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Denali Therapeutics Inc. (DNLI)·Q1 2025 Earnings Summary

Executive Summary

  • Denali reported a larger net loss driven by stepped-up R&D and commercial readiness; Q1 2025 net loss was $133.0M and EPS was $(0.78) . Against S&P Global consensus, EPS missed by $0.08 and revenue was effectively zero vs $2.97M estimate, representing a significant miss for a pre-revenue biotech *.
  • Strategic progress was strong: rolling BLA completed in May for tividenofusp alfa (DNL310) with FDA Breakthrough Therapy Designation; launch preparation underway for late 2025/early 2026 .
  • Operational capability expanded with opening of the Salt Lake City clinical biomanufacturing facility, improving supply chain control and efficiency .
  • Pipeline mixed: positive momentum in DNL126 with FDA START program engagement; ALS program DNL343 Regimen G failed to meet primary endpoint, leading to discontinuation of active treatment extension .
  • Liquidity remains robust at ~$1.05B in cash and marketable securities; management had previously guided 2025 cash OpEx up ~10–15% y/y (maintained) .

What Went Well and What Went Wrong

What Went Well

  • Completion of the rolling BLA for tividenofusp alfa, positioning Denali for its first commercial launch: “The completion of our BLA submission for tividenofusp alfa represents a pivotal milestone… we are now preparing for commercial launch in late 2025 or early 2026.” — Ryan Watts, CEO .
  • Regulatory momentum and clarity: FDA Breakthrough Therapy Designation for tividenofusp alfa; alignment with CDER on accelerated approval using CSF heparan sulfate surrogate endpoint and conversion to full approval .
  • Execution infrastructure: clinical biomanufacturing facility opened in Salt Lake City to strengthen supply chain and reduce costs over time .

What Went Wrong

  • EPS and revenue missed consensus; EPS $(0.78) vs $(0.704) cons and no revenue vs $2.97M cons, reflecting lower interest income and no partnership revenue in the quarter; R&D/G&A stepped up for TV pipeline and BLA activities * .
  • ALS program setback: DNL343 did not meet primary and key secondary endpoints; treatment extension discontinued, raising questions about the small molecule ALS approach .
  • Operating losses widened: net loss increased to $133.0M from $101.8M y/y; R&D up to $116.2M and G&A up to $29.4M with BLA and commercialization prep driving spend .

Financial Results

Core P&L and Liquidity (oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Collaboration Revenue ($USD)$0 $0 $0
R&D Expense ($USD Millions)$98.2 $99.8 $116.2
G&A Expense ($USD Millions)$24.9 $30.1 $29.4
Interest & Other Income ($USD Millions)$16.0 $15.2 $12.6
Net Loss ($USD Millions)$(107.2) $(114.8) $(133.0)
Diluted EPS ($)$(0.63) $(0.67) $(0.78)
Cash, Cash Equivalents & Marketable Securities ($USD Billions)$1.28 $1.19 $1.05

Versus Wall Street Consensus (S&P Global) — Q1 2025

MetricConsensusActual
EPS ($)$(0.704)*$(0.78)
Revenue ($USD)$2,970,830*$0

Values marked with * retrieved from S&P Global.

Operating Metrics Detail (Q1 2025 drivers)

  • R&D increased by ~$9.2M y/y, driven by TV programs (clinical DNL126 and preclinical OTV) and facility operations; partial offset from lower personnel/small molecule spend .
  • G&A increased by $4.1M y/y on BLA submission and commercial launch preparation .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash Operating ExpensesFY 2025Up ~10–15% vs 2024 No update in Q1 release Maintained
Cash RunwayMulti-yearInto 2028 (as of 9/30/2024) No update in Q1 release Maintained
Revenue/MarginsFY/Q1 2025Not provided Not provided Maintained

Earnings Call Themes & Trends

Note: A Q1 2025 earnings call transcript was not available in our document catalog.

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Regulatory path (DNL310)FDA alignment for accelerated approval; CSF HS surrogate; BLA planned early 2025 BLA rolling submission completed in May; Breakthrough designation; launch planning underway Strengthening regulatory momentum
DNL126 (Sanfilippo)Preliminary CSF HS normalization; START selection; planning accelerated path Productive START collaboration continues; Phase 1/2 ongoing Positive progress
Manufacturing/Supply ChainN/AClinical biomanufacturing facility opened (Salt Lake City) enhancing supply and efficiency Operational capacity improved
ALS (DNL343)Awaiting analyses; enrollment complete Primary endpoint not met; extension discontinued; safety acceptable Negative outcome
Partner programs (Biogen LRRK2; Takeda PGRN)LUMA enrollment continuing; BEACON initiated; DNL593 Phase 1/2 ongoing LUMA fully enrolled; BEACON progressing; DNL593 continues Steady execution

Management Commentary

  • “The completion of our BLA submission for tividenofusp alfa represents a pivotal milestone… If approved, tividenofusp alfa would be the first FDA-approved enzyme replacement therapy engineered to cross the blood-brain barrier…” — Ryan Watts, Ph.D., CEO .
  • “The company’s initiation of a rolling submission of a BLA for accelerated approval of tividenofusp alfa… aligned with CDER on the use of CSF HS as a surrogate endpoint… preparing for potential commercial launch in late 2025 or early 2026.” — Carole Ho, M.D., CMO .
  • “Longer-term clinical data add to confidence that normalization of key biomarkers endures… associated with continued improvement in hearing, cognition and behavior…” — Joseph Muenzer, M.D., Ph.D., Investigator (Phase 1/2) .

Q&A Highlights

  • No Q1 2025 earnings call transcript was available; therefore Q&A highlights and any guidance clarifications from a call cannot be provided based on primary sources.

Estimates Context

  • Denali’s Q1 2025 EPS missed S&P Global consensus by ~$0.08 (actual $(0.78) vs $(0.704)). Revenue printed at $0 vs $2.97M consensus, a notable miss typical of pre-revenue biotechs when consensus assumes minimal collaboration income *.
  • Expect estimates to adjust modestly for interest income variability and OpEx cadence as commercialization prep intensifies; pipeline/regulatory milestones (DNL310 BLA status) are likely the bigger driver of the equity narrative than near-term P&L*.
    Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Regulatory catalyst path is intact and advancing: BLA rolling completed and Breakthrough Therapy Designation for tividenofusp alfa; next milestone will be FDA filing acceptance and PDUFA date setting .
  • Cash of ~$1.05B provides substantial runway to launch and fund portfolio, though OpEx is rising with TV programs and commercial readiness; prior guidance of +10–15% 2025 cash OpEx remains .
  • Near-term P&L remains loss-making with zero revenue; consensus-derived EPS/revenue misses are secondary to clinical/regulatory milestones in the valuation framework *.
  • Operational de-risking via in-house clinical biomanufacturing capability should aid supply reliability and cost control heading into launch .
  • Pipeline mix: strong momentum in DNL126 under FDA START; partner programs (Biogen LRRK2, Takeda PGRN) progressing; counterbalanced by ALS DNL343 failure requiring reallocation/strategic reassessment .
  • Trading implications: watch for FDA BLA acceptance and PDUFA date, COMPASS enrollment updates, and commercialization buildout; estimate revisions likely minor vs catalyst-driven moves *.
  • Medium-term thesis: first-in-class BBB-crossing ERT (DNL310) could validate the TV platform and enable a franchise across lysosomal/neurodegenerative diseases; execution on access, payer engagement, and manufacturing scale-up will be key .
Notes:
- Some values (marked with *) are retrieved from S&P Global.
- All document-based figures and statements are cited from SEC filings and press releases.

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