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 second quarter ended June 30, 2022, and provided business
highlights.
“The Phase 1 study of DNL919 (ATV:TREM2) is now underway, making
this our third BBB Transport Vehicle (TV)-enabled program, and
seventh program overall, in clinical development,” said Ryan Watts,
Ph.D., Denali's Chief Executive Officer. “Furthermore, advancement
of our portfolio to late-stage development was highlighted in the
quarter with initiation of late-stage studies for BIIB122 (LRRK2
inhibitor) and SAR443820 (RIPK1 inhibitor) in Parkinson’s disease
and ALS, respectively. We also look forward to presenting data from
ongoing studies of DNL310 (ETV:IDS) in Hunter syndrome and DNL343
(eIF2B activator) in ALS in the second half of the year.”
Second Quarter and Recent Program
Updates:
Denali-Led Programs
DNL310 (ETV:IDS): MPS II (Hunter syndrome)
- New longer-term interim data from the ongoing Phase 1/2 study
will be presented at the 2022 Society for the Study of Inborn
Errors of Metabolism (SSIEM) Annual Symposium being held in
Freiburg, Germany, August 30 – September 2, 2022.
- Interim data continue to show sustained normalization to
healthy levels of CSF heparan sulfate and improvements in markers
of lysosomal function consistent with durable CNS activity; safety
profile with up to 85 weeks of dosing remains comparable with
standard of care therapy.
- In addition, 49-week open label data on global impression of
change continues to suggest stabilization and/or improvement in MPS
II symptoms.
- Denali has initiated recruitment of the Phase 2/3 COMPASS study
which will enroll approximately 54 MPS II patients. Upon completion
of the ongoing Phase 1/2 study, and together with data from the
global COMPASS study, this combined data package will
potentially support registration.
DNL343 (eIF2B activator): Amyotrophic Lateral Sclerosis
(ALS)
- Denali plans to present data from the ongoing Phase 1b study in
ALS in the second half of 2022.
- Based on Phase 1 data and ongoing blinded Phase 1b data, Denali
has initiated planning for late-stage development of DNL343 in
ALS.
TAK-594/DNL593 (PTV:PGRN): Frontotemporal
Dementia-Granulin (FTD-GRN)
- Denali is conducting a Phase 1/2 study, which continues to
enroll healthy volunteers in Part A.
- Pending initial clinical data, Denali expects to begin dosing
participants with FTD-GRN in the second half of 2022.
TAK-920/DNL919 (ATV:TREM2): Alzheimer’s Disease
(AD)
- Dosing has commenced in the Phase 1 single ascending dose study
in healthy volunteers in the Netherlands, following clearance of
the Clinical Trial Application as previously reported in July
2022.
Partner-Led Programs
BIIB122/DNL151 (LRRK2 inhibitor): Parkinson’s disease
(idiopathic and LRKK2-positive)
- In May 2022, Denali and Biogen announced that dosing had
commenced in the global Phase 2b LUMA study to evaluate the
efficacy and safety of BIIB122 as compared to placebo in 640
participants with early-stage Parkinson’s disease.
- The Phase 3 LIGHTHOUSE study in approximately 400 participants
with Parkinson's disease with a confirmed LRRK2 pathogenic variant
is expected to begin in the second half of 2022.
- In June 2022, Science Translational Medicine published Denali's
research supporting the potential of LRRK2 inhibition as a novel
mechanism for the treatment of Parkinson’s disease.
SAR443820/DNL788 and SAR443122/DNL758 (RIPK1
inhibitors): Neurodegenerative and peripheral
inflammatory diseases
- In May 2022, Denali announced that Sanofi began dosing with
SAR443820 in the Phase 2 HIMALAYA study, which is expected to
enroll approximately 260 participants with ALS.
- Denali received a $40 million milestone payment from Sanofi in
the second quarter related to initiation of the Phase 2 HIMALAYA
study.
- A Phase 2 study of SAR443820 in multiple sclerosis is also
planned.
- Sanofi continues to conduct a Phase 2 study of the peripherally
restricted RIPK1 inhibitor SAR443122 (eclitasertib) in cutaneous
lupus erythematosus; a Phase 2 study in ulcerative colitis is also
planned.
Discovery Programs
Denali continues to advance a broad pre-clinical portfolio
including programs enabled by the Enzyme Transport Vehicle, the
Antibody Transport Vehicle, and the Oligonucleotide Transport
Vehicle, and several small molecules engineered to cross the
blood-brain barrier and intended as potential treatments for
patients with neurodegenerative diseases.
Participation in Upcoming Investor
Conferences
- 2022 Wedbush PacGrow Healthcare Virtual Conference, August 9 –
10
- Citi's 17th Annual BioPharma Conference, September 7 – 8
- Morgan Stanley 20th Annual Global Healthcare Conference,
September 12 – 14
- H.C. Wainwright 24th Annual Global Investment Conference,
September 12 – 14
- Berenberg US CEO Conference 2022, Nov 2
Second Quarter 2022 Financial Results
For the three months ended June 30, 2022, Denali reported a net
loss of $58.8 million compared to a net loss of $60.7 million
for the three months ended June 30, 2021.
Collaboration revenue was $52.5 million for the three months
ended June 30, 2022, compared to $22.9 million for the three
months ended June 30, 2021. The increase in collaboration revenue
of $29.6 million for the three months ended June 30, 2022 compared
to the three months ended June 30, 2021 was primarily due to a
$12.0 million preclinical milestone earned for approval of the
CTA for TAK-920/DNL919 (ATV:TREM2) in the second quarter of 2022
and $40.0 million for milestone revenue earned in April 2022 upon
dosing the first patient in a Phase 2 study of SAR443820/DNL788 in
individuals with ALS, compared with a $15.0 million milestone
recognized in the comparable period related to the initiation of a
Phase 2 study of SAR443122/DNL758.
Total research and development expenses were $92.7 million for
the three months ended June 30, 2022, compared to
$65.7 million for the three months ended June 30, 2021. The
increase of approximately $27.0 million was primarily
attributable to an increase in ETV:IDS and LRRK2 program external
expenses due to progress in the clinic in 2022, and
personnel-related expenses, including stock-based compensation,
driven primarily by higher headcount and equity award grants.
Additionally, there were increases in external expenses related to
the progression of other programs in Denali's portfolio, including
the advancement of the TV platform reflected by the progress in the
PTV:PGRN and ATV:TREM2 programs, as well as Denali's continued
overall investment in developing a broad pipeline. These expense
increases were partially offset by decreases in other external and
unallocated research and development expenses and increases in cost
sharing reimbursements.
General and administrative expenses were $21.2 million for the
three months ended June 30, 2022, compared to $19.0 million
for the three months ended June 30, 2021. The increase of
approximately $2.2 million was primarily attributable to an
increase in personnel-related expenses, including stock-based
compensation, driven by higher headcount and equity award grants.
Additionally, there were increases in other general corporate
services costs including IT services and subscriptions, taxes,
insurance and travel related expenses. These increases were
partially offset by a decrease in consulting and legal and other
professional services expenses.
Cash, cash equivalents, and marketable securities were
approximately $1.16 billion as of June 30, 2022.
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 Denali’s TV platform, including its Enzyme
Transport Vehicle (ETV), Antibody Transport Vehicle (ATV), and
Protein Transport Vehicle (PTV) technologies, as well as
preclinical programs enabled by the ETV, ATV and Oligonucleotide
Transport Vehicle technologies; plans, timelines and expectations
regarding DNL151 for the treatment of Parkinson's disease in
collaboration with Biogen, including the ongoing Phase 2b LUMA
study and the planned LIGHTHOUSE study; plans, timelines and
expectations regarding DNL310, including the presentation of data
from the ongoing Phase 1/2 study and the potential for the DNL310
combined data package to support registration of DNL310; plans
timelines and expectations regarding DNL919 for the treatment of
Alzheimer's disease; plans, timelines and expectations regarding
DNL788 of both Denali and Sanofi, including with respect to
expected enrollment for a Phase 2 trial in ALS and a planned Phase
2 study in multiple sclerosis; plans, timelines and expectations
regarding DNL758 of both Denali and Sanofi, including with respect
to the planned Phase 2 study in ulcerative colitis; plans,
timelines and expectations regarding DNL593, including Phase 1/2
trial dosing and initial clinical data from the Phase 1 portion of
such trial; plans, timelines and expectations regarding DNL343,
including the presentation of initial data from the ongoing Phase
1b study of DNL343 in ALS; 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 ongoing 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 or any of Denali’s other collaboration agreements;
Denali’s transition to a late stage clinical drug development
company; Denali’s and its collaborators’ ability to complete the
development and, if approved, commercialization of its product
candidates; Denali’s and its collaborators’ 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 programs and product candidates; Denali’s and
its collaborators' 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; developments relating to Denali's competitors and its
industry, including competing product candidates and therapies;
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; Denali's ability to
obtain additional capital to finance its operations, as needed;
Denali's ability to accurately forecast future financial results in
the current environment; general economic and market conditions;
and other risks and uncertainties, including those described in
Denali’s most recent Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission (SEC) on August 8, 2022 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, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Collaboration revenue: |
|
|
|
|
|
|
|
Collaboration revenue from customers(1) |
$ |
52,480 |
|
|
$ |
22,936 |
|
|
$ |
94,621 |
|
|
$ |
30,858 |
|
Other collaboration revenue |
|
— |
|
|
|
3 |
|
|
|
— |
|
|
|
4 |
|
Total collaboration revenue |
|
52,480 |
|
|
|
22,939 |
|
|
|
94,621 |
|
|
|
30,862 |
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development(2) |
|
92,737 |
|
|
|
65,711 |
|
|
|
178,835 |
|
|
|
125,918 |
|
General and administrative |
|
21,159 |
|
|
|
19,045 |
|
|
|
43,700 |
|
|
|
37,981 |
|
Total operating expenses |
|
113,896 |
|
|
|
84,756 |
|
|
|
222,535 |
|
|
|
163,899 |
|
Loss from operations |
|
(61,416 |
) |
|
|
(61,817 |
) |
|
|
(127,914 |
) |
|
|
(133,037 |
) |
Interest and other income,
net |
|
2,649 |
|
|
|
1,126 |
|
|
|
3,927 |
|
|
|
2,305 |
|
Loss before income taxes |
|
(58,767 |
) |
|
|
(60,691 |
) |
|
|
(123,987 |
) |
|
|
(130,732 |
) |
Income tax expense |
|
(27 |
) |
|
|
— |
|
|
|
(27 |
) |
|
|
— |
|
Net loss |
$ |
(58,794 |
) |
|
$ |
(60,691 |
) |
|
$ |
(124,014 |
) |
|
$ |
(130,732 |
) |
Net loss per share, basic and
diluted |
$ |
(0.48 |
) |
|
$ |
(0.50 |
) |
|
$ |
(1.01 |
) |
|
$ |
(1.08 |
) |
Weighted average number of
shares outstanding, basic and diluted |
|
123,008,558 |
|
|
|
121,291,435 |
|
|
|
122,842,171 |
|
|
|
121,089,174 |
|
__________________________________________________
(1) Includes related-party collaboration revenue from a customer
of $0.5 million and $2.7 million for the three and six
months ended June 30, 2022, respectively, and $0.8 million and
$1.7 million for the three and six months ended June 30, 2021,
respectively.(2) Includes an offset to expense from related-party
cost sharing reimbursements of $0.4 million and expense for
cost sharing payments to a related party of $2.4 million for
the three and six months ended June 30, 2022, respectively, and an
offset to expense from related-party cost sharing reimbursements of
$1.6 million and $4.1 million for the three and six
months ended June 30, 2021, respectively.Denali
Therapeutics Inc.Condensed Consolidated Balance
Sheets(Unaudited)(In thousands)
|
June 30, 2022 |
|
December 31, 2021 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
155,088 |
|
$ |
293,477 |
Short-term marketable securities |
|
913,580 |
|
|
571,930 |
Cost sharing reimbursements due from related party |
|
357 |
|
|
1,226 |
Prepaid expenses and other current assets |
|
45,575 |
|
|
30,601 |
Total current assets |
|
1,114,600 |
|
|
897,234 |
Long-term marketable
securities |
|
94,220 |
|
|
425,449 |
Property and equipment,
net |
|
38,703 |
|
|
38,865 |
Operating lease right-of-use
asset |
|
29,755 |
|
|
30,743 |
Other non-current assets |
|
15,184 |
|
|
11,871 |
Total assets |
$ |
1,292,462 |
|
$ |
1,404,162 |
Liabilities and
stockholders' equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
7,116 |
|
$ |
4,779 |
Accrued compensation |
|
8,315 |
|
|
19,013 |
Accrued clinical and other research & development costs |
|
16,429 |
|
|
15,887 |
Accrued manufacturing costs |
|
17,929 |
|
|
9,955 |
Other accrued costs and current liabilities |
|
2,076 |
|
|
2,857 |
Operating lease liability, current |
|
5,871 |
|
|
5,453 |
Related-party contract liability, current |
|
290,424 |
|
|
292,386 |
Contract liabilities, current |
|
— |
|
|
27,915 |
Total current liabilities |
|
348,160 |
|
|
378,245 |
Related-party contract
liability, less current portion |
|
552 |
|
|
1,295 |
Contract liabilities, less
current portion |
|
3,398 |
|
|
3,398 |
Operating lease liability,
less current portion |
|
55,525 |
|
|
58,554 |
Other non-current
liabilities |
|
379 |
|
|
379 |
Total liabilities |
|
408,014 |
|
|
441,871 |
Total stockholders'
equity |
|
884,448 |
|
|
962,291 |
Total liabilities and
stockholders’ equity |
$ |
1,292,462 |
|
$ |
1,404,162 |
Investor Relations Contact:
Laura Hansen, Ph.D.Vice President, Investor Relations(650)
452-2747hansen@dnli.com
Media Contact:
dna CommunicationsAngela Salerno-RobinSenior Vice President,
Media Relations, Healthcare+ 1 212 445
8219Asalerno-robin@dna-comms.com
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