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Denali Therapeutics Reports Third Quarter 2024 Financial Results and Business Highlights

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Denali Therapeutics (DNLI) reported Q3 2024 financial results with a net loss of $107.2 million, compared to $99.4 million in Q3 2023. The company reported no collaboration revenue, down from $1.3 million in the previous year. R&D expenses increased to $98.2 million from $89.7 million, while G&A expenses remained stable at $24.9 million. Cash position stood at $1.28 billion as of September 30, 2024.

Key developments include plans to file for accelerated approval of tividenofusp alfa for MPS II in early 2025, positive preliminary data from DNL126 Phase 1/2 study in MPS IIIA, and the expansion of clinical trials. The company updated its 2024 guidance, projecting a 5-10% increase in cash operating expenses compared to 2023.

Denali Therapeutics (DNLI) ha reso noti i risultati finanziari del terzo trimestre 2024, registrando una perdita netta di 107,2 milioni di dollari, rispetto ai 99,4 milioni del terzo trimestre 2023. La società non ha riportato ricavi da collaborazioni, in calo rispetto a 1,3 milioni dell'anno precedente. Le spese per ricerca e sviluppo sono aumentate a 98,2 milioni di dollari dai 89,7 milioni, mentre le spese generali e amministrative sono rimaste stabili a 24,9 milioni. La posizione di cassa era di 1,28 miliardi di dollari al 30 settembre 2024.

Tra gli sviluppi chiave ci sono i piani per presentare richiesta di approvazione accelerata per tividenofusp alfa per l'MPS II all'inizio del 2025, dati preliminari positivi dallo studio Fase 1/2 di DNL126 nell'MPS IIIA e l'espansione delle sperimentazioni cliniche. L'azienda ha aggiornato le sue previsioni per il 2024, prevedendo un aumento delle spese operative in contante del 5-10% rispetto al 2023.

Denali Therapeutics (DNLI) informó los resultados financieros del tercer trimestre de 2024 con una pérdida neta de 107,2 millones de dólares, en comparación con 99,4 millones en el tercer trimestre de 2023. La compañía no reportó ingresos por colaboraciones, frente a 1,3 millones del año anterior. Los gastos de I+D aumentaron a 98,2 millones de dólares desde 89,7 millones, mientras que los gastos generales y administrativos se mantuvieron estables en 24,9 millones. La posición de efectivo se situó en 1,28 mil millones de dólares al 30 de septiembre de 2024.

Entre los desarrollos clave se encuentran los planes para solicitar la aprobación acelerada de tividenofusp alfa para MPS II a principios de 2025, datos preliminares positivos del estudio Fase 1/2 de DNL126 en MPS IIIA y la expansión de ensayos clínicos. La empresa actualizó su guía para 2024, proyectando un aumento del 5-10% en los gastos operativos de efectivo en comparación con 2023.

데날리 테라퓨틱스(DNLI)는 2024년 3분기 재무 결과를 발표하며 1억 720만 달러의 순손실을 기록했다고 보고했습니다. 이는 2023년 3분기의 9천940만 달러에 비해 증가한 수치입니다. 회사는 지난해 130만 달러에서 떨어진 협력 수익이 없다고 보고했습니다. 연구 개발 비용은 8천820만 달러에서 9천820만 달러로 증가했으며, 일반 관리 비용은 2천490만 달러로 안정세를 유지했습니다. 2024년 9월 30일 기준으로 현금 보유고는 12억8천만 달러입니다.

주요 개발 사항으로는 2025년 초 MPS II를 위한 티비데노푸스프 알파의 가속 승인을 신청할 계획, MPS IIIA에서 DNL126 임상 1/2 연구의 긍정적인 초기 데이터, 임상 시험의 확장이 포함됩니다. 회사는 2024년 가이드를 업데이트하여 2023년 대비 현금 운영 비용이 5-10% 증가할 것으로 예상하고 있습니다.

Denali Therapeutics (DNLI) a annoncé des résultats financiers pour le troisième trimestre 2024, affichant une perte nette de 107,2 millions de dollars, contre 99,4 millions de dollars au troisième trimestre 2023. La société n'a pas signalé de revenus de collaboration, en baisse par rapport à 1,3 million de dollars l'année précédente. Les dépenses en R&D ont augmenté à 98,2 millions de dollars, contre 89,7 millions de dollars, tandis que les dépenses générales et administratives sont restées stables à 24,9 millions de dollars. La position de liquidités s'établissait à 1,28 milliard de dollars au 30 septembre 2024.

Parmi les développements clés figurent les projets de dépôt d'une demande d'approbation accélérée pour le tividenofusp alfa pour l'MPS II au début de 2025, des données préliminaires positives de l'étude DNL126 Phase 1/2 dans l'MPS IIIA, et l'expansion des essais cliniques. L'entreprise a mis à jour ses prévisions pour 2024, anticipant une augmentation des dépenses opérationnelles en espèces de 5 à 10 % par rapport à 2023.

Denali Therapeutics (DNLI) gab die Finanzberichterstattung für das dritte Quartal 2024 bekannt, mit einem Nettoverlust von 107,2 Millionen Dollar, verglichen mit 99,4 Millionen Dollar im dritten Quartal 2023. Das Unternehmen meldete keine Einnahmen aus Kooperationen, was einem Rückgang von 1,3 Millionen Dollar im Vorjahr entspricht. Die F&E-Ausgaben stiegen auf 98,2 Millionen Dollar von 89,7 Millionen, während die allgemeinen Verwaltungsaufwendungen stabil bei 24,9 Millionen blieben. Die Barreserven betrugen zum 30. September 2024 1,28 Milliarden Dollar.

Zu den wichtigsten Entwicklungen gehören die Pläne, Anfang 2025 einen Antrag auf beschleunigte Zulassung von tividenofusp alfa für MPS II zu stellen, positive vorläufige Daten aus der DNL126 Phase 1/2-Studie in MPS IIIA und die Erweiterung klinischer Studien. Das Unternehmen hat seine Prognose für 2024 aktualisiert und rechnet mit einem Anstieg der Betriebskosten in bar um 5-10 % im Vergleich zu 2023.

Positive
  • Strong cash position of $1.28 billion as of September 30, 2024
  • Successful FDA meeting providing path for accelerated approval of tividenofusp alfa
  • Positive preliminary data from DNL126 Phase 1/2 study showing robust reduction in CSF heparan sulfate levels
Negative
  • Increased net loss to $107.2 million from $99.4 million year-over-year
  • No collaboration revenue in Q3 2024, down from $1.3 million in Q3 2023
  • Increased R&D expenses by $8.5 million compared to previous year
  • Higher projected cash operating expenses for 2024 (5-10% increase vs 2023)

Insights

The Q3 results reveal mixed financial signals. Net losses widened to $107.2 million from $99.4 million year-over-year, while R&D expenses increased by $8.5 million to $98.2 million. The company's strong cash position of $1.28 billion provides substantial runway, though increased guidance for operating expenses (5-10% higher than 2023) reflects growing investment in clinical programs and commercialization preparations.

Key catalysts include the planned BLA filing for tividenofusp alfa in early 2025 and promising preliminary data from DNL126 in MPS IIIA. The discontinuation of the K2 Phase 2 study for SAR443820 represents a setback in the multiple sclerosis program. The company's focus on TV-enabled therapeutics and expanded clinical programs suggests increasing cash burn but potential for significant value creation through pipeline advancement.

The clinical progress across Denali's Transport Vehicle platform shows promising developments. The FDA's acceptance of CSF heparan sulfate as a surrogate endpoint for tividenofusp alfa's accelerated approval pathway in MPS II is a significant regulatory win. The preliminary data from DNL126 in MPS IIIA, showing normalization of CSF heparan sulfate levels, indicates strong potential for another successful rare disease treatment.

The publication in Science Translational Medicine validating the OTV platform's ability to achieve broad CNS biodistribution represents important scientific validation. However, the failure of oditrasertib in multiple sclerosis highlights the inherent risks in neurology drug development. The advancement of next-generation ATV:Abeta candidates with potentially improved safety profiles could position Denali competitively in the Alzheimer's space.

SOUTH SAN FRANCISCO, Calif., Nov. 06, 2024 (GLOBE NEWSWIRE) -- Denali Therapeutics Inc. (Nasdaq: DNLI) today reported financial results for the third quarter ended September 30, 2024, and provided business highlights.

"As leaders in pioneering a new class of therapeutics that cross the blood-brain barrier, we are making significant progress across our Transport Vehicle (TV)-enabled portfolio,” said Ryan Watts, Ph.D., Chief Executive Officer of Denali Therapeutics. “Within our Enzyme TV (ETV) franchise, we are on track to file for accelerated approval of tividenofusp alfa in MPS II in early 2025 after a successful meeting with the FDA in the third quarter. Today, we are also pleased to share that preliminary data from our Phase 1/2 study of DNL126 in MPS IIIA demonstrate a robust reduction from baseline in CSF heparan sulfate levels, including normalization. Based on these data and a positive regulatory environment, we recently expanded the study to support a potential accelerated path. In addition, our recent preclinical publication on our oligonucleotide TV (OTV) technology in Science Translational Medicine, which describes broad and deep brain biodistribution of oligonucleotides following systemic administration of OTV, demonstrates the power and potential of our TV platform to transform the way we treat brain diseases.”

Third 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 September, announced the outcome of a successful meeting with the Center for Drug Evaluation and Research (CDER) of the U.S. Food and Drug Administration (FDA) providing a path to filing a biologics license application (BLA) for accelerated approval and subsequent conversion to full approval for tividenofusp alfa (DNL310) for the treatment of MPS II. Agreement was reached that cerebrospinal fluid heparan sulfate (CSF HS) is reasonably likely to predict clinical benefit and can be used as a surrogate endpoint to support accelerated approval for tividenofusp alfa in MPS II. Denali intends to submit the BLA under the accelerated approval pathway in early 2025.
  • In September, presented new interim data from the Phase 1/2 study at the Society for the Study of Inborn Errors of Metabolism (SSIEM 2024), including data from additional study participants (N=37) and longer duration of treatment with tividenofusp alfa (up to Week 129) as well as new analyses on biomarkers and clinical outcomes.
  • COMPASS, the global Phase 2/3 study, is expected to complete enrollment in 2024.

DNL343: eIF2B activator in development for the treatment of amyotrophic lateral sclerosis (ALS)

  • DNL343 is being evaluated in Regimen G (DNL343) of the Phase 2/3 HEALEY ALS Platform Trial conducted by the Sean M. Healey & AMG Center for ALS at Massachusetts General Hospital (MGH) in collaboration with the Northeast ALS Consortium (NEALS). Enrollment in Regimen G is complete.

SAR443820/DNL788: CNS-penetrant RIPK1 inhibitor

  • In October, Denali was informed by its strategic partner Sanofi that the K2 Phase 2 study evaluating the safety and efficacy of oditrasertib (SAR443820/DNL788) on serum neurofilament light chain levels in participants with multiple sclerosis was discontinued based on not meeting the primary and key secondary endpoints.

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 has initiated screening of participants for the global Phase 2a study 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)

  • Denali today announced that preliminary data from up to 25 weeks of dosing in the ongoing open-label Phase 1/2 study in MPS IIIA participants demonstrate a significant reduction in CSF HS levels from baseline, including normalization. The safety profile supports continued development. The most frequent treatment emergent adverse events were infusion related reactions of mild and moderate severity in all participants. There was one serious adverse event considered by the investigator not related to drug. Denali plans to present the data at a future medical meeting.
  • Based on the preliminary Phase 1/2 results and a positive regulatory environment, Denali recently expanded the study and continues to assess the development plans including an accelerated approval path.
  • DNL126 was selected in June 2024 for the FDA's Support for clinical Trials Advancing Rare disease Therapeutics (START) program to accelerate the development of rare disease therapeutics, and collaborative engagement has commenced to support progress to a pre-BLA meeting.

TAK-594/DNL593: Protein Transport Vehicle (PTV)-enabled progranulin (PGRN) replacement therapy in development for the treatment of frontotemporal dementia-granulin (FTD-GRN)

  • Screening of participants for Cohort B2 in the Phase 1/2 study 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.
  • In August, announced publication of nonclinical data in the August 14, 2024 issue of Science Translational Medicine (link) demonstrating the ability of the OTV platform to achieve broad biodistribution of antisense oligonucleotides (ASOs) in the central nervous system and skeletal and cardiac muscle following intravenous administration.

Antibody Transport Vehicle Amyloid beta (ATV:Abeta) program

  • 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 manuscript posted on bioRxiv (link).
  • 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.

2024 Guidance on Operating Expenses

Cash, cash equivalents, and marketable securities were approximately $1.28 billion as of September 30, 2024. Denali is providing updated guidance on cash operating expenses for the full year 2024 and now anticipates an increase of approximately 5-10% compared to 2023, which is an increase from previous guidance of equal to or less than full year 2023 cash operating expenses. This updated guidance is associated with increased activities to support filing of a BLA in early 2025 and commercial readiness for tividenofusp alfa in MPS II, and to accelerate the development of additional therapeutic programs in Denali's TV platform portfolio.

Participation in Upcoming Investor Conferences

  • UBS Global Healthcare Conference, November 11-14
  • B. Riley Securities’ Next-Gen Tissue Delivery Modalities Virtual Summit, November 14
  • Stifel 2024 Healthcare Conference, November 18-19
  • Jefferies London Healthcare Conference, November 19-21
  • 7th Annual Evercore ISI HealthCONx Conference, December 3-5

Third Quarter 2024 Financial Results

Net losses were $107.2 million and $99.4 million for the three months ended September 30, 2024 and 2023, respectively.

There was no collaboration revenue for the quarter ended September 30, 2024, compared to $1.3 million for the quarter ended September 30, 2023. The decrease in collaboration revenue was primarily due to activities under the Biogen Collaboration Agreement.

Total research and development expenses were $98.2 million for the quarter ended September 30, 2024, compared to $89.7 million for the quarter ended September 30, 2023. The increase of approximately $8.5 million for the quarter ended September 30, 2024 was primarily attributable to increases in costs in various clinical stage programs, including ETV:IDS, eIF2B, ETV:SGSH, and LRRK2 reflecting the continued progress of these programs in clinical trials, and increases in TV platform and other program external expenses, reflecting continued investment in TV-enabled product candidates. These increases were partially offset by a decrease in personnel and external expenses associated with the divestiture of Denali’s preclinical small molecule programs.

General and administrative expenses were $24.9 million for the quarter ended September 30, 2024, and $25.3 million for the same period in 2023.

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 the timing and availability of data from the Phase 2/3 HEALEY ALS Platform Trial; plans, timelines, and expectations of both Denali and Sanofi regarding DNL788; 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 timing and likelihood of regulatory approval; 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; and Denali's participation in upcoming investor conferences. All drugs currently being developed by Denali are investigational and have not received regulatory approval for any indication. 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 August 1, 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 September 30, Nine Months Ended September 30,
  2024   2023   2024   2023 
Collaboration revenue:       
Collaboration revenue from customers(1)$  $1,267  $  $330,531 
Other collaboration revenue           
Total collaboration revenue    1,267      330,531 
Operating expenses:       
Research and development(2) 98,238   89,737   296,653   316,073 
General and administrative 24,949   25,325   75,379   78,585 
Total operating expenses 123,187   115,062   372,032   394,658 
Gain from divestiture of small molecule programs       14,537    
Loss from operations (123,187)  (113,795)  (357,495)  (64,127)
Interest and other income, net 15,995   14,442   49,475   38,376 
Net loss$(107,192) $(99,353) $(308,020) $(25,751)
Net loss per share, basic and diluted$(0.63) $(0.72) $(1.89) $(0.19)
Weighted average number of shares outstanding, basic and diluted 169,456,988   137,644,534   162,589,325   137,076,199 

__________________________________________________

(1)  Includes related-party collaboration revenue from customers of $1.3 million and $295.5 million for the three and nine months ended September 30, 2023, respectively.
(2)  Includes expenses for cost sharing payments due to a related party of $3.4 million and $14.5 million for the three and nine months ended September 30, 2023, respectively.


Denali Therapeutics Inc.

Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)

 September 30, 2024 December 31, 2023
Assets   
Current assets:   
Cash and cash equivalents$90,636 $127,106
Short-term marketable securities 745,923  907,405
Prepaid expenses and other current assets 32,280  29,626
Total current assets 868,839  1,064,137
Long-term marketable securities 445,463  
Property and equipment, net 50,822  45,589
Operating lease right-of-use asset 23,717  26,048
Finance lease right-of-use asset 38,685  
Other non-current assets 26,487  18,143
Total assets$1,454,013 $1,153,917
Liabilities and stockholders' equity    
Current liabilities:   
Accounts payable$9,594 $9,483
Accrued clinical and other research & development costs 23,923  19,035
Accrued manufacturing costs 9,568  15,462
Accrued compensation 14,874  21,590
Operating lease liability, current 8,036  7,260
Deferred research and development funding liability, current 16,269  
Other accrued costs and current liabilities 4,829  5,152
Total current liabilities 87,093  77,982
Operating lease liability, less current portion 38,850  44,981
Finance lease liability, less current portion 5,631  
Deferred research funding and development liability, less current portion 3,944  
Total liabilities 135,518  122,963
Total stockholders' equity 1,318,495  1,030,954
Total liabilities and stockholders’ equity$1,454,013 $1,153,917


Investor Contact:

Laura Hansen, Ph.D.
Vice President, Investor Relations
hansen@dnli.com
(650) 452-2747

Media Contact:
Rich Allan
FGS Global
Rich.Allan@fgsglobal.com
(503) 851-0807


FAQ

What were Denali Therapeutics (DNLI) Q3 2024 financial results?

Denali reported a net loss of $107.2 million, with R&D expenses of $98.2 million and G&A expenses of $24.9 million. The company had no collaboration revenue and maintained a cash position of $1.28 billion.

When will Denali Therapeutics (DNLI) file for tividenofusp alfa approval?

Denali plans to file a biologics license application (BLA) for accelerated approval of tividenofusp alfa in MPS II in early 2025.

What is Denali's (DNLI) updated guidance for 2024 operating expenses?

Denali updated its guidance to project a 5-10% increase in cash operating expenses for 2024 compared to 2023, higher than previous guidance of equal to or less than 2023 expenses.

Denali Therapeutics Inc.

NASDAQ:DNLI

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4.23B
143.17M
13.61%
90.33%
5.4%
Biotechnology
Biological Products, (no Disgnostic Substances)
Link
United States of America
SOUTH SAN FRANCISCO