Deciphera Pharmaceuticals (NASDAQ:DCPH) stock tanked 10% in Wednesday’s extended trade after the company disclosed plans to offer shares worth $125 million in an underwritten public offering. Perhaps investors might have been apprehensive about the offering’s potential to dilute the company’s earnings.
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The biopharmaceutical company has also granted a 30-day option to the underwriters to acquire additional shares of up to $18.75 million in the company.
Deciphera plans to use the proceeds from the offering to fund its 3 INSIGHT study of QINLOCK versus sunitinib in second-line gastrointestinal stromal tumor patients. Also, the company intends to use funds to advance its development pipeline as well as for working capital and general corporate purposes.
JPMorgan (JPM), Jefferies (JEF), Cowen, and Guggenheim Securities are acting as joint book-running managers for the offering.
Is Deciphera Pharmaceuticals a Buy?
It is worth highlighting that shares of the company have already gained more than 29% so far in 2023. Earlier in January, Decipher announced encouraging preliminary results for 2022 along with its strategic plans for this year, including expectations to initiate the INSIGHT Phase 3 study in the second half of 2023.
Wall Street analysts are cautiously optimistic about DCPH stock’s prospects. Deciphera stock has received five Buy, three Hold, and one Sell recommendations for a Moderate Buy consensus rating. The average price target of $21.25 implies 3.11% upside potential.
