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Why Is Deciphera Pharmaceuticals, Inc. (DCPH) Down 78.5% Since Last Earnings Report?

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It has been about a month since the last earnings report for Deciphera Pharmaceuticals, Inc. (DCPH - Free Report) . Shares have lost about 78.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Deciphera Pharmaceuticals, Inc. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Deciphera Q3 Loss Wider Than Expected, Revenues Miss

Deciphera reported third-quarter 2021 loss of $1.37 per share, wider than the Zacks Consensus Estimate of a loss of $1.29 and the year-ago quarter’s loss of $1.13. The loss can be attributed to increased research and development (R&D) expenses.

Total net revenues were $23.2 million in the quarter, narrowly missing the Zacks Consensus Estimate of $23.7 million. However, revenues rose 50.3% year over year.

Quarter in Detail

Total revenues comprised net product revenues and collaboration revenues. Net product revenues were $21.7 million, including $20 million in U.S. sales and $1.7 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 Labs.

Research and development expenses were $66.4 million, up 35% year over year. The increase was attributed to personnel and preclinical costs as well as increased clinical costs related to start-up activities for the planned phase III MOTION study on vimseltinib and phase Ib/II study on Qinlock combined with binimetinib. The company also made an upfront payment of $4 million to Sprint Bioscience for in-licensing the global rights to the research program targeting VPS34.

Selling, general and administrative expenses were $35.5 million, up from $30.1 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.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

VGM Scores

At this time, Deciphera Pharmaceuticals, Inc. has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Deciphera Pharmaceuticals, Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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