Everyone, thank you for joining us on our next session. We have a busy day, and I'm really excited to have the CEO of Denali Therapeutics up here with us, Ryan Watts. Ryan, obviously a dynamic period of time for biotech, but an exciting time for Denali because you guys are on file at the FDA with your potentially first FDA approval and the potential to be a commercial company. Imagine that. Like, years ago, we were sitting there at, you know, in South San Francisco, planning it out, and here you are on file. I would love to give you the opportunity to talk a little bit about where Denali is this year, which obviously includes interacting with the FDA and what the outlook is for Denali here in the middle of 2025.
Yeah, great. Thanks, Mike. Great to be here. Great to be here in New York and, you know, at this meeting. And thank you for those attending and those online. It's an incredible time for us, actually, at Denali. You're right. As we look back, the goal in founding the company, and I think the first five years, the focus was on inventing our own, you know, novel blood-brain barrier technology, which we call the transport vehicle technology to get large molecules across the blood-brain barrier. We also had a number of small molecules in that early portfolio. The subsequent five years was proving that that technology works.
What we've seen in the last five years is a significant uptick in competition around transferrin receptor-enabled molecules crossing the blood-brain barrier, which, you know, usually is a sign that you're on the right path, is you've been able to prove that this works, and now others are inventing their own technologies. In terms of the transport vehicle itself, it's an Fc that's engineered to bind to the transferrin receptor across the blood-brain barrier. Our flagship program was targeting a disease known as Hunter syndrome, where there's an approved enzyme, iduronate-2 sulfatase, that doesn't cross the blood-brain barrier, doesn't give great tissue distribution, even to bone and other regions of the body. That's one of the things that have been really interesting in our data set, is that we're seeing improvement in other aspects of disease, including better peripheral distribution with the transport vehicle technology.
Over the last three years, that data set has matured. We completed the phase one-two study. All 47 patients reaching at least six months presented that data at the beginning of this year, announced last year that we had agreed with the FDA on an accelerated approval path, for filing the BLA, and then initiated that process. I think what's interesting and probably behind your question, Mike, is that there's been a lot of, and even today we're going to learn more, from Makeri, you know, how the FDA has evolved. Our interactions with the FDA have been consistent and timely. I think most importantly, a lot of what we've been doing has been during this uncertain time, as we initiated the rolling BLA and in less than five weeks completed that BLA filing. We have a separate program that was designated as START.
That's an earlier stage Sanfilippo program, which is now rapidly advancing as well. There we're seeing a lot of consistent and positive interaction with the FDA. I think part of that is the review divisions, you know, remain intact and engaged. I think even in really uncertain times for the FDA, we've been impressed with the level of engagement. We know how those uncertain times, because we're all living through them, sometimes is distracting, but we've seen a lot of progress.
Yeah, I mean, talk a little about that. You are a company that fits squarely in the middle of some of the uncertainty that Wall Street and the industry, not just Wall Street, I mean, biotech companies are sitting through. Kind of talk through that. You filed the BLA. It happened at literally, I think, believe the same day there were impacts on headcount at the FDA. A little bit surprised about that. I mean, just talk to that, like, the person that's reviewing it, that's the rare disease group at CDER, like, and that team hasn't been impacted, and you feel like everything has been straightforward, and now we're into June. You know, the interaction, I think we need an acceptance to that needs to come.
That's right.
Talk about all those interactions and what you expect and how things have been kind of going.
Yeah, I mean, I think probably the best way to answer this is to go back in time, and we were at the Jefferies Conference in London.
Okay.
You asked me, you know, in front of everyone, you know, audience like this, what do I think about the appointment of RFK? That was, you know, at, like, the peak post-Trump election, post-RFK nomination. I'm like, Mike, you can't ask me that question. How do you want me to answer it? We've all lived through that uncertainty from that point in time to appointing a new, you know, FDA commissioner. One of the things you've, I'm of course like all of you, and I'm sure this afternoon is going to be another example, you know, hanging on every word that you're hearing from leadership in this new FDA to say, what is, you know, the path? What, like, what's going to happen?
I think what you're seeing is, at least in my opinion, externally, a settling and, you know, obviously some uncertainty around vaccines, but for rare disease remains a major focus. That's exactly where Hunter is. It's exactly where Sanfilippo is. As, you know, to answer the question very specifically, you're right, we initiated the rolling BLA right at the time that there were layoffs at the FDA. In fact, on those days, had consistent and timely response from the FDA. That's, I guess, to my, you know, original point, which is it's fantastic to see that that team at the FDA, which is living through that uncertainty, moving forward with their job. I think the same is true with our Sanfilippo program.
The next step on that particular program is defining what the accelerated approval package will look like so we can bring not just the Hunter program, you know, forward as a commercial product, but also Sanfilippo.
Is that pretty much the same review people? I mean, one's a review team, but it's a FDA team that would need that. Is that literally the kind of the same people?
Exactly. Same people.
Wow. Okay.
The same program manager.
Okay.
For both programs, and maybe not surprising.
Okay. So, then,
Maybe, maybe one comment here, because I think it's actually important. We're in the rare disease and medical genetics division, and just recognize that obviously the FDA is huge, and every division probably has its own uncertainties. If you hear an uneven, unevenness behind, like, how companies are interacting with the FDA, there are two things to consider. One is, what division are they working with? The second is, what is the complexity behind that product? Right? We get, you know, as each decision is made on a product, we get questions about that and say, well, let's look at the review history for that product. A lot of times these more complicated programs that have been in and out of the FDA, in and out of review, are not always the best, like, examples.
Right.
Because obviously with uncertainty in leadership, it's harder, I think, to make decisions.
I'll even go to, let's talk about the next six months. In the next six months, while you're under review, there is also some gene therapy products. Now, one of these gene therapy products is a Hunter product.
That's right.
They have filed, and they will have a PDUFA date, we believe, by the end of the calendar year.
That's right.
Your PDUFA date is likely to file in calendar 2026, but that is also a gene therapy that targets the same disease. For investors that are watching this, and again, for the industry and you guys, how should we think about a gene therapy going through CBER for Hunter? You are a Hunter drug for under CDER.
That's right.
To what degree are there review teams that are overlapping? We tried to look at this, and it's not, like, oncology is another example, like ODAC does look at some of these, but how does one look at that and read through?
I mean, not non-overlapping.
Okay.
I mean, that's actually.
Totally different team? I actually don't know.
Totally different team. That's, you know, I think it relates more to the modality than to the disease, as you know. I mean, this is.
Is there a rare disease team at CBER?
Yeah, it's a separate, I actually, so because we've not interacted with CBER, I don't know exactly how.
Okay.
I don't think they have the same, like, disease subgroups. They probably, they may, but this is, you know, the rare disease and medical genetics is an actual separate division within CDER.
Within CDER.
I think this was the challenge, you know, for three or four years, and I think more of it is around logistics. It's very hard to run these huge, I mean, it's very hard to run big trials, period, in rare disease, but to run an active comparator control trial for a gene therapy. There's been essentially a different set of standards for gene therapy than there has been for biologics or other, you know, small molecules.
Modalities, yeah.
That was challenging for us. I mean, let's face it, that was an issue, and it wasn't until there was an alignment on CSF heparin sulfate. I think the biggest questions for me around how to compete with gene therapy and other blood-brain barrier-enabled programs is not just the primary biomarker, which is heparin sulfate, but let's look at the secondary biomarkers like NFL. One of the interesting, you know, discussions we've had with the FDA is around NFL. Obviously, heparin sulfate is a primary substrate, but at this point, we're the only ones who have shown a normalization or near normalization in NFL in all patients as well. Not only are we correcting the substrate, I think that's the question around gene therapy. It has a different, you know, mode of administration.
It's injected directly in the brain, which won't have an even distribution throughout the brain.
Okay.
and then, you know, other competitors that do not achieve as much, you know, as robust heparin sulfate reduction. The point is, I do not really know what the read-through is between the CBER decision and the CDER, because it is separate.
Thank you for clarifying that. You know, it's our research analyst, Pimba Buyuke, comment that the gene therapy from Regenxbio has data. They are on file. It is under CBER, and a group is looking at that. Their substrate GAG reduction cross-talk comparison is not as robust as yours, and your neurofilament data is particularly strong and normalizing. Their data is spurious.
They've actually not shown it.
They don't show it. Okay. And so, you know, whatever happens with their situation, you're under a different review team, and you're confident in your package of data.
I will just say from a commercial perspective, our assumption is that the gene therapy will be approved. The question is, do patients, you know, benefit, have a lifelong benefit from that gene therapy? In our phase one-two study, and this was presented at World, we have several patients who were on the gene therapy trial that are now on Tivi, right?
They came over to your product, but they were on that.
Exactly. Exactly right. And also cell therapy, by the way. Several patients on cell therapy, several patients on gene therapy that are essentially not seeing a reduction in their CSF heparin sulfate. Those patients, we drive normalization or near normalization, and then also rescue NFL. We see like the long game here is that, and I think really important point, the gene therapy is delivered directly to the CNS. This is a whole body and brain disease. Those patients will either have to be on tividenofusp alfa or on Elaprase at some point. In other words, liver, spleen will not be effectively treated over the long haul with gene therapy that is delivered directly to the brain.
We basically imagine a patient gets diagnosed, they go immediately on Tivi, and then they ask the question, should we take a gene therapy as well? That's going to be essentially the debate. You need to treat the whole body in addition to the brain.
What, so given that these two programs are at the FDA, although in different divisions, and I do not know how much cross-talk there is, is there any chance that there is going to be an adcom?
I, we are prepared, but we don't know. We don't know.
I think.
I don't think, I think we, I think the, I won't comment too much about, you know, our competitors, but I don't think that the gene therapy is signal that there will be an adcom as far as I'm aware.
Right. And again, in our experience, they can tell you about an adcom early on, anytime, you know, but they generally, they try to give you color as to whether one is being planned.
Yeah. There is no, no color from us yet on if there is an adcom.
Okay. And so therefore is the base case that you should get an accelerated approval based on your package and that the confirmatory study called Compass will be required as a confirmatory study that will read out in a few years? And that is the base case?
That's right. Compass, we fully enrolled cohort A at the end of last year and then made the decision because of the waitlist to essentially expand that study for nine additional patients, in part to give an opportunity for patients to have access to drug while we're in this accelerated approval. When that last patient is enrolled, and we'll give guidance on that when that happens, it's essentially two years from that point that we read out the study. There's a separate cohort B that's focused on peripheral disease. It's not on critical path because it's a one-year endpoint as opposed to a two-year endpoint.
How close are you to completing an enrollment of cohort A?
As I mentioned before, the entire cohort was enrolled, and now we've expanded, and basically we have patients on the waitlist, and when that's done, we'll be done enrolling them.
Okay. Do you anticipate receiving a priority review voucher if you were approved for this product?
Yes, for Tivi, tividenofusp alfa.
Yes.
It obviously has breakthrough therapy designation, which also.
It has breakthrough.
Yeah. In fact, at least to our knowledge, and someone can correct me, you know, after this fireside chat, it's the only MPS drug that has breakthrough therapy designation, which is interesting. That happened in January, which I think really helped us in engagement and acceleration with the FDA. It's also the only drug using a blood-brain barrier technology to have breakthrough therapy designation. That's, you know, for us, it's really pioneering there. For Sanfilippo program, we would expect a PRV if it's renewed. So there we're waiting for.
Right. Yeah. Just to be clear, because we had looked at this too, the PRV program technically has expired, but those that were filed and grandfathered in because you filed, or I guess you are designated as a priority.
That's right. Yeah. Priority review.
Before that thing expired. Yes. Okay. So that technically is eligible. Okay. So, again, we can kind of calculate it out, but you should expect an announcement about hopefully an acceptance of that BLA 60 days from the beginning.
Essentially the last queue. Yeah.
What day did you file? May, May?
We announced the filing as part of our queue. Basically prior to that queue. I expect like early July.
Okay. Yep.
Some type of announcement.
Okay. If you add six months to that, it could be an early January PDUFA.
That's right.
Okay. And then no, no messaging or nothing has really been relayed on any adcom. Okay. And then we'll follow the gene therapy, but that's again separate.
Yeah. Likewise.
Review. Okay. Now with all of that said, you know, an extremely powerful part of the story is that this blood-brain barrier platform should be validated based on the success of what I hope is going to be in Hunter. Sanfilippo is the second one. You kind of made some comments about how you are working to agree with the FDA on the filing package and you're enrolling patients on this phase one-two. That could be super fast because this is a phase one-two. You could file. Where are you with that? When would we get more information on Sanfilippo?
A little bit of history behind this program. Because of our experience with Tivi, with DNL310 or ETV:IDUA, we designed a very small phase one-two, and then we were going to go directly to a phase three in Sanfilippo. This was prior to agreeing upon CSF heparin sulfate as an accelerated approval biomarker. Everything changed within a year. Our initial cohort of eight patients, we read out at 24 weeks. We have the ability to normalize heparin sulfate. We immediately expanded that study to include now 20 patients. I mean, the goal is about half the size, half the cost, and half the amount of time to get 20 patients.
Yeah. Right.
Which is as opposed to 47, which is what we have with, with Tivi. So we've now rapidly expanded that study. The engagement with the FDA, and this is, I think, you know, probably not news to most people in this room, but you have to agree upon what a confirmatory trial looks like before you agree upon what an accelerated approval is. Our first engagement with the FDA has been all around how would you confirm that heparin sulfate reduction in Sanfilippo is leading to clinical benefit? What does that trial look like? Now, the difference here, this is actually a very big difference, is that Sanfilippo has no standard of care. When you make a decision to run a placebo control, you're making a decision that those patients on placebo will rapidly decline.
They have no, it's not like they have Elaprase or anything. One of the debates that we've been having with the FDA is, can we use really natural history this time? This is what we tried to do in Hunter and kept getting pushed back. Eventually Compass was designed as an active comparator trial, but we're looking, it's looking much more like in Sanfilippo, we will be able to use natural history. Now, we're not guiding yet because we have to agree with the FDA what that phase three looks like, but that's, that's point number one.
Why could, if there's no standard of care, there's no options, why couldn't you run a 40-patient randomized controlled study? Because the control arm is going to be a placebo. They're going to progress rapidly. So it's not like it's unethical for years. Why couldn't you run a?
Yeah. I think that's where you're starting to see this evolution at the FDA, and especially at the EMA. There's enough natural history data that you don't have to do that necessarily. I mean, you could really benefit patients by, you know, put all patients on drug. That debate is, it's really becoming less about do you have a placebo or not, and more about what is the endpoint and what's the duration of that endpoint. That's the engagement with the FDA. You basically, once you agree upon that, you initiate that, then you're in a position where AA is a reality, right? Because accelerated approval requires, at a minimum, the initiation of a confirmatory trial, right?
The challenge you have is that you do not want to get AA so early that there is really no way to enroll your trial because the patients will all have access to drug. That is the dynamic.
Okay. What is the next update? Because you have FDA START designation.
That's right.
On this one. This one is another one where you have a particular designation that allows you, you know, an accelerated path, but it's a, it's a formal designation for what that's worth. It is one of only a few programs that have that. When would we expect an update on your conversations with FDA and ability to do all this?
Ideally this year. I can give, I mean, the more granularity is that we get to interact through START quarterly.
Quarterly. Okay.
You know, agreeing upon what the phase three is ultimately, you know, this is what it's going to be. This is what we need for accelerated approval. Agreeing upon we've now expanded the phase one-two study to include over 20 patients. What's the duration of that? What's the amount of both safety data and heparin sulfate data that we need? And then we just continue to accumulate data on that particular program.
Okay. I think data on Sanfilippo could be sometime in first half 2026. Is that not a crazy?
Yeah, it's not. That's likely. I mean, for us right now, when we think about the data, I think what's really interesting, if you go back in time and look at all the data cuts that we've taken from Hunter, and you look at the data cut today, it's that like, it's just a really robust data package. Because it was our pilot program, we were cutting data every six months and sharing data every six months. What we learned, by the way, we were four years behind our competitors, both, you know, Regenxbio and JCR. We had the advantage of being able to modify based on their data. Now we're neck and neck in Sanfilippo with JCR. In some ways, we don't have a strong motivation to release data.
We also made an interesting decision, which is we're not even going to look at NFL until we have a much larger data package. And we learned that, I think, the hard way from the Hunter program. You know, it was like five patients, six months, but now you look at 47 patients, everyone's normalized or normalized. And so we actually have not even looked, for example, at NFL. We'll let that data mature so that we're in a position to have that robust data package. We haven't really guided on timing of data release. We hit our biomarker goal, which I think is the most important point. Now you perfect the dose, dose regimen, and you know, you're also assessing your competitors.
All right. We'll get more on that in 2026. Obviously, hopefully Hunter plays out correctly and everyone's going to be paying attention to Sanfilippo because it's quickly right behind it.
Yeah.
Okay. Now.
Just one other comment. We have invested very significantly in the Hunter program. I think for two reasons. One is to really prove the transport vehicle technology. That will then play into all these other programs, including our Alzheimer's programs, our Pompe program.
Yeah. We'll get to them in a second.
The other thing is that establishing the biomarker relationship to clinical benefit should feed through these other rare diseases as well so that, you know, regulatory authorities can be comfortable with accelerated approvals using these primary biomarkers. I think that's why, you know, and so Sanfilippo will, is going to be, you know, hopefully half the size of the development program of Hunter, but then we basically can do this over and over again with our ETV franchise and beyond.
Now, correct me if I'm wrong, there is also a gene therapy as well in Sanfilippo. That's, I think, Ultragenyx.
That actually already has a PDUFA date. You can look at the data there. I think the same question, you know, why has the NFL data not been presented? You know, what is the heparin sulfate data? That is different than the Regenxbio approach because it is a systemically delivered gene therapy. It is actually kind of an interesting dynamic, and we can talk more about that at some other time.
Okay. That has a PDUFA date and we'll follow that. Again, same questions in terms of you believe you have stronger substrate reduction.
I mean, normalized.
The word is normalized. You've normalized.
Yeah. That's right.
Yeah. Okay. They have a PDUFA date. We'll follow that one. Same dynamic, a little bit volatile. In best case scenario, all of this stuff is kind of approved and that makes people feel better and you believe you have a better product.
That's right.
Okay. So then if all of that is presumably going to take place, then I can tell you that in the last few minutes here that everyone is excited about this potential for the platform to go broader than rare diseases. Now, on one hand, Denali's like, well, strategically, should we just do rare diseases? On the other hand, look, there could be multi-billion dollar situations in Alzheimer's disease. There is no doubt that trontinemab from Roche using a shuttle has very strong data. That is right in front of everyone. That should de-risk the opportunity there, but they have some issues on their program. Does not that give you the opportunity to have a much better potential multi-billion dollar product in Alzheimer's? Yet Biogen kind of gave the program back, but then why, why would not you push forward in Alzheimer's?
Yeah.
Could you?
The next three programs that will enter the clinic will be an OTV, an ETV, and an ATV. Basically, one of the three franchises. What does that mean? OTVs are oligonucleotide technology. There, we're targeting MAPT and SNCA. We have a preference towards MAPT because, of course, there's data already with delivery of.
Just for everyone, since they don't know all that, because we're talking Tau and Alpha's nucleon.
That's Tau and alpha-synuclein. Tau, the ETV franchise, the goal now is to go beyond the MPSs. Pompei, Gaucher, and Gaucher-Parkinson. ETV:Gcase is fantastic because it can target both Gaucher and Parkinson's, but I think Pompei, our GAA program, is rapidly advancing. What you're talking about is the ATV:A-beta program. That particular program, it was actually to our advantage to receive rights back to the ATV. That was restricted to single A-beta arms. There's a lot happened at Biogen around prioritization of their various A-beta programs. I think we're all well aware of what happened there. We basically have our own A-beta arms and that's on the fast track as well to IND filing.
I think you can imagine, you know, in a year from now, having at least three molecules in the clinic that target Alzheimer's.
Let me be the guy. Within a year that you would have multiple INDs and that one of them should be, but not confirmed, should be an A-beta one.
Absolutely. And some are in, in much shorter order. This year alone, we were guiding one to two INDs per year, but ideally, you know, two this year, probably two, maybe even three next year. We have a very strong portfolio. I think the challenge we have, and I think some of the criticism is you also look at our spend. We spun out our small molecule efforts last year. We actually spent less last year than the year before. This year we're also driving down that spend, but at the same time bringing forward this transport vehicle, these other programs and preparing for our first launch. I think that's the way to look at it.
I think the goal is now that the transport vehicle is validated is to bring, you know, we want a robust portfolio of TV-enabled programs.
Okay. Let me be clear. I think that there is increasing focus on what's going on in Alzheimer's. Obviously, we have two products approved. You just said that you think that a shuttle A-beta Alzheimer's program could be IND and Roche trontinemab has clinical data. They've put it up. They've presented it. I believe they're starting phase three. There are some issues with that one. Importantly, while everyone is sort of lukewarm on the Alzheimer's commercial opportunity, there could be a huge opportunity in early Alzheimer's. If you're following a lot of this, Biogen and Lilly are super excited about the opportunity in early Alzheimer's, where safety could also be even more important and efficacy is important.
Could be different.
Could be different. How do you think about early Alzheimer's? Do you think that's going to work? Is that really a huge opportunity for you?
I think if you go back in time and we founded Denali, this is exactly the opportunity that we were shooting for. We wanted to prove a blood-brain barrier technology. We wanted to build a foundation with the enzyme franchise that can be, you know, we do get some feedback that you should just be a rare disease company, but that's actually not the goal. The goal is to be a delivery company and to, you know, validate the transport vehicle. If you look at the Alzheimer's opportunity, what is the challenge right now? The challenge is in many ways the safety, the perceived safety and the monitoring around that safety. As you think about the uptake for lecanemab and donanemab, it's the MRI monitoring. It's sort of the onerous, you know, and, and frankly, the way that neurologists view it and the general public.
The risk of ARIA is a concern and the ARIA seems to be significantly reduced with shuttle.
That's right. I think the question is, do you get to a point where you don't need every patient with MRI monitoring? I don't believe that trontinemab will achieve that. They already have had one patient death, you know, in the APOE2/3 carrier. The idea is that that patient had significant vascular risk, you know, prior to dosing. You need that screening MRI, but can you invent a molecule that allows you to have, let's say, an easier path? That being said, the infrastructure is being built with these first A-beta molecules. If you can come in with a molecule that reduces plaque three times faster, has less ARIA and like little or no risk of anemia, that's where the differentiation lands. For us, we've been pretty conservative on the anemia front.
Obviously, we had a program that we pulled back in Alzheimer's, you know, because of that. The basically ATV:CSF law is designed to alleviate that.
Fantastic. Thank you so much for the update. It is obviously an exciting time for you. You are squarely in the middle of FDA discussions and we are wishing you the best of luck to get through that and obviously a whole pipeline behind it that follows. Thank you very much, Ryan. Appreciate it.
Thank you.