DNLI Tops on Q2 Earnings, Expects Decree on Hunter Syndrome Drug in '26

Core Insights - Denali Therapeutics reported a second-quarter 2025 loss of $0.72 per share, which was narrower than the Zacks Consensus Estimate of a loss of $0.74, but wider than the loss of $0.59 in the same quarter last year [1][8] - The company did not generate any collaboration revenues in the reported quarter, missing the Zacks Consensus Estimate of $25 million [2] - Year-to-date, shares of Denali have declined by 31.7%, while the industry has only seen a 0.6% decline [2] Financial Performance - Research and development expenses increased by 12.4% to $102.7 million, primarily due to higher spending on multiple preclinical programs and increased costs for consultants and general facilities [4] - General and administrative expenses rose by 28% to $32.3 million, driven by preparations for the potential launch of tividenofusp alfa [4] - As of June 30, 2025, the company had cash, cash equivalents, and marketable securities totaling approximately $977.4 million [5] Pipeline Developments - The FDA accepted Denali's biologics license application (BLA) for tividenofusp alfa for priority review, with a target action date set for January 5, 2026 [6][8] - The BLA seeks accelerated approval based on data from a phase I/II study in individuals with Hunter syndrome, with previous designations from the FDA including Breakthrough Therapy and Fast Track [7] - Denali is also advancing DNL126 for Sanfilippo syndrome type A, with alignment from the FDA on using cerebrospinal fluid heparan sulfate as a surrogate endpoint for accelerated approval [10] Ongoing Studies - Data from the ongoing phase I/II study of DNL126 shows a significant reduction in cerebrospinal fluid heparan sulfate levels, supporting continued development [11] - Denali is conducting a phase I/II study of DNL593 for frontotemporal dementia, in collaboration with Takeda [12] - The company is also evaluating BIIB122/DNL151 in partnership with Biogen for Parkinson's disease, with a global phase IIb study fully enrolled [13][14] Future Plans - Denali plans to submit regulatory applications for one to two TV-enabled programs each year over the next three years across its various franchises [15] - The most advanced programs include DNL952 for Pompe disease and DNL111 for Parkinson's/Gaucher disease, among others [15] Overall Assessment - Denali's recent pipeline progress is viewed positively, with potential approval of tividenofusp alfa expected to significantly boost the company [16] - The strong cash position is seen as a positive factor for funding ongoing programs [16]