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Deciphera (DCPH) Up More Than 30% in Past 3 Months: Here's Why

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Shares of Deciphera Pharmaceuticals, Inc. (DCPH - Free Report) have rallied 31.5% in the past three months against the industry’s decrease of 17%.

Zacks Investment Research
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Deciphera's sole marketed drug, Qinlock (ripretinib), is approved for the treatment of adult patients with advanced gastrointestinal stromal tumor (“GIST”) who have received prior treatment with three or more kinase inhibitors, including Novartis’ Gleevec (imatinib). Qinlock has also been approved in Europe for the treatment of fourth-line GIST.

The company has made steady progress with Qinlock during this time frame, with the drug witnessing solid uptake so far. Qinlock contributes the majority of Deciphera’s revenues.

In first-quarter 2022, Qinlock generated sales worth $28.8 million, reflecting a sequential increase of 21.5%. Qinlock generated $23.4 million in sales in the United States and $5.4 million in sales in ex-U.S. markets.

Deciphera is also working to expand the label of Qinlock for the larger commercial opportunity in GIST. A potential label expansion for other indications will make the drug eligible to treat a broader patient population and drive sales further in the days ahead.

In late November 2021, Deciphera entered into a corporate restructuring, whereby the company decided to streamline its commercial operations and reduce its current workforce by approximately 35% or almost 140 positions. The changes in the clinical development programs and restructuring efforts are expected to bring a significant reduction in the company’s operating expenses and extend the cash runway into 2024.

This apart, Deciphera has a diverse pipeline and is advancing multiple drug candidates in various stages of clinical development.

The company is evaluating vimseltinib in the phase III MOTION study for the treatment of tenosynovial giant-cell tumor.

A phase I study is evaluating DCC-3116 as a single agent and in combination with FDA-approved MEK inhibitors, trametinib and binimetinib as well as assotorasib, an FDA- approved KRASG12C inhibitor, for treating patients with various advanced/metastatic tumors, driven by mutations in RAS/RAF genes.

A successful development and potential approval of these candidates will be a big boost for the company.

Deciphera currently has no approved product in its portfolio other than Qinlock. All of its drug candidates, including vimseltinib and DCC-3116, are still some time away from commercialization. As a result, the company is heavily dependent on Qinlock for growth. Any regulatory setback for the drug will hurt the company’s prospects.

Zacks Rank & Stocks to Consider

Deciphera currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the biotech sector are Leap Therapeutics, Inc. (LPTX - Free Report) , Aeglea BioTherapeutics, Inc. (AGLE - Free Report) and Precision BioSciences, Inc. (DTIL - Free Report) , all carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Leap Therapeutics’ loss per share has narrowed 11.1% for 2022 and 5.9% for 2023 in the past 60 days.

Earnings of Leap Therapeutics have surpassed estimates in three of the trailing four quarters and missed the same on the other occasion. LPTX delivered an earnings surprise of 1.92%, on average.

Aeglea BioTherapeutics’ loss per share estimates narrowed 19.4% for 2022 and 37.6% for 2023 in the past 60 days.

Earnings of Aeglea BioTherapeutics have surpassed estimates in two of the trailing four quarters and missed the same on the other two occasions. AGLE delivered an earnings surprise of 9.47%, on average.

Precision BioSciences’ loss per share estimates narrowed 21.7% for 2022 and 31.4% for 2023 in the past 60 days.

Earnings of Precision BioSciences have surpassed estimates in each of the trailing four quarters. DTIL delivered an earnings surprise of 76.15%, on average.