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Why Denali Therapeutics Stock Is Soaring Today

What happened

Shares of Denali Therapeutics (NASDAQ: DNLI), a biopharmaceutical company focused on neurodegenerative diseases, rose 24% as of 2:36 p.m. EST on Tuesday in response to announcing that its pipeline is progressing.

So what

Here are the key takeaways for investors:

  • DNL201 showed "high levels of target and pathway engagement and improvement of lysosomal biomarkers" in a phase 1b trial testing the compound as a hopeful treatment for Parkinson's disease. The drug also met all of the trial's biomarker goals and was generally well tolerated at the low dose. The majority of subjects experienced either mild or moderate adverse events at the high dose, however.
  • DNL151 showed "high levels of target and pathway engagement and modulation of lysosomal biomarkers in healthy volunteers" in a Phase 1b study in patients with Parkinson's disease. The trial also met all safety and biomarker goals and DNL151 was generally safe and well-tolerated at all doses tested.
  • An IND has been submitted for DNL310, a hopeful treatment for Hunter syndrome. A phase 1/2 trial will be initiated if Denali receives clearance.
  • DNL747 phase 1b trial in Alzheimer's disease and amyotrophic lateral sclerosis (ALS, which is more commonly known as Lou Gehrig's disease) is fully enrolled. Data is expected by the middle of 2020.
  • A clinical trial application (CTA) has been approved for a Phase 1 study of DNL343 as a hopeful treatment for ALS and other neurodegenerative diseases.

Image source: Getty Images.

Given the deluge of upbeat clinical news, it's easy to understand why shares are flying high today.

Now what

Denali's CEO Ryan Watts stated: "We are also enthusiastic about advancing two new molecules toward the clinic, DNL343 for ALS and other neurodegenerative diseases and DNL310 for Hunter syndrome, which is also expected to generate proof-of-concept in humans for our Transport Vehicle blood-brain barrier delivery platform."

Neurodegenerative diseases like Alzheimer's and ALS are notoriously difficult to treat, so it's highly encouraging to see that Denali continues to make clinical progress. However, history shows that even the most promising biotechnology drugs often fail in late-stage trials, so investors shouldn't get their hopes up just yet. That's why my plan is to root for Denali's success from the safety of the sidelines.

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Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


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