Denali Therapeutics Conference Call Summary Company Overview - **Company**: Denali Therapeutics (DNLI) - **Event**: Bank of America Healthcare Conference - **Date**: May 13, 2025 Key Industry Insights - **FDA Interactions**: Denali has had numerous interactions with the FDA, particularly regarding their Biologics License Application (BLA) filing for TIVI, which received breakthrough therapy designation. This designation is significant as it is the first for a blood-brain barrier-enabled technology in the context of MPS (Mucopolysaccharidoses) [4][5][6] - **Enzyme Replacement Therapy**: The probability of success for enzyme replacement therapies reaching the market is between 85% and 90%, which is notably high compared to other drug development areas. Denali's TIVI aims to address neurological symptoms in lysosomal storage disease patients, a significant unmet need [7][8] Product Development - **TIVI Overview**: TIVI (tividendifusp alfa) is engineered to cross the blood-brain barrier and aims to normalize substrate levels in the brain, showing downstream biomarker benefits such as NfL (neurofilament light chain) [8][9] - **Target Population**: Approximately 500 patients in the U.S. and 2,000 patients worldwide are affected by Hunter syndrome, the primary indication for TIVI [10] - **Commercial Readiness**: Denali has been building a commercial foundation for TIVI over the past three years, focusing on medical education and awareness among healthcare providers [11][12] Market Dynamics - **Switching from Standard of Care**: Most patients currently on Allopraze (the standard of care) are expected to switch to TIVI, with a strong clinical data package supporting this transition [13][16] - **Physician Education**: The company emphasizes the importance of educating physicians about the benefits of TIVI, particularly in achieving normalization of substrate levels [14][15] Future Indications and Expansion - **Next Steps**: Denali plans to expand into other indications such as Sanfilippo syndrome, Pompe disease, and Gaucher disease, leveraging the same biomarkers used for TIVI [32][34] - **Alzheimer's and Parkinson's**: Denali is also developing programs targeting Alzheimer's and Parkinson's diseases, focusing on amyloid beta and tau pathologies. They have two IND-enabling programs in this area [48][49] Financial Outlook - **Cash Position**: Denali reported $1.05 billion in cash, guiding towards cash sustainability into 2028. The company plans to increase spending by 10% to 15% this year to support portfolio expansion [60][61] Strategic Partnerships - **Business Development**: Denali has entered over 40 partnerships to share risk and enhance its portfolio. The company is open to strategic partnerships that can accelerate its development efforts, particularly in blood-brain barrier technologies [63][64] Conclusion Denali Therapeutics is positioned to make significant strides in the treatment of rare neurological diseases through its innovative transport vehicle technology. The company is focused on building a strong commercial foundation while exploring new therapeutic areas, backed by a robust financial position and strategic partnerships.

Core Viewpoint - Denali Therapeutics reported a wider-than-expected loss in Q1 2025, primarily due to increased operating expenses, and did not generate collaboration revenues during the quarter [1][2]. Financial Performance - The company reported a loss of 78 cents per share, compared to the Zacks Consensus Estimate of a loss of 71 cents and a loss of 68 cents in the same quarter last year [1]. - Research and development expenses rose by 8.6% to $116.3 million, driven by increased spending on clinical and preclinical programs [5]. - General and administrative expenses increased by 16.4% to $29.4 million, attributed to activities related to the submission of a biologics license application for tividenofusp alfa [6]. - As of May 31, 2025, the company had approximately $1.05 billion in cash, cash equivalents, and marketable securities [6]. Pipeline Developments - Denali completed the submission of a biologics license application for tividenofusp alfa under the FDA's accelerated approval pathway, based on phase I/II study data for Hunter syndrome [7]. - The FDA granted Breakthrough Therapy Designation for tividenofusp alfa in January 2025 [8]. - Denali is conducting a global phase II/III COMPASS study to support regulatory approvals for tividenofusp alfa [8]. - The company is evaluating DNL126 for Sanfilippo syndrome type A and has had productive discussions with the FDA regarding its accelerated development [9]. - Denali is collaborating with Takeda on DNL593 for frontotemporal dementia and is conducting a phase I/II study [10]. - Denali and Biogen are jointly evaluating BIIB122/DNL151 for Parkinson's disease, with the LUMA study fully enrolled [11]. - The company is also conducting the phase IIa BEACON study for LRRK2-associated Parkinson's disease and evaluating DNL343 in a phase II/III study for ALS [12]. - Denali's partner Sanofi discontinued the development of SAR443820/DNL788 for ALS due to unmet primary endpoints in the phase II study [14]. Market Performance - Shares of Denali Therapeutics have declined by 31.4% year-to-date, while the industry has seen a smaller decline of 2.2% [4]. Overall Assessment - The progress in Denali's pipeline is viewed as encouraging, with potential approval of tividenofusp alfa expected to significantly benefit the company [15].

Financial Performance - The company reported net losses of $133.0 million and $101.8 million for the three months ended March 31, 2025, and 2024, respectively, with an accumulated deficit of $1.67 billion as of March 31, 2025[96]. - The net loss for the three months ended March 31, 2025, was $132.97 million, a 31% increase from the net loss of $101.80 million in the same period of 2024[108]. - The company has incurred significant operating losses and expects to continue doing so as it expands its research and development efforts and hires additional personnel[96]. - The company expects to incur significant losses for the foreseeable future as it expands research and development activities and seeks regulatory approvals[120]. - Net cash used in operating activities was $131.5 million for the three months ended March 31, 2025, compared to $113.6 million in the same period of 2024[126]. Revenue Generation - The company has not generated any product revenue since inception and has funded operations primarily through the issuance of convertible preferred stock and collaboration agreements with Takeda, Sanofi, and Biogen[95]. - The company received approximately $754.4 million from public offerings and $575.0 million from collaboration agreements through March 31, 2025[115][118]. Research and Development - Research and development expenses are expected to increase as the company advances its clinical programs and seeks regulatory approvals for product candidates[103]. - Research and development expenses increased by 9% to $116.2 million for the three months ended March 31, 2025, compared to $107.0 million in the same period of 2024[109]. - The company is developing multiple product candidates targeting rare lysosomal storage diseases and neurodegenerative conditions, including tividenofusp alfa and DNL126[94]. - The company announced that the primary endpoint was not met in the Phase 2/3 HEALEY ALS Platform Trial evaluating DNL343, leading to the discontinuation of the active treatment extension[97]. Regulatory and Clinical Developments - The FDA granted Breakthrough Therapy Designation for tividenofusp alfa (DNL310) for the treatment of MPS II, with a rolling submission of a Biologics License Application (BLA) completed in May 2025[97]. - General and administrative expenses rose by 16% to $29.4 million for the three months ended March 31, 2025, driven by activities related to the submission of the BLA for tividenofusp alfa[112]. Cash and Investments - Cash, cash equivalents, and marketable securities totaled $1.05 billion as of March 31, 2025[114]. - As of March 31, 2025, the company had cash, cash equivalents, and marketable securities totaling $1.05 billion, primarily in money market funds and investment-grade fixed income securities[133]. - The company anticipates needing substantial additional funding to support ongoing operations and future commitments[121]. - The company aims to preserve capital while maximizing income from investments, maintaining a portfolio of high credit quality and short-term duration securities[134]. - The company’s investment activities are primarily focused on preserving capital to fund operations while avoiding significant risk[134]. Market and Operational Risks - The company has experienced challenges in predicting the costs and timing of drug development due to external factors such as global pandemics and geopolitical uncertainties[100]. - The company is exposed to interest rate risk, but a hypothetical 10% relative change in interest rates would not have a material impact on its financial statements[134]. - The majority of the company's transactions are conducted in U.S. dollars, but it is also subject to foreign exchange risk due to transactions in Euro, Swiss Franc, and British Pound[135]. - The company is exposed to market risks related to interest rates and foreign currency sensitivities in the ordinary course of business[132]. - The company’s investments are largely composed of short to intermediate-term fixed income securities, which are subject to interest rate fluctuations[134]. Accounting and Estimates - There have been no material changes to critical accounting estimates during the three months ended March 31, 2025[130]. - No new accounting pronouncements or changes have occurred during the three months ended March 31, 2025, that are significant to the company[131]. - The company’s financial condition and results of operations are based on estimates and assumptions that may differ from actual results under different conditions[130].

Financial Performance - Denali Therapeutics reported a net loss of $133.0 million for Q1 2025, compared to a net loss of $101.8 million in Q1 2024, reflecting an increase of approximately 30.5% year-over-year[13] - Total research and development expenses for Q1 2025 were $116.2 million, up from $107.0 million in Q1 2024, marking an increase of about 8.6%[14] - General and administrative expenses rose to $29.4 million in Q1 2025, compared to $25.2 million in Q1 2024, an increase of approximately 16.5%[15] - Denali's total operating expenses for Q1 2025 were $145.6 million, compared to $132.3 million in Q1 2024, reflecting an increase of approximately 10%[21] Cash and Assets - Cash, cash equivalents, and marketable securities totaled approximately $1.05 billion as of March 31, 2025[16] Regulatory Developments - Denali completed the Biologics License Application (BLA) submission for tividenofusp alfa for Hunter syndrome, initiating the FDA's 60-day filing review process[3] - The FDA granted Breakthrough Therapy Designation for tividenofusp alfa in January 2025, which is also designated as Fast Track, Orphan Drug, and Rare Pediatric Disease[3] - Denali is conducting the ongoing global Phase 2/3 COMPASS study to support global regulatory approvals for tividenofusp alfa[3] - The company is collaborating with the FDA under the START program for accelerated development of DNL126 for Sanfilippo syndrome Type A[4] Operational Developments - Denali's clinical biomanufacturing facility in Salt Lake City commenced operations, enhancing U.S. manufacturing capabilities and supply chain control[9] Contact Information - Investor Relations contact is Laura Hansen, Ph.D., Vice President, reachable at hansen@dnli.com[23] - Media contact is Rich Allan from FGS Global, reachable at Rich.Allan@fgsglobal.com[23]

Core Insights - Denali Therapeutics has completed the Biologics License Application (BLA) submission for tividenofusp alfa, marking a significant milestone in its development as a late-stage commercial organization focused on treating Hunter syndrome [2][3] - The company is preparing for the commercial launch of tividenofusp alfa, expected in late 2025 or early 2026, which would be the first FDA-approved enzyme replacement therapy designed to cross the blood-brain barrier [2][3] - Denali's clinical pipeline includes ongoing programs for Sanfilippo syndrome Type A and frontotemporal dementia, with collaborations with the FDA and Takeda, respectively [4][5] Financial Performance - For Q1 2025, Denali reported a net loss of $133.0 million, an increase from a net loss of $101.8 million in Q1 2024 [10] - Research and development expenses rose to $116.2 million in Q1 2025 from $107.0 million in Q1 2024, primarily due to increased spending on clinical and preclinical programs [11] - General and administrative expenses increased to $29.4 million in Q1 2025 from $25.2 million in Q1 2024, driven by activities related to the BLA submission for tividenofusp alfa [14] Clinical Program Updates - The BLA submission for tividenofusp alfa is based on data from a Phase 1/2 study involving 47 participants, with the FDA's review process now initiated [3] - Denali is conducting a global Phase 2/3 COMPASS study to support regulatory approvals for tividenofusp alfa [3] - The company is also advancing DNL126 for Sanfilippo syndrome Type A, with ongoing discussions with the FDA for an accelerated development path [4] Corporate Developments - Denali has launched a clinical biomanufacturing facility in Salt Lake City, enhancing its manufacturing capabilities and supply chain control [9] - The company is actively participating in several upcoming investor conferences to engage with stakeholders and present its developments [13]

Core Insights - The Medical sector is experiencing a robust first-quarter earnings season, with several drugmakers reporting results, and large caps like J&J, Merck, and Amgen exceeding earnings and sales estimates [1][2] - Overall, first-quarter earnings for the Medical sector are projected to rise by 40%, with revenues expected to increase by 8.3% [3] Earnings Performance - As of April 30, 45% of Medical sector companies, representing approximately 57.9% of the sector's market capitalization, have reported earnings, with 66.7% beating both earnings and revenue estimates [2] - Year-over-year earnings growth for the sector is reported at 60.5%, while revenues have increased by 7.8% [2] Company Highlights - **Novo Nordisk**: Expected to report earnings of 92 cents per share and revenues of $11.33 billion, with strong sales anticipated from diabetes and obesity care products [6][7] - **Pacira BioSciences**: Projected earnings of 57 cents per share and revenues of $174.96 million, driven by sales of its pain-management product Exparel [8][9] - **Ultragenyx Pharmaceuticals**: Expected to report a loss of $1.54 per share and revenues of $141.99 million, with growth driven by its lead drug Crysvita [10][11] - **Acadia Pharmaceuticals**: Anticipated earnings of 6 cents per share and revenues of $241.74 million, primarily from sales of Nuplazid for Parkinson's disease psychosis [12][13] - **Denali Therapeutics**: Expected loss of 71 cents per share and revenues of $8.3 million, with updates on pipeline programs anticipated during the earnings report [17][18] Earnings Surprise Potential - The Earnings ESP methodology indicates that stocks with a positive Earnings ESP and a Zacks Rank of 1, 2, or 3 have a high chance of delivering earnings surprises, with a success rate of up to 70% [4][5]

Core Viewpoint - Denali Therapeutics (DNLI) has initiated a rolling submission of a biologics license application (BLA) for accelerated approval of tividenofusp alfa for the treatment of Hunter syndrome (MPS II), leading to an 11.8% increase in its shares [1] Company Developments - DNLI is engaged in ongoing collaboration with the FDA's Center for Drug Evaluation and Research (CDER) regarding the BLA data package, including the use of CSF HS as a surrogate endpoint for accelerated approval [2] - The company expects to complete its BLA submission by mid-May 2025 and is preparing for a potential U.S. commercial launch in late 2025 or early 2026 [3] - Tividenofusp alfa has received Fast Track and Breakthrough Therapy designations from the FDA for MPS II, and it holds the Priority Medicines designation in the EU [3] - DNLI has lost 32.6% in share value year-to-date, contrasting with a 1.2% growth in the industry [4] Clinical Trials and Pipeline - Denali is currently enrolling patients in the global phase II/III COMPASS study of tividenofusp alfa to support global regulatory approvals, with an expanded target enrollment for neuronopathic participants to 42 patients [6][7] - The candidate has not yet received approval for therapeutic use by any health authority [7] - Denali is also evaluating DNL126 for the treatment of Sanfilippo syndrome type A (MPS IIIA) in a phase I/II study, which has received Orphan Disease designation and Fast Track status from the FDA [8] - Initial positive phase I/II results for DNL126 have led to productive collaboration with the FDA under the START program to align on a pathway for accelerated development and approval [9]

Core Viewpoint - Denali Therapeutics has initiated a rolling submission of a biologics license application (BLA) for accelerated approval of tividenofusp alfa for Hunter syndrome, with expectations to complete the submission by May 2025 and a potential commercial launch in late 2025 or early 2026 [1][7]. Company Developments - The company is engaged in regular collaboration with the FDA's Center for Drug Evaluation and Research (CDER) regarding the BLA data package, including the use of cerebrospinal fluid heparan sulfate as a surrogate endpoint for accelerated approval [1][2]. - Denali's Chief Medical Officer expressed gratitude for the FDA's support and highlighted the importance of this regulatory milestone for the Hunter syndrome community [2]. - The company is also preparing for the development and approval path for DNL126, a treatment for Sanfilippo syndrome, under the START program with CDER [2][7]. Product Information - Tividenofusp alfa (DNL310) is designed to deliver the iduronate 2-sulfatase enzyme to the brain and body, addressing cognitive, behavioral, and physical symptoms of Hunter syndrome [4]. - The product has received Fast Track and Breakthrough Therapy designations from the FDA, as well as Priority Medicines designation from the European Medicines Agency [4]. - The ongoing Phase 2/3 COMPASS study is enrolling participants to support global approval, comparing tividenofusp alfa with idursulfase [5]. Disease Context - Hunter syndrome (MPS II) is a rare genetic disorder affecting over 2,000 individuals worldwide, primarily males, leading to various physical and cognitive symptoms due to a deficiency of the IDS enzyme [3]. - Current standard treatments only partially address physical symptoms and do not cross the blood-brain barrier, leaving cognitive and behavioral symptoms unmet [3].

Company Overview - Denali Therapeutics Inc. (DNLI) is currently an intriguing investment choice due to solid earnings estimate revision activity and a favorable Zacks Industry Rank [1][3] - The company has seen a positive shift in earnings estimates, indicating a more bullish outlook from analysts [3][4] Industry Analysis - The Medical - Biomedical and Genetics industry has a Zacks Industry Rank of 75 out of more than 250 industries, suggesting it is well-positioned compared to other segments [2] - A rising trend in this industry can positively impact multiple securities, indicating a broad uplift in the sector [2] Earnings Estimates - Current quarter estimates for Denali have improved from a loss of 77 cents per share to a loss of 73 cents per share [4] - Current year estimates have also risen from a loss of $3.03 per share to a loss of $2.90 per share, reflecting a more optimistic outlook [4] - Denali currently holds a Zacks Rank 3 (Hold), which is considered a favorable signal for investors [4]

Denali Therapeutics (DNLI) reported a fourth-quarter 2024 loss of 67 cents per share, narrower than the Zacks Consensus Estimate of a loss of 83 cents. The company reported a loss of 86 cents in the year-ago quarter.The loss per share improved year over year due to a decline in total operating expenses and an increase in the number of shares outstanding.In the absence of a marketed product, the company only recognizes revenues from ongoing collaborations. Denali did not generate collaboration revenues in th ...