My name is Eun Yang, a biotech analyst with Jefferies, based in New York. Our next presenting company is Deciphera Pharmaceuticals. This is going to be a fireside chat, but if you would like to ask questions during the discussion, please raise your hand. Joining me from Deciphera is Tucker Kelly, who is the CFO of the company. Tucker, thank you very much for joining me today. Thank you, and thanks so much for hosting us today. We really appreciate it. Sure. So, before we start the Q&A, would you like to give us an overview of what Deciphera does? Sure, absolutely. So, Deciphera is a small molecule kinase inhibitor company. We're focused in oncology, and we're fully integrated. So we have capabilities from discovery through research, development, and now commercialization. So we have our first commercial product that we launched in 2020 in the U.S. and in 2022 in Europe, called QINLOCK. And we just recently reported our next program's phase III pivotal data for a program on a drug called vimseltinib in tenosynovial giant cell tumor. So we are a rare breed these days to be an independent oncology company, and soon, hopefully, on the cusp of being one with multiple products. We've got a strong pipeline behind that in the clinic and pre-clinic, and we're well capitalized, so it's been certainly a challenging set of markets, but Deciphera is in as good a position as we've ever been in. Our QINLOCK business goes well, and we've got, hopefully, a line of sight now to having a second commercial program that fits really nicely with our commercial franchise in sarcoma. Sure. So the QINLOCK is approved for fourth line GIST, but then you have this NCCN guidelines updated for potential use in second line when patients are not tolerable to currently approved drug SUTENT from Pfizer. Third quarter sales are pretty strong. So could you talk about what drove the strong third quarter performance on QINLOCK? Sure. So a couple of things. Let me just step back for those who aren't as familiar with the story. As Eun said, we got QINLOCK approved for fourth line GIST or gastrointestinal stromal tumors. As I mentioned, first in the U.S. back in 2020, and we're commercializing ourselves, and then again, we launched in Germany in January 2022. And so that business has been going on now for over three years in the U.S. and almost two years in Europe, and we've had a really good track record in fourth line GIST. We think we got to peak penetration relatively quickly in terms of fourth line incident patients, and that business over time has been growing based on the duration of therapy for those patients increasing. So, you know, in the clinical studies, we saw about six months PFS, but in practice, what we see is that there's a long tail. There's a smaller percentage of patients that get really outsized benefit, and so as we move over time in the fourth line, in the U.S. in particular, we've seen that be a good contributor to, you know, increased net revenue growth. What you mentioned before, we had two things happen in the first quarter of this year. One of them, as you mentioned, was the NCCN guidelines that I'll touch on, and the second thing was a subset analysis from a study that we had run in earlier line GIST. And both of those things we think potentially could be contributing to off-label utilization of QINLOCK. So, two years ago, we read out a phase III study of QINLOCK in second-line GIST. This was an all-comer study against the standard of care, which is sunitinib. In that study, we showed that we effectively had equivalent efficacy. We were 8.3 months of PFS. Sunitinib was eight months in the intent-to-treat population with a hazard ratio of 1.05, but it was a superiority study, so it was not positive and not something we could file on. Two things came out of that study. One, that you mentioned, Eun, is that in March, based on the data of the intent to treat population, with that efficacy, but with a much better safety and tolerability profile, that the NCCN guidelines for GIST were updated to include QINLOCK as the preferred regimen for patients who are intolerant to sunitinib. And the second thing that happened is that in January of this year, we published data looking at a subgroup of patients from that INTRIGUE study in second-line GIST that have a particular mutational profile. So they have exon 11 primary KIT mutations, and they have exon 17 or 18 secondary mutations, and in that group of patients, we saw an outsized benefit. So we had a response rate of 44% to 0% compared to sunitinib. We had a PFS of 14.2 months compared to 1.5 months for sunitinib, and with overall survival, even with subsequent therapies, we showed that at 30 months, you are twice as likely in the QINLOCK arm to be alive as you would have been randomized to the sunitinib. So really compelling data that was backed up by a strong preclinical rationale. So we knew we would do better in this patient population than sunitinib, but it was the magnitude of the benefit, and we did this using ctDNA. So we published that data in January at the ASCO Plenary Session, and that was also then presented in an oral presentation at the main ASCO in June. So what we saw is in both the second, and this is a long-winded way of getting to your third quarter question, Eun, we saw really strong performance in the U.S. So we saw a 70% quarter-over-quarter growth in the second quarter and a 13% quarter-over-quarter growth in the third quarter, and that's compared to our last two years, where, you know, typically we'd have a 6%, 7%, 8%, 9% kind of growth rate. So substantially increase in the net revenue growth. And while we don't promote to it and we don't have perfect data into line of therapy, those are the only two things that change. We put out the data on the 11, 17, 18, and then the NCCN guidelines were updated for the intolerant to sunitinib. And we have a really good track record the last couple of years of new patient starts in the fourth line and overall volume growth, and those are all really strong in the second and third quarters, but it was a noticeable trend shift from what we'd seen over the last couple of years. So on the third quarter call, we were able to say that, while we don't know for sure, and we don't promote to it, you know, we think that it's likely to be off-label utilization by physicians for one or both of those events. And what we said is we don't know how that'll play out. Again, that's one of the challenges with not being able to extrapolate to that data, and that's why we're running the INSIGHT study, which is now up and running, that we can talk about as well, looking to prove prospectively what we saw in that subset analysis from INTRIGUE. So, clearly you have some benefits from the NCCN guidelines update for second-line use off-label, as well as this, subgroup analysis that you have done from a failed phase III in second-line GIST. So, if you cannot comment on it, that's fine, but what you saw in third quarter, is that trend continuing into now, into fourth quarter? Yeah. So we don't comment on sort of trends intra-quarter. And again, as I mentioned earlier, we don't know—It's hard for us to predict whether that trend will continue, 'cause we can't—we don't have any control or discretion over being able to promote to it, to engage with physicians about it. So we are certainly pleased to see physicians decide on their own to utilize QINLOCK, what we think is off-label. But again, that's something that's out of our control, and we'll just have to continue to monitor the trends as we go and to see what happens in future quarters. So when physicians are using QINLOCK in second-line off-label use, do you know they are using it in patients who are literally intolerant to SUTENT, or are they doing the mutational analysis so that the subgroup of patients that you have, exon 11, 17, or 18, those are patients are they using? So which group are they using mostly? Great, great question. We don't know. So all we can really see is that we have a trend shift, right? So where we had relatively consistent sort of growth in overall demand, as well as things like new patient starts in that fourth-line setting in 2021 and 2022, we certainly saw in the second and third quarter that those metrics had shifted up. Obviously, that's reflected in the net revenue in the U.S. But, you know, we have visibility into only part of the channel. So for instance, our specialty distributors, we don't really have patient-level data, and we have limited visibility into the specialty pharmacy channel. So, and even there, understanding whether what line of therapy it is, is challenging to get at. We have some anecdotal information, but it really isn't enough to give us a strong sense of which of those two things. It's really more about the broad trend shift that makes us... The only things that really changed were these two items in Q1. We don't think the overall fourth-line incident patient population changed. There was nothing else that would lead us to believe that we would see that sort of an increase in growth, and so we would expect that it would be one of those two things, but we don't know which. I see. Or both. And then, you guys mentioned on the third quarter earnings call that the percentage of second-line GIST patients who are intolerant to SUTENT is about 15%. Well, that's another one. I think that's more of an eye of the beholder. I see. So we've talked to physicians and KOLs, and if you ask them, you know, "How many patients do you have that are intolerant to sunitinib?" You get a wide range of answers. So on the one end, you get some physicians who maybe are KOLs; they treat just patients with sunitinib all the time, and they feel very comfortable- Mm-hmm. Doing dose modifications, taking drug holidays, that they can mitigate any adverse events that patients might get on sunitinib. So they'll say, "I don't have any patients that are really intolerant. You know, in my hands, I can use this drug to effect and minimize the side effects." You talk to other physicians, and they say, "Oh, 15%-20%." So I don't think there's a real hard and fast- Yeah. - view of that. I think it's very much physician- Practice. - practice specific. Yeah. All right. And then, as you mentioned, based on a subgroup analysis of phase III trial in second-line GIST, you are currently running a phase III in a subgroup of those patients who have exon 11, 17, or 18 mutations. So question to you is that you're running it, but you have to do the kind of a mutational analysis, which is not a common practice currently. Sure. In the medical community. But there is another company, Cogent. They are running second-line GIST clinical trials. What they are doing is they are actually adding their drug on top of SUTENT, not comparing to SUTENT directly like you, but everybody's taking SUTENT, but they are adding their drug, trying to show better efficacy in combination versus SUTENT. So do you see competition in patient enrollment in second-line setting between your trial and their trial? Yeah, it's a good question. At the moment, I think it's too early to say. We just opened the study for enrollment a couple of months ago, and then we'll be, as you said, pre-screening patients to have the right set of mutations. We think we've got a really compelling profile. The efficacy data that I mentioned before, combined with a significantly better safety and tolerability profile than sunitinib, we think is a winning profile. We've adopted a few other measures in the new INSIGHT trial to make it even more patient-friendly. So, the INTRIGUE trial originally was a 1:1 randomization. We now have a 2:1 randomization- Mm-hmm. - in favor of ripretinib. Again, you-- very clear that based on the data we had from INTRIGUE, that patients with this mutational profile get very limited to any benefit from sunitinib. So having a 2-to-1 randomization certainly helps that. In addition, we did not have a crossover for patients who were randomized to sunitinib in the original INTRIGUE trial, and in this case, we do. Mm-hmm. So if you're randomized to it, one, you've got a 2:1 chance to get ripretinib, which again, clearly seems to be the more active agent based on that data. And two, you've got the ability, even if you do, to cross over. And again, what we saw in the phase III subset analysis was that majority of patients or the, you know, the middle, the mean, was all being done at the first assessment, was it, you know, one at six weeks or 1.5 months. So we think we've set the trial up well. You know, as you mentioned, Cogent has got a different approach. Mm-hmm. We think that having a single drug that inhibits either all KIT mutations, and that's where we can touch on our next generation program, DCC-3009, which will file an IND for in the first half of next year. That is even better than QINLOCK in terms of its coverage, and even more selective in terms of its kinase inhibition profile. But we don't necessarily think that combining two drugs, though theoretically it makes sense, right? You want to cover one set of mutations with sunitinib and cover another set with a bezuclastinib in the case of Cogent. But we think that, you know, in the second-line setting, physicians really don't like giving sunitinib to begin with, and the idea that you would give all patients both drugs, which can really only add toxicities over time, is really challenging. And what we found from our analysis, not just of our subgroup in the 11, 17, 18s, but there really are very few patients in that second-line setting that have both exon 13 and 14 and exon 17, 18 mutations at the same time. There's about 9%. So the idea that you'd really be giving both drugs for potentially an extended period of time when they don't necessarily need to have that, we think the better approach is to either have one molecule, like we think 3009 has the potential to be, or being very specific in using ctDNA, and in this case, for the first time in GIST, to say: These are the right patients that should get this drug based on, you know, their particular mutational profile. So, that's our approach. We think that that's a winning strategy, both from an efficacy and safety standpoint. And so we'll be doing that with the Insight study, as you mentioned, and then looking again to have a broader all-comers KIT inhibition profile with our next generation molecule. I see. So, this phase III INSIGHT trial in subgroup of second-line patient is running, and I don't think you have a given guidance on when the data might be, but according to the ClinicalTrials.gov, it's sometime in 2026. So wait, but once it's approved, how much market, how much more market opportunity do you think you would be able to gain from current approved indication of a fourth-line GIST? Yeah, so we think in the U.S., it can double that revenue. So we think at peak with the fourth-line indication that we're in today, and with a label for this subpopulation in second-line GIST, that we can double it, and it can end up being a $375 million-$400 million business in the U.S. at peak. And the reason that is, is that certainly as we move into second line, we're gonna capture what is a relatively small number of patients percentage-wise. So- About 15, pretty- About 15%. Yeah, exactly. So what we saw in the INTRIGUE study was that a patient, so we had a sample for 15% of them had this particular mutational profile, and that includes taking out the patients who just don't shed ctDNA, which is common among solid tumors. So though it is a smaller fraction of those patients, they get outsized clinical benefit, and the number of patients that exist just on an incidence basis in the second line is larger because unfortunately, a lot of patients progress from second to third to fourth line. So we think that we can capture a group of patients earlier in that second line with that mutational profile, drive outsized clinical benefit, and as I said, we saw a PFS of 14.2 months in the INTRIGUE study for these patients. And we think that, like we've seen in the fourth-line, that actually, average treatment duration can be longer than that. So, those numbers I gave you assume that, like we see in fourth-line, we can increase it by about 20% and, and get roughly 20 months of average treatment duration that, again, builds over time. And that, again, leaves a group of patients that, you know, don't have the 11, 17, 18 profile, or who we might not capture 100% of in second-line, and again, that maintains the strong efficacy we've seen across all mutational profiles in the fourth-line setting. So we think it's a really strong opportunity for us. We're eager to get the INSIGHT trial fully enrolled, but as you said, we haven't provided guidance yet. We'll just have to get further along in the enrollment curve before we have any line of sight to when we can fully enroll that study. Again, we think we've got a compelling data set for physicians and patients to look at in deciding to make the decision to enroll in the study. And the ctDNA analysis that is a pre-screening tool is really easy, right? So it's a, you know, Guardant assay that's a blood draw that you know comes back in a number of days, and we do that, and then follow into the normal screening process. So... And our hope is that the team is able to execute as we have been in the past. We've enrolled over 700 patients in GIST trials in the company's history, I think the most of any company out there, and so we know the investigators, we know the sites. We're very, I think, skilled at running these studies, and so we're very hopeful we can do that quickly and get our commercial teams in the U.S. and Europe a label with the new indication. So with the second generation product, the follow-on to QINLOCK, so it's going into clinical testing, but when you think about the development plan for the second product, what line of therapy would you actually position for pivotal study? Yeah, so that's another really good question, and we haven't provided that detail yet, but I can talk to it at high level. We think there's a great opportunity for both QINLOCK and DCC-3009 to coexist. There's a lot of unmet need, unfortunately, in GIST. We think QINLOCK has really solidified its place in fourth line GIST as the standard of care and gets great clinical benefit for patients with a really good safety and tolerability profile. We hear all the time from physicians how well-tolerated it is and much more so than regorafenib, which is the third line approved agent, and sunitinib, which is the second line approved agent as we've talked about. So we think that DCC-3009 can really play a an even broader role. Again, we think that having even a wider range of KIT inhibition across both exon 9 primary, where sunitinib does well, as well as the 13, 14s, again, where they've got a strength, and QINLOCK, which does well on 11s as well as 17, 18s, we have an even better inhibitory profile across the range mutations. And that's paired with, if you look at a kinome tree, we've got in our investor deck from the AACR meeting earlier this year where we debuted the program. We've got kind of a side by side of the kinome tree, which again, is one way of looking at selectivity and likelihood of being a clean molecule, but it's even more selective than QINLOCK, which, as I said, in the clinic, has been very well tolerated, and we think we've got the chance with DCC-3009 to have an even more efficacious agent. And that opens up opportunities, and whether that's in fifth line or third line or second line, or potentially even front line. I mean, imatinib does really well for patients, but, you know, when you look at its profile, it isn't likely to do it because of its design, it's because it's the first-line agent and the biology and the disease course may be different. That's as we've talked about over the years, I think you and even with QINLOCK, that's a tall order to go head-to-head with imatinib. But certainly aspirationally, there's still a large unmet medical need. All patients end up progressing at some point, and it would be a huge commercial one. But I think, you know, as we get into the clinic, we'll talk more about our particular development plan, but we'll work really hard to find the right place to make this available to patients with maximal benefit. Okay, and then let's move on to the second product, which vimseltinib, you guys reported a positive phase III data. So can you talk about, like, I mean, data was quite positive, but is there a certain aspect or aspects of the data sets that you are most excited about? Yeah, so we thought it was a fantastic data set. It was very much what we would have hoped for. The molecule has behaved really well in terms of its reproducibility from phase I to phase II, and now to phase III. And we hit our primary endpoint, which is a RECIST response at week 25, and we hit all key secondary endpoints, all six of them. They're all statistically significant and clinically meaningful. And in this disease, that's really important. So this is in tenosynovial giant cell tumor. This is a non-malignant neoplasm. It is not a fatal disease. It strikes patients when they're younger, 30s, 40s, 50s. And though you don't die from TGCT, it is a high morbidity. So these are patients who maybe can't work, they can't help take care of their families, they can't certainly, in a lot of cases, walk or run or, live the lives they want to, and we've heard a lot of patient narratives about just how debilitating this disease is. So there's a huge unmet medical need to help these patients. A lot of them can be cured with surgery, but the data we have from the phase III study was great on the primary endpoint, but really how patients feel and function is really important, and so we were thrilled to see the secondary endpoints hit, and hit so well. So we disclosed two of them, and we can touch more on those, but the second one was tumor volume score, which is kind of a TGCT and inflammatory specific way of looking at tumor shrinkage by volume. And then, the second one we had in the cascade was range of motion, so active range of motion, where we showed a nearly five-time improvement relative to placebo, in active range of motion at week 25. So there is an approved product with a similar mechanism of action as vimseltinib, pexidartinib from a Japanese pharma company, Daiichi Sankyo. Their product has a liver toxicity, so that it has a black box warning in the label. Also, the drug is available through REMS, so it's more restricted. Yep. But aside from that, sales have been pretty disappointing. Mm-hmm I have to say. So what do you think you, as you mentioned, like, you know, it seems like a mainstay of care is a surgery for these patients. So aside from the issues that, pexidartinib has with the black box and REMS, all those things, what do you think you would need to do in order to drive vimseltinib commercially successful? Yeah, that's absolutely right. So, Daiichi got approval for pexidartinib or TURALIO, back in 2019, and it has been lackluster at best in terms of its commercial adoption. And the real reasons you mentioned we can touch on is the hepatotoxicity, which is, again, not thought to be target related and seems to be very much specific to pexidartinib itself. In addition, we think we've got a winning efficacy profile. So TURALIO has good efficacy. Their response at week 25 was 38%. Ours in the phase III study was 40%. What we also know from our phase 1/2 is that response rate increases over time. So at the same time, we put out the top-line results from MOTION phase III, we also released data with much more follow-up from our phase 1/2 study, and there we see in the phase I, the most mature, that the response rate by RECIST deepens to 72% and 64% in the phase II cohort A, and in both of those cases, still just under half of the patients remain active on drug with the most, the longest patient out in the phase I to almost four years. So, in addition, the three things that are in the label for efficacy for TURALIO are one, that week 25 ORR. They also have a best overall response from their phase III study. That was 61%, and again, we would expect that the best overall response from MOTION in part two will continue to increase, just as we've seen in the phase 1/2. So we think we've got a very good chance to beat that over time. And then, they had tumor volume score at week 25, which was 53%. Ours was 67% at week 25. And their range of motion data at week 25 was a roughly 2 x improvement relative to placebo, and ours was five times. So we do think we've got potentially even a differentiated efficacy profile. The other challenge was they were not able to get a lot of their secondary endpoint data into the label because they had a lot of missing data in their study, and that was an issue for FDA and EMA, which did not approve the drug. We've got a great set of secondary endpoints and a really strong data set. We don't think we'll have the same issues in terms of missing this. So our hope would be that we would have a label that could potentially have not only the primary, but also a lot of the secondary endpoints included as well. That'll be obviously part of the review discussion with the FDA, but we think that gives us a leg up in addition to the really problematic hepatotoxicity. So again, this is not a fatal disease. These are patients that are looking to not make significant trade-offs in terms of tolerability and safety to get symptomatic relief. They can go back and get another surgery or continue to use opioids or pain medications and steroids, but they really want something that will not cause them to worry about what are rare, but still very serious side effects. So they, in their clinical program, they saw one fatality. They saw one liver transplant outside of TGCT, and in their phase III study, they had a 5% rate of severe, cholestatic hepatotoxicity. So we've not seen that in our phase I or phase III. None of the other CSF1R antibodies or small molecules have seen it either. So, again, that'll be part of the review discussion, but we feel like we've got a great molecule with a winning profile, and we think that is what patients and physicians want, and that the experience Daiichi's had with pexidartinib is not reflective of what the market opportunity really is. Okay, so last question, time is almost up. You are very well capitalized. But- Never well enough, you. Never well enough in these markets. But yes, we feel blessed to have the resources we do today, for sure. My question is, now, you know, pexidartinib could be potentially approved by end of next year. You have two products on market- Yeah ... starting 2025. So, based on your sales trajectory from both the products, do you have any kind of a timeline estimate when you like to actually hit financially break even and growing earnings? Sure. It is absolutely a goal, not one we've sort of put a time horizon on. We think both QINLOCK and vimseltinib at peak, we've said, on a global basis, we think can do $1 billion between the two products. That's at peak, and that's both products, so we've got obviously a lot of time between here and there. We're burning right now about $40 million, roughly a quarter. So you know, we're not yet at a stage where we can say we are fully self-sufficient and have sort of full line of sight to cash flow break even, but we think we're certainly well on the way there. And the great news is that we've built a really cost-efficient, and today, commercial group in the U.S. and in Europe, that is paying for itself. So we've been really, I think, smart and thoughtful about the build relative to the revenue base, and again, we're annualized now based on the Q3 numbers at about $175 million- Mm-hmm ... $180 million. And, you know, our SG&A for all of last quarter, so not just, you know, the S part of G&A, was $33 million. So, you know, we're already, I think, doing well on that, and there's a high overlap with TGCT. Mm-hmm. 70%-80% of the prescribers that treat TGCT patients at the medical oncologist are ones that we call in today for QINLOCK and GIST. So we think while we'll have some investment to build the commercial franchise for the launch, it's not a massive lift, so we think there's a lot of synergy and economy of scale we can get with the launch of vimseltinib. Okay. Thank you very much. Thanks so much.