Denali(DNLI) - 2025 Q2 - Quarterly Results

Business Highlights and Program Updates Denali Therapeutics achieved significant regulatory milestones for its Transport Vehicle (TV) platform, advancing multiple clinical and preclinical programs Overview Denali Therapeutics made significant regulatory progress for its Transport Vehicle (TV) platform, including FDA priority review for tividenofusp alfa and an accelerated approval pathway for DNL126 - The CEO highlighted the potential of the company's Transport Vehicle (TV) platform to create a new class of therapeutics that can cross the blood-brain barrier, positioning Denali to deliver treatments for lysosomal, neurodegenerative, and other serious diseases[3] - The FDA accepted the Biologics License Application (BLA) for tividenofusp alfa for Hunter syndrome for priority review, with a PDUFA target action date of January 5, 2026[4][6] - An accelerated approval pathway for DNL126 for Sanfilippo syndrome Type A was aligned with the FDA[5][6] - The company is on track to submit regulatory applications in 2025 to begin clinical testing for one to two additional TV-enabled programs[6] - Preclinical research on the ATV:Abeta program for Alzheimer's disease was published in the journal Science, demonstrating potential advantages in crossing the blood-brain barrier and reducing ARIA risk[6][10] Clinical Programs Denali's clinical pipeline advanced significantly with tividenofusp alfa under FDA priority review and DNL126 on an accelerated approval pathway Tividenofusp alfa (DNL310) for Hunter syndrome (MPS II) The FDA accepted the Biologics License Application (BLA) for tividenofusp alfa for priority review, setting a PDUFA target action date of January 5, 2026 - The FDA accepted the BLA for tividenofusp alfa for priority review and assigned a PDUFA target action date of January 5, 2026[4] - The BLA seeks accelerated approval based on data from the Phase 1/2 study[4] - The company is preparing for commercial launch and conducting the Phase 2/3 COMPASS study to support global regulatory submissions[4] DNL126 (ETV:SGSH) for Sanfilippo syndrome type A (MPS IIIA) Denali has aligned with the FDA that cerebrospinal fluid heparan sulfate (CSF HS) can be used as a surrogate endpoint to support an accelerated approval for DNL126 - Reached alignment with the FDA that CSF heparan sulfate (CSF HS) may be used as a surrogate endpoint to support accelerated approval[5] - Ongoing open-label Phase 1/2 study data demonstrated a significant reduction in CSF HS from baseline, supporting continued development[5] - Enrollment in the Phase 1/2 study is nearly complete, and planning for a confirmatory global Phase 3 study is underway[5] TAK-594/DNL593 (PTV:PGRN) for GRN-related frontotemporal dementia The collaboration with Takeda to develop DNL593, a therapeutic designed to cross the blood-brain barrier for the treatment of FTD-GRN, is progressing with a Phase 1/2 study currently ongoing - Denali and Takeda are collaborating on the development of DNL593 for FTD-GRN, with a Phase 1/2 study currently ongoing[7] BIIB122/DNL151 (small molecule LRRK2 inhibitor) for Parkinson's disease (PD) In partnership with Biogen, the Phase 2b LUMA study of LRRK2 inhibitor BIIB122 has completed enrollment, with results expected in 2026 - The Phase 2b LUMA study of BIIB122, co-developed with Biogen, has completed enrollment with a readout expected in 2026[8] - Denali is also conducting the Phase 2a BEACON study, which focuses on LRRK2-associated Parkinson's disease[8] IND-Enabling Stage Programs Denali plans to advance one to two new TV-enabled programs into clinical testing annually, with preclinical data for ATV:Abeta showing improved brain distribution and reduced ARIA risk - The company expects to submit regulatory applications to begin clinical testing of one to two TV-enabled programs each year for the next three years[9] - Advanced preclinical programs include candidates for Pompe disease (DNL952), Parkinson's/Gaucher disease (DNL111), MPS I (DNL622), and Alzheimer's disease (DNL921, DNL628)[9] - Preclinical data published in Science for the ATV:Abeta program demonstrated improved brain distribution and reduced ARIA risk in a mouse model compared to conventional antibody treatment[10] Second Quarter 2025 Financial Results Denali reported an increased net loss in Q2 2025 due to higher R&D and G&A expenses, while maintaining a strong cash position Financial Performance Summary For the second quarter of 2025, Denali reported a net loss of $124.1 million, an increase from $99.0 million in the same period of 2024 | Financial Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Loss | $124.1 million | $99.0 million | | Research & Development Expenses | $102.7 million | $91.4 million | | General & Administrative Expenses | $32.3 million | $25.2 million | | Cash, Cash Equivalents, & Marketable Securities | $977.4 million | N/A | - The $11.3 million increase in R&D expenses was primarily driven by increased spending on preclinical TV programs and costs associated with the commencement of operations at the Salt Lake City manufacturing facility[13] - The $7.1 million increase in G&A expenses was mainly due to activities related to preparations for a potential commercial launch of tividenofusp alfa[14] Condensed Consolidated Statements of Operations The statement of operations shows a net loss of $124.1 million for Q2 2025, compared to a net loss of $99.0 million for the same period in 2024 | (In thousands, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Research and development | $102,696 | $91,399 | | General and administrative | $32,267 | $25,194 | | Total operating expenses | $134,963 | $116,593 | | Loss from operations | ($134,963) | ($116,593) | | Interest and other income, net | $10,844 | $17,567 | | Net loss | ($124,119) | ($99,026) | | Net loss per share, basic and diluted | ($0.72) | ($0.59) | Condensed Consolidated Balance Sheets As of June 30, 2025, Denali had total assets of $1.17 billion, compared to $1.37 billion at the end of 2024 | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash, cash equivalents, and marketable securities | $977,415 | $1,191,704 | | Total current assets | $934,706 | $864,436 | | Total assets | $1,166,241 | $1,374,180 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $91,057 | $102,208 | | Total liabilities | $139,188 | $144,496 | | Total stockholders' equity | $1,027,053 | $1,229,684 | Corporate Information Denali Therapeutics will participate in upcoming investor conferences and continues its focus on developing therapies to cross the blood-brain barrier Upcoming Investor Conferences Denali is scheduled to participate in seven investor conferences between September and November 2025, including events hosted by Cantor, Morgan Stanley, Baird, H.C. Wainwright, Deutsche Bank, Stifel, and Jefferies - The company will participate in seven investor conferences in the fall of 2025, providing opportunities to engage with the investment community[11] About Denali Therapeutics Denali Therapeutics is a biopharmaceutical company based in South San Francisco, focused on 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's core strategy involves developing therapies engineered to cross the blood-brain barrier (BBB) to treat neurodegenerative and lysosomal storage diseases[16] - The company's approach includes assessing genetically validated targets and using biomarkers to guide development[16]