Denali Therapeutics Inc. (Nasdaq: DNLI), a biopharmaceutical
company developing a broad portfolio of product candidates
engineered to cross the blood-brain barrier (BBB) for the treatment
of neurodegenerative diseases and lysosomal storage diseases, today
reported financial results for the fourth quarter and year ended
December 31, 2022, and provided business highlights.
“2022 was an important year for Denali, marked by transition to
late-stage clinical development in our therapeutic programs for
Parkinson's, MPS II, and ALS, as well as expansion of our Transport
Vehicle (TV)-enabled portfolio with first-in-human studies in
programs for FTD-GRN and Alzheimer’s,” said Ryan Watts, Ph.D.,
Denali's Chief Executive Officer. “We remain focused on progressing
our broad and diversified therapeutic portfolio, further validating
and expanding our TV platform, and building commercial capabilities
with the ultimate goal of delivering effective medicines to people
living with neurodegenerative and lysosomal storage diseases
worldwide.”
Recent Program Updates and Expected
Milestones:
TV-ENABLED PROGRAMS
DNL310 (ETV:IDS): MPS II (Hunter
syndrome)DNL310 is an investigational, Enzyme Transport
Vehicle (ETV)-enabled, brain-penetrant iduronate-2-sulfatase (IDS)
replacement therapy designed to address the behavioral, cognitive
and physical manifestations of MPS II (Hunter syndrome).
- In February 2023, at the WORLDSymposiumTM, Denali reported
additional interim data from the open-label, single-arm Phase 1/2
study of DNL310. Over 49 weeks of DNL310 treatment in the Phase 1/2
study, positive changes across measures of exploratory clinical
outcomes including VABS-II (adaptive behavior) and BSID-III
(cognitive capabilities) scores and global impression scales were
observed. The data also suggested that DNL310 improved hearing, as
assessed by auditory brainstem response testing. Additional
biomarker data out to 49 weeks continued to demonstrate that DNL310
enabled rapid and sustained normalization of CSF heparan sulfate to
normal healthy levels and improvement in lysosomal function
biomarkers. The DNL310 safety profile, with up to two years of
treatment, remained consistent with standard of care.
- The Phase 2/3 COMPASS study continues to enroll up to 54
participants with MPS II with and without neuronopathic disease.
Upon completion of the ongoing Phase 1/2 study, and together with
data from the global COMPASS study, this combined data package is
intended to support registration.
TAK-594/DNL593 (PTV:PGRN): Frontotemporal
Dementia-Granulin (FTD-GRN)TAK-594/DNL593 is an
investigational, Protein Transport Vehicle (PTV)-enabled,
brain-penetrant progranulin (PGRN) replacement therapy. DNL593 is
being co-developed with Takeda.
- In November 2022, Denali announced interim results from Part A
of the Phase 1/2 study demonstrating in healthy volunteers that
single doses of DNL593 resulted in substantial increases in CSF
PGRN levels and were generally well tolerated, based on blinded
safety analysis. Final Part A data is expected to be available in
mid 2023.
- Recruitment of participants with FTD-GRN in Part B (ascending
multiple doses) of the Phase 1/2 study is ongoing.
TAK-920/DNL919 (ATV:TREM2): Alzheimer’s
diseaseTAK-920/DNL919 is an investigational, Antibody
Transport Vehicle (ATV)-enabled, brain-penetrant TREM2 agonist
intended to improve microglial function as a potential treatment
for Alzheimer’s disease. DNL919 is being co-developed with
Takeda.
- Data from the ongoing Phase 1 single ascending dose study in
healthy volunteers in the Netherlands is expected by year-end
2023.
DNL126 (ETV:SGSH): MPS IIIA (Sanfilippo syndrome Type
A)DNL126 is an investigational, ETV-enabled,
brain-penetrant N-sulfoglucosamine sulfohydrolase (SGSH)
replacement therapy designed to address the behavioral, cognitive
and physical manifestations of MPS IIIA (Sanfilippo syndrome Type
A).
- In February 2023, Denali presented supportive preclinical data
at the WORLDSymposiumTM demonstrating that DNL126 reduced heparan
sulfate in a dose-dependent manner in brain and CSF in an MPS IIIA
mouse model.
- Denali anticipates submitting an investigational new drug (IND)
application in the first half of 2023, with Phase 1/2 recruitment
activities to begin in the second half of 2023.
Oligonucleotide Transport Vehicle (OTV)
platformDenali’s Oligonucleotide Transport Vehicle (OTV)
platform is designed to enable peripheral administration of
oligonucleotide therapeutics, such as antisense oligonucleotides
(ASOs), to address a wide range of neurodegenerative and other
neurological diseases.
- In January 2023, Denali announced the selection of five ASO
targets for further development with a near-term focus on advancing
two OTV candidates towards clinical development.
SMALL MOLECULE PROGRAMS
BIIB122/DNL151 (LRRK2 inhibitor): Parkinson’s disease
(idiopathic and LRKK2-positive)BIIB122/DNL151 is an
investigational small molecule inhibitor of LRRK2, one of the most
common genetic drivers of Parkinson’s disease. Targeting LRRK2 has
the potential to impact the underlying biology and slow the
progression of Parkinson’s disease. Denali and Biogen are
co-developing BIIB122.
- In October 2022, Denali and Biogen announced initiation of the
global Phase 3 LIGHTHOUSE study of BIIB122 in up to 400
participants with Parkinson's disease and a confirmed LRRK2
pathogenic variant.
- Dosing is ongoing in the global Phase 2b LUMA study in up to
640 participants with early-stage Parkinson’s disease.
SAR443820/DNL788 (CNS-penetrant RIPK1 inhibitor): ALS,
MSSAR443820/DNL788 is a CNS-penetrant, small molecule
inhibitor of RIPK1, a critical signaling protein in a canonical
inflammatory and cell death pathway. Increased RIPK1 activity in
the brain drives neuroinflammation and cell necroptosis and
contributes to neurodegeneration. Denali and Sanofi are
co-developing SAR443820.
- In January 2023, Denali announced that Sanofi initiated a Phase
2 clinical trial in multiple sclerosis (MS) for which Denali
received a milestone payment of $25 million.
- In November 2022, Sanofi presented Phase 1 healthy volunteer
data on SAR443820 at the Annual Northeast Amyotrophic Lateral
Sclerosis (NEALS) Meeting demonstrating that safety goals and
target engagement goals were achieved.
- Completion of recruitment in the global Phase 2 HIMALAYA study
for participants with amyotrophic lateral sclerosis (ALS) is
expected by the end of 2023.
DNL343 (eIF2B activator): ALSDNL343, a small
molecule activator of the eukaryotic initiation factor 2B (eIF2B),
is designed to inhibit the cellular integrated stress response
(ISR) and thereby restore protein synthesis, disperse TDP-43
aggregates, and improve neuronal survival.
- In December 2022, at the International Symposium on ALS/MND,
Denali presented results from an interim analysis of the Phase 1b
study demonstrating that once-daily oral dosing with DNL343 for 28
days was generally well tolerated and demonstrated extensive BBB
penetration as well as robust inhibition of biomarkers associated
with the ISR pathway in blood samples from study participants.
Final data from the 28-day double-blind, placebo-controlled portion
of the Phase 1b study in ALS is expected to be available in mid
2023.
- In December 2022, Denali announced the design phase of the
Phase 2/3 study of DNL343 is underway for entry into the HEALEY ALS
Platform Trial led by the Sean M. Healey & AMG Center for ALS
at Massachusetts General Hospital (MGH) in collaboration with the
Northeast ALS Consortium. The Phase 2/3 study is expected to begin
in mid 2023.
OTHER CLINICAL PROGRAMS
SAR443122/DNL758 (peripherally restricted RIPK1
inhibitor): CLE and UCSAR443122/DNL758 (eclitasertib), is
a peripherally restricted, small molecule inhibitor of RIPK1. Under
the collaboration agreement with Denali, Sanofi is solely
responsible for the development and commercialization of
peripherally restricted RIPK1 inhibitors.
- In January 2023, Denali announced that Sanofi had initiated a
Phase 2 trial of SAR443122 in patients with ulcerative colitis
(UC).
- Primary completion of the Phase 2 study in patients with
cutaneous lupus erythematosus (CLE) is anticipated in June
2023.
DISCOVERY PROGRAMSDenali continues to advance a
broad preclinical portfolio including programs enabled by the
Enzyme Transport Vehicle, the Antibody Transport Vehicle, and the
Oligonucleotide Transport Vehicle, and several small molecules
engineered to cross the BBB and intended as potential treatments
for patients with neurodegenerative diseases and lysosomal storage
diseases, and other indications.
Recent Corporate Updates:In October 2022,
Denali raised net proceeds of approximately $296.2 million through
a public offering of its common stock.
2023 Guidance on Operating Expenses:Cash, cash
equivalents, and marketable securities were $1.34 billion as of
December 31, 2022. For the full year 2023, Denali anticipates an
increase of approximately 25-30% in cash operating expenses
compared to 2022, partially offset by up to $50 million from
incoming cash and milestone payments from Denali's current
partnerships, including $25 million received from Sanofi in January
2023 for the initiation of the Phase 2 trial of SAR443820 in
patients with MS.
Participation in Upcoming Investor
Conferences:
- Cowen 43rd Annual Health Care Conference, March 6-8
- Oppenheimer 33rd Annual Healthcare Conference, March 13-15
- 2nd Annual Needham Virtual Neuroscience Forum, March 15
- Stifel 2023 CNS Days, March 28-29
- Bank of America 2023 Health Care Conference, May 9-11
- 44th Annual Global Healthcare Conference, June 12-15
Expected 2023 Key Milestones for Denali-Led
Programs
Program |
Milestone |
Timing |
DNL310 (ETV:IDS) |
- Additional interim Phase 1/2 data at WORLD
|
Feb 22 – 26 |
- Additional Interim Phase 1/2 data at SSIEM
|
Aug 29 – Sept 1 |
- Continued recruitment of participants with MPS II in the global
Phase 2/3 COMPASS study
|
2023 |
TAK-594/DNL593 (PTV:PGRN) |
- Final data from Phase 1/2 Part A healthy volunteer study
|
Mid 2023 |
- Continued recruitment of participants with FTD-GRN in Part B of
the Phase 1/2 study
|
2023 |
TAK-920/DNL919 (ATV:TREM2) |
- Data from the Phase 1 single ascending dose study in healthy
volunteers
|
Year-end 2023 |
DNL126 (ETV:SGSH) |
- Preclinical data at WORLD
|
Feb 22 – 26 |
- Submission of an IND application
|
1H 2023 |
- Phase 1/2 recruitment activities
|
2H 2023 |
DNL343 (eIF2B activator) |
- Final data from the 28-day double-blind, placebo-controlled
portion of the Phase 1b study in ALS
|
Mid 2023 |
- Initiation of Phase 2/3 study in the HEALEY ALS Platform
Trial
|
Mid 2023 |
Expected 2023 Key Milestones for Partner-Led
Programs
Program |
Milestone |
Strategic Partner |
BIIB122/DNL151(LRRK2 inhibitor) |
- Continued recruitment of participants with Parkinson’s disease
in the Phase 2b LUMA study and the Phase 3 LIGHTHOUSE study
|
Biogen |
SAR443820/DNL788(CNS-penetrant RIPK1 inhibitor) |
- Initiation of Phase 2 study in MS
|
Sanofi |
- Completion of recruitment of participants with ALS in the Phase
2 HIMALAYA study
|
SAR443122/DNL758(eclitasertib)(peripherally-restricted RIPK1
inhibitor) |
- Primary completion of Phase 2 CLE study
|
Sanofi |
- Continued recruitment of Phase 2 UC study
|
Fourth Quarter and Full Year
2022 Financial Results
Net losses were $98.7 million and $326.0 million for the quarter
and year ended December 31, 2022, compared to net losses of
$75.3 million and $290.6 million for quarter and year
ended December 31, 2021, respectively.
Collaboration revenue was $10.3 million and $108.5 million for
the quarter and year ended December 31, 2022, compared to
$12.5 million and $48.7 million for the quarter and year ended
December 31, 2021, respectively. The decrease in collaboration
revenue of $2.2 million for the quarter ended December 31, 2022,
compared to the comparative period in the prior year was primarily
due to a decrease in revenue from our collaboration with Takeda due
to option payments received in the prior year fourth quarter,
partially offset by an increase in revenue from our collaboration
with Sanofi pertaining to timing of milestone payments received in
the current year fourth quarter. The increase in collaboration
revenue of $59.8 million for the year ended December 31, 2022 was
primarily due to the performance obligation satisfaction of the Tau
program and preclinical milestone payments earned for CTA approvals
of TAK-920/DNL919 and TAK-594/DNL593 under the Takeda Collaboration
Agreement and increased milestone payments received under the
Sanofi Collaboration Agreement, partially offset by a decrease in
revenue from Biogen.
Total research and development expenses were $92.1 million and
$358.7 million for the quarter and year ended December 31, 2022,
compared to $67.9 million and $265.3 million for the quarter
and year ended December 31, 2021, respectively. The increases of
approximately $24.2 million and $93.4 million for the
quarter and year ended December 31, 2022, respectively, were
primarily attributable to an increase in personnel-related
expenses, including stock-based compensation, driven primarily by
higher headcount and equity award grants. Additionally, there were
increases in external expenses related to the progression of
Denali's portfolio, including costs related to the progress of the
ETV:IDS, PTV:PGRN and LRRK2 programs, the advancement of the TV
platform, and Denali's continued overall investment in developing a
broad pipeline. Net cost sharing reimbursements have decreased for
the quarter and year ended December 31, 2022 as cost sharing
payments owed to Biogen have increased. These net expense increases
were partially offset by a decrease in ATV:TREM2 program external
expenses due to the timing of clinical activities.
General and administrative expenses were $23.5 million and $90.5
million for the quarter and year ended December 31, 2022, compared
to $21.8 million and $79.1 million for the quarter and
year ended December 31, 2021, respectively. The increases of
approximately $1.7 million and $11.4 million for the quarter and
year ended December 31, 2022, respectively, were primarily
attributable to an increase in personnel-related expenses,
including employee compensation and stock-based compensation
expenses, driven by higher headcount and equity award grants.
Additionally, there were increases in facilities and other general
corporate services costs including IT services and subscriptions,
taxes, travel-related expenses, and consulting professional
services expenses.
About Denali TherapeuticsDenali Therapeutics is
a biopharmaceutical company developing a broad portfolio of product
candidates engineered to cross the blood-brain barrier (BBB) for
the treatment of neurodegenerative diseases and lysosomal storage
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
expectations regarding Denali’s TV technology platform; plans,
timelines, and expectations regarding DNL310, the ongoing Phase 2/3
COMPASS and Phase 1/2 studies, and the potential for the DNL310
combined data package to support registration; plans, timelines,
and expectations of both Denali and Takeda regarding DNL593 and the
ongoing Phase 1/2 study, including the timing and availability of
final data from such trial; plans, timelines, and expectations of
both Denali and Takeda regarding DNL919 and the ongoing Phase 1
study, including the timing of availability of data from such
trial; plans, timelines, and expectations related to DNL126,
including the expectation and timing of preclinical data and
potential regulatory submissions and the planned Phase 1/2 trial;
plans, timelines, and expectations regarding the advancement of OTV
candidates towards clinical development; plans, timelines and
expectations of both Denali and Biogen regarding DNL151, the
ongoing Phase 2b LUMA study, and the ongoing Phase 3 LIGHTHOUSE
study; plans, timelines and expectations regarding DNL788 of both
Denali and Sanofi, including the timing and enrollment for Phase 2
trials in MS and ALS; plans, timelines and expectations regarding
DNL343, including the timing and availability of data from the
ongoing Phase 1b study in ALS, and timing and expectations for the
planned Phase 2/3 study in ALS; plans, timeline and expectations
regarding DNL758, including timing of the Phase 2 study in CLE; 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 by the 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
transition to a late stage clinical drug development company;
Denali’s and its collaborators’ ability to complete the development
and, if approved, commercialization of its product candidates;
Denali’s and its collaborators’ 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 programs and
product candidates; Denali’s and its collaborators' 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 attract, motivate and retain qualified
managerial, scientific and medical personnel; developments relating
to Denali's competitors and its industry, including competing
product candidates and therapies; 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; Denali's ability to obtain additional capital to
finance its operations, as needed; Denali's ability to accurately
forecast future financial results in the current environment;
general economic and market conditions; and other risks and
uncertainties. Information regarding additional risks and
uncertainties may be found in Denali’s most recent Annual Report on
Form 10-K filed with the Securities and Exchange Commission (SEC)
on February 27, 2023, and Denali’s future reports to be filed with
the SEC. Denali does not undertake any obligation to update or
revise any forward-looking statements, to conform these statements
to actual results or to make changes in Denali’s expectations,
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 December 31, |
|
Twelve Months Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Collaboration revenue: |
|
|
|
|
|
|
|
Collaboration revenue from customers(1) |
$ |
10,260 |
|
|
$ |
12,514 |
|
|
$ |
105,065 |
|
|
$ |
48,657 |
|
Other collaboration revenue |
|
23 |
|
|
|
— |
|
|
|
3,398 |
|
|
|
4 |
|
Total collaboration revenue |
|
10,283 |
|
|
|
12,514 |
|
|
|
108,463 |
|
|
|
48,661 |
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development(2) |
|
92,111 |
|
|
|
67,876 |
|
|
|
358,732 |
|
|
|
265,353 |
|
General and administrative |
|
23,516 |
|
|
|
21,759 |
|
|
|
90,475 |
|
|
|
79,059 |
|
Total operating expenses |
|
115,627 |
|
|
|
89,635 |
|
|
|
449,207 |
|
|
|
344,412 |
|
Loss from operations |
|
(105,344 |
) |
|
|
(77,121 |
) |
|
|
(340,744 |
) |
|
|
(295,751 |
) |
Interest and other income,
net |
|
6,660 |
|
|
|
1,285 |
|
|
|
14,774 |
|
|
|
4,595 |
|
Loss before income taxes |
|
(98,684 |
) |
|
|
(75,836 |
) |
|
|
(325,970 |
) |
|
|
(291,156 |
) |
Income tax benefit
(expense) |
|
6 |
|
|
|
575 |
|
|
|
(21 |
) |
|
|
575 |
|
Net loss |
$ |
(98,678 |
) |
|
$ |
(75,261 |
) |
|
$ |
(325,991 |
) |
|
$ |
(290,581 |
) |
Net loss per share, basic and
diluted |
$ |
(0.75 |
) |
|
$ |
(0.62 |
) |
|
$ |
(2.60 |
) |
|
$ |
(2.39 |
) |
Weighted average number of
shares |
|
132,877,411 |
|
|
122,164,561 |
|
|
125,530,703 |
|
|
121,524,795 |
|
outstanding, basic and diluted |
|
|
|
__________________________________________________
(1) |
Includes related-party collaboration revenue from a customer of
$0.3 million and $3.2 million for the quarter and year
ended December 31, 2022, respectively, and $1.2 million and
$3.7 million for the quarter and year ended December 31, 2021,
respectively. |
(2) |
Includes expense for cost sharing
payments due to a related party of $4.4 million and
$8.2 million for the quarter and year ended December 31, 2022,
respectively, and an offset to expense from related-party cost
sharing reimbursements of $1.2 million and $6.5 million
for the quarter and year ended December 31, 2021,
respectively. |
Denali Therapeutics
Inc.Condensed Consolidated
Balance Sheets(Unaudited)(In
thousands)
|
December 31, 2022 |
|
December 31, 2021 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
218,044 |
|
$ |
293,477 |
Short-term marketable securities |
|
1,118,171 |
|
|
571,930 |
Cost sharing reimbursements due from related party |
|
— |
|
|
1,226 |
Prepaid expenses and other current assets |
|
36,104 |
|
|
30,601 |
Total current assets |
|
1,372,319 |
|
|
897,234 |
Long-term marketable
securities |
|
— |
|
|
425,449 |
Property and equipment,
net |
|
44,087 |
|
|
38,865 |
Operating lease right-of-use
assets |
|
30,437 |
|
|
30,743 |
Other non-current assets |
|
13,399 |
|
|
11,871 |
Total assets |
$ |
1,460,242 |
|
$ |
1,404,162 |
Liabilities and
stockholders' equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
2,790 |
|
$ |
4,779 |
Cost sharing payments due to related party |
|
4,388 |
|
|
— |
Accrued expenses and other current liabilities |
|
66,691 |
|
|
53,165 |
Related-party contract liability, current |
|
290,053 |
|
|
292,386 |
Contract liabilities, current |
|
— |
|
|
27,915 |
Total current liabilities |
|
363,922 |
|
|
378,245 |
Related-party contract
liability, less current portion |
|
479 |
|
|
1,295 |
Contract liabilities, less
current portion |
|
— |
|
|
3,398 |
Operating lease liabilities,
less current portion |
|
53,032 |
|
|
58,554 |
Other non-current
liabilities |
|
379 |
|
|
379 |
Total liabilities |
|
417,812 |
|
|
441,871 |
Total stockholders'
equity |
|
1,042,430 |
|
|
962,291 |
Total liabilities and
stockholders’ equity |
$ |
1,460,242 |
|
$ |
1,404,162 |
Investor Relations Contact:Laura Hansen,
Ph.D.Vice President, Investor Relations(650)
452-2747hansen@dnli.com
Media Contact:Angela Salerno-RobinSenior Vice
President, Media Relations, Healthcaredna Communications (212)
445-8219Asalerno-robin@dna-comms.com
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