Great. I think we'll get started with the next session. I'm Matthew Harrison, one of the biotech analysts here at Morgan Stanley. Really pleased to have Denali with us for the next session. Briefly before we get started, I need to read a disclosure statement. Please note that all important disclosures, including personal holdings disclosures and Morgan Stanley disclosures, appear on the Morgan Stanley public website at morganstanley.com/researchdisclosures. With that, really pleased to have Ryan Watts, the CEO of Denali with us. Ryan, maybe just like, an overarching question to start out, which is I think, since Denali came public, we've seen a lot more companies come into the neurodegeneration space. I think everybody's not necessarily focused on the same targets or even focused on the same disease areas, but just broadly, as you think about the scope of development in neurodegeneration, what do you think are the key features that differentiate Denali and your approach? Matthew, thanks for having me here, and thanks for that question. 'Cause it was a really interesting time 7 years ago when we founded Denali in neurodegeneration. There was a large number of companies that were especially big companies that were exiting the neuro space. We've noticed really in the last 2 to 3 years that that's started to change. I think that probably the biggest driver behind that change is success in some rare neurological diseases where the genetic understanding is stronger, where there's for example monogenic diseases. When we launched Denali 7 years ago, we focused on 3 major principles. The first is what we call the neurodegeneration pathways, genes when mutated that cause neurodegeneration. The second is brain delivery, all about getting medicines across the blood-brain barrier. The third is biomarker-driven development. What we've seen, over the last seven years is we've taken 10 molecules into the clinic. We have 7 active programs. This year alone, we now have 3 late-stage programs with potentially registrational data kicking off those programs now. It's been pretty incredible, over the last seven years to make that progress. We've seen, as you pointed out, now more companies being founded focusing either on, broader neurodegeneration, rare neurological disease, and even blood-brain barrier technologies. I think when a field starts to mature, that's what you should expect to see is this proliferation of approaches. I think, for us in particular, it's been very exciting to pioneer a lot of the blood-brain barrier work both before Denali and now here. I think the clinical data that we've seen over the last two years with our Hunter program has laid that foundation, at least for large molecules. The same can be said for small molecules, for example, our LRRK2 program in Parkinson's disease. I used to get the question a lot, seven years ago, "How are you different? Everyone's failed in this space." My thought back then is that we're gonna differentiate based on data. I think today we've now generated a lot of data. We have a number of partnerships, and there's a lot of hope and, either from rare neurological disease where we can get, for example, enzymes across the blood-brain barrier or for broader diseases like Parkinson's, where we're going after a specific genetic target. It's now about that translation. It's now about seeing the clinical benefit from some of these discoveries. I mean, you've got small molecules. You've got large molecules. In your mind, does it matter, or is it just fit for purpose and, you'll use what works? I think, again, going back historically, we wanted basically a part of our portfolio that was, like, codependent on success, building a platform that would feed to multiple programs. That ends up being our Transport Vehicle technology. But we also felt there was a number of targets that were ideally targeted with small molecules, and that was actually the first wave of discovery at Denali were these small molecule programs, and we continue to invest in our small molecule portfolio. It's roughly split half and half. That's the concept of fit for purpose really comes down to the molecular nature of the target. Is it targetable with a small molecule t hat can be given orally, once a day or twice a day, probably ideal over an IV therapy. We see that balance between small molecule and large molecule as being a key differentiator for Denali as opposed to being focused on, let's say, a single platform or a single target or therapeutic area. Okay. Great, great. I'm gonna maybe take the portfolio in a I don't know if I call it backwards or frontwards approach, but I wanna talk about ETV first and then maybe we can talk about some of the small molecules. I see ETV as one of the sort of the most interesting things you have right now, just given you have an initial program that I would say is de-risked, and now you're starting to invest behind that in many more enzymes. Can you maybe just for everybody's benefit talk about how de-risked you see Hunter's and what you see the risks are there and then your philosophy for investing in maybe MPSs or other diseases beyond that? For those of you that are new to the Denali approach, the TV stands for transport vehicle, and it's a technology that utilizes natural iron transport at the blood-brain barrier to basically hitch a ride. The E is for enzyme, we have enzyme transport vehicle. We have antibody transport vehicle, oligonucleotide transport vehicle, basically utilizing this transferrin receptor approach to get across the blood-brain barrier. When we first started working on this technology, we wanted a clinical proof of concept in an area where we had a robust set of biomarkers. The potential for clinical translatability. Really the MPSs or lysosomal storage disease was really the first area that we approached because we, there were approved enzyme replacement therapies that we believed if we could cross the blood-brain barrier, we could essentially solve that tissue. They were already working in the periphery, but they needed to cross the blood-brain barrier. One of the first programs we began working on, this and now a handful of other MPSs is MPS II or Hunter syndrome. The primary substrate for that enzyme is heparan sulfate. It had already been shown that reducing heparan sulfate peripherally, actually measured either in urine or in blood, was translating to a clinical benefit with peripheral manifestations. However, about 70% of these patients develop neurological disease and essentially neurodegeneration. In fact, they develop normally till about age 2 and then start to fall off the developmental curve. Again, about 70%, a vast majority of these patients. Our idea is essentially to get the enzyme across the blood-brain barrier using this transport vehicle technology. The first data we generated was actually at this point, still unmatched in the clinical landscape, which was basically a normalization of heparan sulfate just after short-term dosing. The magnitude of response was very robust. Now what we've shown, and very recently, is that sustained reduction, now over a year in 27 patients, which is correlating with what we see, at least in the open label study, as clinical benefit. I think really importantly, we've done a lot of work to show that heparan sulfate in CSF is essentially one-to-one related to heparan sulfate in cells. In fact, the enzyme is only active inside a cell. It has to be at an acidic pH. When this enzyme crosses the blood-brain barrier, in order for it to reduce heparan sulfate, it has to be taken up into a cell to reduce the heparan sulfate levels. T here's a lot, and we'll get into more detail that we've learned from this program, but it ends up being a excellent pioneering program for the Transport Vehicle because of the acute biomarker and that translation, we believe, to clinical benefit. Okay, great. Let's talk about what the phase II/III program looks like. Maybe you could just compare and contrast level of activity in the brain versus level of activity in the periphery versus peripheral activity of the naked enzyme. It's interesting to go back in time. I mean, idursulfase or I guess known as Elaprase, but idursulfase has been around for a while, has been approved. It's. The dose that's given seems to at least in blood and urine reduce heparan sulfate almost to normal levels, but not exactly to normal levels. In fact, it's probably about still twofold elevated. On average, heparan sulfate in Hunter patients is increased by about tenfold in the periphery and in the brain. On idursulfase, what you see is that patients will get a pretty robust reduction in the periphery, but essentially no reduction in brain as measured by CSF. In our trials, we basically patients switch directly from idursulfase to DNL310 or ETV:IDS with no washout period. What we see is, again, that normalization. Notably, we also see an improvement in peripheral biomarkers as well. We think, again, it's probably because it, i dursulfase generally underdosed. The other major factor is that patients develop anti-drug antibodies. It's very common to see anti-drug antibodies. In our study, almost all patients have pre-existing anti-drug antibodies to idursulfase before they go on to DNL310. Remember, DNL310 is idursulfase fused to an FC. We think that in part, maybe the lack of normalization in the periphery may be through some of these anti-drug antibodies. What's I think the first clue that we got is that, essentially all of our patients have normalized or near normalized heparan sulfate, anywhere between 85% to 90% reduction in heparan sulfate. There were 2 patients that did not, we did not see immediate normalization. In those 2 patients, the preexisting anti-drug antibodies to idursulfase were about 6- to 10-fold higher than any of the other patients. It affected the PK of DNL310. We could actually like calculate the minimally efficacious dose, and it's actually about 1.5 mg per kg to normalize, which is really robust. What those patients needed was either a higher dose or a longer duration of dosing. Some of the data that we just shared at SSIEM in Europe was actually that those 2 patients that had these high ADAs, they'd been on, idursulfase for a long period of time, that with DNL310, their ADA levels after about 6 months dramatically drop. In other words, DNL310 is helping to essentially establish tolerance. We think this is probably related to the FC fusion. This is not the first example of FC fusion proteins allowing you to build tolerance, in part because FC is recognized as self, right? But we think this is really important data around the transport vehicle and the future MPSs that we'll be going after, such as Sanfilippo. And I think that's critically important. Ultimately, we selected a clinical dose in the COMPASS study. The question is, what does the COMPASS study or that phase II/III look like? It's basically two cohorts, a neuronopathic cohort and a non-neuronopathic cohort. Our goal ultimately is to improve cognition and behavioral endpoints that are co-primary with CSF heparan sulfate. But we selected a dose that allows us to capture the entire patient population. Because we have this, we have the ability to, have a large range, what we believe is the right dose in this case is 15 mg per kg because it allows you to dose over the ADAs and establish tolerance, which I think is, a very exciting possibility for the platform. How should we think about enrollment there? I guess because we haven't established an effective treatment for the neurological effects of the disease, what is an effective treatment look like there? From a clinical standpoint? Right. We're actively enrolling now. It is a competitive program. We're enrolling in the U.S. and in Europe. Ultimately, what we're looking for is a head-to-head comparison with idursulfase. The study is powered to see a reduction in the rate of decline when looking at either Bayley or Vineland or essentially the various endpoints that we're looking at. Now, the data that we have looking at this is essentially, from our natural history study, whatever we can glean from the literature, but also our ongoing phase 1/2 in terms of how we power that study. Essentially powered to see a reduction rate decline, but at, the data we've shared so far is showing, improvement in the open-label study for the majority of patients in the phase 1/2 study. I guess the follow-up here is, investors, I think, have struggled with how to think about reductions in biomarkers, which I think there's no question about that you've seen significant reductions in heparan sulfate in the CSF. I think there are two pieces here that I get reflected to me. The first one is you've seen certain programs which were dosed directly intrathecally, and I think, we'll discuss this, but how they were measured probably influenced their ability to see a CSF decline in substrate even though it was an actual decline. I think the first question is, how can you be sure that what you're seeing is not something like we've seen with other of these enzymes that have actually been dosed directly in the CSF? Right. T hat's a great question, and I think the Transport Vehicle and the approach of using transferrin receptor is all about biodistribution. It's a systemic delivery, right? It's given IV, and then you're measuring in the brain or in CSF, specifically the effects, right? In order to have an effect, the idea is that you most certainly have to cross the blood-brain barrier and have this cellular effect. The intrathecal idursulfase, that's a very interesting, if you look historically at the data, the dose frequency and the dose levels. Without getting into too much detail, they do not see normalization, but they're also measuring heparan sulfate at the same region of injection. The maximum impact you should have should be right where you inject. We've seen this actually. Well, probably the best example for us is comparing an intrathecal ASO versus an ASO delivered with the Oligonucleotide Transport Vehicle and looking at the vast difference in biodistribution. If you look at the spinal cord, you have very high concentrations of ASO. In fact, it's dose limiting. We see sometimes hindlimb paralysis with ASO delivery. We don't see that with the OTV. What we see is this broad biodistribution, right? That being said, also, patients are dosed once a month at 10 mg per kg, at least in the trial that was reported out for idursulfase. It's very different than what we're seeing, which is this broad distribution. We see a reduction with the systemic delivery. That being said, there are, I mean, at least what we've heard from clinicians is that if started early enough, they are seeing some benefit in these patients. Now, not big enough to have a statistical significant change, not meaningful enough, for there to be approval with IT Elaprase, but I think it goes back to sort of the questions around dose level and dose frequency. Most importantly, biodistribution. Right. Good. Then the second follow-up, which, we've discussed even over time, which is there's been a significant investor focus on neurofilament as somehow a catch-all biomarker. This is a broader question than Hunter's really, which is I think we don't really understand neurofilament either from a temporal standpoint in disease or even, in certain diseases, it may not be as good a biomarker as it may be in other places. Just broadly, how you think about neurofilament at this point? Then maybe the direct question is why should people have confidence that even though you haven't seen a significant reduction in neurofilament, that you have seen a significant reduction in the substrate, and that should lead to c linical outcomes? Let's start first with the substrate and sort of the cascade. Cellular deficiency, right? When heparan sulfate is elevated, what you see is overt lysosomal dysfunction, and that's measured by other lysosomal biomarkers like GM3, GM2, any of which, by the way, when elevated, also cause neurological damage. Basically, what we see is a rescue of all these lysosomal biomarkers. The question then is, what do we observe with neurofilament? Let's talk about neurofilament more broadly. I think our confidence that we're having a biological effect is related to the fact that heparan sulfate is both necessary and sufficient to cause neurological damage across all MPSs, and then we rescue the lysosome. When we started to explore neurofilament, it had never been reported. Actually, to this date, the only data presented on neurofilament in Hunter syndrome is what we've published and what we've shown subsequently. What we observed, and I think in particular in our natural history study, was incredible variability. We had one patient that went up 800%, eight-fold elevation in basically one year or six-month time point. Others go up twofold. Interestingly, when we looked at the Batten disease data, another lysosomal storage disease, we also saw this pretty incredible heterogeneity where patients would go up and down and up, which is very different than what you see in ALS. This kind of gets back to, like, disease-specific behavior of neurofilament. The other thing that was really fascinating is that another cytoskeletal-associated protein, tau, is not elevated in Hunter syndrome. The original hypothesis of neurofilament is really simple. A cell dies, it spills its guts, and you measure it in the form of neurofilament 'cause it's a cytoskeletal protein. You would expect that you would see elevation in other cytoskeletal-associated proteins. Certainly in SMA and in Huntington, you do see that neurofilament and tau follow each other exactly. They both are elevated. In Hunter syndrome, we don't see that. In fact, we also see patients that don't have elevated neurofilament, but they have the clinical manifestation of neurological disease, right? We learned from that there's it may not be this linear relationship, right? I think the most striking evidence is in Batten disease, in cerliponase alfa, where clinical benefit is observed in the first year of direct delivery of cerliponase alfa. This, by the way, is directly to the brain at 600 mg, a massive dose given every other week. Neurofilament doesn't decline until 1.5-3 years. Basically, clinical benefit precedes neurofilament. Now, in ALS, we may have an example where neurofilament, it's the other way around. Neurofilament precedes potential clinical benefit. Then we have cases where there may be a benefit in ALS and no changes in neurofilament. It's, we of all people would love to have a surrogate biomarker that predicts clinical benefit, but in Hunter syndrome it's not neurofilament, right? When you pioneer that space, that we have to try to figure that out. Now, do we expect over time that neurofilament may decline similar to Batten disease? That may be likely. Again, I just point to other cytoskeletal proteins not elevated. I think we're gonna have to approach neurofilament on a disease by disease basis. The question is, can you show that correlation in ALS or in SMA or in lysosomal storage diseases? That's the way that we'll approach it. Okay. Great. I haven't managed time well, and I've chewed up a lot of our time, but now we're gonna go to quick hits across a lot of other stuff. Okay. Great. Let's Let's do it. Can we talk about FTD-GRN, CTA filed? what's the outlook there? We're familiar with other FTD programs. Why have you chosen to go after. The other program that I think most people are familiar with is basically blocking degradation, to raise progranulin levels. Right. Right? You've taken a different approach. Why have you taken the different approach, and how to think about updates for that program? Our goal is to have quick hits here. I know. I'll be. I didn't do well. I'll be efficient. PTV progranulin is protein transport vehicle progranulin, and it's simple. It's like an enzyme replacement therapy. We're just restoring progranulin. It's progranulin loss-of-function that causes FTD. It's usually a loss of one of the gene copies, and similar to IDS, that's our approach. Basically, if you wanna know how we're approaching it, we published a paper in Cell in 2021, September, that sort of highlights the rescue of these lysosomal defects in microglial cells. I think probably the biggest differentiator is that we're restoring the protein that is deficient in FTD-GRN. Timeline or outlook for first clinical data? We basically are in healthy volunteer studies now. We plan to transition this year into FTD GRN studies. What's different with this program than some of our other programs is that we need to be in patient studies in order to see, the desired biomarker effects in rescuing lysosomal function. We're not guiding on that timing right now, but it's simply said, we're partnering, we've partnered with Takeda on it full speed ahead to get through the healthy volunteer study, kick off the FTD GRN, and then look at biomarkers. Great. You'll have more soon. TREM2, you went outside the U.S. because of the issues in starting in the U.S. How should people think about TREM2 and just, broadly, given what we've seen from the TREM2 landscape? What's your excitement level or lack thereof on TREM2? TREM2 loss of function risk in Alzheimer's disease, the approach here is to use an antibody that activates TREM2. It's an agonist antibody. What we see is when we combine our antibody with transferrin receptor, we have this shift in potency, probably anywhere between, like, 20- and 40-fold increased potency to the standard antibody. And part of that is the avidity effect of having transferrin receptor, right? We've, Takeda opted into that program the end of last year. We filed the IND, unexpectedly received a clinical hold letter from the FDA, immediately made the decision to go to Europe after receiving that letter and initiate healthy volunteer studies. It's notable that that letter did not suggest any additional studies. It's just that we wanted to stay as quick on the timeline as the best we could, and we know that running these studies in a clinical center where we've run a number of our studies would allow us to move forward. I think it's an interesting target. It's in Alzheimer's, which has a lot of complication. It's a really exciting area with the biology being unknown. What I think is most interesting about TREM2 is that when Alzheimer's disease was first described, we know about the plaques, we know about the neurofibrillary tangles, but also there were these fat bodies that accumulate in microglial cells that were described as the three hallmark features, and no one really talks about the microglial deficiencies. What we showed in 2019 is that that's ATV:TREM2 dependent. Basically, TREM2 loss of function in, not even in an Alzheimer's model, but when challenged, will create these fat accumulations inside the microglial cells. They essentially become unable to turn over, like triglycerides and cholesterol esters. Activating TREM2 can reverse that. I think the genetics is compelling, the pathology is compelling. The clinical path is, what it is. It's a little challenging in Alzheimer's, and I think TREM2 is even a little bit more complicated based on predecessors who have gone forward in this field. Okay. Great. Why don't we flip to small molecules? Why don't we talk about ALS 343? You have some updates there for us, I think, later this year. Just maybe remind us what to think about that program and that target. Closing the door on our large molecule portfolio, obviously PTV progranulin, ATV:TREM2, we talked about the Hunter program. Maybe one last point, we have this oligo transport vehicle technology with broad biodistribution of ASOs, obviously preclinical, but non-human primate data that we think is really exciting. We've picked several targets, two targets to rapidly advance with the OTV, and that's basically the transport vehicle portfolio. In terms of small molecules, we have a number of small molecule programs as well, some going into late-stage studies, and one of those is the DNL343 program, which is an eIF2B agonist. It specifically activates eIF2B. The simplest way to think about it is when a cell is in a stressed environment, it stops translating protein. If you add DNL343, you can reactivate that translation. In fact, what happens is you form these RNA stress granules, which apparently in ALS, they basically get locked into place. Many of the mutations in ALS are linked to these RNA stress granules, right? Based on sort of midyear data, blinded data, we made the decision to advance that program into late stage development, we're basically designing those studies now. We look forward to sharing additional data. I think the expectation is gonna be similar to what we saw in healthy volunteers, where we can look at the ISR pathway, we can activate it, and then we can basically inhibit the ISR pathway by activating eIF2B. Most of this is done in human PBMCs. We've done that in healthy volunteers. We'll do the same in ALS. We have a number of candidate biomarkers, but I'd say there, stay tuned. We don't see a sense of urgency. I mean, this is a highly competitive space, and we wanna continue to mature those data. Okay, great. LRRK2, obviously a program that you're partnered with Biogen on, you've pushed into pivotal studies. Just how to think about the broader Parkinson's population versus the highly mutated population. Right. There we have two studies. We have the LUMA study, which is basically focused on idiopathic Parkinson's disease. This is a large study focused primarily on, on early patients in that study. There it's essentially all comers with the exception of LRRK2 carriers. The second study, the LIGHTHOUSE study, is the LRRK2 carrier study. LUMA has kicked off. We're enrolling that study now, and LIGHTHOUSE will soon kick off with the LRRK2 carrier study, and it's all based on, functional benefit basically for these patients. These are designed studies to see robust clinical benefit. They're powered for clinical benefit, and we're looking forward to testing the LRRK2 hypothesis, both in sporadic Parkinson's as well as LRRK2 carriers. I think the data around sporadic is that there's a number of genetic lesions that point to lysosomal defects and inhibiting LRRK2 improves lysosomal function. We think there's a broader mechanism here. Okay. Cool. RIPK, to round us out, there's obviously peripheral studies, centrally acting studies. Maybe just comment briefly on ALS, what's the potential there, and then, how to think about AD and the potential, path forward in AD. I always get excited talking about our portfolio. There's a lot of programs, and we could spend, a half hour. Talking about RIPK and TNF receptor 1 and being downstream of TNF receptor 1. This is actually one of the first programs we ever started working on at Denali. Now there are two clinical stage programs. One is a molecule that crosses the blood-brain barrier. It's the HIMALAYA study. It's an ALS study being operationalized by Sanofi. They're leading that. It's a global study, U.S. and Europe, powered for, clinical efficacy. That's the goal. Then in terms of the peripherally restricted compound, that's moving forward in lupus and other, they're picking additional peripheral inflammatory diseases. T his is a great partnership. Sanofi is very committed to RIPK as a pathway, obviously being downstream of TNF receptor 1, and we look forward to, getting additional data from those studies. I'll just also comment that the program will move forward also in MS, actually, the CNS crossing molecule. Great. Maybe just to finish this off, remind people where you are from a cash position, how you can prosecute the portfolio. Really, you've mentioned the handful of partnerships that you have, how you think about non-dilutive capital as being an important driver of the business. I mean, our ultimate goal is to discover, develop, and market our medicines. In fact, very recently, we had a chief commercial officer join. Actually, it's not that recent now. It's been nine months, helping design our late-stage studies and getting us ready to launch in, in lysosomal storage diseases and in ALS. We're in a strong cash position, $1.16 billion in cash. Partnerships are fantastic. We have great collaborations with Takeda, Biogen, and Sanofi. The portfolio is about split between partnered assets and unpartnered in the development, but obviously in preclinical, most of it is unpartnered. We continue to be opportunistic around partnerships. It's not necessary right now, but with our platform, we have the ability to go so broad that there's certainly opportunity around partnering. Great. Ryan, thanks for being here. I appreciate it. Great. Thank you.