On August 2, 2019 Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH), a clinical-stage biopharmaceutical company focused on addressing key mechanisms of tumor drug resistance, reported financial results for the second quarter ended June 30, 2019 and provided an update on clinical and corporate developments (Press release, Deciphera Pharmaceuticals, AUG 2, 2019, View Source [SID1234538080]).
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"In recent months, we’ve made substantial progress across our pipeline of novel candidates from our two Phase 3 GIST trials with ripretinib to the addition of DCC-3116, a potential first-in-class autophagy inhibitor aimed at treating mutant RAS cancers," said Steve Hoerter, President and Chief Executive Officer of Deciphera. "Later this month, we expect to announce top-line data from the INVICTUS pivotal Phase 3 clinical study, the results of which, if favorable, could serve as the basis for our first new drug application, or NDA, filing. We also recently established our first license agreement for ripretinib outside of the U.S., which we believe reflects the growing recognition that ripretinib has the potential to alter the treatment landscape for patients with GIST."
Recent Pipeline Updates
Ripretinib
Deciphera expects to report top-line data from the INVICTUS pivotal Phase 3 clinical study evaluating the safety and efficacy of ripretinib, the Company’s investigational broad-spectrum KIT and PDGFRα inhibitor, in fourth-line and fourth-line plus GIST patients in August 2019. The Company is building its commercial and medical affairs capabilities to support the planned launch of ripretinib in the United States, if approved.
In June 2019, the U.S. Food and Drug Administration (FDA) granted Fast Track Designation for ripretinib for the investigation of the treatment of patients with advanced GIST who have received prior treatment with imatinib, sunitinib and regorafenib.
Deciphera continues to activate sites and enroll patients in the INTRIGUE Phase 3 clinical study comparing ripretinib to sunitinib for the treatment of second-line GIST patients who have previously received imatinib. As of July 26, 2019, 45 sites have been activated.
Rebastinib
Deciphera previously announced the initiation of an open-label, multicenter, Phase 1b/2 combination study of rebastinib, the Company’s investigational small molecule switch control inhibitor of TIE2 kinase, with carboplatin in patients with advanced or metastatic solid tumors.
Deciphera completed enrollment of 43 patients in Part 1 of the Phase 1b/2 combination study of rebastinib with paclitaxel. Part 2 of the Phase 1b/2 study is now enrolling patients. The Company expects to report initial data from Part 1 of this study in the second half of 2019.
DCC-3014
The Company plans to present updated data from the ongoing dose escalation portion of the Phase 1 clinical study of DCC-3014, the Company’s investigational small molecule switch control inhibitor of CSF1R, in patients with advanced malignancies, in the second half of 2019.
The Company continues to enroll patients diagnosed with tenosynovial giant cell tumors (TGCT) in the Phase 1 study evaluating DCC-3014.
DCC-3116
In June 2019, Deciphera announced the addition of a new candidate to its pipeline, DCC-3116, a potential first-in-class small molecule designed to inhibit cancer autophagy, a key tumor survival mechanism, by inhibiting the ULK kinase. Subject to favorable investigational new drug (IND)-enabling studies and filing and activation of an IND, expected in mid-2020, Deciphera intends to develop DCC-3116 for the potential treatment of mutant RAS cancers in combination with inhibitors of downstream RAS effector targets including RAF, MEK, or ERK inhibitors as well as with direct inhibitors of mutant RAS.
Corporate Updates
Ripretinib License Agreement for Greater China.
In June 2019, Deciphera announced an exclusive license agreement with Zai Lab (Shanghai) Co., Ltd. (Zai) to advance the development and commercialization of ripretinib in Greater China, including mainland China, Hong Kong, Macau and Taiwan. Under the terms of the agreement, Deciphera has received an upfront cash payment of $20 million and will be eligible to receive up to $185 million in potential development and commercial milestone payments, including $5 million for an INTRIGUE study-related milestone the Company achieved. In addition, Zai will be obligated to pay Deciphera royalties ranging from low to high teens on annual net sales of ripretinib in Greater China.
New Member of the Board of Directors
In July 2019, Deciphera announced the appointment of Susan L. Kelley, M.D. to its Board of Directors. Dr. Kelley has over 25 years of experience across all stages of oncology drug research and development.
Second Quarter 2019 Financial Results
Cash Position: As of June 30, 2019, cash, cash equivalents and marketable securities were $225.4 million, compared to cash and cash equivalents of $293.8 million as of December 31, 2018. Deciphera expects its cash, cash equivalents and marketable securities as of June 30, 2019, along with the $20.0 million up-front payment from the Company’s recent license agreement with Zai received in the third quarter of 2019, will enable the Company to fund its operating expenses, capital expenditure requirements and debt service payments into the fourth quarter of 2020. This excludes any potential milestone or royalty payments, if any, under Deciphera’s license agreement with Zai.
Revenue: Revenue for the second quarter of 2019 was $25.0 million which was related to the Company’s exclusive license agreement with Zai to advance the development and commercialization of ripretinib in Greater China. Deciphera recognized license revenue of $20.0 million for an upfront fee and $5.0 million for a development milestone related to the INTRIGUE study.
R&D Expenses: Research and development expenses for the second quarter of 2019 were $34.8 million, compared to $18.0 million for the same period in 2018. The increase was primarily due to the INTRIGUE Phase 3 clinical study in second-line GIST, which the Company initiated in December 2018, and to the INVICTUS Phase 3 clinical study in fourth-line and fourth-line plus GIST, which the Company initiated in January 2018. The Company also incurred costs related to other supporting clinical trials for ripretinib. Additionally, expenses related to the rebastinib program increased primarily as a result of an increase in clinical trial costs related to the Phase 1b/2 trial of rebastinib in combination with paclitaxel, which the Company initiated in October 2018, and the second Phase 1b/2 clinical trial of rebastinib in combination with carboplatin, which the Company initiated in January 2019. Personnel-related costs increased $4.0 million primarily due to increased headcount and stock-based compensation expense in research and development functions. Personnel-related costs for the second quarters of 2019 and 2018 included non-cash stock-based compensation expense of $1.8 million and $1.0 million, respectively. Facility-related and other costs included in unallocated expenses increased $2.3 million primarily due to increased consultant fees and other costs in connection with our early-stage drug discovery programs.
G&A Expenses: General and administrative expenses for the second quarter of 2019 were $13.2 million, compared to $4.5 million for the same period in 2018. The increase was primarily due to an increase in professional, consultant and various advisory fees, including those related to commercialization preparedness. Non-cash stock-based compensation was $2.3 million and $1.2 million for the second quarters of 2019 and 2018, respectively. The increase in non-cash stock-based compensation expense was primarily related to the granting of additional employee stock option awards.
Net Loss: For the second quarter of 2019, Deciphera reported a net loss of $21.5 million, or $0.56 per share, compared with a net loss of $21.7 million, or $0.65 per share, for the same period in 2018.