DNL-593

SOUTH SAN FRANCISCO, Calif., May 07, 2024 (GLOBE NEWSWIRE) -- Denali Therapeutics Inc. (Nasdaq: DNLI), a biopharmaceutical company developing a broad portfolio of product candidates engineered to cross the blood-brain barrier (BBB) for the treatment of neurodegenerative diseases and lysosomal storage diseases, today reported financial results for the first quarter ended March 31, 2024, and provided business highlights. "It has been an impactful first quarter, and we are excited about multiple opportunities to accelerate and expand our portfolio. We presented new positive two-year clinical data on tividenofusp alfa in MPS II at WORLDSymposiumTM, and we are encouraged by recent interactions with the FDA about the potential path to patients," said Ryan Watts, Ph.D., Chief Executive Officer of Denali Therapeutics. “We also initiated the first clinical trial with our second enzyme replacement therapy, DNL126, for children with MPS IIIA, and we achieved an important milestone with our eIF2B agonist program, DNL343, completing enrollment in the Phase 2/3 HEALEY ALS Platform Trial. With a focus on our Transport Vehicle platform and additional capital raised, we are well positioned to lead in the promising field of BBB-crossing therapeutics for people living with neurodegenerative and lysosomal storage diseases." First Quarter 2024 and Recent Program Updates Late-stage and mid-stage clinical programs Tividenofusp alfa (DNL310): Enzyme Transport Vehicle (ETV)-enabled, iduronate-2-sulfatase (IDS) replacement therapy in development for MPS II (Hunter syndrome) In February, new positive data from the ongoing Phase 1/2 study of tividenofusp alfa in MPS II were presented at the 20th Annual WORLDSymposiumTM demonstrating sustained normalization of heparan sulfate in cerebrospinal fluid (CSF HS), robust and sustained reductions in biomarkers of lysosomal dysfunction and neuronal damage (NfL; neurofilament light), and improvements and stabilization of multiple clinical outcomes measures over two years of treatment.Also in February, Denali participated in the Reagan-Udall Foundation for the Food and Drug Administration (FDA) workshop on CSF HS as a potential surrogate biomarker to support accelerated approval in MPS.Based on continued dialogue with the Center for Drug Evaluation and Research (CDER) division of the FDA, Denali believes the division may be open to discussing an accelerated path for tividenofusp alfa. Denali looks forward to continuing the productive dialogue with CDER and, in parallel, conducting the global Phase 2/3 COMPASS study, which is expected to complete enrollment in 2024. DNL343: eIF2B activator in development for the treatment of amyotrophic lateral sclerosis (ALS) In May, the Sean M. Healey & AMG Center for ALS at Massachusetts General Hospital (MGH) in collaboration with the Northeast ALS Consortium (NEALS) announced that enrollment is complete in Regimen G (DNL343) of the Phase 2/3 HEALEY ALS Platform Trial. SAR443820/DNL788: CNS-penetrant RIPK1 inhibitor in development for the treatment of multiple sclerosis (MS) Sanofi is evaluating SAR443820/DNL788 in a Phase 2 study in participants with MS, which is fully enrolled.In February, Sanofi discontinued development of SAR443820/DNL788 in ALS based on the results of the Phase 2 HIMALAYA study, which did not meet the primary endpoint. BIIB122/DNL151: LRRK2 inhibitor in development for the treatment of Parkinson’s disease (PD) In February, Denali announced the execution of a Collaboration and Development Funding Agreement with a third party related to a global Phase 2a study of BIIB122/DNL151, which Denali plans to solely operationalize to evaluate safety and biomarkers associated with BIIB122 in participants with Parkinson’s disease and confirmed pathogenic variants of LRRK2. Denali plans to initiate the Phase 2a study in 2024.Biogen is conducting the ongoing global Phase 2b LUMA study of BIIB122 in participants with early-stage Parkinson’s disease. Eclitasertib (SAR443122/DNL758): Peripheral RIPK1 inhibitor in development for the treatment of ulcerative colitis (UC) Sanofi is conducting the ongoing Phase 2 study of SAR443122/DNL758 in participants with UC. Early-stage clinical and preclinical programs DNL126: ETV-enabled N-sulfoglucosamine sulfohydrolase (SGSH) replacement therapy in development for the treatment of MPS IIIA (Sanfilippo syndrome Type A) In February, Denali announced initiation of dosing in the Phase 1/2 study of DNL126 in participants with MPS IIIA and presented supportive preclinical data at WORLDSymposium™.Phase 1/2 biomarker and safety data are expected by the end of 2024. TAK-594/DNL593: Protein Transport Vehicle (PTV)-enabled progranulin (PGRN) replacement therapy in development for the treatment of frontotemporal dementia-granulin (FTD-GRN) In January, Denali announced a voluntary pause in the DNL593 Phase 1/2 study in participants with FTD-GRN to implement protocol modifications and expects the study to resume this year. Oligonucleotide Transport Vehicle (OTV) platform Denali is advancing OTV:MAPT, targeting tau for Alzheimer’s disease, and OTV:SNCA, targeting alpha-synuclein for Parkinson’s disease, in the investigational new drug (IND)-enabling stage of development. Antibody Transport Vehicle Amyloid beta (ATV:Abeta) program ATV:Abeta using Denali's TfR-targeting TV technology is licensed by Biogen and is in the IND-enabling stage of development. Discovery programs Denali applies its deep scientific expertise in neurodegeneration biology and the BBB to discover and develop medicines and platforms with the focus on programs enabled by the TV technology and targeting neurodegenerative disease, including Alzheimer’s and Parkinson’s, and lysosomal storage diseases. Corporate Updates In February, Denali announced completion of a private investment in public equity (PIPE) financing with gross proceeds of $500 million.In January, Denali announced the intention to divest the company's preclinical small molecule portfolio, which was completed on March 1, 2024. Participation in Upcoming Investor Conferences BofA Securities Healthcare Conference 2024, May 14-16Jefferies Global Healthcare Conference, June 5-6Goldman Sachs 45th Annual Global Healthcare Conference, June 10-13 First Quarter 2024 Financial Results Net loss was $101.8 million for the quarter ended March 31, 2024, compared to net loss of $109.8 million for the quarter ended March 31, 2023. There was no collaboration revenue for the quarter ended March 31, 2024, compared to $35.1 million for the quarter ended March 31, 2023. The decrease in collaboration revenue was primarily due to decreases in revenue earned under the Sanofi Collaboration and Takeda Collaboration of $25.0 million and $10.0 million, respectively. Total research and development expenses were $107.0 million for the quarter ended March 31, 2024, compared to $128.8 million for the quarter ended March 31, 2023. The decrease of approximately $21.8 million for the quarter ended March 31, 2024 compared to the comparative period in the prior year was primarily attributable to a decrease in ETV:IDS program external expenses because the first quarter of 2023 included expense for a contingent consideration payment of $30.0 million related to the acquisition of F-star Gamma, which was triggered in March 2023 upon the achievement of a specified clinical milestone in the ETV:IDS program. Further, there were also decreases in external expenses associated with the ATV:TREM2 and PTV:PGRN programs due to the discontinuation of clinical development of TAK-920/DNL919 (ATV:TREM2) in Alzheimer’s disease and voluntary pause of Part B in the TAK-594/DNL593 (PTV:PGRN) Phase 1/2 study, respectively. Additionally, there was a decrease in LRRK2 program external expenses due to the transition of LRRK2 clinical activities to Biogen. These decreases were partially offset by increases in the ETV:SGSH and eIF2B program external expenses reflecting the continued progress of these programs in clinical trials, and an increase in net cost sharing payments due to increased payments due to Biogen as a result of increased LRRK2 clinical trial costs incurred by Biogen. General and administrative expenses were $25.2 million for the quarter ended March 31, 2024, compared to $27.1 million for the quarter ended March 31, 2023. The decrease of $1.9 million for the quarter ended March 31, 2024 was primarily attributable to $2.4 million of combined decreases in professional services, facilities and other corporate costs, partially offset by $0.5 million of increased personnel-related expenses consisting of employee compensation and stock-based compensation expense. The loss from operations also includes a non-cash gain from divestiture of small molecule programs of $14.5 million, reflecting the gain associated with the divestiture of assets associated with select preclinical small molecule programs in exchange for equity consideration. Cash, cash equivalents, and marketable securities were approximately $1.43 billion as of March 31, 2024. 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 the treatment of neurodegenerative diseases and lysosomal storage 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 expectations regarding Denali’s TV technology platform; statements made by Denali’s Chief Executive Officer; plans, timelines, and expectations regarding DNL310 and the ongoing Phase 2/3 COMPASS and Phase 1/2 studies as well as the likelihood of receiving accelerated approval; plans and timelines regarding DNL343, including in Regimen G of the Phase 2/3 HEALEY ALS Platform Trial; plans, timelines, and expectations of both Denali and Sanofi regarding DNL788, including the Phase 2 study in MS; plans, timelines, and expectations regarding DNL151, including with respect to the ongoing LUMA study as well as enrollment and timing of the proposed Phase 2a study in PD patients with LRRK2 mutations; expectations regarding DNL758, including the ongoing Phase 2 study in patients with UC; plans, timelines, and expectations related to DNL126, including the timing and availability of data in the ongoing Phase 1/2 study; plans, timelines, and expectations of both Denali and Takeda regarding DNL593 and the ongoing Phase 1/2 study, including the timing of continuation of the study; plans, timelines, and expectations regarding the advancement of OTV:MAPT towards clinical development; plans, timelines, and expectations of both Denali and Biogen regarding the ATV:Abeta; plans and expectations for Denali's preclinical programs; Denali's future operating expenses and anticipated cash runway; Denali's PIPE financing and its anticipated proceeds; and Denali's participation in upcoming investor conferences. 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 by adverse economic conditions; 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, or 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; 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; and other risks and uncertainties, including those described in Denali's most recent Annual and Quarterly Reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission (SEC) on February 28, 2024 and May 7, 2024, respectively, and Denali’s future reports to be filed with the SEC. Denali does not undertake any obligation to update or revise any forward-looking statements, to conform these statements to actual results, or to make changes in Denali’s expectations, 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 March 31, 2024 2023 Collaboration revenue: Collaboration revenue from customers(1) $— $35,141 Total collaboration revenue — 35,141 Operating expenses: Research and development(2) 107,016 128,816 General and administrative 25,236 27,140 Total operating expenses 132,252 155,956 Gain from divestiture of small molecule programs 14,537 — Loss from operations (117,715) (120,815)Interest and other income, net 15,913 11,034 Net loss $(101,802) $(109,781)Net loss per share, basic and diluted $(0.68) $(0.80)Weighted average number of shares outstanding, basic and diluted 149,404,188 136,524,528 __________________________________________________ (1) Includes related-party collaboration revenue from customers of $0.1 million for the three months ended March 31, 2023.(2) Includes expenses for cost sharing payments due to a related party of $4.2 million for the three months ended March 31, 2023. Denali Therapeutics Inc.Condensed Consolidated Balance Sheets(Unaudited)(In thousands) March 31, 2024 December 31, 2023Assets Current assets: Cash and cash equivalents $60,574 $127,106 Short-term marketable securities 876,295 907,405 Prepaid expenses and other current assets 36,706 29,626 Total current assets 973,575 1,064,137 Long-term marketable securities 490,723 — Property and equipment, net 46,863 45,589 Operating lease right-of-use asset 25,309 26,048 Other non-current assets 44,621 18,143 Total assets $1,581,091 $1,153,917 Liabilities and stockholders' equity Current liabilities: Accounts payable $11,855 $9,483 Accrued clinical and other research & development costs 19,956 19,035 Accrued manufacturing costs 16,720 15,462 Other accrued costs and current liabilities 5,986 5,152 Accrued compensation 8,053 21,590 Operating lease liability, current 7,512 7,260 Deferred research funding liability, current 12,500 — Total current liabilities 82,582 77,982 Operating lease liability, less current portion 43,034 44,981 Total liabilities 125,616 122,963 Total stockholders' equity 1,455,475 1,030,954 Total liabilities and stockholders’ equity $1,581,091 $1,153,917 Investor and Media Contact: Laura Hansen, Ph.D.Vice President, Investor Relations(650) 452-2747hansen@dnli.com

SOUTH SAN FRANCISCO, Calif., Feb. 27, 2024 (GLOBE NEWSWIRE) -- Denali Therapeutics Inc. (Nasdaq: DNLI), a biopharmaceutical company developing a broad portfolio of product candidates engineered to cross the blood-brain barrier (BBB) for the treatment of neurodegenerative diseases and lysosomal storage diseases, today reported financial results for the fourth quarter and year ended December 31, 2023, and provided business highlights. "2023 was a year of significant progress across our broad therapeutic portfolio and further clinical validation of our BBB-crossing Transport Vehicle (TV) platform," said Ryan Watts, Ph.D., Chief Executive Officer of Denali. "In 2024, we expect to complete enrollment of our late-stage trials in MPS II and ALS as we establish commercial readiness for our product candidates in our first peak of programs. In addition, we are well positioned to expand our TV-enabled portfolio to address large neurodegenerative diseases with TV-enabled enzymes, antibodies, and oligonucleotides. We recognize the urgent needs of patients and families living with neurodegenerative and lysosomal storage diseases and we will continue to push for the fastest path to approval of effective medicines." Fourth Quarter 2023 and Recent Program Updates: Late-stage and mid-stage clinical programs Tividenofusp alfa (DNL310): Enzyme Transport Vehicle (ETV)-enabled, iduronate-2-sulfatase (IDS) replacement therapy in development for MPS II (Hunter syndrome) Presented additional interim data from the open-label, single-arm Phase 1/2 study of DNL310 at the 2024 WORLDSymposium™. Data out to 104 weeks showed additional improvement and stabilization in multiple measures of clinical outcomes, including those of adaptive behavior, cognition, hearing, and growth trajectory. In addition, robust and sustained responses in biomarkers of neuronal health (e.g., CSF heparan sulfate, neurofilament light (NfL)) and peripheral activity (e.g., urine heparan sulfate and dermatan sulfate) were observed. DNL310 continued to be generally well tolerated. Participated in the Reagan-Udall Foundation for the Food and Drug Administration (FDA) workshop that brought together FDA representatives, patient advocates, clinical and basic science researchers, and industry to explore a case study of CSF heparan sulfate as a relevant substrate biomarker to support accelerated approval in neuronopathic mucopolysaccharidoses (MPS). Enrollment continues in the global Phase 2/3 COMPASS study and is expected to be completed in 2024. DNL343: eIF2B activator in development for the treatment of amyotrophic lateral sclerosis (ALS) Enrollment continues in Regimen G (DNL343) of the Phase 2/3 HEALEY ALS Platform Trial and is expected to be completed in 2024. SAR443820/DNL788: CNS-penetrant RIPK1 inhibitor in development for the treatment of multiple sclerosis (MS) As previously announced, Sanofi informed Denali that the Phase 2 HIMALAYA study evaluating SAR443820/DNL788 in participants with ALS did not meet the primary endpoint of change in ALS Functional Rating Scale-Revised (ALSFRS-R). Sanofi intends to present the detailed efficacy and safety results of the ALS Phase 2 HIMALAYA study at a future scientific forum. Sanofi is evaluating SAR443820/DNL788 in another Phase 2 clinical trial in participants with MS, and the outcome of HIMALAYA study has no impact on the ongoing MS study. BIIB122/DNL151: LRRK2 inhibitor in development for the treatment of Parkinson’s disease (PD) Today Denali also announced the execution of a Collaboration and Development Funding Agreement in January 2024 with a third party related to a global Phase 2a study of BIIB122/DNL151, which Denali plans to solely operationalize to evaluate safety and biomarkers associated with BIIB122 in participants with Parkinson’s disease and confirmed pathogenic variants of LRRK2. This agreement includes committed funding of $75.0 million, of which $12.5 million was received in January 2024, and the remainder will be triggered based on time and operational milestones in the study. Biogen will continue to conduct the ongoing global Phase 2b LUMA study in early-stage Parkinson’s disease. Denali and Biogen will co-commercialize BIIB122/DNL151 assuming regulatory approval. The third party will be eligible to receive low single-digit royalties from Denali on annual worldwide net sales of LRRK2 inhibitors for the treatment of Parkinson’s disease, with royalty amounts varying based on the scope of the label. Eclitasertib (SAR443122/DNL758): Peripheral RIPK1 inhibitor in development for the treatment of ulcerative colitis (UC) Sanofi is conducting the Phase 2 trial of SAR443122/DNL758 in UC. Early-stage clinical and preclinical programs DNL126: ETV-enabled N-sulfoglucosamine sulfohydrolase (SGSH) replacement therapy in development for the treatment of MPS IIIA (Sanfilippo syndrome Type A) Initiated dosing in the Phase 1/2 study of DNL126 in MPS IIIA; biomarker proof of concept and safety data are expected by the end of 2024. Presented preclinical data at WORLDSymposium™ demonstrating that DNL126 improves lysosomal and microglial morphology, neurodegeneration, and cognitive function in adult MPS IIIA mice. TAK-594/DNL593: Protein Transport Vehicle (PTV)-enabled progranulin (PGRN) replacement therapy in development for the treatment of frontotemporal dementia-granulin (FTD-GRN) Announced Part B has been voluntarily paused in the DNL593 Phase 1/2 study in participants with FTD-GRN to implement protocol modifications, and is expected to resume this year. Oligonucleotide Transport Vehicle (OTV) platform Announced two lead OTV programs in the investigational new drug (IND)-enabling stage of development: OTV:MAPT targeting tau for Alzheimer’s disease and OTV:SNCA targeting alpha-synuclein for Parkinson’s disease. Antibody Transport Vehicle Amyloid beta (ATV:Abeta) program ATV:Abeta using Denali's TfR-targeting TV technology is licensed by Biogen and is in the IND-enabling stage of development. Presented preclinical data showing superior amyloid plaque binding and reduction with ATV:Abeta compared to a conventional Abeta antibody and the potential for ATV:Abeta to reduce the risk of amyloid-related imaging abnormalities (ARIA) associated with the treatment of Alzheimer’s disease. Discovery programs Denali continues to use deep scientific expertise in neurodegeneration biology and the BBB to discover and develop medicines and platforms with the focus on programs enabled by the TV technology and targeting neurodegenerative disease, including Alzheimer’s and Parkinson’s, and lysosomal storage diseases. Announced the second TV platform, which targets CD98 heavy chain (CD98hc), an amino acid transporter expressed at the BBB. The CD98hc-targeting TV platform, having distinct properties from Denali's TfR-targeting TV platform, may enable selection of the optimal platform for a given drug target. Corporate Updates Announced entering into a securities purchase agreement with certain existing accredited investors to issue and sell an aggregate of 3,244,689 shares of Denali's common stock at a price of $17.07 per share and pre-funded warrants to purchase an aggregate of 26,046,065 shares of Denali's common stock at a purchase price of $17.06 per pre-funded warrant, through a private investment in public equity (PIPE) financing. Denali anticipates the gross proceeds from the PIPE to be approximately $500 million. Announced the intention to spin out the company's preclinical small molecule portfolio. Denali will maintain ownership of and continue to advance its current portfolio of clinical stage small molecule programs. The decision was made based on clinical validation and prioritization of Denali’s TV-enabled platforms for brain delivery of large molecules. 2024 Guidance on Operating Expenses: Cash, cash equivalents, and marketable securities were approximately $1.03 billion as of December 31, 2023. For the full year 2024, Denali anticipates its operating expenses will be less than or equal to those in 2023 based on prioritization of its portfolio. With the anticipated proceeds from the PIPE financing, Denali expects the company’s cash runway to extend into 2028. Participation in Upcoming Investor Conferences: Cowen 44th Annual Health Care Conference, March 4-6 Leerink Global Biopharma Conference, March 11-13 Jefferies Biotech on the Bay Summit, March 12-13 Stifel 2023 CNS Days, March 19-20 Fourth Quarter 2023 Financial Results Net losses were $119.5 million and $145.2 million for the quarter and year ended December 31, 2023, compared to net losses of $98.7 million and $326.0 million for the quarter and year ended December 31, 2022, respectively. There was no collaboration revenue for the quarter ended December 31, 2023, compared to $10.3 million for the quarter ended December 31, 2022. Collaboration revenue was $330.5 million for the year ended December 31, 2023, compared to $108.5 million for the year ended December 31, 2022. The decrease in collaboration revenue of $10.3 million for the quarter ended December 31, 2023, compared to the comparative period in the prior quarter was primarily due to a decrease of revenue earned under the Sanofi Collaboration of $10.0 million for a milestone triggered in December 2022 upon first patient dosed in a Phase 2 study of SAR443122/DNL758 in individuals with UC. The increase in collaboration revenue of $222.0 million for the year ended December 31, 2023 compared to the previous year was primarily due to $293.9 million in revenue recognized in April 2023 under the Biogen Collaboration Agreement as a result of Biogen exercising its option to license our ATV:Abeta program, partially offset by a decrease of $41.9 million in revenue earned under the Takeda Collaboration Agreement, as well as a decrease of $28.4 million in milestone revenue earned under the Sanofi Collaboration Agreement. The decreases in revenues from the Sanofi and Takeda Collaboration Agreements are due to the timing of underlying activities and achievement of milestones under the collaboration agreements. Total research and development expenses were $107.8 million and $423.9 million for the quarter and year ended December 31, 2023, compared to $92.1 million and $358.7 million for the quarter and year ended December 31, 2022, respectively. The increases of approximately $15.7 million and $65.2 million for the quarter and year ended December 31, 2023 compared to the comparative period in the prior year were primarily attributable to increases in ETV:IDS and eIF2B program external expenses reflecting the continued progress of these programs in clinical trials; and an increase in personnel-related expenses mainly driven by increased salary costs as a result of higher headcount. Furthermore, net cost sharing with collaboration partners shifted from reimbursements to payments due to decreased reimbursements from Takeda and increased payments to Biogen. These expense increases were partially offset by decreases in TV platform and other program external expenses, PTV:PGRN program external expenses and other external research and development expenses due to the timing of significant external research and manufacturing related activities period over period, and LRRK2 program external expenses due to the transition of LRRK2 clinical activities to Biogen. Further, for the quarter ended December 31, 2023, there was also a decrease in other unallocated research and development expenses as a result of reduced facility costs. General and administrative expenses were $24.8 million and $103.4 million for the quarter and year ended December 31, 2023, compared to $23.5 million and $90.5 million for the quarter and year ended December 31, 2022, respectively. The increases of approximately $1.3 million and $12.9 million for the quarter and year ended December 31, 2023, respectively, were primarily attributable to an increase in personnel-related expenses, including employee compensation and stock-based compensation expenses, driven by higher headcount and equity award grants. Additionally, there was an increase in facility and other corporate costs for the year ended December 31, 2023 associated with the new Salt Lake City manufacturing facility. Cash, cash equivalents, and marketable securities were approximately $1.03 billion as of December 31, 2023. 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 the treatment of neurodegenerative diseases and lysosomal storage 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 . 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 expectations regarding Denali’s TV technology platform; statements made by Denali’s Chief Executive Officer; plans, timelines, and expectations regarding DNL310 and the ongoing Phase 2/3 COMPASS and Phase 1/2 studies as well as the timing of approval; plans and timelines regarding DNL343, including enrollment for Regimen G of the Phase 2/3 HEALEY ALS Platform Trial; plans, timelines, and expectations of both Denali and Sanofi regarding DNL788, including the Phase 2 study in MS and the timing of data in the Phase 2 study in ALS; plans, timelines, and expectations regarding DNL151, including with respect to the ongoing LUMA study as well as enrollment and timing of the proposed Phase 2a study in PD patients with LRRK2 mutations, the potential for commercialization, and the achievement of milestones under the third-party agreement; expectations regarding DNL758, including the ongoing Phase 2 study in patients with UC; plans, timelines, and expectations related to DNL126, including the timing and availability of data in the ongoing Phase 1/2 study; plans, timelines, and expectations of both Denali and Takeda regarding DNL593 and the ongoing Phase 1/2 study, including the implementation of protocol modifications and timing of continuation of the study; plans, timelines, and expectations regarding the advancement of OTV candidates towards clinical development; plans, timelines, and expectations of both Denali and Biogen regarding the ATV:Abeta; plans and expectations for Denali's preclinical programs and the CD98hc-targeting TV platform; Denali's future operating expenses and anticipated cash runway; Denali's PIPE financing, including the number of shares and warrants and the anticipated proceeds; and Denali's participation in upcoming investor conferences. 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 by adverse economic conditions; 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, or 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; 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; and other risks and uncertainties, including those described in Denali's most recent Annual and Quarterly Reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission (SEC) on February 27, 2023 and November 7, 2023, respectively, and Denali’s future reports to be filed with the SEC. Denali does not undertake any obligation to update or revise any forward-looking statements, to conform these statements to actual results, or to make changes in Denali’s expectations, 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 December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Collaboration revenue: Collaboration revenue from customers(1) $ — $ 10,260 $ 330,531 $ 105,065 Other collaboration revenue — 23 — 3,398 Total collaboration revenue — 10,283 330,531 108,463 Operating expenses: Research and development(2) 107,803 92,111 423,876 358,732 General and administrative 24,769 23,516 103,354 90,475 Total operating expenses 132,572 115,627 527,230 449,207 Loss from operations (132,572 ) (105,344 ) (196,699 ) (340,744 ) Interest and other income, net 13,129 6,660 51,505 14,774 Loss before income taxes (119,443 ) (98,684 ) (145,194 ) (325,970 ) Income tax benefit (expense) (30 ) 6 (30 ) (21 ) Net loss $ (119,473 ) $ (98,678 ) $ (145,224 ) $ (325,991 ) Net loss per share, basic and diluted $ (0.86 ) $ (0.75 ) $ (1.06 ) $ (2.60 ) Weighted average number of shares outstanding, basic and diluted 138,245,382 132,877,411 137,370,897 125,530,703 __________________________________________________ (1) Includes related-party collaboration revenue from customers of $0.3 million for the quarter ended December 31, 2022, and $295.5 million and $3.2 million for the year ended December 31, 2023 and 2022, respectively. There is no related-party collaboration revenue from customers for quarter ended December 31, 2023 (2) Includes expenses for cost sharing payments due to a related party of $3.2 million and $17.7 million for the quarter end year ended December 31, 2023, respectively, and $4.4 million and $8.2 million for the quarter and year ended December 31, 2022. Denali Therapeutics Inc. Condensed Consolidated Balance Sheets (Unaudited) (In thousands) December 31, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 127,106 $ 218,044 Short-term marketable securities 907,405 1,118,171 Prepaid expenses and other current assets 29,626 36,104 Total current assets 1,064,137 1,372,319 Property and equipment, net 45,589 44,087 Operating lease right-of-use asset 26,048 30,437 Other non-current assets 18,143 13,399 Total assets $ 1,153,917 $ 1,460,242 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 9,483 $ 2,790 Cost sharing payments due to related party — 4,388 Accrued expenses and other current liabilities 68,499 66,691 Related-party contract liability, current — 290,053 Total current liabilities 77,982 363,922 Related-party contract liability, less current portion — 479 Operating lease liability, less current portion 44,981 53,032 Other non-current liabilities — 379 Total liabilities 122,963 417,812 Total stockholders' equity 1,030,954 1,042,430 Total liabilities and stockholders’ equity $ 1,153,917 $ 1,460,242 Investor and Media Contact: Laura Hansen, Ph.D. Vice President, Investor Relations (650) 452-2747 hansen@dnli.com