puma said.

The revelation sent Puma's shares down by as much as 20% after hours on Tuesday, as investors took the last-minute change in strategy as a troubling sign for a drug that has lost some luster over the past few months.

In November, neratinib failed to better extend progression-free survival (PFS) when pitted against Roche's ($RHHBY) Herceptin in a Phase II study. Puma said it expected the drug to flunk its primary endpoint all along, taking care to point out that neratinib did hit its secondary goal of preventing the spread of cancer to the central nervous system.

Puma's drug rocketed into the spotlight back in June when the biotech posted Phase III results in which neratinib, delivered as an adjuvant to Herceptin, contributed to a 33% improvement in PFS. The company's shares promptly tripled in value, spurring peak sales projections north of $1 billion.

Those data convinced Puma to amend its desired indication for neratinib, CEO Alan Auerbach said on a conference call Tuesday. At the time, the company believed it could submit the requisite carcinogenicity studies, slated to wrap up in November 2015, after filing the drug, Auerbach said. But regulators have since informed Puma that all results need to be handed in at the same time, he said.

However, Auerbach believes the resulting delay will have no effect on Puma's long-term prospects of finding a partner for neratinib or landing a buyout deal, he told analysts.

- read the statement

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