Denali Enters Into a $275M Funding Deal With Royalty Pharma

Denali Therapeutics Inc. DNLI has announced a funding agreement with Royalty Pharma plc RPRX for $275 million. The stock gained 5.84% following the announcement.

The deal centers on future net sales of Denali’s lead drug candidate, tividenofusp alfa, an investigational TransportVehicle-enabled enzyme replacement therapy designed to treat mucopolysaccharidosis type II (MPS II), commonly known as Hunter syndrome.

The funding agreement with RPRX provides a significant influx of capital as Denali approaches a crucial regulatory event.

Please note that the biologics license application (BLA) seeking accelerated approval for tividenofusp alfa is currently under review in the United States, with a target action date set for April 5, 2026.

Shares of DNLI have lost 1.3% year to date against the industry’s 20% growth.

More on DNLI’s Funding Agreement With RPRX

The transaction is contingent on various closing conditions, including accelerated approval of tividenofusp alfa by the FDA.

Upon closing, Royalty Pharma will make an initial payment of $200 million.

Royalty Pharma is also required to make an additional payment of $75 million once DNLI obtains European Medicines Agency approval of tividenofusp alfa by Dec. 31, 2029.

In lieu of the above-mentioned payments, Royalty Pharma will receive a 9.25% royalty on worldwide net sales of tividenofusp alfa from Denali. The royalty payments to Royalty Pharma will cease upon reaching a multiple of 3.0x, or 2.5x if achieved by the first quarter of 2039.

More on DNLI’s Hunter Syndrome Drug

Denali earlier suffered a setback when the FDA extended its review timeline of the BLA seeking accelerated approval of tividenofusp alfa for the treatment of Hunter syndrome.

Consequently, the target action date got extended to April 5 from Jan. 5, 2026.

The BLA was extended after DNLI submitted updated clinical pharmacology information in response to an information request from the FDA as part of the standard review process. DNLI stated that the response was not related to efficacy, safety or biomarkers.

The FDA classified the submission as a major amendment to the BLA, leading to the extension of the target action date.

Nevertheless, the regulatory body did not ask for additional data.

Denali believes that the updated information submitted in the amendment does not affect the clinical pharmacology or benefit-risk conclusions of the BLA.

The FDA had previously granted tividenofusp alfa Breakthrough Therapy, Fast Track, Orphan Drug and Rare Pediatric Disease designations.

If approved, tividenofusp alfa may become the first Hunter syndrome therapy designed to address cognitive and physical manifestations of the disorder.

As of Sept. 30, 2025, cash, cash equivalents and marketable securities amounted to approximately $872.9 million.

DNLI’s Other Candidates 

Denali is also developing other candidates in partnership with Takeda TAK and Biogen BIIB.

Denali and partner Takeda have collaborated to develop DNL593, an investigational therapeutic designed to deliver progranulin across the blood-brain barrier for the treatment of granulin (GRN) mutation-associated frontotemporal dementia (FTD-GRN). A phase I/II study is ongoing.

Denali and Biogen continue co-development of BIIB122. Biogen is leading the global phase IIb LUMA study, evaluating BIIB122's impact on disease progression in early-stage PD. In May 2025, Biogen announced that the LUMA study was fully enrolled, with a readout expected in 2026.

Meanwhile, Denali is conducting the phase IIa BEACON study, specifically enrolling participants with LRRK2-associated PD to assess how LRRK2 inhibition may impact this disease.

DNLI’s Zacks Rank

Denali currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


 

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