Deciphera Pharmaceuticals, inc (DCPH) Q3 2021 Earnings Call Transcript

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Deciphera Pharmaceuticals, inc (DCPH 3.09%)
Q3 2021 Earnings Call
Nov 2, 2021, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon, everyone, and welcome to the Deciphera Pharmaceuticals Third Quarter 2021 Financial Results Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Jen Robinson, Vice President of Investor Relations, Jen?

Jen Robinson -- Vice President, Investor Relations

Thank you operator. Welcome, and thank you for joining us today to discuss Deciphera's third quarter 2021 financial results. I am Jen Robinson, Vice President, Investor Relations at Deciphera. With me this afternoon to discuss the financial results and provide a general corporate update are Steve Hoerter, President and Chief Executive Officer; Dan Martin, Chief Commercial Officer; Matt Sherman, Chief Medical Officer; and Tucker Kelly, Chief Financial Officer.

Before we begin, I would like to remind you that any statements we make on this call that are not historical facts are forward-looking statements reflecting the current beliefs and expectations of management, made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements made during this conference call include our expectations for our preclinical and clinical programs, our commercialization of QINLOCK and 2021 and 2022 guidance.

Forward-looking statements made on this call involve substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements, and we cannot assure you that our expectations will be achieved. Such risks and uncertainties include those set forth in our most recent quarterly report on Form 10-Q as well as our other SEC filings. We assume no obligation to update or revise any forward-looking statements.

Following this call, a replay will be made available on the company's website, www.deciphera.com.

With that, I will now turn the call over to Steve Hoerter, President and Chief Executive Officer of Deciphera. Steve?

Steve Hoerter -- President and Chief Executive Officer

Thank you, Jen, and good afternoon, everyone. During the third quarter, we made significant progress against our strategic priorities, including both expanding the reach of QINLOCK for patients with just around the world and providing important new data updates for the next two product candidates advancing through the pipeline and moving toward registration directed studies.

In the US, we have rapidly established QINLOCK as the clear standard of care and fourth-line GIST, providing a strong foundation as we prepare to report top-line results from the Phase three INTRIGUE study in second line GIST later this quarter. At ASCO, we presented long-term follow-up from the Phase three INVICTUS study, showing that QINLOCK nearly tripled the overall survival benefit for patients in this setting.

Based on the totality of the clinical data we have generated with QINLOCK so far, we remain confident in the potential for QINLOCK to fundamentally transform the treatment of this disease.

Outside of the US, we continue our work to broaden the geographic reach of QINLOCK. In September, we received a positive opinion from the EMAs, CHMP. And we expect EU approval for QINLOCK in fourth-line GIST later this quarter.

In October, we were also pleased to announce the approval of QINLOCK by Swissmedic, Switzerland's regulatory agency. This marks the seventh approval worldwide for QINLOCK and our first approval in Continental Europe. We are excited to bring this important new medicines specifically designed for GIST to patients in Europe who are in need of a new treatment option.

Beyond Europe, our partner, Zai Lab continues to execute on its launch of QINLOCK in fourth-line GIST in the China market, where an estimated 30,000 new patients are diagnosed with this disease each year. Building on the recent regulatory approvals in China and Hong Kong, Zai received approval for QINLOCK in Taiwan last quarter. We look forward to working with Zai to provide QINLOCK to just patients throughout Greater China. Later on today's call, Matt Sherman, our Chief Medical Officer will review the highly encouraging data updates we provided for Vimseltinib and Rebastinib at the ESMO meeting in September.

We were excited to present these new data updates and disclose our plans to move forward with pivotal Phase three studies for these novel product candidates. For Vimseltinib our potential best in class CSF one receptor inhibitor, we expect to initiate the Phase three motion study in patients with tennis synovial giant cell tumour this quarter. And for Rebastinib our potential first-in-class type two inhibitor, we expect to initiate a registration study next year.

We are leaders in targeting autophagy in cancer and our ULK inhibitor DCC-3116 is the first to enter the clinic in this important area of cancer research. In June, we initiated the Phase one study of DCC-3116 and we expect to present data from the dose escalation portion of this study next year.

In October at the triple meeting, we highlighted exciting new preclinical data with 3116 in combination with EGFR inhibitors. For the first time, we described the upregulation of autophagy and non-small cell lung cancer preclinical models with osimertinib, the current standard of care for mutant EGFR, non-small cell lung cancer, and the significant anti-tumour synergy seen with the combination of DCC-3116 and osimertinib.

These data and the growing literature underscore the broad applicability of targeting autophagy in cancer and the potential for DCC-3116 to be combined with a number of targeted agents across a spectrum of solid and haematological malignancies.

I'll now turn the call over to Dan Martin, our Chief Commercial Officer to discuss the QINLOCK commercial results from Q3. Dan?

Dan Martin -- Chief Commercial Officer

Thank you, Steve. In Q3, we continue to execute on our commercial goals for QINLOCK, reinforcing its position as the standard of care in fourth-line GIST and further strengthening the excellent foundation we have established ahead of our planned launch into the significantly larger second line setting.

In Q3, we achieved 21.7 million in total net Product Revenue globally, including 20 million in the US. The core drivers of QINLOCK demand remained consistent, including new patient acquisition, payer access and persistency.

During the quarter, we increased our prescriber footprint by nearly 20% to approximately 530 prescribers since launch with most of this growth again coming from the community setting. Other key performance metrics again demonstrated strong commercial execution and positive physician perceptions of QINLOCK.

As in prior quarters, we achieved high levels of prescriber reach, share voice and product awareness. And prescribers again gave QINLOCK high marks for efficacy, safety, convenience and ease of access.

Consistent with our guidance during our Q2 earnings call, the percentage of patients receiving free drug under our patient assistance program or PAP was slightly higher than our 20% to 30% estimated range due to increased patient affordability challenges within the Medicare Part D patient population.

Additionally, as expected, the Q3 gross net adjustment increased significantly versus Q2 and was in line with our projected annual average of 15%. In Q4, we expect the core drivers of QINLOCK demand to remain consistent, and we expect the PAP percentage in gross to net adjustment to be in line with Q3.

Looking ahead, our team is hard at work preparing for the second line launch where we expect to benefit from the clinical experience and positive product perceptions we have already established. Since launch in addition to the approximately 530 GIST treaters who have prescribed QINLOCK, we have reached almost 3,000 additional physicians mostly in the community setting, who are potential traders of earlier line GIST patients.

Recent market research has also been very encouraging. In a recent market research survey, GIST treaters rated QINLOCK higher than sunitinib across all product attributes tested based on their experience with the two agents. We believe QINLOCK has the potential to establish a new standard of care in the second line setting, and we look forward to helping even more patients gain access to this important medicine.

I will now turn the call over to Matt.

Matt Sherman -- Chief Medical Officer

Thank you, Dan. We've made tremendous progress advancing our clinical stage pipeline this year, and I'm pleased to share the encouraging results we have in each of our programs. Importantly, working toward our mission to discover, develop and deliver important new medicines to patients for the treatment of cancer. We are rapidly advancing our clinical development programs forward.

I'd like to start with QINLOCK in the Phase three line INTRIGUE study comparing QINLOCK to sunitinib in patients with second-line GIST. We expect to report top line results this quarter and remain confident in the likelihood of success in this pivotal study. We're also excited to move forward with our next pivotal development program Vimseltinib, our potential best-in-class inhibitor of CSF1R. This quarter, we expect to treat the first patient in the motion study. The global randomized, placebo controlled Phase three study and approximately patients with symptomatic TGCT non-amenable to surgical resection.

In the double-blind period of the study, eligible patients will be randomized to 2:1 to receive either Vimseltinib 30 milligrams twice weekly or placebo for 24 weeks. Following the evaluation of the primary endpoint of objective response rate of week 25, patients will have the option to continue or crossover to Vimseltinib during the open-label period of the study.

I'm extremely proud of our team for getting this pivotal study up and running so quickly. There's a great unmet medical need in TGCT and Vimseltinib may offer a new best-in-class treatment option for these patients. Today, there is only one approved product for this indication pexidartinib, which has a black boxed warning and subject to a REMS program to the potentially fatal hepatotoxicity, an adverse event that is thought to be an off target effect.

Interestingly, most patients are using off late imatinib to treat their disease. Imatinib is a weak CSF1R inhibitor which is not approved for TGCT and was listed in the NCCN guidelines based on limited data from a retrospective study that showed a low response rate. We are excited to announce today that we have received Fast Track Designation for Vimseltinib from the FDA for treatment of patients with symptomatic TGCT who are not amenable to surgery. This designation is designed to get important drugs to patients and need faster, and is intended to help facilitate the development of themselves to them and expedite this regulatory review.

The motion study was designed based on the exciting safety and efficacy results from the Phase one, two Study we recently presented at ESMO this year. We reported a 47% objective response rate across all cohorts in the Phase one dose escalation portion of the study and from patients without CSF1R treatment exposure Cohort A of the Phase two expansion portion of the study. The encouraging preliminary data from CT is still early, and we're looking forward to longer follow up.

Treatment with Vimseltinib it was generally well tolerated in patients with TGCT, the majority of the common treatment emergent as adverse events 15% or greater, for Grade 2 or lower.

Now turning to our other late stage clinical program rebastinib, our potential best-in-class class TIE2 inhibitor, planning is ongoing for Phase three pivotal study rebastinib and Rebastinib in platinum-resistant ovarian cancer or PROC. We expect to initiate this study next year following feedback from health authorities.

Earlier this year, we presented exciting preliminary data ESMO from the ongoing Phase one two study of Rebastinib, the combination of Paclitaxel in heavily pretreated PROC patients. The combination demonstrated the promising median progression-free survival with 9.1 months. In addition, the confirmed and unconfirmed objective response rate was 38% and the confirmed objective response rate was 29%. Based on the published literature, the median progression-free survival of single agent Paclitaxel is expected to be three to four months, while its objective response rate is expected to be 15% to 25%. The combination was also generally well tolerated and most treatment emergent adverse events were grade one or two.

We recently received Orphan Drug Designation in the EU for the treatment of ovarian cancer based on a positive opinion issued by the EMA, underscoring the significant unmet patient need that Rebastinib has potential to address. In addition to our late-stage programs, we are very excited about our next generation of product candidates led by DCC-3116, our first-in-class ULK kinase inhibitor that entered clinical development a few months ago. The ULK kinase is an initiating factor in the autophagy pathway, the key survival mechanism in which cells recycle components to generate energy. There's substantial and growing body of evidence showing that autophagy is upregulated in cancer cells to the stress of damage caused by anticancer treatments.

And then, in addition of autophagy, in combination with a variety of anticancer agents may provide a novel approach to treatment by directly addressing one of the important escape mechanisms that plague many types of cancer therapy. Deciphera continue to generate preclinical evidence on the role of autophagy in cancer. At the recent triple meeting, we presented new data demonstrating synergy with 3116 in EGFR inhibitors osimertinib and afatinib in non-small cell lung cancer preclinical models.

In Vitro data show that 3116 reduce autophagy that develops the resistance mechanism after treatment with EGFR inhibitors in lung cancer cell lines. In addition, the in vivo data demonstrated that the combination of 3116 with EGFR inhibitors resulted in significant greater tumor responses, non-lung cancer xenograft model compared to single agent treatment. Researchers outside of Deciphera have also continued to add the strong case for a potential role of a tough gene in addition, in the treatment of solid and haematological malignancies. When recently published study in Nature cancer showed that non-small cell lung cancers with an LKB 1 mutation, which is frequently co mutated with KRAS are resistant to immune checkpoint inhibition, that can be resensitize the PD-1 checkpoint inhibition after blocking both kinase and autophagy.

Another recent study in Science Translational Medicine show the treatment of CML cell lines with an autophagy inhibitor in a matter of decreased growth. In addition, co-treatment on eliminated persistent leukemic stem cells, which drive TKI resistance and patient relapse. Once again, our leadership role in the field of autophagy in cancer, including old kinase and VPS34 kinase positions Deciphera to make significant contributions to cancer patients in the near future. These data provide additional support for the potential graph of the DCC-3116 program adding to the preclinical evidence supporting combination strategies with other cancer treatments, including MEK, ERK, RAF, and direct KRAS G12C inhibitors, as well as PD-1, PDL-1 checkpoint inhibitors, and a wide range of cancers. We're actively pursuing preclinical combinations of 3116 with a with a variety of standard of care therapies and drugs acting by novel cancer mechanisms and look forward to reporting further on these studies next year. Our first area of focus for clinical development in 3116 is for the treatment of RAS/RAF mutated solid tumors in combination with MEK inhibitor. The ongoing Phase oneudy is two parts, dose escalation phase and an expansion phase. Enrolling for the dose escalation phase of the study started in the second quarter of this year and will provide important single agent data for 3116 including safety, tolerability, pharmacokinetics and pharmacodynamics. Data from this phase will also determine the go forward dose and the expansion phase of the study with 3116 will be used in combination with trametinib in multiple tumor types. We look forward to presenting data from the dose escalation phase next year. We are strongly encouraged by the progress across each of our innovative programs and believe that these will make a meaningful difference in the treatment of patients with cancer.

I will now turn the call over to Tucker Kelly, our Chief Financial Officer to review the financial results. Tucker.

Tucker Kelly -- Chief Financial Officer

Thanks, Matt. I'd like to give the highlights from our third quarter financial results. Total revenues in the third quarter was $23.2 million, which includes $21.7 million in net product revenue QINLOCK. Net product revenues for the third quarter of 2021 includes US sales of QINLOCK of $20 million and ex-US sales of QINLOCK of $1.7 million. The gross to net adjustment in the third quarter was in line with our estimate of 15%. Collaboration revenue in the quarter was $1.5 million, which includes QINLOCK supply and royalty revenue under our agreements with Zai Lab for Greater China.

Cost of Sales for the three months ended September 30, 2021 was $0.9 million, which included $0.2 million in cost of net product revenue for QINLOCK product sales and $0.7 million in cost of collaboration efforts. We do not expect that the cost of sales as a percentage of net product sales of QINLOCK will increase significantly after we have sold all zero cost inventories and commence the sales of inventories which will reflect the full cost of manufacturing. We expect to continue to sell the zero cost inventories of QINLOCK in US during the remainder of this year and into 2022.

Total operating expenses were $102 million in the third quarter of 2021 compared to total operating expenses of $79.4 million in the same period in 2020. Research and Development expenses in the third quarter were $66.4 million compared to $49.2 million in the same period in 2020. Selling, general and administrative expenses in the third quarter with $35.5 million compared to $30.1 million in the same period in 2020.

We expect that operating expenses will increase as we continue to invest in the development of our clinical pipeline, execute on the commercialization of QINLOCK in US and prepare for potential commercial launch in Europe. We ended the third quarter in a strong financial position and remain well capitalized with cash, cash equivalents and marketable securities of approximately $392 million, which together with our anticipated product and supply revenues, we expect will be sufficient to fund our operations into the first half of 2023.

With that I'm now turn the call back over to Steve.

Steve Hoerter -- President and Chief Executive Officer

Thank you, Tucker. As we enter the last quarter of 2021, I'm excited about what we've accomplished so far this year and the progress we've made across the company. We are well positioned for long term success as we prepare to launch QINLOCK in Europe and report the results from the Phase threeIGUE study. In addition, we continue to advance the rest of our pipeline as first in class and best in class product candidates. And we look forward to updating you on our future progress.

Operator. I'd now like to open the call for Q&A.

Questions and Answers:

Operator

Thank you [Operator Instructions] And our first question comes from Chris Raymond from Piper Sandler. Your line is now open.

Chris Raymond -- Piper Sandler -- Analyst

Hey, thanks for taking the question. Just a couple quick ones commercial questions here. Dan, I heard you talk about a lot of the metrics, but I'm not sure, I heard you talk about this. Last quarter, I think you were indicating there was some intra patient dose escalation that was going on past progression. Just wonder if you can talk directionally. Are you seeing that pick up? Is it the same? Is there any sort of dynamic to that especially since you had that data at ASCO? It was published, I think, in July?

And then maybe just sort of another sort of broader question, I guess. And I get this question -- this is probably the most asked question I hear from investors is, just thinking about, how quickly QINLOCK became standard of care in fourth line just, really maxing out the opportunity in three quarters. How should we be thinking about the dynamic in the second line setting? Obviously, it's a different sort of dynamic, given that there's an established option in second line, but just kind of talk about, the sort of velocity of penetration between fourth and second that you might be anticipating, assuming, obviously, positive data this quarter? Thanks.

Steve Hoerter -- President and Chief Executive Officer

Hey Chris, it's Steve. So let me take the first part of that, and then I'll turn it over to Dan to address the other part of your question. So you reference the IPDE data from both INVICTUS randomized phase three study, the fourth line study, as well as from the phase one. And we were really pleased to see both of those datasets published in the peer reviewed literature as manuscripts over the course of the summer months. And as you know, from the data and certainly the feedback that we've heard from thought leaders, they view the PFS2 to data that we generated upon dose escalation, as being very meaningful clinically for patients, especially when you look at the data as a fraction of the benefit that patients received as measured by PFS1. So we're really encouraged by the data.

As you might remember, in the Phase one udy, the dose escalation part of the study, we didn't actually reach a maximum tolerated dose with ripretinib, and we dose patients up to 400 milligrams daily. So, we feel as if we have ample headroom for dose escalation, and I think that's been now evidenced by the data from INVICTUS and from the phase one, and certainly even at that higher dose, the drug remains well tolerated. So, we're encouraged by the data, and that underscores the efficacy of the product interests. Dan, do you want to address the rest of Chris's question with respect to what you're seeing in the actual market in terms of utilization of IPDE

Dan Martin -- Chief Commercial Officer

Sure, absolutely. Thanks Chris for the questions. So on the IPDE front, as Steve said, the data has been really well received by the KOL in particular, who view this as a really meaningful benefit for patients. And so there's certainly been interest there. The challenge though is that, of course, this is an off label, so we're not able to promote that. We only, of course, promote consistent with our label dose. And so, what we see in the marketplace is relatively consistent use, which is a smaller portion of our overall dosing, the vast majority of doses are at the labeled dose.

And a couple thoughts on this. From a payer perspective, what we see is sort of inconsistent. We see some claims are approved for the IPDE dose and others are not. And, you know, it has not been added to the NCCN Guidelines, thus far remains to be seen, if and when that will happen. If it is, and if we think that could provide some momentum with respect to not only demand for use of that dosing regimen, but also the access side of the equation. So we'll just have to see how that plays out. But thus far, it's been pretty consistent as a relatively small overall portion of our dosing.

With respect to your second question about uptake in the second line, yes, we've been incredibly pleased with the rapid uptake that we've seen in the fourth line. And we just continue to see, as I underscored in the prepared remarks, just tremendous support, and belief in QINLOCK and really high scores across the board, not just by users but even more broadly, as we've made more and more progress in reaching the community setting, so we're really pleased with the progress thus far. And we think it bodes extremely well for our second line plan second line launch.

As I mentioned, we've reached an additional 3,000 physicians who are likely to be treaters of earlier line patients beyond the 530 or so that have prescribed it, you know, today. And we reached, of course we only message our fourth line indication to those physicians to be clear, because you never know where a fourth line patients going to appear. But the awareness that we've developed in that broader set of potential future prescribers, we think sets us up extremely well.

And as I mentioned in the prepared remarks, the market research that we're seeing now suggests that just based on general experience and perceptions of the two drugs that actually many just treaters rate QINLOCK significantly higher than students. So for all of these reasons, we think that we're really well set up for second line, we think a relatively rapid uptake is certainly possible.

The only other things I'll mention, that will be things we work through, of course, is as you mentioned, there isn't established therapy. And we think that, you know, we'll need to continue to reach, and continue to impact the community more and more, because we think that earlier line setting will be that much more, you know, the domain of the community physician. So those are things that will be very focused on driving at launch. But we think for all the reasons listed, we've got a great opportunity for a rapid penetration is a second line tending data from INTRIGUE.

Chris Raymond -- Piper Sandler -- Analyst

Okay, thank you.

Operator

And thank you. And our next question comes from Jessica Fye from JPMorgan. Your line is now open.

Jessica Fye -- JPMorgan -- Analyst

Hey, guys. Good evening. Thanks for taking my question. A couple from me. Where do you estimate your penetration rate stands in fourth line just at this point? And separately, can you talk about the next steps following the top line results for INTRIGUE? So how soon could you file? And appreciate those earlier kind of comments about the reaching more community physicians, but how much additional SG&A if any, do you envision would be needed to support a second line launch?

Steve Hoerter -- President and Chief Executive Officer

Hey, It's Steve, Jess. Thanks for your questions. But let's try and work our way through these in turn. So I think that I'll take the part of the last two here, and then I'll turn it over to Dan to talk a little bit about what we're seeing in the market in terms of penetration and how we view that.

With respect to the top line, once we report out the INTRIGUE results, you know, our next step, of course, would be to prepare a filing both in the US as well as in Europe. And our goal would be to, of course, get those filings in over the course of the subsequent months. And I think probably looking back to the timeline that we experienced with INVICTUS for the initial fourth line filings, probably a good proxy to use with respect to the US filing. And we would, of course, hope to make the European filing shortly thereafter.

With respect to SG&A and what to expect in terms of additional investment for a second line launch. We don't expect at all and don't plan to increase the size of our footprint from a commercial or medical affairs perspective. We are right size for the opportunity already. And as Dan has noted, we're already calling on the physicians in the community to treat patients Jess's, who would see both fourth line patients as well as second line patients. So we wouldn't expect to see any increase in terms of headcount. Of course, there'll be additional investment in terms of marketing and promotional dollars as we start that launch process in the second line, post data from INTRIGUE. Dan, do you want to cover off on the penetration question?

Dan Martin -- Chief Commercial Officer

Sure. Absolutely. Thanks, Jess, for the question. So we, continue all fronts continuing to point to being very highly penetrated within a fourth line opportunity. We do any number of surveys, -- I've mentioned before that the data to derive the shares and perfect in the space. So we leverage any number of surveys, position surveys, but we also will go out and do what are called chart audit surveys will actually have positions pull their charts and show us, who's getting what in the fourth line setting and by all accounts, it continues to be very highly penetrated, clearly viewed as the standard of care and fourth line. And one physician even told us lately, recently, excuse me, that he'd use it as a quote, must use agent in the fourth line setting.

Jessica Fye -- JPMorgan -- Analyst

Okay. Thanks. I just had a couple follow-ups the comment on the proportion of your patients who are on free drug right now. Seems like it's running a little high this quarter, and you talked about the same Q4 -- fourth quarter, should we expect that dynamic to persist through 2022? Or to come back down to the range that you've talked about that 20 to 30% range? And then one R&D question, how long do you project it will take to enroll the motion trial.

Steve Hoerter -- President and Chief Executive Officer

Yeah. Thanks for the questions. Just Dan, do you want to take Jess's first question about PAP percentage and persistency of that. And then Matt, if you'd like to take the motion question.

Dan Martin -- Chief Commercial Officer

Yeah, absolutely. Thank you. So good question, Jess. Thanks. So as we mentioned, on the Q2 earnings call, we did expect that PAP would continue to be at or perhaps slightly above our -- the top end of our 20 to 30% range and in Q3 and then likely in Q4 as well. And the reason for that is the way the Medicare Part D drug benefit or drug program works is that if a patient goes on free drug -- free drug program, they need to remain on free drugs for the balance of the calendar year. So there is that? I don't know if seasonality is the best term for it. But there is that dynamic to the program that you know once you're into Q3, you have a sense for where you're likely to wind up, in as you round out the year. So that's why we've been able to provide the guidance that we have. And it's played out pretty much exactly as we anticipated thus far. In terms going forward though, there it does as we've said all along. It does we do expect it to vary somewhat quarter-to-quarter; these are that along with gross to matter things that can vary quarter-to-quarter. We think that overall our 20% to 30% estimated range is still very much the guidance that we would give over the whole of the year.

Matt Sherman -- Chief Medical Officer

Hi, Jess. Yeah, this is Matt. So regards to your question about the MOTION study, we're very excited about the Phase one and two data that we recently presented at ESMO showing a combined 47% response rate across all cohorts and both the escalation and the cohort expansion things without planning the 120 patient MOTION study will be a randomized study in about 40 countries.

Just as a benchmark, we were able to enroll about 40 patients in approximately six months in the Part one of the core of the Phase one and two study. So really excited about the interest from the investigators the high response rate, and now opening this up in multiple countries around the world, we expect that this enrollment should be very good enrollment rates.

Jessica Fye -- JPMorgan -- Analyst

Thank you.

Operator

And thank you. And our next question comes from Michael Schmidt from Guggenheim. Your line is now open.

Paul -- Guggenheim Securities -- Analyst

Hi. This is Paul on from Michael. Thanks for taking our questions. Just a couple on INTRIGUE from us ahead of the readout. First, maybe your current thoughts on the expected genetic breakdown of second line patients in the study in terms of primary or secondary mutations. And then as a follow on, any additional color on how you view the exon 13/14 population, in terms of patent share and potential performance of QINLOCK would be really helpful. Thank you.

Steve Hoerter -- President and Chief Executive Officer

Great. Hi, Paul. It's Steve. Thanks. Thanks for the question with respect to genetic profile ingest, and what we'd expect to see in the second line population. I'll ask Matt to just kind of follow-up on this, but what will we expect to see in the second line population in the INTRIGUE studies. INTRIGUE is a 450 patients study. So we would expect the patient population to be very representative of what a second line patient population would look like generally, and as reported in the literature. And so in terms of primary mutations, we would expect to see about 70% of patients with a KIT exon 11, maybe up to 15% of patients with a kit exon nine, and then you'd expect to see 5% to 6% of PDGFRA-alpha mutated patients, and then the balance would be wild type patients. So that's generally when you look at the literature references, what you what you see in the literature in terms of expectations for a population, and just in terms of distribution of primary mutations. Matt, is there anything else you would add to that in terms of secondary mutations?

Matt Sherman -- Chief Medical Officer

I think we would just also highlight the recent publication we had on the INVICTUS Phase three four points study that was published in Global Cancer Research just back in September. And what that highlights is the distribution of both primary and secondary mutations in the fourth line setting. And really, there's a quite extensive mutational heterogeneity in the fourth line setting and that's also been seen in the Phase one study we had an earlier look at some of the second line, third line, fourth line patients, also showing that many of these patients harbor up to five knee mutations. So it's interesting to note that broad spectrum regions such as QINLOCK will be necessary to recover this broad spectrum of mutational burden that these patients harbor.

Paul -- Guggenheim Securities -- Analyst

Great, Thank you.

Operator

And thank you. And our next question comes from Eun Yang from Jefferies. Your line is now open.

Eun Yang -- Jefferies -- Analyst

Thank you. So Steve, in your prepared remark, you said Phase three and trigger data on late this quarter. So should we assume that the data is going to be in December?

Steve Hoerter -- President and Chief Executive Officer

Yeah. Hi, Eun. Good afternoon and thanks, thanks for joining the call.

So, with respect to our guidance on intrigued topline results, what we said very consistently as quarter four. So, we have not refined that guidance to be any specific time within Q4. We just said quarter four this year. So, what you may have heard me say was later this quarter, given that we're already in Q4.

Eun Yang -- Jefferies -- Analyst

Okay. Thank you. And then in the study, in terms of tumor imaging scan. So, in INTRIGUE Phase three, imaging scans are done every six weeks cycle for the first six cycles than every other cycle later -- every other cycle. But in Pfizer's SUTENT Phase three trial, I think a scan was done on day 28 of all treatment cycles. And could it be done more frequently? So, just want to ask you, your rationale for you choosing every six week cycles scanning in your trial aside from patient convenience?

Steve Hoerter -- President and Chief Executive Officer

Yes, thanks for the question.

Eun Yang -- Jefferies -- Analyst

Yes, -- sorry for interruption. And then do you think that every six weeks cycle versus every 28-day cycle would potentially impact PFS? Thank you. Sorry for interruption.

Steve Hoerter -- President and Chief Executive Officer

No, that's all right Eun. Thank thanks for completing the thought and the question. Matt, would you like to take that?

Matt Sherman -- Chief Medical Officer

Sure Steven. Hi Eun. Yes, you're right in the INTRIGUE Phase three study, what we have is a scanning cycle of every other cycle with a six week cycle. And that's related to the dosing of sunitinib that patients are being administered.

So, this dosing is 12 weeks of drug and two weeks of rest period and that constitutes one cycle. So, it's very typical for companies to use that type of cycle for follow-up scans for patients.

But what's probably most important is that's the same for both arms of the study. Even though we're -- is a continuous dosing drug, the interval for scanning will be the same across the two arms of the study and that prevents any bias in terms of the time to be move-in, such as a progression-free survival event.

Eun Yang -- Jefferies -- Analyst

And if I remember, maybe I'm mistaken, but I thought the Pfizer's trial -- in Pfizer's Phase three trial for SUTENT, tumor imaging was done on day 28 of all treatment cycles. So, does that mean it's every six weeks as well because two weeks off?

Matt Sherman -- Chief Medical Officer

Yes, that I don't know. We'd have to go back and look at their protocol design, look at the FDA documents about -- for their actual schedule. But it's -- for our sites, probably more important, just recognize that -- it's a pretty every six weeks is a frequent interval for measuring tumor progression, like many standards -- like many standard protocols, that's a four-week cycle, measure every other cycle. So, that's in every eight week basis. So, every cycle -- very -- pretty reasonable or aggressive interval to measure for those first six cycles.

Eun Yang -- Jefferies -- Analyst

Okay. Thank you. Thank you for the clarification. And the last question is on Vimseltinib. So, the Phase three MOTION trial, you are enrolling patients who are not amenable to surgery. So, can you actually quantify what percent of diffused -- form of a patient are not amenable to surgery in general? Thank you.

Steve Hoerter -- President and Chief Executive Officer

Yes, hi Eun, its Steve, thanks for the question. So, at our ESMO Investor Event, once we -- after we presented the data at ESMO from the Phase one two study with Vimseltinib and then Matt references this earlier during the Q&A and also in the prepared remarks, we were really pleased to see that high 47% response rate we saw in that patient population across the Phase one and Phase two portions of the study. So really encouraging activity that we saw. Dan Martin also spend some time talking a little bit about what we see today in the market in terms of how these patients are being treated, and talked a little bit about patient journey and how these patients who are not amenable to surgery flow through, so maybe I'll ask Dan to comment on that in just a second.

But before I do, I think the one point that I would make, and I think that Matt mentioned this in his prepared remarks is surprisingly in TGCT despite having an approved treatment for these patients pexidartinib this -- that drug, when we look at claims analysis in the US, actually isn't the market share leader that's not the standard treatment that's used for these patients, it's actually a imatinib Gleevec, despite the fact that imatinib is not approved for this use. And the data to support its use actually shows a very low response rate in these patients.

So we think that speaks to the unmet medical need in TGCT. And I think that was really reinforced by the FDA granting themselves in a fast track designation. So we were pleased to announce that as well today. Dan, would you like to comment just on patient journey?

Dan Martin -- Chief Commercial Officer

Sure. Absolutely. Thank you. And thanks Eun for the question. So overview that was a lot of work that we've done, not only with KOLs, but also as Steve mentioned with a lot of US claims work to really try to understand the patient journey. And also to try to size the both the incident and the prevalent populations that we think are likely to be eligible for our drug upon launch.

And so we what we laid out was that we think there are about 14,000 to 18,000 patients who are diagnosed annually in US with TGCT now that's both localized and diffuse. And as you mentioned, it is true that diffuse patients tend to have a higher recurrence rate and localized, but there are a lot more localized patients and so both contribute to a population that would be recurrent after surgery. We think there's somewhere in the order of 2,000 to 2,400 a year, who would recur after their first surgery.

Now, some of those patients may go on to get additional surgeries and receive some benefit. But ultimately, this population as they progress were systemic therapy becomes a focus, systemic therapy delivered by medical oncologists. And so we've estimated that the incident RX treated population within the US is about 1,300 to 1,400 patients annually. And then given that this is a non-lethal disease, therefore, we believe that there is a meaningful prevalent population. And we estimate that to be about 8,000 patients, 8,000 patients that around the time that we would be launching, and that's consists of patients who are on systemic therapy currently, and those who were recently on in the prior several years.

So that's kind of a summary of how that -- how it flows. And a little bit about, we think the market opportunity size wise. And as Steve mentioned, while pexidartinib is really important consideration from sort of a regulatory and development point of view, it really has struggled with uptake. And we think about, a lot of patients out there actually receive imatinib and other TKIs because of the issues that imatinib and pexidartinib profile presents.

Eun Yang -- Jefferies -- Analyst

So in your trial, when you say patients who are not amenable to surgery, that's not really a first timer for surgery, or is it the patients who had the surgery previously, and relapsed, so that they are not eligible for surgery anymore?

Steve Hoerter -- President and Chief Executive Officer

So, it could be Eun, it's Steve, it could be either, right, so it could be patients who present with a tumor and based on tumor location, or based on other maybe medical history of the patient, the patient's not eligible for surgery anymore? So it could be -- Eun, it's Steve. It could be either, right.

Eun Yang -- Jefferies -- Analyst

Okay.

Steve Hoerter -- President and Chief Executive Officer

So it could be a patient who's pushed out with a tumor and based on tumor location or based on other -- maybe medical history of the patient, the patient's not eligible for a surgical intervention, and so therefore, they become eligible for systemic treatment, or it could be patients that have had a lengthy journey with the disease and have undergone multiple surgeries who then become eligible.

And we've shared previously some vignettes from the Phase one experience and we have both of those types of patients, in fact, in the Phase one-two to study. There's a vignette of a woman who was diagnosed some years ago that had undergone multiple surgeries, I think, including a total joint replacement. And then we had another patient who was newly diagnosed, but not amenable to surgery. So that's the spectrum.

Eun Yang -- Jefferies -- Analyst

Okay. Thank you very much.

Operator

Eun, thank you. And our next question comes from Ren Benjamin from JMP Security. Your line is now open.

Reni Benjamin -- JMP Securities -- Analyst

Hey. Good afternoon, guys. Thanks for taking the questions. Just to piggyback off of what just asked. Regarding next steps for the INTRIGUE study, I guess, not after the data is reported, I'm pretty confident as the next steps at that point, but kind of between now and call at the end of the year.

Can you just kind of take us through, I guess, how you're getting the data? Is this something that's coming in daily or weekly? Do you just wait for an email from the DSMB that says, hey, this is what the results are? How long database clean up might be? Just any sort of color in regards to that.

Steve Hoerter -- President and Chief Executive Officer

Hi, Ren, it's Steve. Thanks for the question. So let me try and answer that in general terms. So with any study of this nature there's a time to event end point. And, of course, the sponsor needs to wait for the number of events to accumulate in the study before proceeding with data cleaning, and then being able to lock the database and do the statistical analysis and then report out the top line.

And the timelines associated with each of those steps, of course, can vary, just based on complexity of the study, number of subjects in the study, and the like. So those are the key steps that are taken before any sponsor would be prepared to report out top line results.

Reni Benjamin -- JMP Securities -- Analyst

Okay. And just, I don't know when is the last time you guys get the data, but I guess based on the last time you feel very confident that this can't slip into the first quarter or second quarter, just because of a delay of events. You feel you feel pretty confident about this fourth quarter bookends that you've created.

Steve Hoerter -- President and Chief Executive Officer

Thanks for the question Ren. That's exactly why we reiterated today our guidance of reporting our top line results for INTRIGUE in Q4 of this year.

Reni Benjamin -- JMP Securities -- Analyst

Got it. And then just switching gears to the EU preparedness and the launch activities. I know, we've talked about this in the in the past, but can you just remind us kind of what those are, the key EU markets that you're targeting.

And as we think about kind of the EU launch? Should we be using maybe the U.S. ramp in fourth line as a good proxy? Or should we be kind of looking more at the rest of the world revenues as kind of more of a proxy?

Steve Hoerter -- President and Chief Executive Officer

Yes. Thanks for the question, Ren. So let me let me try and address each of those components. So, for us, our focus is on the five largest markets in Europe. So by five largest I'm including the UK, despite the fact that the UK, of course, is no longer part of the European Union. But those are the five markets principally that we will be targeting with our team.

As we've spoken about previously, our goal always has been to put in place a nimble focus team in Europe to address the fourth line launch in that territory. And we would expect to see that launch cascade over time across markets from early launch markets to later launch markets. And what really drives the timing is achieving market access. So in some markets, like Germany, we're able to price freely, so that allows us to launch very quickly.

In other markets, if you think about Southern European markets, as an example, Italy and Spain, the pricing and reimbursement negotiations can take longer. And so that those launches would occur at some later period in time, once we achieve market access in those territories.

And so the way that we think about our build is in a very efficient way or organizational build, is in a very efficient way to ensure that we're only adding the human resources that we need at the time when we expect to get market access in a key territory.

Now with respect to uptake, it's a great question. And I think, touching on, I think was a question that Chris may have asked earlier. One of the reasons that we think that we've seen such rapid uptake of repetitive of QINLOCK in the fourth line setting in the U.S, is based on the strength of the data.

So as you know, we reported long-term follow-up recently at ESMO, which showed with longer term follow-up and overall survival benefit in the QINLOCK arm of 18 months versus about six months in the placebo arm so I think tripling in the overall survival benefit for patients.

So I think the strength of the data certainly helps us in terms of being a compelling factor for physicians, as they think about treatment options for their patients. And as we know, in the fourth line setting there, there are no good options aside from QINLOCK for these patients.

So when you combine the unmet need with the strength of the data, we think that's a key factor or key set of factors that's driving rapid uptake of the drug in that setting. So in Europe, I think it's premature for us to comment on what we might see in European markets, I think each market will be slightly different.

So as we get into the markets will be in a better position to talk about, what we're seeing, what we see in terms of rapidity of uptake, and how physicians are viewing the drug as they get hands on experience with it.

Reni Benjamin -- JMP Securities -- Analyst

Great, I guess one final one for me. Can you talk? Is there any thought from your end regarding a biomarker strategy? For the inhibitors cover the autophagy or targeting autophagy inhibition? So there are there -- is there a tumor selection or patient selection model where you can look for enhanced levels of autophagy that would result in a patient selection for preclinical studies?

That's a great question,. I mean, we certainly are evaluating that, I think, however, pre-clinically, we certainly haven't seen any indication that there would be a selection strategy that seems to be a fairly widespread, sort of up-regulation of autophagy in solid tumors, as well as now in CML based on what's been reported in the literature.

And I think what what's changing for us and what's evolving for us with this program specifically is we're starting to see not only in the data that we're generating internally, but also the data in the literature, as Matt spoke to in his prepared remarks, we're seeing that this, this mechanism of escape, seems to be very common when tumors are treated with targeted therapies.

So we reported our own preclinical data, looking at Osimertinib and in afatinib and meeting EGFR lung cancer models. At the triple meeting, as we referenced in the prepared remarks, there have been other groups that have published now in the literature looking at LKB 1 mutant non-small cell lung cancer, separate group published on data looking at autophagy in CML and in the effect of afatinib on an upregulation of autophagy.

So we're encouraged by what we see as broad confirmation of the mechanism and the role that this plays is an escape mechanism in both, solid and liquid tumors. And so for us, I think the challenge now is continuing, of course, to progress with the Phase one dose escalation study. But also thinking about what this potential broad applicability tells us in terms of how our clinical program may evolve over time. So we're really encouraged by what we're seeing, and certainly very pleased to be the leader in this space and to have the leading program first into the clinic. Great. Thanks for taking the questions.

Operator

And thank you. And our next question comes from Robyn Karnauskas from Truist Security. Your line is now open.

Alex -- Truist Securities -- Analyst

Hi. This is Alex on for Robyn. Thanks for taking the question. Can you walk us through any market research that you've done that touches upon how physician use for QINLOCK in the second-line setting would be affected by price? And Sutent going generic and is there any indication that a generic Sutent affects the bar so to speak for QINLOCK at all?

Steve Hoerter -- President and Chief Executive Officer

Yes. Thanks for the questions. We, of course, and Dan referenced this earlier, we've done quite a bit of market research with physicians in the US to understand their perception of QINLOCK relative to Sutent, even based on the data that we've generated so far in the fourth-line, and of course, from the Phase one study in the second-line cohort. And as Dan referenced earlier, we're quite encouraged by what we see in terms of physician response there. Dan, are there some details that you'd like to offer in terms of how we're thinking about Sutent into next profile relative to QINLOCK.

Dan Martin -- Chief Commercial Officer

Sure, just a little bit extra color. As Steve mentioned, we have done quite a bit of research thus far. Of course, the outcome of intrigue will be a really important part of understanding exactly how it will stack up with Sutent in the eyes of treaters. And of course, we'll do additional research after we have those results. But we've done quite a bit of work thus far. And what comes back really consistently is that, you know, there are concerns with Sutent a profile and it's a drug that, can be hard to give and hard to take for patients.

And so physicians, both academic and community are really rooting for QINLOCK and intrigue and they really want to use it in the second-line. In fact, we just did some research, as I mentioned in my prepared remarks, where we asked physicians, just treaters, you know, for their basically to rate the product attributes of QINLOCK and Sutent side by side. And what we saw was that QINLOCK came out on top, on every attribute we tested, and by a fair amount, in fact, nearly all of the attributes scoring was statistically significantly higher for QINLOCK.

So I think what that tells us is that, you know, clinicians are really eager to use QINLOCK in the second line. And, you know, I think that's why there's so much anticipation and looking forward to the intrigue results.

As it relates to generic Sutent, you know, we think that at the end of the day, most clinicians, make their decisions based on the clinical evidence. And so a positive head to head study will put us in great position with treaters. And we think also with payers, while obviously payers look to different factors, value and cost and such, at the end of the day, the gold standard for demonstrating, head to head value, head to head clinical trial. And that's what we have. So we look forward to the readout of intrigue, and we believe, you know, pending positive results will be in a really good position for a successful launch in the second line.

Alex -- Truist Securities -- Analyst

Sounds good. Thanks. And one more if I can. I think we've touched on this before, but it's been another quarter. And you know, when you interact with doctors, what are you seeing with how doctors use student in the second mind? And is it hasn't been different from label at all?

Steve Hoerter -- President and Chief Executive Officer

Yes. Thanks for the question. So I'd be happy to take that. So, we've done quite a lot of work looking at how physicians use Sutent. And I assume your question really relates to dosing schedule. Is that correct?

Alex -- Truist Securities -- Analyst

Yeah. Exactly.

Steve Hoerter -- President and Chief Executive Officer

Yeah. So what we see is really a mixed bag. So there isn't any one standard dosing schedule that's used of Sutent. So you see everything from the labeled dosing schedule of 50 milligrams four weeks on, two weeks off, all the way to down to patients who are getting 25 milligrams per day, and we think that's probably just reflective of the tolerability challenges that are often seen with Sutent.

Alex -- Truist Securities -- Analyst

All right. Thanks for taking my question.

Operator

Thank you. And our next question comes from Brad Canino from Stifel. Your line is now open.

Brad Canino -- Stifel -- Analyst

Good afternoon, and congrats on the additional approvals for QINLOCK. One on INTRIGUE and then one on the pipeline, as I've been having my conversations heading into the INTRIGUE data, one of the sticking points remains the high rate of censoring you announced back in early 2020. So I just like to ask, what is your level of confidence that you have that this censoring will not add bias to the PFS measure for either drug arm?

Steve Hoerter -- President and Chief Executive Officer

Well, thanks for the question, Brad. So this isn't something that we spend a lot of time thinking about. So we announced the addition of patients at the beginning of last year. We're really pleased with the conduct of the study, and how the team has navigated INTRIGUE during the pandemic in particular, and following regulatory guidance from regulators around the world. So we're pleased with how things have been conducted and looking forward to reporting out the top line.

Brad Canino -- Stifel -- Analyst

Okay, I appreciate that. And then, on the call, you spoke at length about the ULK inhibitor. Sounds like you have pretty grand ambitions for multiple combination therapy trials. So Steve, how are you thinking about value creation for shareholders with this asset, given that you've already in three Phase three programs and spending on those? Is the ULK inhibitor program that would be better to out license and co develop, and if so, at what stage? Or do you think you can establish some R&D collaborations for free drug where you share data but retain the cost and the value for the asset? Thanks.

Steve Hoerter -- President and Chief Executive Officer

Yeah, thanks for the question, Brad. So as we mentioned in the prepared remarks, we're really excited about the ULK program and the potential broad applicability. And Matt spoke to this in some detail based on the data we reported at the triple meeting, and of course, what's been reported in the literature. So we do believe that the program has the potential to have very broad applicability and a range of solid and liquid tumors, potentially in combination with a variety of different targeted agents.

So we're looking forward to continuing to follow the science here and to prioritize where we want to take the ULK inhibitor in combination with other agents and you'll be hearing more from us, I'm sure in the in the coming months in terms of how we might decide to prosecute that. But with respect to partnering specifically, it would just be premature for me to comment on that. But we're excited about the program and the opportunity to build long term value.

Brad Canino -- Stifel -- Analyst

Okay. Thank you.

Operator

And thank you. And I am showing no further questions. I would now like to turn the call back over to Steve Hoerter for closing remarks.

Steve Hoerter -- President and Chief Executive Officer

Thanks very much. Thanks, everyone, for joining us on today's call and thank you for your continued support. We look forward to keeping you updated on our continued progress. I hope you all have a great evening.

Operator

[Operator Closing Remarks]

Duration: 60 minutes

Call participants:

Jen Robinson -- Vice President, Investor Relations

Steve Hoerter -- President and Chief Executive Officer

Dan Martin -- Chief Commercial Officer

Matt Sherman -- Chief Medical Officer

Tucker Kelly -- Chief Financial Officer

Chris Raymond -- Piper Sandler -- Analyst

Jessica Fye -- JPMorgan -- Analyst

Paul -- Guggenheim Securities -- Analyst

Eun Yang -- Jefferies -- Analyst

Reni Benjamin -- JMP Securities -- Analyst

Alex -- Truist Securities -- Analyst

Brad Canino -- Stifel -- Analyst

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