Denali Therapeutics (DNLI) reported a second-quarter 2025 loss of 72 cents per share, narrower than the Zacks Consensus Estimate of a loss of 74 cents. The company reported a loss of 59 cents in the year-ago quarter. The loss per share deteriorated year over year due to an increase in total operating expenses. In the absence of a marketed product, the company only recognizes revenues from ongoing collaborations. Denali did not generate collaboration revenues in the reported quarter. The Zacks Consensus Estimate for revenues was pegged at $25 million. Shares of DNLI have lost 31.7% year to date compared with the industry’s 0.6% decline.\n\nResearch and development expenses increased 12.4% to $102.7 million. The increase was primarily due to increased spending on multiple preclinical programs. An increase in other research and development expenses, consultants and general facilities costs also contributed to the surge. General and administrative expenses increased 28% to $32.3 million due to activities related to the preparations for a potential launch of tividenofusp alfa. As of June 30, 2025, cash, cash equivalents, and marketable securities amounted to approximately $977.4 million.\n\nIn July 2025, Denali announced that the FDA accepted its biologics license application (BLA) for pipeline candidate tividenofusp alfa for priority review. The regulatory body assigned a target action date of Jan. 5, 2026. The BLA seeks accelerated approval based on a data package, including results from the phase I/II study in individuals with Hunter syndrome. The FDA had previously granted tividenofusp alfa Breakthrough Therapy, Fast Track, Orphan Drug, and Rare Pediatric Disease designations. Tividenofusp alfa is an investigational, next-generation enzyme replacement therapy designed to cross the blood-brain barrier (BBB) and deliver the iduronate-2-sulfatase (IDS) enzyme throughout the body and brain. Denali continues to prepare for commercial launch and is conducting the phase II/III COMPASS study to support global regulatory submissions.\n\nDenali is also evaluating DNL126 for the treatment of Sanfilippo syndrome type A (MPS IIIA). Concurrent with the quarterly results, Denali announced that it has reached alignment with the FDA’s Center for Drug Evaluation and Research that cerebrospinal fluid heparan sulfate (CSF HS) may be considered a reasonably likely surrogate endpoint to predict clinical benefit and may therefore be used to support accelerated approval of DNL126 for MPS IIIA. Data from the ongoing open-label phase I/II study at week 49 is consistent with previously announced 25-week data, demonstrating a significant reduction in CSF HS from baseline, including normalization, and a safety profile that supports continued development. Denali has almost completed enrollment in the phase I/II study, and planning is underway for a confirmatory global phase III study.\n\nAnother candidate in DNLI’s pipeline is TAK-594/DNL593. Denali has collaborated with Takeda for the co-development and co-commercialization of DNL593, a therapeutic candidate engineered for the delivery of progranulin (PGRN) across the BBB and into lysosomes for the treatment of frontotemporal dementia (FTD) associated with a mutation in the granulin (GRN) gene. Denali is conducting the ongoing phase I/II study of DNL593 in FTD-GRN.\n\nDenali and Biogen (BIIB) are jointly evaluating an LRRK2 inhibitor, BIIB122/DNL151, in development to treat Parkinson’s disease (PD). Biogen is leading the global phase IIb LUMA study, evaluating BIIB122's impact on disease progression in early-stage PD. In May 2025, Biogen announced that the LUMA study was fully enrolled with a readout expected in 2026. Meanwhile, Denali is conducting the phase IIa BEACON study, specifically enrolling participants with LRRK2-associated PD to assess how LRRK2 inhibition may impact this disease.\n\nDenali expects to submit regulatory applications to begin clinical testing of one to two TV-enabled programs each year over the next three years across its Enzyme TV (ETV), Antibody TV (ATV), and Oligonucleotide TV (OTV) franchises. The most advanced programs include: DNL952 (ETV: GAA) for Pompe disease; DNL111 (ETV: GCase) for Parkinson’s/Gaucher disease; DNL622 (ETV: IDUA) for MPS I; DNL921 (ATV: Abeta) for Alzheimer’s disease; DNL628 (OTV: MAPT) for Alzheimer’s disease; and DNL422 (OTV: SNCA) for Parkinson’s disease.\n\nOur Take on DNLI’s Performance Denali’s recent pipeline progress is impressive. A potential approval of tividenofusp alfa should be a significant boost for DNLI. The company’s progress with DNL126 is encouraging as well. The company’s sound cash position is a positive as well and ensures its ability to fund ongoing programs.

DNLI Tops on Q2 Earnings, Expects Decree on Hunter Syndrome Drug in '26

Denali Therapeutics reported a second-quarter 2025 loss of 72 cents per share, narrower than the Zacks Consensus Estimate of 74 cents, with a year-ago loss of 59 cents per share. The loss increased year over year due to higher operating expenses, primarily research and development and general and administrative costs. The company has no marketed products and generates no collaboration revenues in the reported quarter. Denali announced in July 2025 that the FDA accepted its biologics license application (BLA) for tividenofusp alfa for priority review with a target action date of January 5, 2026. The drug is an investigational enzyme replacement therapy designed to cross the blood-brain barrier for treating Hunter syndrome. Denali is also advancing DNL126 for Sanfilippo syndrome type A, with the FDA suggesting cerebrospinal fluid heparan sulfate as a surrogate endpoint. The company is preparing for a global phase III study and has a collaboration with Takeda on DNL593 for frontotemporal dementia. Denali and Biogen are jointly evaluating BIIB122/DNL151 for Parkinson’s disease, with Biogen leading the phase IIb LUMA study and Denali conducting the phase IIa BEACON study. Denali expects to submit regulatory applications for one to two TV-enabled programs annually over the next three years across its Enzyme TV, Antibody TV, and Oligonucleotide TV franchises, including candidates for Pompe disease, Parkinson’s, Gaucher disease, and Alzheimer’s disease.