Good morning, everybody. Thanks for joining us here at the Bank of America conference in Las Vegas. I'm Tazeen Ahmad. I'm one of the senior SMid Biotech analysts here. It's my pleasure to have our next presenting company with me, Denali Therapeutics. Presenting for Denali is CEO Ryan Watts. Good morning, Ryan. Yep, great to be here. Thank you. For those who might not be as familiar with the company, maybe just give us a two minute overview. There's a lot going on, obviously, but maybe just the top-level stuff, and we can go straight into Q&A after that. Yeah, great. Definitely a lot going on, and we actually brought one slide, which is our development portfolio slide. Let me just start by telling you a little bit about the history of Denali for those that are new. The company was founded eight years ago with a focus on defeating degeneration. At the time, actually, most companies were exiting neuroscience and neurodegeneration, and I think a lot has changed in eight years. You can see the recent success in Alzheimer's and in ALS and also in rare disease. We've built a broad portfolio focused on both the rare neurodegenerative components of disease as well as indications like Alzheimer's and Parkinson's disease. I think importantly, we focused on three principles in the building and now execution of the company. First, what we call the degenogene pathways, so basically genes that cause neurodegeneration. Second, engineering brain delivery, so getting medicines across the blood-brain barrier. Third, biomarker-driven development, so using biomarkers to identify the right dose, and even the right patient population, and hopefully in the future, biomarkers driving approval of medicines. Mm-hmm. which now we're seeing, for example, in ALS. You know, we're very happy with where we are. We have seven, soon to be eight, programs in clinical development and four in late-stage. I think the last year and a half has been a big transition for the company focused on late-stage clinical development and actually some launch readiness, so preparing to launch our first medicines, especially in rare, and in ALS. There's a lot to talk about. Maybe let's start with your program, 310 or 310, Hunter syndrome. Can you just give us a quick overview of that, where you are, and when the next catalyst would be? Right. As shown here on the development portfolio slide that the top program, what we call ETV:IDS, which is Enzyme Transport Vehicle, idursulfase or iduronate 2-sulfatase. It's basically Elaprase type molecule or idursulfase molecule that's engineered across the blood-brain barrier using what we call the Transport Vehicle technology. It utilizes transferrin receptor to get across the blood-brain barrier. That clinical program kicked off in 2020, about two and a half years ago in August, almost three years ago. And we're able to show robust, and rapid and now sustained, reduction of heparan sulfate, which is the primary biomarker. In fact, it's the biomarker that causes disease. An elevation in heparan sulfate, which is the substrate for idursulfase, is causing organ damage, especially in the brain. At this point, you know, approved enzyme replacement therapies don't treat the brain. They don't readily cross the blood-brain barrier. Right. The goal of this program was to essentially get enzyme across the blood-brain barrier. We've now shown that successfully with a number of biomarkers, not only heparan sulfate, but the downstream biomarkers around lysosomal function, for example, GM3 and GM2. We recently presented data at World, which I think we'll probably get into some detail. Basically, you know, this is a very exciting program, and it's also the flagship program for the Transport Vehicle technology. We'll soon have a second enzyme in clinical testing for Sanfilippo and another number of other Transport Vehicle-enabled programs. I think also a lot of people call this MPS II. That's right. Sorry. What is the competitive landscape right now? You mentioned ERT. What kind of penetration are they getting? It's very, very wide. Essentially almost every patient that is diagnosed with Hunter syndrome or mucopolysaccharidosis type II. Mm-hmm. or MPS II, has, is on idursulfase. Mm-hmm. That's IV once a week. The biggest sort of competitive landscape now is gene therapy and other enzymes that are engineered across the blood-brain barrier. Mm-hmm. It's basically, you know, which technology will provide the most robust evidence of biomarker correction, and ultimately, that translates to clinical benefit. Notably, actually, our program, not only are we seeing a reduction in heparan sulfate in the cerebrospinal fluid to normal levels, we also are seeing a reduction in blood and urine as well, and in plasma and urine, meaning that likely the standard of care is underdosing with the enzyme replacement therapy. Our goal is to improve treatment both in the periphery, but obviously capture the brain, which is about 70% of Hunter patients have neurological deficits. Those that are non-neurological, we can also improve peripheral efficacy. I think in summary, you know, the other, I think, big competitor, at least in the brain, is basically gene therapy injected directly into the brain. In some ways, they're trying to lead the way with regulators, on some form of accelerated approval. Yeah. I know we're going to get into that. Yeah. I'm hoping. Okay. Given the platform that you have, you could have gone in all different directions, right? Why did MPS II make sense to be sort of your beachhead? Yeah. When you look at what we wanted to accomplish, which is eventually effectively developing and delivering a medicine for Alzheimer's disease, the idea is that you need to first de-risk the technology, and then you de-risk the biology. The goal of going after Hunter syndrome and Sanfilippo and these monogenic diseases is that the biology has been de-risked. There are approved enzyme replacement therapies. Right. We're trying to accomplish one goal here, which is to get that enzyme across the blood-brain barrier. We picked not just, again, Hunter syndrome, but now multiple MPSs and other lysosomal storage diseases because there's this big unmet need. The entire, what we call ETV or Enzyme Transport Vehicle franchise is actually very large. The probability of success in those indications are much higher. Mm-hmm. I think we'll all agree, than Parkinson's and Alzheimer's. It's notable that now it's changing. I mean, you're seeing progress, especially in Alzheimer's and in ALS. We took all of those paths in parallel, as you can see here, but now are very dedicated to building an enzyme franchise where we basically replace the standard of care 'cause we can treat both body and now brain. Mm-hmm. For us, it was about decreased risk in biology. Sure ... and proving the technology. I think actually just to comment, in 2020 when we showed the first data, and shared the first data on the enzyme replacement therapy using ETV:IDS, this normalization of heparan sulfate is not achieved by any of the competitors, either gene therapy or other enzymes engineered across the blood-brain barrier. Even intrathecal Elaprase, if you look very closely at the recent publication, the phase III is not coming close to normalizing heparan sulfate. I think it's actually really important that everyone take a look at that, and see that there's clearly an unmet need in being able to reduce heparan sulfate in brain. I think that was the beachhead. We think we can now build this enzyme franchise, and that's actually where we're preparing for launch and actually have a lot of interaction with regulators in defining the path forward. On that topic, you did show biomarker data. How does the FDA feel about those particular biomarkers? Are they already validated? Can you talk to us about the pivotal program, the phase II study? Yeah. There's really 2 different stories here depending on which division of the FDA we're working with, either CBER or CDER. There's a very strong push, and of course, we will be part of that, to use validated biomarkers as a way of receiving accelerated approval for these rare diseases where it's harder to run very large- Okay controlled studies, either active comparative controlled or placebo-controlled. Some may even argue that it's unethical to run those studies, and it's actually really interesting. The first study design for our phase three was just gonna use natural history. Mm-hmm. If you engage with patient population and these caregivers, there's zero desire to be on active comparator. Every patient wants to be on the. Mm-hmm ... on the drug that's being tested, and it's obvious why that's the case, especially in a rare disease, and especially because if you look at what data we've shown, which is normalization of heparan sulfate, so biochemical correction, normalization or near normalization of lysosomal biomarkers, so cellular correction, and then we're actually now showing improvement in hearing, cognition, behavioral endpoints. There's serious momentum around, you know, patients wanting to be on. Mm-hmm ... on the active medicine. CDER has a long history working with, like for example, IT, idursulfase, and so it's been a little bit more challenging to use these biomarkers as a correlation to clinical benefit, and I can explain why that might be the case. Number one, they actually don't see robust reduction in heparan sulfate with the newly published data. Number two, they actually are giving it intrathecally, so it's a limited distribution throughout the brain. There's work to be done with regulators on using the primary biomarker, heparan sulfate, as a basically approvable or an accelerated approval biomarker. That's why we're focusing so much on the Hunter program to stack that up, so that when we bring the next program, Sanfilippo and others forward, we can essentially use that. From where you stand today, what's your confidence level in being able to tap into the accelerated path? Yeah. I think the FDA on the CDER side has been clear that we need this active comparator study. Mm-hmm. Now CBER is a different story, where there is some suggestion that an accelerated approval may be granted or at least, you know, reviewed for gene therapy. There has to be a unification across the FDA. Mm-hmm. We're just, we're, you know, very engaged, very prepared, and when the time is right, we would go forward if that ends up being the new precedent. In other words, if a biomarker is actually assumed to be a trigger for accelerated approval, we'll have that data package. In fact, we have it now. If you look at our data package, it's about 2x of what maybe gene therapy will have in about, two years from now. Okay. As it relates to your pivotal program, where are you on enrollment? Has it been easy to find these patients? Yeah. We have now activated over 17 sites across nine countries. It's going well. It is a rare disease. It's competitive. You know, we're competing with other programs, but it's going well. You know, I think the best guidance I can give is just the clin trials sort of update on timing. Okay. I guess what is the consensus view on when you would be commercial? It depends on the regulatory path. Mm-hmm. You know, that's actually the biggest challenge is how to work with the FDA and use some of these biomarkers for accelerated approval versus full approval. I think the math is pretty simple when you look at the timelines, you know. Yeah ... based on clin trials. Okay. maybe let's move on to FTD. you recently presented some data there. Right. Can you just remind everybody about that and what next steps are? Right. Our approach to Frontotemporal Dementia, specifically the granulin mutation carriers, is similar to what we just described for IDS, which is basically progranulin replacement therapy, so getting progranulin across the blood-brain barrier. Our initial data that we shared, and we actually will present at AAIC, so the Alzheimer's Association International Conference coming up, another data set. Mm-hmm. Basically, the full data set and healthy volunteer data. That is, you know, one of the-. Mm-hmm. the key data updates. Basically showed a dose-dependent increase in progranulin and CSF. If you wanna know our approach to treating FTD-GRN, probably the best place to point you to is the publication we had in 2020 that described progranulin replacement. I think what was most important about that publication is that it showed that granulin loss of function is essentially causing lysosomal deficits. You know, again, the relationship to enzyme replacement therapy, that can be corrected with PTV:PGRN. We have a number of biomarkers that look again at correction at the cellular level and then more at the network level, looking at biomarkers of microglial or neuronal health. Basically expect another set of data- Mm-hmm. -for the healthy volunteer, now we're actively enrolling the progranulin study. I will comment that it's about 5%-10% of FTD is granulin, and it's extraordinarily difficult to enroll this study. I think others are having challenges as well, in part because a lot of FTD patients are, you know, not granulin mutation carriers. You know, we're not giving any guidance on timing, but we think this is an important program to further validate, you know, the approach to granulin. We're of course looking very heavily at biomarkers to validate the approach. Yeah. What are good biomarkers? Cause a lot of companies have been trying to do FTD, and it's been slow and that's not a surprise. How validated are the biomarkers for FTD? Yeah. I would point to, again, to our publication in 2020, where we're sort of stacking proximal to distal biomarkers. The most proximal are lysosomal biomarkers, and the most distal would be, you know, glial, like GFAP or neuronal- Yeah. biomarkers, like neurofilament. How do you think it's still early that you could be differentiated from other programs that are trying to be developed? Right. Even also targeting progranulin. That's right. I think the two probably biggest competitors in this space for us are gene therapy approaches. Mm-hmm. Which has, I think, the challenge of just limited distribution throughout the brain. You pick a point to inject the gene therapy, doesn't necessarily broadly distribute. There can be... Mm-hmm. There can be some cross-cellular correction, so a non-cell autonomous correction. Then the other is blocking the natural receptor for progranulin sortilin. We are actually following those competitors closely, especially the approach to blocking sortilin and looking at that data, which I think, again, is part of the challenge of enrolling the studies, is that there are multiple programs in a relatively small indication. Okay. Do you think that your stock has value for FTD right now? It's a good question. Probably not, but the path is also long, right? Yeah. So. Okay. Let's talk about the next program on the list here, which is Antibody TV. I think in Alzheimer's, Biogen recently exercised an option for it. Can you talk about the importance of that particular program and why you think Biogen's the best partner for it? Yeah. There we have two antibodies that we're developing, and we have more that we haven't disclosed yet for Alzheimer's disease using the Transport Vehicle technology. One is a TREM2 a-activating antibody, and the other one is an Aβ antibody. I think, you know, it's probably never a better time to be working on Aβ antibodies. Mm-hmm. It was so hard for so long. Yeah. I've actually been working on Aβ antibodies since 2006, so I've seen everything from, you know, the bapineuzumab, solanezumab era now to the lecanemab and aducanumab and, you know, other, you know, donanemab data recently, which was striking. Mm-hmm. You know, our approach is basically to improve brain exposure of these antibodies. Interestingly, in our hands, no matter how high we dosed enzymes, we couldn't correct in the brain the enzyme deficit. However, with antibodies that have a much better half-life, antibodies do cross the blood-brain barrier at a very, you know, a minimal fraction. The idea is that Transport Vehicle technology can enhance these antibodies. In other words, you can use a much smaller dose or you can enhance activity. For example, with our ATV:HER2 program for cancer or our TREM2 program, we massively enhance the activity by combining transferrin receptor with these transmembrane targets. The Aβ antibody is unique in the sense that when we look at biodistribution of a transport vehicle antibody versus a standard antibody, so let's use like aducanumab or lecanemab as an example. Antibodies that are just given as a standard antibody, when they cross the blood-brain barrier, most of their localization is perivascular. It gets across the CSF barrier. Some may get across capillaries, and if you look at the biodistribution, it's very endothelial. Of course, this is a challenge. Mm-hmm. I think, the greatest risk around Aβ antibodies are ARIA. Yeah. Amyloid related imaging abnormalities. Basically vasogenic edema is what it was originally described as with bapineuzumab. The idea here is that rather than having to cross the perivascular space, you give lower doses and cross the capillary space. At least in our hands, we're seeing a differentiation in the biodistribution of vascular versus non-vascular. That will, I think, be important. Also important will be the dosing frequency and route. The only data so far looking at, you know, different routes was actually the gantenerumab data, where data was shown using Sub-Q. And there they saw actually less plaque reduction, less Cmax. If you actually look at the lecanemab data, you're giving 10 mg per kg every other week, so that's a very high dose given every other week, which is giving you a better brain exposure. Mm-hmm. The idea is that the Transport Vehicle technology will improve that by basically 10x, allowing you to probably give a lower dose and maybe even enabling Sub-Q dosing. Okay. I did wanna touch upon DNL919 and where you are in discussions with FDA regarding clinical hold. Yeah. Just a reminder, DNL919 is our TREM2 antibody program. Probably the best way to describe it is looking at a recent Nature Neuroscience paper where we go in detail about the mechanism of enhancing, you know, TREM2 activity when we combine TFR with TREM2. We went forward in Europe in a healthy volunteer study. The idea is that we'll generate that data and determine the path based on that data, and then decide how we engage with the FDA. Just a reminder that, you know, the clinical hold from the FDA is based on basically the therapeutic index and preclinical tox assessment. Mm-hmm. I guess what is the path forward there? Yeah, the path would be identifying a dose in healthy volunteers and then advancing to an Alzheimer's study. On that. Note by end of year, we should have guidance on TREM2. Maybe in the time that we have, I wanna make sure I touch on all of the many programs. Let's move on to DNL343 and ALS. ALS is now a hot topic, and I wanted to get your thoughts on whether you think there's been a shift in the way FDA views the disease and what the criteria actually is for what you need to show or anyone would need to show to get a drug approved. Yeah. I think, you know, this is actually two of the near and midterm data readouts for us will be two ALS studies. One is RIP Kinase, the HIMALAYA trial, which is being operationalized by Sanofi, and that's going along well. Mm-hmm. Then we're just about to begin the HEALEY ALS Platform Trial, which will be a relatively large trial. It's actually 240 patients, which, you know, has the potential to be registrational based on the size and also the duration. This is gonna be really important for us is the ALS path here. I do think, you know, with tofersen accelerated approval, AMX0035, they're kind of two ends of a spectrum. Yeah. One is approved based on a biomarker neurofilament, and the other is based on, you know, clinical efficacy where there actually wasn't a change in neurofilament. I think the take-home message is that regulators are very open to providing options for ALS patients. I mean, it's a death sentence, as you know. Right two to five years after diagnosis. Therefore, you know, it's actually a fantastic time to be developing ALS medicines, and you can go both clinical efficacy as well as biomarker path to approval. I guess in your mind, does that change any trial design that you would think of doing or accelerate what you would've taken more time to do? Yeah. I. We're definitely invested in ALS. It's interesting because when we get questions, it's almost all about the programs that are enabled by the Transport Vehicle, but we have a very large small molecule portfolio as well. Now there's a shift in focus back to the ALS programs... Yeah ...either. The short answer is it's not only just a shift in what we do, but it's also a shift of our resources and making sure that we enable these programs that have a clear path to approval. How are the two molecules, the RIP Kinase and the eIF2B different from each other? I think the best way to think about RIP Kinase is that it's downstream of TNF receptor 1, and it mediates inflammation and necroptosis, which is basically a necrotic cell death. When you inhibit RIP Kinase, you basically dampen that. We've actually shown some data in COVID with a RIP Kinase... Mm-hmm ...a peripheral RIP Kinase inhibitor that we actually have a pretty robust biomarker effect on various inflammatory pathways and actually somewhat better outcomes. It's kind of interesting data. Sanofi is broadly developing two different RIP Kinase inhibitors that were invented at Denali. One in peripheral inflammatory disease, basically lupus and ulcerative colitis, and then our CNS penetrant molecule in both ALS and MS. This is really going after the basically inflammatory or immunology component, which I would say in ALS is probably an accelerator of disease. Mm-hmm. eIF2B is going after an initiator of disease, so actually the actual RNA stress granules that form, essentially starve the cells in an integrated stress response pathway. You form these TDP-43 positive granules, and basically using the eIF2B activators, you can dissolve these, and you basically block the cascade at the beginning. One is an accelerator, the other is an initiator, so very different pathways both implicated in ALS. Is there any way that they could be complementary? Absolutely, yeah. I think that you'll see, I mean, we're seeing this obviously in cancer, but the likely in degenerative diseases, the inflammatory cascade is an accelerator of disease, but it's not necessarily caused like Aβ or TDP-43… Mm-hmm ...which are essentially triggers of or initiators of disease. There are other big pharma companies that are trying to pursue ALS as well. How do you think about... Some of them are using similar approaches. How do you think about differentiation in what could be a crowded space? Right. The, probably the two biggest competitors for us for eIF2B, we were the first, by the way, to take an eIF2B activator in the clinic and the first to show data... Mm-hmm ...with an eIF2B activator. Recently at AAN, we showed data for the broad 28 data, the complete data set for our eIF2B program, so that was very recent. Also at that conference, one of our competitors, AbbVie, Calico, showed their first healthy volunteer data. I just encourage everyone to look very closely at their data versus our data. I'll just comment on our data, not necessarily on theirs, but we see a robust and sustained response on the ISR pathway, and have selected a dose where we can see, you know, oral once a day, very robust inhibition of the ISR pathway. Mm-hmm. We think it's likely differentiated just based on the data alone. They are in the platform study, as are we. Mm-hmm ...in the HEALEY study. Then for BMS, we know less about where their program is. Mm-hmm. Okay. Now, I guess what would be the next definable data catalyst for each of these programs? Yeah. I think, you know, I mean, we can go one by one, but I'll summarize probably the two most important updates coming. SSIEM for the Hunter program. Mm-hmm. We continue on average twice a year to give an update on the Hunter program. Of course, what we had shown previously, as I mentioned, is biochemical correction, cellular correction, and network correction and hearing. Now it's just showing sustained effect. Then we'll also provide data on PTV:PGRN progranulin at an upcoming at the AAIC. Those are probably the most recent. Our major focus is basically executing on this late stage portfolio and preparing for our first launches in either rare or ALS. Which of the ones that you've mentioned, I guess by patient size would be the biggest contributor? Yeah. I think that probably RIP Kinase and eIF2B have very broad- Mm-hmm. potential. Also our LRRK2 program, especially in idiopathic Parkinson's disease. Now we think about as, you know, we started at the beginning about probability of success versus patient population, and they kinda correlate, right? Yeah. In part because it's monogenic diseases versus these large, complex, polygenic diseases. We have that balance in our portfolio. One of the ways we balance risk is some of the larger indications are essentially partnered where we share cost and share upside. Okay. Now we've talked about biomarkers a few times in this conversation. Now, for a lot of the indications that we've talked about, neurofilaments are often deemed biomarker. They are kind of unstable, and it does take some time to really get confidence in them. I guess it's a two-part question. Do you plan on showing neurofilament data this year for any of these programs that we just talked about? How should we be thinking about what would be a good result on neurofilament impact? It depends on what indication you're looking at, how neurofilament behaves. We and others have done a very extensive analysis. Basically, every one of these programs we have historically and will in the future look at biomarkers such as neurofilament, GFAP. Uh-huh. and neuronal biomarkers. I'll just give you an example. In Parkinson's disease, there's essentially very little to no change in neurofilaments. Even though it's a degenerative disease, it's such a small region that's dying that you don't see neurofilament necessarily elevated in CSF. There's some, you know, there are some. Basically, if there's any elevation, it's very modest, like 1.2-fold. Alzheimer's is also modest elevation in neurofilament. Even though it's pretty broad and there are many cells are impacted, you see maybe a, you know, 1.5- to 2-fold increase. ALS, you have a very high increase in neurofilament as well as MS. MS is interesting because in relapse remitting, you get this peak of neurofilament, and then after obviously, the event, you see that decline naturally, right? We will continue to assess. I think the challenge we've had is we, for example, blazed the trail in lysosomal storage diseases. There was essentially no data at all in the field on neurofilament in Hunter syndrome. We were the first to show the natural history data, and we looked at six months, and we realized not enough patients and a lot of variability. When you look back at that disease, you see this incredible variability with neurofilament. Between about two and three years, neurofilament eventually starts to go down with cerliponase alfa, right? Mm-hmm. I think in some diseases, neurofilament will be acutely responsive, and in others it may take time. I think even in particular, some of the childhood diseases, it's complex because you're also going through a process of remodeling of the nervous system during that time. Got it. In the couple of minutes we have, I might wanna just focus on MS. We touched upon it, this is also one of those areas where it's relatively crowded. There's different modalities, fairly established. What makes it attractive for Denali to wanna pursue that indication? Yeah. Actually, interestingly, personally, Denali alone has no MS programs that we're developing within our portfolio. It's actually through our collaboration with Sanofi. Yeah. that RIP Kinase is being explored in MS. Yeah. Part of it is the competitive nature. The other is that there's this huge unmet need in Parkinson's and Alzheimer's and ALS. MS is essentially an immunological disease. you know. Just mechanistically, why does it make sense? Yeah. I think you go after immunology targets in MS. I do think there's gonna be a next wave of targets in MS that focus on the underlying effects on myelination and neurodegeneration, but that has not been primarily a focus for us. Do you think that next generation compounds that you would develop in-house could change your view about directly pursuing it? Obviously, that's a big indication. Yeah. with a lot of investment in focus. I think it's possible. Not today. Mm-hmm. I think for us, the focus is the enzyme franchise, these two near and midterm readouts in ALS, and then balancing our risk and our portfolio through our partnerships in some of the bigger indications. I think you'll see that we're really investing in this. The other area that we haven't discussed that I think is really important for us, from a development perspective, it's late stage enzyme franchise, but our OTV, which is the oligonucleotide transport vehicle, and that's basically getting ASOs across the blood-brain barrier. I'll just note that we have a paper that's now in bioRxiv. It's in review at a top medical journal. We released the paper because we know it's a super competitive field, and we wanna make sure that people see the data and understand that you can get antisense oligos across the blood-brain barrier with systemic delivery, which we didn't think was possible. Now we've shown it both in mice and monkeys, and that's all outlined in that manuscript. We're very excited about the future potential for OTV, but that's where we'll invest in the future. Mm-hmm. That allows us to go after many indications, both the monogenic diseases, but also the broader diseases like Alzheimer's and Parkinson's. We've named five targets, and one is in Alzheimer's, one is in Parkinson's, and then the three other are in more rare diseases. The idea is to pick two of those five and advance rapidly. I think that's the next wave of investment for Denali. Okay. Last question is, what's your current cash balance, and how much of the goals that you just described to be achieved with what you have on hand? Yeah. A little less than about $1.3 billion. I think it's $1.23 billion. We basically are set to get those readouts in the next, you know, two to three years- Mm-hmm. that I described. Okay. Perfect. With that, we're out of time. Thanks, guys, for joining. Thank you for Ryan for coming over and presenting for the first time... That's right. at our conference. Great to be here. It was great to have you. Yeah. Thanks. Thank you.