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Deciphera Pharmaceuticals, Inc. Announces Fourth Quarter 2017 Financial Results and Corporate Highlights

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- Initiated Pivotal Phase 3 Trial of DCC-2618 in 4th
Line Plus GIST; 2
nd Line GIST Study Expected to
Commence Later this Year -

Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH), a clinical-stage
biopharmaceutical company focused on addressing key mechanisms of tumor
drug resistance, today announced financial results for the fourth
quarter ended December 31, 2017 and provided an update on recent
clinical and corporate developments.

"2017 was a highly productive year for Deciphera marked by significant
progress with our lead program, DCC-2618. Data presented throughout the
year continue to support our belief that DCC-2618 has the potential to
serve as a much-needed therapy across multiple disease indications where
treatment options for patients are limited," said Michael D. Taylor,
Ph.D., President and Chief Executive Officer of Deciphera. "We have
entered 2018 with strong momentum, and we were pleased to announce the
initiation of our pivotal Phase 3 INVICTUS study of DCC-2618 in
fourth-line plus GIST, which, if successful, could serve as the basis
for a New Drug Application (NDA). Pending regulatory feedback in the US
and Europe, we expect to initiate an additional pivotal Phase 3 study in
second-line GIST patients later this year, and we plan to report data
emerging from our Phase 1 expansion study cohorts over the course of the
year."

Dr. Taylor added, "Following our successful IPO last year, we have a
strong balance sheet and believe we are well-positioned for continued
success across our full clinical-stage pipeline, including DCC-3014 and
rebastinib, and look forward to sharing our progress throughout the
coming months."

Recent Clinical and Corporate Developments

  • DCC-2618
    • Announced the initiation of the Phase 3 INVICTUS pivotal study in
      January 2018 evaluating the safety and efficacy of DCC-2618, in
      heavily pretreated patients with advanced gastrointestinal stromal
      tumors (GIST). The Company expects to report top-line data from
      the study in 2019.
    • Received Orphan Drug Designation from the European Medicines
      Agency in November 2017 for the treatment of GIST.
    • Provided an enrollment update from the ongoing Phase 1 clinical
      trial of DCC-2618 at the Annual Meeting of The Connective Tissue
      Oncology Society in November 2017. As of October 31, 2017, a total
      of 125 patients had been dosed with DCC-2618 of which 109 were
      GIST patients, including 54 GIST patients in three expansion
      cohorts of the Phase 1 trial, which are enrolling second-line,
      third-line, and fourth-to-fifth line GIST patients, respectively.
    • Reported data on eight patients with malignant gliomas in the
      ongoing Phase 1 clinical trial of DCC-2618 at the 22nd
      Annual Scientific Meeting and Education Day of the Society for
      Neuro-Oncology in November 2017, including a 94% tumor reduction
      per RANO after 84 weeks (cycle 23, day 1) from a patient with
      glioblastoma multiforme (GBM) and amplification of three kinase
      genes, KIT, PDGFRα and VEGFR2.
  • Corporate Updates
    • Completed an initial public offering of 8,166,496 shares of its
      common stock in October 2017 at a public offering price of $17.00
      per share, including shares pursuant to the partial exercise by
      the underwriters of their option to purchase additional shares.
      Deciphera Pharmaceuticals received net proceeds of approximately
      $124.6 million from the offering, after deducting underwriting
      discounts, commissions and offering expenses.

Fourth Quarter 2017 Financial Results

Cash Position: As of December 31, 2017, Deciphera Pharmaceuticals
reported cash and cash equivalents of $196.8 million.

R&D Expenses: Research and development expenses for the
fourth quarter of 2017 were $15.7 million compared to $6.5 million for
the same period in 2016. The increase was primarily due to an increase
in spending on the DCC-2618 program of $6.3 million as a result of
clinical trial costs related to the Phase 1 trial as well as start-up
activities related to the pivotal Phase 3 trial in fourth-line GIST, and
increased manufacturing and preclinical study costs to support the
current and planned clinical trials. In addition, facility and personnel
related costs increased an aggregate of $2.9 million as the result of an
increase in costs associated with early-stage drug discovery programs
and headcount. Personnel costs for each of the fourth quarters of 2017
and 2016 included non-cash share-based compensation expense of
$0.5 million and $0.2 million, respectively.

G&A Expenses: General and administrative expenses for the
fourth quarter of 2017 were $4.7 million, compared to $2.0 million for
the same period in 2016. The increase was primarily due to an increase
in non-cash share-based compensation, which was $2.3 million and
$0.4 million for each of the fourth quarters of 2017 and 2016,
respectively. In addition, legal and professional fees increased as a
result of ongoing business activities and operations as a public company.

Net Loss: For the fourth quarter of 2017, Deciphera reported a
net loss of $19.9 million, or $0.62 per share, compared with a net loss
of $8.6 million, or $0.74 per share, for the same period in 2016.

About Deciphera Pharmaceuticals
Deciphera Pharmaceuticals is
a clinical-stage biopharmaceutical company focused on improving the
lives of cancer patients by tackling key mechanisms of drug resistance
that limit the rate and/or durability of response to existing cancer
therapies. Our small molecule drug candidates are directed against an
important family of enzymes called kinases, known to be directly
involved in the growth and spread of many cancers. We use our deep
understanding of kinase biology together with a proprietary chemistry
library to purposefully design compounds that maintain kinases in a
"switched off" or inactivated conformation. These investigational
therapies comprise tumor-targeted agents designed to address therapeutic
resistance causing mutations and immuno-targeted agents designed to
control the activation of immunokinases that suppress critical immune
system regulators, such as macrophages. We have used our platform to
develop a diverse pipeline of tumor-targeted and immuno-targeted drug
candidates designed to improve outcomes for patients with cancer by
improving the quality, rate and/or durability of their responses to
treatment.

Availability of Other Information About Deciphera Pharmaceuticals
Investors
and others should note that Deciphera Pharmaceuticals communicates with
its investors and the public using its company website (www.deciphera.com),
including but not limited to investor presentations and scientific
presentations, Securities and Exchange Commission filings, press
releases, public conference calls and webcasts. The information that
Deciphera Pharmaceuticals posts on these channels and websites could be
deemed to be material information. As a result, Deciphera
Pharmaceuticals encourages investors, the media and others interested in
Deciphera Pharmaceuticals to review the information that it posts on
these channels, including Deciphera Pharmaceuticals' investor relations
website, on a regular basis. This list of channels may be updated from
time to time on Deciphera Pharmaceuticals' investor relations website
and may include other social media channels than the ones described
above. The contents of Deciphera Pharmaceuticals' website or these
channels, or any other website that may be accessed from its website or
these channels, shall not be deemed incorporated by reference in any
filing under the Securities Act of 1933, as amended.

Cautionary Note Regarding Forward-Looking Statements
This
press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, as amended,
including, without limitation, statements regarding the potential for
DCC-2618 to treat GIST; statements regarding the potential benefits to
patients of DCC-2618; statements regarding plans and timelines for the
clinical development of DCC-2618; and Deciphera Pharmaceuticals'
strategy, business plans and focus. The words "may," "will," "could,"
"would," "should," "expect," "plan," "anticipate," "intend," "believe,"
"estimate," "predict," "project," "potential," "continue," "target" and
similar expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain these identifying
words. Any forward-looking statements in this press release are based on
management's current expectations and beliefs and are subject to a
number of risks, uncertainties and important factors that may cause
actual events or results to differ materially from those expressed or
implied by any forward-looking statements contained in this press
release, including, without limitation, risks and uncertainties related
to the delay of any current or planned clinical trials or the
development of Deciphera Pharmaceuticals' drug candidates, including
DCC-2618; Deciphera Pharmaceuticals‘ advancement of multiple early-stage
efforts; Deciphera Pharmaceuticals' ability to utilize the EMA orphan
drug designation to accelerate the clinical development of DCC-2618 for
the treatment of GIST; Deciphera Pharmaceuticals' ability to
successfully demonstrate the efficacy and safety of its drug candidates;
the preclinical and clinical results for Deciphera Pharmaceuticals' drug
candidates, which may not support further development of such drug
candidates; and actions of regulatory agencies, which may affect the
initiation, timing and progress of clinical trials; Deciphera
Pharmaceuticals‘ ability to develop and commercialize companion
diagnostic tests for its current and future drug candidates. These and
other risks and uncertainties are described in greater detail in the
section entitled "Risk Factors" in Deciphera Pharmaceuticals' most
recent annual report on Form 10-K, and other filings that Deciphera
Pharmaceuticals may make with the SEC in the future. Any forward-looking
statements contained in this press release represent Deciphera
Pharmaceuticals' views only as of the date hereof and should not be
relied upon as representing its views as of any subsequent date.
Deciphera Pharmaceuticals explicitly disclaims any obligation to update
any forward-looking statements.

       
Balance Sheets
(In thousands)
 
 
 
December 31,
2017 2016
Assets
Cash and cash equivalents $ 196,754 $ 57,461
Prepaid expenses and other current assets 1,428 791
Property and equipment, net 838 514
Other assets   75   179
Total assets $ 199,095 $ 58,945
 
Liabilities, Convertible Preferred Shares
and
Stockholders' Equity/Members' Deficit
Accounts payable $ 4,395 $ 1,413
Accrued expenses and other liabilities 9,246 2,957
Debt obligations   1,481   1,668
Total liabilities   15,122   6,038
 
Convertible preferred shares   -   192,667
 
Total stockholders' equity/(members' deficit)   183,973   (139,760)
Total liabilities, convertible preferred shares
and
stockholders' equity/members' deficit
$ 199,095 $ 58,945
               
 
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except share and per share data)
 
 
 
 
Three Months Ended Year Ended
December 31, December 31,
2017 2016 2017 2016
 
Revenue

$

$

$

$

Operating expenses:
Research and development 15,658 6,537 39,514 20,163
General and administrative   4,680   1,997   11,421   5,675
Total operating expenses   20,338   8,534   50,935   25,838
Loss from operations   (20,338)   (8,534)   (50,935)   (25,838)
Other income (expense):
Interest expense (23) (25) (95) (106)
Interest and other income, net   449   2   746   4
Total other income (expense), net   426   (23)   651   (102)
Net loss and comprehensive loss $ (19,912) $ (8,557) $ (50,284) $ (25,940)
 
Net loss per share —basic and diluted $ (0.62) $ (0.74) $ (2.99) $ (2.23)
 

Weighted average common shares outstanding—basic and diluted
(1)

  32,121,428   11,626,287   16,792,179   11,626,287
 

(1)The Company did not have any common shares
outstanding prior to the closing of the IPO on October 2, 2017. To
determine the weighted average shares outstanding for purposes of
calculating net loss per share during those periods, the Company
used the weighted average number of Series A convertible preferred
shares outstanding because such shares represented the most
subordinated share class outstanding during those periods. Share
amounts for periods prior to the IPO have been retrospectively
adjusted to give effect to the exchange of Series A convertible
preferred shares into shares of common stock upon the Conversion
on a one-for-5.65 basis.

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