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Deciphera (DCPH) Q2 Loss Wider Than Expected, Revenues Beat

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Deciphera Pharmaceuticals, Inc. DCPH reported second-quarter 2021 loss of $1.21 per share, wider than the Zacks Consensus Estimate of a loss of $1.15 and the year-ago quarter’s loss of $1.20. The loss was attributed to increased research and development expenses incurred during the quarter.

Total net revenues were $23.6 million in the quarter, which beat the Zacks Consensus Estimate of $22.3 million. Revenues were up 232% year over year.

Shares of the company have lost 48.3% in the year so far compared with the industry’s decline of 1.1%.

Zacks Investment Research
Zacks Investment Research


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Quarter in Detail

In May 2020, Qinlock was approved by the FDA for the treatment of adult patients with advanced gastrointestinal stromal tumors (GIST) who have received prior treatment with three or more kinase inhibitors, including imatinib.

Apart from Qinlock, there are no other marketable drugs in the company’s pipeline. Total revenues comprised net product revenues and collaboration revenues. Net product revenues were $22 million, inclusive of $20.7 million in U.S. sales and $1.3 million in ex-U.S. sales.

Collaboration revenues of $1.5 million comprised commercial supply and royalty revenues under the company’s license agreement with Zai Lab. In March 2021, the company collaborated with Zai Labs to commercially launch Qinlock in China for the treatment of adult patients with fourth-line GIST.

Research and development expenses were $60 million, up 30% year over year. The increase was attributed to personnel and preclinical costs as well as increased clinical costs on ongoing phase I/II study on vimseltinib.

Selling, general and administrative expenses were $32.8 million, up from $29.9 million in the year-ago quarter due to personnel costs as well as external spend related to professional fees, including those associated with establishing a targeted commercial infrastructure in key European markets to support a potential launch of Qinlock in Europe, if approved.

Deciphera had cash, cash equivalents and investments worth $451 million as of Jun 30, 2021, down from $502.2 million as of Mar 31, 2021.

Pipeline Updates

Deciphera plans to initiate a phase I/IIb study of Qinlock in combination with Mektovi (binimetinib), in post-imatinib GIST patients in the fourth quarter.

Top-line results for the INTRIGUE phase III study on Qinlock are expected in the fourth quarter of 2021.The company anticipates a potential approval in Europe for Qinlock in the fourth quarter.

In June 2021, Deciphera initiated phase I study to evaluate its investigational ULK kinase inhibitor, DCC-3116, to treat patients with advanced/metastatic tumors driven by mutations in RAS/RAF genes. The study is investigating DCC-3116 as a single agent and also in combination with Mekinist (trametinib), an FDA-approved MEK inhibitor.

The company plans to finalize pivotal development plans in second-half 2021 for vimseltinib and rebastinib to treat tenosynovial giant cell tumor (TGCT) and solid tumors, respectively.

Our Take

The initial uptake of Qinlock has been encouraging and the company is working to expand access to this medicine globally. The successful results of the INTRIGUE study (expected later in the year) will broaden the targeted market further (larger, second-line patient population).

Deciphera Pharmaceuticals, Inc. Price

Deciphera Pharmaceuticals, Inc. Price
Deciphera Pharmaceuticals, Inc. Price

Deciphera Pharmaceuticals, Inc. price | Deciphera Pharmaceuticals, Inc. Quote

Zacks Rank & Stocks to Consider

Deciphera currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks worth considering in the same sector are Repligen RGEN, Vanda Pharmaceuticals VNDA and Vertex Pharmaceuticals VRTX, all of which currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Repligen’s earnings per share estimates for 2021 have increased from $2.26 to $2.69 in the past 30 days. The same for 2022 has moved north from $2.56 to $2.94 over the same period. The stock has rallied 30% in the year so far.

Vanda’s earnings per share estimates for 2021 have increased from $0.62 to $0.67 in the past 30 days. The same for 2022 has been revised upward from $0.80 to $1.01 over the same period. The stock has risen 28.8% in the year so far.

Vertex’s earnings per share estimates for 2021 have been raised from $11.20 to $12.21 in the past 30 days. The same for 2022 has been revised upward from $12.25 to $13.00 over the same period.


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