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Denali's (DNLI) Q4 Earnings & Revenues Beat on Biogen Deal

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Denali Therapeutics (DNLI - Free Report) reported earnings of $1.91 per share in the fourth quarter of 2020 against a loss of 56 cents per share in the year-ago quarter. The Zacks Consensus Estimate was a loss of 55 cents per share.

Collaboration revenues came in at $316.8 million in the fourth quarter, beating the Zacks Consensus Estimate of $88 million, primarily owing to $307.4 million of revenues recognized under the collaboration agreement with Biogen (BIIB - Free Report) .

The company earned collaboration revenues of $4.7 million in the year-ago quarter.

Research and development expenses were $54.7 million for the quarter under review compared with $51.5 million for the year-ago quarter. The increase was primarily due to higher personnel-related expenses, including stock-based compensation.

General and administrative expenses were $17.9 million, up from $10.9 million in the year-ago quarter due to an increase in personnel-related expenses, including stock-based compensation, primarily driven by higher headcount and additional equity award grants.

Denali’s stock has lost 19.% in the year so far against the industry’s growth of 3.2%.

 

Other Updates

In January 2021, Denali announced that its phase Ib study of LRRK2 inhibitor, DNL151, in Parkinson's disease was completed and met target engagement and pathway engagement goals. Denali and partner Biogen expect to initiate late-stage clinical development of DNL151 in Parkinson's patients by 2021-end. 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.

In October 2020, Denali announced that its partner Sanofi (SNY - Free Report) 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. Dosing in a healthy volunteer study was commenced in December 2020.

Meanwhile, DNL593 (frontotemporal dementia) and DNL919 (Alzheimer’s disease) have advanced into the IND-enabling stage. Consequently, Denali received an $8-million milestone payment from Takeda (TAK - Free Report) in January 2021 for DNL593 and expects to receive another $8-million milestone payment for DNL919 later in the quarter.

Denali currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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