Denali Therapeutics (DNLI) AI Stock Analysis

• Market Cap: $1.91B
• Dividend Yield: N/A
• Average Volume (3M): 1.51M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.26
• Revenue Growth: -100.00%
• EPS Growth: -144.79%
• Country: US
• Employees: 422
• Sector: Healthcare
• Sector Strength: 64
• Industry: Biotechnology
• EPS (TTM): -2.58
• Shares Outstanding: 145,215,400
• 10 Day Avg. Volume: 1,614,106
• 30 Day Avg. Volume: 1,509,659
• 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: $39.09
• Price Target Upside: 167.74% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14

Denali Therapeutics faces significant financial hurdles with declining revenues and profitability issues, reflected in poor financial and valuation scores. Technical indicators also suggest a bearish trend. Positive corporate events, such as the BLA submission, offer a potential growth catalyst but are balanced by setbacks like the discontinued ALS trial. The overall outlook remains challenging, with strategic adjustments needed for improvement.

Positive Factors

Financial Stability

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

Market Position

The launch of DNL310 is expected to be brisk as it is clearly a best-in-class drug with better tolerability and systemic effects compared to the currently marketed drug.

Regulatory Progress

Denali announced it had initiated the BLA submission for accelerated approval of its lead asset tividenofusp alfa (tivi) in Hunter syndrome.

Negative Factors

Clinical Trial Challenges

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

Competitive Risks

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

Pipeline Setbacks

A topline miss was announced for the ALS trial related to 343, leading to its removal from models despite interesting Nf-L data.

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: Neutral
• Last Price: 14.60
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DNLI, the sentiment is Neutral. The current price of 14.6 is above the 20-day moving average (MA) of 13.09, below the 50-day MA of 15.84, and below the 200-day MA of 22.50, indicating a neutral trend. The MACD of -0.66 indicates Negative momentum. The RSI at 54.17 is Neutral, neither overbought nor oversold. The STOCH value of 83.84 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DNLI.

Denali Therapeutics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HRMY	77 Outperform	$1.64B	11.35	25.84%	―	22.80%	18.12%
ARQT	57 Neutral	$1.54B	―	-113.76%	―	229.74%	70.23%
RXRX	51 Neutral	$2.17B	―	-61.89%	―	32.00%	-6.86%
Sector *	51 Neutral	$5.20B	3.18	-40.80%	2.96%	17.66%	1.94%
NAMS	47 Neutral	$1.79B	―	-61.35%	―	―	―
DNLI	45 Neutral	$1.91B	―	-37.40%	―	-100.00%	-144.79%
BLTE	41 Neutral	$1.74B	―	-30.60%	―	―	―

Denali Therapeutics Corporate Events

Denali Therapeutics Begins BLA Submission for Tividenofusp Alfa

On April 2, 2025, Denali Therapeutics announced the initiation of a rolling submission for a biologics license application (BLA) for tividenofusp alfa, aimed at securing accelerated approval for treating Hunter syndrome (MPS II). This step aligns with the U.S. FDA’s Center for Drug Evaluation and Research (CDER) and includes using cerebrospinal fluid heparan sulfate as a surrogate endpoint. The company anticipates completing the BLA submission by May 2025 and is preparing for a potential U.S. commercial launch in late 2025 or early 2026. The announcement highlights Denali’s ongoing collaboration with CDER under the START program, which also supports the development of DNL126 for Sanfilippo syndrome, reflecting broader implications for expanding Denali’s Enzyme TransportVehicle franchise.

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.