Deciphera Pharma Scores A Sell-Side Recommendation

Deciphera Pharmaceuticals Inc DCPH’s kinase switch control platform has largely gone unnoticed on the Street.

The nascent portfolio caught an analyst's attention this week. 

The Rating

B Riley analyst Madhu Kumar initiated coverage on Deciphera with a Buy rating and $43 price target.

The Thesis

The analyst expects Deciphera’s DCC-2618 to post positive Phase 3 results in fourth-line gastrointestinal stromal tumors in 2019 and to start Phase 3 studies for second-line GIST in the latter half of 2018.

Phase 1 studies for the fourth-line indication demonstrated efficacy in disease control rate and early progression-free survival data. Early results in the second-line indication lend additional confidence in success against Pfizer Inc. PFE’s Sutent.

“Consequently, the second-line opportunity for DCC-2618 could provide a critical edge in the GIST market, particularly in relation to competing c-Kit/PDGFRα TKI avapritinib from Blueprint Medicines Corp BPMC, for which Phase 3 studies in third-line GIST, versus Stivarga from Bayer, are guided to start in the first half of 2018,” Kumar said in a Thursday note.

“Taken as a whole, we see a broader opportunity for DCC-2618 in GIST in the second-line setting.”

Price Action

At the time of publication, Deciphera shares were up 0.8 percent at $28.93.

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