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Denali's (DNLI) Q1 Earnings Miss Estimates, Revenues Up Y/Y

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Denali Therapeutics (DNLI - Free Report) reported a loss of 58 cents per share in the first quarter of 2021, wider than the Zacks Consensus Estimate of a loss of 37 cents per share and the year-ago quarter’s loss of 55 cents per share.

Collaboration revenues came in at $7.9 million in the first quarter, missing the Zacks Consensus Estimate of $29 million but up from $3.6 million in the year-ago quarter, primarily owing to an increase in revenues from the company’s collaboration with Takeda (TAK - Free Report) .

Research and development expenses were $60.2 million for the quarter under review compared with $51 million for the year-ago quarter. The upside was primarily driven by an increase in personnel-related expenses.

General and administrative expenses were $18.9 million, up from $12.6 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 30.3% in the year so far compared with the industry’s decline of 3%.

 

Other Updates

In February 2021, Denali reported three-month data from cohort A (n=5) in a phase I/II study of its pipeline candidate, DNL310 (enzyme replacement therapy), in patients with Hunter syndrome (MPS II). The data showed that treatment with DNL310 resulted in normalization of glycosaminoglycan (GAG) levels in cerebrospinal fluid and a safety and tolerability profile consistent with the standard-of-care enzyme replacement therapy. In March 2021, the FDA granted a Fast Track designation to DNL310 for the treatment of patients with Hunter syndrome. Denali plans to report six-month data from cohort A in mid-2021 at a medical conference.

Denali recently presented results from two studies of its small molecule LRRK2 inhibitor, DNL151 (BIIB122) — a phase I study in healthy volunteers and a phase Ib study in patients with Parkinson's disease. DNL151 was generally well tolerated, and target engagement and pathway engagement biomarker goals were met. Denali and partner Biogen (BIIB - Free Report) plan to initiate the late-stage clinical development of DNL151 in patients with Parkinson's disease by 2021-end.

In February 2021, Denali announced that partner Sanofi (SNY - Free Report) has decided to cease further development of DNL758 (SAR443122), a peripherally-restricted small molecule inhibitor of RIPK1, in COVID-19. The decision was taken following the completion of an early-stage study in hospitalized adult patients with severe COVID-19 lung disease. Sanofi plans to commence dosing in a phase II study of DNL758 (SAR443122) in cutaneous lupus erythematosus (CLE) patients, in the first half of 2021.

Denali currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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