Denali Therapeutics Q2 Earnings Call Highlights

Key Points

• AVLAYAH generated $3.6 million in its first full commercial quarter for Hunter syndrome, with payer policies covering more than 50% of covered lives. Denali guided to $10 million–$12 million in third-quarter revenue as access and treatment starts expand.
• Denali advanced two Alzheimer’s programs, DNL628 and DNL921, into clinical development, with initial data expected in 2027. The company also delayed DNL593 data to the first half of 2027 to gather additional biomarker observations.
• Following the $195 million sale of its Priority Review Voucher, Denali’s pro forma cash, cash equivalents and marketable securities exceeded $1.1 billion, supporting commercialization, clinical programs and manufacturing expansion.

Denali Therapeutics NASDAQ: DNLI reported $3.6 million in net product revenue from AVLAYAH during the second quarter of 2026, its first full quarter of commercial availability, as the company expanded payer access and advanced two Alzheimer’s disease programs into clinical development.

Chief Executive Officer Ryan Watts described the period as “a transformative quarter” for Denali, citing the early AVLAYAH launch, progress across the Transport Vehicle platform and a strengthened cash position following the July sale of a rare pediatric disease Priority Review Voucher.

AVLAYAH Launch Gains Early Momentum

AVLAYAH, approved by the FDA earlier this year for Hunter syndrome, is Denali’s first commercial product and the first approved medicine developed using its Transport Vehicle platform, which is designed to help biologic medicines cross the blood-brain barrier. The therapy is intended to reach both peripheral tissues and the brain.

Chief Commercial Officer Katie Peng said the U.S. addressable market includes roughly 375 currently eligible prevalent pediatric patients, based on Denali’s estimate of approximately 500 prevalent Hunter syndrome patients in the country and the FDA-approved label. The company estimates about 2,000 patients are addressable globally.

Denali said commercial policies covering more than 50% of covered lives had been established by the end of the second quarter. Fourteen state Medicaid programs publicly listed AVLAYAH as covered, while other patients have obtained access through prior authorizations, appeals and medical exceptions, according to the company.

Peng said Denali reached about 80% of targeted healthcare organizations through field engagements, scientific exchanges, webinars and treatment-center support. The company also said it had engaged with more than 100 families through launch webinars and patient services, representing more than one-quarter of the eligible U.S. population.

The company expects third-quarter AVLAYAH net product revenue of $10 million to $12 million. Peng said the forecast reflects growing physician and family engagement, improving payer coverage and progress moving patients through reimbursement and infusion processes.

Denali did not disclose patient-start or prescription-form figures, saying revenue guidance provides a clearer indicator of launch progress because individual treatment journeys vary and dosing is weight-based. Peng said the majority of patients starting treatment so far were not former clinical-trial participants, though Denali expects clinical-trial participants to transition to commercial treatment by the end of the year.

For a 10-kilogram patient at maintenance dosing, AVLAYAH costs roughly $270,000 annually, Peng said. For a 30-kilogram patient, the annual cost is about $800,000. The label includes dose escalation, with the company indicating physicians have been provided an expected four-week escalation period at each step, although treatment decisions are individualized.

Pipeline Updates Include Alzheimer’s Programs

Denali said DNL628, an investigational tau-targeting antisense oligonucleotide, and DNL921, an investigational anti-amyloid beta antibody, have entered clinical development for Alzheimer’s disease. The company expects initial clinical biomarker data from the DNL628 Phase I-B study in the first half of 2027, while initial safety and clinical proof-of-concept data for DNL921 are expected in 2027.

Watts said the programs are designed to use the company’s blood-brain barrier delivery technology to improve distribution of therapies throughout the brain. DNL628 is being evaluated in people with biomarker-confirmed early Alzheimer’s disease for safety, dose selection, tau effects and imaging measures. Denali submitted a clinical trial application for DNL921 during the first half of 2026.

The company also pushed back its expected data timing for DNL593, a progranulin replacement therapy for frontotemporal dementia caused by progranulin mutations, or FTD-GRN. Denali now expects data from the ongoing Phase I/II study in the first half of 2027, rather than by the end of 2026.

Watts said the company chose to allow additional observation time in the study’s open-label extension to better characterize effects across biomarkers, including neurofilament light chain. The FDA granted orphan drug designation to DNL593 for FTD-GRN during the week of the earnings call.

Denali also said its Phase II/III COMPASS study of AVLAYAH is scheduled to conclude at the end of 2027. The company expects the study to support full approval and potentially expand the product label to include adults in the United States, as well as support potential global launches.

Financial Position and Expenses

Denali ended the second quarter with approximately $940 million in cash equivalents and marketable securities. In July, it received $195 million from the sale of the Priority Review Voucher awarded after AVLAYAH’s approval, bringing pro forma cash equivalents and marketable securities to more than $1.1 billion.

Research and development expense declined to $97 million from $102.7 million a year earlier, primarily reflecting the timing of AVLAYAH commercial-supply manufacturing in the prior-year period and lower external spending on small-molecule programs. Selling, general and administrative expense rose to $36.3 million from $32.3 million, driven primarily by investments supporting the AVLAYAH launch.

Chief Operating and Financial Officer Alexander Schuth said the company plans to allocate capital toward AVLAYAH commercialization, preparations for a potential 2027 launch of DNL126, clinical development programs, manufacturing capabilities and potential partnerships. Denali does not plan to manufacture AVLAYAH at its Salt Lake City facility and instead intends to expand production with Lonza in Portsmouth, including a move to 6,000-liter scale.

About Denali Therapeutics (NASDAQ:DNLI)

Denali Therapeutics is a clinical‐stage biopharmaceutical company focused on developing therapies for neurodegenerative diseases. The company's research leverages a proprietary Blood–Brain Barrier Transport Vehicle (TV) platform designed to enable large molecules, including antibodies and enzymes, to penetrate the central nervous system. Denali's approach includes small molecules, monoclonal antibodies and gene therapy candidates aimed at key drivers of disorders such as Alzheimer's disease, Parkinson's disease, amyotrophic lateral sclerosis (ALS) and frontotemporal dementia.

Among Denali's lead programs is an orally delivered leucine‐rich repeat kinase 2 (LRRK2) inhibitor for Parkinson's disease, and an anti‐TREM2 antibody designed to modulate microglial activity in Alzheimer's patients.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Add As Preferred Source