On August 4, 2020 Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH) reported financial results for the second quarter ended June 30, 2020 and provided an update on clinical and corporate developments (Press release, Deciphera Pharmaceuticals, AUG 4, 2020, View Source [SID1234562798]).
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"The second quarter for Deciphera was a transformational one as we launched our first commercial product following the FDA approval of QINLOCK," said Steve Hoerter, President and Chief Executive Officer of Deciphera Pharmaceuticals. "We are proud to deliver QINLOCK to advanced GIST patients as the first approved therapy designed specifically for their disease. We are encouraged by the initial results from our first partial quarter of commercial sales, which speaks to both the need for a novel therapy such as QINLOCK in GIST, and our preparedness and determination in ensuring that eligible patients who can benefit from QINLOCK have access to this new treatment option."
Mr. Hoerter continued, "Additionally, we remain focused on advancing our portfolio of innovative medicines to improve the lives of people with cancer and are pleased with the progress of our ongoing pipeline programs, DCC-3014, rebastinib and DCC-3116."
Recent Business Progress
Regulatory and Commercial Updates
QINLOCK(ripretinib)
Received U.S. Food and Drug Administration (FDA) approval for QINLOCK on May 15, 2020 for the treatment of adult patients with advanced gastrointestinal stromal tumor (GIST) who have received prior treatment with 3 or more kinase inhibitors, including imatinib. Deciphera also announced the approval of QINLOCK by Health Canada and the Australian Therapeutic Goods Administration (TGA). The Company expects to file a Marketing Authorization Application (MAA) with the European Medicines Agency (EMA) in the fourth quarter of this year.
Launched QINLOCK in the U.S. for the treatment of fourth-line GIST and achieved net product revenue of $4.8 million in the first partial quarter of the launch.
Announced, along with Zai Lab Limited, that the China National Medical Products Administration (NMPA) accepted its New Drug Application (NDA) for ripretinib for the treatment of adult patients with advanced GIST who have received prior treatment with 3 or more kinase inhibitors, including imatinib.
Recent Clinical Highlights and Updates Announced Today
QINLOCK(ripretinib)
Two mini oral presentations containing results from the INVICTUS pivotal study and the ongoing Phase 1 study of QINLOCK will be featured during the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Virtual Congress 2020, being held September 19-21. The titles for the presentations can be found below:
"Ripretinib intra-patient dose escalation (IPDE) following disease progression provides clinically meaningful progression-free survival (PFS) in gastrointestinal stromal tumor (GIST) in phase 1 study"
"Clinical benefit with ripretinib as ≥4th line treatment in patients with advanced gastrointestinal stromal tumors (GIST): update from the phase 3 INVICTUS study"
DCC-3014
Submitted updated data from the Phase 1 dose-escalation study in patients with tenosynovial giant cell tumor (TGCT) to a medical conference taking place in the fourth quarter of this year.
Rebastinib
Data from Part 2 (Stage 1) of the ovarian cancer cohort of the ongoing Phase 1b/2 study in combination with paclitaxel will be featured in an E-poster presentation at the upcoming ESMO (Free ESMO Whitepaper) Virtual Congress 2020 in September.
Data from Part 1 of the Phase 1b/2 study in combination with carboplatin will be featured in an E-poster presentation at the upcoming ESMO (Free ESMO Whitepaper) Virtual Congress 2020 in September.
Second Quarter 2020 Financial Results
Cash Position: As of June 30, 2020, cash, cash equivalents and marketable securities were $631.8 million, compared to $579.6 million as of December 31, 2019. The increase was primarily due to the Company’s follow-on public offering in February 2020 that provided net proceeds of $188.4 million. Based on its current operating plans, Deciphera expects its current cash, cash equivalents and marketable securities together with anticipated product revenues, but excluding any potential future milestone payments or other payments under its collaboration or license agreements, will enable the Company to fund its operating and capital expenditures into the second half of 2022.
Revenue: Total net revenues for the second quarter of 2020 were $7.1 million, which includes $4.8 million of net product revenue of QINLOCK and $2.3 million of collaboration revenue. In the second quarter of 2019, the Company did not generate product revenue and had net collaboration revenues of $25 million.
Cost of Sales: Cost of sales was less than $0.1 million for the second quarter of 2020 as the majority of the manufacturing costs related to second quarter QINLOCK sales were incurred prior to FDA approval, and thus, were recorded as R&D expense. Cost of sales will not be significant until the initial pre-launch inventory is depleted, and additional inventory is manufactured and sold. In the second quarter of 2019, there were no cost of sales as no product sales were generated during that period.
R&D Expenses: Research and development expenses for the second quarter of 2020 were $46.1 million, compared to $34.8 million for the same period in 2019. The increase was primarily due to personnel costs, clinical trial costs related to our Phase 3 INTRIGUE trial in second-line GIST, DCC-3014 and rebastinib, and preclinical costs related to DCC-3116. The increase was partially offset by a decrease in manufacturing costs for QINLOCK primarily due to the commencement of capitalization of inventory as we received FDA approval for QINLOCK in May 2020. Non-cash, stock-based compensation was $5.3 million and $1.8 million for the second quarters of 2020 and 2019, respectively.
SG&A Expenses: Selling, general and administrative expenses for the second quarter of 2020 were $29.9 million, compared to $13.2 million for the same period in 2019. The increase was primarily a result of personnel costs as well as external spend associated with commercial preparedness and launch of QINLOCK, increased expenses incurred in connection with our new headquarters that commenced in October 2019, and technology related costs to support the growth of the business. Non-cash, stock-based compensation was $5.3 million and $2.3 million for the second quarters of 2020 and 2019, respectively.
Net Loss: For the second quarter of 2020, Deciphera reported a net loss of $67.2 million, or $1.20 per share, compared with a net loss of $21.5 million, or $0.56 per share, for the same period in 2019. The increase in net loss was primarily related to increases in R&D and SG&A expenses and the $25.0 million of collaboration revenue recognized in the second quarter of 2019, as discussed above.
Conference Call and Webcast
Deciphera will host a conference call and webcast to discuss this announcement today, August 4, 2020 at 4:30 PM ET. To access the live call by phone please dial (866) 930-5479 (domestic) or (409) 216-0603 (international); the conference ID is 3769662. A live audio webcast of the event may also be accessed through the "Investors" section of Deciphera’s website at www.deciphera.com. A replay of the webcast will be available for 30 days following the event.