pbyi-10q_20160331.htm

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 32,493,092 shares of Common Stock, par value $0.0001 per share, were outstanding as of May 3, 2016.

This Quarterly Report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward looking. These forward-looking statements include, but are not limited to, statements about:

These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend” and similar words or phrases. Accordingly, these statements involve estimates, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them. Discussions containing these forward-looking statements may be found throughout this Quarterly Report on Form 10-Q, including, in Part I, the section entitled “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These forward-looking statements involve risks and uncertainties, including the risks discussed in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2015 and Part II, Item 1A. “Risk Factors” of this Quarterly Report on Form 10-Q that could cause our actual results to differ materially from those in the forward-looking statements. Such risks should be considered in evaluating our prospects and future financial performance. We undertake no obligation to update the forward-looking statements or to reflect events or circumstances after the date of this document.

	March 31, 2016 (unaudited)			December 31, 2015 (Note 1)
ASSETS
Current assets:
Cash and cash equivalents	$	78,219		$	31,569
Marketable securities		102,995			184,320
Prepaid expenses and other, current		8,143			7,660
Total current assets		189,357			223,549
Property and equipment, net		2,219			2,383
Prepaid expenses and other, long-term		9,284			9,597
Restricted cash		4,314			4,313
Total assets	$	205,174		$	239,842
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	24,837		$	17,803
Accrued expenses		14,068			14,639
Total current liabilities		38,905			32,442
Deferred rent		1,326			1,393
Total liabilities		40,231			33,835
Commitments and contingencies (Note 8 - Subsequent Events)
Stockholders' equity:
Common stock - $.0001 par value; 100,000,000 shares authorized; 32,493,092 shares issued and outstanding at March 31, 2016 and 32,466,842 issued and outstanding at December 31, 2015		3			3
Additional paid-in capital		756,383			726,651
Accumulated other comprehensive income (loss)		29			(147	)
Accumulated deficit		(591,472	)		(520,500	)
Total stockholders' equity		164,943			206,007
Total liabilities and stockholders' equity	$	205,174		$	239,842

	For the Three Months Ended March 31,
	2016			2015
Operating expenses:
General and administrative	$	11,039		$	7,871
Research and development		60,207			44,728
Totals		71,246			52,599
Loss from operations		(71,246	)		(52,599	)
Other (expenses) income:
Interest income		282			123
Other (expenses) income		(8	)		22
Totals		274			145
Net loss	$	(70,972	)	$	(52,454	)
Net loss applicable to common stock	$	(70,972	)	$	(52,454	)
Net loss per common share—basic and diluted	$	(2.19	)	$	(1.66	)
Weighted-average common shares outstanding—basic and diluted		32,478,408			31,588,315

	Common Stock				Additional		Accumulated Other
	Shares		Amount		Paid-in Capital		Comprehensive Income (Loss)			Accumulated Deficit			Total
Balance at December 31, 2015		32,466,842	$	3	$	726,651	$	(147	)	$	(520,500	)	$	206,007
Stock-based compensation		—		—		29,510		—			—			29,510
Exercises of stock options		26,250		—		222		—			—			222
Unrealized gain on available-for-sale securities		—		—		—		176			—			176
Net loss		—		—		—		—			(70,972	)		(70,972	)
Balance at March 31, 2016		32,493,092	$	3	$	756,383	$	29		$	(591,472	)	$	164,943

	For the Three Months Ended March 31,
	2016			2015
Operating activities:
Net loss	$	(70,972	)	$	(52,454	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		208			180
Build-out allowance received from landlord		—			179
Stock-based compensation		29,510			20,103
Changes in operating assets and liabilities:
Prepaid expenses and other		(170	)		131
Accounts payable		7,034			(2,389	)
Accrued expenses		(571	)		(15,975	)
Accrual of deferred rent		(67	)		202
Net cash used in operating activities		(35,028	)		(50,023	)
Investing activities:
Purchase of property and equipment		(44	)		(435	)
Restricted cash		(1	)		—
Expenditures for leasehold improvements		—			(179	)
Purchase of available-for-sale securities		(36,768	)		(104,838	)
Sale/maturity of available-for-sale securities		118,269			52,769
Net cash provided by (used in) investing activities		81,456			(52,683	)
Financing activities:
Net proceeds from issuance of common stock		—			205,196
Net proceeds from exercise of options		222			14,437
Net cash provided by financing activities		222			219,633
Net increase in cash and cash equivalents		46,650			116,927
Cash and cash equivalents, beginning of period		31,569			38,539
Cash and cash equivalents, end of period	$	78,219		$	155,466

Puma Biotechnology, Inc., or Puma, is a biopharmaceutical company based in Los Angeles, California with a focus on the development and commercialization of innovative products to enhance cancer care. The Company in-licenses the global development and commercialization rights to three drug candidates—PB272 (neratinib (oral)), PB272 (neratinib (intravenous)) and PB357. Neratinib is a potent irreversible tyrosine kinase inhibitor that blocks signal transduction through the epidermal growth factor receptors, HER1, HER2 and HER4. Currently, the Company is primarily focused on the development of the oral version of neratinib, and its most advanced drug candidates are directed at the treatment of HER2-positive breast cancer. The Company believes that neratinib has clinical application in the treatment of several other cancers as well, including non-small cell lung cancer and other tumor types that over-express or have a mutation in HER2.

In November 2012, the Company established and incorporated Puma Biotechnology Ltd., a wholly owned subsidiary, for the sole purpose of serving as Puma’s legal representative in the United Kingdom and the European Union in connection with Puma’s clinical trial activity in those countries.

The Company is initially focused on developing neratinib for the treatment of patients with human epidermal growth factor receptor type 2, or HER2-positive, breast cancer, HER2 mutated non-small cell lung cancer, HER2-negative breast cancer that has a HER2 mutation and other solid tumors that have an activating mutation in HER2. The Company has reported a net loss of approximately $71.0 million and negative cash flows from operations of approximately $35.0 million for the three months ended March 31, 2016. Management believes that the Company will continue to incur net losses and negative net cash flows from operating activities through the drug development process.

The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC, for interim financial information. Accordingly, the unaudited condensed consolidated financial statements do not include all information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the accompanying unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation. Interim operating results are not necessarily indicative of results that may be expected for the year ending December 31, 2016, or for any subsequent period. These unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. The condensed consolidated balance sheet at December 31, 2015, has been derived from the audited consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

The Company’s continued operations will depend on its ability to raise funds through various potential sources, such as equity and debt financing. Through March 31, 2016, the Company’s financing was primarily through public offerings of Company common stock and private equity placements. Given the current and desired pace of clinical development of its product candidates, management believes that the cash and cash equivalents and marketable securities on hand at March 31, 2016, are sufficient to fund clinical development through 2016 and into 2017. The Company may need additional financing until it can achieve profitability, if ever. There can be no assurance that additional capital will be available on favorable terms or at all or that any additional capital that the Company is able to obtain will be sufficient to meet its needs. If it is unable to raise additional capital, the Company could likely be forced to curtail desired development activities, which will delay the development of its product candidates.

The significant accounting policies followed in the preparation of these condensed consolidated financial statements are as follows:

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the balance sheet, and reported amounts of expenses for the period presented. Accordingly, actual results could differ from those estimates. Significant estimates include accrued expenses for the

cost of services provided by consultants who manage clinical trials and conduct research and clinical trials on behalf of the Company that are billed on a delayed basis. As the actual costs become known, the Company adjusts its estimated cost in that period. The value of stock-based compensation includes estimates based on future events, which are difficult to predict. It is at least reasonably possible that a change in the estimates used to record accrued expenses and to value the stock-based compensation will occur in the near term.

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value.

The Company classifies all investment securities (short term and long term) as available-for-sale, as the sale of such securities may be required prior to maturity to implement management’s strategies. These securities are carried at fair value, with the unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis. A decline in the market value of any available-for-sale security below cost that is determined to be other than temporary results in a revaluation of its carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the straight-line method. Interest income is recognized when earned.

Accounting Standards Codification, or “ASC,” 820, Fair Value Measurement, or ASC 820, provides a single definition of fair value and a common framework for measuring fair value as well as new disclosure requirements for fair value measurements used in financial statements. Under ASC 820, fair value is determined based upon the exit price that would be received by a company to sell an asset or paid by a company to transfer a liability in an orderly transaction between market participants, exclusive of any transaction costs. Fair value measurements are determined by either the principal market or the most advantageous market. The principal market is the market with the greatest level of activity and volume for the asset or liability. Absent a principal market to measure fair value, the Company uses the most advantageous market, which is the market from which the Company would receive the highest selling price for the asset or pay the lowest price to settle the liability, after considering transaction costs. However, when using the most advantageous market, transaction costs are only considered to determine which market is the most advantageous and these costs are then excluded when applying a fair value measurement. ASC 820 creates a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below, with Level 1 having the highest priority and Level 3 having the lowest.

Following are the major categories of assets measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015, using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3) (in thousands):

March 31, 2016	Level 1		Level 2		Level 3		Total
Cash equivalents	$	76,429	$	—	$	—	$	76,429
Commercial paper		—		14,932		—		14,932
Marketable securities - U.S. government		—		17,546		—		17,546
Marketable securities - corporate bonds		—		70,517		—		70,517
	$	76,429	$	102,995	$	—	$	179,424

December 31, 2015	Level 1		Level 2		Level 3		Total
Cash equivalents	$	29,166	$	—	$	—	$	29,166
Commercial paper		—		2,996		—		2,996
Marketable securities - U.S. government		—		11,500		—		11,500
Marketable securities - corporate bonds		—		169,824		—		169,824
	$	29,166	$	184,320	$	—	$	213,486

The Company’s investments in commercial paper, corporate bonds and U.S. government securities are exposed to price fluctuations. The fair value measurements for commercial paper, corporate bonds and U.S. government securities are based upon the quoted prices of similar items in active markets multiplied by the number of securities owned, exclusive of any transaction costs and without any adjustments to reflect discounts that may be applied to selling a large block of securities at one time.

Financial instruments, which potentially subject the Company to concentrations of credit risk, principally consist of cash and cash equivalents. The Company’s cash and cash equivalents in excess of the Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation insured limits at March 31, 2016, were approximately $82.3 million. The Company does not believe it is exposed to any significant credit risk due to the quality of the financial instruments in which the money is held. Pursuant to the Company’s internal investment policy, investments must be rated A-1/P-1 or better by Standard and Poor’s Corporation and Moody’s Investors Service at the time of purchase.

Property and equipment are recorded at cost and depreciated over estimated useful lives ranging from three to five years using the straight-line method. Leasehold improvements are recorded at cost and amortized over the shorter of their useful lives or the term of the lease by use of the straight-line method. Maintenance and repair costs are charged to operations as incurred.

The Company assesses the impairment of long-lived assets, primarily property and equipment, whenever events or changes in business circumstances indicate that carrying amounts of the assets may not be fully recoverable. When such events occur, management determines whether there has been impairment by comparing the asset’s carrying value with its fair value, as measured by the anticipated undiscounted net cash flows of the asset. Should impairment exist, the asset is written down to its estimated fair value. The Company has not recognized any impairment losses through March 31, 2016.

Research and development expenses are charged to operations as incurred. The major components of research and development costs include clinical manufacturing costs, clinical trial expenses, consulting and other third-party costs, salaries and employee benefits, stock-based compensation expense, supplies and materials, and allocations of various overhead costs. Clinical trial expenses include, but are not limited to, investigator fees, site costs, comparator drug costs, and clinical research organization, or CRO, costs. In the normal course of business, the Company contracts with third parties to perform various clinical trial activities in the ongoing development of potential products. The financial terms of these agreements are subject to negotiation and variations from contract to contract and may result in uneven payment flows. Payments under the contracts depend on factors such as the achievement of certain events, the successful enrollment of patients and the completion of portions of the clinical trial or similar conditions. The Company’s accruals for clinical trials are based on estimates of the services received and efforts expended pursuant to contracts with numerous clinical trial sites, cooperative groups and CROs. The objective of the Company’s accrual policy is to match the recording of expenses in the condensed consolidated financial statements to the actual services received and efforts expended. As actual costs become known, the Company adjusts its accruals in that period.

In instances where the Company enters into agreements with third parties for clinical trials and other consulting activities, upfront amounts are recorded to prepaid expenses and other in the accompanying condensed consolidated balance sheets and expensed as services are performed or as the underlying goods are delivered. If the Company does not expect the services to be rendered or goods to be delivered, any remaining capitalized amounts for non-refundable upfront payments are charged to expense immediately. Amounts due under such arrangements may be either fixed fee or fee for service, and may include upfront payments, monthly payments and payments upon the completion of milestones or receipt of deliverables.

Costs related to the acquisition of technology rights and patents for which development work is still in process are charged to operations as incurred and considered a component of research and development costs.

ASC 718, Compensation — Stock Compensation, or ASC 718, requires the fair value of all share-based payments to employees, including grants of stock options, to be recognized in the statement of operations over the requisite service period. Under ASC 718, employee option grants are generally valued at the grant date and those valuations do not change once they have been established. The fair value of each option award is estimated on the grant date using the Black-Scholes Option Pricing Method. As allowed by ASC 718 for companies with a short period of publicly traded stock history, the Company’s estimate of expected volatility is based on the average expected volatilities of a sampling of seven companies with similar attributes to the Company, including industry, stage of life cycle, size and financial leverage. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant valuation. Option forfeitures are calculated when the option is granted to reduce the option expense to be recognized over the life of the award and updated upon receipt of further information as to the amount of options expected to be forfeited. The option expense is “trued-up” upon the actual forfeiture of a stock option grant. Due to its limited history, the Company uses the simplified method to determine the expected life of the option grants.

The performance shares are valued on the grant date and the fair value of the performance award is equal to the market price of the Company’s common stock on the grant date. The performance share expense is recognized based on the Company’s estimate of a range of probabilities that the Company’s closing common stock price on the vesting dates will be lower or higher than the Company’s common stock price on the grant date. Based on the range of probabilities, the expense is calculated and recognized over the three-year vesting period.

Basic net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding during the periods presented as required by ASC 260, Earnings per Share. Diluted earnings per common share are the same as basic earnings per common share because the assumed exercise of the Company’s outstanding options are anti-dilutive. For the three months ended March 31, 2016, potentially dilutive securities excluded from the calculations were 5,675,393 shares issuable upon exercise of options, 9,469 shares issuable as performance awards and 2,116,250 shares issuable upon exercise of a warrant. For the three months ended March 31, 2015, potentially dilutive securities excluded from the earnings per common share calculation were 3,832,073 issuable upon exercise of options, 18,942 issuable as performance shares and 2,116,250 shares issuable upon exercise of a warrant.

The Company has entered into operating lease agreements for its corporate offices in Los Angeles and South San Francisco that contain provisions for future rent increases, leasehold improvement allowances and rent abatements. The Company records monthly rent expense equal to the total of the payments due over the lease term, divided by the number of months of the lease term. The difference between the rent expense recorded and the amount paid is credited or charged to deferred rent, which is reflected as a separate line item in the accompanying condensed consolidated balance sheets. Additionally, the Company recorded as deferred rent the cost of the leasehold improvements paid by the landlord, which is amortized on a straight-line basis over the term of the lease.

When a stock option grant is exercised, the Company notifies its transfer agent to release the required number of common stock shares from the reserve for the Company’s 2011 Incentive Award Plan. The Company records the transaction for the cash received and the issuance of common shares. Should there be a delay in the cash receipts due to the settlement period, the Company records a receivable from the exercise of an option as part of stockholders’ equity on the condensed consolidated balance sheet.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which eliminates the requirement for public companies to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. Additionally, the standard requires public entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. Furthermore, the standard requires presentation of financial assets and liabilities by measurement category and form of financial asset on the balance sheet or accompanying notes to the financial statements. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early application is permitted. We are currently evaluating the impact of adoption on our financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases, which increases transparency and comparability among organizations by requiring recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. We are currently evaluating the impact of adoption on our financial statements.

In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting, which is intended to simplify several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The standard is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early application is permitted. We are currently evaluating the impact of adoption on our financial statements.

	March 31, 2016		December 31, 2015
Current:
CRO services	$	3,133	$	2,969
Other clinical development		2,204		2,309
Insurance		852		1,138
Other		1,954		1,244
		8,143		7,660
Long-term:
CRO services		6,045		5,754
Other clinical development		2,466		3,005
Insurance		90		87
Other		683		751
		9,284		9,597
Totals	$	17,427	$	17,257

Property and Equipment:	March 31, 2016			December 31, 2015
Leasehold improvements	$	1,502		$	1,502
Computer equipment		1,690			1,646
Telephone equipment		169			169
Furniture and fixtures		1,167			1,167
		4,528			4,484
Less: accumulated depreciation and amortization		(2,309	)		(2,101	)
Totals	$	2,219		$	2,383

	March 31, 2016		December 31, 2015
Accrued CRO services	$	7,331	$	8,436
Accrued other clinical development		2,706		3,618
Accrued legal fees		551		443
Accrued compensation		3,342		1,970
Other		138		172
Totals	$	14,068	$	14,639

Accrued CRO services represent the Company’s estimate of such costs and will be adjusted in the period the actual costs become known. Accrued compensation includes estimated bonus and earned but unused vacation for full-time employees. When actual performance bonuses are paid out to employees, the bonus expense will be adjusted to reflect the actual expense for the year. Additionally, vacation is accrued at the rate the employee earns vacation and reduced as vacation is used by the employee.

The Company’s 2011 Incentive Award Plan, or the 2011 Plan, was adopted by the Board of Directors on September 15, 2011. Pursuant to the 2011 Plan, the Company may grant incentive stock options and nonqualified stock options, as well as other forms of equity-based compensation. Incentive stock options may be granted only to employees, while consultants, employees, officers and directors are eligible for the grant of nonqualified options under the 2011 Plan. The maximum term of stock options granted under the 2011 Plan is 10 years. The exercise price of incentive stock options granted under the 2011 Plan must be at least equal to the fair value of such shares on the date of grant. Through March 31, 2016, a total of 10,529,412 shares of the Company’s common stock have been reserved for issuance under the 2011 Plan.

Employee stock-based compensation for the three months ended March 31, 2016 and 2015 were as follows (in thousands, except share and per share data):

	Three Months Ended March 31,
	2016		2015
Stock-based compensation:
Options -
Research and development, or R&D	$	23,556	$	15,254
General and administrative, or G&A		5,882		4,704
Performance shares - R&D		72		145
Total stock-based compensation expense	$	29,510	$	20,103
Impact on basic and diluted net loss per share	$	0.91	$	0.64
Weighted average shares (basic and diluted)		32,478,408		31,588,315

During January 2014, performance share awards that provide for a maximum of 28,411 common stock shares to be issued were granted to certain employees. These shares vest over three years on the first, second and third anniversary of December 15, 2013. On each vesting date, if the Company’s closing common stock price is equal to $102.46 per share, one-third of the 28,411 shares will be awarded. If the Company’s closing common stock price is either lesser or greater than $102.46 per share, the number of common stock shares to be issued will be adjusted to be less than one-third of the 28,411 shares. No shares will be awarded if the Company’s closing common stock price is less than $47.53 per share at the vesting dates. The performance shares are valued on the grant date and the fair value of the performance award is equal to the market price of the Company’s common stock on the grant date. The performance share expense is recognized based on the Company’s estimate of a range of probabilities that the Company’s closing common stock price will be lower or higher than $102.46 on the vesting dates. Based on the range of probabilities, the expense is calculated and recognized over the three-year vesting period. On December 15, 2015, the second vesting occurred and the calculations were performed. As a result, 6,530 shares of common stock were issued to the employees and 2,943 performance shares were cancelled. The third and final vesting event will occur on December 15, 2016.

			Weighted
			Average
			Grant-Date
Performance shares	Shares		Fair Value
Nonvested shares at December 31, 2015		9,469	$	102.46
Granted		—		—
Vested/Issued		—		—
Cancelled		—		—
Nonvested shares at March 31, 2016		9,469	$	102.46

The fair value of options granted to employees was estimated using the Black-Scholes Option Pricing Method (see Note 2—Significant Accounting Policies) with the following weighted-average assumptions used during the three months ended March 31, 2016 and 2015:

Activity with respect to options granted under the 2011 Plan is summarized as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2015		5,542,285		$	105.59		8.6	$	87,632
Granted		249,750		$	60.82
Forfeited		(89,392	)	$	121.08
Exercised		(26,250	)	$	8.46			$	920
Expired		(1,000	)	$	106.41
Outstanding at March 31, 2016		5,675,393		$	103.83		8.4	$	17,190
Nonvested at March 31, 2016		3,433,496		$	118.33		9.2	$	—
Exercisable at March 31, 2016		2,241,897		$	81.62		7.2	$	17,190

At March 31, 2016, total estimated unrecognized employee compensation cost related to nonvested stock options and performance shares granted prior to that date were approximately $202.5 million and $0.4 million, respectively. These unrecognized expenses are expected to be recognized over a weighted-average period of 2.0 years for stock options and 0.7 years for performance shares. The weighted-average grant date fair value of options granted during the three months ended March 31, 2016 and 2015, were $36.28 per share and $125.41 per share, respectively.

				Weighted
				Average
				Grant-Date
Stock options	Shares			Fair Value
Nonvested shares at December 31, 2015		3,572,202		$	73.59
Granted		249,750			36.28
Vested/Issued		(299,064	)		95.25
Forfeited		(89,392	)		74.51
Nonvested shares at March 31, 2016		3,433,496			70.72

During 2012, the Company adopted a 401(k) savings plan for the benefit of its employees. The Company is required to make matching contributions to the 401(k) plan equal to 100% of the first 3% of wages deferred by each participating employee and 50% on the next 2% of wages deferred by each participating employee. The Company incurred expenses for employer matching contributions of approximately $0.3 million and $0.2 million for the three months ended March 31, 2016 and 2015, respectively.

On April 1, 2016, the Company took possession of additional office space pursuant to the amendments to the leases entered into in July 2015 (see Note 9 – Commitments and Contingencies of the Consolidated Financial Statements section of the Annual Report on Form 10-K for the year ended December 31, 2015). This office space increased the leased square footage in the Los Angeles and South San Francisco offices by approximately 26,000 square feet and 13,000 square feet, respectively.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included in Item 1 in this Quarterly Report on Form 10-Q. The following discussion should also be read in conjunction with our audited consolidated financial statements and the notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2015.

Unless otherwise provided in this Quarterly Report, references to the “Company,” “we,” “us,” and “our” refer to Puma Biotechnology, Inc., a Delaware corporation, together with its wholly-owned subsidiary, Puma Biotechnology Ltd.

We are a biopharmaceutical company with a focus on the development and commercialization of innovative products to enhance cancer care. We in-license the global development and commercialization rights to three drug candidates—PB272 (neratinib (oral)), PB272 (neratinib (intravenous)) and PB357. Neratinib is a potent irreversible tyrosine kinase inhibitor, or TKI, that blocks signal transduction through the epidermal growth factor receptors, HER1, HER2 and HER4. Currently, we are primarily focused on the development of the oral version of neratinib, and our most advanced drug candidates are directed at the treatment of HER2-positive breast cancer. We believe neratinib has clinical application in the treatment of several other cancers as well, including non-small cell lung cancer and other tumor types that over-express or have a mutation in HER2. Our efforts and resources to date have been focused primarily on acquiring and developing our pharmaceutical technologies, raising capital and recruiting personnel. We have had no product sales to date and we will have no product sales until we receive approval from the United States Food and Drug Administration, or FDA, or equivalent foreign regulatory bodies to begin selling our pharmaceutical candidates. Developing pharmaceutical products, however, is a lengthy and very expensive process. Assuming we do not encounter any unforeseen safety issues during the course of developing our product candidates, we do not expect to receive approval of a product candidate until approximately 2017.

We recently completed a Phase III clinical trial of neratinib for the extended adjuvant treatment of women with early stage HER2-positive breast cancer, which we refer to as the ExteNET trial. Based on the results from the ExteNET trial, we expect to file a New Drug Application, or NDA, for regulatory approval of neratinib in the extended adjuvant setting in the United States in mid-2016 and a Marketing Authorization Application, or MAA, in the European Union in the second quarter of 2016. We are continuing to evaluate potential commercialization options for neratinib in this indication, including developing a direct sales force, contracting with third parties to provide sales and marketing capabilities, some combination of these two options or other strategic options. Additionally, we believe we currently have sufficient inventory on hand to support at least the first year of commercialization in the extended adjuvant setting and will continue to monitor and evaluate our third party manufacturers’ ability to provide commercial supply of the product. We expect that our expenses will continue to increase as we continue to evaluate our options with regard to commercialization efforts.

To the extent we are successful in acquiring additional product candidates for our development pipeline, our need to finance R&D will increase. Accordingly, our success depends not only on the safety and efficacy of our product candidates, but also on our ability to finance product development. Our major sources of working capital have been proceeds from public offerings of our common stock and sales of our common stock in private placements.

As of the date of the filing of this quarterly report, we believe there have been no material changes to our critical accounting policies and estimates during the three months ended March 31, 2016, from our accounting policies at December 31, 2015, as reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

General and administrative, or G&A, expenses consist primarily of salaries and related personnel costs, including stock-based compensation expense, professional fees, business insurance, rent, general legal activities, and other corporate expenses.

R&D expenses include costs associated with services provided by consultants who conduct clinical services on our behalf, contract organizations for manufacturing of clinical materials and clinical trials. During the three months ended March 31, 2016 and 2015, our R&D expenses consisted primarily of clinical research organization, or CRO fees, fees paid to consultants, salaries and related personnel costs and stock-based compensation. We expense our R&D costs as they are incurred.

For the three months ended March 31, 2016, G&A expenses were approximately $11.0 million, compared to approximately $7.9 million for the three months ended March 31, 2015. G&A expenses for the three months ended March 31, 2016 and 2015 were as follows:

General and administrative expenses	Three Months Ended March 31,				Period to Period
(in thousands)	2016		2015		Percentage Change
Payroll and related costs	$	1,436	$	1,033		39.0	%
Professional fees and expenses		2,312		974		137.4	%
Facility and equipment costs		704		551		27.8	%
Employee stock-based compensation expense		5,882		4,704		25.0	%
Other		705		609		15.8	%
	$	11,039	$	7,871		40.2	%

For the three months ended March 31, 2016, G&A expenses increased approximately $3.1 million compared to the same period in 2015. Approximately $1.2 million of this increase is related to an increase in stock-based compensation expense, attributable to our increased headcount and additional incentive awards to existing employees. The remaining approximately $1.9 million increase in G&A expense for the three months ended March 31, 2016 compared to the same period in 2015 was primarily attributable to:

For the three months ended March 31, 2016, R&D expenses were approximately $60.2 million, compared to approximately $44.7 million for the three months ended March 31, 2015. R&D expenses for the three months ended March 31, 2016 and 2015 were as follows:

Research and development expenses	Three Months Ended March 31,				Period to Period
(in thousands)	2016		2015		Percentage Change
Clinical trial expenses	$	23,617	$	19,318		22.3	%
Internal clinical development		6,746		5,021		34.4	%
Internal regulatory affairs and quality assurance		2,697		1,968		37.0	%
Consultants and contractors		3,065		2,732		12.2	%
Internal chemical manufacturing		454		290		56.6	%
Employee stock-based compensation		23,628		15,399		53.4	%
	$	60,207	$	44,728		34.6	%

For the three months ended March 31, 2016, R&D expenses increased approximately $15.5 million compared to the same period in 2015. Approximately $8.2 million of this increase is related to an increase in stock-based compensation expense, attributable to our increased headcount and additional incentive awards to existing employees. The remaining approximately $7.3 million increase in R&D expense for the three months ended March 31, 2016 compared to the same period in 2015 was primarily attributable to:

While expenditures on current and future clinical development programs, particularly our PB272 program, are expected to be substantial, they are subject to many uncertainties, including the results of clinical trials and whether we develop any of our drug candidates with a partner or independently. As a result of such uncertainties, we cannot predict with any significant degree of certainty the duration and completion costs of our research and development projects or whether, when and to what extent we will generate revenue from the commercialization and sale of any of our product candidates. The duration and cost of clinical trials may vary significantly over the life of a project as a result of unanticipated events arising during clinical development and a variety of other factors, including:

For the three months ended March 31, 2016 and March 31, 2015, we recognized approximately $282,000 and approximately $123,000 in interest income, respectively. The increase in interest income is due to higher cash equivalents and marketable securities balances and use of longer-term higher yielding investments.

The following table summarizes our liquidity and capital resources as of March 31, 2016 and December 31, 2015, and is intended to supplement the more detailed discussion that follows:

Liquidity and capital resources (in thousands)	March 31, 2016			December 31, 2015
Cash and cash equivalents	$	78,219		$	31,569
Marketable securities		102,995			184,320
Working capital		150,452			191,107
Stockholders' equity		164,943			206,007

	Three Months Ended			Three Months Ended
	March 31, 2016			March 31, 2015
Cash provided by (used in):
Operating activities	$	(35,028	)	$	(50,023	)
Investing activities		81,456			(52,683	)
Financing activities		222			219,633
Increase in cash and cash equivalents	$	46,650		$	116,927

For the three months ended March 31, 2016 and March 31, 2015, we reported net loss of approximately $71.0 million and $52.5 million, respectively, and net cash used in operating activities of approximately $35.0 million and $50.0 million, respectively.

The approximately $35.0 million of net cash used in operating activities for the three months ended March 31, 2016, consisted primarily of approximately $29.7 million of non-cash items such as depreciation and amortization and stock-based compensation, a decrease of approximately $0.1 million in the liability for deferred rent, an increase of approximately $0.1 million in prepaid expenses and other and an increase of approximately $6.5 million in accrued expenses and accounts.

For the three months ended March 31, 2015, the net cash used in operating activities, noted above, consisted of approximately $20.5 million of non-cash items such as depreciation and amortization and stock-based compensation, and a decrease of approximately $18.4 million in accounts payable and accrued expenses, approximately $16.4 million of which represents a payment of taxes for stock option exercises in late December 2014. Cash used in operating activities included an increase of approximately $0.1 million in prepaid expenses and other and an increase of approximately $0.2 million in deferred rent.

During the three months ended March 31, 2016, net cash provided by investing activities was approximately $81.5 million compared to net cash used in investing activities of approximately $52.7 million for the same period in 2015. The approximately $81.5 million of net cash provided by investing activities during the three months ended March 31, 2016 was made up of approximately $118.3 million of sales or maturities of available-for-sale securities, offset by $36.8 million of cash invested in available-for-sale securities and approximately $0.1 million used to purchase property, equipment and leasehold improvements. During the three months ended March 31, 2015, cash used in investing activities was primarily made up of approximately $104.8 million used for the purchase of available-for-sale securities, offset by approximately $52.8 million cash provided by the sale or maturities of available-for-sale securities and approximately $0.5 million used to purchase property, equipment and leasehold improvements.

During the three months ended March 31, 2016, we received approximately $0.2 million of net proceeds from the exercise of stock options. During the same period in 2015, cash provided by financing activities was approximately $219.6 million, comprised of net proceeds of approximately $205.2 million from the closing of the January 2015 public offering of our common stock and approximately $14.4 million of net proceeds from the exercise of stock options.

We have incurred negative cash flow from operations since we started our business. We have spent, and expect to continue to spend, substantial amounts in connection with implementing our business strategy, including our planned product development efforts, our clinical trials and our R&D efforts, and the commencement of commercialization efforts. Given the current and desired pace of clinical development of our product candidates, over the next 12 months we estimate that our R&D spending will be approximately $115 million to $130 million, excluding stock-based compensation. We anticipate spending approximately $30 million to $35 million over the next 12 months for general and administrative expenses excluding stock-based compensation and as we continue to evaluate

our options with regards to commercialization efforts. The actual amount of funds we will need to operate is subject to many factors, some of which are beyond our control.

While we believe that the approximately $181.2 million in cash, cash equivalents and marketable securities as of March 31, 2016, will be sufficient to enable us to meet our anticipated expenditures through 2016 and into 2017, we may seek to obtain additional capital through the sale of debt or equity securities, if necessary, especially in conjunction with opportunistic acquisitions or licensing arrangements. We expect to continue incurring significant losses for the foreseeable future and our continuing operations will depend on whether we are able to raise additional funds through additional equity or debt financing or by entering into a strategic alliance with a third party concerning one or more of our product candidates. Through March 31, 2016, a significant portion of our financing has been through public offerings and private placements of our equity securities. We will continue to fund operations from cash on hand and through the similar sources of capital previously described. We can give no assurances that any additional capital raised will be sufficient to meet our needs. Further, in light of current economic conditions, including the lack of access to the capital markets being experienced by small companies, particularly in our industry, there can be no assurance that such capital will be available to us on favorable terms or at all. If we are unable to raise additional funds in the future, we may be forced to delay or discontinue the development of one or more of our product candidates and forego attractive business opportunities. Any additional sources of financing will likely involve the sale of our equity securities, which will have a dilutive effect on our stockholders.

In addition, we have based our estimate of funding our capital requirements on assumptions that may prove to be wrong. We may need to obtain additional funds sooner than planned or in greater amounts than we currently anticipate. Potential sources of financing include strategic relationships, public or private sales of equity or debt and other sources of funds. We may seek to access the public or private equity markets when conditions are favorable due to our long-term capital requirements. We do not have any committed sources of financing at this time, and it is uncertain whether additional funding will be available when we need it on terms that will be acceptable to us, or at all. If we raise funds by selling additional shares of common stock or other securities convertible into common stock, the ownership interests of our existing stockholders will be diluted. If we are not able to obtain financing when needed, we may be unable to carry out our business plan. As a result, we may have to significantly limit our operations, and our business, financial condition and results of operations would be materially harmed. In such an event, we would be required to undertake a thorough review of our programs, and the opportunities presented by such programs, and allocate our resources in the manner most prudent.

On April 1, 2016, we took possession of the additional office space pursuant to the amendments to the leases entered into in July 2015 (see Note 9 – Commitments and Contingencies of the Consolidated Financial Statements section of the Annual Report on Form 10-K for the year ended December 31, 2015). This office space increased the leased square footage in the Los Angeles and South San Francisco offices by approximately 26,000 square feet and 13,000 square feet, respectively.

In addition to our operating results, as calculated in accordance with accounting principles generally accepted in the United States of America, or GAAP, we use certain non-GAAP financial measures when planning, monitoring, and evaluating our operational performance. The following table presents our net loss and net loss per share, as calculated in accordance with GAAP, as adjusted to remove the impact of employee stock-based compensation. These non-GAAP financial measures are not, and should not be viewed as, substitutes for GAAP reporting measures. We believe these non-GAAP measures enhance understanding of our financial performance, are more indicative of our operational performance and facilitate a better comparison among fiscal periods.

For the three months ended March 31, 2016 and March 31, 2015, stock-based compensation represented approximately 41.6% and 38.3% of our net loss, respectively. This cost is related to our employee hiring practice and the fair market value of the stock option grants on the day granted.



	Three Months Ended March 31,
	2016			2015
GAAP net loss	$	(70,972	)	$	(52,454	)
Adjustments:
Stock-based compensation -
General and administrative		5,882			4,704		(1)
Research and development		23,628			15,399		(2)
Non-GAAP adjusted net loss	$	(41,462	)	$	(32,351	)

GAAP net loss per share—basic and diluted	$	(2.19	)	$	(1.66	)
Adjustment to net loss (as detailed above)		0.91			0.64
Non-GAAP adjusted net loss per share	$	(1.28	)	$	(1.02	)	(3)

(1) To reflect a non-cash charge to operating expense for general and administrative stock-based compensation.
(2) To reflect a non-cash charge to operating expense for research and development stock-based compensation.
(3) Non-GAAP adjusted net loss per share was calculated based on 32,478,408 and 31,588,315 weighted average common shares outstanding for the three months ended March 31, 2016 and 2015, respectively.

We do not have any “off-balance sheet agreements,” as defined by SEC regulations.

The primary objective of our investing activities is to preserve principal while maximizing the income we receive from our investments without significantly increasing the risk of loss. Some of the investable securities permitted under our cash management policy may be subject to market risk for changes in interest rates. To mitigate this risk, we maintain a portfolio of cash equivalents and available-for-sale investments in a variety of securities, which may include investment grade commercial paper, money market funds, government debt issued by the United States of America, state debt, certificates of deposit and investment grade corporate debt. Presently, we are exposed to minimal market risks associated with interest rate changes because of the relatively short maturities of our investments and we do not expect interest rate fluctuations to materially affect the aggregate value of our financial instruments. We manage our sensitivity to these risks by maintaining investment grade short-term investments. We do not purchase or hold derivative or commodity instruments or other financial instruments for trading purposes. Additionally, we periodically monitor our investments for adverse material holdings related to the underlying financial solvency of the issuer. As of March 31, 2016, our investments consisted primarily of corporate obligations. Our results of operations and financial condition would not be significantly impacted by either a 10% increase or 10% decrease in interest rates due mainly to the short-term nature of our investment portfolio. We have not used derivative financial instruments in our investment portfolio. Additionally, we do not invest in foreign currencies or other foreign investments.

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the timelines specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (the Company’s principal executive officer) and Senior Vice President, Finance and Administration and Treasurer (the Company’s principal financial and accounting officer), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Senior Vice President, Finance and Administration and Treasurer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined under Exchange Act Rule 13a-15(e)), as of March 31, 2016. Based on that evaluation, our Chief Executive Officer and Senior Vice President, Finance and Administration and Treasurer have concluded that these disclosure controls and procedures were effective as of March 31, 2016.

There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended March 31, 2016, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

On June 3, 2015, Hsingching Hsu, individually and on behalf of all others similarly situated, filed a class action lawsuit against us and certain of our executive officers in the United States District Court for the Central District of California (Case No. 8:15-cv-00865-AG-JCG). On October 16, 2015, lead Plaintiff Norfolk Pension Fund filed an amended complaint on behalf of all persons who purchased our securities between July 22, 2014 and May 29, 2015. The amended complaint alleges that we and certain of our executive officers made false and/or misleading statements and failed to disclose material adverse facts about our business, operations, prospects and performance in violation of Sections 10(b) (and Rule 10b-5 promulgated thereunder) and 20(a) of the Exchange Act. The plaintiff seeks damages, interest, costs, attorneys' fees, and other unspecified equitable relief. On November 30, 2015, we filed a motion to dismiss the amended complaint. The plaintiff opposed this motion, and the court heard oral argument on March 14, 2016. We intend to vigorously defend this matter.

On February 2, 2016, Fredric N. Eshelman filed a lawsuit against our Chief Executive Officer and President, Alan H. Auerbach, and us in the United States District Court for the Eastern District of North Carolina (Case No. 7:16-cv-00018-D). The complaint generally alleges that Mr. Auerbach and we made defamatory statements regarding Dr. Eshelman in connection with a proxy contest. Dr. Eshelman seeks compensatory and punitive damages and expenses and costs, including attorneys’ fees. We intend to vigorously defend this matter.

On April 12 and April 14, 2016, alleged shareholders filed two derivative lawsuits purportedly on behalf of the Company against certain of our officers and directors in the Superior Court of the State of California, Los Angeles, captioned Xing Xie v. Alan H. Auerbach, et al., No. BC616617, and Kevin McKenney v. Auerbach, et al., No. BC617059. The complaints assert claims for breach of fiduciary duty, unjust enrichment, abuse of control, mismanagement and waste of corporate assets arising from substantially similar allegations as those contained in the putative securities class action described above. The complaints seek an unspecified sum of damages and equitable relief. We intend to vigorously defend these matters.

The pending proceedings described in this section involve complex questions of fact and law and will require the expenditure of significant funds and the diversion of other resources to defend. The results of legal proceedings are inherently uncertain, and material adverse outcomes are possible.

Under Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2015, which was filed with the SEC on February 29, 2016, we identified important factors that could affect our financial performance and could cause our actual results for future periods to differ materially from our anticipated results or other expectations, including those expressed in any forward-looking statements made in this Form 10-Q. There has been no material change in our risk factors subsequent to the filing of our Annual Report. However, the risks described in our Annual Report are not the only risks we face. Additional risks and uncertainties that we currently deem to be immaterial or not currently known to us, as well as other risks reported from time to time in our reports to the SEC, also could cause our actual results to differ materially from our anticipated results or other expectations.

We did not sell any of our equity securities without registration under the Securities Act of 1933, as amended, during the quarter ended March 31, 2016.

Neither we nor any “affiliated purchasers” within the definition of Rule 10b-18(a)(3) made any purchases of our equity securities during the quarter ended March 31, 2016.

Exhibit		Description

3.1		Amended and Restated Certificate of Incorporation, as filed with the Secretary of State of the State of Delaware on November 14, 2011 (filed as Appendix I to the Company’s Definitive Information Statement on Schedule 14C filed with the SEC on October 24, 2011 and incorporated herein by reference)

3.2		Amended and Restated Bylaws of Puma Biotechnology, Inc. (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 16, 2016 and incorporated herein by reference)

10.1+		Non-Employee Director Compensation Program (filed as Exhibit 10.10 to the Company’s Annual Report on Form 10-K filed with the SEC on February 29, 2016 and incorporated herein by reference)

31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2016

31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2016

32.1		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Linkbase Document

+		Management contract or compensatory plan or arrangement.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Large accelerated filer	x	Accelerated filer	¨

Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

		Page
PART I – FINANCIAL INFORMATION:
Item 1.	Financial Statements:	1
	Condensed Consolidated Balance Sheets as of March 31, 2016 (Unaudited) and December 31, 2015	1
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2016 and 2015 (Unaudited)	2
	Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2016 and 2015 (Unaudited)	3
	Condensed Consolidated Statement of Stockholders’ Equity for the Three Months Ended March 31, 2016 (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015 (Unaudited)	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19
Item 4.	Controls and Procedures	19
PART II – OTHER INFORMATION:
Item 1.	Legal Proceedings	21
Item 1A.	Risk Factors	21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3.	Defaults Upon Senior Securities	21
Item 4.	Mine Safety Disclosures	22
Item 5.	Other Information	22
Item 6.	Exhibits	23
Signatures		24

Level 1:		Quoted prices in active markets for identical assets or liabilities.

Level 2:		Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.

Level 3:		Valuations derived from valuation techniques in which one or more significant inputs are unobservable.

	2016			2015
Dividend yield		0.0	%		0.0	%
Expected volatility		66.1	%		63.1	%
Risk-free interest rate		1.6	%		1.6	%
Expected life in years		5.85			5.85

	PUMA BIOTECHNOLOGY, INC.
Date: May 10, 2016	By:	/s/ Alan H. Auerbach
		Alan H. Auerbach
		President and Chief Executive Officer
		(Principal Executive Officer)
Date: May 10, 2016	By:	/s/ Charles R. Eyler
		Charles R. Eyler
		Senior Vice President, Finance and Administration and Treasurer
		(Principal Financial and Accounting Officer)