Okay. Thanks for joining us, everybody. I'm Marc Goodman, one of the biopharma analysts at Leerink Partners. We are lucky to have Denali Therapeutics. We have Ryan Watts, who's the CEO of the company, and we have Katie Peng, who is the Chief Commercial Officer, who I was just joking around with her, but I'm very serious, as we all are. We need her to be very busy with an approved drug very, very soon.
That's right.
We probably should start, right there, and just give us a sense of. I don't even know where to start, Ryan. Just what's going on with the back and the forth and this and that, and where are we now?
Well, thanks for having us here. You know, great to be in Miami. It's a extraordinarily exciting time for us at Denali. We have a PDUFA date coming up April 5th. Obviously, it's been something we've been looking forward to since the founding of the company over a decade ago, with the goal of obviously delivering medicines to the brain using these novel technologies, using the transferrin receptor-enabled technologies, in this case, the Transport Vehicle. The question you're really asking is on tividenofusp alfa, which is our lead program for Hunter syndrome. A little bit of backstory behind Tivi. We started developing Tivi in 2020, and really the first five patients of data we saw that four out of those five patients had normalized heparan sulfate, this is just after four doses.
That was sort of unprecedented in the field, and heparan sulfate is a biomarker of the enzyme, and we're measuring it in brain through, I guess, through a surrogate, through cerebrospinal fluid. You know, at the time, of course, that data told us that our platform was working in 2020, and now the question is: How could we expand that platform, and at the same time accelerate the Hunter program to some form of approval? I think as people appreciate, it's been a long story of imagining a surrogate endpoint of a biomarker that's reasonably likely to predict clinical benefit as the category in these monogenic diseases where the FDA has given us, you know, single enzyme guidance on sort of the simplicity of this.
That being said, in MPS diseases, there is no precedent yet of using a biomarker as a surrogate endpoint. We began this long journey. Obviously, there are others on this journey as well. In our case, it's an enzyme replacement therapy, as I mentioned, engineered across the blood-brain barrier. We submitted our BLA last year and have had, frankly, the way you describe it is really constructive, very engaging interaction with the FDA. You know, as anyone who has gone through this process, a lot of back and forth on the CMC as we sort of nail down this biologic. Obviously, it's the first medicine using transferrin receptor as a mechanism for delivery to be reviewed at the FDA, so setting the precedent there as well.
At this point, you know, we're weeks away from a decision, but moving in a positive direction.
It was delayed by a short amount of time.
Right.
Do we have any idea what that delay was about now?
Yeah, we know exactly what that delay was about. As we were nearing the late cycle review, it was identified that there was a miscalculation on a molecular weight from a public database that actually someone, a third party, used to calculate our population PK. That was corrected in, like, four days, the FDA, in general, you know, sort of stayed on track with the review, and as I mentioned, like, that longer period of time probably going mainly through CMC. Now let's put all of this in the context of the complexity of the regulatory environment right now, I think a lot of has been said about accelerated approval and rare disease and providing medicines in these patients, especially in patients where you have these neurological deficits.
What I'll say is that our experience with our review division has been generally positive and constructive. That was completed. There's been actually no more questions around that particular piece, and now it's just the final stages, you know, label discussions, post-marketing commitments, everything you'd expect at this timing of the review.
You've been in labeling discussions, right, for a while?
Yeah
...or is that not a fair statement?
I would say that in the last month or two, we're, like, really in it.
Okay.
Right? It's like we began that process. We had a late cycle meeting towards the end of last year, now we're really in the thick of it now.
Right. REGENXBIO gets a CRL, and I think everybody says, "Uh-oh, did something change here?
Yeah
...for Denali as well? I guess I'll let you kinda answer that question.
I think the best way for me to answer that is, rather than comment on REGENXBIO and their dataset specifically, what I can tell you is sort of the totality of our dataset, right?
Mm-hmm.
47 patients' worth of data. Patients have now been treated at up to, you know, 4 - 5 years. We have a confirmatory trial, the COMPASS trial, that has, you know, a significant number of patients as well, both neuronopathic as well as attenuated. And what we see is a normalization of heparan sulfate, and we'll just call it total heparan sulfate, so the four major dextrans as measured. No specific, you know, not measuring just one specific dextran and looking at effect, but there we're seeing normalization. I think importantly, we also see NfL normalization, which is a biomarker of neurodegeneration. I think we obviously, like others, have looked very carefully at what the FDA has said in that CRL.
We feel like we're in a strong position with our data and our engagement with the FDA.
Not to keep harping on this, but they didn't have four major dextrans. Right? In their data.
That's right.
They were kind of focused on.
Yeah. I think historically they did, but then they focused in on-
Right
... a single dextran .
Do you think that's a potential reason?
Well, I think the issue you have and sort of cited in the CRL, again, without going into too much detail-
Yeah
... is the great debate with biomarkers, you've seen this in the last month or two, is what level of biomarker correction is needed to drive a clinical benefit, right? Until you know what that level is-
Yeah
... the best case scenario is you normalize, therefore it puts you in the highest probability of confirming that that biomarker's leading to clinical benefit. I think this is where the FDA is, you know, the way I would state it is holding a high bar.
Okay.
It's holding a high bar, and obviously we were behind our competitors, both REGENXBIO and JCR, and our goal has been to develop a platform broadly to prove it with Hunter syndrome, but to hold ourselves also to a high bar in terms of the quality of the data we generate and the path towards approval.
Let's talk about what is the standard of care for Hunter today and is there any way to make a comparison of your product versus that product?
Yeah. I'll answer that, and then as we get into more, Katie will add to it.
Yeah.
The standard of care today is it's now been almost 20 years since idursulfase was approved, which is a enzyme replacement therapy, and it's delivered systemically. What I can just say generally is that if you look at our data, specifically looking at like peripheral urine heparan sulfate, we see even normalization in that as well when patients switch from standard of care to Tivi. Part of that is probably around dose, the dose that we selected. In reality, that particular medicine is not engineered to cross the blood-brain barrier. 70% of patients on diagnosis are determined to be neuronopathic, will have severe neurological deficits, and the idea is that those patients in particular will greatly benefit from a medicine that can also cross the blood-brain barrier. We replace standard of care.
We're not dosing on top of any other medicine, but we're dosed to treat both the entire body and the brain.
Right. Right. Right. Katie, why don't you talk about commercial now?
Yeah.
What's the plan?
Yeah. We're very excited to be here at this stage, and we've actually built our field team at the end of last year, getting ready originally for a January approval. Our payer field team, our sales team, our medical science liaison team are all out now. We've had great engagements with payers so far to share our data and to get an understanding of how they see pricing and coverage for patients. In addition, we've also engaged with all of the centers of excellence because our MSL team is very familiar with the investigators, but also we've been sharing our data along the way for a few years now. There's tremendous excitement in the community. There's high awareness of the Tivi data, but not just with physicians, but with the patient community as well. There's general excitement.
In addition, this year now we finished setting up our distribution model as well as our patient services because we know that's really important to get patient reimbursed and supported as we launch this medicine. We expect to see a very strong uptake in the patients who are just recently diagnosed and also patients that are diagnosed with the severe neurologic manifestations.
Do you think, patients will switch?
Yeah. Today, about 95% of patients are on Elaprase.
Yeah.
It is absolutely a switch strategy.
Yeah.
As Ryan mentioned earlier on the data, our phase I /II data showed, right, patients who were on Elaprase switching to Tivi and doing much better on all the biomarkers. It is actually the most compelling point because physicians monitor patient progression today using urinary GAGs, we see that Tivi does much better. For all the market research we've done and the advisory boards we've done, this data is what's gonna compel physicians to make the switch.
The doctors are saying, even though the patient, it seems to be working, this works even better, so we should switch.
Yeah.
That's it.
One interesting fact that we've learned is that, because there's been no innovation for 20 years, there's was nothing to switch to. As we get into these deeper conversations, almost all patients are still progressing-
Mm-hmm
... on the standard of care. It could be neurologically, it could be in the periphery. What we have learned is that standard of care, even in the periphery, I think there's still unmet need.
Yep. What about genetic testing? How does that fit in?
Yeah. In order to get, an official Hunter syndrome or MPS II diagnosis, patients do have to be genetically tested.
Yeah.
Once they get tested, then they confirm they have an ICD-9 code, and they can start billing for Hunter syndrome. Are you asking maybe about newborn screening?
Yeah.
Yeah.
That's where I was migrating to.
Yeah. In the U.S. now, about 13 states have adopted newborn screening, which is great, because we know in this disease, the earlier you can impact-
Yeah
... the treatment and treat the disease, the better it will be for patients. 13 states have now adopted it. As you can imagine, with medicines now being approved in this space, there will be more incentive to push newborn screening more holistically across the U.S.
Yeah. Yeah. Interesting. Lastly, just on this subject, the Royalty Pharma deal, what was the purpose of that?
I think, you know, for us, if we step back a little bit and look at the entire portfolio, our goal, which we've set, now a while back, was to commercialize our own medicine, specifically in the enzyme replacement therapies, right? We set out to figure out how would we do that as, you know, really leading it ourselves, and the Royalty Pharma deal puts us in a very strong position. That with also an equity financing brings in another year of capital, really takes us to the end of 2028. I think also is reflective of the deep diligence on the platform, in order to say, okay, there's real promise here and there's real promise in Hunter as a commercial opportunity, right?
We wanted to be able to finance ourselves through our three-year goals, and we've laid those out at the end of last year, which was to have two growing brands, one with Tivi and Hunter syndrome, another with DNL126 and Sanfilippo syndrome, five clinical proof- of- concepts, and bringing in an additional five medicines into the clinic using the Transport Vehicle. At this point, we have five Tivi-enabled programs. The royalty financing with the equity financing at the end of last year lays that foundation for the next three years.
Yeah. Yeah. Interesting. Let's flip gears to Sanfilippo 126. Where are we with that program, and what do we have to show? 'Cause there seems to be some de-risking that's already occurred, I would think.
Yeah. I'll start on where we are with the program and then.
Yeah
Katie, you can add to that. We just presented data at WORLDSymposium. This was the first data, the most robust data set, I think, yet presented in Sanfilippo syndrome. We have a robust reduction in CSF heparan sulfate, again, you know, our familiar biomarker, as well as GM2 and other, you know, other lysosomal biomarkers. We also see reduction in urine heparan sulfate, normalization of liver volume, and basically we're in a strong position. What's interesting about that data set is that it was essentially two cohorts that were dose finding, and we really needed to figure out the dose frequency and the dose levels. If you look closely at the data, you can see how that plays out in the biomarker over time as well, especially the urinary GAGs.
You can really see that as we've shifted to weekly dosing at the high dose, we drove a really robust effect. We also improved tolerance going to weekly from every other week dosing, part of that is, you know, in these enzyme replacement therapies, having drug on board allows you to build tolerance. A lot of really important insight in that data set. We now have what we call the key efficacy cohorts, which are fully enrolled. We'll have a data cut in September, that will be the data that goes into our BLA filing for accelerated approval, again, using CSF heparan sulfate as a surrogate biomarker, reasonably likely to predict clinical benefit. A lot of similarities with Hunter, also some significant differences. There's no standard of care in this disease.
It is a very aggressive neurodegenerative disease, I'd say even more so than Hunter. Hunter is, of course, whole body and brain. Sanfilippo tends to really impact the central nervous system. Even the heparan sulfate is elevated about twofold above what you see in Hunter. I think timing of intervention is really gonna matter with Sanfilippo more so than some of these other diseases.
Yeah. Yeah.
In terms of the commercial opportunity, it is exciting because the infrastructure today that we're building for Tivi is gonna be the same infrastructure that will be launching DNL126 as well. We will not have to add additional headcount.
Same call points.
It's the same call points.
Yeah
same customers. You can imagine that with our ETV portfolio, we can get very, very high brand margins because our spend will be limited.
Yeah.
Yeah.
Interesting. Just lastly, before we move on, the number of patients in each one of these populations?
Yeah. It's hard to... Because there's no treatment, getting the right EPI is hard, but we're roughly estimating that it's about 75% of the MPS II market, so around 1,500 patients worldwide. Sorry, MPS II. MPS IIIA is 1,500, MPS II is 2,000 worldwide.
Yep. Okay. Terrific. I wanna step back just for a second. Well, actually, before we do that, let's talk about any other lysosomal storage disorder pipeline products-
Yeah
that we should talk about.
So, uh-
Let's do that first.
Yes. We just received, you know, clearance and will soon begin dosing with our Pompe program using the Transport Vehicle technology. This is ETV:GAA. What we've shown there, which is a little unique from Hunter and Sanfilippo, is the ability for transferrin receptor-enabled technology to improve muscle biodistribution. That's well known. There are other companies that are using TfR platforms to deliver, for example, oligonucleotides to muscle. What we've seen compared to the standard of care is more robust benefit in muscle endpoints in Pompe. LOPD obviously is the primary goal here. Now, fortunately, there's also a rare population that has more severe mutations, IOPD, where we also believe ETV:GAA can be differentiated 'cause we can deliver across the blood-brain barrier. Improve muscle delivery, improve brain delivery.
That program will begin dosing and, you know, really expecting data for this next set of Transport Vehicles that includes GAA, MAPT for Alzheimer's, Abeta for Alzheimer's in 2027. It all comes down to our ability to enroll and dose escalate in each of these, in each-
Yeah
... of these studies. A very exciting time expanding the portfolio at the same time that Katie and her team are preparing for a first commercial launch.
five, six years ago, I feel like you were the blood-based barrier buster, right? I mean, you were the one. Now it feels like, I don't know, everybody seems to wanna have one. How is yours different? Like, as you hear about each one of these, I'm sure you get questions like, "What do you think of this one? What do you think of..." How do you differentiate?
I mean, Very good news that everyone else is wanting to do it. If you're in a field and you're the only one doing it probably means that what you're doing is not working. I think in biotech, like, once something starts to work, everyone jumps on board with a variation. Frankly, that's actually what's best for patients because then they'll have many options, and people will use their deep expertise-
Yeah
... to invent in whatever part of this technology, if it's the protein engineering, if it's the cargo that you're delivering. Obviously, you're right, we probably had a decade head start in this area. It's something that I've worked on now for 20 years and started working on blood-brain barrier in actually 2006. I remember first working on this is prior to founding of Denali. We looked at everything that existed in the patent literature and everything that existed in the, in the publication literature and just made them and said, "Is there something that already works?" That's where we started to invent and really understand the dynamics of trafficking at the blood-brain barrier, first with transferrin receptor, then with CD98, and then we've now combined them.
What we learned when we founded Denali now over a decade ago is that we wanted really something that was modular, that allowed us to make fusion proteins, that allowed us to make antibodies, and then eventually we were the first to show that you could actually get an oligonucleotide into the brain. That had never been shown. Frankly, I didn't think it was possible because think of what has to happen. You deliver this thing either subQ or IV. It has to cross the blood-brain barrier, get into a cell, release the oligonucleotide, and then modulate gene expression in the neuron or... I mean, that's a, that's a journey. That's multiple cells that you're crossing to this...
Yeah
... to get to this spot. When we saw that for the first time, and we actually published that in 2024, but saw it for the first time in 2021, we thought, "This is really, like, this can really change things." I actually feel like that presentation of that data in 2021 in the NELLY trial, that's become one of the most competitive areas in blood-brain barrier, is delivery of oligonucleotides, 'cause now you can regulate gene expression in the brain. You know, of course we wanna win. We're competitive. That's great. Also, if it's working, you should expect a lot of people to do it, which was my original point. Now to answer the question, what is differentiated? I think the fact that we built receptor binding into the Fc is unique.
We haven't seen that with any other competitors. Part of that is we have a very strong IP landscape. The Fab approach is what most people are taking. There are some variation of Fab, then they make Fab fusions with oligos, fusions with antibodies. I think stability can be a challenge there. We've done a lot of work on differentiation, in some cases, directly against the exact architecture of a competitor. In other cases, like theoretical differences. Some of that has been published. Others we presented at the end of last year in an extensive R&D day. I think that those areas of differentiation are important, but, you know, all of them may work to some extent. The question is, who will get there first and who will ultimately be better? Let's see how.
Mm.
I mean, I would love to look back 10 years from now and have, like, 20 or 30 approved transferrin receptor, you know, programs. Great if a lot of them are ours-
Yeah
... but also okay if the field is now really growing and can actually deliver medicines that way.
Yep. Yep. You mentioned the MAPT and the Abeta. Talk about those products a little bit. Obviously, there's two drugs for Alzheimer's on the market. Obviously, Roche is working very hard with trontinemab to kinda get there as well. Where do these fit in?
Yeah. As we're on the eve of our first approval, I think it's important to step back and say a decade ago, we founded Denali because we wanted to defeat degeneration. Our goal was to make medicines for Alzheimer's and Parkinson's. As almost always the case in biotech, you follow the science, and it was actually much more compelling for us to start with Hunter and Sanfilippo, where it's a monogenic disease, there's approved enzymes, they don't get in the brain. There's a linearity, like you know there's a high probability of success. What's changed for us is that, you know, I didn't ever imagine working on childhood diseases. It's profoundly impactful, like beyond measure as you engage with these families and you engage with the community.
That ended up being very foundational for Denali, is working in the enzyme replacement therapies. We never forgot that we wanted to solve, at least be part of solving Alzheimer's and Parkinson's and these other areas. It's very exciting that our first, you know, real oligonucleotide program, MAPT, is now entering the clinic. It's gonna silence the expression of the gene MAPT that codes for tau. The idea is right now there's intrathecal delivery, but can we replace that with IV delivery and subQ delivery and knock down expression of tau? In addition to that, there's now a class of molecules. I mean, let's all face it, everyone either believed in Abeta or tau, and now you can hopefully believe in both. I mean, we're still waiting to see if tau knockdown-
Yeah
will lead to clinical benefit, but there are now. Like, now we need a best-in-class Abeta molecule, and that's where our ATV:Abeta program comes. That's, you know, I think it's an exciting time to go back to our origin and make neurodegeneration medicines using the Transport Vehicle technology to create this best in class, certainly in the Abeta field.
Just to be clear, the Abeta, this is your own Abeta?
Yeah. what-
This is-
What we've done, I think it's probably best described in a paper we published in Science last year in August. We've engineered this antibody to be immune silent when bound to transferrin receptor, but when bound to amyloid plaque, we can remove amyloid plaque through the Fc gamma receptor interaction. It's called a cis- LALA mutation. I think it's very clever. Our engineers proposed this idea and then determined it sort of empirically. The goal is to have the robustness of plaque removal that you have with any standard full effector function antibody, but have that molecule be silent when bound to transferrin receptor. In terms of the A-beta arms, we're selecting arms that bind, you know, aggregated A-beta preferentially, not monomeric, and that's essentially the approach we're taking with that program.
Interesting. Where is that program?
We'll be filing it very soon. We'll be starting clinical studies this year. I think with both MAPT, Abeta, and our GAA program for Pompe, we're just generally seeing data in 2027, but full speed ahead. The faster we can go, the better with any of those three programs. Obviously, the Pompe program expands the ETV franchise to a larger market, including muscle, but let's face it, like tau and Abeta are really important targets, one of which has at least been clinically validated.
Right. We're all watching Biogen, I guess...
Yeah
is probably the next tau oligo, right?
Right.
We'll know. What if it doesn't work? What if it does work? What does it mean?
I think what we can say already, and probably the most interesting thing we can say is that with the Biogen ASO program, they were able to reduce tau, but they were also able to reduce tau pathology by PET, and that actually is not intuitive. We think of amyloid plaque. You have these microglial cells, they're the since we're here in Miami Beach, they're the beachcombers of the brain. Microglia goes around and cleans everything up. You have antibody tag the amyloid plaque and basically engulf the amyloid plaque. That's what the A-beta antibodies do. With tau, those neurofibrillary tangles are inside a cell, and it's uncertain that reducing tau protein alone would actually reverse tau pathology. That's what the initial data has already taught us from Biogen.
Yeah.
Now there's one really important question, which is, does reducing tau pathology lead to a clinical benefit? The distinction of the OTV, which is the oligo Transport Vehicle, and the way that Biogen approach it, which is an intrathecal delivery of an ASO, so injecting the spinal cord, is it's a very different biodistribution profile. Our medicine will cross capillaries and give you even distribution throughout the brain, where intrathecal delivered medicines don't penetrate deeper brain regions. We've shown this in non-human primates and of course, humans are, at least our brain or central nervous system, is about 18 times larger than a non-human primate. There you're just relying on, you know, Brownian motion for these ASOs to diffuse. I think there's a real chance for differentiation in biodistribution. Now, does the traditional intrathecal approach, is it gonna actually test the tau hypothesis? I guess remains...
This is a type two experiment.
Yeah. Yeah.
In other words, if there's clinical data's looks great, then we know, and then we can replace that with either a sub Q or an IV injection. If it doesn't look great, it could be around biodistribution, right?
Yeah.
There's really one outcome that's informative, which would be a clinical benefit. If not, there are multiple reasons why it may have failed.
Yeah. Interesting. Very interesting. Another data readout this year is LRRK2, right?
That's right.
Give us the quick update on LRRK2?
Yeah. This is an exciting year. Waiting for an approval. Just had our first data in Sanfilippo.
Uh-huh.
We'll complete that. We have the LRRK2 readout midyear. That's being run by Biogen. LRRK2 is a kinase that when mutated, is hyperactive and is one of the two major genetic risk factors in Parkinson's. GBA is the other. We're approaching that with a GCase enzyme replacement therapy. In the case of LRRK2, it's really compelling genetics, and we've developed a LRRK2 inhibitor. This is one of few medicines that aren't using the Transport Vehicle in our portfolio. This is one of our very first programs way back 11 years ago, that we started engineering small molecules that were blood-brain barrier penetrant. This will be a really big test of the LRRK2 hypothesis because it's 650 patients, UPDRS, real clinical endpoint, you know. This is a registrational size study, being run by Biogen.
I think the reason to believe is that the genetics is very compelling, that the question neurodegeneration is always timing of intervention, right? You can have a genetic cause, but even Abeta, it took time for us to understand selecting the right patients, intervening at the right time to provide a clinical benefit. We hope we've learned from that. In the case of LRRK2, we're actually testing idiopathic, but we also have a separate study with just LRRK2 carriers where we're looking at biomarkers. I think it's-
Mm.
obviously an exciting target.
Were you able to find those patients? I know it was an issue.
Actually, we are. The difference between LIGHTHOUSE, which was a 400 patient study, and BEACON, which is a 50 patient study, is that we actually focus more on the biomarker aspects of BEACON and therefore change the enrollment criteria to allow us to quickly find those patients. That study, we're nearing completion enrollment in that study much faster than we had for LIGHTHOUSE.
Yeah. Just lastly, in the last few seconds, the other program that you were mentioning.
Yeah. progranulin.
Yeah, progranulin.
This is progranulin is PTV progranulin, the idea here is a protein replacement therapy, enzyme replacement therapy for progranulin. This year, we're looking at the proximal biomarkers, the biomarkers of lysosomal function in FTD-GRN.
Excellent. Well, there's a lot going on.
It's exciting times.