Denali Therapeutics Inc. (NASDAQ: DNLI), a biopharmaceutical
company developing a broad portfolio of product candidates for
neurodegenerative diseases, today reported financial results for
the fourth quarter and full year ended December 31, 2018 and
provided business highlights.
“We have made significant progress toward our long-term goal of
defeating neurodegenerative diseases. We successfully completed
Phase 1 healthy volunteer clinical trials for our LRRK2 inhibitor
and RIPK1 inhibitor programs, initiated clinical studies in
patients with Parkinson’s disease, ALS and Alzheimer’s disease, and
further validated our blood-brain barrier delivery technology,”
said Ryan Watts, Ph.D., CEO. “Furthermore, we are excited about our
strategic partnerships with Takeda and Sanofi which allow us to
broaden our portfolio and expand into new programs and
indications.”
Fourth Quarter 2018 and Recent Business
Highlights
- First Patient dosed in Three Phase 1b Studies
- In December 2018, we announced the first patient dosed in our
Phase 1b Study of DNL201 in Parkinson’s disease patients with and
without a genetic LRRK2 mutation; in January and February 2019, in
collaboration with our partner Sanofi, we announced the first
patient dosed in two Phase 1b studies of DNL747 in ALS and
Alzheimer’s patients, respectively.
- Entered into a broad RIPK1 Collaboration Agreement with
Sanofi – In October 2018, Denali entered into a
Collaboration and License Agreement with Genzyme Corporation, a
wholly owned subsidiary of Sanofi S.A., (“Sanofi”) to develop and
commercialize therapeutic products to treat neurological and
systemic inflammatory diseases by targeting RIPK1. Denali received
an upfront fee of $125 million in November 2018 and is eligible to
receive 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.
- Achieved First Milestone for the Second and Third
Programs Under the Takeda Collaboration Agreement - In
October and December 2018, the first preclinical milestone was met
for the second and third program partnered with Takeda,
respectively, upon which Takeda paid Denali a milestone payment of
$5 million for each program.
Fourth Quarter and Full Year 2018 Financial
Results
For the fourth quarter of 2018, Denali reported a net income of
$77.5 million compared with a net loss for the fourth quarter
December 31, 2017 of $22.9 million. For the year ended December 31,
2018, net loss was $36.2 million, compared with a net loss for the
year ended December 31, 2017 of $88.2 million.
Collaboration revenue was $125.7 million and $129.2
million for the fourth quarter and year ended December 31, 2018,
respectively, with no collaboration revenue recognized for both
the fourth quarter and year ended December 31, 2017. The
increase in revenue in both the fourth quarter and year ended
December 31, 2018 compared to the same periods in 2017, was due to
revenue recognized under the Option and Collaboration Agreement
with Takeda Pharmaceutical Company Limited, which we entered into
in January 2018 and amended in February 2019, and the Collaboration
and License Agreement with Sanofi, which we entered into in October
2018.
Total research and development expenses were $39.9 million for
the fourth quarter of 2018, including non-cash stock-based
compensation of $2.9 million, compared to $18.5 million for the
fourth quarter of 2017, including non-cash stock-based compensation
of $0.7 million. Total research and development expenses were
$143.2 million for the year ended December 31, 2018, including
non-cash stock-based compensation of $10.1 million, compared to
$74.5 million for the year ended December 31, 2017, including
non-cash stock-based compensation of $2.9 million. The increase in
total research and development expenses of $21.4 million and $68.7
million for the fourth quarter and year ended December 31, 2018,
respectively compared to the same periods in 2017, 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 Denali's initial public offering. Further, there was
an increase in external research and development expenses
reflecting the progress of Denali's most advanced programs in the
clinic, the growing and maturing pipeline, and an increase in other
research and development expenses primarily due to rent expense
associated with the headquarters lease amendment to relocate and
expand our headquarters and an increase in lab consumable
expenses.
General and administrative expenses were $11.0 million for the
fourth quarter of 2018, including non-cash stock-based compensation
of $2.7 million, compared to $5.1 million for the fourth quarter of
2017, including non-cash stock-based compensation of $0.4 million.
General and administrative expenses were $32.3 million for the year
ended December 31, 2018, including non-cash stock-based
compensation of $8.7 million, compared to $15.7 million for the
year ended December 31, 2017, including non-cash stock-based
compensation of $1.6 million. The increase in total general and
administrative expenses of $6.0 million and $16.7 million for both
the fourth quarter and year ended December 31, 2018, respectively,
compared to the same periods in 2017, 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
Denali's initial public offering, an increase in legal and
professional service expenses required to support Denali's ongoing
operations as a public company, and an increase in rent expense
associated with the headquarters lease amendment.
Cash, cash equivalents, and marketable securities were $612.2
million as of December 31, 2018.
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, statements regarding
Denali's progress and business plans; the potential benefits of the
collaborations with Sanofi and Takeda; 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 of the occurrence of
any event, change or other circumstance that could give rise to the
termination of the Sanofi or Takeda collaboration agreements; risks
related to the effect of the announcement of the transactions 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 most recent Annual Report on
Form 10-K, most recent Quarterly Report on From 10-Q 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 EndedDecember 31, |
|
Twelve Months EndedDecember 31, |
|
2018 |
|
2017 |
|
|
2018 |
|
|
2017 |
|
Collaboration
revenue |
$ |
125,676 |
|
$ |
— |
|
|
$ |
129,160 |
|
|
$ |
— |
|
Operating
expenses: |
|
|
|
|
|
|
|
Research
and development |
39,909 |
|
18,471 |
|
|
143,183 |
|
|
74,460 |
|
General
and administrative |
11,045 |
|
5,069 |
|
|
32,349 |
|
|
15,680 |
|
Total
operating expenses |
50,954 |
|
23,540 |
|
|
175,532 |
|
|
90,140 |
|
Profit (loss) from
operations |
74,722 |
|
(23,540 |
) |
|
(46,372 |
) |
|
(90,140 |
) |
Interest and other
income, net |
2,811 |
|
653 |
|
|
10,132 |
|
|
1,955 |
|
Net income (loss) |
$ |
77,533 |
|
$ |
(22,887 |
) |
|
$ |
(36,240 |
) |
|
$ |
(88,185 |
) |
|
|
|
|
|
|
|
|
Net income (loss) per
share, basic |
$ |
0.82 |
|
$ |
(0.74 |
) |
|
$ |
(0.39 |
) |
|
$ |
(5.89 |
) |
Net income (loss) per
share, diluted |
$ |
0.79 |
|
$ |
(0.74 |
) |
|
$ |
(0.39 |
) |
|
$ |
(5.89 |
) |
Weighted average number
of shares outstanding, basic |
94,299,096 |
|
30,743,980 |
|
|
92,621,991 |
|
|
14,964,144 |
|
Weighted average number
of shares outstanding, diluted |
97,746,224 |
|
30,743,980 |
|
|
92,621,991 |
|
|
14,964,144 |
|
Denali Therapeutics Inc.Condensed
Consolidated Balance Sheets(Unaudited)(In
thousands)
|
December 31, 2018 |
|
December 31, 2017 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash
equivalents |
$ |
77,123 |
|
$ |
218,375 |
Short-term marketable securities |
387,174 |
|
187,851 |
Prepaid
expenses and other current assets |
16,539 |
|
3,381 |
Total
current assets |
480,836 |
|
409,607 |
Long-term marketable
securities |
147,881 |
|
60,750 |
Property and equipment,
net |
25,162 |
|
14,923 |
Other non-current
assets |
8,105 |
|
1,441 |
Total assets |
$ |
661,984 |
|
$ |
486,721 |
Liabilities and
stockholders' equity |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
1,891 |
|
$ |
2,716 |
Accrued
liabilities |
8,520 |
|
5,364 |
Accrued
compensation |
9,952 |
|
5,166 |
Contract
liability |
11,427 |
|
— |
Deferred
rent |
616 |
|
855 |
Other
current liabilities |
380 |
|
63 |
Total
current liabilities |
32,786 |
|
14,164 |
Contract liability,
less current portion |
57,350 |
|
— |
Deferred rent, less
current portion |
24,532 |
|
6,294 |
Other non-current
liabilities |
471 |
|
467 |
Total liabilities |
115,139 |
|
20,925 |
Total stockholders'
equity |
546,845 |
|
465,796 |
Total liabilities and
stockholders’ equity |
$ |
661,984 |
|
$ |
486,721 |
Denali Media Relations Contacts:
Morgan Warners (202) 337-0808
mwarners@gpg.com
Lizzie Hyland (646) 495-2706
lhyland@gpg.com
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