Biogen exits Denali Alzheimer's partnership, impacting biotech revenue

Biogen has decided to return the rights to an early-stage Alzheimer's disease program to Denali Therapeutics, significantly impacting Denali's revenue stream. This decision involves terminating the license of the ATV:Abeta program, which was developed using Denali's TfR-targeting technology aimed at amyloid beta. The collaboration between the two companies, which focused on potential Alzheimer’s treatments, has now ended. Consequently, Denali will regain all rights and data generated during their partnership, as noted in Denali's second-quarter earnings release.

Denali CEO Ryan Watts expressed optimism despite the setback, stating that regaining the rights to the TfR-based ATV:Abeta program enhances their potential to develop a best-in-class treatment for Alzheimer's disease. The company clarified that Biogen's decision was not due to any concerns regarding the efficacy or safety of the Transport Vehicle platform. Nonetheless, the termination of this partnership marks a substantial loss in future revenue for Denali. The biotech firm reported a net loss of $99 million for the second quarter, contrasting sharply with a net income of $183.4 million for the same period the previous year.

The significant drop in income is linked to the absence of collaboration revenue from Biogen, which contributed $294.1 million to Denali's earnings last year, with $293.9 million coming directly from Biogen. Without this financial support, Denali has experienced a notable decline in its revenue.

A Denali spokesperson mentioned that while there were future royalties tied to the program, the "full financial downstream upside" now belongs solely to Denali. The ATV:Abeta program, initially licensed in April 2023 when Biogen exercised an option from a 2020 collaboration, is now back under Denali's control. The company aims to advance the development of a TfR-targeting ATV:Abeta molecule as well as a CD98hc-targeting ATV:Abeta molecule for Alzheimer's treatment.

The ATV:Abeta technology is designed to enhance the exposure of therapeutic antibodies in the brain, thereby improving both efficacy and safety. Despite the setback, Denali is optimistic about the future development of these molecules.

This is not the first instance where Biogen has scaled back its collaboration with Denali. Just over a year ago, Biogen discontinued work on a clinical trial for BIIB122 (DNL151), which focused on Parkinson’s disease patients with a specific gene mutation. The trial was not expected to yield results until 2031, and the cut was part of Biogen's broader R&D prioritization efforts.

However, the collaboration between the companies on BIIB122, a selective LRRK2 inhibitor for Parkinson's disease, continues. A spokesperson confirmed that Biogen is conducting a phase 2b clinical trial involving 640 patients with early-stage Parkinson’s disease.

In summary, Biogen's decision to terminate the license for the ATV:Abeta program represents a significant financial and strategic shift for Denali Therapeutics. While this change poses challenges, Denali remains focused on advancing its Alzheimer's treatment programs and continues to collaborate with Biogen on Parkinson's disease research.

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