Deciphera stock rocketed to a three-year high Monday after Ono Pharmaceutical agreed to buy it for $2.4 billion.
The deal focuses on Deciphera's switch-control platform. These drugs block problematic kinases tied to cancer growth by targeting the pocket within the enzyme that determines whether it's active or inactive. Doing so allows for more accurate and complete inhibition, Deciphera says.
Piper Sandler analyst Christopher Raymond said there was a lot going for Deciphera before the deal. The company sells Qinlock, a treatment for late-stage stomach tumors. It's also testing vimseltinib in patients with tenosynovial giant cell tumor. These are tumors that occur in the joints.
"Truth be told, we were looking forward to watching vimseltinib's launch play out with approval and launch of the drug for tenosynovial giant cell tumor anticipated in 2025," he said in a report, noting Qinlock also has plenty of uptake potential. "We felt this name was well positioned in terms of commercial catalysts."
Deciphera stock soared 72.6% to 25.28. Shares hit their highest point since November 2021. Deciphera stock retook its 50-day moving average, MarketSurge shows.
Deciphera Stock: Qinlock Upside
Qinlock has already been commercially strong for Deciphera. In the fourth quarter, sales jumped 12% sequentially to $46.7 million and easily beat expectations, according to FactSet. The drug is projected to bring in $195.2 million in sales this year, growing to $393.4 million in 2029.
Qinlock is currently approved for patients who've received and worsened while undergoing three prior therapies. But Piper Sandler's Raymond noted Deciphera has been working to move Qinlock earlier in the treatment paradigm to healthier patients.
The deal places a fair value on Deciphera stock, he said. He had a 23 price target on shares, while the Ono deal values Deciphera at $25.60 per share. The companies expect the deal to close in the third quarter.
With "little in the way of regulatory obstacles (from where we sit), we see a high likelihood that this deal goes through," Raymond said.
He downgraded Deciphera stock to a neutral rating ahead of the takeover.
More to follow.
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