SVB Leerink ups Deciphera Pharma to MP; PT to $34 from $29

Deciphera Pharma

SVB Leerink upgraded Deciphera Pharmaceuticals (NASDAQ:DCPH) to “market perform” from “underperform” and raised its price target to $34 from $29 after the FDA decided to split competitor Blueprint Medicines’ NDA for avapritinib into two NDAs based on two different indications for the cancer drug.

Shares of Deciphera closed at $39.07 on Oct. 28.

“While it is still unclear how long avapritinib will be delayed in 4L+ GIST (gastrointestinal stromal tumors), it’s apparent that the drug will not launch in non-PDGFRα GIST in February 2020 as originally expected, removing what we saw as a potential overhang for Deciphera – namely questions around the size of the addressable market and the impact of being second to market,” writes analyst Dr. Andrew Berens.

“While we still have concerns that the overall GIST market is not as large as some investors anticipate, this denouement may not become apparent until 2021, when both avapritinib and [Deciphera’s] ripretinib are likely to be commercialized in KIT-driven GIST with more defined demand trajectories,” he added.

“Therefore, this removes a key part of what we saw as the bear thesis for Deciphera in the near-term,” Dr. Berens said.