Why Is Denali Therapeutics Stock Trading Higher On Wednesday?

Denali Therapeutics Inc DNLI CEO Ryan Watts presented at the J.P. Morgan Healthcare Conference. 

The presentation primarily focused on the company’s blood-brain-barrier (BBB) crossing platform technology and the pipeline, including tividenofusp alfa (tivi, DNL310) in Hunter syndrome and DNL126 in Sanfilippo syndrome Type A, as well as ATV:Abeta approach in Alzheimer’s disease.

Also Read: Denali Therapeutics’ Amyotrophic Lateral Sclerosis Misses Pivotal Trial, But Analyst Says It Was Expected

JP Morgan notes that the management believes each TV franchise has the potential to generate over $3 billion in value.

The analyst views Denali Therapeutics as being in the early stages of unlocking the full potential of its BBB TV platform across various applications, maintaining the stock’s Overweight rating.

Ahead of the conference, DNL310 received Breakthrough Therapy Designation in Hunter Syndrome and is on track to file a BLA for accelerated approval in early 2025. Based on this timeline, JP Morgan expects a potential late-2025/early 2026 launch.

• The company is gearing up for commercialization and product launch, focusing initially on the U.S. market. Management estimates there are approximately 400-500 patients in the U.S.
• Meanwhile, the Phase 2/3 COMPASS trial has completed enrollment for neuronopathic participants in cohort A. Both study cohorts are expected to have simultaneous results, but no timeline for the readout has been provided. Globally, management estimates around 2,000 patients.

On DNL126, the management did not share detailed data but emphasized promising results from the Phase 1/2 trial in Sanfilippo syndrome Type A.

These include DNL126’s ability to normalize CSF HS levels. Building on these findings and insights from DNL310, the company is working to speed up DNL126’s development timeline.

To support this, they expanded the Phase I/II trial from two to five cohorts, aiming for a faster approval pathway. Management estimates a global patient population of over 1,500.

JP Morgan also notes that Denali Therapeutics has a manufacturing facility. While it won’t be used for the commercial launch of Tivi in Hunter syndrome, it is expected to support the company’s other programs.

As of September 30, 2024, cash, cash equivalents, and marketable securities were approximately $1.28 billion. Denali anticipates its cash runway will extend into 2028.

Price Action: DNLI stock is up 14.60% at $21.48 at the last check on Wednesday.

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