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Edited Transcript of DCPH.OQ earnings conference call or presentation 5-May-20 8:30pm GMT

Q1 2020 Deciphera Pharmaceuticals Inc Earnings Call

May 26, 2020 (Thomson StreetEvents) -- Edited Transcript of Deciphera Pharmaceuticals Inc earnings conference call or presentation Tuesday, May 5, 2020 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Daniel C. Martin

Deciphera Pharmaceuticals, Inc. - Chief Commercial Officer

* Jennifer Robinson

Deciphera Pharmaceuticals, Inc. - VP of IR

* Matthew L. Sherman

Deciphera Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer

* Steven L. Hoerter

Deciphera Pharmaceuticals, Inc. - President, CEO & Director

* Thomas Patrick Kelly

Deciphera Pharmaceuticals, Inc. - Executive VP, CFO & Treasurer

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Conference Call Participants

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* Arlinda Anna Lee

Canaccord Genuity Corp., Research Division - Analyst

* Christopher Joseph Raymond

Piper Sandler & Co., Research Division - MD & Senior Research Analyst

* Eun Kyung Yang

Jefferies LLC, Research Division - MD & Senior Equity Research Analyst

* Jackson Dean Harvey

Nomura Securities Co. Ltd., Research Division - Research Analyst

* Robyn Kay Shelton Karnauskas

SunTrust Robinson Humphrey, Inc., Research Division - Research Analyst

* Yue-Wen Zhu

Guggenheim Securities, LLC, Research Division - Associate

* Yuko Oku

JP Morgan Chase & Co, Research Division - Analyst

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Presentation

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Operator [1]

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Good afternoon, everyone, and welcome to the Deciphera Pharmaceuticals First Quarter 2020 Financial Results Conference Call. Today's call is being recorded.

At this time, I would like to turn the call over to Jen Robinson, Vice President, Investor Relations. Thank you. Jen, go ahead.

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Jennifer Robinson, Deciphera Pharmaceuticals, Inc. - VP of IR [2]

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Thank you, Frederica. Welcome, and thank you for joining us today to discuss Deciphera's first quarter 2020 financial results. I'm Jen Robinson, Vice President, Investor Relations at Deciphera. With me this afternoon to discuss the financial results and provide a general corporate update are Steve Hoerter, President and Chief Executive Officer; Matt Sherman, Chief Medical Officer; Dan Martin, Chief Commercial Officer; and Tucker Kelly, Chief Financial Officer.

Before we begin, I would like to remind you that any statements we make on this call that are not historical facts are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements made during this conference call include the status of and our expected time lines for our preclinical and clinical studies, the impact of COVID-19, 2020 guidance, review and status of our NDA submission and preparations for a potential commercial launch.

Forward-looking statements made on this call involve substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements, and we cannot assure you that our expectations will be achieved. Such risks and uncertainties include the impact of COVID-19, the execution of clinical trials, the timing of study data, the actions of regulatory agencies and those set forth in our most recent quarterly report on Form 10-Q as well as our other SEC filings. We assume no obligation to update or revise any forward-looking statements.

Following this call, a replay will be available on the company's website, www.deciphera.com.

With that, I will now turn the call over to Steve Hoerter, President and Chief Executive Officer of Deciphera. Steve?

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Steven L. Hoerter, Deciphera Pharmaceuticals, Inc. - President, CEO & Director [3]

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Thank you, Jen. Good afternoon, everyone, and thank you for joining us on this call to discuss our first quarter 2020 financial results. In addition to providing our financial results and regular quarterly business update, today, we are also reaffirming the timing of our clinical and commercial milestones and providing an update on the potential for COVID-19 to affect the business.

Given the uncertainties that the COVID-19 pandemic presents, I want to emphasize that the outlook presented today is based on the assumption and the hope that the most severe impacts are of a short-term nature over the next few months rather than a prolonged and sustained disruption to everyday life. At Deciphera, our first concern is maintaining the safety and security of our employees as well as the patients and physicians participating in our ongoing clinical trials, and this principle has guided the actions we've taken to date.

In early March, we adopted a work-from-home policy for our employees with limited exceptions for certain business-critical activities, including ongoing laboratory research activities. For these activities, we have implemented appropriate safety measures designed to comply with federal, state and local guidelines.

While adapting to our new work environment has presented its challenges, I have been continually impressed by the team's ability to adjust while steadfastly maintaining our corporate values and executing on our company's mission.

As the COVID-19 pandemic has spread around the world, the Deciphera team has worked to ensure the safety and well-being of patients enrolled in our clinical studies and their clinical teams. We are focused on advancing our ongoing clinical studies and are actively monitoring risks associated with potential interruptions to our programs. We are in frequent communication with our clinical study sites and contract research organizations around the world.

As you may be aware, some clinical trial sites are restricting site visits by sponsors and CROs and imposing restrictions on the initiation of new trials, new patient enrollment and patient visits to protect both site staff and patients from possible COVID-19 exposure. While our studies remain open for enrollment, we have provided guidance that new patient enrollment may occur at sites where resources allow these patients to be safely enrolled and closely monitored. And some sites in our studies have temporarily paused enrollment of new patients.

Importantly, patients already enrolled in all of our clinical studies continue to receive investigational drug, and we are focused on supporting sites and providing ongoing care for these patients. We are also actively implementing remote and local procedures per recent FDA guidance, and working with investigators to help ensure patients receive care in a safe manner, consistent with agency guidelines.

As of this time, while there has been a slowdown in patient enrollment in the current environment, we currently expect to achieve our previously stated clinical milestones in the second half of this year, including full enrollment in INTRIGUE, our Phase III study in second-line GIST; updated clinical data for DCC-3014 from the dose escalation portion of the study in tenosynovial giant cell tumor patients; selection of a Phase II dose for DCC-3014 and opening the expansion portion of the study in TGCT patients and updated clinical data from both of the Phase Ib studies of rebastinib.

In addition, our discovery research for preclinical efforts and early development activities are currently on track and we expect to file the IND for DCC-3116, our ULK kinase inhibitor in the second half of 2020. In terms of drug supply, Deciphera has commercial drug supply sufficient to support the potential launch of ripretinib in fourth-line GIST. Based on current inventories and supply plans, the company does not anticipate any COVID-19-related supply interruptions to its clinical programs at this time.

With respect to our new drug application or NDA for ripretinib in patients with fourth-line GIST, we continue to work very collaboratively with the FDA as they review the submission, which has a PDUFA target action date of August 13 this year. We continue to build our commercial and medical affairs organizations to be ready to launch ripretinib in the U.S. upon a potential approval.

The ripretinib NDA is also part of Project Orbis, an initiative of the FDA Oncology Center of Excellence that provides a framework for concurrent submission and review of oncology drugs among participating international health authorities. Under this program, we have received priority review for a new drug submission with Health Canada, and a market authorization application with the Therapeutic Goods Administration in Australia for ripretinib in advanced GIST. In addition, we plan to submit a marketing authorization application to the European Medicines Agency in the second half of this year.

Given the evolving landscape, our commercial team has been preparing for a potential launch of ripretinib in a health care environment with limited to no physical, in-person promotional activities and therefore, has been working intensively on an effective commercial launch using a virtual interaction model, if necessary. Lastly, we are in a strong position from a cash runway perspective, which we expect to last us into the second half of 2022.

Despite the challenges we face, we expect this to be an exciting year for Deciphera. In particular, we look forward to a successful and impactful first commercial launch of ripretinib in fourth-line GIST, if approved, and to achieving full enrollment in INTRIGUE, and we remain confident about ripretinib's potential to alter the treatment landscape for patients in the post-imatinib setting.

Beyond ripretinib, we believe that our earlier stage programs can each deliver significant value-creating events with additional clinical data for DCC-3014 and rebastinib and the filing of an IND for DCC-3116 later this year.

To review progress on our clinical programs, I'll now turn the call over to Matt Sherman, our Chief Medical Officer. Matt?

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Matthew L. Sherman, Deciphera Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [4]

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Thank you, Steve. First, I would like to review our progress with ripretinib, our investigational broad spectrum KIT and PDGFR-alpha kinase inhibitor. As Steve mentioned, the NDA for approval of ripretinib in patients with fourth-line GIST is currently under priority review by the FDA with a PDUFA date of August 13 this year. The NDA submission is supported by highly significant and clinically meaningfully positive results from our INVICTUS pivotal Phase III study of ripretinib in patients with fourth-line and fourth-line plus GIST.

Today, we also announced that the 2 posters containing additional data from the INVICTUS study will be featured in [the clinical meeting], which is being held virtually this year from May 29 through May 31. The first poster will focus on quality of life outcomes with ripretinib in the fourth-line and fourth-line plus treatment settings, while the second poster will focus on the safety profile for ripretinib, including the impact of adverse events on patient-reported outcomes. We look forward to reporting these data later this month.

As we work towards the potential approval and launch of ripretinib in patients with advanced GIST who have received prior treatment with imatinib, sunitinib and regorafenib, we continue to explore other possible uses of ripretinib, including in second-line GIST patients. INTRIGUE is our ongoing randomized Phase III study of ripretinib in patients with second-line GIST compared to the current standard of care, sunitinib. We have now finalized the amendment for INTRIGUE, and the sample size will be 426 patients. We have approximately 118 sites activated in 22 countries. The global diversity and number of sites have been beneficial in helping us continue to enroll patients as we target full enrollment in the second half of this year.

Additionally, as Steve mentioned, our clinical team has been in close correspondence with study sites to implement remote and local procedures per the recent FDA guidance to ensure the appropriate care of patients. In addition, we expect to present data from at least one of the expansion cohorts of our ongoing Phase I study of ripretinib in the second half of this year.

Beyond ripretinib, we are focused on the development of DCC-3014, our highly selective inhibitor of CSF1R for patients with tenosynovial giant cell tumor or TGCT. We believe 3014 has the potential to fulfill the unmet medical need for an infective treatment with a favorable safety profile for these patients. The only approved systemic therapy for patients with TGCT is pexidartinib, a small molecule inhibitor of a number of different kinases, including CSF1R, which was approved in August of last year with a boxed warning for hepatotoxicity and is subject to a risk evaluation and mitigation strategy or REMS program.

We are continuing to enroll TGCT patients in the ongoing dose escalation portion of the Phase I study. In the second quarter, due to the COVID-19 pandemic and given that this is not a life-threatening disease, we are seeing a slower-than-expected enrollment trend. Despite this, we are still currently expecting to present data from additional patients in this study, select a Phase II dose and to open a Phase II expansion portion of the study in TGCT patients in the second half of this year.

Turning now to rebastinib, our potent and selective TIE2 inhibitor, we are conducting 2 clinical studies in combination with chemotherapy, 1 with paclitaxel and 1 with carboplatin. Part 1 of each study was designed to select a combination dose of rebastinib with each chemotherapeutic agent, and part 2 of each study was designed as a Simon 2-stage design. In the first stage, the combinations are being evaluated in multiple solid tumor cohorts, and that's 18 patients each. If there are more than 4 responses in a given cohort, then that cohort is expanded in the second stage to enroll up to a total of 33 patients. Last year, we presented preliminary data from Part 1 of the study of rebastinib in combination with paclitaxel. We saw encouraging preliminary activity with objective responses in patients who have previously received paclitaxel therapy across multiple solid tumor types.

This afternoon, we announced that in Part 2 of the paclitaxel combination study, we have observed the required number of responses in both the endometrial and ovarian cancer cohorts, triggering the expansion of enrollment in these cohorts. We also announced today that we will present initial data from the endometrial cohort in Part 2 of the study at the ASCO meeting this year.

In addition, we have added a new carcinosarcoma cohort in Part 2 of the study based on the encouraging antitumor activity from Part 1 presented at the triple meeting last year that showed partial responses in both patients with carcinosarcoma who were enrolled in the trial. In our Phase Ib/II study with rebastinib in combination with carboplatin, we're continuing to enroll patients with breast cancer, ovarian cancer and mesothelioma in Part 2 of the study at the recommended Phase II dose of 50 milligrams BID, which was reduced from 100 milligrams BID based on the observed frequency of muscular weakness and preliminary data from the ongoing Part 2 portion of the study. We expect to present data from Part 1 of this study in the second half of this year.

Finally, our discovery research engine continues to generate new product candidates for novel targets. And we disclosed last year that the next target we'll be pursuing is the ULK kinase, the initiating factor in the autophagy pathway, namely DCC-3116 is our potential first-in-class ULK kinase inhibitor that we intend to develop for the treatment of mutant RAS cancers, and we continue to expect to file the IND for this program later this year.

Deciphera is a company founded on deep insights into kinase biology and inspired by the prospect of developing important new medicines for the treatment of cancer. Thus far this year, we have demonstrated our ability to remain focused on discovering and developing novel drug candidates based on our proprietary research, despite the significant challenges that Deciphera and the biotechnology community as a whole faces from the ongoing COVID-19 pandemic. I look forward to updating you on the progress with our clinical and preclinical programs throughout the year.

I will now turn the call over to Dan Martin, our Chief Commercial Officer, to discuss our commercial preparations for a potential launch of ripretinib in the U.S. Dan?

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Daniel C. Martin, Deciphera Pharmaceuticals, Inc. - Chief Commercial Officer [5]

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Thank you, Matt. Since its founding, Deciphera has been steadfast in its mission to discover and develop innovative therapies to improve the lives of patients with cancer worldwide. Now as we prepare for the potential commercial launch of ripretinib, the entire organization is laser-focused on ensuring we optimize our ability to bring this important therapy to patients in need, despite the challenges that coronavirus pandemic may pose. Although this is uncharted territory and things continue to evolve, I want to provide updates on several topics, including what we are hearing from market research regarding the impacts of COVID-19 on providers and patients, how we are adapting our launch planning and our current thinking on how the potential launch of ripretinib could be impacted.

Results from various industry surveys suggest that patient visits across many specialties, including oncology, have decreased compared to pre-pandemic levels. Despite this, initial data suggests, in oncology, the impact of both new patient starts and overall patient treatment volume may be less than in other specialties. It remains to be seen if the resilience we are seeing in oncology continues as the data mature to more fully reflect the impact of the pandemic. Not surprisingly, in-person interactions between oncologists and sales representatives have declined dramatically. However, oncologists appear to be increasingly open to virtual engagement through various technology-enabled platforms.

To meet the unique challenges posed by the pandemic, the cross-functional launch team has done an outstanding job adapting our launch preparations and go-to-market strategies to ensure we optimize our ability to bring ripretinib to patients in need, pending FDA approval. We have hired a very talented commercial team, including approximately 40 sales representatives with extensive oral oncology launch experience. Given our work-from-home policy, we have converted our entire training program, including our launch meeting, to virtual platforms. We have modified key go-to-market strategies and core elements of our planned tactical mix. This includes developing comprehensive remote detailing capabilities and increasing our investment in digital and other nonpersonal marketing channels. The team has devised and implemented these changes to our launch plans without losing focus on the importance of providing disease education to providers and patients prior to approval.

In addition to our previously launched provider-oriented website, rethinkgist.com, we recently launched our patient site gisttogether.com, which provides important education and resources to support patients and caregivers during their treatment journey. We look forward to providing more updates on our launch preparations and core initiatives to support providers, patients and caregivers in their fight against GIST.

Our discussions with GIST KOLs confirm that despite the challenges of COVID-19, things that have not changed include the high unmet need in fourth-line GIST, their excitement for ripretinib, and their dedication to providing optimal care for their GIST patients. As a result, our view of ripretinib's practice-changing potential for the treatment of GIST has not changed, nor has our expectation for ripretinib's mid and long-term commercial potential.

That said, while we are confident in our revised launch plans, we also recognize that in the short term, the challenges from COVID-19 may slow the rate of uptake. Additionally, it's likely that the increased unemployment rate caused by the pandemic will increase the number of uninsured or underinsured patients, which, in turn, could drive increased utilization of our patient assistance program.

As an organization, we are tremendously excited to potentially launch Deciphera's first drug this year and are extremely focused on bringing this important treatment option to patients in need. I look forward to updating you on our progress in the coming months.

I will now turn the call over to Tucker Kelly, our Chief Financial Officer, to review the financial results.

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Thomas Patrick Kelly, Deciphera Pharmaceuticals, Inc. - Executive VP, CFO & Treasurer [6]

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Thanks, Dan. Let me take just a minute to discuss a few highlights from our first quarter financial results. Importantly, in the current market environment, we remain well capitalized to fund our business as we prepare to potentially launch ripretinib this year. We ended the first quarter with cash, cash equivalents and marketable securities of approximately $691.5 million. Based on our current plans, we expect that our cash will be sufficient to fund our operations and CapEx into the second half of 2022.

In the first quarter of 2020, our total operating expenses increased to approximately $75.3 million from $49 million in the first quarter of last year based on increased investments to support our potential commercial launch of ripretinib as well as increased clinical development activities across the pipeline.

Research and development expenses were approximately $51.4 million, and selling, general and administration expenses were approximately $23.9 million for the first quarter of 2020. We expect our expenses to continue to grow modestly over the coming quarters as we continue to invest in our commercial and clinical activities.

And with that, I'll now turn the call back over to Steve.

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Steven L. Hoerter, Deciphera Pharmaceuticals, Inc. - President, CEO & Director [7]

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Thanks, Tucker. I'd like to take a moment to thank the entire team here at Deciphera for their continued dedication to our mission in the face of adversity as we adapt to these rapidly changing conditions presented by COVID-19. Because of our focus and determination, 2020 will be a transformational year for the company as we await the potential approval and launch of ripretinib in the U.S. later this year. We look forward to keeping you all updated as we continue to progress throughout the year.

And with that, Frederica, I'd like to open the call for questions.

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Questions and Answers

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Operator [1]

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Sure. Your first question comes from the line of Jessica Fye with JPMorgan.

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Yuko Oku, JP Morgan Chase & Co, Research Division - Analyst [2]

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This is Yuko on the call for Jessica. Do you expect a pre-approval inspection will still be required prior to an FDA decision of ripretinib? Has this taken place yet?

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Steven L. Hoerter, Deciphera Pharmaceuticals, Inc. - President, CEO & Director [3]

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Yes. Yuko, it's Steve. Thanks very much for the question. So we haven't provided any additional color in terms of the granularity that you mentioned down to the level of PAIs and the like. What I can say is that we continue our very collaborative dialog with the agency. We're very pleased with the progress, and we look forward to the agency taking action on the application by the PDUFA date, which, as you know, is August 13.

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Yuko Oku, JP Morgan Chase & Co, Research Division - Analyst [4]

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Great. And my second question, I have -- have patients enrolled in INTRIGUE been able to get their scans within the defined windows in the study protocol despite the pandemic?

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Steven L. Hoerter, Deciphera Pharmaceuticals, Inc. - President, CEO & Director [5]

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Yes. Thanks for the question. We've been working very closely, as Matt mentioned in his prepared remarks, with clinical trial sites across all of the trials, including INTRIGUE. Matt, would you like to provide a little bit more color about the nature of the work that we've been doing with respect to INTRIGUE specifically?

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Matthew L. Sherman, Deciphera Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [6]

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Sure. Thanks, Steven. Thanks for the question. So as we indicated, due to the pandemic, the FDA has issued guidance about pharmaceutical-sponsoring companies to be able to monitor patients, both centrally as traditionally done as well as locally. So we're able to implement those procedures at sites and feel very confident with the data that's being collected through the pandemic.

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Operator [7]

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And your next question comes from the line of Chris Raymond with Piper Sandler.

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Christopher Joseph Raymond, Piper Sandler & Co., Research Division - MD & Senior Research Analyst [8]

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Just 2 questions. I guess, first, it's more of a general sort of commercial question. I know you guys have talked about launch prep, and I would imagine you're not interested in giving us too much detail. But the VOYAGER miss, I think, was a pretty big deal in that you now have this market essentially to yourself in terms of KIT inhibitors. So I guess, can you give any more color about how this changes your commercial picture? Obviously, having one less competitor is good. But can you talk a little bit about how you are sort of structuring the field force differently, if at all, and sort of the go-to-market approach? I mean, obviously, you've got to get your KIT out there for a small subset, but just in terms of the broader population.

And then maybe secondly, just in terms of the entry study, can you just remind us what's the bar for success in that study? I think you've talked about 2 to 3 months increase over Sutent. Can you sort of just reaffirm that and just sort of talk about what we should be looking for?

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Steven L. Hoerter, Deciphera Pharmaceuticals, Inc. - President, CEO & Director [9]

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Chris, it's Steve. So let me take the second part of your question first, and then I'll start off addressing your other question about VOYAGER and then turn it over to Dan Martin to offer some additional color on -- from a commercial point of view.

So first, with respect to INTRIGUE, you're right, in terms of the study versus Sutent, we would expect Sutent to offer about 6 months of PFS. And that's consistent, I think, whether you look at the drug label or whether you look at other public studies with sunitinib or Sutent. And so we would expect that a 2- to 3-month improvement in progression-free survival over sunitinib would be a favorable study. And we haven't provided any additional detail in terms of powering assumptions and the like.

With respect to your first question around VOYAGER, I mean, I think, first, it's certainly disappointing news, I think, for the GIST community to have a negative study in this disease. As you know, this is a group of patients and a community that's really been waiting for new options for patients. And I think the data that we saw from VOYAGER certainly puts in context the potential for ripretinib and the INVICTUS study that we presented last year, where, as you know, we've showed, for the primary end point, an 85% reduction in the risk of progression or death. So I think it does show that the ripretinib has the real potential to be best-in-class in this disease.

So now I'll turn it over to Dan Martin. Dan, do you want to offer any additional comments in terms of commercial context?

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Daniel C. Martin, Deciphera Pharmaceuticals, Inc. - Chief Commercial Officer [10]

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Sure. I think you framed it really well, Steve. I was just going to say that I really think that the VOYAGER outcome serves to really validate our long-held view of really the core value proposition -- the core clinical value proposition for ripretinib in GIST. GIST is a very heterogeneic disease from a mutational perspective and I think this really underscores the need for a broad spectrum inhibitor like ripretinib. It's really been the strategy all along and why this drug was designed specifically for GIST. So we've always knew ripretinib as really the drug with real practice-changing potential, certainly in the fourth line and hopefully down the road beyond that. So in terms of your question about is it leading us to change our sales force size or structure, that sort of thing, VOYAGER result is not -- we don't view that as a rationale to change our strategy. So full steam ahead.

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Christopher Joseph Raymond, Piper Sandler & Co., Research Division - MD & Senior Research Analyst [11]

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Okay. One more follow-up, if I can. So just another general question. But if you look at analogs of FDA's approval cycle for other RTOR designated oncology compounds, one would assume that your August PDUFA date might be outside the norm of what they generally approve. If it comes earlier, including much earlier, are you ready regardless to launch?

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Steven L. Hoerter, Deciphera Pharmaceuticals, Inc. - President, CEO & Director [12]

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Yes. Chris, it's Steve. So it's a good question, and you're right. When you look at the analogs, whether if you look at drugs that have received breakthrough therapy designation as ripretinib has or you look at the handful of drugs that have been reviewed under RTOR, you're right. I think generally speaking, those reviews tend to conclude earlier than the PDUFA date. And so our team internally has been working really hard to be ready for what we would view as a reasonably accelerated time frame, recognizing, of course, that it's up to the FDA in terms of the time line in which they choose to act on the application up to the point of the PDUFA date. But we're really comfortable with our level of preparedness. As I mentioned in the prepared remarks, from a commercial supply perspective, we feel like we're in good shape there. And Dan and his team and Matt on the medical affairs side, I think they've done a really nice job, a , building superb teams, but also doing all of the heavy lifting to be ready for a potential early approval should that come.

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Operator [13]

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Your next question comes from the line of Eun Yang with Jefferies.

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Eun Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [14]

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So Steve, as you pointed out, the pandemic impact is uncertain and it's so fluid, yet you are maintaining your clinical time lines including Phase III INTRIGUE study. So my question to you is, is there something that you are seeing giving you such a confidence? Or it is purely based on your expectation of short-term impacts such that you can catch up later?

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Steven L. Hoerter, Deciphera Pharmaceuticals, Inc. - President, CEO & Director [15]

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Yes. Eun, it's Steve. Thanks for the question. It's a good question and we've been getting questions similar to this, as you can imagine, from investors over the course of the last month or 2. So as you point out, the impact of the pandemic is inherently uncertain. So we're not -- we don't have any additional insight aside from what we shared in the prepared remarks, which is we believe and our guidance is predicated on this having a shorter term impact as opposed to a longer term fully disruptive impact.

But based on the number of clinical trial sites that we have open, based on the number of countries now in which we're operating with INTRIGUE and based on what we see in terms of enrollment in the study, that all gave us comfort in reiterating our guidance to have INTRIGUE enrolled by the end of the year. And so to the extent we need to change that guidance, we, of course, will, and we'll update investors at that time. But based on what's in view at the moment, we're comfortable with the reiteration of our guidance as to the INTRIGUE enrollment.

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Eun Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [16]

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Okay. And then in terms of the 19% increase in total number of patients to be enrolled in INTRIGUE Phase III, has that been signed off by the FDA?

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Steven L. Hoerter, Deciphera Pharmaceuticals, Inc. - President, CEO & Director [17]

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Yes. So we've heard -- thanks, Eun, for the question. So we're comfortable now announcing what that n is as we did, as Matt did in his prepared remarks, n of 426 in INTRIGUE. So we formally have initiated the amendment process for the study and getting that information pushed out to clinical trial sites. So yes, so with that as the new n for the INTRIGUE study, and we're looking forward, as I noted, to getting the study fully enrolled by year-end and then reporting that out when the time is right.

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Eun Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [18]

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And then my last question is on ULK kinase inhibitor. So IND filing is on track for second half of this year. So obviously, it's very early, but given the target, is it reasonable to assume that the cancer types that you may go after are like a pancreatic, lung and colorectal cancer with a high frequency of RAS mutation?

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Steven L. Hoerter, Deciphera Pharmaceuticals, Inc. - President, CEO & Director [19]

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Yes, Eun, I think that's right. So yes. You noted the tumor types that have a high frequency of mutant RAS, and so those would be obvious tumor types for us to consider pursuing. We haven't yet disclosed what tumor types we will pursue. We'll get to that later as we get the drug into the clinic and are able to articulate further what the development path may be and specifically what tumor types we might select. But certainly, we, of course, would consider moving into tumor types where there's a high frequency of mutant RAS.

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Operator [20]

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And your next question comes from the line of Peter Lawson with Barclays.

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Unidentified Analyst, [21]

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This is [Waleed] on for Peter. Just had a question, sort of a follow-up to an earlier question on your market strategy in advance. Just wanted to ask whether your thoughts have changed on pricing now, especially after the VOYAGER failure, and how you're thinking about that going forward?

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Steven L. Hoerter, Deciphera Pharmaceuticals, Inc. - President, CEO & Director [22]

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Yes. Thanks for the question. So I'll start off, and then I'll turn it over to Dan to offer some additional color. I guess what I'd say is that this is premature for us to talk about potential price for ripretinib. So we would do that upon a potential approval of the drug and we'd be in a position to talk about it then. I will offer that we've done a considerable amount of market research with payers to get their reaction and to understand their perspective on the profile of ripretinib based on the INVICTUS data.

And Dan, perhaps you'd want to offer some additional color in terms of what we hear from both physicians, but also from payers?

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Daniel C. Martin, Deciphera Pharmaceuticals, Inc. - Chief Commercial Officer [23]

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Sure. Thanks, Steve. So good question. We -- the research that we've done with a number of stakeholders, obviously, payers being central to that, has really very clearly shown us the payers appreciate not only the unmet need in GIST, but the potentially best-in-class profile for ripretinib. And so we -- the methodology used in those studies, as you may know, certainly, we review the approved therapies and the class and their prices and their profiles as well as our profile, and what continues to come back is just that payers really appreciate how this drug may be able to help patients.

So as you said, it's premature for us to comment on pricing and we'll be doing so in due time upon approval.

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Unidentified Analyst, [24]

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Got it. That's really helpful. And just a question on your program in TGCT. Maybe if you can provide us some color on your differentiation between your drug and pexidartinib. And as we look to the data in second half, what would be the bar there and what you would consider to be a win?

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Steven L. Hoerter, Deciphera Pharmaceuticals, Inc. - President, CEO & Director [25]

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Yes. Thanks for the question on 3014. So maybe I'll start off and then Matt can add some additional color if he'd like to. So when we look at 3014 relative to the other approved agent to treat this disease, I think the things that come to mind for us in terms of distinctions between the 2 programs are the 3014 is highly selective for the target. So this is a very potent and selective CSF1R inhibitor. And pexidartinib, we know, as Matt referenced in his prepared remarks, is a multi-kinase inhibitor that hits a variety of targets, including C-KIT, including FLT3. And this is also a drug that upon review, as you know, may recall, it was referred to an ODAC for a discussion about risk-benefit, and the drug was ultimately approved, but with the REMS and a black box warning for hepatotoxicity. And it's a dose of the drug that is a relatively high drug load, in the range of 800 milligrams daily for patients.

So we believe that there's room in this disease setting for a more potent and selective agent that has an attractive efficacy as well as safety profile for these patients. And we're looking forward to continuing to generate additional data with 3014 in patients with TGCT.

Matt, do you want to comment a little bit on that or on additional data that may be coming in the second half of this year?

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Matthew L. Sherman, Deciphera Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [26]

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Yes. No. So again, clearly, the distinction between the safety profiles may be a very important aspect of treating this disease because as we recognize, this is -- it's a locally aggressive disease, but it's not a malignant disease, so not generally life-threatening. Certainly can be associated with very severe morbidity, pain, swelling, limitations of activities. So a tolerable drug is really probably one of the most important characteristics along with an efficacious drug and the pexidartinib REMS warning certainly restricts its use under the FDA program.

So just referring back to the data that we did present for the first 3 patients, we're able to show that not only did we have a good safety profile in the data we presented at the CTOS meeting last year, but the first 3 patients that we enrolled all had reductions -- initial reductions in their tumor volume. And the first patient who's on the longest had a 48% reduction after 2 cycles and then after 9 cycles of therapy, had an 84% reduction in their tumor size.

So again, important early data that we believe can differentiate us from pexidartinib. And as we also said in our prepared remarks today, we continue -- we plan to have data to be able to update folks by the end of this year from the ongoing Phase I/II study.

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Unidentified Analyst, [27]

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And do you have any clarity on the potential regulatory path forward for 3014?

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Matthew L. Sherman, Deciphera Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [28]

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Yes. No, I think it's -- for us, specifically, it's probably too early to talk about a regulatory path forward for 3014. But clearly, the development of pexidartinib to establish at least the FDA's perspective on what they were looking for in terms of response rate. Importantly, also, functional outcomes or PROs were also a big part of the ODAC discussion for the approval of pexidartinib. So certainly it's something that we should be -- that we'll be considering for our development program.

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Operator [29]

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And your next question comes from the line of Michael Schmidt with Guggenheim.

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Yue-Wen Zhu, Guggenheim Securities, LLC, Research Division - Associate [30]

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This is Charles Zhu on for Michael Schmidt. Congrats on all this progress. One quick one, swinging back to ripretinib. What are your high-level plans? Or how has your thinking for commercializing ripretinib evolved with respect to ex-U. S. as well as outside of Greater China?

And if you decide to go and partner out this drug, how should we think of economics for Deciphera given that the Zai Lab collaboration was signed before INVICTUS and now you obviously have much more data?

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Steven L. Hoerter, Deciphera Pharmaceuticals, Inc. - President, CEO & Director [31]

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Yes, Charles, it's Steve. Thanks for the question. So as you know, we've said that one of our key milestones for the year is filing the marketing authorization application with the European Medicines Agency in the second half of this year. So we're looking forward to engaging with the European regulator on the package for ripretinib and getting that review process started.

We haven't provided any greater detail in terms of what our path might be to commercialization in Europe, what our go-to-market strategy might be in Europe. What I have said is there are 2 different options that we are evaluating. One is the potential for us to go it alone in Europe and to build a capital-efficient structure to commercialize ripretinib on our own. And the alternative to that, of course, would be to pursue a potential licensing transaction.

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Yue-Wen Zhu, Guggenheim Securities, LLC, Research Division - Associate [32]

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Got it. Okay. And shifting over to rebastinib. As you evaluate type 2 inhibition in conjunction with either paclitaxel or carboplatin, is there any reason to believe that the drug may perform differently between these 2 combinations, either from a drug mechanistic perspective or a disease biology perspective given their -- they may go onto different tumor types?

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Steven L. Hoerter, Deciphera Pharmaceuticals, Inc. - President, CEO & Director [33]

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Yes. It's a good question, Charles. I'll ask Matt to take that question. Matt?

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Matthew L. Sherman, Deciphera Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [34]

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Thanks for the question. So there's been a fair amount of preclinical data that's been done to look at the combination. And actually, there's been different combination partners up in the study with rebastinib, the type 2 kinase inhibitor. And what we've shown that with different combinations, we are able to have this inhibitory effect. I think the distinction may come from the tumor indications that will be developed because paclitaxel (inaudible) perhaps differently for different indications. So selection of particular tumor -- the selection of particular combination would be applicable to which tumor will be targeted.

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Operator [35]

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And your next question comes from the line of Robyn Karnauskas with SunTrust.

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Robyn Kay Shelton Karnauskas, SunTrust Robinson Humphrey, Inc., Research Division - Research Analyst [36]

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I have 2 of them. One, I'm sure you've heard a lot, but I think we just -- we need to go through it again. Big picture. So you have a competitor out of the way that presumably means you'll get more revenue. What does that mean for your company? That's more of a bold scenario maybe than you originally contemplated. So how do you put that money to work in the long run?

And then second, just a question, I'm sure you hear all the time, but let's deal with it. Obviously, we've seen other drugs do better in the real market than they do in their clinical trials. So does Sutent do better after a few years in the market, so would Sutent data look better today than it did when it launched? So that goes to the power in which you said there's a 2 to 3 months difference from Sutent in second-line of PFS? And would that be enough to get stats today? I think that's a concern some investors have?

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Steven L. Hoerter, Deciphera Pharmaceuticals, Inc. - President, CEO & Director [37]

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Yes, Robyn, thanks. It's Steve. Let me take those 2. So I'll start with the second question first with respect to sunitinib. So as you know, when you look at the sunitinib label and the data that was generated, that was the basis for approval. The PFS seen with Sutent was shy of 6 months in that pivotal study. And when you look at the literature, you, of course, see a range of different PFS estimates depending on the study, and there's some very small studies, some larger studies that have been done. But they tend to coalesce generally around the 6-month PFS range. And in fact, this, as you can imagine, was an important input for us when we were designing the INTRIGUE study, to try to understand how Sutent might perform in the current environment versus in the time when the original study was done. And from our discussions with thought leaders from around the world, very consistently, the group of thought leaders that manage patients with this disease came back and said that, yes, 6 months is the right sort of expectation in terms of how sunitinib might perform in the present day, in the second-line setting. So we feel very comfortable with that estimate.

And then as you know, our Phase I study, where we have a second line cohort of patients, so at the recommended dose of 150 milligrams once daily, which is an n of 31, we have seen a PFS in that patient population of about 10.6, 10.7 months. So that -- with the data, of course, now that's been generated with INVICTUS in the fourth line population, gives us great confidence in the potential for ripretinib to perform in the INTRIGUE study versus sunitinib and to establish a new standard of care in that line of therapy.

So with respect to your first question, and this is coming on the heels now of the VOYAGER study failure where avapritinib underperformed regorafenib in that study. And as I mentioned earlier in the Q&A, while it's certainly disappointing news for the GIST community that has been waiting for new options for patients, I think it does help -- it does put in context, of course, the data that we've generated with INVICTUS and I believe firmly signals and establishes that ripretinib has the potential to be best-in-class in this setting and to be a new standard of care.

And so we look forward to engaging with physicians upon a potential approval, sharing the data with them for those physicians that aren't already familiar with the INVICTUS data, and hopefully benefiting patients with ripretinib who are in need of additional options.

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Robyn Kay Shelton Karnauskas, SunTrust Robinson Humphrey, Inc., Research Division - Research Analyst [38]

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My first question about your competitor's gone. I mean obviously, this has to change, like how you think about strategy of the company, how to be a good day, giving you more flexibility to do other things that you want to do. Any thoughts on that?

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Steven L. Hoerter, Deciphera Pharmaceuticals, Inc. - President, CEO & Director [39]

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Well, I think, Robyn, certainly, it's a clearing event, and I think that's how investors view it as well with the failure of the VOYAGER study. From our point of view, we designed ripretinib specifically to address the spectrum of mutations that drive this disease and our ingoing assumption all along has been that ripretinib would prove to be best-in-class in this setting in this disease. And so at some level, of course, while you're -- it's helpful to see final data, that data confirms what our ingoing set of assumptions were in terms of how ripretinib is truly best-in-class here.

So we look forward to continuing to explore the role of ripretinib in other settings and just to see where ripretinib may be able to benefit patients beyond the INTRIGUE study in the second line. So that includes looking at the frontline setting, whether it be in monotherapy or in combination with other agents. But we certainly think there are additional places that we can go with ripretinib in GIST, and we look forward to exploring that further and initiating additional studies potentially in the future.

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Operator [40]

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And your next question comes from the line of Christopher Marai with Nomura Instinet.

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Jackson Dean Harvey, Nomura Securities Co. Ltd., Research Division - Research Analyst [41]

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This is Jackson Harvey on for Christopher Marai. My first question is when the ripretinib launch does get underway, what kinds of launch metrics do you plan on sharing? Will we be able to get any color on which line of therapy the patients are on?

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Steven L. Hoerter, Deciphera Pharmaceuticals, Inc. - President, CEO & Director [42]

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Jackson, it's Steve. Thanks for the question. Yes, it's a little early for us to share what launch metrics would be for ripretinib. Once we get on the other side of a potential approval, we'll start to share how we're going to be tracking performance of ripretinib in the marketplace, and we'll share some of that information with investors.

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Jackson Dean Harvey, Nomura Securities Co. Ltd., Research Division - Research Analyst [43]

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Got it. And my other question is on rebastinib around the muscular weakness side effects. So at the 50-milligram dose, are you able to dose through this side effect, meaning that the muscular weakness will get better with continued dosing? Or is it something that patients need to discontinue treatment for? Also, does that have any cardiac ramifications?

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Steven L. Hoerter, Deciphera Pharmaceuticals, Inc. - President, CEO & Director [44]

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Yes. Thanks, Jackson. So I'll turn that over to Matt. If you'd like to answer that question, Matt?

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Matthew L. Sherman, Deciphera Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [45]

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Sure. So thanks for the question. So yes -- what we've reported previously in the paclitaxel/rebastinib combination study was the initial Phase I/II study was dose-ranging across 50 and 100 milligrams of rebastinib BID. And in that setting, we saw fairly equal and lower rates of muscular weakness in those 2 cohorts. When we started the expansion cohorts with 150-milligram BID, we did see some -- a few more cases at 100 milligrams BID. So we modified the dose down to 50 milligrams BID, which is what we just discussed today as well for the carboplatin combination study.

When those patients have discontinued, they actually can recover fairly quickly from the muscle weakness. However, really, for longer term treatment, felt that the 50-milligram BID dose level is a more tolerable dose level. And this is really in the background of fairly robust activity that we saw in the paclitaxel combination study with 8 partial responses across those 2 dose levels. This is peripheral muscle weakness. It is not associated with cardiac -- any cardiac muscle effects.

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Jackson Dean Harvey, Nomura Securities Co. Ltd., Research Division - Research Analyst [46]

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Got it. And is there a mechanistic basis to expect that cardiac muscle would not be affected?

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Matthew L. Sherman, Deciphera Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [47]

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We haven't really talked about any specific mechanism that could be associated with this. So that would certainly be a conversation perhaps as we go forward with the development program. But there's no known target that we can identify that would make us believe that the cardiac muscle is involved.

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Operator [48]

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And your last question comes from the line of Arlinda Lee with Canaccord.

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Arlinda Anna Lee, Canaccord Genuity Corp., Research Division - Analyst [49]

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I wanted to follow-up on the INTRIGUE population increase. You mentioned previously that it was due to early censoring. I'm wondering if given COVID and maybe some of the -- if you've put any other assumptions within that and how the pairing may or may not have changed?

And then secondly, I was curious about your interactions with your thought leaders and sales with prescribers at how this might have been different now with COVID and following the avapritinib VOYAGER failure?

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Steven L. Hoerter, Deciphera Pharmaceuticals, Inc. - President, CEO & Director [50]

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Yes, Arlinda, it's Steve. Thanks for the 2 questions. So maybe what I'll do is ask Dan Martin to take the first question in terms of what we're hearing from thought leaders and from some of the secondary research that he referenced in the prepared remarks in the context of COVID-19. And then we can come back and I can answer the question with respect to INTRIGUE and Matt can offer some additional color. So Dan?

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Daniel C. Martin, Deciphera Pharmaceuticals, Inc. - Chief Commercial Officer [51]

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Sure. Thanks, Steve. So a couple of thoughts. We have been continuing to engage the thought leaders and the medical community, the GIST-prescribing community more broadly, very actively over the last several months as the COVID-19 situation has developed. We've continued to hold advisory boards. We've continued to have our one-on-one discussions. We do these through virtual platforms, of course, but we've had really great engagement that has helped inform our thinking, not only on positioning for ripretinib in the market, but thoughts on strategies, tactics, that sort of thing.

A lot of the research that we've looked at, as I mentioned in my prepared remarks, would suggest that oncology has had some level of resilience, just in terms of treatment volumes. But clearly, it's having an impact on patient visits, and it may ultimately have some impact on launch therapies -- launch drugs in terms of rate of uptake, and we'll just have to see. But beyond that, beyond what I shared in the prepared remarks, that's really what we're hearing.

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Steven L. Hoerter, Deciphera Pharmaceuticals, Inc. - President, CEO & Director [52]

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Yes. Thanks, Dan. So Arlinda, hopefully, that answers that second question that you had. With respect to INTRIGUE, you're right, we disclosed today that the n for INTRIGUE is 426 subjects. So just wanted to be clear that the addition of these subjects to INTRIGUE has no impact on powering of the study. This is just about getting to the requisite number of events for the study to have those study readout in a timely fashion.

And Matt, maybe you want to offer some additional commentary with respect to impact of COVID-19 and other considerations that may have been not taken into account as we got through this?

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Matthew L. Sherman, Deciphera Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [53]

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Thanks, Steve. So yes, so as we have the early information about the number of patients that we're looking early in the study of who might have come off the study and didn't have central confirmation of progression, gave us a better estimate in terms of the overall sample size. But certainly, as Steve mentioned, this very modest increase in sample size will allow us to get to the required number of events, which does not change the statistical analysis of plan.

This -- the implementation of the processes we put into place, again, we feel very comfortable during this particular unusual time with COVID-19 pandemic. And with the team being in close communication with investigators and the sites and able to implement local procedures as well, we still feel very comfortable about being able to collect the information that will be necessary to evaluate the effect of ripretinib in the second line setting.

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Operator [54]

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And this concludes today's Q&A session. I would like to turn the call over to Steve Hoerter for closing remarks.

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Steven L. Hoerter, Deciphera Pharmaceuticals, Inc. - President, CEO & Director [55]

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Yes. Thank you very much, Frederica, and thanks all of you for joining us on the call today. We look forward to continuing to update you on our progress as the rest of the year progresses. And we wish each of you safety and good health in these challenging times. Have a great night.

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Operator [56]

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Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.