Deciphera(US:DCPH)2020-11-05 21:24Regulatory Approvals - QINLOCK was approved by the FDA on May 15, 2020, for the treatment of adult patients with advanced GIST who have received prior treatment with three or more kinase inhibitors, including imatinib [111]. - QINLOCK was authorized for sale in Canada in June 2020 and approved in Australia in July 2020 for the same indication as in the U.S. [127]. - QINLOCK received FDA approval in May 2020 for treating adult patients with advanced GIST after prior treatment with three or more kinase inhibitors, leading to the commencement of commercial sales in the U.S. [140]. Financial Performance - As of September 30, 2020, the company reported a net loss of $203.7 million for the nine months ended September 30, 2020, and an accumulated deficit of $691.7 million [120]. - For the three months ended September 30, 2020, product revenues were $15.2 million, with $14.7 million from the U.S. and $0.5 million from the rest of the world [179]. - Collaboration revenues for the three months increased by $0.3 million, while for the nine months, they decreased by $22.4 million due to prior milestone payments [180][181]. - The net loss for the three months ended September 30, 2020, was $63.7 million, compared to a net loss of $56.2 million for the same period in 2019 [177]. - As of September 30, 2020, the company had generated limited revenue from product sales, primarily from QINLOCK, and does not expect to generate revenue from other drug candidates in the near future [199]. Cash and Funding - The company had cash, cash equivalents, and marketable securities of $584.3 million as of September 30, 2020, which is expected to fund operations into the second half of 2022 [126]. - The company has issued and sold 29,203,017 shares of common stock since its IPO, resulting in net proceeds of $930.1 million [200]. - Net cash provided by financing activities for the nine months ended September 30, 2020, was $199.0 million, a decrease from $435.6 million in the same period of 2019 [211][212]. - Investing activities used $17.6 million of cash during the nine months ended September 30, 2020, a significant reduction from $462.2 million in the same period of 2019 [204][210]. Expenses and Costs - The company expects to continue incurring significant expenses related to the commercialization of QINLOCK and ongoing clinical trials, particularly for DCC-3014 and rebastinib [120]. - Research and development expenses for the nine months ended September 30, 2020, were $146.7 million, up from $111.0 million in the same period of 2019, reflecting increased clinical trial costs [177][188]. - Selling, general, and administrative expenses for the nine months ended September 30, 2020, were $84.0 million, compared to $44.4 million in the same period of 2019, driven by increased personnel-related costs [177][195]. - The company anticipates increased research and development costs as drug candidate development progresses, but cannot accurately project total program-specific expenses [156]. - The company expects expenses and capital requirements to increase due to ongoing activities, including clinical development and commercialization efforts for QINLOCK [213]. Clinical Trials and Development - QINLOCK is currently being investigated in a Phase 3 study for second-line GIST, with full target enrollment expected in Q4 2020 [129]. - The company is conducting two Phase 1b/2 studies of rebastinib in combination with chemotherapy, with the first stage evaluating multiple solid tumor cohorts [138]. - The company cannot guarantee the timelines for clinical trials due to potential COVID-19 related interruptions, although studies remain open for enrollment [136]. Market and Operational Environment - The ongoing COVID-19 pandemic may adversely affect the company's ability to launch and commercialize QINLOCK, impacting sales and market penetration [135]. - The company has implemented a virtual launch model due to COVID-19, which may hinder the effectiveness of sales personnel in marketing QINLOCK [135]. - The operating environment remains uncertain due to the ongoing impact of the COVID-19 pandemic, affecting business operations and future revenue generation [137]. - The company anticipates that market acceptance for QINLOCK and future approved drugs will significantly influence its financial performance and operational expenditures [213]. Other Financial Considerations - The gross margin on QINLOCK sales for the three and nine months ended September 30, 2020 was enhanced due to the use of previously expensed active pharmaceutical ingredients [148]. - The cost of sales for QINLOCK was $0.1 million for both the three and nine months ended September 30, 2020, primarily related to packaging and distribution costs [182]. - Contractual commitments related to commercial supply agreements for QINLOCK amounted to $7.9 million as of September 30, 2020, primarily expected to be paid within one year [217]. - A hypothetical 100 basis point adverse movement in interest rates could result in an estimated loss in fair value of approximately $4.7 million to the company's interest rate sensitive instruments as of September 30, 2020 [221]. - Inflation has not had a material effect on the company's business, financial condition, or results of operations during the three and nine months ended September 30, 2020 and 2019 [225].