Denali Therapeutics Reports Second Quarter 2019 Financial Results and Business Highlights
August 06 2019 - 4:30PM
Denali Therapeutics Inc. (NASDAQ: DNLI), a biopharmaceutical
company developing a broad portfolio of product candidates for
neurodegenerative diseases, today reported financial results for
the second quarter ended June 30, 2019, and provided business
highlights.
“With one more program entering clinical testing, steady patient
recruitment into our ongoing clinical trials in Alzheimer’s,
Parkinson’s and ALS as well as encouraging data in many of our
discovery and IND-enabling programs, we continue to make progress
towards our goal of defeating degeneration,” said Ryan Watts,
Ph.D., CEO.
Second Quarter 2019 and Recent Business
Highlights
- Achieved First Clinical Milestone for Peripheral RIPK1
Inhibitor Under the Sanofi Collaboration Agreement - In
July 2019, Sanofi commenced dosing in healthy volunteers of the
partnered small molecule inhibitor of RIPK1, DNL758. This triggered
a milestone payment of $10.0 million, which Denali expects to
receive in August 2019.
- Presented progress of EIF2B program DNL343 -
In June 2019, the progress of DNL343, a therapeutic candidate
designed to inhibit the formation of stress granules by activating
EIF2B, was presented. Stress granule formation is present in many
neurodegenerative diseases, including ALS and Frontotemporal
Dementia (FTD). Denali plans to commence dosing in a Phase 1
clinical study in healthy volunteers for this program in the first
half of 2020.
- Announced Orphan Drug and Rare Pediatric Disease
Designation for DNL310 and expansion of portfolio of brain
penetrant enzyme replacement therapy (ERT) programs - In
June 2019, Denali announced that the FDA granted Orphan Drug
Designation and Rare Pediatric Disease Designation for its DNL310
program, which Denali is developing for patients with Hunter
Syndrome. Based on pre-clinical proof of concept with DNL310,
Denali has initiated two additional ERT programs that are enabled
by its enzyme transport vehicle technology. A Phase 1/2 patient
study of DNL310 in Hunter Syndrome is planned for mid 2020.
Second Quarter 2019 Financial Results
For the three months ended June 30, 2019, Denali reported a net
loss of $58.3 million compared with a net loss of
$54.7 million for the three months ended June 30, 2018.
Collaboration revenue was $4.2 million for the three months
ended June 30, 2019, compared with collaboration revenue of
$1.6 million for the three months ended June 30,
2018. The increase was due to $3.5 million of revenue
recognized under the Sanofi Collaboration Agreement in the three
months ended June 30, 2019, partially offset by a decrease in
revenue recognized under the Takeda Collaboration Agreement.
Total research and development expenses were $51.9 million
for the three months ended June 30, 2019 compared to
$52.1 million for the three months ended June 30, 2018. The
decrease in total research and development expenses of
$0.3 million was primarily attributable to expenses associated
with the nomination of two additional Fcab targets under the F-star
Collaboration Agreement, and the acquisition of F-star Gamma
Limited in the three months ended June 30, 2018. The decrease was
largely offset by increases in external expenses related to the
Company's portfolio and platform technology, and personnel-related
expenses, including non-cash stock-based compensation, driven
primarily by higher headcount and stock-based compensation expense
associated with new equity award grants and certain performance and
market-based awards. There were also increases in external research
and development expenses supporting a growing pipeline, and
increased facilities-related expenses primarily due to rent
expense.
General and administrative expenses were $15.1 million for
the three months ended June 30, 2019, compared to $6.9 million
for the three months ended June 30, 2018. The increase in total
general and administrative expenses of $8.2 million was
primarily attributable to an increase in personnel-related
expenses, including non-cash stock-based compensation, driven
primarily by higher headcount and stock-based compensation expense
associated with new equity award grants and certain performance and
market-based awards. Additionally, there were increases in legal
and professional services expenses required to support Denali's
growing operations, and facilities-related expenses primarily due
to rent expense.
Cash, cash equivalents, and marketable securities were
$534.4 million as of June 30, 2019.
About Denali Therapeutics
Denali is a biopharmaceutical company developing a broad
portfolio of product candidates for neurodegenerative diseases.
Denali pursues new treatments by rigorously assessing genetically
validated targets, engineering delivery across the blood-brain
barrier and guiding development with biomarker monitoring to
demonstrate target engagement and select patients. 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
Denali's progress and business plans; Denali’s expected receipt of
a clinical milestone payment from Sanofi; Denali’s plans for, and
the timing of commencing, dosing in a Phase 1 clinical study of
DNL343 in healthy volunteers and a Phase 1/2 patient study of
DNL310 in Hunter Syndrome; and statements made by Denali’s
Chief Executive Officer.
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: Denali’s early stages
of clinical drug development; Denali’s ability to complete the
development and, if approved, commercialization of its product
candidates; the risk of the occurrence of any event, change or
other circumstance that could give rise to the termination of
Denali’s collaboration agreements; Denali’s dependence on
successful development of its BBB platform technology and product
candidates currently in its core program; Denali’s ability to
conduct or complete clinical trials on expected timelines; 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; 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 BBB platform technology; and
other risks, including those described in Denali’s Annual Report on
Form 10-K filed with the SEC on March 12, 2019, Denali’s Quarterly
Report on From 10-Q filed with the SEC on August 6, 2019, and
Denali’s future reports to be filed with the SEC. The
forward-looking statements in this press release are based on
information available to Denali as of the date hereof. Denali
disclaims any obligation to update any forward-looking statements,
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 June 30, |
|
Six Months Ended June 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Collaboration revenue |
$ |
4,197 |
|
|
$ |
1,648 |
|
|
$ |
8,402 |
|
|
$ |
2,289 |
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development |
51,884 |
|
|
52,134 |
|
|
89,287 |
|
|
72,953 |
|
General and administrative |
15,076 |
|
|
6,896 |
|
|
24,386 |
|
|
12,466 |
|
Total operating expenses |
66,960 |
|
|
59,030 |
|
|
113,673 |
|
|
85,419 |
|
Loss from operations |
(62,763 |
) |
|
(57,382 |
) |
|
(105,271 |
) |
|
(83,130 |
) |
Interest and other income,
net |
4,113 |
|
|
2,658 |
|
|
7,629 |
|
|
4,728 |
|
Income tax benefit |
313 |
|
|
— |
|
|
313 |
|
|
— |
|
Net loss |
$ |
(58,337 |
) |
|
$ |
(54,724 |
) |
|
$ |
(97,329 |
) |
|
$ |
(78,402 |
) |
Net loss per share, basic and
diluted |
$ |
(0.61 |
) |
|
$ |
(0.59 |
) |
|
$ |
(1.02 |
) |
|
$ |
(0.86 |
) |
Weighted average number of shares outstanding, basic and
diluted |
95,495,497 |
|
|
92,899,524 |
|
|
95,241,412 |
|
|
91,239,274 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denali
Therapeutics Inc.Condensed Consolidated Balance
Sheets(Unaudited)(In thousands) |
|
|
|
|
|
June 30, 2019 |
|
December 31, 2018 |
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
62,936 |
|
|
$ |
77,123 |
|
Short-term marketable securities |
|
415,667 |
|
|
|
387,174 |
|
Prepaid expenses and other current assets |
|
17,378 |
|
|
|
16,539 |
|
Total current assets |
|
495,981 |
|
|
|
480,836 |
|
Long-term marketable
securities |
|
55,832 |
|
|
|
147,881 |
|
Property and equipment,
net |
|
47,195 |
|
|
|
25,162 |
|
Operating lease right-of-use
asset |
|
34,647 |
|
|
|
— |
|
Other non-current assets |
|
3,949 |
|
|
|
8,105 |
|
Total assets |
$ |
637,604 |
|
|
$ |
661,984 |
|
Liabilities and
stockholders' equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
3,931 |
|
|
$ |
1,891 |
|
Accrued liabilities |
|
13,793 |
|
|
|
8,520 |
|
Accrued compensation |
|
4,092 |
|
|
|
9,952 |
|
Contract liabilities |
|
22,598 |
|
|
|
11,427 |
|
Other current liabilities |
|
2,135 |
|
|
|
996 |
|
Total current liabilities |
|
46,549 |
|
|
|
32,786 |
|
Contract liabilities, less
current portion |
|
44,563 |
|
|
|
57,350 |
|
Operating lease liability,
less current portion |
|
70,911 |
|
|
|
— |
|
Deferred rent, less current
portion |
|
— |
|
|
|
24,532 |
|
Other non-current
liabilities |
|
408 |
|
|
|
471 |
|
Total liabilities |
|
162,431 |
|
|
|
115,139 |
|
Total stockholders'
equity |
|
475,173 |
|
|
|
546,845 |
|
Total liabilities and
stockholders’ equity |
$ |
637,604 |
|
|
$ |
661,984 |
|
|
|
|
|
|
|
|
|
Contacts:
Lizzie Hyland (646) 495-2706
lhyland@gpg.com
or
Morgan Warners (202) 295-0124
mwarners@gpg.com
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