B.Riley Reiterates Buy Rating on Denali Therapeutics Inc. (DNLI)

B.Riley analyst Marank Mamtani reiterated a Buy rating and $33.00 price target on Denali Therapeutics Inc. (NASDAQ: DNLI).

The analyst comments "On 9/3, BMO, Buy-rated Denali Therapeutics (DNLI; $33 PT) announced a favorable outcome reached from its recently concluded Type C regulatory correspondence with the Center for Drug Evaluation and Research (CDER) division of the FDA regarding the potential accelerated approval path for the DNL310. DNLI and FDA reached alignment on a registrational path that includes early 2025 BLA submission under the accelerated approval pathway; full approval will ultimately be based on the Ph. II/III COMPASS trial that expects to complete enrollment of n=54 MPS-II patients by YE24. We view the outcome as best case scenario, setting up DNL310 to enter the commercial market as early as 2H25 (in line or even slightly ahead of the peer gene therapy targeted approach). CDER has agreed to allow cerebrospinal fluid heparan sulfate (CSF HS) to be utilized as a surrogate endpoint, as it is considered reasonably likely to predict clinical benefit, which has been the basis of ongoing constructive regulatory dialogue in recent months that included the Feb'24 Reagan-Udall workshop (2/22/24 note) and a recent peer-reviewed journal publication (8/5/24 note) that have collectively called for CDER to accept CSF HS as a surrogate in MPS-II—those efforts now appear to have been successful. DNLI plans to incorporate preclinical and clinical data into the BLA submission, focusing on biomarkers such as CSF HS and neurofilament light (NfL), along with safety data in the BLA for DNL310 (tividenofusp alfa) as a treatment for MPS-II (Hunter Syndrome). We've been expecting a rolling BLA submission with the CMC module to follow the original submission, but we now believe there's a possibility the CMC module could be included in the original submission, which shouldn't be too surprising given the importance and efforts Mgmt has allocated to building out manufacturing capabilities ahead of a 2025 launch. Recall that DNL310 achieved CSF HS normalization in 100% of participants by week 24 (2/7/24 note), which is reinforced in updated SSIEM data DNLI previewed BMO. Today's announcement also bodes well for DNLI's second enzyme replacement therapy, DNL126, which is indicated for MPS-III and with expected biomarker/safety data by YE24. Recall that DNL126 is one of three therapies selected by the FDA to participate in the Support for Clinical Trials Advancing Rare Disease Therapeutics (START) Pilot Program (6/4/24 note), which is an initiative between CDER and CBER that aims to accelerate the development of rare disease medicines."

For an analyst ratings summary and ratings history on Denali Therapeutics Inc. click here. For more ratings news on Denali Therapeutics Inc. click here.

Shares of Denali Therapeutics Inc. closed at $24.44 yesterday.

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