JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
Thursday, analysts at H.C. Wainwright adjusted their outlook on Denali Therapeutics Inc. (NASDAQ:DNLI), slashing the price target to $32.00 from the previous $80.00, while maintaining a Buy rating on the stock. The stock, currently trading at $14.32, has experienced a significant decline of over 54% in the past six months, according to InvestingPro data. The revision follows Denali’s announcement on Wednesday that the company has completed its Biologic License Application (BLA) submission for tividenofusp alfa (tivi), eying a potential launch in late 2025 or early 2026.
The analyst’s commentary highlighted the challenges faced by similar drugs in the rare disease market, such as Elaprase for Hunter Syndrome (HS). Despite the benefits of orphan drug incentives, Elaprase encountered obstacles like complex payer negotiations due to its high cost, inconsistent market access due to varied national coverage policies, and the need for prior authorization and step therapy. InvestingPro analysis shows Denali maintains a strong liquidity position with a current ratio of 8.46, though the company is currently burning through cash with negative free cash flow of $363.6 million in the last twelve months.
Denali is believed to hold several advantages over the Elaprase launch strategy, according to the analyst. The HS market is now well-established, which may enable Denali to employ dynamic pricing strategies, including volume-based discounts and an initial skimming strategy followed by more penetrative pricing models in certain markets. Furthermore, strategies such as risk-sharing agreements, early access programs, and contingent reimbursements based on clinical outcomes could be beneficial. The integration of pre-marketing access strategies with post-launch performance monitoring and early payer engagement, along with streamlined manufacturing and distribution, are anticipated to support a successful launch and adoption of tivi.
The adjustment in Denali’s price target reflects a shift in the valuation approach by H.C. Wainwright. The firm cited a change in investor sentiment, the increased cost of capital, and a reduced appetite for early-stage clinical risk as key factors influencing the new price target. The analysts have lowered their price-to-earnings multiples and increased discount rates to better align with the current market conditions. According to InvestingPro Fair Value analysis, the stock appears to be overvalued at current levels, though it maintains strong fundamentals with more cash than debt on its balance sheet. Despite the lowered price target, the firm’s continued Buy rating indicates a belief in the long-term potential of Denali Therapeutics’ prospects. InvestingPro subscribers have access to 8 additional key insights about DNLI’s financial health and market position.
In other recent news, Denali Therapeutics has initiated a rolling submission for a biologics license application (BLA) for tividenofusp alfa, aimed at treating Hunter syndrome. The company anticipates completing this submission by May 2025, with a potential U.S. market launch in late 2025 or early 2026. Analysts from Morgan Stanley (NYSE:MS) have begun coverage of Denali with an Overweight rating, citing confidence in the company’s enzyme transport vehicle platform and setting a price target of $33.00. H.C. Wainwright has adjusted its price target for Denali to $80.00, down from $87.00, while maintaining a Buy rating, reflecting reassessments of operational expenses and market penetration projections. Deutsche Bank (ETR:DBKGn) has also initiated coverage with a Buy rating and a $31.00 price target, highlighting Denali’s extensive pipeline and expected developments in 2025. Stifel maintains a Buy rating with a $37.00 target, focusing on the potential regulatory approval of DNL310 for Hunter syndrome and progress with DNL126 for Sanfilippo syndrome. These developments underscore Denali’s ongoing efforts in advancing its treatment candidates through regulatory and clinical milestones.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.