On a bad day for the stock market overall, Deciphera Pharmaceuticals (NASDAQ:DCPH) was quite the happy standout. Shares of the biotech closed more than 12% higher on Tuesday thanks to the launch of a new company initiative.
Deciphera is in restructuring mode, with the aim being "to prioritize clinical development of select programs, streamline commercial operations, maintain a focus on discovery research, and extend the company's cash runway," as it wrote in a statement.
The cancer-focused biotech is doing this in several ways. Firstly, the pipeline will be narrowed, with the discontinuation of the rebastinib program. This is a drug targeting breast cancer that was in early stage clinical testing.
Meanwhile, Deciphera said it would "streamline" the commercial development of stomach cancer treatment Qinlock on the U.S. market to boost commercialization on certain European markets. The company added that this should reduce operating expenses and extend its cash runway into 2024.
As is typical in restructuring programs, the company's workforce is going to be affected. Deciphera said that it will reduce its headcount by around 35% in total, meaning roughly 140 workers.
At the end of September, Deciphera had nearly $53.2 million in cash on its books, down considerably from the year-ago level of over $111 million.
With these moves, Deciphera said it is now prioritizing two pipeline programs, that for tenosynovial giant cell tumor treatment vimseltinib, and DCC-3116, which targets autophagy (a survival mechanism utilized by cancer cells).
All told, the company said its restructuring moves will result in an approximately $32 million cash charge in the fourth quarter.