Shares of Puma Biotechnology (PBYI) surged as much as 200% in one session in after hours trading after the company released the results of an investigational drug being developed for patients with early stage breast cancer. This enormous move came just one week after Yellen, the current Fed chair, claimed that biotechnology stocks were overvalued in terms of valuation. Obviously the investors of the market feel differently because these biotechnology companies have seen great improvements in new treatments -- not only in cancer, but other disease areas. This move is possible for two big reasons; first, the results of the trial are phenomenal and second, Puma's share float was very small at only 20 million shares. 

The results laid out were nothing short of amazing! Puma's drug, known as Neratinib, was able to improve Disease free survival by 33% compared to placebo. The big boom was seen since this was a phase 3 trial but also because the primary endpoint of the trial was disease-free survival. Disease free survival is the amount of time in which a patient survives over the course of the study without the associated symptoms. If Neratinib didn't perform all that great compared to placebo we would be seeing the stock behave in the opposite manner -- down by a huge margin. It is a good thing for shareholders that these results were amazing and short-term profit may be made as well over the next few days. Actually, if you are a long term investor then there is nothing to worry about because it will take additional time for approval. Regardless, Puma has announced that it expects to file an NDA filling for regulatory approval by the first half of 2015 in the adjuvant setting. 

By adjuvant setting we infer that the drug will be approved as a secondary treatment after patients have had their tumor removed and were treated with Roche (RHHBY) Herceptin. Then Neratinib will be used to keep the patients disease free so that the breast cancer doesn't recur. The trial doesn't have to worry about a setback with a small group of patients because the trial enrolled 2,821 women. These women received either placebo or Neratinib after finishing their Herceptin treatment. As we have clearly seen, patients are better off with Neratinib after completing their first round of treatment to avoid recurrence of their breast cancer. We see the share price rising over the next few days with the ability for long term investors to gain a good entry point after some profit taking occurs. Like Intercept Pharmaceuticals (ICPT), we think the share price may dip as short term volatility kicks in, but long term investors have nothing to worry about in the long run.