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Investing.com - William Blair has reiterated its Outperform rating on Denali Therapeutics Inc. (NASDAQ:DNLI) following the Biologics License Application (BLA) acceptance and priority review for the company’s Hunter syndrome treatment. The company, currently trading at $14.53, has received strong analyst support, with a consensus recommendation of 1.21 (Strong Buy) and price targets ranging from $24 to $45.
The BLA acceptance and confirmation of priority review, granted through breakthrough therapy designation, represents an incremental step forward for Denali, according to William Blair. The firm views the clinical data for the treatment, known as tivi, as worthy of accelerated approval. According to InvestingPro data, Denali maintains a strong financial position with more cash than debt and a healthy current ratio of 9.56x, though the company is currently burning through cash rapidly.
William Blair highlighted the beneficial central nervous system (CNS) effects demonstrated by tivi in Phase I/II trials as clearly differentiated from Elaprase, which generated $649 million in 2024 revenue. The firm projects total global peak sales of tivi at $784 million.
The research firm expects tivi to become the new standard of care for Hunter syndrome patients and believes a 2.7x peak sales multiple for Denali shares represents attractive value based on tivi alone.
William Blair also expressed optimism about the translatability of Denali’s TV platform across other enzyme replacement therapies, specifically mentioning DNL126 for Sanfilippo syndrome, and expects further regulatory clarity on development paths in the near term.
In other recent news, Denali Therapeutics Inc. announced that the U.S. Food and Drug Administration (FDA) has accepted its Biologics License Application for tividenofusp alfa with a priority review for treating Hunter syndrome. The FDA has set a target action date of January 5, 2026, for this potential approval. This application follows the FDA’s earlier Breakthrough Therapy Designation for the drug, which aims to address both neurological and physical symptoms of Hunter syndrome by delivering the missing enzyme across the blood-brain barrier. Analysts at Stifel have maintained a Buy rating for Denali Therapeutics, with a price target of $37, expressing optimism about the company’s regulatory processes and strategic direction.
Conversely, H.C. Wainwright has adjusted its price target for Denali to $32 from $80, citing a shift in valuation approach due to market conditions and investor sentiment, while maintaining a Buy rating. The analyst firm noted the challenges faced by similar drugs in the rare disease market but acknowledged Denali’s potential advantages in pricing strategies and market access. Denali’s management has also expressed confidence in their broader pipeline, including programs targeting Sanfilippo syndrome and other diseases. The company is considering strategic partnerships to leverage its platform while managing cash expenditures prudently. These developments underscore Denali’s ongoing efforts in advancing its therapeutic offerings and navigating the regulatory landscape.
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