DNLI Posts Narrower-Than-Expected Q3 Loss, Advances MPS IIIA Drug

Core Insights - Denali Therapeutics (DNLI) reported a narrower loss of 74 cents per share for Q3 2025, compared to the Zacks Consensus Estimate of a loss of 76 cents and a loss of 63 cents 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 $14 million [2] - DNLI's stock has declined by 29.3% year-to-date, while the industry has grown by 11.5% [2] Financial Performance - Research and development expenses increased by 3.8% to $101.9 million, primarily due to the start of operations at Denali's large molecule manufacturing facility in Salt Lake City, UT [4] - General and administrative expenses rose by 42.2% to $35.5 million, driven by preparations for a potential launch of tividenofusp alfa [4] - As of September 30, 2025, the company had cash, cash equivalents, and marketable securities totaling approximately $872.9 million [5] Regulatory and Pipeline Updates - The FDA extended the review timeline for the biologics license application (BLA) for tividenofusp alfa to April 5, 2026, from January 5, 2026, following the submission of updated clinical pharmacology information [6][9] - The extension was classified as a major amendment, but the FDA did not request additional data [9] - Denali is advancing programs for Sanfilippo syndrome, Alzheimer’s disease, Parkinson’s disease, and Pompe disease [8][10] Pipeline Developments - Denali is evaluating DNL126 for Sanfilippo syndrome type A, with a phase I/II study completed [10][11] - The company is also developing DNL593 in collaboration with Takeda for frontotemporal dementia and has submitted a clinical trial application for DNL628 for Alzheimer's disease [12][14] - Denali and Biogen are co-developing BIIB122, with a phase IIb study fully enrolled and results expected in 2026 [13] Overall Assessment - The delay in the approval of tividenofusp alfa is disappointing, as it is the lead candidate in Denali's pipeline, but progress with DNL126 is encouraging [15] - The company's strong cash position is a positive factor for funding ongoing programs [15]