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 full year ended December 31, 2020 and provided business
highlights.
"We kicked off 2021 with more encouraging data from our ETV:IDS
(DNL310) Phase 1/2 study in Hunter syndrome, further suggesting
that we may be able to treat a wide array of diseases with CNS and
bodily manifestations via intravenous infusion by leveraging our
blood-brain barrier Transport Vehicle technology,” said Ryan Watts,
Ph.D., Denali’s Chief Executive Officer. “In 2021 we plan to
advance our lead LRRK2 inhibitor, DNL151 (BIIB122), with Biogen
into late-stage development for Parkinson's disease and initiate
our first patient study with our lead EIF2B activator, DNL343, in
amyotrophic lateral sclerosis (ALS). In our RIPK1 inhibitor program
partnered with Sanofi, we expect DNL758 (SAR443122), our lead
peripherally-restricted molecule, to enter a Phase 2 study for
cutaneous lupus erythematosus (CLE) and DNL788 (SAR443820), our
lead brain-penetrant molecule, to complete a Phase 1 study in
healthy volunteers. In parallel, we continue to advance additional
therapeutic modalities, including PTV:PGRN (DNL593) for
frontotemporal dementia and ATV:TREM2 (DNL919) for Alzheimer's
disease, towards the clinic. We believe that we are well positioned
to deliver on our ambitious goals this year on our path to becoming
a fully integrated global organization to serve patients with
neurodegenerative diseases.”
Recent Business Highlights
Reported positive 3-month data from Phase 1/2 study of
DNL310 in patients with Hunter syndrome (MPS II): In
February 2021, Denali reported additional interim data from Cohort
A (n=5) in its Phase 1/2 study of DNL310 in patients with Hunter
syndrome. The data showed that at dose levels resulting in robust
and durable glycosaminoglycan (GAG) response in the central nervous
system (CNS) and periphery, DNL310 was generally well tolerated
with a safety profile consistent with standard of care enzyme
replacement therapy (ERT). In addition, early effects on GAGs
initially seen after four weeks of treatment with DNL310 (as
announced in November 2020) were sustained after three months of
dosing, and reductions in levels of exploratory lipid biomarkers in
the CSF indicated an improvement in lysosomal function. Enrollment
in Cohort B (approximately 12 patients) is ongoing and, as
announced in January 2021, Denali plans to add a third Cohort C
(approximately 12 patients) to the ongoing Phase 1/2 study to
enable further exploration of clinical endpoints in younger
neuronopathic patients.
Added five new Enzyme Transport Vehicle (ETV) programs
for LSDs: In January 2021, following achievement of human
biomarker proof of concept for its Transport Vehicle (TV)
technology, Denali announced five new brain-penetrant ERT programs
in its ETV portfolio including: (1) ETV:GBA for Gaucher disease and
Parkinson’s disease; (2) ETV:GAA for Pompe disease; (3) ETV:IDUA
for MPS I; (4) ETV:NAGLU for MPS IIIB; and (5) ETV:ARSA for
MLD.
Expanding manufacturing capabilities and continuing to
build out commercial capabilities: In January 2021, in
conjunction with broadening of its ETV development portfolio,
Denali announced that activities are underway to expand clinical
manufacturing capabilities and to continue to build out commercial
capabilities. More than 30,000 patients suffer from lysosomal
storage diseases (LSDs) world-wide, with approximately two-thirds
having CNS manifestations that are not addressed by currently
available ERTs. Denali believes that DNL310 has the potential to be
its first approved medicine and that certain efficiencies of scale
can be leveraged in the LSD field to support further development
and potential commercialization of additional therapeutics for
LSDs.
Completed Phase 1b study of DNL151 (BIIB122), supporting
late-stage development: In January 2021, Denali announced
that its Phase 1b study of LRRK2 inhibitor, DNL151, in Parkinson's
disease was completed and met target engagement and pathway
engagement goals. Denali and Biogen expect to initiate late-stage
clinical development of DNL151 in Parkinson's patients by year-end
2021. Two clinical studies are planned: one in Parkinson's patients
who carry LRRK2 mutations and the other in Parkinson's patients
independent of mutation status.
Reported completion of single ascending dose portion of
DNL343 Phase 1 study in healthy volunteers: Mutations in
genes associated with ALS and frontotemporal dementia (FTD) alter
RNA homeostasis, which contributes to the aggregation of TDP-43 or
other RNA binding proteins observed in a large proportion of
patients. Activators of EIF2B have demonstrated benefits in
resolving TDP-43 aggregation, restoring protein translation and
attenuating neurodegeneration via inhibition of the cellular
integrated stress response (ISR) in numerous in vitro and in vivo
models. Denali’s lead EIF2B activator, DNL343, is a brain-penetrant
small molecule designed to rescue EIF2B function and restore normal
RNA metabolism. In January 2021, Denali reported completion of
dosing in the single ascending dose portion of its Phase 1 study of
DNL343 with safety, tolerability, pharmacokinetic and
pharmacodynamic data supporting pathway engagement and continued
development. Denali plans to initiate a Phase 1b study of DNL343 in
patients with ALS in 2H 2021.
RIPK1 program updates: In October 2020, Denali
announced that its partner Sanofi submitted an investigational new
drug (IND) application for DNL788 (SAR443820), a potent, selective
and brain-penetrant small molecule inhibitor of RIPK1 intended to
treat patients with Alzheimer’s disease, ALS, multiple sclerosis
(MS) and potentially other indications. First-in-human dosing in a
healthy volunteer study commenced in December 2020. In October
2020, Denali reported that Sanofi completed enrollment in a Phase
1b clinical trial of DNL758 (SAR443122), a peripherally-restricted
small molecule inhibitor of RIPK1, in hospitalized adult patients
with severe COVID-19 lung disease. DNL758 was found to be generally
well tolerated and resulted in changes in disease relevant
biomarkers and clinical outcome trends consistent with the proof of
mechanism. Based on the rapidly evolving landscape of treatment and
prevention options for COVID-19, Sanofi has made a sponsor decision
to hold further development in COVID-19 at this time. Separately,
Sanofi plans to initiate a Phase 2 clinical trial of DNL758 in CLE
in early 2021.
Milestones with Takeda met for progress in PTV:PGRN and
ATV:TREM2 programs: DNL593 (PTV:PGRN) and DNL919
(ATV:TREM2), intravenously administered recombinant biotherapeutics
enabled by Denali’s TV technology and intended for the potential
treatment of frontotemporal dementia and Alzheimer’s disease,
respectively, have advanced into IND-enabling stage. For the
achievement of this milestone, Denali received an $8 million
milestone payment from Takeda in January 2021 for DNL593, and
expects to receive another $8 million milestone payment for DNL919
later in Q1 2021.
Strong financial position: Cash, cash
equivalents, and marketable securities were $1.5 billion as of
December 31, 2020. For 2021, Denali anticipates an increase of
approximately 20-25% in cash operating expenses compared to
2020.
Summary Table of Upcoming 2021 Expected Key
Milestones
Timing |
Investigational DrugCandidate |
Therapeutic Area |
Expected Milestone |
Q1 |
ATV:TREM2 (DNL919) |
Alzheimer’s disease |
Receive milestone payment from Takeda for initiation of
IND-enabling studies |
1H |
RIPK1 inhibitor (DNL758) |
CLE |
Initiate Phase 2 study in CLE patients (Sanofi) |
1H |
EIF2B activator (DNL343) |
ALS, FTD |
Phase 1 data in healthy volunteers |
Mid 2021 |
ETV:IDS (DNL310) |
Hunter syndrome (MPS II) |
24-week data from Cohort A of Phase 1/2 study |
2H |
EIF2B activator (DNL343) |
ALS, FTD |
Initiate Phase 1b study in ALS patients |
2H |
RIPK1 inhibitor (DNL788) |
ALS, Alzheimer’s disease, MS |
Phase 1 data in healthy volunteers (Sanofi) |
Late 2021 |
LRRK2 inhibitor (DNL151) |
Parkinson’s disease |
Initiate late-stage clinical development |
Late 2021 |
PTV:PRGN (DNL593) |
FTD |
File IND application or CTA |
Late 2021/Early 2022 |
ATV:TREM2 (DNL919) |
Alzheimer’s disease |
File IND application or CTA |
|
|
|
|
Participation in Upcoming Investor
Conferences
Members of Denali’s management will participate in the following
upcoming investor conferences:
- H.C. Wainwright Global Life Sciences Conference, March
9-10
- Stifel CNS Day, March 31
- UBS Global Healthcare Virtual Conference, May 24-26
- Jefferies Healthcare Conference, June 1-3
- Goldman Sachs 42nd Annual Global Healthcare Conference, June
8-10
Fourth Quarter and Full Year 2020 Financial
Results
Net income was $244.9 million and $71.1 million for
the quarter and year ended December 31, 2020, compared to net
losses of $54.0 million and $197.6 million for the
quarter and year ended December 31, 2019, respectively.
Collaboration revenue was $316.8 million and $335.7 million
for the quarter and year ended December 31, 2020, compared to
$4.7 million and $26.7 million for the quarter and year ended
December 31, 2019, respectively. The increases of
$312.1 million and $309.0 million for the quarter and
year ended December 31, 2020, respectively, compared to the same
periods ended December 31, 2019 were primarily due to $307.4
million of revenue recognized under the Biogen Collaboration
Agreement in 2020.
Total research and development expenses were $54.7 million
and $212.6 million for the quarter and year ended December 31,
2020, compared to $51.6 million and $193.4 million for the
quarter and year ended December 31, 2019, respectively. The
increases of approximately $3.1 million and $19.2 million
for the quarter and year ended December 31, 2020, respectively,
were primarily attributable to an increase in personnel-related
expenses, including stock-based compensation, driven primarily by
higher headcount and additional equity award grants. Additionally,
there were increases in external expenses related to progression of
Denali's portfolio, including costs related to the progress of the
EIF2B and ETV:IDS programs in the clinic in 2020. Other increases
include TV platform and other program external expenses reflecting
the increased investment in Denali's pipeline. These increases were
partially offset by a decrease in the LRRK2 program external
expenses primarily due to cost sharing reimbursements from Biogen
under the Biogen Collaboration Agreement as well as a decrease in
other external research and development expenses.
General and administrative expenses were $18.0 million and
$60.3 million for the quarter and year ended December 31, 2020,
compared to $10.9 million and $46.5 million for the quarter
and year ended December 31, 2019, respectively. The increases of
approximately $7.1 million and $13.8 million for the quarter and
year ended December 31, 2020, respectively, were primarily
attributable to an increase in personnel-related expenses,
including stock-based compensation, driven primarily by higher
headcount and additional equity award grants. Additionally, there
were increases in legal and other professional services expenses,
including those associated with the execution of the Biogen
Collaboration Agreement, and other general costs such as insurance,
tax and IT related expenses.
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; the potential benefits, expectations and
results of the collaboration with Biogen; plans to conduct clinical
development activities and commercialize products; LRRK2 inhibitors
as modifying therapy for Parkinson’s disease; plans, timelines and
expectations related to DNL310 and Denali’s TV technology; plans,
timelines and expectations related to DNL151, including with
respect to initiation of late-stage clinical development; plans,
timelines and expectations related to DNL343, including with
respect to the initiation of future clinical trials; plans,
timelines and expectations related to DNL788 and DNL758 of both
Denali and Sanofi, including with respect to the availability of
data and the initiation of future clinical trials; Denali’s
expectations regarding DNL593 and DNL919 and plans and expectations
regarding planned regulatory filings and milestone payments with
respect to such programs; Denali’s priorities, regulatory
approvals, timing and likelihood of success and expectations
regarding collaborations; Denali’s plans to expand clinical
manufacturing and commercial capabilities; Denali’s expectations
regarding cash operating expenses for 2021; 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 evolving 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 early stages of clinical drug development;
Denali’s and its partners’ ability to complete the development and,
if approved, commercialization of its product candidates; Denali’s
and its partners’ 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 product candidates
currently in its core program; Denali’s and it's partners' 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
or clinical trials of any other product candidates to differ from
preclinical, preliminary or expected results; 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 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; and other risks, including those described in Denali’s
most recent Annual Report on Form 10-K filed with the Securities
and Exchange Commission (SEC) on February 26, 2021 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 December31, |
|
Twelve Months EndedDecember
31, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Collaboration revenue: |
|
|
|
|
|
|
|
Collaboration revenue from customers(1) |
$ |
316,810 |
|
|
$ |
4,603 |
|
|
$ |
335,561 |
|
|
$ |
26,320 |
|
Other collaboration revenue |
5 |
|
|
69 |
|
|
98 |
|
|
358 |
|
Total collaboration revenue |
316,815 |
|
|
4,672 |
|
|
335,659 |
|
|
26,678 |
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development(2) |
54,743 |
|
|
51,551 |
|
|
212,615 |
|
|
193,382 |
|
General and administrative |
17,994 |
|
|
10,879 |
|
|
60,326 |
|
|
46,480 |
|
Total operating expenses |
72,737 |
|
|
62,430 |
|
|
272,941 |
|
|
239,862 |
|
Income (loss) from
operations |
244,078 |
|
|
(57,758 |
) |
|
62,718 |
|
|
(213,184 |
) |
Interest and other income,
net |
1,630 |
|
|
3,808 |
|
|
9,241 |
|
|
15,219 |
|
Income (loss) before income
taxes |
245,708 |
|
|
(53,950 |
) |
|
71,959 |
|
|
(197,965 |
) |
Income tax (expense)
benefit |
(823 |
) |
|
(75 |
) |
|
(823 |
) |
|
351 |
|
Net income (loss) |
$ |
244,885 |
|
|
$ |
(54,025 |
) |
|
$ |
71,136 |
|
|
$ |
(197,614 |
) |
Net income (loss) per
share: |
|
|
|
|
|
|
|
Basic net income (loss) per
share |
2.04 |
|
|
(0.56 |
) |
|
0.65 |
|
|
(2.07 |
) |
Diluted net income (loss) per
share |
1.91 |
|
|
(0.56 |
) |
|
0.63 |
|
|
(2.07 |
) |
Weighted-average shares used
in calculating: |
|
|
|
|
|
|
|
Basic net income (loss) per
share |
120,161,578 |
|
|
96,078,950 |
|
|
108,974,137 |
|
|
95,608,208 |
|
Diluted net income (loss) per
share |
128,297,841 |
|
|
96,078,950 |
|
|
112,703,108 |
|
|
95,608,208 |
|
|
|
|
|
|
|
|
|
|
|
|
|
________________________________
(1) Includes related party collaboration
revenue from customer of $307,437 for the quarter and year ended
December 31, 2020.(2) Includes an offset to
expense from related party cost reimbursement of $9,260 for the
quarter and year ended December 31, 2020.Denali
Therapeutics Inc.Condensed Consolidated Balance
Sheets(Unaudited)(In thousands)
|
December 31, 2020 |
|
December 31, 2019 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
507,144 |
|
|
$ |
79,449 |
|
Short-term marketable securities |
962,553 |
|
|
335,907 |
|
Cost sharing reimbursements due from related party |
5,674 |
|
|
— |
|
Prepaid expenses and other current assets |
20,284 |
|
|
14,675 |
|
Total current assets |
1,495,655 |
|
|
430,031 |
|
Long-term marketable
securities |
32,699 |
|
|
39,886 |
|
Property and equipment,
net |
40,846 |
|
|
46,732 |
|
Operating lease right-of-use
asset |
32,618 |
|
|
33,923 |
|
Other non-current assets |
2,462 |
|
|
2,659 |
|
Total assets |
$ |
1,604,280 |
|
|
$ |
553,231 |
|
Liabilities and
stockholders' equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
1,071 |
|
|
$ |
2,590 |
|
Accrued expenses and other current liabilities |
47,145 |
|
|
24,015 |
|
Related party contract liability, less current portion |
3,569 |
|
|
— |
|
Contract liabilities, current |
19,914 |
|
|
18,739 |
|
Total current liabilities |
71,699 |
|
|
45,344 |
|
Contract liabilities, less
current portion |
23,325 |
|
|
43,753 |
|
Related party contract
liabilities, less current portion |
293,849 |
|
|
— |
|
Operating lease liability,
less current portion |
64,175 |
|
|
68,865 |
|
Other non-current
liabilities |
701 |
|
|
379 |
|
Total liabilities |
453,749 |
|
|
158,341 |
|
Total stockholders'
equity |
1,150,531 |
|
|
394,890 |
|
Total liabilities and
stockholders’ equity |
$ |
1,604,280 |
|
|
$ |
553,231 |
|
|
|
|
|
|
|
|
|
Investor Relations Contact:
Laura Hansen, Ph.D.Vice President,
Investor Relations(650)
452-2747hansen@dnli.com
Media Contacts:
Lizzie Hyland(646)
495-2706lizzie.hyland@fgh.com
or
Morgan Warners(202)
295-0124morgan.warners@fgh.com
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