Denali Therapeutics Reports Third Quarter 2018 Financial Results and Business Highlights and Announces the Appointment of Jen...
November 08 2018 - 3:30PM
Denali Therapeutics Inc. (NASDAQ: DNLI), a biopharmaceutical
company developing a broad portfolio of product candidates for
neurodegenerative diseases, today reported financial results for
the third quarter ended September 30, 2018, provided business
highlights and announced the appointment of Jennifer Cook to the
Board of Directors.
“The recent clinical progress with our LRRK2 inhibitor and RIPK1
inhibitor programs are important milestones towards our goal of
developing medicines for patients suffering from neurodegenerative
diseases,” said Ryan Watts, Ph.D., CEO. “Furthermore, we are very
excited to partner with Sanofi and expand our RIPK1 program into
new indications.”
Third Quarter 2018 and Recent Business
Highlights
- Presented Phase 1 data and commenced recruitment for
Phase 1b clinical trial for DNL201 – On October 25, 2018
detailed preclinical and clinical data from the DNL201 Phase 1
clinical trial in healthy volunteers were presented at the Michael
J. Fox Foundation Parkinson's Disease Therapeutic Conference. The
results met all endpoints and support testing DNL201 in patients.
Patient recruitment has commenced for the DNL201 Phase 1b clinical
trial in Parkinson’s disease patients with and without the LRRK2
mutation, with the first patient expected to be dosed in late
2018.
- Completed dosing in DNL747 Phase 1 clinical
trial – In October 2018, dosing was completed in the
DNL747 Phase 1 clinical trial in healthy volunteers. The data from
this trial will be presented at the Denali 2018 R&D Day on
December 10, 2018.
- Entered into a broad RIPK1 Collaboration Agreement with
Sanofi – On October 29, 2018, Denali entered into a
Collaboration and License Agreement with Genzyme Corporation, a
wholly owned subsidiary of Sanofi S.A., to develop and
commercialize therapeutic products to treat neurological and
systemic inflammatory diseases by targeting RIPK1. Denali will
receive an upfront fee of $125 million and contingent milestone
payments that could exceed $1 billion. For products
intended to treat neurological diseases, Denali and Sanofi will
share development costs and commercial profits and losses in the
United States and China, while Denali will receive a royalty from
Sanofi for other territories. For products intended to
treat systemic inflammatory diseases, Sanofi will pay all
development costs and Denali will receive a royalty
worldwide. The transaction is expected to close in the coming
months in accordance with customary regulatory
approvals.
- Appointed Jennifer Cook to the Board of
Directors – On November 6, 2018 Jennifer Cook joined the
Board of Directors as an independent director. Ms. Cook is the
Chief Executive Officer of GRAIL. Previously, she was at Roche
Pharmaceuticals and Genentech, where she held a number of senior
management positions during a 25-year tenure, covering the full
lifecycle of product development and commercialization. Ms.
Cook holds a BA in Human Biology and an MS in Biology from Stanford
University, as well as an MBA from the Haas School of Business at
University of California, Berkeley.
Third Quarter 2018 Financial Results
For the three months ended September 30, 2018, Denali reported a
net loss of $35.4 million compared with a net loss of $21.8 million
for the three months ended September 30, 2017.
Collaboration revenue was $1.2 million for the three
months ended September 30, 2018, with no collaboration revenue
recognized for the three months ended September 30,
2017. The increase was due to revenue recognized under the
Option and Collaboration Agreement with Takeda Pharmaceutical
Company Limited, which was entered into in January 2018.
Total research and development expenses were $30.3 million for
the three months ended September 30, 2018, including non-cash
stock-based compensation of $2.9 million, compared to $18.5 million
for the three months ended September 30, 2017, including non-cash
stock-based compensation of $0.7 million. The increase in total
research and development expenses of $11.8 million was primarily
attributable to an increase in personnel-related expenses,
including non-cash stock-based compensation, driven primarily by
higher headcount and new options granted at higher exercise prices
subsequent to the Company's initial public offering. Further, there
was an increase in other external research and development
expenses, reflecting Denali's growing and maturing pipeline,
increased LRRK2 program expenses due to increased costs associated
with Phase 1 clinical trials in healthy volunteers with DNL201 and
DNL151, and an increase in other research and development expenses
primarily due to rent expense associated with the new headquarters
lease and an increase in lab consumable expenses.
General and administrative expenses were $8.8 million for the
three months ended September 30, 2018, including non-cash
stock-based compensation of $2.6 million, compared to $3.8 million
for the three months ended September 30, 2017, including non-cash
stock-based compensation of $0.4 million. The increase in total
general and administrative expenses of $5.0 million was primarily
attributable to an increase in personnel-related expenses,
including non-cash stock-based compensation, driven primarily by
higher headcount and new options granted at higher exercise prices
subsequent to the Company's initial public offering, and an
increase in legal and professional service expenses required to
support Denali's ongoing operations as a public company.
Cash, cash equivalents, and marketable securities were $517.1
million as of September 30, 2018, compared to $467.0 million as of
December 31, 2017. The increase of $50.1 million was
primarily attributable to $155.0 million in cash received
related to the Option and the Collaboration Agreement and Stock
Purchase Agreement with Takeda, both entered into in January 2018,
partially offset by operating and investing cash payments.
About Denali Therapeutics
Denali is a biopharmaceutical company developing a broad
portfolio of product candidates for neurodegenerative diseases.
Denali pursues new treatments by rigorously assessing genetically
validated targets, engineering delivery across the blood-brain
barrier and guiding development with biomarker monitoring to
demonstrate target engagement and select patients. Denali is based
in South San Francisco. For additional information, please visit
www.denalitherapeutics.com.
Cautionary Note Regarding
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements expressed or implied
in this press release include, but are not limited to, the
potential benefits of the collaboration with Sanofi; the
expectation as to when such transaction will close; expectations
regarding clinical development activities; plans for Sanofi and
Denali to collaborate on global clinical development; and
statements made by Denali’s Chief Executive Officer.
Actual results are subject to risks and
uncertainties and may differ materially from those indicated by
these forward-looking statements as a result of these risks and
uncertainties, including but not limited to, risks related to: the
risk that the Sanofi transaction may not close in a timely manner
or at all; risks related to obtaining the requisite regulatory
approvals; the risk of the occurrence of any event, change or other
circumstance that could give rise to the termination of the
collaboration agreement (including without limitation the failure
to timely obtain requisite regulatory approvals); risks related to
the effect of the announcement of the transaction on Denali’s
business relationships, operating results and business generally;
Denali’s early stages of clinical drug development; Denali’s
ability to complete the development and, if approved,
commercialization of its product candidates; Denali’s ability to
conduct or complete clinical trials on expected timelines;
implementation of Denali’s strategic plans for its business,
product candidates and BBB platform technology; and other risks,
including those described in Denali’s Annual Report on Form 10-K
filed with the SEC on March 19, 2018, Denali’s Quarterly Report on
Form 10-Q filed with the SEC on November 8, 2018 and Denali’s
future reports to be filed with the SEC. The forward-looking
statements in this press release are based on information available
to Denali as of the date hereof. Denali disclaims any obligation to
update any forward-looking statements, except as required by
law.
Denali Therapeutics Inc.Condensed
Consolidated Statements of
Operations(Unaudited)(In thousands,
except share and per share amounts)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Collaboration
revenue |
$ |
1,195 |
|
|
$ |
— |
|
|
$ |
3,484 |
|
|
$ |
— |
|
Operating
expenses: |
|
|
|
|
|
|
|
Research
and development |
30,321 |
|
|
18,515 |
|
|
103,274 |
|
|
55,989 |
|
General
and administrative |
8,838 |
|
|
3,773 |
|
|
21,304 |
|
|
10,611 |
|
Total
operating expenses |
39,159 |
|
|
22,288 |
|
|
124,578 |
|
|
66,600 |
|
Loss from
operations |
(37,964 |
) |
|
(22,288 |
) |
|
(121,094 |
) |
|
(66,600 |
) |
Interest
and other income, net |
2,593 |
|
|
444 |
|
|
7,321 |
|
|
1,302 |
|
Net
loss |
$ |
(35,371 |
) |
|
$ |
(21,844 |
) |
|
$ |
(113,773 |
) |
|
$ |
(65,298 |
) |
Net loss
per share, basic and diluted |
$ |
(0.38 |
) |
|
$ |
(2.14 |
) |
|
$ |
(1.24 |
) |
|
$ |
(6.77 |
) |
Weighted
average number of shares outstanding, basic and diluted |
93,665,231 |
|
|
10,231,036 |
|
|
92,056,812 |
|
|
9,643,686 |
|
Denali Therapeutics Inc.Condensed
Consolidated Balance Sheets(Unaudited)(In
thousands)
|
September 30, 2018 |
|
December 31, 2017 |
Assets |
|
|
|
Current
assets: |
|
|
|
Cash and cash
equivalents |
$ |
43,651 |
|
|
$ |
218,375 |
|
Short-term marketable securities |
331,307 |
|
|
187,851 |
|
Prepaid
expenses and other current assets |
8,445 |
|
|
3,381 |
|
Total
current assets |
383,403 |
|
|
409,607 |
|
Long-term
marketable securities |
142,173 |
|
|
60,750 |
|
Property
and equipment, net |
16,245 |
|
|
14,923 |
|
Other
non-current assets |
2,654 |
|
|
1,441 |
|
Total
assets |
$ |
544,475 |
|
|
$ |
486,721 |
|
Liabilities and stockholders' equity |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
3,354 |
|
|
$ |
2,716 |
|
Accrued
liabilities |
7,393 |
|
|
5,364 |
|
Accrued
compensation |
4,847 |
|
|
5,166 |
|
Contract
liability |
12,658 |
|
|
— |
|
Deferred
rent |
3,227 |
|
|
855 |
|
Other
current liabilities |
138 |
|
|
63 |
|
Total
current liabilities |
31,617 |
|
|
14,164 |
|
Contract
liability, less current portion |
44,452 |
|
|
— |
|
Deferred
rent, less current portion |
7,103 |
|
|
6,294 |
|
Other
non-current liabilities |
124 |
|
|
467 |
|
Total
liabilities |
83,296 |
|
|
20,925 |
|
Total
stockholders' equity |
461,179 |
|
|
465,796 |
|
Total
liabilities and stockholders’ equity |
$ |
544,475 |
|
|
$ |
486,721 |
|
Denali Media Relations
Contacts:
Morgan Warners (202)
295-0124mwarners@gpg.com
Lizzie Hyland(646) 495-2706lhyland@gpg.com
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