Denali Therapeutics Inc. (NASDAQ: DNLI), a biopharmaceutical
company developing a broad portfolio of product candidates
engineered to cross the blood-brain barrier (BBB) for
neurodegenerative diseases, today reported financial results for
the first quarter ended March 31, 2021, and provided business
highlights.
“Our programs have reached a number of exciting milestones so
far this year across our broad portfolio of targeted therapeutics
for neurodegenerative diseases,” said Ryan Watts, Ph.D., Denali’s
Chief Executive Officer. “We remain focused on advancing our lead
clinical programs including DNL310 for Hunter syndrome, DNL151
(BIIB122) in collaboration with Biogen for Parkinson's disease, and
DNL343 for amyotrophic lateral sclerosis (ALS). In addition, based
on human biomarker proof of concept achieved with DNL310, we see
significant potential in using our Transport Vehicle (TV)
technology to create new, effective biologic therapeutics
previously not possible due to limitations posed by the blood-brain
barrier, and we continue to rigorously advance additional
TV-enabled programs towards the clinic."
Recent Business Highlights
Achieved clinical and regulatory milestones with
DNL310: In February 2021, Denali reported three-month data
from Cohort A (n=5) in a Phase 1/2 study of DNL310, Denali’s lead
TV-enabled brain-penetrant enzyme replacement therapy, in patients
with Hunter syndrome (MPS II). The data showed that DNL310
treatment resulted in normalization of glycosaminoglycan (GAG)
levels in cerebrospinal fluid and a safety and tolerability profile
consistent with standard of care enzyme replacement therapy. In
March 2021, Denali announced that the U.S. Food and Drug
Administration (FDA) granted Fast Track designation to DNL310 for
the treatment of patients with Hunter syndrome. Denali plans to
report six-month data from Cohort A in mid-2021 at a medical
conference.
Met safety and biomarker goals in DNL151 (BIIB122) Phase
1/1b studies: In May 2021, Denali presented results from
two studies of its small molecule LRRK2 inhibitor, DNL151
(BIIB122), a Phase 1 study in healthy volunteers and a Phase 1b
study in patients with Parkinson's disease, at the International
Association of Parkinsonism and Related Disorders Virtual Congress
held on May 1-4. DNL151 (BIIB122) was generally well tolerated, and
target engagement and pathway engagement biomarker goals were met.
Denali and Biogen plan to initiate late-stage clinical development
of DNL151 (BIIB122) in patients with Parkinson's disease by
year-end 2021.
Met safety and pathway engagement biomarker goals in
DNL343 Phase 1 healthy volunteer study: Based on interim
data from the ongoing Phase 1 single- and multiple-ascending-dose
study of Denali’s small molecule EIF2B activator, DNL343, in
healthy volunteers, safety and pathway engagement biomarker goals
of the study were met. A maximum tolerated dose was not reached,
and an additional multiple dose cohort has been added to the study
to further explore the therapeutic window. Based on these data,
Denali plans to initiate a Phase 1b study in patients with ALS in
the second half of 2021.
DNL758 (SAR443122) advancing into Phase 2 study for
cutaneous lupus erythematosus (CLE): In February 2021,
Denali announced its partner Sanofi's decision, upon completion of
a Phase 1b study in hospitalized adult patients with severe
COVID-19 lung disease, to cease further development of DNL758
(SAR443122), a peripherally-restricted small molecule inhibitor of
RIPK1, in COVID-19 based on the rapidly evolving landscape of
treatment and prevention options for COVID-19. Although the Phase
1b study did not meet its primary endpoint, DNL758 (SAR443122) was
generally well tolerated and did generate positive signals of
relevant biological effect. Sanofi plans to commence dosing in a
Phase 2 study of DNL758 (SAR443122) in CLE patients in the first
half of 2021.
Summary Table of Upcoming 2021 Expected Key
Milestones
Timing |
Investigational DrugCandidate |
Therapeutic Area |
Expected Milestone |
1H 2021 |
RIPK1 inhibitor (DNL758/SAR443122) |
CLE |
Commence dosing in Phase 2 study in CLE patients (Sanofi) |
Mid 2021 |
ETV:IDS (DNL310) |
Hunter syndrome (MPS II) |
6-month data from Cohort A of Phase 1/2 study |
2H 2021 |
EIF2B activator (DNL343) |
ALS, FTD |
Initiate Phase 1b study in ALS patients |
2H 2021 |
RIPK1 inhibitor (DNL788/SAR443820) |
ALS, Alzheimer’s disease, MS |
Phase 1 data in healthy volunteers (Sanofi) |
Late 2021 |
LRRK2 inhibitor (DNL151/BIIB122) |
Parkinson’s disease |
Initiate late-stage clinical development in Parkinson's
patients |
Late 2021 |
PTV:PGRN (DNL593) |
FTD |
File IND application or CTA |
Late 2021/Early 2022 |
ATV:TREM2 (DNL919) |
Alzheimer’s disease |
File IND application or CTA |
Participation in Upcoming Investor
Conferences
Members of Denali’s management will participate in the following
upcoming investor conferences:
- UBS Global Healthcare Virtual Conference, May 24-26
- Jefferies Healthcare Conference, June 1-3
- Goldman Sachs 42nd Annual Global Healthcare Conference, June
8-10
- 2021 Wedbush PacGrow Healthcare Conference, August 10-11
First Quarter 2021 Financial Results
For the three months ended March 31, 2021, Denali reported a net
loss of $70.0 million compared with a net loss of
$56.8 million for the three months ended March 31, 2020.
Collaboration revenue was $7.9 million for the three months
ended March 31, 2021, compared to $3.6 million for the three
months ended March 31, 2020. The increase of $4.3 million in
collaboration revenue was primarily due to an increase in revenue
from our collaboration with Takeda driven by increased costs
incurred in the underlying partnered programs.
Total research and development expenses were $60.2 million for
the three months ended March 31, 2021, compared to
$51.0 million for the three months ended March 31, 2020. The
increase of approximately $9.2 million was primarily
attributable to an increase in personnel-related expenses,
including stock-based compensation, driven primarily by higher
headcount and additional equity award grants at a higher market
price. Additionally, there were increases in external expenses
related to progression of Denali's portfolio, including costs
related to the progress of the EIF2B and ETV:IDS programs in the
clinic in 2021. Other increases included TV platform and other
program external expenses reflecting the increased investment in
Denali's pipeline. These increases were partially offset by a
decrease in the LRRK2 program external expenses primarily due to
completion of the Phase 1 and 1b studies, as well as cost sharing
reimbursements from Biogen under the Biogen collaboration
agreement, and a decrease in other external research and
development expenses.
General and administrative expenses were $18.9 million for the
three months ended March 31, 2021, compared to $12.6 million
for the three months ended March 31, 2020. The increase of
approximately $6.3 million was primarily attributable to an
increase in personnel-related expenses, including stock-based
compensation, driven primarily by higher headcount and additional
equity award grants at a higher market price. Additionally, there
were increases in legal and other professional services expenses,
including accounting and tax expenses associated with assessing the
Biogen collaboration agreement, and other general costs such as
insurance, tax and IT related expenses.
Cash, cash equivalents, and marketable securities were $1.45
billion as of March 31, 2021.
About Denali Therapeutics
Denali Therapeutics is a biopharmaceutical company developing a
broad portfolio of product candidates engineered to cross the
blood-brain barrier (BBB) for neurodegenerative diseases. Denali
pursues new treatments by rigorously assessing genetically
validated targets, engineering delivery across the BBB and guiding
development through biomarkers that demonstrate target and pathway
engagement. 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, business plans, business strategy, product
candidates, planned preclinical studies and clinical trials and
expected milestones; plans to conduct clinical development
activities across various programs; plans, timelines and
expectations related to DNL310 and Denali’s TV technology; plans,
timelines and expectations related to DNL151 of both Denali and
Biogen, including with respect to initiation of late-stage clinical
development; plans, timelines and expectations related to DNL343,
including with respect to the initiation of future clinical trials;
plans, timelines and expectations related to DNL788 and DNL758 of
both Denali and Sanofi, including with respect to the availability
of data and the initiation of future clinical trials; Denali’s
expectations regarding DNL593 and DNL919 and plans and expectations
regarding planned regulatory filings; Denali’s priorities,
regulatory approvals, timing and likelihood of success and
expectations regarding collaborations; 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: any and all risks to Denali’s business and operations
caused directly or indirectly by the evolving COVID-19 pandemic;
risk of the occurrence of any event, change or other circumstance
that could give rise to the termination of Denali’s agreements with
Sanofi, Takeda, Biogen or any of Denali’s other collaboration
agreements; Denali’s early stages of clinical drug development;
Denali’s and its partners’ ability to complete the development and,
if approved, commercialization of its product candidates; Denali’s
and its partners’ ability to enroll patients in its ongoing and
future clinical trials; Denali’s reliance on third parties for the
manufacture and supply of its product candidates for clinical
trials; Denali’s dependence on successful development of its
blood-brain barrier platform technology and its current programs
and product candidates; Denali’s and its partners' ability to
conduct or complete clinical trials on expected timelines; the risk
that preclinical profiles of Denali’s product candidates may not
translate in clinical trials; the potential for clinical trials to
differ from preclinical, early clinical, preliminary or expected
results; the risk of significant adverse events, toxicities or
other undesirable side effects; the uncertainty that product
candidates will receive regulatory approval necessary to be
commercialized; Denali’s ability to continue to create a pipeline
of product candidates or develop commercially successful products;
Denali’s ability to obtain, maintain, or protect intellectual
property rights related to its product candidates; implementation
of Denali’s strategic plans for its business, product candidates
and blood-brain barrier platform technology; and other risks,
including those described in Denali’s most recent Annual Report on
Form 10-K filed with the Securities and Exchange Commission (SEC)
on February 26, 2021 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 March 31, |
|
2021 |
|
2020 |
Collaboration revenue: |
|
|
|
Collaboration revenue from customers(1) |
$ |
7,922 |
|
|
$ |
3,552 |
|
Other collaboration revenue |
1 |
|
|
52 |
|
Total collaboration revenue |
7,923 |
|
|
3,604 |
|
Operating expenses: |
|
|
|
Research and development(2) |
60,207 |
|
|
51,016 |
|
General and administrative |
18,936 |
|
|
12,555 |
|
Total operating expenses |
79,143 |
|
|
63,571 |
|
Loss from operations |
(71,220 |
) |
|
(59,967 |
) |
Interest and other income,
net |
1,179 |
|
|
3,069 |
|
Loss before income taxes |
(70,041 |
) |
|
(56,898 |
) |
Income tax benefit |
— |
|
|
135 |
|
Net loss |
$ |
(70,041 |
) |
|
$ |
(56,763 |
) |
Net loss per share, basic and
diluted |
$ |
(0.58 |
) |
|
$ |
(0.55 |
) |
Weighted average number of
shares outstanding, basic and diluted |
120,884,665 |
|
|
102,419,718 |
|
(1) |
Includes
related party collaboration revenue from customer of $0.9 million
for the three months ended March 31, 2021. |
(2) |
Includes an offset to expense from related party cost
reimbursement of $2.5 million for the three months ended March 31,
2021. |
Denali Therapeutics Inc.Condensed
Consolidated Balance Sheets(Unaudited)(In
thousands)
|
March 31, 2021 |
|
December 31, 2020 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
435,321 |
|
|
$ |
507,144 |
|
Short-term marketable securities |
977,827 |
|
|
962,553 |
|
Cost sharing reimbursements due from related party |
2,511 |
|
|
5,674 |
|
Prepaid expenses and other current assets |
15,963 |
|
|
20,284 |
|
Total current assets |
1,431,622 |
|
|
1,495,655 |
|
Long-term marketable
securities |
38,885 |
|
|
32,699 |
|
Property and equipment,
net |
41,376 |
|
|
40,846 |
|
Operating lease right-of-use
asset |
32,236 |
|
|
32,618 |
|
Other non-current assets |
3,739 |
|
|
2,462 |
|
Total assets |
$ |
1,547,858 |
|
|
$ |
1,604,280 |
|
Liabilities and
stockholders' equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
1,626 |
|
|
$ |
1,071 |
|
Accrued compensation |
4,963 |
|
|
20,503 |
|
Accrued clinical costs |
5,049 |
|
|
6,497 |
|
Accrued manufacturing costs |
13,342 |
|
|
7,140 |
|
Other accruals and other current liabilities |
8,299 |
|
|
8,315 |
|
Operating lease liability, current |
4,876 |
|
|
4,690 |
|
Related party contract liability, current |
3,569 |
|
|
3,569 |
|
Contract liabilities, current |
12,886 |
|
|
19,914 |
|
Total current liabilities |
54,610 |
|
|
71,699 |
|
Related party contract
liability, less current portion |
292,956 |
|
|
293,849 |
|
Contract liabilities, less
current portion |
31,322 |
|
|
23,325 |
|
Operating lease liability,
less current portion |
62,916 |
|
|
64,175 |
|
Other non-current
liabilities |
701 |
|
|
701 |
|
Total liabilities |
442,505 |
|
|
453,749 |
|
Total stockholders'
equity |
1,105,353 |
|
|
1,150,531 |
|
Total liabilities and
stockholders’ equity |
$ |
1,547,858 |
|
|
$ |
1,604,280 |
|
Investor Relations Contact:
Laura Hansen, Ph.D.Vice President, Investor Relations(650)
452-2747hansen@dnli.com
Media Contacts:
Lizzie Hyland(646)
495-2706lizzie.hyland@fgh.com
or
Morgan Warners(202)
295-0124morgan.warners@fgh.com
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