Any time a stock moves down 75% over a given period of time, investors have reason to be concerned. When such a move happens in a given trading day, it’s time to ring the alarm bells. For investors in Deciphera Pharmaceuticals (NASDAQ:DCPH) and DCPH stock, such appears to be the case today.
This incredible daily move in DCPH stock is notable for a few reasons. Over the past month, prior to today, Deciphera had seen some rather bullish momentum. This was a biopharmaceutical stock with some real potential.
The company’s focus on improving the lives of cancer patients via increasing the durability of response and other key issues plaguing cancer drugs is notable. This is a company on a mission to make the world a better place. And Deciphera has high hopes its QINLOCK treatment for those with gastrointestinal (GI) tumors will be the answer the pharmaceutical industry is waiting for.
However, today, the company shared some very bad news with its investors. Let’s dive into what was announced and why this stock is plunging.
DCPH Stock Loses Three-Quarters Of Its Value on Clinical Trial Results
Today, Deciphera announced the results of its Phase 3 QINLOCK study. Keep in mind, this is the key drug candidate the company has in its pipeline.
The study did not meet its primary endpoint. In other words, this drug did not show enough efficacy for the company to be reasonably assured it can gain approval with QINLOCK. Accordingly, investors appear to have been quick to re-adjust their models, sending shares of DCPH stock to all-time lows today.
Compared to exiting treatments provided for patients with GI tumors, QINLOCK did not improve the progression-free survival rate. This is a key metric used to assess whether this drug has any viability as an alternative to existing treatments.
For investors in DCPH stock, this is a big blow. Now, this isn’t Deciphera’s only drug. However, investors clearly had forecasted a significant amount of long-term cash-flow growth on the basis of this drug being approved. Accordingly, this is a stock that’s likely to continue its price discovery in the coming days. That is, investors who want to trade this stock are likely to see outsized volatility from here as these results are digested.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.