Note 1—Business and Basis of Presentation:

Business and Liquidity: 

Puma Biotechnology, Inc., (the “Company”) is a biopharmaceutical company based in Los Angeles, California that develops and commercializes innovative products to enhance cancer care and improve treatment outcomes for patients. The Company is currently commercializing NERLYNX®, an oral version of neratinib (“NERLYNX”), for the treatment of HER2-positive breast cancer. Additionally, the Company in-licensed, and is responsible for the global development and commercialization of, alisertib. Alisertib is a selective, small molecule inhibitor of Aurora Kinase A that is designed to disrupt mitosis leading to apoptosis of rapidly proliferating tumor cells dependent on Aurora Kinase. The Company believes alisertib has potential application in the treatment of a range of different cancer types, including hormone receptor-positive breast cancer, triple-negative breast cancer, and small cell lung cancer. 

The Company has one subsidiary, Puma Biotechnology, B.V., a Netherlands company. This subsidiary was established for the purpose of legal representation in the European Union (“EU”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated.

The accompanying consolidated financial statements of the Company and its subsidiary have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).

The Company has incurred significant operating losses since its inception. While the Company has reported net income, the Company cannot ensure that it will continue to do so and will need to continue to generate significant revenue to sustain operations and successfully commercialize neratinib. In 2017, the Company received U.S. Food and Drug Administration (“FDA”) approval for its first product, NERLYNX® (neratinib), formerly known as PB272 (neratinib, oral), for the extended adjuvant treatment of adult patients with early stage HER2-overexpressed/amplified breast cancer following adjuvant trastuzumab-based therapy. Following FDA approval in July 2017, NERLYNX became available by prescription in the United States, and the Company commenced commercialization.

In February 2020, NERLYNX was also approved by the FDA in combination with capecitabine for the treatment of adult patients with advanced or metastatic HER2-positive breast cancer who have received two or more prior anti-HER2-based regimens in the metastatic setting.

In 2018, the European Commission (“EC”) granted marketing authorization for NERLYNX in the EU for the extended adjuvant treatment of adult patients with early stage hormone receptor-positive HER2-overexpressed/amplified breast cancer and who are less than one year from the completion of prior adjuvant trastuzumab-based therapy.

The Company is required to make substantial payments to Pfizer upon the achievement of certain milestones and has contractual obligations for clinical trial contracts.

The Company has entered into other exclusive sub-license agreements with various parties to pursue regulatory approval, if necessary, and commercialize NERLYNX, if approved, in many regions outside the United States, including Europe (excluding Ukraine), Australia, Canada, China, Southeast Asia, Israel, South Korea, Russia and various countries and territories in Central America, South America, Africa, and the Middle East. The Company plans to continue to pursue commercialization of NERLYNX in other countries outside the United States, if approved.

In September 2022, the Company entered into an exclusive license agreement with a subsidiary of Takeda Pharmaceutical Company Limited (“Takeda”) to license the worldwide research and development and commercial rights to alisertib, a selective, small-molecule, orally administered inhibitor of Aurora Kinase A. Alisertib is an adenosine triphosphate–competitive and reversible inhibitor of Aurora Kinase A and results in disruption of mitosis, leading to apoptosis of rapidly proliferating tumor cells that are dependent on Aurora Kinase A. Alisertib has been tested in clinical trials in patients with metastatic cancers, including breast cancer, small cell lung cancer, head and neck cancer, ovarian cancer, peripheral T-cell lymphoma and acute myeloid leukemia. Under the terms of the exclusive license agreement, the Company assumed sole responsibility for the global development and commercialization of alisertib. The Company paid Takeda an upfront license fee of $7.0 million in October 2022, and Takeda is eligible to receive potential future milestone payments of up to $287.3 million upon the Company’s achievement of certain regulatory and commercial milestones over the course of the exclusive license agreement, as well as tiered royalty payments for any net sales of alisertib. As of  June 30, 2026, no milestones had been accrued as the underlying contingencies were not probable.

The Company has reported net income of approximately $4.4 million and cash provided by operations of approximately $17.0 million for the six months ended June 30, 2026. The Company’s commercialization, research and development or marketing efforts  may require funding in addition to the cash and cash equivalents and marketable securities totaling approximately $93.9 million at  June 30, 2026.

The Company believes that its existing cash and cash equivalents and marketable securities as of  June 30, 2026 and proceeds that are expected to become available to the Company through product sales and sub-license payments are sufficient to satisfy its operating cash needs for at least one year after the filing of the Quarterly Report on Form 10-Q in which these financial statements are included. The Company continues to remain dependent, in part, on its ability to obtain sufficient funding to sustain operations and continue to successfully commercialize neratinib in the United States. On May 4, 2026, the Company paid $11.5 million to Athyrium Opportunities IV Co-Invest 1 LP ("Athyrium"), consisting of principal, interest and exit fees due under the 2021 Note Purchase Agreement. This payment was made ahead of the maturity date of July 23, 2026, reduced the principal balance outstanding under the Athyrium Notes to zero and terminated all remaining obligations of the Company under the 2021 Note Purchase Agreement, other than customary continuing indemnification obligations. While the Company has been successful in raising capital in the past, there can be no assurance that it will be able to do so in the future. The Company’s ability to obtain funding  may be adversely impacted by uncertain market and economic conditions, including the Company’s success in commercializing neratinib and unfavorable decisions of regulatory authorities or adverse clinical trial results. The outcome of these matters cannot be predicted at this time. 

Since its inception through  June 30, 2026, the Company’s financing has consisted primarily of proceeds from product, royalty and license revenue, public offerings of its common stock, private equity placements, and various debt instruments.

In the opinion of management, the included disclosures are adequate, and the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary for a fair statement of its consolidated financial position as of  June 30, 2026. Such adjustments are of a normal and recurring nature. The condensed consolidated balance sheet as of  December 31, 2025 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the audited annual financial statements. The condensed consolidated results of operations for the quarter ended  June 30, 2026 are not necessarily indicative of the consolidated results of operations that may be expected for the fiscal year ending  December 31, 2026.

The Company does not believe that tariffs imposed or proposed to be imposed by the United States, particularly with the EU and China, will have a material impact on its product costs or results of operations. However, shifts in trade policies in the United States and other countries have been rapidly evolving and are difficult to predict. The ultimate impact of any announced or future tariffs will depend on various factors, including what tariffs are ultimately implemented, the timing of implementation and the amount, scope and nature of such tariffs and potential exclusions from the application of those tariffs.

On April 2, 2026, the U.S. government issued a proclamation under Section 232 of the Trade Expansion Act of 1962, imposing a 100% ad valorem duty, subject to specified exclusions, on the import of patented pharmaceutical products listed in the FDA’s Orange Book or Purple Book, as well as their associated active pharmaceutical ingredients (“APIs”). A reduced 20% rate is available to companies with onshoring plans approved by the U.S. Secretary of Commerce, although this reduced rate is scheduled to increase to 100% over a four-year period. These tariffs become effective on July 31, 2026 for certain large companies and will become effective on September 29, 2026 for all other companies. The potential impact of the proclamation on the Company, including any indirect effect, remains uncertain and under review.