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Denali Therapeutics Reports Second Quarter 2018 Financial Results

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SOUTH SAN FRANCISCO, Calif., Aug. 09, 2018 (GLOBE NEWSWIRE) -- Denali Therapeutics Inc. (NASDAQ:DNLI), a biopharmaceutical company developing a broad portfolio of product candidates for neurodegenerative diseases, today reported financial results for the second quarter ended June 30, 2018.

Second Quarter 2018 Financial Results

For the three months ended June 30, 2018, Denali reported a net loss of $54.7 million compared with a net loss of $22.1 million for the three months ended June 30, 2017.

Collaboration revenue was $1.6 million for the three months ended June 30, 2018, with no collaboration revenue recognized for the three months ended June 30, 2017. The increase was due to revenue recognized under the Option and Collaboration Agreement with Takeda Pharmaceutical Company Limited, which was entered into in January 2018.

Total research and development expenses were $52.1 million for the three months ended June 30, 2018, including non-cash stock-based compensation of $2.6 million, compared to $19.0 million for the three months ended June 30, 2017, including non-cash stock-based compensation $0.7 million. The increase in total research and development expenses of $33.1 million was primarily attributable to a $26.7 million increase in BBB platform external expenses, the majority of which related to expense associated with the acquisition of F-star Gamma Limited and the nomination of two additional Fcab targets under the F-star Collaboration Agreement. Additionally, there was an increase in personnel related expenses including stock-based compensation driven by increased headcount and options granted at higher valuations subsequent to the IPO, as well as an increase in lab consumable costs and facilities related expenses.

General and administrative expenses were $6.9 million for the three months ended June 30, 2018, including non-cash stock-based compensation of $2.1 million, compared to $3.6 million for the three months ended June 30, 2017, including non-cash stock-based compensation of $0.4 million. The increase in total general and administrative expenses of $3.3 million was primarily attributable to an increase in personnel related expenses, including stock-based compensation, and an increase in legal and professional service expenses. The increases were primarily attributable to an increase in general and administrative headcount and options granted at higher valuations subsequent to the IPO, as well as the increased professional services required to support Denali's ongoing operations as a public company.

Cash, cash equivalents, and marketable securities were $551.3 million as of June 30, 2018, compared to $467.0 million as of December 31, 2017.  The increase of $84.3 million was primarily attributable to $155.0 million in cash received related to the Option and the Collaboration Agreement and Stock Purchase Agreement with Takeda, both entered into in January 2018, offset by operating and investing cash payments.

About Denali Therapeutics

Denali is a biopharmaceutical company developing a broad portfolio of product candidates for neurodegenerative diseases. Denali pursues new treatments by rigorously assessing genetically validated targets, engineering delivery across the blood-brain barrier and guiding development with biomarker monitoring to demonstrate target engagement and select patients. Denali is based in South San Francisco. For additional information, please visit www.denalitherapeutics.com.

 
Denali Therapeutics Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share amounts)
       
  Three Months Ended June 30,   Six Months Ended June 30,
  2018   2017   2018   2017
Collaboration revenue $ 1,648     $     $ 2,289     $  
Operating expenses:              
Research and development 52,134     19,004     72,953     37,474  
General and administrative 6,896     3,564     12,466     6,838  
Total operating expenses 59,030     22,568     85,419     44,312  
Loss from operations (57,382 )   (22,568 )   (83,130 )   (44,312 )
Interest and other income, net 2,658     434     4,728     858  
Net loss $ (54,724 )   $ (22,134 )   $ (78,402 )   $ (43,454 )
Net loss per share, basic and diluted $ (0.59 )   $ (2.29 )   $ (0.86 )   $ (4.65 )
Weighted average number of shares outstanding, basic and diluted 92,899,524     9,670,449     91,239,274     9,346,051  
                       


Denali Therapeutics Inc.
Condensed Consolidated Balance Sheet Data
(Unaudited)
(In thousands)
  June 30, 2018   December 31, 2017
Assets      
Current assets:      
Cash and cash equivalents $ 33,088     $ 218,375  
Short-term marketable securities 339,503     187,851  
Prepaid expenses and other current assets 4,827     3,381  
Total current assets 377,418     409,607  
Long-term marketable securities 178,703     60,750  
Property and equipment, net 13,323     14,923  
Other non-current assets 2,611     1,441  
Total assets $ 572,055     $ 486,721  
Liabilities and stockholders' equity      
Current liabilities:      
Accounts payable $ 9,176     $ 2,716  
Accrued liabilities 5,537     5,364  
Accrued compensation 2,751     5,166  
Contract liability 8,715      
Deferred rent 4,782     855  
Other current liabilities 47     63  
Total current liabilities 31,008     14,164  
Contract liability, less current portion 49,590      
Deferred rent, less current portion 1,029     6,294  
Other non-current liabilities 156     467  
Total liabilities 81,783     20,925  
Total stockholders' equity 490,272     465,796  
Total liabilities and stockholders' equity $ 572,055     $ 486,721  
               

Contacts:

Morgan Warners
(202) 337-0808
mwarners@gpg.com

OR

Lizzie Hyland
(646) 495-2706
lhyland@gpg.com

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