Good afternoon. My name is Alex, and I will be your conference call operator today. At this time, all participants are in a listen-only mode. After the speaker's formal remarks, there will be a question-and-answer session. If you'd like to ask a question during that time, simply press the star key, then the number one on your telephone keypad. If you'd like to withdraw your questions, please press star two. If you should require operator assistance during the conference, please press star zero. As a reminder, this call is being recorded. I would now like to turn the conference call over to Mariann Ohanesian, Senior Director of IR for Puma Biotechnology. You may begin your conference.
Thank you, Alex. Good afternoon, and welcome to Puma's conference call to discuss our financial results for the second quarter of 2022. Joining me on the call today are Alan Auerbach, Chief Executive Officer, President, and Chairman of the Board of Puma Biotechnology, Maximo Nougues, Chief Financial Officer, and Jeff Ludwig, Chief Commercial Officer. After market close today, Puma issued a news release detailing second quarter 2022 financial results. That news release, the slides that Jeff will refer to, and a webcast of this call are accessible via the homepage and investor sections of our website at pumabiotechnology.com. The webcast and presentation slides will be 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 12/31/2021 and our quarterly report on Form 10-Q for the period ended June 30, 2022. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this live conference call, August 4, 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 a substitute for, our GAAP financial measures. Please refer to our second quarter 2022 news release for a reconciliation of our GAAP to non-GAAP results. I will now turn the call over to Alan.
Thank you, Marianne, and thank you all for joining our call today. Today, Puma reported total revenue for the second quarter of 2022 of $59.5 million. Total revenue includes product revenue net, which consists entirely of NERLYNX sales, as well as license fees and royalties from our sub-licensees. Product revenue net was $51.3 million in the second quarter of 2022, which represents an increase as expected from the $40.7 million in product revenue net reported in the first quarter of 2022 and $48.9 million in product revenue net reported in Q2 2021. Product revenue for the second quarter of 2022 included approximately $2.7 million on inventory build at our specialty pharmacies and specialty distributors.
Royalty revenue was $8.2 million in the second quarter of 2022, an increase from $5 million in Q1 2022 and $4.3 million in Q2 2021. We recorded no license revenue in the latest quarter. We reported 3,200 bottles of NERLYNX sold in the second quarter of 2022, an increase of 520 from the 2,680 bottles sold in Q1 2022. We estimate that the Q2 inventory build amounted to approximately 175 bottles. As noted on our last quarter call, we estimate that inventory stocking in late 2021 caused a reduction of approximately 282 bottles in Q1 2022.
In Q2 2022, new prescriptions, NRx, were down approximately 8% compared to Q1, while total prescriptions, TRx, were up about 1.6%. Jeff will provide further details in his comments and slides. I will now provide a clinical review of the quarter, and then Jeff Ludwig will add additional color on NERLYNX commercial activities. Maximo Nougues will follow with highlights of the key components of our financial statements for the second quarter of 2022. As we have mentioned on our prior calls, Puma has an ongoing basket trial of neratinib in HER2-mutated cancers, referred to as the SUMMIT trial. The arm of the trial that has enrolled the most patients to date is the arm that is testing neratinib in patients with hormone receptor-positive, HER2-negative breast cancer who have a HER2 mutation.
As we have discussed on previous investor calls, Puma has been looking to pursue a regulatory approval in this indication and more specifically for the triplet of neratinib plus trastuzumab plus fulvestrant for which clinical data was presented at the recent American Society of Clinical Oncology annual meeting in June. As investors are aware, at the American Society of Clinical Oncology meeting in June, data was presented on Enhertu in patients with HER2-negative, HR-positive metastatic breast cancer in a trial referred to as DESTINY-Breast04 or DB-04. This trial showed an improvement in progression-free survival and overall survival. Assuming that it is approved, we believe it is likely to become the new standard of care for patients with HER2-negative metastatic breast cancer.
Based on the inclusion criteria for DB-04, we believe that it is likely that the population of patients studied in DB-04 overlaps with that of SUMMIT for neratinib in HR-positive, HER2-negative, HER2-mutated breast cancer. While we do not know what percent of the patients in DB-04 had HER2 mutations, we acknowledge that Enhertu is a HER2-targeted agent and has shown activity in and is in the NCCN guidelines for other HER2-mutated tumors. Due to this, we believe that it is unlikely that the FDA would grant accelerated approval for neratinib based on the SUMMIT data and would instead require us to either, one, do a head-to-head trial against Enhertu in this indication, two, do a trial of the triplet in combination with Enhertu versus Enhertu monotherapy, or three, study neratinib in a HER2-mutated population that does not overlap with a DB-04 indication.
We believe that the head-to-head trial against Enhertu is not in the best interest of shareholders, as the cost of this trial would be prohibitive and the likelihood of success would be low. The trial of the triplet in combination with Enhertu versus Enhertu monotherapy would require a new trial of the safety of the triplet with Enhertu, and it's further complicated by the fact that Enhertu is trastuzumab-based, which would complicate giving the triplet, which includes trastuzumab with Enhertu. The third option of studying neratinib in a different indication would require us to redo the randomized three-arm study, which tested neratinib plus trastuzumab plus fulvestrant versus trastuzumab plus fulvestrant versus fulvestrant alone in a new population, such as an earlier stage group of patients who are fulvestrant naive or a later group of patients who have already received Enhertu.
Due to the rarity of the HER2 mutation in breast cancer and the time it would take to enroll this three-arm randomized trial and the subsequent Simon's two-stage expansions, it is not clear that this can be accomplished in a time frame that would result in a positive return for Puma shareholders. Puma plans to submit the final data from SUMMIT to the FDA later this year to confirm our thoughts on this indication with the FDA and obtain their guidance. Puma will continue to update investors on the status of this as it progresses. As investors are also aware, in November 2020, we announced interim data from another cohort of the SUMMIT trial, and more specifically, in a cohort of patients with metastatic non-small cell lung cancer with epidermal growth factor exon 18 mutations who have been previously treated with an EGFR-targeted tyrosine kinase inhibitor.
As was shown in the data that was presented, there were 4 responders out of 11 patients, and therefore, the criteria had been met to proceed to stage 2 of the Simon's two-stage design and to 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 2022. Once we receive the data, we plan to meet with the FDA to discuss the regulatory pathway for this indication. Puma 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.
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. Enrollment to this arm of the trial has been halted while we analyze the current data and wait for regulatory guidance. As mentioned on prior earnings calls and in response to investor questions, Puma is also evaluating several drugs to potentially in-license that would allow the company to diversify itself and leverage Puma's existing R&D, regulatory, and commercial infrastructure. Puma will continue to update investors on the status of this as it progresses. I will now turn the call over to Jeff Ludwig, Puma's Chief Commercial Officer, for a review of our commercial performance during the quarter.
Thanks, Alan, appreciate it, and thanks to everyone for joining our second quarter earnings call. Before I move into the commercial review, just a reminder that I will be making forward-looking statements. Now I continue to be inspired by the stories of women battling breast cancer, but saddened by the overall impact of this disease. I am hopeful given the progress being made, but know there is so much more that needs to be done. We remain committed to helping women and their families battling breast cancer and believe that NERLYNX can play a more important role in both early-stage disease as well as in metastatic disease. Our overall commercial strategy has not changed. We remain focused on three areas. Number one, leveraging and communicating the evolving positive clinical data for NERLYNX. Number two, engaging and educating patients about the risks and benefits of NERLYNX.
Three, increasing our impact through field force execution and evolution. I'm happy to say that progress was made on all three fronts in Q2. Now let me provide a little more color around this statement. In Q2, we updated several of our promotional tools to better communicate the clinical benefits of NERLYNX. Rolled out a new case-based speaker deck, which has been very well received and continued to refine our personal and non-personal promotion mix. In addition, our field teams further engaged with local and regional advocacy organizations to better support and educate patients throughout their breast cancer journey. Lastly, we saw steady increases in HCP calls per day made throughout Q2, and our mix of live versus virtual interactions have continued to evolve. In Q2, more specifically, over 75% of our sales force interactions were live versus virtual engagements.
Now, the ebb and flow of COVID has been hard to predict, but we are hopeful this trend will continue. As I said up front, I have been inspired by the stories of women battling breast cancer, but saddened by the overall impact of this disease. The extended adjuvant breast cancer market is significantly under-penetrated, and we remain committed and focused on doing more to help support women throughout their battle with breast cancer. With that high level update, let me transition to some of the U.S. commercial slides. Once I have finished my remarks, I will turn the call over to Maximo for a more detailed review of our financial results. Looking at slide three, our distribution model has not changed. We have two channels that provide NERLYNX 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. In Q2, approximately 79% of our business went through this channel, with the remaining 21% of the business flowing through the specialty distributor channel. This is slightly different, but very similar to the 81% specialty pharmacy and 19% specialty distributor mix that we reported in our Q1 earnings call. Moving to slide four. Slide four shows U.S. quarterly net sales of NERLYNX since FDA approval. As Alan noted, our net product sales were $51.3 million in the second quarter of 2022. This is a $10.6 million increase from the $40.7 million we reported in Q1 of 2022.
This quarter-over-quarter increase is being driven by an estimated $4.3 million inventory drawdown that occurred in Q1 of 2022, and an estimated $2.7 million inventory build that occurred in Q2 of 2022. On slide five. Slide five shows the bottles of NERLYNX sold by quarter since launch. Please note that this slide shows ex-factory bottles sold, so it represents sales into our specialty pharmacy and specialty distributor channel and not end user demand. We sold 3,200 bottles of NERLYNX in Q2 of 2022, which is an increase of 520 bottles from our Q1 2022 bottle sales of 2,680.
The majority of this increase was a direct result of the 282 bottle inventory drawdown that occurred in Q1 of 2022, and the subsequent 175 bottle inventory build that occurred in Q2 of 2022. Now, let me provide some additional insight into the business. New prescriptions and new patient starts are clearly an important leading indicator for our business. We follow these trends very closely. New patient starts turn into refills, which influences subsequent quarters in terms of total bottles sold. As highlighted in previous earnings calls, we tend to see a decline in new patient starts in the fourth quarter due to some patients deciding to delay starting NERLYNX therapy until after the Q4 holidays. This decreases Q4 new patient starts, but subsequently increases Q1 new patient starts.
Now, this pattern did play out, as previously mentioned during our Q1 earnings call. Playing this forward, this also impacts quarter-over-quarter comparisons in Q2, since you're comparing Q2 to an artificially high Q1. In Q2, we saw an 8% decline in new patient starts as compared to Q1. Now looking at year-over-year comparisons, new patient starts in Q2 of 2022 were flat compared to Q2 of 2021. This is the first time since launch we have not seen a negative Q2 year-over-year decline. Transitioning to total prescriptions, we saw a Q2 quarter-over-quarter increase of 1.6% and a Q2 year-over-year decrease of 6.3%. The commercial team is focused on trying to drive consistent quarter-over-quarter growth and subsequent year-over-year growth.
Now in regards to free drug, we continue to see an increase in the number of patients qualifying for a free drug through our patient assistance program. This is being driven largely by an increase in Medicare patients who cannot cover the cost of their copay and are unable to obtain financial assistance due to limited availability of copay support from local, regional, or national foundations. Moving to slide 6. As previously reported, we were excited to have dose escalation added to our label in late June of last year for both our extended adjuvant indication as well as our metastatic indication. In addition, we're pleased that NCCN updated their 2022 clinical practice guidelines for breast cancer to include dose escalation in early stage breast cancer. As you can see on slide 6, we continue to see an increase in the adoption of dose escalation.
In Q2, approximately 65% of patients who received commercial drug started NERLYNX on a lower daily dose. Dose escalation can clearly benefit patients by significantly reducing both the amount of grade three diarrhea and the median days of grade three diarrhea, as well as reducing the overall discontinuation rate. Now, we are pleased with the adoption of dose escalation and are committed to seeing this adoption continue to grow. Slide 7 highlights the strategic collaborations we have formed across the globe with the goal of making NERLYNX available to more patients around the world. We are pleased with our global partners and the progress being made. In Q2 of 2022, we saw regulatory approval in the Philippines for the extended adjuvant indication, and just recently in Q3, NERLYNX was launched in Spain, and Ecuador received regulatory approval in the metastatic breast cancer indication.
Our global partners are preparing for additional launches and working hard to drive increased adoption. I look forward to highlighting their future progress. Now, Puma was founded on a commitment to making a difference in the lives of patients and their families battling breast cancer. I wanna thank our global partners, my commercial colleagues, and the entire cross-functional Puma organization for their continued passion and commitment to making such a difference. We know more must be done, and we will not stop until we have achieved our goals. I will now turn the call over to Maximo for a review of our full financial results.
Thanks, Jeff. I will begin with a brief summary of our financial results for the second quarter of 2022. Please note that I will make comparisons to Q1 2022, which we believe is a better indication of our progress as a commercial company than year-over-year comparisons. For more information, I recommend that you refer to our Q2 2022 10-Q, which will be filed today and includes our consolidated financial statements. The second quarter of 2022, we reported net income based on GAAP of $9.4 million or $0.21 per share. This compares to a Q1 2022 net loss of $3.4 million or $0.08 per share.
On a non-GAAP basis, which is adjusted to remove the impact of stock-based compensation expense, we reported net income of $12.6 million or $0.28 per share for the second quarter of 2022. Gross revenue from NERLYNX sales was $63.4 million in Q2 2022, versus $51.5 million in Q1 2022. As Alan mentioned, net product revenue from NERLYNX sales was $51.3 million, compared to the $40.7 million we reported in the first quarter of 2022. We believe that Q2 net sales included approximately $2.7 million of inventory build from our distributors. Royalty revenue totaled $8.2 million in the second quarter of 2022, an increase from $5 million in Q1 2022.
Our gross to net adjustment in Q2 2022 was 19% compared to the 21% gross to net adjustment in Q1 2022. Lower Medicaid share, lower co-pay, and lower coverage gap due to seasonality are the main drivers for the decline versus prior quarter. Cost of sales for Q2 2022 was $14.9 million, including $2 million for the amortization of intangible assets related to our neratinib license. Cost of sales for Q1 2022 was $10.8 million. Going forward, we will continue to recognize amortization of milestones to the licensor for about $2 million per quarter as cost of sales. For the fiscal year 2022, Puma reiterates its prior guidance that net product revenue will be in the range of $180 million-$190 million.
We also anticipate that our gross to net for the full year 2022 will be between 20% and 21%, slightly better than our prior guidance. Furthermore, for fiscal year 2022, we anticipate receiving royalties from our partners around the world in the range of $27 million-$30 million, lower than our prior guidance due to the timing of our NERLYNX shipments to our partner in China and potential negative foreign exchange impact. We don't expect license revenue in 2022. In addition, we expect our full-year net income to be in the range of $6 million-$10 million. We recognize there continues to be a great deal of uncertainty regarding the impact of COVID-19, and this may continue to negatively impact our sales, royalties, and license revenue.
We anticipate that for Q3 2022, NERLYNX net sales will be in the range of $44 million-$47 million. This guidance assumes that some of the inventory buildup in Q2 is reduced in Q3. We additionally anticipate that we will see an additional increase in inventory in Q4, as we have seen in prior years. We expect Q3 royalty revenues will be in the range of $3 million-$6 million. This is a reduction in the royalty revenue compared to Q2. This reduction is caused by the timing of shipments to our partner in China. According to our agreement, Puma received royalties when the product is sold to the distributor in China. The timing of these shipments and sales have been negatively impacted by the challenges associated with supply chain delays and the various shutdowns in China. Precisely forecasting the shipping and delivery times have been challenging.
Therefore, we are conservatively anticipating. The achievements we were expecting in Q3 could move to Q4, which will subsequently reduce Q3 royalties and increase Q4 royalties. We further estimate that our gross-to-net adjustment in Q3 2022 will be approximately 19.5% to 20.5%. Puma anticipates a Q3 net loss between $1 million and $2 million. SG&A expenses were $20.6 million in the second quarter of 2022, compared to $20.4 million for the first quarter. SG&A expenses included non-cash charges for the stock-based compensation of $2.1 million for the second quarter of 2022, compared to $2.2 million for Q1 2022. SG&A expenses in Q2 included a payroll tax credit under the CARES Act of $2 million.
Research and development expenses were $12 million in the second quarter of 2022, compared to $15.2 million for the first quarter. R&D expenses included non-cash charges for stock-based compensation of $1.1 million in the second quarter of 2022, compared to $0.9 million for the first quarter. R&D expenses in Q2 2022 included a payroll tax credit under the CARES Act of $1.8 million. In the second quarter of 2022, Puma reported cash burn of approximately $14 million, compared to cash burn of approximately $17 million in Q1 2022. Our Q2 2022 cash burn includes a final payment of approximately $27.1 million related to our class action lawsuit. As a reminder, in Q1 2022, we made a payment of $27.1 million related to the class action lawsuit and executed a private placement of $10 million.
As a result of cost containments actions across the company implemented in the fourth quarter of 2021, Puma continues to expect lower operating expenses in 2022 compared to 2021. More specifically, we anticipate SG&A expenses to be down approximately 15%-20% and R&D expenses to be down 10%-15% year-over-year. On June 30, 2022, we had $60.8 million in cash equivalents, and marketable securities. Our accounts receivables balance was $34 million. Our accounts receivables terms range between 10 and 68 days, while our day sales outstandings are about 44 days. We estimate that as of June 30, 2022, our distribution network maintained approximately four weeks of inventory. Overall, we continue to deploy our financial resources to focus on the advancement of neratinib through ongoing clinical trials and the commercialization of NERLYNX.
Thanks, Maximo. During 2020 and 2021, the COVID-19 pandemic presented significant commercial challenges to Puma and presented significant barriers to commercial access for Puma's commercial team. As Jeff mentioned, we are starting to see a positive trend in face-to-face interactions with HCPs, which we believe is a result of COVID cases declining and vaccination and booster rates increasing, resulting in these commercial barriers reducing. However, we also recognize the uncertainty as to whether access to healthcare providers will continue to trend positively. We are remaining conservative in our outlook for improvements in access for this year. Puma senior management, in cooperation with the board of directors, continues to remain focused on improving NERLYNX sales in 2022 and beyond. In the fourth quarter of 2021, we implemented a reduction in expenses with the goal of reducing expenses in order to maximize operating cash flows.
We believe that the positive net income reported in the quarter was a direct result of these expense reductions. The company remains committed to continuing to achieve 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 Puma are committed and passionate about finding more effective ways at helping these patients during their journey and 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?
Thank you. We will now begin the question-and-answer session. If you wish to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. If you wish to withdraw your request, please press star two. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Geoff Meacham with Bank of America. Please proceed with your question.
Good afternoon. This is Hao calling in for Geoff Meacham. Thanks for the question. I think my first question is really, you know, as we mentioned, given COVID recovery, you are seeing more live interactions for your sales force. I just wonder in terms of the sales force structure, do you see any, you know, change needed to sort of adapt to this more live interaction per se? Or you seeing maybe the mix of virtual plus live would be sort of as the new normal moving forward?
Hey, Hao. Appreciate that question and makes good sense. What I'll tell you is a couple things. One, we firmly believe NERLYNX is promotionally sensitive, so getting that sales force share of voice out there is very important to us. We're very happy to see that live visits continue to increase in Q1 versus Q2, and we certainly hope that trend continues. We did restructure in the latter half of last year. I can tell you that I feel currently like we are at the right size to capitalize on the opportunity given some of the restrictions that are out there in the oncology space. Specifically, you commented on something. I do believe the new normal will be a combination of live versus virtual.
We pay very close attention to the effectiveness of our field force, and as I said, right now we feel good about it. If we feel at a later date that things need to change, we'll certainly make adjustments and talk about that then. We feel very good right now with the trends.
Yeah, if I can add to that. You know, I think that right now we're very comfortable with the size of the sales force. If we start to see sales growth, which would, you know, necessitate we need to increase the size of it, we would certainly address that. We would need to see, you know, a significant trend of sales growth in order for us to increase the size of it.
Awesome. Thank you.
Thank you. Your next question comes from Divya Rao with Cowen. Please proceed with your question.
Hi. Thanks for taking my question. This is Divya on for Mark. This is more of a clarification, but will you guys be presenting updated HER2-mutated breast cancer data before taking it to the FDA? Can we expect kind of a concurrent disclosure of the data along with the go, no-go label expansion decision? Just curious if we could get a little bit of color on the compliance rates now that the dose titration regimen has been on the label for about a year now. Thank you.
Divya, on the first one, I would anticipate we'll probably present updated data on the basket trial, the SUMMIT trial for breast cancer at the San Antonio Breast Cancer Symposium. That would be my assumption. Whether or not we would do it concurrent with a FDA disclosure or just present it at the meeting, I don't know the answer to that. It depends on which, you know, the timing of when those are occurring. I would anticipate there will be additional disclosure of the data this year.
Divya, let me take that second question regarding dose escalation and if we're seeing an impact on duration or persistency. Again, we're very happy to see the adoption continue to grow. As you see, and you look at the slide, the majority of that increased adoption did occur within the last year, following the inclusion of dose escalation into our label. That yearly cohort of patients has not had enough time to mature, but we're certainly monitoring that group. Let me give you some more insight, though.
Looking back at fully matured yearly cohorts, what I can tell you is we've seen a steady increase in the length of therapy going back 2018, 2019 and 2020 for patients who started on a lower dose, with the largest increase in compliance occurring in 2020 or more recently. Now, if I look at smaller cohorts, even look at some monthly cohorts, say in the last, you know, Q4, Q1, what I can tell you also, as we monitor those patients who start on lower dose, we clearly don't have the ability to follow that entire length of therapy 'cause those cohorts haven't matured.
If you think about dose escalation likely to have the biggest impact in the first month or two, what I can tell you is that we see a benefit to the tune of about 5%-7% increase in compliance between month one and month two. So we are seeing that benefit. Now, will that benefit continue to play out through the full length of therapy? I don't know yet. We'll follow that very closely, but we do like to see that early positive impact. We also know through market research that physicians are very positive, physician staff are very positive, and we've got strong podium support. I will point out the obvious, though, that adherence has many other factors besides length of therapy from treatment fatigue, overall benefits, cost, side effects, et cetera. So we are watching those cohorts very closely.
That's really helpful. Thank you so much.
You're welcome.
Your next question comes from the line of Gena Wang with Barclays. Please proceed with your question.
Hi, this is Sheldon on for Gena. Thanks for taking our questions. Maybe something on the OpEx. You reiterated your guidance on the cost cutting for R&D and SG&A, but so far for the first two quarters of the year, it seems like if the trend continues, you will probably have much more cost savings than your guidance. Do you expect the second half to significantly ramp up on both R&D and SG&A? Longer term, what efforts would you further make to achieve a more sustainable profitability? Thanks.
Hi. I'm sorry. Can you clarify your question regarding the expenses, the R&D expenses and the G&A?
Yeah. Yeah. I think if you just take the second quarter run rates, it seems like the annual R&D and SG&A will come with a higher reduction of expense other than your guidance of 10%-15% R&D, 15%-20% SG&A. Is that correct? If you achieved annual cost saving in those range, it seems to imply that the second half would have some ramp- up.
Just to clarify, right, as I mentioned on the call, Q2 we had a credit, a CARES Act credit on our payroll for about $3.8 million. You need to net that out of the run rate if you're looking at that. Also if you're looking at comparison Q2 versus year- to- date versus the prior year, last year we had a one-time warrant cost on the stock-based compensation. You need to also take that into account.
I see. I think that's the difference. Thank you so much. My second question is on the more about long-term profitability.
Yeah. Okay. In terms of your second question, you know, as we gave you guidance, we are expecting to be, you know, net income positive for the year. I believe we said a $1-2 million net loss in Q3, and that would obviously imply, you know, Q4 is positive net income again. We certainly recognize the importance of being, you know, net income positive and cash flow positive. Absolutely, as I said at the end of my speech, you know, us focusing on protecting those cash flows and net income is something very important to us. If additional cost cuts need to be made to continue our, you know, the company being cash flow positive and net income positive, we are of course committed to doing that.
Thank you so much.
Thank you. This concludes our question and answer session. I would like to turn the conference back to Mariann for closing remarks.
Thank you for joining us today. As a reminder, this call may be accessed via replay of the webcast at pumabiotechnology.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.