If Biogen has shown that tau can impact cognition, Denali’s technology—validated with an FDA approval in Hunter syndrome—could ensure the medicine gets where it needs to be for the greatest therapeutic impact, analysts said.
Biogen has helped validate the tau theory of Alzheimer’s, though with many caveats, side notes and what-ifs still to be addressed. But the news of the big biotech’s success with BIIB080 has helped bolster an eager group of smaller companies like Denali Therapeutics, which just might have a therapy that can break through in the challenging neurodegenerative disease.
The Phase 2 results for BIIB080, released yesterday, led to a spike for Denali’s shares. But the stock has returned to normal as of Friday, trading around $19.39 apiece.
“Investor confidence in the tau hypothesis should rise, naturally boding well for DNL628,” Jefferies wrote on Thursday afternoon.
Biogen showed that BIIB080, a tau-targeting agent, led to cognitive improvements and improved key biomarkers associated with Alzheimer’s. The therapy failed on the main goal of the study, dubbed CELIA, as it did not lead to a dose-dependent change in disease severity at 76 weeks.
Nevertheless, Biogen is advancing into Phase 3, buoyed by other efficacy signals. Analysts and investors were also enthused by the data, with Jefferies seeing “sufficient [positive] cognitive trends” to support late-stage advancement.
Biogen plans to release more details at the AAIC conference in July, which Jefferies believes could move Denali’s stock if positive.
That’s because the biotech’s Transport Vehicle technology helps ease transfer of medicines across the blood-brain barrier. If Biogen has shown that tau can impact cognition, Denali’s technology—which has been validated with an FDA approval in Hunter syndrome—could ensure the medicine gets where it needs to be for the greatest therapeutic impact. Its DNL628, which uses the same technology and targets tau, is now in early clinical studies in patients with Alzheimer’s.
“Taken together, BIIB080’s data clinically validates the intracellular tau approach partially de-risks DNL628 (also targets intracellular tau), and even potentially leaves room for ‘628 to differentiate on efficacy,” Jefferies wrote.
Denali will reveal Phase 1b data for DNL628 in the first half of next year. The company is looking for a 40%–50% reduction in tau, according to Jefferies. As for cognitive impacts, the firm noted that the trial is relatively short at 24 weeks and therefore not powered to show such changes. If such effects emerge, however, it will be a major positive for Denali.
The biotech also has an edge because DNL628 is an intravenous injection, whereas Biogen’s BIIB080, now called diranersen, is delivered by intrathecal injection directly into the cerebrospinal fluid.
Another biotech in the mix is Alector, which similarly has an anti-tau asset called AL164 that has readthrough to the Biogen data, according to William Blair. The siRNA therapy is still preclinical, with investigational new drug enabling studies getting underway. Like Denali, William Blair expects Alector to benefit from Biogen’s AAIC readout.
Alector’s shares gained nearly 7% to close at $2.30 on Thursday.
Denali is also developing an A-beta asset for Alzheimer’s, similar to approved Alzheimer’s therapies Biogen and Eisai’s Leqembi and Eli Lilly’s Kisunla. The Salt Lake City-based biotech will release Phase 1/2b data for DNL921 in 2027, which, if successful, will allow the drug to move directly into Phase 3, Jefferies noted.
The next gen drug could be better than Leqembi and Kisunla given Denali’s blood-brain barrier technology, and even best Roche’s upcoming asset trontinemab, the analyst wrote. Roche’s Genentech unit showed in December last year that trontinemab cleared amyloid plaques in the brain, marking a return to the Alzheimer’s space for the Swiss pharma after a series of clinical failures saw Biogen and Lilly rise above.
