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Denali (DNLI) Q1 Earnings Miss, Pipeline Progress in Focus
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Denali Therapeutics (DNLI - Free Report) incurred a first-quarter 2024 loss of 68 cents per share, wider than the Zacks Consensus Estimate of a loss of 67 cents but narrower than the year-ago quarter’s loss of 80 cents.
The year-over-year narrower loss was due to a decline in operating expenses.
In the absence of a marketed product, the company only recognizes revenues from ongoing collaborations in the top line. Denali did not generate any collaboration revenues in the reported quarter. The Zacks Consensus Estimate for revenues was pegged at $21 million. In the year-ago quarter, the company recorded collaboration revenues of $35 million.
In the year so far, shares of DNLI have lost 21.5% compared with the industry’s 5.9% decline.
Image Source: Zacks Investment Research
Quarter in Detail
The bottom line also benefited from a non-cash gain of $14.5 million due to the divestiture of small molecule programs.
Research and development expenses decreased 17% to $107 million in the quarter. The decrease was mainly attributable to a decrease in ETV:IDS program external expenses year.
General and administrative expenses decreased 7% to $25.2 million due to a decline in professional services, facilities and other corporate costs.
As of Mar 31, 2024, cash, cash equivalents, and marketable securities were approximately $1.43 billion. In February, Denali announced the completion of a private investment in public equity financing with gross proceeds of $500 million.
Denali Therapeutics Inc. Price, Consensus and EPS Surprise
Denali has two wholly-owned, late-stage development programs — DNL310 for (Hunter syndrome) and DNL343 (eIF2B activator) — for amyotrophic lateral sclerosis (ALS).
DNL310 or tividenofusp alfa is an Enzyme Transport Vehicle (ETV)-enabled, iduronate-2-sulfatase (IDS) replacement therapy in development for MPS II (Hunter syndrome). In February, DNLI presented new positive data from the ongoing phase I/II study of tividenofusp alfa in MPS II.
Denali is continuing dialogue with the Center for Drug Evaluation and Research (“CDER”) division of the FDA for the path ahead for tividenofusp alfa. Based on the same, 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. Concurrently, the company is conducting the global phase II/III COMPASS study, which is expected to complete enrollment in 2024.
DNL343, an eIF2B activator, is being evaluated in a phase II/III HEALEY study to treat ALS. Enrollment is complete in Regimen G of the study.
Denali and Biogen (BIIB - Free Report) are jointly evaluating a LRRK2 inhibitor BIIB122/DNL151 in development for the treatment of Parkinson’s disease (PD).
In February, Denali executed a funding agreement with a third party related to a global phase IIa study of BIIB122/DNL151. Denali plans to operationalize the study to evaluate safety and biomarkers associated with BIIB122 in participants with PD and confirmed pathogenic variants of LRRK2. The phase IIa study will be initiated in 2024.
Meanwhile, Biogen is conducting the ongoing global phase IIb LUMA study of BIIB122 in participants with early-stage PD.
Denali and partner Sanofi (SNY - Free Report) are co-developing SAR443820/DNL788. In February, Sanofi discontinued the development of SAR443820/DNL788 for the treatment of ALS based on the results of the phase II HIMALAYA study, which did not meet the primary endpoint.
Nonetheless, Sanofi continues to evaluate SAR443820 in another phase II study for the treatment of multiple sclerosis.
Denali and partner Sanofi are also developing SAR443122/DNL758 (eclitasertib), a peripheralRIPK1 inhibitor, for the treatment of ulcerative colitis (UC). Sanofi is currently conducting a phase II study of the UC treatment candidate.
In the past 30 days, the Zacks Consensus Estimate for Ligand’s 2024 and 2025 earnings per share has remained constant at $4.56 and $5.27, respectively. Year to date, shares of LGND have gained 2.5%. Ligand beat estimates in each of the trailing four quarters, delivering an average surprise of 56.02%.
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Denali (DNLI) Q1 Earnings Miss, Pipeline Progress in Focus
Denali Therapeutics (DNLI - Free Report) incurred a first-quarter 2024 loss of 68 cents per share, wider than the Zacks Consensus Estimate of a loss of 67 cents but narrower than the year-ago quarter’s loss of 80 cents.
The year-over-year narrower loss was due to a decline in operating expenses.
In the absence of a marketed product, the company only recognizes revenues from ongoing collaborations in the top line. Denali did not generate any collaboration revenues in the reported quarter. The Zacks Consensus Estimate for revenues was pegged at $21 million. In the year-ago quarter, the company recorded collaboration revenues of $35 million.
In the year so far, shares of DNLI have lost 21.5% compared with the industry’s 5.9% decline.
Image Source: Zacks Investment Research
Quarter in Detail
The bottom line also benefited from a non-cash gain of $14.5 million due to the divestiture of small molecule programs.
Research and development expenses decreased 17% to $107 million in the quarter. The decrease was mainly attributable to a decrease in ETV:IDS program external expenses year.
General and administrative expenses decreased 7% to $25.2 million due to a decline in professional services, facilities and other corporate costs.
As of Mar 31, 2024, cash, cash equivalents, and marketable securities were approximately $1.43 billion. In February, Denali announced the completion of a private investment in public equity financing with gross proceeds of $500 million.
Denali Therapeutics Inc. Price, Consensus and EPS Surprise
Denali Therapeutics Inc. price-consensus-eps-surprise-chart | Denali Therapeutics Inc. Quote
Pipeline Updates
Denali has two wholly-owned, late-stage development programs — DNL310 for (Hunter syndrome) and DNL343 (eIF2B activator) — for amyotrophic lateral sclerosis (ALS).
DNL310 or tividenofusp alfa is an Enzyme Transport Vehicle (ETV)-enabled, iduronate-2-sulfatase (IDS) replacement therapy in development for MPS II (Hunter syndrome). In February, DNLI presented new positive data from the ongoing phase I/II study of tividenofusp alfa in MPS II.
Denali is continuing dialogue with the Center for Drug Evaluation and Research (“CDER”) division of the FDA for the path ahead for tividenofusp alfa. Based on the same, 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. Concurrently, the company is conducting the global phase II/III COMPASS study, which is expected to complete enrollment in 2024.
DNL343, an eIF2B activator, is being evaluated in a phase II/III HEALEY study to treat ALS. Enrollment is complete in Regimen G of the study.
Denali and Biogen (BIIB - Free Report) are jointly evaluating a LRRK2 inhibitor BIIB122/DNL151 in development for the treatment of Parkinson’s disease (PD).
In February, Denali executed a funding agreement with a third party related to a global phase IIa study of BIIB122/DNL151. Denali plans to operationalize the study to evaluate safety and biomarkers associated with BIIB122 in participants with PD and confirmed pathogenic variants of LRRK2. The phase IIa study will be initiated in 2024.
Meanwhile, Biogen is conducting the ongoing global phase IIb LUMA study of BIIB122 in participants with early-stage PD.
Denali and partner Sanofi (SNY - Free Report) are co-developing SAR443820/DNL788. In February, Sanofi discontinued the development of SAR443820/DNL788 for the treatment of ALS based on the results of the phase II HIMALAYA study, which did not meet the primary endpoint.
Nonetheless, Sanofi continues to evaluate SAR443820 in another phase II study for the treatment of multiple sclerosis.
Denali and partner Sanofi are also developing SAR443122/DNL758 (eclitasertib), a peripheralRIPK1 inhibitor, for the treatment of ulcerative colitis (UC). Sanofi is currently conducting a phase II study of the UC treatment candidate.
Zacks Rank and A Stock to Consider
Denali currently carries a Zacks Rank #3 (Hold).
A better-ranked stock from the drug/biotech industry is Ligand Pharmaceuticals (LGND - Free Report) , sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 30 days, the Zacks Consensus Estimate for Ligand’s 2024 and 2025 earnings per share has remained constant at $4.56 and $5.27, respectively. Year to date, shares of LGND have gained 2.5%. Ligand beat estimates in each of the trailing four quarters, delivering an average surprise of 56.02%.