Denali Therapeutics Q1 2024 Financial Results and Highlights

Denali Therapeutics Inc., a biopharmaceutical company based in South San Francisco, announced its financial results for the first quarter ending March 31, 2024, and highlighted significant business developments. Denali specializes in creating treatments for neurodegenerative and lysosomal storage diseases, with a focus on therapies capable of crossing the blood-brain barrier (BBB).

CEO Ryan Watts expressed enthusiasm about the company's progress, including new two-year clinical data for tividenofusp alfa in treating MPS II, presented at the WORLDSymposiumTM. The data showed sustained normalization of heparan sulfate in cerebrospinal fluid, reductions in lysosomal dysfunction and neuronal damage biomarkers, and improvements in clinical outcomes. Encouraging discussions with the FDA suggest a potential accelerated approval pathway.

Denali's other significant advancements include initiating the first clinical trial of DNL126, an enzyme replacement therapy for children with MPS IIIA. Additionally, enrollment in the Phase 2/3 HEALEY ALS Platform Trial for DNL343, an eIF2B agonist, has been completed. These developments underscore Denali's leadership in BBB-crossing therapeutics for neurodegenerative and lysosomal storage diseases.

In the late-stage and mid-stage clinical programs, Denali made significant strides:
- Tividenofusp alfa (DNL310) for MPS II showed promising results over two years.
- DNL343 has progressed in the HEALEY ALS Platform Trial.
- SAR443820/DNL788, a RIPK1 inhibitor, is in a Phase 2 study for multiple sclerosis (MS) by Sanofi, despite being discontinued for ALS.
- BIIB122/DNL151, an LRRK2 inhibitor for Parkinson’s disease, will see a new Phase 2a study initiated by Denali, with Biogen conducting a global Phase 2b study.

In early-stage clinical and preclinical programs:
- DNL126's Phase 1/2 study for MPS IIIA is underway, with initial data expected by the end of 2024.
- TAK-594/DNL593, a progranulin replacement therapy for frontotemporal dementia, is on a temporary pause but expected to resume this year.
- Denali is advancing OTV:MAPT and OTV:SNCA for Alzheimer’s and Parkinson’s diseases, respectively, and Biogen is progressing with ATV:Abeta using Denali's technology.

Denali also reported corporate updates, including completing a $500 million private investment in public equity (PIPE) financing and divesting its preclinical small molecule portfolio.

Financially, Denali reported a net loss of $101.8 million for Q1 2024, an improvement from a $109.8 million loss in Q1 2023. The absence of collaboration revenue in Q1 2024, compared to $35.1 million in Q1 2023, primarily resulted from decreased revenue from collaborations with Sanofi and Takeda.

Research and development expenses decreased to $107 million from $128.8 million in the previous year, mainly due to reduced external costs in several programs, including the ETV:IDS program following a substantial payment in Q1 2023. General and administrative expenses also saw a slight reduction to $25.2 million.

Denali's financial position remains strong, with cash, cash equivalents, and marketable securities totaling approximately $1.43 billion as of March 31, 2024. The company's strategic focus remains on leveraging its BBB-crossing technology to develop transformative therapies for patients with severe neurological and lysosomal storage diseases.