Denali Therapeutics (DNLI) AI Stock Analysis

• Market Cap: $2.15B
• Dividend Yield: N/A
• Average Volume (3M): 1.17M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.31
• Revenue Growth: -100.00%
• EPS Growth: -144.79%
• Country: US
• Employees: 422
• Sector: Healthcare
• Sector Strength: 72
• Industry: Biotechnology
• EPS (TTM): -2.58
• Shares Outstanding: 145,215,400
• 10 Day Avg. Volume: 886,079
• 30 Day Avg. Volume: 1,168,192
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 6.68
• Price to Cash Flow (P/CF): -6.30
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $37.86
• Price Target Upside: 178.38% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16

Denali Therapeutics faces significant financial and operational challenges, with continued net losses and negative cash flows being major concerns. The technical analysis indicates bearish momentum, and the valuation is unappealing due to the negative P/E ratio. While recent corporate events include setbacks, there are also strategic initiatives that may offer potential for future growth. Overall, the stock scores low due to current financial and operational difficulties.

Positive Factors

FDA Recognition

Denali is a key beneficiary in an evolving landscape following FDA recognition of HS as a surrogate endpoint.

Financial Stability

Denali has cash of approximately $1.2 billion, which should take the company into 2028.

Platform Potential

Denali Therapeutics is ideally positioned with its enzyme transport vehicle (ETV) platform.

Negative Factors

Clinical Trial Setbacks

DNL343 did not demonstrate a treatment effect on neurofilament light (NfL), a biomarker of neuronal damage.

Competitive Pressures

Competitive Sanfilippo drug, RARE's UX111, could gain significant market share ahead of any DNL126 launch upon a successful outcome.

Price Target Adjustment

Reevaluation of operational expenses and penetration assumptions for DNL310 results in a reduced price target from $87 to $80.

Denali Therapeutics Business Overview & Revenue Model

Company Description

Denali Therapeutics Inc. is a biopharmaceutical company focused on discovering and developing therapies for neurodegenerative diseases, such as Alzheimer's, Parkinson's, and ALS. The company operates in the biotechnology sector, leveraging its expertise in the biology of neurodegeneration to create a diverse pipeline of product candidates. Denali's core services include the development of small molecules, antibodies, and other therapeutic modalities aimed at addressing the underlying mechanisms of neurodegenerative conditions.

How the Company Makes Money

Denali Therapeutics generates revenue primarily through collaborations and licensing agreements with other pharmaceutical companies. These partnerships often involve milestone payments and royalties from the commercialization of co-developed products. Additionally, Denali may receive funding from research grants and government contracts to support its R&D activities. The company focuses on advancing its drug candidates through clinical trials, aiming for regulatory approval and subsequent market entry to drive future revenue growth. Key partnerships with industry leaders help bolster its financial position and expand its development capabilities.

Denali Therapeutics Financial Statement Overview

Summary

Denali Therapeutics is facing substantial financial challenges, with declining revenues and persistent net losses impacting its income statement. Despite maintaining a strong equity base and low leverage, the company's negative cash flows highlight operational challenges in the biotech industry, underscoring a need for strategic adjustments to improve profitability and cash generation.

Income Statement

Denali Therapeutics has experienced significant revenue fluctuations, with no revenue in the most recent year compared to $330.5 million in the previous year. The company has faced consistent net losses, and its EBIT and EBITDA margins are negative, indicating ongoing operational challenges in achieving profitability.

Balance Sheet

The company maintains a strong equity position with a high equity ratio, suggesting good financial stability. The debt-to-equity ratio is low, reflecting limited leverage and reduced risk. However, the return on equity is negative due to sustained net losses, highlighting profitability issues.

Cash Flow

Denali's cash flow situation shows negative free cash flow, which has deteriorated over the period. The operating cash flow is also negative, indicating challenges in generating cash from core operations. However, strong financing cash flows have helped maintain liquidity.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
0.00	330.53M	108.46M	48.66M	335.66M
	Gross Profit
0.00	313.81M	101.43M	43.05M	123.04M
	EBIT
-487.34M	-196.70M	-340.74M	-295.75M	62.72M
	EBITDA
-487.34M	-179.97M	-330.36M	-287.16M	62.72M
	Net Income Common Stockholders
-422.77M	-145.22M	-325.99M	-290.58M	71.14M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
832.33M	1.03B	1.34B	865.41M	1.47B
	Total Assets
1.37B	1.15B	1.46B	1.40B	1.60B
	Total Debt
42.29M	52.24M	60.35M	58.55M	64.17M
	Net Debt
-132.67M	-74.86M	-157.69M	-234.92M	-442.97M
	Total Liabilities
144.50M	122.96M	417.81M	441.87M	453.75M
	Stockholders Equity
1.23B	1.03B	1.04B	962.29M	1.15B
Cash Flow		Free Cash Flow
-363.61M	-370.93M	-262.55M	-219.89M	413.06M
	Operating Cash Flow
-347.69M	-357.99M	-244.72M	-211.39M	416.15M
	Investing Cash Flow
-88.76M	249.31M	-141.39M	-21.63M	-623.21M
	Financing Cash Flow
484.30M	17.82M	310.67M	19.35M	634.75M

Denali Therapeutics Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 13.60
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DNLI, the sentiment is Negative. The current price of 13.6 is below the 20-day moving average (MA) of 15.01, below the 50-day MA of 18.89, and below the 200-day MA of 23.19, indicating a bearish trend. The MACD of -1.32 indicates Negative momentum. The RSI at 34.21 is Neutral, neither overbought nor oversold. The STOCH value of 38.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DNLI.

Denali Therapeutics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACAD	76 Outperform	$2.85B	12.55	38.89%	―	31.85%	―
NBIX	68 Neutral	$11.28B	34.38	14.16%	―	24.81%	33.67%
BIIB	65 Neutral	$20.25B	12.37	10.36%	―	-1.60%	39.71%
VRTX	64 Neutral	$126.52B	―	-3.15%	―	11.64%	-114.72%
PTCT	55 Neutral	$4.28B	―	33.08%	―	-13.97%	43.51%
Sector *	49 Neutral	$6.85B	0.81	-52.91%	2.50%	17.48%	1.17%
DNLI	42 Neutral	$2.15B	―	-37.40%	―	-100.00%	-144.79%

Denali Therapeutics Corporate Events

Denali Therapeutics Discontinues DNL343 ALS Trial

On March 5, 2025, Denali Therapeutics announced that further analyses from the Phase 2/3 HEALEY ALS Platform Trial of DNL343 did not show a treatment effect on neurofilament light, a biomarker of neuronal damage, over a 24-week period. The study, which also did not meet its primary endpoint of slowing ALS disease progression, will lead to the discontinuation of the active treatment extension. Despite these results, DNL343 was found to be safe and well tolerated, and Denali plans to explore future development opportunities for the drug.

Denali Therapeutics Signs New Equity Distribution Deal

On February 27, 2025, Denali Therapeutics entered into a new equity distribution agreement with Goldman Sachs and Leerink Partners, allowing the company to sell up to $400 million in common stock through an at-the-market offering program. This agreement replaces a prior sales agreement terminated on the same date. Denali also reported significant progress in its clinical programs, particularly with its Enzyme Transport Vehicle (ETV) programs, and plans for the potential U.S. commercial launch of tividenofusp alfa for Hunter syndrome in late 2025 or early 2026. The company is actively preparing for this launch and continues to advance its pipeline, including programs for Sanfilippo syndrome and frontotemporal dementia.

Denali Therapeutics Outlines 2025 Milestones and Strategies

Denali Therapeutics has outlined key milestones for 2025, including the anticipated submission of a biologics license application for tividenofusp alfa for Hunter syndrome and preparations for its commercial launch. The company is also pursuing an accelerated approval pathway for DNL126 for Sanfilippo syndrome Type A. These efforts, along with expanding their portfolio through the TransportVehicleTM platform, aim to establish a broad franchise of enzyme replacement therapies, highlighting Denali’s commitment to addressing rare and common brain-impacting diseases.

Denali Therapeutics’ ALS Drug Fails Phase 2/3 Trial

Denali Therapeutics announced that its Phase 2/3 trial of DNL343, intended to treat amyotrophic lateral sclerosis (ALS), did not meet its primary or key secondary endpoints of efficacy in slowing disease progression over 24 weeks. Despite these results, the drug was found to be safe and well-tolerated, and further analysis, including biomarker and subgroup assessments, is expected later in 2025. The company remains committed to understanding the effects of DNL343 and advancing ALS research, highlighting the need for better treatment options and the value of data collected from the trial.