The Biotech Stock Mailbag returns.

Jay P. asks, "Can you help me understand this large increase in the Puma Biotechnology (PBYI) - Get Report stock price? I know biotech stocks are starting to recover but that can't be the reason for this move. What am I missing?"

Puma is up 55% to $48 per share since July 20, the day before the company made two announcements: The new drug application for neratinib was filed to the Food and Drug Administation (as expected) and an update from the extended adjuvant study in breast cancer showed the disease-free survival (DFS) benefit favoring neratinib over placebo was maintained out to five years (not a huge surprise, but not totally expected, either.)

In this same time period, the Nasdaq Biotechnology Index is up only 12%, so you're right, something else is fueling Puma's resurgence.

The most apparent explanation is the five-year data from the so-called "ExteNet" study, which came back with a statistically adjusted DFS rate of 90.4% for neratinib versus 87.9% for placebo, or a 2.5 percentage point difference. At two years, the primary endpoint of the study, the relative DFS difference favoring neratinib was 2.3 percentage points, hence the optimism for the duration of the treatment effect.

As a reminder, the ExteNet study compares one year of neratinib to a placebo in women who had previously undergone successful breast cancer surgery followed by one year's treatment with the drug Herceptin. The goal of this treatment is to extend cancer-free remission as long as possible.

Puma is seeking FDA approval for neratinib as an extended adjuvant breast cancer therapy based on the two-year DFS data. The five-year data are like a security blanket, meant to re-assure regulators and investors that the drug's benefit is durable.

But (and you knew this was coming), the ExteNet study has been changed, poked, prodded, raked over and generally fiddled with so many times that those five-year DFS data aren't reliable. EP Vantage writer Jacob Plieth dove into the statistical hocus pocus of ExteNet in this article, which is well worth the read.

The other explanation for Puma's sudden move higher is a contrarian bet some investors are making on a competing adjuvant breast cancer therapy trial underway by Roche.

This trial, known as "Aphinity," compares the combination of Perjeta and Herceptin (both approved Roche breast cancer medicines) to Herceptin plus a placebo for one year following successful surgery. Disease-free survival is the primary endpoint of the study.

Roche has told investors to expect an announcement of Aphinity trial results near the end of the year.

If Perjeta succeeds in the Aphinity trial, the combination with Herceptin will become standard of care in adjuvant breast cancer. This is a very significant risk for Puma because Perjeta would obviate the need for neratinib.

The general consensus among healthcare investors for awhile now, based on my conversations, is odds favor a positive outcome from Aphinity. This is one reason why Puma's stock price is down almost 80% over the past two years.

However, more recently, I've heard investor chatter talking up the opposite outcome: Aphinity fails. If that's what happens, neratinib's outlook improves and Puma's stock price moves higher.

This Puma stock rebound over the past 10 days is related to some investors buying Puma on a speculative, contrarian bet Roche fails with the Aphinity trial.

None of this alters my bearish view of neratinib as a breast cancer drug with a marginal (almost non-existent) benefit and intolerable side effects, namely high rates of serious, life-threatening diarrhea. I won't be surprised to see an FDA advisory panel rip neratinib to pieces. Even if FDA ends up approving the drug, the commercial potential is small. 

Puma is run by men. There are no women in the company's C suite, no women on the board of directors. Talk about not understanding your customer. 

Randy L. writes, "You were on vacation and Relypsa (RLYP) was bought! You missed it!."

I did miss it, but congratulations to all the Relypsa shareholders on the $1.5 billion acquisition by the Swiss drug firm Galenica. Owning Relypsa through the early months of the Veltassa drug launch has not been easy, so the takeout at a 50%-plus premium is a nice reward.

Leslie W. writes, "You were right about XBiotech (XBIT) - Get Report . Thank you."

Thank you. Again, while I was on vacation, XBiotech buried a big "uh oh" in a Friday night, July 22, press release. The accelerated review of XBiotech's colon cancer drug Xilonix was rescinded by European regulators. Instead, the drug is being reviewed on a standard review timetable.

XBiotech played down the negative implications of the review status switch, but it's just another indication of trouble with Xilonix. Given everything that's happened recently, it's hard to conjure a scenario under which Europe approves the drug.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.