The Debate Is Over: This Cancer Stock Is Winning the GIST Race

In the last decade alone, scientists have made notable progress understanding cancer progression and developing targeted treatments that significantly improve outcomes. One of the best examples is gastrointestinal stromal tumors (GIST). 

As recently as the late 1990s, doctors knew relatively little about the solid tumors, which meant GIST was often misdiagnosed as other cancers. Today, there are a handful of approved drugs targeting specific genetic mutations common in GIST. That's led to a footrace between Blueprint Medicines (BPMC -1.66%) and Deciphera Pharmaceuticals (DCPH -3.01%) to develop next-generation checkpoint inhibitors for the rare cancer.

While Wall Street had anointed Blueprint Medicines as the front-runner in the GIST race for the last several years, it's now clear that a drug from Deciphera Pharmaceuticals will provide the most benefit to patients. Here's the latest breakdown of the competitive landscape and what investors need to watch for these two healthcare stocks.

Image source: Getty Images.

What is GIST?

An estimated 4,000 to 6,000 individuals are diagnosed with GIST in the United States each year, according to the American Cancer Society. That represents only 0.3% of all cancer diagnoses in the country each year. The rarity has contributed to a lack of knowledge and targeted treatment options, although that's slowly changing. 

In 2001, the U.S. Food and Drug Administration (FDA) approved imatinib (Gleevac) from Novartis as a first-line treatment option. It remains the standard treatment option for advanced GIST today: 65% of individuals achieve a partial response, roughly 15% achieve stable disease, and the median duration of response (DOR) exceeds 24 months. The outcomes can be even greater in less advanced cases and those with specific genetic mutations. 

While imatinib is a highly effective first-line treatment option, there's a severe lack of treatment options available for patients who progress on the drug. Consider the steep drop-off in median progression-free survival (PFS) and median overall survival (OS) from first-line to second-line and above treatment options. (A second-line treatment option means the individual has received at least one prior treatment, and so on.) 

Data source: Deciphera Pharmaceuticals presentation, Blueprint Medicines presentation, Novartis.

The lack of second-line and greater treatment options is where the competition between Blueprint Medicines and Deciphera Pharmaceuticals began. Both were developing drug candidates aimed at the post-imatinib patient population, although recent developments hand Deciphera Pharmaceuticals the clear edge.

Image source: Getty Images.

Is this the next major GIST treatment?

Blueprint Medicines was developing avapritinib as a treatment for third- and fourth-line GIST. In April 2020, the company announced disappointing results in a phase 3 trial that pitted the drug candidate against the current standard third-line treatment option, regorafenib. That prompted the company to discontinue development of avapritinib in GIST, although the drug is approved to treat a small population of patients whose tumors harbor a specific genetic mutation. 

Shortly thereafter, Deciphera Pharmaceuticals announced that the FDA had approved its drug candidate, ripretinib, as a fourth-line treatment option for GIST. It was the first drug to be approved for use in individuals who had failed at least three prior treatments, but the company has more ambitious plans. 

Deciphera Pharmaceuticals is currently conducting a phase 3 trial pitting ripretinib against the current standard second-line treatment option, sunitinib. Investors and analysts are cautiously optimistic about the trial's outcome. In an earlier study, ripretinib achieved a median PFS of 10.6 months as a second-line treatment option. That's far better than the median PFS of 5.6 months sunitinib achieved to earn regulatory approval. 

The fate of the drug depends on the ongoing phase 3 trial. If ripretinib emerges as the superior second-line treatment option for GIST, then SVB Leerink analyst Andrew Berens estimates the drug could generate peak annual sales of $1.6 billion in the United States and European Union. Considering Deciphera Pharmaceuticals is valued at $3.4 billion, a successful trial result could send the stock higher. 

The GIST race is over, but these stocks are still worth watching

Despite the high-profile failure of avapritinib in third-line GIST, investors cannot write-off Blueprint Medicines. The company has two other clinical-stage assets in development targeting specific genetic mutations in multiple other cancers, while another three assets are in preclinical development. In other words, the business lost out on the near-term opportunity to generate revenue from a next-generation GIST treatment, but it has other shots on goal -- they're just earlier-stage assets.

The near-term future is potentially much brighter for Deciphera Pharmaceuticals. Investors and analysts are cautiously optimistic ripretinib can deliver a successful outcome in the ongoing phase 3 trial evaluating its potential as a second-line treatment option for GIST, which could allow the company to capture the post-imatinib market. That would significantly de-risk the development of the company's remaining two clinical assets and likely allow the stock to generate above-average returns in the next several years. 

Of course, nothing is guaranteed for ripretinib, so investors need to remain cautious heading into the release of preliminary study results.