Denali Therapeutics soars on earnings beat

Investing.com -- Denali Therapeutics Inc (NASDAQ: DNLI) reported third-quarter earnings that exceeded analyst expectations, driven by accelerating sales of its recently launched product AVLAYAH, sending shares up 9.8% in after-hours trading Tuesday.

The company posted adjusted earnings per share of $0.37, beating the analyst consensus of -$0.37 by $0.74. Revenue reached $17.77 million, surpassing the $12.22 million estimate. The quarter's net income of $70.1 million included a one-time $194.0 million net gain from the sale of a Priority Review Voucher. AVLAYAH net product revenue totaled $17.8 million in its second full commercial quarter following FDA approval in March 2026. The company issued fourth-quarter 2026 net product revenue guidance of $30.0 million to $32.0 million.

"Families and physicians are telling us that AVLAYAH is making a difference for children with Hunter syndrome, and the results this quarter reflect that," said Ryan Watts, Chief Executive Officer of Denali Therapeutics.

AVLAYAH, the first FDA-approved medicine leveraging the transferrin receptor to cross the blood-brain barrier, is approved for treating neurologic manifestations of Hunter syndrome. Coverage now exceeds 70% of U.S. commercial lives, up from more than 50% in the prior quarter, and 20 state Medicaid programs have published coverage. A permanent J-code became effective October 1, 2026, streamlining billing and reimbursement.

The company is advancing zafinofusp alfa as its second potential product, with a Biologics License Application submission on track for 2027 seeking accelerated approval for Sanfilippo syndrome type A. The Phase 1/2 study completed its prespecified treatment duration for the primary endpoint in the third quarter, enrolling 20 participants.

Research and development expenses totaled $106.1 million, compared to $102.0 million in the third quarter of 2025. Selling, general and administrative expenses were $37.5 million, up from $35.5 million YoY. Cash, cash equivalents and marketable securities stood at approximately $1.0 billion as of September 30, 2026.

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