Executive Summary

EPS beat on tighter expense control; GAAP diluted EPS was -$0.72 vs S&P Global consensus of -$0.74*, while net loss was $124.1M (vs $99.0M a year ago) as operating expenses rose with launch prep and manufacturing scale-up .
No collaboration revenue was recognized in Q2; Street expected ~$5.64M*, implying a revenue shortfall vs consensus. Operating expenses were $134.96M (R&D $102.70M; G&A $32.27M) .
Regulatory momentum continued: tividenofusp alfa (DNL310) BLA accepted for priority review (PDUFA Jan 5, 2026) and FDA alignment on an accelerated approval path for DNL126 in MPS IIIA .
Liquidity strong with $977.4M in cash, cash equivalents and marketable securities at June 30, 2025, supporting commercial readiness and pipeline execution .
Key near-term stock catalysts: FDA priority-review path and readiness milestones for DNL310; advancement of DNL126 toward a Phase 3 confirmatory study .

What Went Well and What Went Wrong

What Went Well

Priority review for DNL310 and alignment on accelerated approval for DNL126, underscoring FDA engagement and the TV platform’s regulatory traction .
CEO tone on platform conviction and launch readiness: “Denali is poised to deliver meaningful treatments for people living with lysosomal, neurodegenerative, and other serious diseases.” .
Publication in Science of ATV:Abeta preclinical data supporting improved brain distribution and potential ARIA risk mitigation for anti-amyloid approaches, strengthening platform credibility ahead of future readouts .

What Went Wrong

Wider net loss YoY and lower interest income (10.8M vs 17.6M) partly offsetting cost controls; net loss grew to $124.1M from $99.0M YoY, reflecting higher R&D and G&A as operations scale .
R&D increased on preclinical TV programs and Salt Lake City biomanufacturing start-up; G&A rose on commercial launch preparation, pressuring P&L in absence of revenue .
Street expected revenue (~$5.64M*) but none was recognized, creating a headline miss on the top line even as EPS beat .

Financial Results

P&L snapshot (oldest → newest)

Metric	Q2 2024	Q1 2025	Q2 2025
Net Loss ($M)	$99.03	$132.97	$124.12
Diluted EPS (GAAP)	-$0.59	-$0.78	-$0.72
Total Operating Expenses ($M)	$116.59	$145.58	$134.96
Interest & Other Income ($M)	$17.57	$12.61	$10.84

Operating expense mix and drivers

Operating Expense Detail ($M)	Q2 2024	Q2 2025
External R&D – TV programs (incl. cost sharing)	$30.25	$37.59
External R&D – small molecules (incl. cost sharing)	$12.60	$2.79
Other R&D (labs, consultants, facilities)	$14.50	$22.06
Personnel-related R&D	$34.05	$40.26
Total R&D	$91.40	$102.70
G&A	$25.19	$32.27

Notes: R&D increases were driven by multiple TV preclinical programs and the commencement of operations at the Salt Lake City manufacturing facility; G&A rise tied to tividenofusp launch preparation .

Liquidity

Liquidity ($M)	Dec 31, 2024	Mar 31, 2025	Jun 30, 2025
Cash & cash equivalents	$174.96	$56.95	$141.21
Short-term marketable securities	$657.37	$760.98	$757.75
Long-term marketable securities	$359.37	$235.84	$78.46
Total cash, cash equivalents & marketable securities	~$1,190	~$1,050	~$977.4

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Cash operating expenses	FY 2025	Up ~10%–15% vs 2024 (provided Feb 27, 2025)	No quantitative update provided in Q2 materials	Maintained/No update
Liquidity runway	Next 12 months	N/A	Management expects cash, cash equivalents, and marketable securities to fund projected operations for at least 12 months from filing date	New context (10-Q standard)

No revenue, margin, or EPS guidance was provided.

Earnings Call Themes & Trends

Note: A public Q2 2025 earnings call transcript was not located despite targeted searches; themes below are drawn from the Q2 press release and 10-Q.

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Regulatory progress	Q4: On track to submit DNL310 BLA early 2025; Breakthrough Therapy in Jan 2025 . Q1: BLA submission completed; START collaboration on DNL126 .	DNL310 BLA accepted with priority review; PDUFA Jan 5, 2026. FDA alignment that CSF HS may support accelerated approval for DNL126; Phase 3 planning underway .	Accelerating FDA engagement and de-risking path
TV platform credibility	Portfolio build and IND-enabling plans in 2025 .	Science paper on ATV:Abeta supporting improved brain distribution and potential ARIA mitigation .	Strengthening scientific validation
Manufacturing readiness	Prelaunch activities and scale-up emphasis . Q1: SLC biomanufacturing facility opened .	SLC operations increased other R&D and personnel costs .	Execution progressing; cost footprint rising
Parkinson’s (LRRK2)	LUMA enrollment expected to complete in 2025 .	LUMA fully enrolled; readout expected 2026 .	On plan toward 2026 efficacy readout
Financial discipline	$1.19B (12/31/24) cash + M/S . Q1: ~$1.05B .	~$977.4M at 6/30/25 .	Cash burn consistent with scaling activities

Management Commentary

“The FDA’s priority review of our BLA for tividenofusp alfa and alignment on an accelerated approval path for DNL126 are key milestones highlighting the potential of our Transport Vehicle (TV) platform…” — Ryan Watts, Ph.D., CEO .
“If FDA-approved, tividenofusp alfa would mark the first significant advancement in nearly two decades for enzyme replacement therapy…also a pivotal milestone for our TransportVehicle platform.” — Carole Ho, M.D., CMO (July 7 release) .
Expense drivers: increases in TV program external R&D, other R&D and personnel linked to SLC manufacturing start-up; offset by lower small-molecule spend as ALS program winds down .

Q&A Highlights

A public Q2 2025 earnings call transcript was not available at publication; key clarifications from filings:

Cost drivers: R&D up 12% YoY on TV preclinical programs and SLC facility; G&A up 28% YoY on launch preparation .
Funding offsets: $8.8M six‑month R&D offset recognized from a third‑party funding collaboration for the BIIB122/DNL151 Phase 2a study .
Liquidity: ~$977.4M cash, cash equivalents and marketable securities; at least 12 months runway from filing .

Estimates Context

Metric (Q2 2025)	Consensus	Actual
Primary EPS Consensus Mean	-$0.735*	-$0.72
Primary EPS – # of Estimates	14*	—
Revenue Consensus Mean	$5.64M*	$0 (no collaboration revenue recognized)
Revenue – # of Estimates	15*	—

Values marked with * are from S&P Global consensus (GetEstimates). Values retrieved from S&P Global.

Result: EPS beat (actual above consensus) but revenue below consensus as no revenue was recognized.

Key Takeaways for Investors

Regulatory momentum is strong: DNL310 on priority review (PDUFA Jan 5, 2026) and DNL126 has an FDA-aligned accelerated pathway—both meaningful de‑risking steps for the TV platform .
P&L leverage improving despite higher OpEx: EPS beat vs consensus* came from disciplined spend and lower interest income headwind, but overall losses remain elevated ahead of potential 2026/2027 catalysts .
Commercial readiness costs are flowing through now: expect continued G&A investment tied to DNL310 launch prep and medical affairs, and R&D expenses tied to SLC manufacturing operations and TV preclinical scale-up .
Liquidity of ~$977M provides flexibility to bridge key inflections (FDA decision for DNL310; DNL126 Phase 3 planning; LUMA readout in 2026) without near-term capital needs under base plan .
Near-term trading catalysts: regulatory interactions and launch readiness disclosures for DNL310; additional DNL126 Phase 1/2 data and Phase 3 design clarity; any BD updates on TV-enabled programs .
Watch estimate revisions: models likely adjust revenue lower for 2H25 (given lack of collaboration revenue signals) with potential upward EPS adjustments if expense cadence stays measured relative to expectations* .

Appendix: Additional Program and Period References

Q1 2025 press release (BLA completion, SLC facility opening) .
Q4/FY 2024 press release (operating expense guidance for 2025; prelaunch activities) .
July 7, 2025 press release (BLA acceptance, PDUFA date) .

Notes on sources and availability:

Q2 2025 8-K and press release provided headline metrics and program updates .
Q2 2025 Form 10-Q provided full financial statements, expense drivers, funding offsets, and liquidity disclosures .
A public Q2 2025 earnings call transcript was not found despite targeted document and web searches.

Denali Therapeutics Inc. (DNLI)·Q2 2025 Earnings Summary