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Denali Therapeutics Reports Second Quarter 2018 Financial Results

August 09, 2018
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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 development52,134 19,004 72,953 37,474
General and administrative6,896 3,564 12,466 6,838
Total operating expenses59,030 22,568 85,419 44,312
Loss from operations(57,382) (22,568) (83,130) (44,312)
Interest and other income, net2,658 434 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 diluted92,899,524 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 securities339,503 187,851
Prepaid expenses and other current assets4,827 3,381
Total current assets377,418 409,607
Long-term marketable securities178,703 60,750
Property and equipment, net13,323 14,923
Other non-current assets2,611 1,441
Total assets$572,055 $486,721
Liabilities and stockholders' equity
Current liabilities:
Accounts payable$9,176 $2,716
Accrued liabilities5,537 5,364
Accrued compensation2,751 5,166
Contract liability8,715
Deferred rent4,782 855
Other current liabilities47 63
Total current liabilities31,008 14,164
Contract liability, less current portion49,590
Deferred rent, less current portion1,029 6,294
Other non-current liabilities156 467
Total liabilities81,783 20,925
Total stockholders' equity490,272 465,796
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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Source: Denali Therapeutics Inc.

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