Denali Therapeutics Q3 2024 Financial Results and Highlights

Denali Therapeutics Inc., based in South San Francisco, recently shared its financial outcomes for the third quarter ending September 30, 2024, alongside significant business updates. The company, listed on Nasdaq as DNLI, specializes in developing therapies that penetrate the blood-brain barrier. Ryan Watts, Ph.D., CEO of Denali Therapeutics, highlighted the strides made in their Transport Vehicle (TV)-enabled portfolio, particularly in their Enzyme TV (ETV) franchise. The company is on track to seek accelerated approval for tividenofusp alfa for MPS II in early 2025, following a successful FDA meeting.

Recent data from a Phase 1/2 study of DNL126 for MPS IIIA showed considerable reductions in CSF heparan sulfate levels, prompting the study’s expansion to potentially expedite approval. Additionally, their latest publication in Science Translational Medicine showcased the broad brain biodistribution of oligonucleotides via their OTV technology, underscoring the potential of their TV platform in treating brain diseases.

**Third Quarter 2024 and Recent Program Updates**

**Late-stage and Mid-stage Clinical Programs**

- **Tividenofusp alfa (DNL310):** This iduronate-2-sulfatase replacement therapy, part of the Enzyme Transport Vehicle (ETV) program, is under development for MPS II (Hunter syndrome). In September, Denali announced a successful FDA meeting, paving the way for a biologics license application (BLA) for accelerated approval. Preliminary data from a Phase 1/2 study was presented at the Society for the Study of Inborn Errors of Metabolism (SSIEM 2024), showing promising results in a sample size of 37 participants over up to 129 weeks of treatment. The global Phase 2/3 COMPASS study is expected to finish enrollment in 2024.

- **DNL343:** This eIF2B activator is being developed for amyotrophic lateral sclerosis (ALS) and is part of the Phase 2/3 HEALEY ALS Platform Trial at Massachusetts General Hospital, with enrollment now complete.

- **SAR443820/DNL788:** Despite the discontinuation of the K2 Phase 2 study by partner Sanofi due to unmet endpoints, Denali continues its commitment to developing this CNS-penetrant RIPK1 inhibitor.

- **BIIB122/DNL151:** Biogen is advancing the global Phase 2b LUMA study for early-stage Parkinson’s disease. Additionally, Denali has initiated participant screening for a Phase 2a study focusing on those with confirmed LRRK2 mutations, funded by a third-party agreement.

- **Eclitasertib (SAR443122/DNL758):** Sanofi is progressing with the Phase 2 study of this peripheral RIPK1 inhibitor aimed at treating ulcerative colitis.

**Early-stage Clinical and Preclinical Programs**

- **DNL126:** Positive preliminary results from the Phase 1/2 study in MPS IIIA participants showed significant CSF HS reductions. Denali has expanded the study and continues to evaluate development plans, including an accelerated approval path. DNL126 was selected for the FDA’s START program to accelerate rare disease therapeutics development.

- **TAK-594/DNL593:** Screening for a Phase 1/2 study cohort is ongoing for this Protein Transport Vehicle (PTV)-enabled progranulin replacement therapy aimed at frontotemporal dementia-granulin.

- **Oligonucleotide Transport Vehicle (OTV) Platform:** Denali is advancing OTV:MAPT for Alzheimer’s disease and OTV:SNCA for Parkinson’s disease. Recent nonclinical findings published in Science Translational Medicine highlighted the platform’s ability to achieve broad CNS biodistribution of antisense oligonucleotides.

- **Antibody Transport Vehicle Amyloid Beta (ATV:Abeta) Program:** Development efforts continue for ATV:Abeta, designed to enhance therapeutic antibody exposure in the brain, with promising preclinical data indicating a potential for better efficacy and safety.

**Discovery Programs**

Denali leverages its expertise in neurodegenerative biology and blood-brain barrier technology to develop treatments targeting diseases such as Alzheimer’s, Parkinson’s, and lysosomal storage diseases, utilizing its TV technology.

**2024 Financial Guidance and Operational Results**

As of September 30, 2024, Denali’s cash, cash equivalents, and marketable securities totaled approximately $1.28 billion. The company has updated its cash operating expense guidance for 2024, projecting a 5-10% increase over 2023, driven by activities supporting the BLA filing for tividenofusp alfa in early 2025 and ongoing development of TV platform programs.

Denali reported a net loss of $107.2 million for the third quarter of 2024, compared to $99.4 million in the same period the previous year. Research and development expenses rose to $98.2 million, reflecting advancements in various clinical programs, while general and administrative expenses remained relatively stable at $24.9 million.

Denali Therapeutics remains committed to advancing its portfolio of therapies aimed at treating neurodegenerative and lysosomal storage diseases, driven by its innovative TV technology platform.