Denali Therapeutics Inc.

Previous wording

•the commercial success of AVLAYAH and any other products for which we obtain marketing approval;

Current wording

•the commercial success of AVLAYAH and any other products for which we obtain marketing approval, including sales and revenue forecasts;

Previous wording

•the terms and conditions of licenses granted to us and our ability to license and/or acquire additional intellectual property relating to our product candidates and Transport Vehicle TM ("TV");

Current wording

•the terms and conditions of licenses granted to us and our ability to license and/or acquire additional intellectual property relating to our product candidates and Transport Vehicle® ("TV");

Previous wording

We currently have one approved product. Our commercial product, AVLAYAHTM(tividenofusp alfa-eknm) received accelerated approval from the U.S. Food and Drug Administration ("FDA") on March 24, 2026 and is approved for the treatment of neurologic manifestations in patients with Hunter syndrome or mucopolysaccharidoses II (MPS II) when initiated in presymptomatic or symptomatic pediatric patients weighing at least 5 kg prior to advanced neurologic impairment. AVLAYAH's accelerated approval was based on a surrogate endpoint (reduction in CSF HS), and continued approval is contingent upon confirmation of clinical benefit in the ongoing global Phase 2/3 COMPASS trial, as further described under "Clinical-Stage Programs" below.

Current wording

We currently have one approved product. Our commercial product, AVLAYAH®(tividenofusp alfa-eknm) received accelerated approval from the U.S. Food and Drug Administration ("FDA") on March 24, 2026 and is approved for the treatment of neurologic manifestations in patients with Hunter syndrome or mucopolysaccharidoses II (MPS II) when initiated in presymptomatic or symptomatic pediatric patients weighing at least 5 kg prior to advanced neurologic impairment. AVLAYAH's accelerated approval was based on a surrogate endpoint (reduction in CSF HS), and continued approval is contingent upon confirmation of clinical benefit in the ongoing global Phase 2/3 COMPASS trial, as further described under "Clinical-Stage Programs" below.

Previous wording

•DNL921 (ATV:Abeta) is an investigational Antibody TransportVehicle (ATV)-enabled antibody designed for systemic delivery across the blood-brain barrier to target amyloid plaques for the treatment of Alzheimer's disease. In the first half of 2026, we submitted a clinical trial application ("CTA") to initiate a Phase 1/1b study of DNL921;

Current wording

•DNL921 (ATV:Abeta) is an investigational Antibody TransportVehicle (ATV)-enabled antibody designed for systemic delivery across the blood-brain barrier to target amyloid plaques for the treatment of AD;

Previous wording

•DNL151 is an investigational small molecule inhibitor of leucine-rich repeat kinase 2 (LRRK2) for the treatment of Parkinson's disease. Denali conducts the Phase 2a BEACON study evaluating DNL151 in individuals with Parkinson's disease who are confirmed by genetic testing to be carriers of a pathogenic LRRK2 variant; and

Current wording

•DNL151 is an investigational small molecule inhibitor of leucine-rich repeat kinase 2 (LRRK2). Denali is conducting the Phase 2a BEACON study evaluating DNL151 in individuals with Parkinson's disease who are confirmed by genetic testing to be carriers of a pathogenic LRRK2 variant; and

Previous wording

•In June 2026, we entered into a definitive agreement to sell our Rare Pediatric Disease Priority Review Voucher for gross proceeds of $195.0 million. The transaction closed and proceeds were received in July 2026; and

Current wording

•In June 2026, we entered into a definitive agreement to sell our PRV for gross proceeds of $195.0 million. The transaction closed and proceeds were received in July 2026;

Previous wording

•In the first half of 2026, we submitted a clinical trial application to initiate a Phase 1/1b study of DNL921 (ATV:Abeta) in healthy volunteers and participants with Alzheimer's disease, and we are conducting the study;

Current wording

•In the first half of 2026, we submitted a clinical trial application to initiate a Phase 1/1b study of DNL921 (ATV:Abeta) in healthy volunteers and participants with Alzheimer's disease, and the first healthy volunteer was dosed in August 2026; and

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 $127.6 million and $256.0 million for the three and six months ended June 30, 2026, respectively, and $124.1 million and $257.1 for the three and six months ended June 30, 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $2.31 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 approved product AVLAYAH to full US and broader global approval; 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 income of $70.1 million and a net loss of $185.9 million for the three and nine months ended September 30, 2026, respectively, and net losses of $126.9 million and $384.0 million for the three and nine months ended September 30, 2025, respectively. Net income for the three months ended September 30, 2026, included a one-time gain of $194.0 million from the sale of our priority review voucher, as described above. As of September 30, 2026, we had an accumulated deficit of $2.24 billion. Our ability to grow product revenue will depend on the continued commercialization of AVLAYAH and the successful development and commercialization of our product candidates. We expect to continue to incur significant expenses and operating losses as we advance our approved product AVLAYAH to full U.S. and broader global approval; 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, 2026 and 2025

Current wording

Comparison of thethree and nine months ended September 30, 2026 and 2025

Previous wording

Product revenue was$3.6 million for thethree and six months ended June 30, 2026, compared to no product revenue in the prior-year periods. The increase was due to the FDA approval of AVLAYAH in March 2026 and commencement of commercial sales in the United States during the second quarter of 2026. Product revenue reflects sales of AVLAYAH, net of estimates for variable consideration, including distributor service fees, government rebates, product returns and other fees and incentives.

Current wording

Product revenue was$17.8 million and $21.4 million for thethree and nine months ended September 30, 2026, respectively, compared to no product revenue in the prior-year periods. The increase was due to the FDA approval of AVLAYAH in March 2026 and commencement of commercial sales in the United States during the second quarter of 2026. Product revenue reflects sales of AVLAYAH, net of estimates for variable consideration, including distributor service fees, government rebates, product returns and other fees and incentives.

Previous wording

Cost of goods sold was$0.1 million for thethree and six months ended June 30, 2026, compared to no cost of goods sold in the prior-year periods. Because manufacturing costs incurred prior to FDA approval of AVLAYAH were expensed to research and development, cost of goods sold during the initial commercialization period reflects a lower average per-unit cost of materials as previously expensed inventory is sold.

Current wording

Cost of goods sold was$0.2 million and $0.3 million for thethree and nine months ended September 30, 2026, respectively, compared to no cost of goods sold in the prior-year periods. Because manufacturing costs incurred prior to FDA approval of AVLAYAH were expensed to research and development, cost of goods sold during the initial commercialization period reflects a lower average per-unit cost of materials as previously expensed inventory is sold. As of September 30, 2026, we had$4.5 millionof expensed pre-launch inventory, which we expect to be sold through by December 2026. We expect cost of goods sold per unit to increase as this inventory is depleted.

Previous wording

Research and development expenses were $97.0 million and $102.7 million for the three months ended June 30, 2026 and 2025, respectively, and $200.9 million and $218.9 million for the six months ended June 30, 2026 and 2025, respectively.

Current wording

Research and development expenses were $106.1 million and $102.0 million for the three months ended September 30, 2026 and 2025, respectively, and $307.0 million and $320.9 million for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

(1)Personnel related expenses include stock-based compensation expense of $13.5 million and $15.2 million for the three months ended June 30, 2026 and 2025, respectively, reflecting a decrease of $1.7 million.

Current wording

(1)Personnel related expenses include stock-based compensation expense of $13.0 million and $15.2 million for the three months ended September 30, 2026 and 2025, respectively, reflecting a decrease of $2.2 million.

Previous wording

The decrease in research and development expenses of approximately $5.7 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, was primarily attributable to the following:

Current wording

The increase in research and development expenses of approximately $4.2 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, was primarily attributable to the following:

Previous wording

•a decrease of $8.4 million in other research and development expenses is driven by lower cost for BIIB122/DNL151 and DNL343; partially offset by increased purchasing of raw materials at our large molecule manufacturing facility in Salt Lake City, Utah;

Current wording

•A decrease of $3.9 million in other research and development expenses is driven by timing of purchase of raw materials at our large molecule manufacturing facility in Salt Lake City, Utah, and lower clinical costs for DNL151; partially offset by higher internal manufacturing costs forzafinofusp alfa.

Previous wording

(1)Personnel related expenses include stock-based compensation expense of $27.0 million and $30.3 million for the six months ended June 30, 2026 and 2025 respectively, reflecting a decrease of $3.3 million.

Current wording

(1)Personnel related expenses include stock-based compensation expense of $40.0 million and $45.5 million for the nine months ended September 30, 2026 and 2025, respectively, reflecting a decrease of $5.5 million.

Previous wording

The decrease in research and development expenses of approximately $18.1 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, was primarily attributable to the following:

Current wording

The decrease in research and development expenses of approximately $13.9 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, was primarily attributable to the following:

Previous wording

•a decrease of $14.3 million in other research and development expenses is driven by lower clinical expenses for BIIB122/DNL151 and DNL343; partially offset by increased purchasing of raw material at our large molecule manufacturing facility in Salt Lake City, Utah;

Current wording

•A decrease of $18.2 million in other research and development expenses is driven by lower clinical expenses for our previous small molecule eIF2B activator program DNL343 and lower clinical costs for DNL151.

Previous wording

•an increase of $2.8 million in TV programs external research and development expenses is driven by manufacturing expenses and clinical expenses for zafinofusp alfa; partially offset by lower manufacturing expenses for DNL628, and lower clinical expense for tividenofusp alfa.

Current wording

•An increase of $3.2 million in external TV research and development expenses is driven by higher clinical expenses for zafinofusp alfa, DNL952 and DNL921, higher manufacturing and contract research services expenses across multiple pre-clinical programs; partially offset by lower manufacturing expenses for DNL628 and lower clinical expense for AVLAYAH.

Previous wording

•an increase of $1.4 million in personnel-related expenses driven by increased headcount year over year.

Current wording

•An increase of $1.1 million in personnel-related expenses is driven by increased R&D headcount year over year.

Previous wording

Selling, general and administrative expense was $36.3 million and $32.3 million for the three months ended June 30, 2026 and 2025 respectively. The$4.0 million increase was primarily driven by:

Current wording

Selling, general and administrative expense was $37.5 million and $35.5 million for the three months ended September 30, 2026 and 2025, respectively. The$2.0 million increase was primarily attributable tothe following:

Previous wording

•An increase of $1.2 million in other selling general and administration costs driven by increased South San Francisco site costs

Current wording

•An increase of $1.6 million in other selling, general and administrative expenses is driven by higher commercial and medical affairs expenses and South San Francisco site costs.

Previous wording

•An increase of $2.8 million in personnel expenses driven by increased headcount related to the commercial launch of AVLAYAH

Current wording

•An increase of $0.4 million in personnel expenses is driven by increased headcount related to the commercial launch of AVLAYAH.

Previous wording

Selling, general and administrative expense was $69.8 million and $61.6 million for the six months ended June 30, 2026, and 2025, respectively. The$8.2 million increase was primarily driven by:

Current wording

Selling, general and administrative expense was $107.3 million and $97.1 million for the nine months ended September 30, 2026 and 2025, respectively. The$10.2 million increase was primarily attributable tothe following:

Previous wording

•An increase of $6.6 million in personnel expenses driven by increased headcount related to the commercial launch of AVLAYAH

Current wording

•An increase of $7.1 million in personnel expenses is driven by increased headcount related to the commercial launch of AVLAYAH.

Previous wording

•An increase of $1.5 million in other selling general and administration costs driven by increased South San Francisco site costs; partially offset by lower IT project expenses

Current wording

•An increase of $3.1 million in other selling, general and administrative expenses is driven by higher South San Francisco site costs, commercial and medical affairs expenses and consulting.

Previous wording

Intangible asset amortization was $0.7 million and zero for both the three and six months ended June 30, 2026 and 2025, respectively. The intangible asset, which consists of developed technology recognized in connection with the FDA approval of AVLAYAH in March 2026, began amortizing in the second quarter of 2026 on a straight-line basis over its estimated useful life.

Current wording

Intangible asset amortization was $0.8 million and $1.5 million for the three and nine months ended September 30, 2026, respectively. The intangible asset, which consists of developed technology recognized in connection with the FDA approval of AVLAYAH in March 2026, began amortizing in the second quarter of 2026 on a straight-line basis over its estimated useful life.

Previous wording

Interest and other income, net was $3.0 million and $10.8 million for the three months ended June 30, 2026 and 2025, respectively. The decrease of approximately $7.8 million was primarily driven by $5.9 million of non-cash interest expense related to the revenue participation right liability under the Royalty Pharma synthetic royalty funding agreement, which commenced in the second quarter of 2026.

Current wording

Interest and other income, net was $2.9 million and $10.5 million for the three months ended September 30, 2026 and 2025, respectively. The decrease of approximately $7.7 million was primarily driven by $6.1 million of interest expense related to the revenue participation right liability under the Royalty Pharma synthetic royalty funding agreement, which commenced in the second quarter of 2026.

Previous wording

Interest and other income, net was $11.9 million and $23.5 million for the six months ended June 30, 2026 and 2025, respectively. The decrease of approximately $11.6 million was primarily driven by:

Current wording

Interest and other income, net was $14.8 million and $34.0 million for the nine months ended September 30, 2026 and 2025, respectively. The decrease of approximately $19.2 million was primarily driven by:

Previous wording

•$5.9 million of non-cash interest expense related to the revenue participation right liability under the Royalty Pharma funding agreement, which commenced in the second quarter of 2026.

Current wording

•$12.1 million of interest expense related to the revenue participation right liability under the Royalty Pharma synthetic royalty funding agreement, which commenced in the second quarter of 2026;

Previous wording

•Lower interest income due to lower average cash and investment balances;

Current wording

•lower interest income due to lower average cash and investment balances; and

Previous wording

•Lower yields on our investment portfolio; and

Current wording

•lower yields on our investment portfolio.

Previous wording

As of June 30, 2026, we had cash, cash equivalents and marketable securities in the amount of $940.0 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. Following the commercial launch of AVLAYAH, we expect product revenue to contribute to funding our operations, and our liquidity requirements will include working capital to support commercial inventory, patient support programs, market access activities, distribution arrangements, pharmacovigilance obligations and continued investment in commercial infrastructure. Although we expect AVLAYAH product revenue to contribute to funding our operations, we do not expect such revenue to be sufficient to offset our operating expenses in the near term. 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, 2026, we had cash, cash equivalents and marketable securities in the amount of $1.0 billion. 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. Following the commercial launch of AVLAYAH, we expect product revenue to contribute to funding our operations, and our liquidity requirements will include working capital to support commercial inventory, patient support programs, market access activities, distribution arrangements, pharmacovigilance obligations and continued investment in commercial infrastructure. Although we expect AVLAYAH product revenue to contribute to funding our operations, we do not expect such revenue to be sufficient to offset our operating expenses in the near term. 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, 2026, we have obtained aggregate net proceeds of approximately $956.1 million from public offerings of our common stock, including $12.4 million obtained through the sale of 746,468 shares of common stock in January 2026. In March 2026, wereceived $200.0 million in gross proceeds in connection with the closing of the synthetic royalty funding agreement with Royalty Pharma, triggered by the U.S. Food and Drug and Administration’s accelerated approval of AVLAYAH. Under stock purchase agreements with collaboration partners we have received a further $575.0 million through June 30, 2026.

Current wording

Through September 30, 2026, we have obtained aggregate net proceeds of approximately $956.1 million from public offerings of our common stock, including $12.4 million obtained through the sale of 746,468 shares of common stock in January 2026. In March 2026, wereceived $200.0 million in gross proceeds in connection with the closing of the synthetic royalty funding agreement with Royalty Pharma, triggered by the U.S. Food and Drug Administration’s accelerated approval of AVLAYAH. Under stock purchase agreements with collaboration partners we have received a further $575.0 million through September 30, 2026.

Previous wording

In February 2025, we established a registered “at-the-market” facility for the potential future sale of up to $400.0 million of shares of common stock from time to time by entering into an equity distribution agreement with Goldman Sachs & Co. LLC and Leerink Partners LLC as sales agents. To date, no shares have been sold under either equity distribution agreement. All sales under the current equity distribution agreement are conditioned upon satisfaction of customary closing conditions.

Current wording

In February 2025, we established a registered “at-the-market” facility for the potential future sale of up to $400.0 million of shares of common stock from time to time by entering into an equity distribution agreement with Goldman Sachs & Co. LLC and Leerink Partners LLC as sales agents. To date, no shares have been sold, and all sales under the equity distribution agreement would be conditioned upon satisfaction of customary closing conditions.

Previous wording

Through June 30, 2026, we have received$115.0 million,$225.0 million, $565.0 million and $62.5 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$58.2 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, 2026, we have received$115.0 million,$225.0 million, $565.0 million and $62.5 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$59.8 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

In July 2026, we completed the sale of our Rare Pediatric Disease PRV for gross proceeds of $195.0 million.

Current wording

In July 2026, we completed the sale of our rare pediatric disease PRV for net proceeds of$194.0 million.

Previous wording

Since our inception, we have incurred significant losses and negative cash flows from operations. We have an accumulated deficit of $2.31 billion as of June 30, 2026. We expect to incur substantial additional losses in the future as we support the commercialization of AVLAYAH and 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 $2.24 billion as of September 30, 2026. We expect to incur substantial additional losses in the future as we support the commercialization of AVLAYAH and 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, certain commercial product, clinical and manufacturing agreements. As of June 30, 2026, we had total undiscounted lease payment obligations of $47.8 million. We had total non-refundable purchase commitments of $104.7 million as of June 30, 2026. While the lease obligations span multiple years, the majority of the purchase commitments are due within the upcoming twelve months. 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 10 "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 26, 2026.

Current wording

Our existing commitments primarily relate to our obligations under existing lease agreements, certain commercial product, clinical and manufacturing agreements. As of September 30, 2026, we had total undiscounted lease payment obligations of $44.5 million. We had total non-refundable purchase commitments of $95.8 million as of September 30, 2026. While the lease obligations span multiple years, the majority of the purchase commitments are due within the upcoming twelve months. 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 10 "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 26, 2026.

Previous wording

In March 2026, we received $200.0 million in gross proceeds under the Royalty Agreement with Royalty Pharma, which was initially recorded as a liability related to the revenue participation right on our Condensed Consolidated Balance Sheet in the first quarter of 2026. Under the Royalty Agreement, we may receive an additional $75.0 million upon approval of AVLAYAH by the EMA on or before December 31, 2029. In exchange, Royalty Pharma is entitled to a 9.25% royalty on worldwide net sales of AVLAYAH until cumulative royalty payments reach a cap of 3.0 times the total funding received, or 2.5 times the total funding received if such cap is reached on or before the first quarter of 2039. These obligations are described in this Quarterly Report on Form 10-Q in Note 9, “Liability Related to the Revenue Participation Right”.

Current wording

In March 2026, we received $200.0 million in gross proceeds under the Royalty Agreement with Royalty Pharma, which was recorded as a liability related to the revenue participation right on our Condensed Consolidated Balance Sheet in the first quarter of 2026. Under the Royalty Agreement, we may receive an additional $75.0 million upon approval of AVLAYAH by the EMA on or before December 31, 2029. In exchange, Royalty Pharma is entitled to a 9.25% royalty on worldwide net sales of AVLAYAH until cumulative royalty payments reach a cap of 3.0 times the total funding received, or 2.5 times the total funding received if such cap is reached on or before the first quarter of 2039. These obligations are described in this Quarterly Report on Form 10-Q in Note 9, “Liability Related to the Revenue Participation Right”.