Stifel 2026 Healthcare Conference - DENALI THERAPEUTICS INC

Explicit Guidance:

• FY2024 Q4 commercial revenue guidance: $30 million to $32 million.
• Full-year 2024 performance exceeded prior guidance; Q2 revenue was $7.8 million against an implied expectation of $10–12 million, driven by accelerated payer coverage and clinical-to-commercial patient switches.

Business-Segment Outlook:

• Avleia (Hunter Syndrome): Goal to pivot 100% of the 375 eligible U.S. patients onto the therapy; current commercial lives coverage stands at 70% (20 states on Medicaid); trajectory expected to follow a measured S-shaped growth curve post-rapid initial ramp.
• San Felipe (Mucopolysaccharidosis Type I): Targeting accelerated approval based on Heparin Sulfate reduction (>80% reduction observed); planned filing in 2027 following detailed data presentation at a World Conference early next year.
• Pompe Disease (DNL952): Phase I study ongoing in patients already on enzyme replacement therapy (ERT) to demonstrate superiority via switching strategy; primary biomarkers are urine GLIC4 and serum creatine kinase; clinical differentiation to muscle tissue expected based on preclinical data.
• Alzheimer's (Anti-Aβ - DNL921): Differentiated from Roche's TRODANAB by FC domain protein engineering (no appended sequence) to reduce immunogenicity and anemia risks; Phase I in Healthy Volunteers to assess safety, immunogenicity, and CNS exposure; plaque clearance and ARIA data expected in subsequent patient studies.
• Alzheimer's (Tau): Phase I study focused on CSF Tau knockdown as the initial clinical readout (~3-month duration); Tau PET data expected as a longer-term readout (18+ months) to correlate pathology reduction with cognitive outcomes.
• Progranulin (NFTD): Study extended from 6 to 12 months to capture Neurofilament Light Chain (NFL) kinetics; data readout expected in 2027; potential for accelerated approval pursuit pending data results.
• Zafi (Sanfilippo D Type A): Program progressing to commercialization behind Avleia.

Market and Competitive Outlook:

• Competitive Landscape: Acknowledges Roche's TRODANAB as a benchmark for plaque clearance but highlights risks of immunogenicity and anemia associated with appended TFR-binding domains; positions Denali's protein-engineered approach as having superior safety profiles regarding anemia and biodistribution.
• Efficacy vs. Safety: Anticipates that Denali's capillary-mediated delivery will provide even CNS biodistribution compared to Biogen's intrathecal ASO approach, potentially mitigating the "inverse dose response" and uneven toxicity seen in other Tau therapies.
• Pompe Market: Believes existing ERTs (first and second generation) provide inadequate tissue target engagement, specifically in muscle due to low M6P receptor expression; expects TFR-enabled delivery to show clear superiority in preclinical models.

Macro / Industry Outlook:

• No explicit commentary on macroeconomic factors, interest rates, FX, or regulation beyond standard regulatory pathways (FDA alignment on San Felipe; potential accelerated approval for Progranulin).

Strategic Initiatives:

• Financial Position: Ended last quarter with $1.01 billion in cash, providing sufficient capital to progress early-stage Alzheimer's and other pipeline assets independently.
• Partnership Strategy: No immediate partnerships planned for Alzheimer's programs; decision to partner or maintain sole development will be data-dependent following initial Phase I readouts.
• Route of Administration: Exploring subcutaneous (Sub-Q) administration for the Anti-Aβ molecule as a differentiation point, though no specific dosing paradigm is currently guided.
• Program Rights: Fully reacquired rights to the Progranulin program from Takeda, allowing for extended 12-month study design without partner constraints.
• Filing Timeline: COMPASS (Avleia confirmatory trial) data readout expected in 2027, with filing anticipated in 2028.

Risks and Headwinds to Outlook:

• Clinical Trial Complexity: Placebo-controlled trials for rare diseases face challenges in patient enrollment and statistical power; natural history data is being used to power the COMPASS study.
• Biomarker Variability: Neurofilament Light Chain (NFL) kinetics are highly variable across disease states and disease types, complicating readout interpretation for the Progranulin program.
• Safety Signals: Potential risks of anemia and immunogenicity with TFR-enabled molecules are actively being managed through molecular engineering; Biogen's Tau data highlights the risk of inverse dose responses if target engagement is too high in specific brain regions.
• Regulatory Uncertainty: Accelerated approval pathways for San Felipe and Progranulin require specific biomarker validation (Heparin Sulfate, NFL) and are subject to FDA feedback.

Management Tone on the Future:

• High Confidence: Expressed strong confidence in the Avleia launch success, the ability to reproduce clinical results in placebo-controlled settings for COMPASS, and the scientific validity of the TFR platform for CNS delivery.
• Optimistic but Cautious: Management emphasizes "excitement" regarding the pipeline expansion into Alzheimer's and storage disorders but acknowledges the complexity of biomarker readouts (NFL, Tau PET) and the need for robust patient data before declaring full efficacy.
• Strategic Patience: Willing to extend study durations (Progranulin 6m to 12m) to ensure data robustness rather than rushing to premature readouts.

Miscellaneous:

• COMPASS Trial Design: Includes Part B to assess somatic aspects of the disease; aims to open access to the full heterogeneous Hunter disease population, including adults.
• Biomarker Strategy: Management notes that CSF antibody levels are not a reliable proxy for brain uptake for TFR-mediated therapies; target engagement is the primary measure of success.
• Cash Flow Context: Rapid commercial ramp-up in Q2 provided liquidity; Q3/Q4 growth expected to moderate to a "measured" S-curve.