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 first quarter ended March 31,
2024, and provided business highlights.
"It has been an impactful first quarter, and we are excited
about multiple opportunities to accelerate and expand our
portfolio. We presented new positive two-year clinical data on
tividenofusp alfa in MPS II at WORLDSymposiumTM, and we are
encouraged by recent interactions with the FDA about the potential
path to patients," said Ryan Watts, Ph.D., Chief Executive Officer
of Denali Therapeutics. “We also initiated the first clinical trial
with our second enzyme replacement therapy, DNL126, for children
with MPS IIIA, and we achieved an important milestone with our
eIF2B agonist program, DNL343, completing enrollment in the Phase
2/3 HEALEY ALS Platform Trial. With a focus on our Transport
Vehicle platform and additional capital raised, we are well
positioned to lead in the promising field of BBB-crossing
therapeutics for people living with neurodegenerative and lysosomal
storage diseases."
First 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 February, new positive data from the ongoing Phase 1/2 study
of tividenofusp alfa in MPS II were presented at the 20th Annual
WORLDSymposiumTM demonstrating sustained normalization of heparan
sulfate in cerebrospinal fluid (CSF HS), robust and sustained
reductions in biomarkers of lysosomal dysfunction and neuronal
damage (NfL; neurofilament light), and improvements and
stabilization of multiple clinical outcomes measures over two years
of treatment.
- Also in February, Denali participated in the Reagan-Udall
Foundation for the Food and Drug Administration (FDA) workshop on
CSF HS as a potential surrogate biomarker to support accelerated
approval in MPS.
- Based on continued dialogue with the Center for Drug Evaluation
and Research (CDER) division of the FDA, Denali believes the
division may be open to discussing an accelerated path for
tividenofusp alfa. Denali looks forward to continuing the
productive dialogue with CDER and, in parallel, conducting the
global Phase 2/3 COMPASS study, which is expected to complete
enrollment in 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.
- In February, Sanofi discontinued development of
SAR443820/DNL788 in ALS based on the results of the Phase 2
HIMALAYA study, which did not meet the primary endpoint.
BIIB122/DNL151: LRRK2 inhibitor in development
for the treatment of Parkinson’s disease (PD)
- In February, Denali announced the execution of a Collaboration
and Development Funding Agreement with a third party related to a
global Phase 2a study of BIIB122/DNL151, which Denali plans to
solely operationalize to evaluate safety and biomarkers associated
with BIIB122 in participants with Parkinson’s disease and confirmed
pathogenic variants of LRRK2. Denali plans to initiate the Phase 2a
study in 2024.
- Biogen is conducting the ongoing global Phase 2b LUMA study of
BIIB122 in participants with early-stage Parkinson’s disease.
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 February, Denali announced initiation of dosing in the Phase
1/2 study of DNL126 in participants with MPS IIIA and presented
supportive preclinical data at WORLDSymposium™.
- 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)
- In January, Denali announced a voluntary pause in the DNL593
Phase 1/2 study in participants with FTD-GRN to implement protocol
modifications and expects the study to resume this year.
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
- ATV:Abeta using Denali's TfR-targeting TV technology is
licensed by Biogen and is in the IND-enabling stage of
development.
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.
Corporate Updates
- In February, Denali announced completion of a private
investment in public equity (PIPE) financing with gross proceeds of
$500 million.
- In January, Denali announced the intention to divest the
company's preclinical small molecule portfolio, which was completed
on March 1, 2024.
Participation in Upcoming Investor
Conferences
- BofA Securities Healthcare Conference 2024, May 14-16
- Jefferies Global Healthcare Conference, June 5-6
- Goldman Sachs 45th Annual Global Healthcare Conference, June
10-13
First Quarter
2024 Financial Results
Net loss was $101.8 million for the quarter ended March 31,
2024, compared to net loss of $109.8 million for the quarter
ended March 31, 2023.
There was no collaboration revenue for the quarter ended March
31, 2024, compared to $35.1 million for the quarter ended
March 31, 2023. The decrease in collaboration revenue was primarily
due to decreases in revenue earned under the Sanofi Collaboration
and Takeda Collaboration of $25.0 million and $10.0 million,
respectively.
Total research and development expenses were $107.0 million for
the quarter ended March 31, 2024, compared to $128.8 million
for the quarter ended March 31, 2023. The decrease of approximately
$21.8 million for the quarter ended March 31, 2024 compared to
the comparative period in the prior year was primarily attributable
to a decrease in ETV:IDS program external expenses because the
first quarter of 2023 included expense for a contingent
consideration payment of $30.0 million related to the acquisition
of F-star Gamma, which was triggered in March 2023 upon the
achievement of a specified clinical milestone in the ETV:IDS
program. Further, 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, there was a decrease in LRRK2 program external
expenses due to the transition of LRRK2 clinical activities to
Biogen. These decreases were partially offset by increases in the
ETV:SGSH and eIF2B program external expenses reflecting the
continued progress of these programs in clinical trials, and an
increase in net cost sharing payments due to increased payments due
to Biogen as a result of increased LRRK2 clinical trial costs
incurred by Biogen.
General and administrative expenses were $25.2 million for the
quarter ended March 31, 2024, compared to $27.1 million for
the quarter ended March 31, 2023. The decrease of $1.9 million for
the quarter ended March 31, 2024 was primarily attributable to $2.4
million of combined decreases in professional services, facilities
and other corporate costs, partially offset by $0.5 million of
increased personnel-related expenses consisting of employee
compensation and stock-based compensation expense.
The loss from operations also includes a non-cash gain from
divestiture of small molecule programs of $14.5 million, reflecting
the gain associated with the divestiture of assets associated with
select preclinical small molecule programs in exchange for equity
consideration.
Cash, cash equivalents, and marketable securities were
approximately $1.43 billion as of March 31, 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 as well as the likelihood of receiving
accelerated approval; 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; plans, timelines, and expectations of both
Denali and Takeda regarding DNL593 and the ongoing Phase 1/2 study,
including the timing of continuation of the study; plans,
timelines, and expectations regarding the advancement of OTV:MAPT
towards clinical development; plans, timelines, and expectations of
both Denali and Biogen regarding the ATV:Abeta; 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 March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
Collaboration revenue: |
|
|
|
|
Collaboration revenue from customers(1) |
|
$ |
— |
|
|
$ |
35,141 |
|
Total collaboration revenue |
|
|
— |
|
|
|
35,141 |
|
Operating expenses: |
|
|
|
|
Research and development(2) |
|
|
107,016 |
|
|
|
128,816 |
|
General and administrative |
|
|
25,236 |
|
|
|
27,140 |
|
Total operating expenses |
|
|
132,252 |
|
|
|
155,956 |
|
Gain from divestiture of small
molecule programs |
|
|
14,537 |
|
|
|
— |
|
Loss from operations |
|
|
(117,715 |
) |
|
|
(120,815 |
) |
Interest and other income,
net |
|
|
15,913 |
|
|
|
11,034 |
|
Net loss |
|
$ |
(101,802 |
) |
|
$ |
(109,781 |
) |
Net loss per share, basic and
diluted |
|
$ |
(0.68 |
) |
|
$ |
(0.80 |
) |
Weighted average number of
shares outstanding, basic and diluted |
|
|
149,404,188 |
|
|
|
136,524,528 |
|
__________________________________________________
(1) Includes related-party collaboration revenue from customers
of $0.1 million for the three months ended March 31, 2023.(2)
Includes expenses for cost sharing payments due to a related party
of $4.2 million for the three months ended March 31, 2023.
Denali Therapeutics Inc.Condensed
Consolidated Balance Sheets(Unaudited)(In
thousands)
|
|
March 31, 2024 |
|
December 31, 2023 |
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
60,574 |
|
|
$ |
127,106 |
|
Short-term marketable securities |
|
|
876,295 |
|
|
|
907,405 |
|
Prepaid expenses and other current assets |
|
|
36,706 |
|
|
|
29,626 |
|
Total current assets |
|
|
973,575 |
|
|
|
1,064,137 |
|
Long-term marketable
securities |
|
|
490,723 |
|
|
|
— |
|
Property and equipment,
net |
|
|
46,863 |
|
|
|
45,589 |
|
Operating lease right-of-use
asset |
|
|
25,309 |
|
|
|
26,048 |
|
Other non-current assets |
|
|
44,621 |
|
|
|
18,143 |
|
Total assets |
|
$ |
1,581,091 |
|
|
$ |
1,153,917 |
|
Liabilities and
stockholders' equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
11,855 |
|
|
$ |
9,483 |
|
Accrued clinical and other research & development costs |
|
|
19,956 |
|
|
|
19,035 |
|
Accrued manufacturing costs |
|
|
16,720 |
|
|
|
15,462 |
|
Other accrued costs and current liabilities |
|
|
5,986 |
|
|
|
5,152 |
|
Accrued compensation |
|
|
8,053 |
|
|
|
21,590 |
|
Operating lease liability, current |
|
|
7,512 |
|
|
|
7,260 |
|
Deferred research funding liability, current |
|
|
12,500 |
|
|
|
— |
|
Total current liabilities |
|
|
82,582 |
|
|
|
77,982 |
|
Operating lease liability,
less current portion |
|
|
43,034 |
|
|
|
44,981 |
|
Total liabilities |
|
|
125,616 |
|
|
|
122,963 |
|
Total stockholders'
equity |
|
|
1,455,475 |
|
|
|
1,030,954 |
|
Total liabilities and
stockholders’ equity |
|
$ |
1,581,091 |
|
|
$ |
1,153,917 |
|
Investor and Media Contact:
Laura Hansen, Ph.D.Vice President, Investor Relations(650)
452-2747hansen@dnli.com
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