The U.S. Food and Drug Administration (FDA) placed a clinical hold on Denali Therapeutics Inc.’s (NASDAQ:DNLI) investigational new drug (IND) application for the Phase 1 study of DNL952 under development for Pompe disease.
The FDA requested a protocol amendment to include a lower starting dose, revised inclusion criteria, certain safety monitoring commitments, and stopping rules.
These requests are related to preclinical hypersensitivity reactions observed in GAA mouse models, which are commonly observed across all GAA enzyme replacement therapies in mice.
Also Read: FDA Delays Decision Date For Denali Therapeutics’ Lead Drug Candidate
The FDA did not request additional nonclinical studies. Denali has submitted a response to the FDA, and pending FDA feedback, anticipates minimal delays in the initiation of the Phase 1 study.
The company, in an SEC filing on Thursday, said it is on track to submit a Clinical Trial Application for DNL952 in Europe in the first half of 2026.
Pipeline Updates from Investor Day
On Thursday, Denali provided key updates on programs across its development pipeline at its 2025 Investor Day.
The Biologics License Application for tividenofusp alfa for MPS II (Hunter Syndrome) remains under review with the FDA, with a Prescription Drug User Fee Act target action date of April 5, 2026.
A Late Cycle Meeting with the FDA has been completed, and labeling discussions are underway. Commercial readiness activities are progressing. Enrollment in Cohort A (neuronopathic) of the Phase 2/3 COMPASS study of tividenofusp alfa is expected to be completed in December 2025.
The Phase 1/2 study of DNL126 for MPS IIIA (Sanfilippo Syndrome Type A) remains on track for completion in 2026, supporting a potential accelerated approval pathway and commercial launch by the end of 2027. Denali plans to present initial Phase 1/2 data at the 2026 WORLD Symposium. Phase 3 planning is ongoing.
Royalty Pharma Signs $275 Million Funding Deal
On Thursday, Royalty Pharma plc (NASDAQ:RPRX) announced a $275 million synthetic royalty funding agreement based on future net sales of tividenofusp alfa.
The transaction is subject to various closing conditions, including Denali achieving U.S. FDA accelerated approval of tividenofusp alfa.
At the closing, Royalty Pharma will make an initial payment of $200 million, and Royalty Pharma will be obligated to make an additional payment of $75 million upon achieving European Medicines Agency approval of tividenofusp alfa by December 31, 2029.
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.
Analyst Ratings
BTIG reiterated Denali Therapeutics with a Buy rating and maintains a price forecast of $32.
Wedbush maintains Denali Therapeutics with an Outperform and raises the price forecast from $30 to $31.
DNLI Price Action: Denali Therapeutics shares were down 0.10% at $20.09 at the time of publication on Friday, according to Benzinga Pro data.
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