Denali Therapeutics DNLI reported a second-quarter 2026 loss of 68 cents per share, narrower than the Zacks Consensus Estimate of a loss of 73 cents. The company incurred a loss of 72 cents in the year-ago quarter.
In late March, Denali secured a major regulatory win with the FDA approval of its lead pipeline candidate tividenofusp alfa-eknm, under the brand name Avlayah, for the treatment of Hunter Syndrome (MPS II). The FDA granted accelerated approval to Avlayah, marking the first new treatment option in nearly 20 years for patients with Hunter syndrome, a rare lysosomal storage disorder. It is also the first approved therapy in a new class of biologics designed to cross the blood-brain barrier by targeting the transferrin receptor. The continued approval for this indication may be contingent upon verification of clinical benefit in a confirmatory study.
The company recorded net product revenues of $3.6 million in the second quarter, driven by the initial commercial sales of Avlayah in the United States following its FDA approval in March 2026. The reported number surpassed the Zacks Consensus Estimate of $1 million.
DNLI did not record any revenues in the year-ago quarter.
The stock is trading up in response to the quarterly results. Shares of DNLI have gained 49.8% year to date compared with the industry’s 3.9% growth.
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Highlights of DNLI’s Q2 Results
Research and development expenses decreased 11% to $97 million due to lower costs related to small molecule programs as well as lower clinical expenses for tividenofusp alfa.
General and administrative expenses rose 14% to $36.3 million, primarily driven by higher personnel-related costs due to increased headcount to support the commercial launch of Avlayah.
Intangible asset amortization was $0.7 million for the quarter, reflecting amortization of the developed technology intangible asset recognized upon FDA approval of Avlayah.
In June 2026, Denali entered into an agreement to sell a Rare Pediatric Disease Priority Review Voucher (“PRV”), awarded following the FDA approval of Avlayah, for gross proceeds of $195 million. Denali received the funds in July 2026.
Cash, cash equivalents and marketable securities totaled approximately $940.0 million as of June 30, 2026. Following the receipt of $195.0 million in gross proceeds from the sale of a PRV in July 2026, the company's pro forma cash, cash equivalents and marketable securities exceeded $1.1 billion.
Encouraging Uptake of DNLI’s Avlayah
The U.S. launch of Avlayah gained strong traction during its first full quarter of commercialization, driven by favorable uptake among patients, caregivers and physicians, encouraging early treatment experiences and the rapid expansion of payer coverage.
Initial demand for Avlayah has exceeded Denali's internal expectations, with early patient interest in initiating treatment tracking ahead of projections.
Denali projects third-quarter 2026 Avlayah net product revenues of $10.0 million to $12.0 million.
The ongoing global phase II/III COMPASS study is designed to generate confirmatory data, support the potential expansion of the U.S. label to include adult patients and enable future regulatory submissions worldwide.
Denali Therapeutics Inc. Price, Consensus and EPS Surprise
Denali Therapeutics Inc. price-consensus-eps-surprise-chart | Denali Therapeutics Inc. Quote
DNLI’s Key Pipeline Updates
Denali is evaluating zafinofusp alfa (DNL126) for the treatment of Sanfilippo syndrome type A (MPS IIIA). It is an investigational intravenously administered ETV-enabled SGSH replacement therapy being developed to target the neurological and systemic manifestations of the disease by delivering the enzyme to both the brain and body.
Preliminary results from the ongoing phase I/II study showed that zafinofusp alfa significantly reduced cerebrospinal fluid (CSF) and urine heparan sulfate (HS) levels, including normalization of CSF HS, while demonstrating a safety profile generally consistent with established enzyme replacement therapies. Preparations are underway for a global phase III confirmatory study, with Denali anticipating a biologics license application submission and potential accelerated approval for zafinofusp alfa in Sanfilippo syndrome type A in 2027.
DNL593 is an investigational Protein TransportVehicle (PTV)-enabled therapy designed to deliver progranulin across the blood-brain barrier for FTD-GRN. In August 2026, the FDA granted Orphan Drug Designation to DNL593. Enrollment in the phase I/II study is complete, with 40 participants, and results are now expected in 2027 (updated from its prior expectation of results by the end of 2026) to allow additional time to evaluate biomarker responses, including neurofilament light chain (NfL).
Denali is also developing DNL952, an ETV-enabled enzyme replacement therapy designed to systemically deliver acid alpha-glucosidase to muscle tissue and the brain by crossing the blood-brain barrier for the treatment of Pompe disease. Dosing has begun in the phase I study of DNL952 in participants with late-onset Pompe disease, with initial clinical data expected in 2027.
Denali is also developing other candidates in partnership with Biogen BIIB.
Denali and Biogen are co-developing BIIB122/DNL151. Biogen led the global phase IIb LUMA study, evaluating BIIB122's impact on disease progression in early-stage Parkinson’s disease (PD). However, in May 2026, both companies announced that the global phase IIb LUMA study of DNL151 failed to meet its primary and secondary endpoints in early-stage Parkinson’s disease, leading to the discontinuation of further development in idiopathic Parkinson’s disease.
Denali continues the phase IIa BEACON study of DNL151 in genetically confirmed LRRK2 variant carriers, with data expected in the first half of 2027.
In April, Denali announced that former partner Takeda TAK decided to terminate its collaboration agreement to co-develop and co-commercialize DNL593 (PTV: PGRN). Per DNLI, Takeda’s decision was based on strategic priorities and not on any efficacy or safety issues. Following the termination of the co-development agreement, Denali regained full ownership of DNL593, along with its intellectual property.
Our Take on DNLI’s Performance
Denali’s recent FDA approval and commercial launch of Avlayah provide a key growth catalyst, with early demand exceeding expectations and strong cash resources supporting pipeline expansion. However, pipeline setbacks, including the DNL151 LUMA failure, highlight execution risks. Progress across neurological programs and potential approvals remain important long-term drivers.
DNLI’s Zacks Rank
Denali currently has a Zacks Rank #4 (Sell).
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