Puma Biotechnology Inc (PBYI) Jumps: Counting the Chickens Before They Hatch? IBB, XBI & ABBV

Yesterday, small cap biopharmaceutical stock Puma Biotechnology Inc (NYSE: PBYI) jumped 11.98% after announcing they will have a conference call next week to update investors on its clinical trials of PB272 (neratinib) in cancer patients, meaning its probably time to take a closer look at the stock to see if investor might be counting the chickens before they hatch along with the performance of large cap AbbVie Inc (NYSE: ABBV) which also recently had positive news about its own breast cancer treatment plus biotech ETFs iShares NASDAQ Biotechnology Index ETF (NASDAQ: IBB) and SPDR S&P Biotech ETF (NYSEARCA: XBI).

What is Puma Biotechnology Inc?

Small cap Puma Biotechnology is a development stage biopharmaceutical company that acquires and develops innovative products for the treatment of various forms of cancer. Puma Biotechnology focuses on in-licensing drug candidates that are undergoing or have already completed initial clinical testing for the treatment of cancer and then seeks to further develop those drug candidates for commercial use. The Company is initially focused on the development of PB272 (oral neratinib), a potent irreversible tyrosine kinase inhibitor, for the treatment of patients with HER2-positive metastatic breast cancer and patients with non-small cell lung cancer, breast cancer and other solid tumors that have a HER2 mutation.

As for possible performance benchmark peers, the iShares NASDAQ Biotechnology Index ETF tracks the Nasdaq Biotechnology Index through 119 stocks and has a 77.11% weight in "biotechnology" and a 22.86% weight in Pharma while the SPDR S&P Biotech ETF tracks the S&P Biotechnology Select Industry Index with a 100% allocation in 58 biotechnology stocks.  Finally, AbbVie Inc is a research-based pharmaceuticals company whose veliparib was recently reported to have proved especially promising against so-called triple negative breast cancer (see the Wall Street Journal "Two Experimental Breast-Cancer Drugs Pass Major Milestone in Study" about PBYI's and ABBV's potential breast cancer treatments).

What You Need to Know or Be Warned About Puma Biotechnology Inc

Yesterday, Puma Biotechnology announced that it would host a conference call at 1:30 pm PST (4:30 pm EST) on Monday, December 23, to provide an update on its clinical trials of PB272 (neratinib) in cancer patients with activating HER2 mutations. The update will cover the company's ongoing trials of neratinib in:

Patients with HER2 mutated non-small cell lung cancer; Patients with HER2-negative breast cancer who have a HER2 mutation; and Patients with solid tumors who have an activating HER2 mutation.

Puma Biotechnology had announced near the beginning of the month positive top line results from the Phase II clinical trial with the unexpectedly strong results sending shares soaring as much as 60%. However, the full data was not released at the time – meaning investors will probably want to pay close attention to what is said on the conference call and remember that its not over until there is a Phase III trial and FDA approval as the biotech space is littered with promising drugs that ended up crashing and burning before being approved.

Investors should also be aware that Puma Biotechnology has produced no revenues and net losses of $14.28M (3 months ending 2013-09-30), $12.65M (3 months ending 2013-06-30) and $11.78M (3 months ending 2013-03-31) so far this year plus annual net losses of $74.35M (2012), $10.23M (2011) and $0.01M (2010). Nevertheless, Puma Biotechnology had $95.64M in cash and short term investments at the end of September – meaning its not going to run out of cash any time soon while FDA approval of neratinib would quickly turn both the top line around.

Share Performance: Puma Biotechnology Inc vs. IBB, XBI & ABBV

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On Tuesday, small cap Puma Biotechnology jumped 11.98% to $99.85 (PBYI has a 52 week trading range of $18.22 to $105.00 a share) for a market cap of $2.86 billion plus the stock is up 432.5% since the beginning of the year and up 698.8% since June 2012. Here is a look at the long term performance of Puma Biotechnology verses that of large cap AbbVie Inc and biotech ETFs iShares NASDAQ Biotechnology Index ETF and SPDR S&P Biotech ETF:

As you can see from the above chart, small cap Puma Biotechnology has been a hands down winner over the longer term but AbbVie Inc, the iShares NASDAQ Biotechnology Index ETF and the SPDR S&P Biotech ETF have put in good performances.

Finally, here is a look at the latest technical charts for all four biotech investments:

The Bottom Line. At least some of the recent gains (and potentially more upside gains) by small cap Puma Biotechnology could be riding on Monday's conference call – meaning investors and traders alike should be listening.