On November 5, 2020 Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH) reported financial results and provided a business update for the third quarter ended September 30, 2020 (Press release, Deciphera Pharmaceuticals, NOV 5, 2020, View Source [SID1234570042]).

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"The strong U.S. commercial launch of QINLOCK, which is reflected in our first full quarter of results since the approval in May, is a testament to the potential for this new medicine to be a best-in-class treatment for people with GIST," said Steve Hoerter, President and Chief Executive Officer of Deciphera Pharmaceuticals. "During the third quarter, we also made substantial progress in preparing to bring QINLOCK to eligible patients around the world, including the submission and validation of the MAA by the EMA and the establishment of distribution agreements in Canada and Australia."

Mr. Hoerter continued, "In addition to executing on the successful launch of QINLOCK, we continue to advance our pipeline of promising product candidates. Notably, we look forward to presenting new data from our Phase 1/2 study of DCC-3014 in TGCT patients at the CTOS 2020 Virtual Meeting later this month."

Third Quarter 2020 Highlights and Recent Business Updates

QINLOCK (ripretinib) Commercialization
Recorded $15.2 million in net product revenue in the third quarter of 2020, including $14.7 million in U.S. net product revenue in the first full quarter of commercial launch following FDA approval in May 2020.
Submitted and received validation of a Marketing Authorisation Application (MAA) for QINLOCK in fourth-line gastrointestinal stromal tumor (GIST) by the European Medicines Agency (EMA). Validation of the MAA confirms that the application is sufficiently complete for the EMA to begin its formal review process.
Announced plans to establish a targeted commercial infrastructure in key European markets to support the potential launch of QINLOCK, as well as to support additional future product launches.
Entered into exclusive distribution agreements with the following partners to distribute QINLOCK in other territories:
Medison to distribute QINLOCK in Canada and Israel. Health Canada approved QINLOCK for fourth-line GIST in June 2020 under the U.S. FDA’s Project Orbis, an initiative that enables concurrent review of oncology products by international regulatory agencies.
Specialised Therapeutics Asia (STA) to distribute QINLOCK in Australia, New Zealand, Singapore, Malaysia, and Brunei. The Australian Therapeutic Goods Administration (TGA) approved QINLOCK in July 2020 under the U.S. FDA’s Project Orbis.
Presented two mini oral presentations on QINLOCK at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Virtual Congress 2020 in September. The first mini oral presentation was on the nine-month follow-up data from the Phase 3 INVICTUS study in patients with fourth-line and fourth-line plus GIST. The second mini oral presentation was on the ongoing Phase 1 study of QINLOCK in patients with second-line through fourth-line plus GIST. The presentation highlighted that the patients receiving QINLOCK who, upon disease progression, dose escalated to QINLOCK 150 mg twice daily (BID) experienced additional, clinically meaningful, progression-free survival benefit across all lines of therapy.

Rebastinib
Presented results from Part 2 (Stage 1) of the platinum-resistant ovarian cancer cohort in the ongoing Phase 1b/2 study of rebastinib in combination with paclitaxel in an E-poster presentation at the ESMO (Free ESMO Whitepaper) Virtual Congress 2020. Data presented demonstrated encouraging efficacy with an objective response rate of 38%, confirmed and unconfirmed, and a clinical benefit rate of 88% at eight weeks. Treatment with rebastinib 50 mg BID in combination with paclitaxel was generally well-tolerated. Enrollment in Stage 2 of the platinum-resistant ovarian cancer cohort at the rebastinib 50 mg BID dose is completed and further efficacy and safety evaluation is ongoing.
Presented results from Part 1 of the Phase 1b/2 study of rebastinib in combination with carboplatin in an E-poster presentation at the ESMO (Free ESMO Whitepaper) Virtual Congress 2020. The clinical benefit rate was 50% at six weeks and 36% at twelve weeks, and the median duration of treatment was 7.8 weeks. Rebastinib in combination with carboplatin was generally well-tolerated. The Part 2 portion of the ongoing Phase 1/2 study is currently enrolling patients and will evaluate the safety and efficacy of rebastinib at the recommended Phase 2 dose of 50 mg BID in combination with carboplatin.
Upcoming Scientific Congress Presentations

Connective Tissue Oncology Society (CTOS) 2020 Virtual Annual Meeting, November 18-21
DCC-3014
Oral Presentation: "Phase 1 dose-escalation study of the safety, tolerability, pharmacokinetics, and pharmacodynamics of DCC-3014 in advanced solid tumors and tenosynovial giant cell tumor"
QINLOCK (ripretinib)
Oral Presentation: "Characterization of the extensive heterogeneity of KIT/PDGFRA mutations in patients with fourth-line advanced gastrointestinal stromal tumor: genomic analysis of the phase 3 INVICTUS study"
Poster Presentation: "Ripretinib demonstrated activity across all KIT/PDGFRA mutations in patients with fourth-line advanced gastrointestinal stromal tumor: analysis from the phase 3 INVICTUS study"
Oral Presentation: "Ripretinib intra-patient dose escalation following disease progression provides clinically meaningful progression-free survival in gastrointestinal stromal tumor in phase 1 study"
Poster Presentation: "Clinical benefit with ripretinib as ≥4th line treatment in patients with advanced gastrointestinal stromal tumor: update from the phase 3 INVICTUS study"
Third Quarter 2020 Financial Results

Revenue: Total revenue for the third quarter of 2020 was $15.5 million, which includes $15.2 million of net product revenue from sales of QINLOCK and $0.3 million of collaboration revenue. Net product revenues for the third quarter of 2020 includes U.S. sales of QINLOCK of $14.7 million and ex-U.S. sales of QINLOCK of $0.5 million. In the third quarter of 2019, the Company did not generate revenue.
Cost of Sales: Cost of sales for the third quarter of 2020 was $0.1 million as the majority of the manufacturing costs related to third 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 third 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 third quarter of 2020 were $49.2 million, compared to $40.4 million for the same period in 2019. The increase was primarily due to personnel costs, preclinical costs, and clinical trial costs related to DCC-3014, rebastinib, and the Phase 3 INTRIGUE trial in second-line GIST. The increase was partially offset by a decrease in clinical trial expenses related to the Phase 3 INVICTUS trial in fourth-line and fourth-line plus GIST. Non-cash, stock-based compensation was $4.5 million and $2.0 million for the third quarters of 2020 and 2019, respectively.
SG&A Expenses: Selling, general and administrative expenses for the third quarter of 2020 were $30.1 million, compared to $18.0 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 Deciphera’s 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 $2.7 million for the third quarters of 2020 and 2019, respectively.
Net Loss: For the third quarter of 2020, Deciphera reported a net loss of $63.7 million, or $1.13 per share, compared with a net loss of $56.2 million, or $1.28 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, partially offset by the recognition of revenues in the third quarter of 2020, as discussed above.
Cash Position: As of September 30, 2020, cash, cash equivalents and marketable securities were $584.3 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, partially offset by cash used in operations. 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.
Conference Call and Webcast

Deciphera will host a conference call and webcast to discuss this announcement today, November 5, 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 6048987. 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.