Denali Therapeutics Inc. (NASDAQ: DNLI), a biopharmaceutical
company developing a broad portfolio of product candidates
engineered to cross the blood-brain barrier (BBB) for
neurodegenerative diseases, today reported financial results for
the third quarter ended September 30, 2021, and provided business
highlights.
“We continue to advance our broad therapeutic pipeline,
strengthen our strategic collaborations, and build out our
manufacturing and commercial capabilities,” said Ryan Watts, Ph.D.,
Denali's Chief Executive Officer. “In the third quarter, we began a
Phase 1b study of our potential first-in-class eIF2B activator,
DNL343, in individuals with amyotrophic lateral sclerosis (ALS).
Also in ALS, Sanofi has advanced our RIPK1 inhibitor, SAR443820
(DNL788), into Phase 2 development. In Parkinson’s disease (PD), we
presented a progress update at Biogen’s R&D Day event on our
LRRK2 inhibitor collaboration, highlighting data and activities to
support late-stage development of BIIB122 (DNL151). In addition,
our Transport Vehicle (TV)-enabled portfolio continues to move
forward. Our Phase 1/2 study of DNL310 (ETV:IDS) for Hunter
syndrome is now enrolling Cohort C, which is designed to further
explore clinical endpoints in participants younger than four years
of age. In parallel, we have begun activities to initiate a pivotal
Phase 2/3 study of DNL310 for Hunter syndrome in the first half of
2022. Furthermore, we have started building out a clinical
manufacturing facility to support our development plans and
expansion of our TV platform programs.”
Recent Pipeline Highlights
Expanding antisense oligonucleotides (ASOs) research
collaboration with Secarna: In October 2021, Denali and
Secarna expanded their strategic research collaboration for the
discovery and development of ASOs to treat neurodegenerative
diseases with the addition of multiple new targets and indications.
As part of the research collaboration originally formed in the fall
of 2020, Secarna uses its discovery and development platform,
LNA-plus™ to generate ASO candidates and Denali applies its
Oligonucleotide Transport Vehicle (OTV) technology designed to
enhance central nervous system (CNS) delivery of ASOs. Following
the discovery period, Denali is solely responsible for all
development and commercialization activities. Secarna will receive
a target-based technology access fee and prepaid R&D fee and is
eligible to receive milestone payments and royalties for each
program that Denali progresses through development and
commercialization.
Commenced dosing in Phase 1b study of eIF2B activator
DNL343 in ALS: In October 2021, Denali presented results
from a Phase 1 healthy volunteer study demonstrating that DNL343
met safety and biomarker goals. The Phase 1 data supported
initiation of a Phase 1b study in participants with ALS, which
commenced dosing in August 2021 (study number NCT05006352). The
Phase 1b study is a multicenter, randomized, placebo-controlled,
double-blind, 28-day study followed by an 18-month open-label
extension, designed to evaluate the safety, pharmacokinetics, and
pharmacodynamics of DNL343 in approximately 30 participants with
ALS. Further information on the Phase 1b study can be accessed on
the ClinicalTrials.gov website or by clicking here.
Advancing CNS-penetrant RIPK1 inhibitor SAR443820
(DNL788) into Phase 2 study in ALS: In October 2021,
Denali announced that its partner Sanofi advanced development of
SAR443820 in ALS and that the U.S. FDA granted SAR443820 Fast Track
designation for the potential treatment of ALS. Results from a
Phase 1 study of SAR443820 in healthy volunteers demonstrated
robust target engagement at doses that were generally well
tolerated. Sanofi plans to initiate the Phase 2 study, named
HIMALAYA, in the first quarter of 2022.
Presented BIIB122 (DNL151) program progress in PD at
Biogen’s R&D Day: In September, at Biogen’s R&D
Day event, Denali provided a progress update on its collaboration
with Biogen to develop BIIB122 (DNL151) for PD. The companies
highlighted data supporting the advancement to late-stage clinical
development and ongoing start-up activities for BIIB122 (DNL151) in
preparation to commence PD studies. As previously announced, two
studies are planned: one in participants with PD who do not carry a
LRRK2 mutation and another in PD participants with LRRK2 mutations.
Biogen will lead operationalization and conduct of these
studies.
Published preclinical proof of concept for DNL593
(PTV:PGRN) in Cell: In
August, Denali announced publication of the company's research in
Cell demonstrating preclinical proof of concept for using its
Protein Transport Vehicle (PTV) to enhance brain uptake of
peripherally administered progranulin (PTV:PGRN) by multiple cell
types in the brain, including neurons and microglia. In addition,
PTV:PGRN rescued both neurodegeneration and microglial dysfunction
in progranulin-deficient mice. This research supports the potential
utility of DNL593 in treating certain types of frontotemporal
dementia (FTD), especially FTD-GRN caused by progranulin
deficiency.
Recent Corporate Highlights
Expanding leadership: In September 2021, Denali
announced the appointment of Katie Peng to the newly created role
of Chief Commercial Officer. Ms. Peng is a proven commercial leader
with broad global experience in building and running commercial
organizations and successfully launching products for people with
neurological and rare diseases. Ms. Peng most recently served as
the Senior Vice President, Head of the OMNI Business Unit at
Genentech where she was responsible for the neurology,
ophthalmology, immunology, respiratory, and rare diseases portfolio
representing approximately $14 billion in annual revenues and
served as part of Genentech’s commercial leadership team. In
addition, Denali announced expansion of its Scientific Advisory
Board with the appointment of Melissa Starovasnik, Ph.D., an
accomplished scientific leader and executive in the fields of
protein sciences, including protein/antibody therapeutics,
structural biology, and small molecule drug discovery and
development. Dr. Starovasnik is a 28-year veteran of Genentech who
served as Vice President, Protein Sciences and leader of the
large-molecule drug discovery organization from 2011-2017, and most
recently as Senior Scientific Advisor, Research.
Expanding clinical manufacturing capabilities:
In August 2021, Denali entered into an operating lease for
approximately 50,000 square feet of laboratory, office and
warehouse premises in Salt Lake City, Utah. Denali has initiated
the build-out of the Utah site to expand its clinical manufacturing
capabilities for biologic therapeutics (large molecules) with the
goal of increasing flexibility and speed in advancing new
investigational therapies into clinical trials.
Summary Table of Upcoming 2021 Expected Key
Milestones
Timing |
Investigational Drug Candidate |
Therapeutic Area |
Expected Milestone |
Late 2021 |
PTV:PGRN (DNL593) |
FTD |
File IND application or CTA |
Late 2021/Early 2022 |
ATV:TREM2 (DNL919) |
Alzheimer’s disease |
File IND application or CTA |
Participation in Upcoming Investor
Conferences
Members of Denali’s management will participate in the following
upcoming investor conferences:
- Stifel 2021 Virtual Healthcare Conference, November 15-17
- 12th Annual Jefferies London Healthcare Conference, November
16-19
- 4th Annual Evercore ISI HealthCONx Conference, November 30 -
December 2
- J.P. Morgan Healthcare Conference,
January 10-13, 2022
Third Quarter 2021 Financial Results
For the three months ended September 30, 2021, Denali reported a
net loss of $84.6 million compared with a net loss of
$58.2 million for the three months ended September 30,
2020.
Collaboration revenue was $5.3 million for the three months
ended September 30, 2021, compared to $9.4 million for the
three months ended September 30, 2020. The decrease of
$4.1 million in collaboration revenue was primarily due to a
decrease in revenue from our collaboration with Takeda driven by
decreased costs incurred in the underlying partnered programs.
Total research and development expenses were $71.6 million for
the three months ended September 30, 2021, compared to
$53.7 million for the three months ended September 30, 2020.
The increase of approximately $17.9 million was primarily
attributable to an increase in personnel-related expenses,
including stock-based compensation, driven primarily by higher
headcount and additional equity award grants at a higher market
price. Additionally, there were increases in external expenses
related to progression of Denali's portfolio, including costs
related to the progress of the eIF2B and ETV:IDS programs in the
clinic in 2021 and the development of the TV platform reflecting
the increased investment in Denali's pipeline. These increases were
partially offset by a decrease in external expenses related to the
LRRK2 program primarily due to completion of the Phase 1 and 1b
studies, as well as cost sharing reimbursements under our
collaboration with Biogen.
General and administrative expenses were $19.3 million for the
three months ended September 30, 2021, compared to
$15.8 million for the three months ended September 30, 2020.
The increase of approximately $3.5 million was primarily
attributable to an increase in personnel-related expenses,
including stock-based compensation, driven primarily by higher
headcount and additional equity award grants at a higher market
price. Additionally, there were increases in and other general
costs such as insurance, tax, IT and facilities related expenses.
These increases were partially offset by a decrease in legal and
other professional services expenses since the prior period
included those expenses associated with the execution of the Biogen
collaboration agreements.
Cash, cash equivalents, and marketable securities were
approximately $1.36 billion as of September 30, 2021.
About Denali Therapeutics
Denali Therapeutics is a biopharmaceutical company developing a
broad portfolio of product candidates engineered to cross the
blood-brain barrier (BBB) for neurodegenerative diseases. Denali
pursues new treatments by rigorously assessing genetically
validated targets, engineering delivery across the BBB and guiding
development through biomarkers that demonstrate target and pathway
engagement. 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, business plans, business strategy, product
candidates, planned preclinical studies and clinical trials and
expected milestones; plans to conduct clinical development
activities across various programs; plans, timelines and
expectations related to DNL310 and Denali’s TV technology,
including enrollment in the Phase 1/2 study of DNL310 for Hunter
Syndrome and the initiation of a Phase 2/3 study; plans and
expectations relating to the build-out of a clinical manufacturing
facility in Utah to expand clinical manufacturing capabilities for
biologic therapeutics, including the expansion of Denali's TV
platform programs; plans, timelines and expectations related to
DNL151 of both Denali and Biogen, including with respect to
progress updates in support of late-stage clinical development;
plans, timelines and expectations related to DNL343, including with
respect to the Phase 1b study commenced in August, and the
initiation of any future clinical trials; plans, timelines and
expectations related to SAR443820(DNL788) of both Denali and
Sanofi, including with respect to the plans to initiate a Phase 2
study in the first quarter of 2022, the Fast Track designation
granted to SAR443820 for the potential treatment of ALS and the
payment of future milestone payments and royalties on product
sales; Denali’s expectations regarding DNL593 and DNL919 and plans
and expectations regarding planned regulatory filings; Denali’s
expectations regarding its expanded research collaboration with
Secarna for the discovery and development of ASOs; Denali's
priorities, regulatory approvals, timing and likelihood of success
and expectations regarding collaborations; 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: any and all risks to Denali’s business and operations
caused directly or indirectly by the evolving COVID-19 pandemic;
risk of the occurrence of any event, change or other circumstance
that could give rise to the termination of Denali’s agreements with
Sanofi, Takeda, Biogen, Secarna or any of Denali’s other
collaboration agreements; Denali’s early stages of clinical drug
development; Denali’s and its partners’ ability to complete the
development and, if approved, commercialization of its product
candidates; Denali’s and its partners’ ability to enroll patients
in its ongoing and future clinical trials; Denali’s reliance on
third parties for the manufacture and supply of its product
candidates for clinical trials; Denali’s dependence on successful
development of its blood-brain barrier platform technology and its
current programs and product candidates; Denali’s and its partners'
ability to conduct or complete clinical trials on expected
timelines; the risk that preclinical profiles of Denali’s product
candidates may not translate in clinical trials; the potential for
clinical trials to differ from preclinical, early clinical,
preliminary or expected results; the risk of significant adverse
events, toxicities or other undesirable side effects; 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 attract,
motivate and retain qualified managerial, scientific and medical
personnel; 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 blood-brain barrier platform technology; and
other risks, including those described in Denali’s most recent
Annual Report on Form 10-K filed with the Securities and Exchange
Commission (SEC) on February 26, 2021 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 September 30, |
|
Nine Months Ended September 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Collaboration revenue: |
|
|
|
|
|
|
|
Collaboration revenue from customers(1) |
$ |
5,285 |
|
|
|
$ |
9,388 |
|
|
|
$ |
36,143 |
|
|
|
$ |
18,751 |
|
|
Other collaboration revenue |
— |
|
|
|
5 |
|
|
|
4 |
|
|
|
93 |
|
|
Total collaboration revenue |
5,285 |
|
|
|
9,393 |
|
|
|
36,147 |
|
|
|
18,844 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development(2) |
71,559 |
|
|
|
53,704 |
|
|
|
197,477 |
|
|
|
157,872 |
|
|
General and administrative |
19,319 |
|
|
|
15,805 |
|
|
|
57,300 |
|
|
|
42,332 |
|
|
Total operating expenses |
90,878 |
|
|
|
69,509 |
|
|
|
254,777 |
|
|
|
200,204 |
|
|
Loss from operations |
(85,593 |
) |
|
|
(60,116 |
) |
|
|
(218,630 |
) |
|
|
(181,360 |
) |
|
Interest and other income,
net |
1,005 |
|
|
|
1,944 |
|
|
|
3,310 |
|
|
|
7,611 |
|
|
Loss before income taxes |
(84,588 |
) |
|
|
(58,172 |
) |
|
|
(215,320 |
) |
|
|
(173,749 |
) |
|
Income tax expense |
— |
|
|
|
(56 |
) |
|
|
— |
|
|
|
— |
|
|
Net loss |
$ |
(84,588 |
) |
|
|
$ |
(58,228 |
) |
|
|
$ |
(215,320 |
) |
|
|
$ |
(173,749 |
) |
|
Net loss per share, basic and
diluted |
$ |
(0.69 |
) |
|
|
$ |
(0.54 |
) |
|
|
$ |
(1.77 |
) |
|
|
$ |
(1.65 |
) |
|
Weighted average number of
shares outstanding, basic and diluted |
121,742,067 |
|
107,490,702 |
|
121,309,197 |
|
105,217,770 |
(1) Includes related party collaboration revenue from
customer of $0.9 million and $2.5 million for the three and nine
months ended September 30, 2021, respectively.(2) Includes an
offset to expense from related party cost reimbursement of $1.2
million and $5.3 million for the three and nine months ended
September 30, 2021, respectively.Denali Therapeutics
Inc.Condensed Consolidated Balance
Sheets(Unaudited)(In thousands)
|
September 30, 2021 |
|
December 31, 2020 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
394,553 |
|
|
$ |
507,144 |
|
Short-term marketable securities |
644,622 |
|
|
962,553 |
|
Cost sharing reimbursements due from related party |
1,194 |
|
|
5,674 |
|
Prepaid expenses and other current assets |
15,140 |
|
|
20,284 |
|
Total current assets |
1,055,509 |
|
|
1,495,655 |
|
Long-term marketable
securities |
319,472 |
|
|
32,699 |
|
Property and equipment,
net |
40,012 |
|
|
40,846 |
|
Operating lease right-of-use
asset |
31,196 |
|
|
32,618 |
|
Other non-current assets |
3,777 |
|
|
2,462 |
|
Total assets |
$ |
1,449,966 |
|
|
$ |
1,604,280 |
|
Liabilities and
stockholders' equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
4,817 |
|
|
$ |
1,071 |
|
Accrued compensation |
10,534 |
|
|
20,503 |
|
Accrued manufacturing costs |
13,142 |
|
|
7,140 |
|
Accrued clinical and other research & development costs |
13,380 |
|
|
11,775 |
|
Other accrued costs and current liabilities |
2,364 |
|
|
3,037 |
|
Operating lease liability, current |
5,252 |
|
|
4,690 |
|
Related party contract liability, current |
3,438 |
|
|
3,569 |
|
Contract liabilities, current |
1,324 |
|
|
19,914 |
|
Total current liabilities |
54,251 |
|
|
71,699 |
|
Related party contract
liability, less current portion |
291,434 |
|
|
293,849 |
|
Contract liabilities, less
current portion |
31,313 |
|
|
23,325 |
|
Operating lease liability,
less current portion |
59,990 |
|
|
64,175 |
|
Other non-current
liabilities |
701 |
|
|
701 |
|
Total liabilities |
437,689 |
|
|
453,749 |
|
Total stockholders'
equity |
1,012,277 |
|
|
1,150,531 |
|
Total liabilities and
stockholders’ equity |
$ |
1,449,966 |
|
|
$ |
1,604,280 |
|
Investor Relations Contact:
Laura Hansen, Ph.D.Vice President, Investor Relations(650)
452-2747hansen@dnli.com
Media Contacts:
Lizzie Hyland(646)
495-2706lizzie.hyland@fgh.com
or
Morgan Warners(202)
295-0124morgan.warners@fgh.com
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