Denali Therapeutics Inc.: Q3 FY2026 earnings call

What management said about Q3 FY2026, from the documents filed with the SEC on 3 November 2026: press release. Guidance figures: 3 new, 5 kept. The quarter’s numbers.

Read the filing

Key takeaways

• AVLAYAH revenue reached $17.8 million: Net product revenue was $17.8 million in the quarter, the second full quarter of U.S. commercial availability of AVLAYAH following FDA approval in March 2026. Source
• Net income included Priority Review Voucher gain: The company reported net income of $70.1 million, including a one-time $194.0 million net gain on the sale of a Priority Review Voucher. Net loss in the prior-year quarter was $126.9 million. Source
• Fourth-quarter revenue expected higher: Management expects fourth-quarter 2026 AVLAYAH net product revenue of $30.0 million to $32.0 million, which management ties to continued growth expectations. Source
• Payer coverage widened further: Coverage now exceeds 70% of U.S. commercial lives, up from more than 50% last quarter, and 20 state Medicaid programs have published coverage of AVLAYAH. Source
• Zafinofusp biomarkers fell at week 49: Dose-finding data showed mean reductions of 80% in CSF heparan sulfate and 83% in urine heparan sulfate at week 49. Some participants normalized CSF HS and all assessed normalized liver volume. Source
• BLA submission on track for 2027: The company said the BLA submission for zafinofusp alfa in Sanfilippo syndrome type A, seeking accelerated approval, is on track for 2027. Source
• Cash and securities near $1.0 billion: Cash, cash equivalents and marketable securities reached $1.0 billion, with the Priority Review Voucher gain contributing in the quarter. Source

“Families and physicians are telling us that AVLAYAH is making a difference for children with Hunter syndrome, and the results this quarter reflect that,”

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

Guidance

What changed from last quarter

• New guidance: Fourth-quarter 2026 AVLAYAH net product revenue guidance of $30.0 million to $32.0 million was given in this release. Source
• New: Payer coverage rose to more than 70% of U.S. commercial lives from more than 50% in the prior quarter, and state Medicaid coverage rose from 14 to 20 programs. Source
• New: A permanent J-code for AVLAYAH became effective October 1, 2026. Source
• New: Enrollment in Cohort B of the COMPASS study was completed, bringing total enrollment across Cohorts A and B to 65 participants. Source
• New: Preliminary dose-finding data for zafinofusp alfa were presented at WORLDSymposium 2026, reporting biomarker reductions at week 49. Source

Results and AVLAYAH revenue

• AVLAYAH revenue reached $17.8 million: Net product revenue was $17.8 million in the quarter, the second full quarter of U.S. commercial availability of AVLAYAH following FDA approval in March 2026. Source
• Net income included Priority Review Voucher gain: The company reported net income of $70.1 million, including a one-time $194.0 million net gain on the sale of a Priority Review Voucher. Net loss in the prior-year quarter was $126.9 million. Source
• Fourth-quarter revenue expected higher: Management expects fourth-quarter 2026 AVLAYAH net product revenue of $30.0 million to $32.0 million, which management ties to continued growth expectations. Source

AVLAYAH launch and access

• Payer coverage widened further: Coverage now exceeds 70% of U.S. commercial lives, up from more than 50% last quarter, and 20 state Medicaid programs have published coverage of AVLAYAH. Source
• Permanent J-code took effect: A permanent J-code became effective October 1, 2026, which the company said streamlines billing and reimbursement for treatment centers. Source
• COMPASS enrollment completed: Enrollment in Cohort B of the Phase 2/3 COMPASS study was completed, for 65 participants across Cohorts A and B. Management links the study to confirmatory evidence and an adult label expansion. Source
• AVLAYAH named Galien award winner: In October, AVLAYAH was recognized as the Best Biotechnology Product of 2026 by The Galien Foundation, according to the release. Source

“We look forward to sharing the Phase 1/2 data, which will support a BLA submission in 2027 as planned.”

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

Operating costs and expenses

• R&D spending rose on TV programs: Research and development expenses were $106.1 million, up from $102.0 million a year earlier. The company attributed the $4.1 million increase mainly to external costs for TV programs. Source
• SG&A rose on AVLAYAH launch costs: Selling, general and administrative expenses were $37.5 million, up $2.0 million, mainly from higher commercial and medical affairs costs for the AVLAYAH launch, plus site and personnel costs. Source
• Cost of goods sold stayed low: Cost of goods sold was $0.2 million. Management said pre-approval manufacturing costs were expensed as R&D, so sold inventory carries a lower average per-unit cost. Source
• Intangible amortization began: Intangible asset amortization was $0.8 million, reflecting amortization of the developed technology intangible asset recognized on FDA approval of AVLAYAH in March 2026. Source

Clinical program milestones

• Zafinofusp Phase 1/2 treatment period completed: The zafinofusp alfa Phase 1/2 study completed the prespecified treatment duration for its primary endpoint, with 20 participants across the pediatric age range enrolled. Source
• Zafinofusp biomarkers fell at week 49: Dose-finding data showed mean reductions of 80% in CSF heparan sulfate and 83% in urine heparan sulfate at week 49. Some participants normalized CSF HS and all assessed normalized liver volume. Source
• DNL593 enrollment complete, data due: Enrollment in the DNL593 Phase 1/2 study in FTD-GRN is complete at 40 participants. The FDA granted Orphan Drug Designation to DNL593 for FTD-GRN in August 2026. Source
• DNL952 Phase 1 enrolling patients: The DNL952 Phase 1 study is enrolling participants with late-onset Pompe disease, with initial clinical data expected in 2027. Source
• Alzheimer's programs advance toward 2027 data: DNL921 safety and proof-of-concept data are expected in 2027. Initial biomarker data for DNL628 are expected in the first half of 2027. Source
• DNL151 BEACON data expected: The Phase 2a BEACON study of DNL151 in LRRK2-positive Parkinson's disease is ongoing, with data expected in the first half of 2027. Source

“We are applying what we have learned from developing and launching AVLAYAH as we work with urgency to bring zafinofusp alfa to families affected by Sanfilippo syndrome type A”

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

Zafinofusp alfa path to filing

• BLA submission on track for 2027: The company said the BLA submission for zafinofusp alfa in Sanfilippo syndrome type A, seeking accelerated approval, is on track for 2027. Source
• Phase 3 confirmatory study starting up: Start-up activities are underway for a global Phase 3 confirmatory study of zafinofusp alfa. Source
• More zafinofusp data at congress: Additional Phase 1/2 data are planned for presentation at a medical congress in the first quarter of 2027. Source

Cash, balance sheet and capital

• Cash and securities near $1.0 billion: Cash, cash equivalents and marketable securities reached $1.0 billion, with the Priority Review Voucher gain contributing in the quarter. Source
• Revenue participation liability grew: The liability for the revenue participation right agreement was $209.7 million at September 30, 2026, compared with $205.2 million at June 30, 2026. Source

Platform and corporate updates

• Five TV programs to report data in 2027: Management expects five TransportVehicle programs to generate data in 2027: zafinofusp alfa, DNL593, DNL628, DNL921 and DNL952. Source

Coming up, as management said on 3 November 2026

• Fourth-quarter AVLAYAH revenue guided: Fourth-quarter 2026 AVLAYAH net product revenue is expected at $30.0 million to $32.0 million, to be reported with the next quarterly results. Source
• Zafinofusp data at congress Q1 2027: Additional zafinofusp alfa Phase 1/2 data are planned for a medical congress in the first quarter of 2027. Source
• Zafinofusp BLA filing in 2027: The company plans a BLA submission in 2027 seeking accelerated approval for zafinofusp alfa in Sanfilippo syndrome type A. Source
• DNL593 data in first half 2027: Data from the DNL593 Phase 1/2 study in FTD-GRN are expected in the first half of 2027. Source
• DNL628 biomarker data in 2027: Initial clinical biomarker data from the Phase 1b study of DNL628 in Alzheimer's disease are expected in the first half of 2027. Source
• COMPASS data in first half 2028: Data from the Phase 2/3 COMPASS study of AVLAYAH are expected in the first half of 2028. Source
• Investor conferences scheduled: Management listed upcoming investor conferences, beginning with the Stifel 2026 Healthcare Conference on November 10-12 in New York. Source

Figures management reported

Earlier plans management reported on

• On track: Management states the BLA submission for zafinofusp alfa in 2027 is on track. Source
• On track: Management says the Phase 1/2 data will support the BLA submission in 2027 as planned. Source

Other quarters

• Q2 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.