Q4 2021 Puma Biotechnology Inc Earnings Call
Good afternoon, My name is Alexandra and I will be your conference call operator today.
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I would now like to turn the conference call over to Marianne O Hannesson senior director of IR for Puma Biotechnology, you may begin your conference.
Thank you Alex Good afternoon, and welcome to promise conference call to discuss our financial results for the fourth quarter of 2021, joining me on the call today are Alan Auerbach, Chief Executive Officer, President and Chairman of the board of Puma Biotechnology.
Extra ammonia guess, Chief financial Officer, and Jeff Ludwig Chief Commercial Officer.
After market close today Puma issued a news release detailing fourth quarter 2021 financial results.
Usually the slides the chips will refer to and a webcast of this call are accessible via the homepage and investor sections of our website at Puma biotechnology Dot com the webcast and presentation slides will be art archived on our website and available for replay for the next 90 days.
Today's conference call will include statements about the company's future expectations plans and prospects that constitute forward looking statements for purposes of federal Securities laws.
Such statements are subject to risks and uncertainties and actual events and results may differ from those expressed in these forward looking statements.
For a full discussion of these risks and uncertainties. Please review our periodic and current reports filed with the Securities and Exchange Commission from time to time, including our annual report on Form 10-K for the year ended December 31 2021.
You are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date of this slide conference call March three 2022.
The company undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances. After the date of this conference call, except as required by law.
During today's call. We may also refer to certain non-GAAP financial measures that involve adjustments to our GAAP figures. We believe these non-GAAP metrics may be useful to investors as a supplement to but not as substitute for our GAAP financial measures.
Please refer to our fourth quarter 2021 news release for a reconciliation of our GAAP to non-GAAP results I will now turn the call over to Alan.
Yeah.
Thank you Mary Anne and thank you all for joining our call today.
Today Puma reported total revenue for the fourth quarter of 2021 of $55 4 million total.
Total revenue includes product revenue net.
Consist entirely of near link sales as well as license fees and royalties from our sub licensees.
Products revenue net was $51 million in the fourth quarter of 2021, which represents increases from the $43 4 million in product revenue reported in the third quarter of 2021 and $50 million and product revenue reported in Q4 of 2020.
Product revenue for the fourth quarter included approximately $5 million of inventory build at our specialty pharmacies and specialty distributors royalty revenue was $2 9 million in the fourth quarter of 2021 versus $2 8 million in Q3, 2021, and $2 6 million in Q4 2020.
License revenue was $1 5 billion in Q4 2021.
We reported 3454 bottle that near links sold in the fourth quarter of 2021, an increase from the 2947 bottles sold in Q3 of 2021.
Bottle sold in the quarter included an estimated 345 bottles, representing inventory stocking at our specialty pharmacies and specialty distributors as mentioned earlier.
<unk> prescriptions were down 8% in Q4 compared to Q3, while total prescriptions were down two 8% bottle sold through our specialty distributor network, which we often refer to as our in office network were up two 6% in Q4 compared to Q3.
Jeff will provide further details in his comments and slides I will now provide a clinical overview of the quarter and then Jeff Ludwig.
And additional color on the airlines commercial activities.
But I guess, we'll follow with highlights of the key components of our financial statements for the fourth quarter of 2021.
As we have mentioned on prior calls pulling that has an ongoing basket trial of Niraparib and hurts your mutated cancers referred to as the summit trial in the fourth quarter of 2021 from a met with the FDA to discuss the regulatory path for in Iraq.
In patients with hormone receptor positive hurts your negative breast cancer, who had her two mutation.
Vessels will remember that based on our meeting with the FDA in the fourth quarter of 2019. This arm on the southern trial was modified such that patients were randomized to receive either pharma strength alone.
<unk>, plus trastuzumab or the combination of underwriting if possible desperate plus trastuzumab.
Under the initial Simon two stage design to each of the three arms enroll seven patients during stage, one and if no patient in a given arm responded that arm was closed to further enrollment in the first stage one or more patients responded the arm with an expanded up to 18 patients.
Less than four patients in the expanded arm respond.
Almost close to further enrollment if.
More than four patients responded the arm was expanded to 30 patients as.
As was previously disclose to investors and it was presented at the San Antonio breast cancer Symposium in 2021 for the first seven patients who were treated in the photo strength alone arm of the trial no patients achieved a response in the first seven patients who were treated in the fall of <unk> plus Trastuzumab arm of the trial no patients achieved a response.
In the first seven patients who were treated in the underwriting at the plus sylvestris, plus trastuzumab arm of the trial, one or more responses were seen and therefore, the criteria was bad to expand to stage two of the Simon two stage design.
That arm of the trial was expanded to further enrollment in an additional 18 patients had been treated with the combination of Niraparib plus <unk> plus trastuzumab enrollment to this arm has been stopped while we analyze the additional data.
At the meeting with the FDA in the fourth quarter of 2021, the data from the southern patients randomized to each of the three hours are shared with the FDA.
Puma also notified the FDA that they had enrolled an additional 18 patients who had been treated with the combination of Niraparib plus <unk> plus trastuzumab and if the data from these 18 patients could be shared with the FDA in 2022.
From our plans to submit this data in the first half of 2022 and schedule a meeting to discuss the regulatory path for a variety of in this indication.
Puma anticipates that the FDA will either allow the company to file for accelerated approval based on single arm data or me a call.
Require additional data or it may require a separate randomized trial for this indication if a randomized trial is required the company will make a decision whether or not to proceed based on the time and cost of the trial versus the potential market opportunity.
Additional data from this cohort will be presented in the first half of 2022 Premier will continue to update investors on the status of this as it progresses.
As investors are also aware in November 2020, we announced interim results from another cohort of the summit trial and more specifically the cohort of patients with metastatic non small cell lung cancer with epidermal growth factor or Egfr exon 18 mutations who have previously been treated with Egfr tyrosine kinase inhibitor.
As was shown in the data that was presented there were four responses out of 11 patients and therefore the criteria have been met to proceed to stage two of the Simon two stage design and enroll 30 patients. There are currently 31 patients enrolled in this arm of the trial and we anticipate that we will have additional data from this cohort to report in the second half of 2000.
22, once we receive this data we plan to meet with the FDA to discuss the regulatory path for this indication from anticipates that the FDA will either allow the company to file for accelerated approval based on single arm data or may require additional data or a separate randomized trial for this indication.
A randomized trial is required the company will make a decision whether or not to proceed based on the time and cost of the trial versus the potential market opportunity enrolment.
Enrollment in this arm of the trial has been halted while we analyze the current data and wait for regulatory guidance I will now turn the call over to Jeff Ludwig.
As Chief commercial officer for a review of our commercial performance during the quarter.
Alright, Thanks, Alan I appreciate it and thanks to everyone for joining our fourth quarter earnings call.
Before I move into the commercial review just a reminder, that I will be making forward looking statements.
Commercially we remain focused on three areas.
One leveraging the evolving positive clinical data for <unk>.
To engaging and educating patients to Ashford, our links and three increasing our impact through field force execution and evolution.
It is great to see progress being made to help support women battling breast cancer overall.
But this market clearly remains underpenetrated and more must be done and we clearly believe that <unk> can play a bigger role in helping patients throughout their journey.
We were happy to announce in Q4 that <unk> was included in two important NCC in clinical practice guideline updates for the treatment of breast cancer.
The first update added neuro links to the body of the guidelines for the treatment of adjuvant her two positive breast cancer under the heading useful in certain circumstances.
Previously <unk> was included as a footnote only.
The updated guidelines recommend considering extended adjuvant in rat and their patients with HR positive her two positive disease with a perceived high risk of recurrence.
The second update involved the inclusion of dose escalation as an approach to improve the tolerability of niraparib in the treatment of adjuvant her two positive breast cancer.
These MCC and updates are important as many institutions practices and clinicians referenced these guidelines in their treatment decisions.
As highlighted on our Q3 earnings call, we implemented some important organizational changes in Q4.
These changes were implemented based on the evolving oncology marketplace and were designed to streamline our commercial organization not only to better align our financial resources, but as importantly to simplify reporting structures reduce layers of management and improve overall ownership and execution at the customer level.
We revised targeting to help our teams to better focus our efforts and started building out a core strategic accounts team to better align with our largest customers.
Although it's still early I'm happy with the overall transition and the new organizational structure I believe we are in a better position to adapt to the evolving marketplace and focus our efforts where they matter most.
With that high level update let me transition to some of the U S commercial slides and I'll provide some additional insights along the way.
Once I finish my remarks, I will turn the call over to Maximo <unk>, who will review the full financial results.
On slide three our distribution model has not changed we have two channels that provide <unk> links to patients we refer to these as our specialty pharmacy channel and our specialty distributor channel or in office dispensing channel.
The majority of our business continues to flow through the specialty pharmacy channel more specifically in Q4, approximately 76% of our business went through this channel with the remaining 24% of the business flowing through the specialty distributor channel.
This is in line with what we reported in our Q3 earnings call as well.
Slide four shows U S quarterly net sales of <unk> since FDA approval.
<unk> noted our net product sales were $51 million in our fourth quarter of 2021.
This is an increase from the $43 $4 million, we reported in Q3 of 2021.
We have consistently seen increases in inventory in the fourth quarter of each year since launch and we estimate that approximately $5 billion on the fourth quarter net revenue is attributed to that increase in inventory.
Slide five shows the bottles of <unk> sold by quarter. Since launch. Please note. This is slide this slide shows ex factory bottle sold so it represents sales into our specialty pharmacy and specialty distribution channel and not end user demand.
We sold 3454 bottles of <unk> links in Q4 of 2021.
There is an increase of 507 bottles from our Q3 2021 bottle sales of 2947.
We estimate that about 345 bottles are attributed to the increase in inventory that occurred in Q4.
Let me provide some additional insight into the business.
New prescriptions for new patients starts arent important leading indicator for our business. These new patient starts turning to refills, which will influence subsequent quarters in terms of total bottle sold.
As we have previously discussed we tend to see a decline in new patient starts in the fourth quarter with a subsequent increase in the first quarter of the following year.
This was driven largely by some patients deciding to delay starting on therapy until after the holidays.
As Alan mentioned, we did see a decline in new patient starts represented by an Rx by about 8% in Q4 compared to Q3.
This is a smaller decline that we've seen in the last several years, but nonetheless still a decline.
The positive change is that year over year fourth quarter, new patient starts are flat.
In addition, we paid close attention to enrollments, which is another important leading indicator.
Enrollments really represent the intention to prescribe and there's a strong correlation between enrollment and subsequent new patient starts.
Similar to new patient starts we have historically seen a drop in Q4 enrollments with a subsequent increase in Q1.
This year, we did not see a decline in Q4 enrollments as they were flat to Q3 and were 2% higher than Q4 of last year.
We do continue to see an increase in the number of patients qualifying for free drug through our patient assistance program, which is being driven largely by the limited availability of co pay support from the foundations. This is contributing to the decline in Rx compared to enrollments being flat.
As previously reported we were excited to have dose escalation added to our label in late June for both of our extended adjuvant indication as well as our metastatic indication.
In addition, again, we were pleased that NCC have updated their clinical practice guidelines for breast cancer to include dose escalation in early stage breast cancer.
As you can see we saw an increase in the adoption of dose escalation in the fourth quarter. We're over 60% of patients were started underlying at a lower dose.
We are pleased with the increasing adoption of dose escalation and believe that this increased adoption will improve the overall tolerability of mirror links increase the average length of therapy and ultimately allow more patients to receive the full benefit of neuro links.
Slide seven highlights the strategic collaborations we have formed across the globe with the goal of making <unk> available to more patients around the world.
We continue to be pleased with our global partners with the progress being made.
As mentioned on our Q3 earnings call. We were pleased that <unk> received extended adjuvant approval in South Korea.
Metastatic regulatory approval in Taiwan, and it was officially launched in Peru, all in early Q4.
Additional recent highlights include regulatory approval in Chile in the metastatic setting.
Regulatory approval in both Brazil, and Mexico in the extended adjuvant setting an official launch in South Korea.
On top of that we were extremely pleased that in December of 2021, we were notified by our partner Pierre Pharm that near links was added to China's national reimbursement drug list or <unk> for 2022.
And our <unk> approval is an important milestone and will significantly increase access to women battling early stage breast cancer in China.
We are continuing to work closely with our partners and look forward to future potential launches in additional countries in Europe , Latin America Asia, and the Middle East.
Our Puma was founded on a commitment to making a difference in the lives of patients and their families battling breast cancer.
Want to thank the commercial team for their passion and commitment to making such a difference we know more must be done and we will not stop until we achieved our goals.
I'm now going to turn the call over to Maximo for a review of our financial results Maximo.
Thanks, Jeff.
We'll begin with a brief summary of our financial results for the fourth quarter of 2021.
Please note that I will make comparisons to Q3 2021, which we believe is a better indication of our progress as a commercial company.
For the year comparisons.
For more information.
Element that you referred to our 2021 10-K.
We will be filed today and includes our consolidated financial statements.
For the fourth quarter of 2021, we reported net income based on GAAP of $4 2 million or 10 cents per basic and diluted share.
This compares to a Q3 2021 net loss of $44 7 million.
Or $1 90 per share.
The non-GAAP basis, which is adjusted to remove the impact of stock based compensation expense.
We reported net income of $8 4 million or <unk> 21 per basic diluted.
Diluted share for the fourth quarter of 2021.
Yeah.
Gross revenue from Nellix sales was $64 5 million in Q4 2021.
There are some $53 8 million in Q3 2021.
Okay.
And I've mentioned it net product revenue from <unk> sales was $51 million.
$243 4 million, we reported in the third quarter of 2021.
We believe that Q4 net sales included approximately $5 million of inventory buying from our distributors.
Royalty revenue totaled $2 9 million in the fourth quarter of 2021.
$2 8 million in Q3 2021.
Our gross to net adjustment in Q4, 2021 most of them.
21% and.
An increase from the 19, 4% gross to net adjustment in Q3 2021 .
The increase was driven mainly by higher Medicaid rebates.
Co pay higher interest participation in government pricing.
Cost of sales for Q4, 2021 was $11 9 million, including $2 million for the amortization of intangible assets related to our <unk> license.
Cost of sales for Q3, 2021 was $10 3 million.
Going forward, we will continue to recognize amortization of milestones to the license or were about 2 million per quarter across cost of sales.
Yeah.
For fiscal year, 2022 Puma anticipates, a net product revenue will be in the range of $180 million to $190 million.
We also anticipate that our gross to net adjustment for the full year 2022 will be between 21, 5% and 22, 5%.
Furthermore, for the fiscal year 2022 we anticipate receiving royalties from our partners around the world in the range of 27% to $34 million.
License revenue in the range of zero to $1 5 million.
We recognize there continues to be a great deal of uncertainty regarding the impact of COVID-19.
And these may continue to negatively impact our sales royalties license revenue.
Yeah.
Historically, the first quarter represents the lowest net product sales quarter of the year due to a number of factors, including inventory built the channel in the fourth quarter of the prior year.
Which has a negative effect over bottle sold in Q1.
As well.
Gross to net due to higher co pays and coverage gaps expenses.
<unk> occur in the first quarter.
We also are anticipating that Q1 revenues will be impacted by the higher amount of free drug needed to be administered due to the decline in funding for the Medicare foundations that Jeff mentioned it in his remarks.
We anticipate that Q1 2022 nanometer net sales will be in the range of $35 million to $39 million I may repeat the $35 million to $39 million.
This guidance.
Assumes that $5 million of inventory buying from Q4 is work during the quarter.
We also anticipate Q1 royalty revenues will be.
In the range of $5 million to $7 million.
We anticipate that gross to net adjustment in Q1, 2022 will be approximately 23% 24%.
SG&A expenses were $22 5 million in the fourth quarter of 2021.
Compared to $26 1 million from Q3 2021.
SG&A expenses included noncash charges for stock based compensation of $2 4 million towards the fourth quarter of 2021 .
Two 3 million for Q3 2021.
Research and development expenses were $14 2 million in the fourth quarter of 2021.
Compared to $18 8 million for Q3 2021.
R&D expenses included noncash charges for stock based compensation of 1.8 million in the fourth quarter compared to $1 3 million for Q3, 2021 .
Yeah.
In the fourth quarter 2021 .
Puma reported cash burn of $5 4 million COO.
Compared to cash burn of $21 4 million in Q3 2021.
The cash burn for the full year 2021 was $11 3 million.
As a result of our cost containment actions across the company implemented in the fourth quarter of 2021.
Nice expecting lower operating expenses in 2022 compared to 2021.
More specifically, we anticipate SG&A expenses to be down approximately 15% to 20%.
And R&D expenses to be down 10% to 15% year over year.
At December 31, 2021 we had $82 1 million in cash cash equivalents and marketable securities.
Our accounts receivables balance again at year end was $32 5 million.
Our accounts receivable terms range between 10 and 68 days.
Our day sales Outstandings are about 48 days.
We estimate that as of December 31, 2021, our distribution level maintained approximately five weeks of inventory.
Yeah.
Overall, we continue to deploy our financial resources to focus on the monsoon is often about the navy through ongoing clinical trials and the commercialization of Nellix.
Thanks Maximo.
The COVID-19 pandemic has continued to present commercial challenges the Puma.
Even with the vaccinations that had been administered in 2021.
Still our noting that barriers to commercial access to our sell in place.
We are hopeful that with Covid cases declining these various all reduced in the future, which should improve the ability of our commercial team to access and interact with health care providers to increase their awareness of the New Orleans data. We also recognize the uncertainty as to widen access to health care providers will improve and we are remaining conservative in our outlook for improvements in excess.
So for this year.
I'm the senior management in cooperation with the board of Directors continues to remain focused on improving nearly sales in 2022 and beyond.
The fourth quarter of 2021, and we implemented a reduction in expenses with the goal of reducing expenses in order to maximize operational cash flows.
The company remains committed to protecting these operational cash flows and will continue to reduce expenses if needed to achieve this we look forward to updating investors on this in the future.
There continues to remain a significant unmet need for patients battling breast cancer lung cancer and other solid tumors. We at <unk> are committed and passionate about finding more effective ways and helping these patients during their journey and we will continue to strive to achieve that goal.
This concludes today's presentation, we will now turn the floor back to the operator for Q&A operator.
We will now begin the question and answer session.
If you wish to ask a question. Please press star one on your telephone keypad.
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For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star Keith.
Your first question comes from Ed White with H C. Wainwright. Please proceed with your question.
Wow.
Afternoon, Thanks for taking my questions.
So.
Regarding the sales force is the Salesforce right sized now.
And maybe if you can give us a little bit more information on.
Virtual sales calls versus in person calls in the fourth quarter, how that compares to the third quarter and what youre seeing so far in 2022.
Hi, Oh, let me answer your second question and then I'll have Jeff answer the first one in terms of the virtual calls versus live it's running about 50 50 about half of the calls are in person have being done virtually we haven't really seen that change a whole lot yet.
Hopefully that will change more during the year in terms of the size of the Salesforce, Jeff would you like to comment please yeah sure happy to.
And I believe we've got the right sized for the opportunity here as I mentioned, we made this change certainly not just to maximize resources, but to really capitalize or right sized where the change in the oncology marketplace. There are more and more customers that have gone to virtual or preferred virtual including some continued.
Accounts that are not accessible so it has allowed us to reduce our footprint, but ultimately we feel still be able to cover the vast majority of our business and I know. This question was asked in the last last call as well, we will pay very close attention to this this product is promotional sensitive if we come to the point, where we cannot get in front of the right.
Customers to improve our business, we will make a business case and adjust that appropriately but right now we feel very good about the size and as part of that structure. We put all elements of our salesforce or see any use of clinical nurse educators are clinical specialists or sales reps and our strategic account managers managers under a loan.
Leadership teams. So they can make right decisions in a quick efficient and hopefully a rapid fashion. So we feel good about it.
Thanks, you mentioned.
If the distribution networks at the year end about five weeks of inventory are there.
What do you expect to see throughout 2022 more like four weeks of inventory stocking.
Yes so.
We always see in the fourth quarter and inventory buy in and that's something we've seen every year.
Our anticipation is and Maximo commented. This in his comments, we saw the inventory buy in which was you know roughly almost 345 bottles in Q4, we're expecting to see that burn down in Q1, and so because of that burned down.
It's going to impact our Q1 sales and we see that trend if you look at the.
Figure, we put up we see that trend every time.
Our current expectation is that inventory will remain flat Q3 to Q4.
I'm, sorry, Q2, and Q3, and then come back up in Q4 again as you get the inventory buying again.
Okay, great. Thanks on that that's what I was looking for and then.
Just thinking a bit more about strategy and business development.
You know how are you looking at any potential targets now or are you looking at anything perhaps.
Early stage products for late stage products or even.
Currently marketed products that you can use.
Leverage your sales reps to.
To obtain value we just wanted to get your thoughts on on your BD development. Thanks.
Yeah, Thanks for asking it.
We've always been evaluating additional drugs to in license.
We tend to be more of a product centric company and that are technology centric one meeting.
We're not likely to get involved in any platform that acquired the big preclinical R&D investment.
He is a what's called an <unk> so no research development only.
Do we feel there are.
Early stage clinical assets that.
Could be developed I think that's a fair assumption.
Certainly as we're going to have a lot of operating cash flows this year.
Assuming we hit our numbers in all the numbers come in and we think theyre going to in our expenses stay where they are or go down and investing that cash flow in other assets certainly would it makes sense as a way to contribute value to stockholders.
Obviously, we would be very picky, and we would not look for something that would have a negative impact on those cash flows.
Okay, great. Thanks for taking my question.
Your next question comes from Ian download <unk> with Citi. Please proceed with your question.
Hi, This is carly on for Yigal. Thanks, so much for taking our questions.
We were just hoping you could go into a bit more detail on the discussion you had with the FDA last quite are on a path forward for <unk> mutated breast cancer I guess, given the FDA had previously requested the amendment to summit to isolate the effect of that in the randomized stage one portion.
Just curious why you now believe the FTA cut.
I actually require another study another randomized study here. Thank.
Thank you yeah. Thanks, Kelly the randomization they required was to randomize the patients to either <unk>, plus herceptin, plus full vestments versus herceptin for investment versus full investment alone.
Those would not be considered.
Yeah.
The standard of care, if you will for that industry and it was only seven patients.
I think that if they do require us to do a randomized trial I would expect it would probably be where we have to throw in something that represents the current standard of care for ER positive patients, which would probably be something of a physician's choice type of thing. So you're correct that the purpose of the randomization was isolated.
The effects of that in there at nib, but I don't think number one I don't think I only seven patients what would be a standard of care, but more importantly, I don't know that full investment alone would be a standard of care in that setting either so I think that's that's where the the.
If the FDA requires one.
That would be probably the hypothesis as to why.
Okay got it thank you for taking the question.
Your next question comes from Mark Forum with Cowen. Please proceed with your question.
Thanks for taking my question.
Did you just answered what was going to be a first one on presque from maybe just a similar question on kind of what that randomized trial will look like on the lung cancer side for those discussions later in the year and kind of what your expectations are there.
Yeah, Hi, Mark I don't know the answer to what it would look like.
My assumption would be so we would probably be looking at.
Patients with Egfr exon 18 mutated lung cancer.
They would be patients who already had an egfr tyrosine kinase inhibitor.
So again, if they will take a single arm trial, then that will be the way to proceed if they need a randomized trial I would assume it's against their enough care I don't know until we talk to them and you know again. These are both small indications. So if again if they want a single arm trial, we can certainly look at what the ROI on that would be.
If they want a randomized one that we would need to look at what the ROI is given the market opportunity and certainly that the time it would take in the money. It would take to do that again, we want to protect our operational cash flows.
Very important to us to do that and so yes. It's obviously, that's the decision we need to make.
Okay that makes sense and then maybe.
Any updates you can provide on the T 790 M patent cases.
Prosecuting that time.
Yeah, So mark regarding the.
790, MIP that Puma has as I'm sure you can imagine the topic, you're discussing is a very sensitive legal matter.
So there is not really all that much we can comment on.
Okay fair enough. Thank you.
Your next question comes from Geoff Meacham with Bank of America. Please proceed with your question.
Hi, This is Alex on for Josh. Thank you for taking my question can you provide any color on why the phase two data from the summit trial of Manhattan is answered.
Ill cancer patients with <unk> mutations with pushed from the first half to the second half. Thank you.
Yes in terms of the data for <unk>.
In hurting mutated cervical cancer and moving it from first half to the second half.
We did not get data together in time to submit it to S. G O, which would be the conference. We were looking for so therefore, we're going to be the next conference we were able to do it add is in the second half.
Yeah.
Alright, thank you.
I remember off the top of my head South of US ever had I think we were shooting for ethanol for that one.
So it was really just a timing issue we couldn't get it done for the <unk> deadline.
Thank you. Our next question comes from the line of Gena Wang with Barclays. Please proceed with your question.
Alright, Thanks for taking all my questions. This is Tom for Ciena.
Just wanted to ask about web two questions first one about the launch metrics.
Can you just remind us about the current complaint rate and implementation of the property three minutes diarrhea or any change. My second question is thinking about the gross.
Community in 2022, how much cost of impact do you expect from the recent guidance update as well as China.
<unk> program.
Yeah, I'm, sorry can you repeat those questions.
We didn't hear it quite well so if you could speak up a little bit greatly appreciate that please.
Oh sure. So the first question is about <unk>.
Remind us about the current compliance rate.
Property treatment for diarrhea.
Change there and also other metrics.
More color on that front.
The second question is about.
Thinking about the revenue growth opportunity in 2022, how much positive influence from reason MCC and guidance update.
It's China.
Greenberg Ms program.
So in terms of the.
Compliance rate if you will the main diarrhea prophylaxis that we're looking at is the use of the dose escalation as Jeff put in his slides, we have seen that increase quarter over quarter.
You would expect that that would continue.
As we increase awareness of it and you know as you mentioned this in the NCC guidelines as well.
Regarding the.
How much influence the SEC guidelines will have on revenue going forward.
Certainly hopeful that the improvements that the guidelines are adding to the body.
<unk> has a positive influence and in terms of the China that that's going to be a very you know.
Major influence on our numbers positively.
The market for her two positive breast cancer in China is probably two to three X in.
In terms of the number of patients what it is in the U S and certainly you know being added to the NRG L, which means that you know the government is reimbursing it.
It's a wonderful thing for patients.
I would say, we'll have a very positive impact on our numbers. So you know as you heard in our guidance, we're expecting a very big ramp up in our royalties and that is it.
All of our partners are showing growth, which is wonderful and in Europe , we're showing good growth et cetera, but the big jump up is the China revenue there.
And maybe the <unk>.
The compliance rate.
Right.
Yeah.
When you say compliance rates can you clarify.
When they started and they stay on the payment.
Okay.
So let me try to address that we do measure cohorts of patients really by quarter and as you look at and we do expect as the adoption of dose escalation continues you'll see a lower discontinuation rate and hopefully an extension of overall length of therapy.
<unk> of our patients have come on therapy on dose escalation in the last six to nine months. So we don't have a full assessment of that yet, but I can tell you that feedback from customers is very positive around dose escalation, it's easier for patients easier for nurses and easier for customers and we've got pretty strong podium Sip.
Court from some of our Kols about implementing dose escalation as well.
Thank you.
Yeah.
Thank you.
This concludes our question and answer session I would like to turn the conference back over to Mary Anne for closing remarks.
Thank you all for joining us today as a reminder, this call may be accessed via replay of the webcast at Puma Biotechnology Dot com beginning later today have a good evening.
Ladies and gentlemen, thank you for participating in today's conference call.
This concludes our program everyone have a great day you may now disconnect.