Denali Therapeutics Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 6 August 2026: press release. Guidance figures: 4 new, 2 kept. The quarter’s numbers.

Read the filing

Key takeaways

• First full quarter of AVLAYAH sales: Revenue came from the first full quarter after the March 2026 FDA approval of AVLAYAH. The company reported net product revenue for the quarter. Source
• Net loss rose year over year: Net loss was $127.6 million, compared with $124.1 million in the second quarter of 2025. The increase followed higher selling, general and administrative expense. Source
• Third-quarter AVLAYAH revenue projected: Management projected third-quarter 2026 AVLAYAH net product revenue of $10.0 million to $12.0 million, a range the prior release did not give. Source
• DNL151 development ended in idiopathic PD: After the Phase 2b LUMA study did not meet its primary or secondary endpoints, the companies stopped developing DNL151 in idiopathic Parkinson's disease. Source
• DNL593 results moved to 2027: Enrollment in the DNL593 Phase 1/2 study is complete at 40 participants. Results are now expected in 2027, allowing more time to observe the NfL biomarker. Source
• Priority review voucher sale adds cash: Denali agreed in June to sell a priority review voucher for $195 million gross. The transaction closed and funds were received in July 2026. Source
• Cash above $1.1 billion pro forma: Cash, equivalents and marketable securities were about $940.0 million at June 30, 2026. Pro forma for the voucher proceeds, they exceeded $1.1 billion. Source

“This quarter marks an important step in Denali’s growth.”

Ryan Watts, Ph.D., Chief Executive Officer of Denali Therapeutics

Guidance

What changed from last quarter

• New guidance: A third-quarter 2026 AVLAYAH net product revenue range of $10.0 million to $12.0 million was given. The prior release did not include one. Source
• Ended: Development of DNL151 in idiopathic Parkinson's disease was discontinued by Denali and Biogen. The independent BEACON study continues. Source
• New: Denali agreed in June 2026 to sell a Rare Pediatric Disease Priority Review Voucher for $195 million gross. The sale closed and funds were received in July 2026. Source
• New: DNL921 is now in an ongoing Phase 1/1b study. The prior release planned a regulatory filing in the first half of 2026 to begin clinical development. Source
• New: Dosing of late-onset Pompe patients in the DNL952 Phase 1 study began in the second quarter of 2026. Source
• New: The FDA granted Orphan Drug Designation to DNL593 for FTD-GRN in August 2026. The prior release did not report this. Source

Results and growth drivers

• First full quarter of AVLAYAH sales: Revenue came from the first full quarter after the March 2026 FDA approval of AVLAYAH. The company reported net product revenue for the quarter. Source
• Net loss rose year over year: Net loss was $127.6 million, compared with $124.1 million in the second quarter of 2025. The increase followed higher selling, general and administrative expense. Source
• Loss per share narrowed slightly: Net loss per share, basic and diluted, was $(0.68), compared with $(0.72) a year earlier. The weighted share count rose to about 187.3 million from 171.4 million. Source

Launch demand and access

• Third-quarter AVLAYAH revenue projected: Management projected third-quarter 2026 AVLAYAH net product revenue of $10.0 million to $12.0 million, a range the prior release did not give. Source
• Most eligible treating sites reached: About 80% of healthcare organizations that treat eligible MPS II patients were reached through launch webinars and the Denali field team. Source
• Payer coverage widened quickly: Published commercial policies now cover more than 50% of covered lives. Fourteen state Medicaid programs have published coverage of AVLAYAH. Source
• Access work continues across functions: Launch work continues in patient access services, physician engagement and payer access, supported by an established commercial infrastructure. Source

“AVLAYAH establishes our commercial foundation, validates our TransportVehicle platform and supports the continued expansion of our portfolio of medicines.”

Ryan Watts, Ph.D., Chief Executive Officer of Denali Therapeutics

Pipeline and clinical programs

• DNL151 development ended in idiopathic PD: After the Phase 2b LUMA study did not meet its primary or secondary endpoints, the companies stopped developing DNL151 in idiopathic Parkinson's disease. Source
• DNL593 results moved to 2027: Enrollment in the DNL593 Phase 1/2 study is complete at 40 participants. Results are now expected in 2027, allowing more time to observe the NfL biomarker. Source
• Zafinofusp heading toward a 2027 filing: Zafinofusp alfa for Sanfilippo syndrome type A is in a Phase 1/2 study. A BLA submission and potential accelerated approval are expected in 2027. Source
• DNL952 Pompe dosing began: Dosing of late-onset Pompe patients in the Phase 1 study began in the second quarter. Initial clinical data are expected in 2027. Source
• Two Alzheimer's programs in clinic: The company now has two clinical-stage Alzheimer's programs. DNL628 biomarker data are expected in the first half of 2027, and DNL921 data in 2027. Source

Costs, margins and gross profit

• Cost of goods sold stayed low: Cost of goods sold was $0.1 million. Pre-approval manufacturing costs were expensed to R&D, so inventory sold now carries a lower per-unit cost. Source
• R&D spending declined year over year: Lower small molecule program costs and lower clinical expenses for tividenofusp alfa reduced research spending by about $5.7 million. Source
• SG&A rose on launch headcount: Selling, general and administrative expense increased about $4.0 million, mainly from personnel costs for headcount added to support the AVLAYAH launch. Source
• Intangible amortization began: Amortization of the developed technology intangible asset started after the March 2026 approval, at $0.7 million in the quarter. Source

“We believe this combination of a commercial business, a broad clinical pipeline and a scalable platform uniquely positions Denali to deliver sustainable value.”

Ryan Watts, Ph.D., Chief Executive Officer of Denali Therapeutics

Capital, cash and royalty liability

• Priority review voucher sale adds cash: Denali agreed in June to sell a priority review voucher for $195 million gross. The transaction closed and funds were received in July 2026. Source
• Cash above $1.1 billion pro forma: Cash, equivalents and marketable securities were about $940.0 million at June 30, 2026. Pro forma for the voucher proceeds, they exceeded $1.1 billion. Source
• Revenue participation liability increased: The liability related to the revenue participation right agreement was $205.2 million at June 30, up from $199.6 million at March 31, 2026. Source
• Receivables and inventory appear after launch: Accounts receivable of $3.9 million and inventory of $4.1 million appear on the June 30 balance sheet. Neither line appeared at March 31. Source

Platform and strategy

• Platform framed as clinically validated: The company describes its TransportVehicle platform as clinically validated, with AVLAYAH the first FDA-approved medicine using transferrin receptor to cross the blood-brain barrier. Source
• DNL593 received orphan designation: The FDA granted Orphan Drug Designation to DNL593 for granulin-related frontotemporal dementia in August 2026. Source
• Takeda exited DNL593 collaboration: In April, Takeda terminated its agreement to co-develop and co-commercialize DNL593. Management said the decision was strategic and not related to data. Source

Public presentations and programs

• CEO gave Alzheimer's plenary: Ryan Watts gave the opening plenary at the Alzheimer's Association International Conference in London in July, covering biomarkers and blood-brain barrier delivery. Source
• BEACON study continues independently: Denali continues to run the Phase 2a BEACON study on its own in LRRK2 variant carriers with Parkinson's disease. Source
• IND-enabling programs continue: Several additional programs remain at the investigational new drug (IND)-enabling stage, including DNL111, DNL622 and DNL422. Source

Coming up, as management said on 6 August 2026

• COMPASS study aims at label and filings: The COMPASS study is intended to generate confirmatory evidence, expand the U.S. label to adults and support future global regulatory submissions. Source
• Zafinofusp Phase 3 start-up underway: Start-up activities for a global Phase 3 confirmatory study of zafinofusp alfa are underway, followed by a planned BLA submission in 2027. Source
• September investor conferences scheduled: Denali listed five investor conferences in New York between September 9 and 17, 2026, including the Cantor and Deutsche Bank events. Source

Figures management reported

Risks management discussed

• Operational: The Phase 2b LUMA study did not meet its endpoints, so development in idiopathic Parkinson's ended. The BEACON study in genetic carriers continues. Source
• Financial: Takeda ended the DNL593 co-development and co-commercialization agreement. Management said the decision was not related to efficacy or safety data. Source
• Operational: DNL593 results were moved to 2027 to allow a longer observation period for biomarkers that may decline gradually after treatment. Source

Earlier plans management reported on

• Ahead: Initial interest in starting AVLAYAH treatment is described as tracking ahead of the company's internal expectations. Source
• Not stated: The prior expectation for DNL593 results was by the end of 2026. Management now expects results in 2027 and gave no status label. Source

Other quarters

• Q3 FY2026 earnings call
• Q3 FY2025 results
• Q2 FY2025 results
• Q4 FY2024 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.