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Why Denali Therapeutics Stock Popped Today

What happened

Shares of Denali Therapeutics (NASDAQ: DNLI) popped on Thursday, with the stock rising 12.3% as of 3:28 p.m. EST. The nice gain came after the biotech announced that the U.S. Food and Drug Administration (FDA) granted Fast Track designation to DNL310 in treating Hunter syndrome, which is also known as mucopolysaccharidosis type II (MPS II).

So what

The old adage that time is money applies to biotech stocks. Fast Track designation for DNL310 should speed up the process for DNL310 to potentially ultimately win regulatory approval.

Image source: Getty Images.

The FDA established the Fast Track program to expedite the review of drugs that target serious conditions and that fill an unmet medical need. DNL310 certainly meets those criteria. Hunter syndrome is a rare genetic disease that can lead to neurodegeneration and damage to organs including the heart and lungs. Although enzyme replacement is currently used to treat the disease, the therapies don't cross the blood-brain barrier. As a result, they don't address the central nervous system symptoms of Hunter syndrome.

Denali is currently evaluating DNL310 in a phase 1/2 clinical study. The company also has another early-stage clinical program for DNL151, which targets the treatment of Parkinson's disease.

Now what

Several major pipeline milestones should be on the way for Denali. The company plans to add a third cohort to its phase 1/2 study of DNL310. Denali and Biogen should advance DNL151 into late-stage testing by the end of this year. In addition, the company anticipates kicking off a phase 1b study of DNL343 in treating neurodegenerative disease amyotrophic lateral sclerosis (ALS) in the second half of 2021.

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Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends Biogen. The Motley Fool has a disclosure policy.


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