Denali Therapeutics Ends ALS Trial Extension, Analyst Stays Optimistic Despite Trial Setback

On Wednesday, Denali Therapeutics Inc DNLI provided an update on Regimen G of the Phase 2/3 HEALEY ALS Platform Trial of DNL343 for amyotrophic lateral sclerosis.

The company said that further analyses did not demonstrate a treatment effect on neurofilament light (NfL), a biomarker of neuronal damage, over the 24-week, double-blind period and in a subset of participants that completed an additional 28 weeks in the open-label active treatment extension.

The company plans to discontinue the active treatment extension in Regimen, according to an SEC filing. Overall, DNL343 was found to be safe and well-tolerated.

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

Data from Regimen G will be presented at a future medical meeting. Denali intends to assess potential future development opportunities for DNL343.

In January, Denali revealed topline results from an analysis of Regimen G of the Phase 2/3 HEALEY ALS Platform Trial evaluating DNL343 for amyotrophic lateral sclerosis.

Compared to placebo, the study did not meet the primary endpoint of efficacy in slowing disease progression.

William Blair analysts found the update “disappointing,” but largely expected following the previous update on the failed study. The analyst sees little impact on fair value estimates, which have been slightly lowered from $32/share to $30/share.

Analyst Sarah Schram believes the key investment focus will be on 2025 updates regarding the FDA’s accelerated approval application for Tividenofusp alfa in Hunter syndrome, with potential approval by late 2025 or early 2026.

Schram also expects clarity on the regulatory process for DNL126 in Sanfilippo syndrome, likely following a similar path as Tividenofusp.

Additionally, the company plans to expand its transport vehicle platform, aiming to move one or two new treatments into clinical trials each year for the next three years.

Based on biomarker and clinical data, Schram sees Tividenofusp as a leading treatment for Hunter syndrome. She believes the market is undervaluing the drug and the company's platform. This could also be used for common diseases like Parkinson's and Alzheimer's.

William Blair reiterates the Outperform rating on Denali and remains a buyer on the recent weakness.

Price Action: Denali stock is down 2.64% at $15.87 at the last check Thursday.

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