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 second quarter ended June 30,
2024, and provided business highlights.
"In the second quarter, our Enzyme Transport Vehicle franchise
gained additional momentum with continued engagement with the FDA
on an accelerated approval pathway for tividenofusp alfa (DNL310,
ETV:IDS) in MPS II and the FDA's selection of DNL126 (ETV:SGSH) in
MPS IIIA for the START program," said Ryan Watts, Ph.D., Chief
Executive Officer of Denali Therapeutics. “Today, we are also
pleased to share that we have regained the rights to our TfR-based
ATV:Abeta program from Biogen, thereby expanding our opportunities
for addressing Alzheimer's disease with a potential best-in-class
approach. We look forward to continuing to make significant
progress as leaders in the promising and growing field of
BBB-crossing therapeutics."
Second Quarter 2024 and Recent Program
Updates
Late-stage and mid-stage clinical programs
Tividenofusp alfa (DNL310): Enzyme
Transport Vehicle (ETV)-enabled, iduronate-2-sulfatase (IDS)
replacement therapy in development for MPS II (Hunter syndrome)
- In April, completed enrollment of 47 participants with MPS II
in the Phase 1/2 open-label study.
- COMPASS, the global Phase 2/3 study, is expected to complete
enrollment in 2024.
- In July, Molecular Genetics and Metabolism published a
review co-authored by Denali's Chief Medical Officer, Carole Ho,
M.D., titled, "Community consensus for heparan sulfate as a
biomarker to support accelerated approval in neuronopathic
mucopolysaccharidoses", which summarizes many of the presentations
at the Reagan-Udall Foundation workshop held in February 2024 and
provides a perspective on the path forward for neuronopathic MPS
disorders.
- Following the Reagan-Udall Foundation workshop, Denali received
written communication from the Center for Drug Evaluation and
Research (CDER) division of the FDA indicating openness to
discussing an accelerated approval pathway for tividenofusp alfa in
MPS II with cerebrospinal fluid heparan sulfate (CSF HS) as a
surrogate biomarker. Denali looks forward to continued engagement
with CDER regarding Denali’s intention to file for approval of
tividenofusp alfa using the accelerated approval pathway. Denali
will provide an update in 2H 2024.
DNL343: eIF2B activator in development for the
treatment of amyotrophic lateral sclerosis (ALS)
- In May, the Sean M. Healey & AMG Center for ALS at
Massachusetts General Hospital (MGH) in collaboration with the
Northeast ALS Consortium (NEALS) announced that enrollment is
complete in Regimen G (DNL343) of the Phase 2/3 HEALEY ALS Platform
Trial.
SAR443820/DNL788: CNS-penetrant RIPK1 inhibitor
in development for the treatment of multiple sclerosis (MS)
- Sanofi is evaluating SAR443820/DNL788 in a Phase 2 study in
participants with MS, which is fully enrolled.
BIIB122/DNL151: LRRK2 inhibitor in development
for the treatment of Parkinson’s disease (PD)
- Biogen is conducting the ongoing global Phase 2b LUMA study of
BIIB122 in participants with early-stage Parkinson’s disease.
- Denali plans to initiate a global Phase 2a study in 2024 to
evaluate safety and biomarkers associated with BIIB122 in
participants with Parkinson’s disease and confirmed pathogenic
variants of LRRK2. This study is being funded under the
Collaboration and Development Funding Agreement with a third
party.
Eclitasertib (SAR443122/DNL758): Peripheral
RIPK1 inhibitor in development for the treatment of ulcerative
colitis (UC)
- Sanofi is conducting the ongoing Phase 2 study of
SAR443122/DNL758 in participants with UC.
Early-stage clinical and preclinical
programs
DNL126: ETV-enabled N-sulfoglucosamine
sulfohydrolase (SGSH) replacement therapy in development for the
treatment of MPS IIIA (Sanfilippo syndrome Type A)
- In June, Denali announced that the CDER selected DNL126 for
participation in the FDA's Support for clinical Trials Advancing
Rare disease Therapeutics (START) Pilot Program to further
accelerate the development of novel drug and biological products
for rare diseases. Participation in START is expected to facilitate
and accelerate development of DNL126.
- Phase 1/2 biomarker and safety data are expected by the end of
2024.
TAK-594/DNL593: Protein Transport Vehicle
(PTV)-enabled progranulin (PGRN) replacement therapy in development
for the treatment of frontotemporal dementia-granulin (FTD-GRN)
- Denali has finalized the protocol amendment for the Phase 1/2
study and prescreening of participants for Cohort B2 is
ongoing.
Oligonucleotide Transport Vehicle (OTV)
platform
- Denali is advancing OTV:MAPT, targeting tau for Alzheimer’s
disease, and OTV:SNCA, targeting alpha-synuclein for Parkinson’s
disease, in the investigational new drug (IND)-enabling stage of
development.
Antibody Transport Vehicle Amyloid beta (ATV:Abeta)
program
- Today, Denali also announced that Biogen terminated its license
to the ATV:Abeta program enabled by Denali’s TfR-targeting
technology against amyloid beta for the potential treatment of
Alzheimer's disease and granted Denali rights to data generated
during the collaboration. As a result of the termination, all
rights to develop, manufacture, perform medical affairs activities,
and commercialize new TfR-targeting ATV:Abeta therapeutics reverted
to Denali. Biogen licensed Denali's TfR-targeting ATV:Abeta program
in April 2023 having exercised an option that was part of the 2020
collaboration agreement between the two companies. Biogen’s
decision was not related to any efficacy or safety concerns with
the Transport Vehicle platform.
- Denali is working to develop the next generation of
anti-amyloid beta therapeutics with ATV:Abeta, which is designed to
increase exposure of the therapeutic antibody and achieve broad
biodistribution in the brain with the potential for improved
efficacy and safety. Preclinical data demonstrated potential for a
wider therapeutic window compared to a standard antibody, with
superior plaque decoration and reduction and very low rates of
amyloid related imaging abnormalities (ARIA). These data are
included in a recent manuscript posted on bioRxiv.
- Denali plans to advance a TfR-targeting ATV:Abeta molecule as
well as a CD98hc-targeting ATV:Abeta molecule into development for
Alzheimer's disease.
Discovery programs
Denali applies its deep scientific expertise in
neurodegeneration biology and the BBB to discover and develop
medicines and platforms with the focus on programs enabled by the
TV technology and targeting neurodegenerative disease, including
Alzheimer’s and Parkinson’s, and lysosomal storage diseases.
- In July, Denali posted the manuscript
titled, "Fc-engineered large molecules targeting the blood-brain
barrier transferrin receptor and CD98hc have distinct central
nervous system and peripheral biodistribution compared to standard
antibodies" on bioRxiv. Using comprehensive and unbiased
approaches, Denali scientists reveal distinct biodistribution of
the TfR and CD98hc transport vehicle delivery platforms from the
brain single-cell level all the way to the whole body.
Participation in Upcoming Investor
Conferences
- BTIG Virtual Biotechnology Conference,
August 5-6
- 2024 Wedbush PacGrow Healthcare
Conference, August 13-14
- Morgan Stanley 22nd Annual Global
Healthcare Conference, September 4-6
- H.C. Wainwright 26th Annual Global
Investment Conference, September 9-11
- 2024 Cantor Global Healthcare
Conference, September 17-19
Second Quarter
2024 Financial Results
Net loss was $99.0 million for the quarter ended June 30, 2024,
compared to net income of $183.4 million for the quarter ended
June 30, 2023.
There was no collaboration revenue for the quarter ended June
30, 2024, compared to $294.1 million for the quarter ended
June 30, 2023. The decrease in collaboration revenue was primarily
due to $293.9 million of revenue recognized in the quarter
ended June 30, 2023 as a result of Biogen exercising their option
to license our ATV:Abeta program.
Total research and development expenses were $91.4 million for
the quarter ended June 30, 2024, compared to $97.5 million for
the quarter ended June 30, 2023. The decrease of approximately
$6.1 million for the quarter ended June 30, 2024 was primarily
attributable to a decrease in personnel and external expenses
associated with the divestiture of the Company's preclinical small
molecule programs. There were also decreases in external expenses
associated with the ATV:TREM2 and PTV:PGRN programs due to the
discontinuation of clinical development of TAK-920/DNL919
(ATV:TREM2) in Alzheimer’s disease and voluntary pause of Part B in
the TAK-594/DNL593 (PTV:PGRN) Phase 1/2 study, respectively.
Additionally, the Company commenced recognition of research funding
for the LRRK2 program from the Collaboration and Development
Funding Agreement executed in January 2024. These decreases were
partially offset by increases in costs in various clinical stage
programs, including eIF2B, ETV:SGSH and ETV:IDS reflecting the
continued progress of these programs in clinical trials.
General and administrative expenses were $25.2 million for the
quarter ended June 30, 2024, compared to $26.1 million for the
quarter ended June 30, 2023. The decrease of $0.9 million for the
quarter ended June 30, 2024 was primarily attributable to a
decrease in personnel-related expenses consisting of employee
compensation and stock-based compensation expense, partially offset
by combined increases of $0.2 million in professional
services, facilities and other corporate costs.
Cash, cash equivalents, and marketable securities were
approximately $1.35 billion as of June 30, 2024.
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 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; statements
made by Denali’s Chief Executive Officer; plans, timelines, and
expectations regarding DNL310 and the ongoing Phase 2/3 COMPASS and
Phase 1/2 studies, the timing and likelihood of accelerated
approval, and the timing and availability of program updates; plans
and timelines regarding DNL343, including in Regimen G of the Phase
2/3 HEALEY ALS Platform Trial; plans, timelines, and expectations
of both Denali and Sanofi regarding DNL788, including the Phase 2
study in MS; plans, timelines, and expectations regarding DNL151,
including with respect to the ongoing LUMA study as well as
enrollment and timing of the proposed Phase 2a study in PD patients
with LRRK2 mutations; expectations regarding DNL758, including the
ongoing Phase 2 study in patients with UC; plans, timelines, and
expectations related to DNL126, including the timing and
availability of data in the ongoing Phase 1/2 study and the impact
on development of participation in START; plans, timelines, and
expectations of both Denali and Takeda regarding DNL593 and the
ongoing Phase 1/2 study; plans, timelines, and expectations
regarding the advancement of OTV:MAPT and OTV:SNCA towards clinical
development; plans, timelines, and expectations regarding the
ATV:Abeta program, including its therapeutic potential and the
clinical advancement of ATV:Abeta molecules; plans and expectations
for Denali's preclinical programs; Denali's future operating
expenses and anticipated cash runway; Denali's PIPE financing and
its anticipated proceeds; and Denali's participation in upcoming
investor conferences. 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 adverse
economic conditions; 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, or 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;
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; and other risks and uncertainties, including
those described in Denali's most recent Annual and Quarterly
Reports on Forms 10-K and 10-Q filed with the Securities and
Exchange Commission (SEC) on February 28, 2024 and May 7, 2024,
respectively, 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 June 30, |
|
Six Months Ended June 30, |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Collaboration revenue: |
|
|
|
|
|
|
|
Collaboration revenue from customers(1) |
$ |
— |
|
|
$ |
294,123 |
|
|
$ |
— |
|
|
$ |
329,264 |
|
Total collaboration revenue |
|
— |
|
|
|
294,123 |
|
|
|
— |
|
|
|
329,264 |
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development(2) |
|
91,399 |
|
|
|
97,520 |
|
|
|
198,415 |
|
|
|
226,336 |
|
General and administrative |
|
25,194 |
|
|
|
26,120 |
|
|
|
50,430 |
|
|
|
53,260 |
|
Total operating expenses |
|
116,593 |
|
|
|
123,640 |
|
|
|
248,845 |
|
|
|
279,596 |
|
Gain from divestiture of small
molecule programs |
|
— |
|
|
|
— |
|
|
|
14,537 |
|
|
|
— |
|
Income (loss) from
operations |
|
(116,593 |
) |
|
|
170,483 |
|
|
|
(234,308 |
) |
|
|
49,668 |
|
Interest and other income,
net |
|
17,567 |
|
|
|
12,900 |
|
|
|
33,480 |
|
|
|
23,934 |
|
Net income (loss) |
$ |
(99,026 |
) |
|
$ |
183,383 |
|
|
$ |
(200,828 |
) |
|
$ |
73,602 |
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
Net income (loss) per share,
basic |
$ |
(0.59 |
) |
|
$ |
1.34 |
|
|
$ |
(1.26 |
) |
|
$ |
0.54 |
|
Net income (loss) per share,
diluted |
$ |
(0.59 |
) |
|
$ |
1.30 |
|
|
$ |
(1.26 |
) |
|
$ |
0.52 |
|
Weighted-average shares used
in calculating: |
|
|
|
|
|
|
|
Net income (loss) per share,
diluted |
|
168,831,329 |
|
|
|
137,047,227 |
|
|
|
159,117,759 |
|
|
|
136,787,321 |
|
Weighted average number of
shares outstanding, basic and diluted |
|
168,831,329 |
|
|
|
140,930,625 |
|
|
|
159,117,759 |
|
|
|
140,550,226 |
|
__________________________________________________ |
(1) |
|
Includes
related-party collaboration revenue from customers of
$294.1 million and $294.3 million for the three and six
months ended June 30, 2023, respectively. |
(2) |
|
Includes expenses for cost sharing payments due to a related
party of $7.0 million and $11.1 million for the three and
six months ended June 30, 2023, respectively. |
|
Denali Therapeutics Inc.Condensed
Consolidated Balance Sheets(Unaudited)(In
thousands)
|
June 30, 2024 |
|
December 31, 2023 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
74,679 |
|
|
$ |
127,106 |
|
Short-term marketable securities |
|
821,365 |
|
|
|
907,405 |
|
Prepaid expenses and other current assets |
|
32,339 |
|
|
|
29,626 |
|
Total current assets |
|
928,383 |
|
|
|
1,064,137 |
|
Long-term marketable
securities |
|
450,994 |
|
|
|
— |
|
Property and equipment,
net |
|
48,077 |
|
|
|
45,589 |
|
Operating lease right-of-use
asset |
|
24,533 |
|
|
|
26,048 |
|
Other non-current assets |
|
50,578 |
|
|
|
18,143 |
|
Total assets |
$ |
1,502,565 |
|
|
$ |
1,153,917 |
|
Liabilities and
stockholders' equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
13,936 |
|
|
$ |
9,483 |
|
Accrued clinical and other research & development costs |
|
19,915 |
|
|
|
19,035 |
|
Accrued manufacturing costs |
|
7,111 |
|
|
|
15,462 |
|
Other accrued costs and current liabilities |
|
6,013 |
|
|
|
5,152 |
|
Accrued compensation |
|
9,555 |
|
|
|
21,590 |
|
Operating lease liability, current |
|
7,771 |
|
|
|
7,260 |
|
Deferred research funding liability |
|
10,232 |
|
|
|
— |
|
Total current liabilities |
|
74,533 |
|
|
|
77,982 |
|
Operating lease liability,
less current portion |
|
40,981 |
|
|
|
44,981 |
|
Total liabilities |
|
115,514 |
|
|
|
122,963 |
|
Total stockholders'
equity |
|
1,387,051 |
|
|
|
1,030,954 |
|
Total liabilities and
stockholders’ equity |
$ |
1,502,565 |
|
|
$ |
1,153,917 |
|
|
Investor and Media Contact:
Laura Hansen, Ph.D.Vice President, Investor Relations(650)
452-2747hansen@dnli.com
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