Denali Therapeutics Inc.

Previous wording

•BIIB122/DNL151, a small molecule LRRK2 inhibitor, is being developed in collaboration with Biogen for the potential treatment of Parkinson's disease ("PD"); and

Current wording

•BIIB122/DNL151, a small molecule LRRK2 inhibitor, is being developed in collaboration with Biogen for the potential treatment of Parkinson's disease ("PD");

Previous wording

Key operational and financing milestones in 2025 to date include:

Current wording

Key operational milestones in 2025 to date include:

Previous wording

•In July 2025, we announced that the FDA accepted our BLA for tividenofusp alfa for priority review, assigning a Prescription Drug User Fee Act (PDUFA) target action date of January 5, 2026, and we continue to prepare for commercial launch; and

Current wording

•In July 2025, we announced that the FDA accepted our BLA for tividenofusp alfa for priority review, assigning a Prescription Drug User Fee Act (PDUFA) target action date of January 5, 2026;

Previous wording

•In August 2025, we announced we reached alignment with the FDA that cerebrospinal fluid heparan sulfate (CSF HS) may be considered a reasonably likely surrogate endpoint to predict clinical benefit and may therefore be used to support accelerated approval of DNL126 for MPS IIIA. Additional 49-week data from the ongoing open-label Phase 1/2 study are consistent with previously announced 25-week data, demonstrating a significant reduction in CSF HS from baseline, including normalization, and a safety profile that supports continued development. Enrollment in the Phase 1/2 study is nearly complete, and planning is underway for a confirmatory global Phase 3 study.

Current wording

•In August 2025, we announced we reached alignment with the FDA that cerebrospinal fluid heparan sulfate (CSF HS) may be considered a reasonably likely surrogate endpoint to predict clinical benefit and may therefore be used to support accelerated approval of DNL126 for MPS IIIA. Additional 49-week data from the ongoing open-label Phase 1/2 study are consistent with previously announced 25-week data, demonstrating a significant reduction in CSF HS from baseline, including normalization, and a safety profile that supports continued development;

Previous wording

We have incurred significant operating losses to date and expect to continue to incur operating losses for the foreseeable future. We had net losses of $124.1 million and $257.1 million for the three and six months ended June 30, 2025, respectively, and $99.0 million and $200.8 million for the three and six months ended June 30, 2024. As of June 30, 2025, we had an accumulated deficit of $1.80 billion. Our ability to generate product revenue will depend on the successful development and eventual commercialization of one or more of our product candidates. We expect to continue to incur significant expenses and operating losses as we advance our current clinical stage programs through healthy volunteer and patient trials; broaden and improve our TV platform; acquire, discover, validate and develop additional product candidates; obtain, maintain, protect and enforce our intellectual property portfolio; and hire additional personnel.

Current wording

We have incurred significant operating losses to date and expect to continue to incur operating losses for the foreseeable future. We had net losses of $126.9 million and $384.0 million for the three and nine months ended September 30, 2025, respectively, and $107.2 million and $308.0 million for the three and nine months ended September 30, 2024. As of September 30, 2025, we had an accumulated deficit of $1.92 billion. Our ability to generate product revenue will depend on the successful development and eventual commercialization of one or more of our product candidates. We expect to continue to incur significant expenses and operating losses as we advance our current clinical stage programs through healthy volunteer and patient trials; broaden and improve our TV platform; acquire, discover, validate and develop additional product candidates; obtain, maintain, protect and enforce our intellectual property portfolio; and hire additional personnel.

Previous wording

Comparison of thethree and six months ended June 30, 2025 and 2024

Current wording

Comparison of thethree and nine months ended September 30, 2025 and 2024

Previous wording

Research and development expenses. Research and development expenses were $102.7 million and $218.9 million for the three and six months ended June 30, 2025, compared to $91.4 million and $198.4 million for the three and six months ended June 30, 2024, respectively.

Current wording

Research and development expenses. Research and development expenses were $102.0 million and $320.9 million for the three and nine months ended September 30, 2025, compared to $98.2 million and $296.7 million for the three and nine months ended September 30, 2024, respectively.

Previous wording

The following table provides a breakdown of our research and development expenses by category (in thousands):

Current wording

The following tables provide a breakdown of our research and development expenses by category (in thousands):

Previous wording

(1)Personnel related expenses include stock-based compensation expense of $15.2 million and $14.4 million for the three months ended June 30, 2025 and 2024, respectively, reflecting an increase of $0.8 million.

Current wording

(1)Personnel related expenses include stock-based compensation expense of $15.2 million and $14.1 million for the three months ended September 30, 2025 and 2024, respectively, reflecting an increase of $1.1 million.

Previous wording

The increase in research and development expenses of approximately $11.3 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, was primarily attributable to the following:

Current wording

The increase in research and development expenses of approximately $3.7 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, was primarily attributable to the following:

Previous wording

•an increase of $7.6 million in other research and development expenses, including lab consumables, consultants and general facilities costs, driven by the commencement of operations at our large molecule manufacturing facility in Salt Lake City, Utah; and

Current wording

•an increase of $7.8 million in other research and development expenses, including lab consumables, consultants and general facilities costs, driven by the commencement of operations at our large molecule manufacturing facility in Salt Lake City, Utah; and

Previous wording

•an increase of $6.2 million in personnel-related expenses, including salaries and stock-based compensation, primarily driven by higher headcount related to the commencement of operations at our large molecule manufacturing facility in Salt Lake City, Utah.

Current wording

•an increase of $6.4 million in personnel-related expenses, including salaries and stock-based compensation, primarily driven by higher headcount related to the commencement of operations at our large molecule manufacturing facility in Salt Lake City, Utah.

Previous wording

These increases were partially offset by a $9.8 million decrease in small molecule external research and development expenses, primarily due to the winding down of activities related to the Phase 2/3 HEALEY ALS Platform Trial.

Current wording

These increases were partially offset by a $10.2 million decrease in small molecule external research and development expenses, primarily due to the winding down of activities related to the Phase 2/3 HEALEY ALS Platform Trial in 2025.

Previous wording

(1)Personnel related expenses include stock-based compensation expense of $30.3 million and $30.7 million for the six months ended June 30, 2025 and 2024, respectively, reflecting a decrease of $0.4 million.

Current wording

(1)Personnel related expenses include stock-based compensation expense of $45.5 million and $44.8 million for the nine months ended September 30, 2025 and 2024, respectively, reflecting an increase of $0.7 million.

Previous wording

The increase in research and development expenses of approximately $20.5 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, was primarily attributable to the following:

Current wording

The increase in research and development expenses of approximately $24.2 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, was primarily attributable to the following:

Previous wording

•an increase of $7.3 million in TV program external research and development expenses, primarily attributable to increased spend on multiple preclinical programs;

Current wording

•an increase of $17.8 million in TV program external research and development expenses, primarily attributable to increased spend on multiple preclinical programs including OTV:MAPT and ETV:GAA, as well as an increase in expenses of $4.9 million on our DNL126 program. These increases were partially offset by a decrease in expenses related to our DNL310 program of $6.5 million;

Previous wording

•an increase of $12.3 million in other research and development expenses, including lab consumables, consultants and general facilities costs, driven by the commencement of operations at our large molecule manufacturing facility in Salt Lake City, Utah; and

Current wording

•an increase of $20.1 million in other research and development expenses, including lab consumables, consultants and general facilities costs, driven by the commencement of operations at our large molecule manufacturing facility in Salt Lake City, Utah; and

Previous wording

•an increase of $4.1 million in personnel-related expenses, including salaries and stock-based compensation, primarily driven by higher headcount related to the commencement of operations at our large molecule manufacturing facility in Salt Lake City, Utah.

Current wording

•an increase of $10.6 million in personnel-related expenses, including salaries and stock-based compensation, primarily driven by higher headcount related to the commencement of operations at our large molecule manufacturing facility in Salt Lake City, Utah.

Previous wording

These increases were partially offset by a $14.1 million decrease in small molecule external research and development expenses primarily attributable to the following:

Current wording

These increases were partially offset by a $24.3 million decrease in small molecule external research and development expenses primarily attributable to the following:

Previous wording

•a decrease of $8.7 million related to the winding down of activities related to DNL343 including the Phase 2/3 HEALEY ALS Platform Trial;

Current wording

•a decrease of $16.3 million related to the winding down of activities related to our DNL343 program including the Phase 2/3 HEALEY ALS Platform Trial in 2025;

Previous wording

•a decrease of $3.5 million related to offset R&D funding related to the Collaboration and Development Funding Agreement with an unrelated third party, under which, starting in the second quarter of 2024, funding earned offsets LRRK2 program expenses; and

Current wording

•a decrease of $7.8 million for our LRRK2 program related to the R&D funding from our Collaboration and Development Funding Agreement with an unrelated third party, under which, starting in the second quarter of 2024, program expenses were offset; and

Previous wording

General and administrative expenses. General and administrative expense was$32.3 million and $25.2 million for the three months ended June 30, 2025, and 2024, respectively, and $61.6 million and $50.4 million for the six months ended June 30, 2025, and 2024, respectively. Theincreases of$7.1 million for the three month period, and $11.2 million for the six month period, were both primarily driven by activities related to preparations for a potential commercial launch for tividenofusp alfa.

Current wording

General and administrative expenses. General and administrative expense was$35.5 million and $24.9 million for the three months ended September 30, 2025, and 2024, respectively, and $97.1 million and $75.4 million for the nine months ended September 30, 2025, and 2024, respectively. Theincreases of$10.6 million for the three month period, and $21.7 million for thenine months ended, were both primarily driven by activities related to preparations for a potential commercial launch for tividenofusp alfa.

Previous wording

As of June 30, 2025, we had cash, cash equivalents and marketable securities in the amount of $977.4 million. We fund our operations primarily with the proceeds from the sale of common stock and payments received from our collaboration partners, including those received under agreements with Takeda, Sanofi, and Biogen. We have sold common stock and other securities in public offerings, a private placement, and stock purchase agreements with Takeda and Biogen.

Current wording

As of September 30, 2025, we had cash, cash equivalents and marketable securities in the amount of $872.9 million. We fund our operations primarily with the proceeds from the sale of common stock and payments received from our collaboration partners, including those received under agreements with Takeda, Sanofi, and Biogen. We have sold common stock and other securities in public offerings, a private placement, and stock purchase agreements with Takeda and Biogen.

Previous wording

Through June 30, 2025, we have received$115.0 million,$225.0 million, $565.0 million and $50.0 million, pursuant to our collaboration and research and development funding agreements with Takeda, Sanofi, Biogen and an unrelated third party, respectively. These payments include upfront, option and milestone payments. Additionally, we have received$51.7 million and $16.2 million in gross cost sharing reimbursements from Takeda and Biogen, respectively, and received$13.7 million in specified reimbursements from Sanofi.

Current wording

Through September 30, 2025, we have received$115.0 million,$225.0 million, $565.0 million and $50.0 million, pursuant to our collaboration and research and development funding agreements with Takeda, Sanofi, Biogen and an unrelated third party, respectively. These payments include upfront, option and milestone payments. Additionally, we have received$53.1 million and $16.2 million in gross cost sharing reimbursements from Takeda and Biogen, respectively, and received$13.7 million in specified reimbursements from Sanofi.

Previous wording

Since our inception, we have incurred significant losses and negative cash flows from operations. We have an accumulated deficit of $1.80 billion as of June 30, 2025. We expect to incur substantial additional losses in the future as we conduct and expand our research and development activities. We believe that our existing cash, cash equivalents and marketable securities will be sufficient to enable us to fund our projected operations through at least the twelve months following the filing date of this Quarterly Report on Form 10-Q, including our existing commitments as outlined below. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. In the longer term, we anticipate that we will need substantial additional resources to fund our operations and meet future commitments.

Current wording

Since our inception, we have incurred significant losses and negative cash flows from operations. We have an accumulated deficit of $1.92 billion as of September 30, 2025. We expect to incur substantial additional losses in the future as we conduct and expand our research and development activities. We believe that our existing cash, cash equivalents and marketable securities will be sufficient to enable us to fund our projected operations through at least the twelve months following the filing date of this Quarterly Report on Form 10-Q, including our existing commitments as outlined below. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. In the longer term, we anticipate that we will need substantial additional resources to fund our operations and meet future commitments.

Previous wording

Our existing commitments primarily relate to our obligations under existing lease agreements, and certain clinical and manufacturing agreements, including the DMSA with Lonza Sales AG ("Lonza") for the development and manufacture of biologic products. As of June 30, 2025, we had total undiscounted lease payment obligations of $61.9 million. Under the DMSA with Lonza, and certain other clinical and manufacturing agreements, we had total non-refundable purchase commitments as of June 30, 2025 of $66.9 million, with certain amounts subject to cost sharing with Takeda. While the lease obligations span multiple years, the majority of the purchase commitments with Lonza and other clinical and manufacturing agreements are due within twelve months, with some spanning several years. Further, we may be required to make contingent payments under existing arrangements upon the achievement of defined clinical, regulatory and commercial milestones in certain programs, including contingent consideration payments to former shareholders of F-star under the F-star Gamma license, and milestone and royalty payments to Genentech under the Genentech License Agreement. These commitments are more fully described in Note 6 "Commitments and Contingencies" of our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, and in Note 4, "Acquisition, License Agreement and Research and Development Funding Collaboration Agreement" and Note 7, "Commitments and Contingencies" to the consolidated financial statements included in Item 8. of our Annual Report on Form 10-K filed on February 27, 2025.

Current wording

Our existing commitments primarily relate to our obligations under existing lease agreements, and certain clinical and manufacturing agreements, including the DMSA with Lonza Sales AG ("Lonza") for the development and manufacture of biologic products. As of September 30, 2025, we had total undiscounted lease payment obligations of $57.4 million. Under the DMSA with Lonza, and certain other clinical and manufacturing agreements, we had total non-refundable purchase commitments as of September 30, 2025 of $39.4 million. While the lease obligations span multiple years, the majority of the purchase commitments with Lonza and other clinical and manufacturing agreements are due within twelve months, with some spanning several years. Further, we may be required to make contingent payments under existing arrangements upon the achievement of defined clinical, regulatory and commercial milestones in certain programs, including contingent consideration payments to former shareholders of F-star under the F-star Gamma license, and milestone and royalty payments to Genentech under the Genentech License Agreement. These commitments are more fully described in Note 6 "Commitments and Contingencies" of our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, and in Note 4, "Acquisition, License Agreement and Research and Development Funding Collaboration Agreement" and Note 7, "Commitments and Contingencies" to the consolidated financial statements included in Item 8. of our Annual Report on Form 10-K filed on February 27, 2025.

Previous wording

During the six months ended June 30, 2025, net cash used in operating activities was $206.8 million, which consisted of a net loss of $257.1 million, adjusted by non-cash items primarily related to stock-based compensation expense, depreciation and amortization, net accretion of discounts on marketable securities, and non-cash rent expenses. Cash used in operating activities was also driven by changes in our operating assets and liabilities.

Current wording

During the nine months ended September 30, 2025, net cash used in operating activities was $314.1 million, which consisted of a net loss of $384.0 million, adjusted by non-cash items primarily related to stock-based compensation expense, depreciation and amortization, net accretion of discounts on marketable securities, and non-cash rent expenses. Cash used in operating activities was also driven by changes in our operating assets and liabilities.

Previous wording

During the six months ended June 30, 2025, net cash provided by investing activities was $176.7 million, which consisted of $324.0 million in proceeds from the maturities of marketable securities, partially offset by $137.9 million of purchases of marketable securities and $9.4 million capital expenditures to purchase property and equipment.

Current wording

During the nine months ended September 30, 2025, net cash provided by investing activities was $234.5 million, which consisted of $431.0 million in proceeds from the maturities of marketable securities, partially offset by $188.6 million of purchases of marketable securities and $8.0 million capital expenditures to purchase property and equipment.

Previous wording

During the six months ended June 30, 2025, cash used in financing activities was $2.1 million which consisted of the aggregate of $6.8 million of payments related to our finance lease, partially offset by the $4.7 million in proceeds from the exercise of stock options and the Company's ESPP.

Current wording

During the nine months ended September 30, 2025, cash used in financing activities was $2.9 million which consisted of the aggregate of $8.2 million of payments related to our finance lease, partially offset by the $5.2 million in proceeds from the exercise of stock options and the Company's ESPP.

Previous wording

This discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported revenues recognized and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our significant accounting policies are described in detail in the notes to our consolidated financial statements included elsewhere in this report. In our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on February 27, 2025, we described the accounting estimates that we believe involve a significant level of estimation uncertainty which could have a material impact on our financial condition or results of operations. There have been no material changes to these critical accounting estimates during the six months ended June 30, 2025.

Current wording

This discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported revenues recognized and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our significant accounting policies are described in detail in the notes to our consolidated financial statements included elsewhere in this report. In our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on February 27, 2025, we described the accounting estimates that we believe involve a significant level of estimation uncertainty which could have a material impact on our financial condition or results of operations. There have been no material changes to these critical accounting estimates during the nine months ended September 30, 2025.

Previous wording

There have been no new accounting pronouncements or changes to accounting pronouncements during the six months ended June 30, 2025, as compared to the recent accounting pronouncements described in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on February 27, 2025, that are of significance or potential significance to us.

Current wording

There have been no new accounting pronouncements or changes to accounting pronouncements during the nine months ended September 30, 2025, as compared to the recent accounting pronouncements described in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on February 27, 2025, that are of significance or potential significance to us.