Denali Therapeutics (DNLI) AI Stock Analysis

• Market Cap: $1.91B
• Dividend Yield: N/A
• Average Volume (3M): 2.00M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.22
• Revenue Growth: -100.00%
• EPS Growth: 1.62%
• Country: US
• Employees: 443
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): -0.72
• Shares Outstanding: 146,212,280
• 10 Day Avg. Volume: 2,105,469
• 30 Day Avg. Volume: 2,004,327
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.81
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: -507.78
• Enterprise Value/Ebitda: -3.02
• 1Y Price Target: $33.29
• Price Target Upside: 154.90% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

• Rating: 45 Neutral
• Price Target: ―

Denali Therapeutics faces significant financial hurdles with declining revenues and profitability issues, reflected in poor financial and valuation scores. Technical indicators also suggest a bearish trend. Positive corporate events, such as the BLA submission, offer a potential growth catalyst but are balanced by setbacks like the discontinued ALS trial. The overall outlook remains challenging, with strategic adjustments needed for improvement.

Positive Factors

BLA Submission for Tividenofusp Alfa

The BLA submission for tividenofusp alfa could lead to accelerated approval and a commercial launch, enhancing Denali's market position in treating Hunter syndrome.

Strong Equity Position

A strong equity position with low leverage provides Denali with financial stability and flexibility to invest in R&D and strategic initiatives.

New Equity Distribution Deal

The new equity distribution deal enhances liquidity, supporting Denali's pipeline advancement and potential commercial launches, crucial for long-term growth.

Negative Factors

Discontinued ALS Trial

The discontinuation of the DNL343 ALS trial represents a setback in Denali's pipeline, potentially delaying revenue from new treatments and impacting long-term growth.

Negative Cash Flows

Persistent negative cash flows highlight operational challenges, limiting Denali's ability to fund R&D and expand its pipeline without external financing.

Declining Revenues

Declining revenues and persistent net losses indicate difficulties in achieving profitability, affecting Denali's ability to sustain operations and invest in growth.

Denali Therapeutics Business Overview & Revenue Model

Company Description

Denali Therapeutics Inc. is a biopharmaceutical company focused on discovering and developing therapies for neurodegenerative diseases, such as Alzheimer's, Parkinson's, and ALS. The company operates in the biotechnology sector, leveraging its expertise in the biology of neurodegeneration to create a diverse pipeline of product candidates. Denali's core services include the development of small molecules, antibodies, and other therapeutic modalities aimed at addressing the underlying mechanisms of neurodegenerative conditions.

How the Company Makes Money

Denali Therapeutics generates revenue primarily through collaborations and licensing agreements with other pharmaceutical companies. These partnerships often involve milestone payments and royalties from the commercialization of co-developed products. Additionally, Denali may receive funding from research grants and government contracts to support its R&D activities. The company focuses on advancing its drug candidates through clinical trials, aiming for regulatory approval and subsequent market entry to drive future revenue growth. Key partnerships with industry leaders help bolster its financial position and expand its development capabilities.

Denali Therapeutics Financial Statement Overview

Summary

Denali Therapeutics is facing substantial financial challenges with declining revenues and persistent net losses. Despite a strong equity base and low leverage, negative cash flows highlight operational challenges, underscoring a need for strategic adjustments to improve profitability.

Income Statement

Denali Therapeutics has experienced significant revenue fluctuations, with no revenue in the most recent year compared to $330.5 million in the previous year. The company has faced consistent net losses, and its EBIT and EBITDA margins are negative, indicating ongoing operational challenges in achieving profitability.

Balance Sheet

The company maintains a strong equity position with a high equity ratio, suggesting good financial stability. The debt-to-equity ratio is low, reflecting limited leverage and reduced risk. However, the return on equity is negative due to sustained net losses, highlighting profitability issues.

Cash Flow

Denali's cash flow situation shows negative free cash flow, which has deteriorated over the period. The operating cash flow is also negative, indicating challenges in generating cash from core operations. However, strong financing cash flows have helped maintain liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	0.00	0.00	330.53M	108.46M	48.66M	335.66M
Gross Profit	-3.04M	0.00	313.81M	101.43M	43.05M	123.04M
EBITDA	-511.59M	-414.91M	-179.97M	-330.36M	-287.16M	62.72M
Net Income	-479.03M	-422.77M	-145.22M	-325.99M	-290.58M	71.14M
Balance Sheet
Total Assets	1.17B	1.37B	1.15B	1.46B	1.40B	1.60B
Cash, Cash Equivalents and Short-Term Investments	898.95M	832.33M	1.03B	1.34B	865.41M	1.47B
Total Debt	46.56M	48.71M	52.24M	60.35M	58.55M	64.17M
Total Liabilities	139.19M	144.50M	122.96M	417.81M	441.87M	453.75M
Stockholders Equity	1.03B	1.23B	1.03B	1.04B	962.29M	1.15B
Cash Flow
Free Cash Flow	-367.95M	-363.61M	-370.93M	-262.55M	-219.89M	413.06M
Operating Cash Flow	-349.62M	-347.69M	-357.99M	-244.72M	-211.39M	416.15M
Investing Cash Flow	442.55M	-88.76M	249.31M	-141.39M	-21.63M	-623.21M
Financing Cash Flow	-24.87M	484.30M	17.82M	310.67M	19.35M	634.75M

Denali Therapeutics Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 13.06
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DNLI, the sentiment is Negative. The current price of 13.06 is below the 20-day moving average (MA) of 14.89, below the 50-day MA of 14.51, and below the 200-day MA of 16.73, indicating a bearish trend. The MACD of -0.28 indicates Positive momentum. The RSI at 33.70 is Neutral, neither overbought nor oversold. The STOCH value of 2.34 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DNLI.

Denali Therapeutics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HRMY	75 Outperform	1.84B	10.33	23.40%	―	17.74%	59.96%
NAMS	63 Neutral	2.76B	-15.19	-31.89%	―	0.00%	0.00%
ARQT	58 Neutral	2.06B	-23.03	-67.11%	―	99.50%	65.91%
RXRX	50 Neutral	2.05B	-2.64	-70.61%	―	30.14%	-10.08%
DNLI	45 Neutral	$1.91B	―	-39.69%	―	-100.00%	1.62%
BLTE	43 Neutral	2.38B	-47.10	0.00%	―	0.00%	-26.26%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Denali Therapeutics Corporate Events

Denali Therapeutics Begins BLA Submission for Tividenofusp Alfa

On April 2, 2025, Denali Therapeutics announced the initiation of a rolling submission for a biologics license application (BLA) for tividenofusp alfa, aimed at securing accelerated approval for treating Hunter syndrome (MPS II). This step aligns with the U.S. FDA’s Center for Drug Evaluation and Research (CDER) and includes using cerebrospinal fluid heparan sulfate as a surrogate endpoint. The company anticipates completing the BLA submission by May 2025 and is preparing for a potential U.S. commercial launch in late 2025 or early 2026. The announcement highlights Denali’s ongoing collaboration with CDER under the START program, which also supports the development of DNL126 for Sanfilippo syndrome, reflecting broader implications for expanding Denali’s Enzyme TransportVehicle franchise.

Denali Therapeutics Discontinues DNL343 ALS Trial

On March 5, 2025, Denali Therapeutics announced that further analyses from the Phase 2/3 HEALEY ALS Platform Trial of DNL343 did not show a treatment effect on neurofilament light, a biomarker of neuronal damage, over a 24-week period. The study, which also did not meet its primary endpoint of slowing ALS disease progression, will lead to the discontinuation of the active treatment extension. Despite these results, DNL343 was found to be safe and well tolerated, and Denali plans to explore future development opportunities for the drug.

Denali Therapeutics Signs New Equity Distribution Deal

On February 27, 2025, Denali Therapeutics entered into a new equity distribution agreement with Goldman Sachs and Leerink Partners, allowing the company to sell up to $400 million in common stock through an at-the-market offering program. This agreement replaces a prior sales agreement terminated on the same date. Denali also reported significant progress in its clinical programs, particularly with its Enzyme Transport Vehicle (ETV) programs, and plans for the potential U.S. commercial launch of tividenofusp alfa for Hunter syndrome in late 2025 or early 2026. The company is actively preparing for this launch and continues to advance its pipeline, including programs for Sanfilippo syndrome and frontotemporal dementia.