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BofA Securities has updated its stance on Denali Therapeutics Inc. (NASDAQ: NASDAQ:DNLI), increasing the price target to $29 from $25 while maintaining a Buy rating.
The adjustment comes after Denali announced progress with the FDA regarding its therapy for Hunter syndrome, known as tividenofusp alfa (tivi; DNL310).
Denali has reportedly reached an agreement with the FDA on a pathway to accelerated approval for tivi, using cerebrospinal heparan sulfate (CSF HS) as a surrogate biomarker.
The management anticipates filing the Biologics License Application (BLA) in early 2025 and is expecting a priority review. The development is seen as a significant milestone, potentially clearing the way for expedited approval in other indications that also use CSF HS as a biomarker.
The company has also signaled its intentions to present an initial update on another therapy, DNL126, for Sanfilippo syndrome by the end of the year. While it remains uncertain whether an advisory committee will be necessary for the approval process, management has indicated that this topic has not yet been discussed with the FDA.
BofA Securities has expressed confidence in the unique profile of tivi, highlighting its potential to treat both systemic and CNS symptoms associated with MPS II.
In other recent news, Denali Therapeutics has received a favorable response from the US Food and Drug Administration (FDA) regarding the accelerated approval pathway for its drug candidate DNL310, a treatment for MPS-II (Hunter Syndrome). B. Riley, Goldman Sachs, and H.C. Wainwright have maintained a Buy rating on Denali's stock, while Stifel has maintained a Hold rating.
Denali's second enzyme replacement therapy, DNL126, indicated for MPS-III, is part of the FDA's Support for Clinical Trials Advancing Rare Disease Therapeutics (START) Pilot Program. The company's Oligonucleotide Transport Vehicle platform has also shown potential in delivering antisense oligonucleotides to the central nervous system and muscle tissues.
InvestingPro Insights
As Denali Therapeutics Inc. (NASDAQ: DNLI) advances its therapy for Hunter syndrome, investors may find it beneficial to consider some key financial metrics and analyst insights. With a market capitalization of around $3.6 billion, the company's financial health is underpinned by a balance sheet that holds more cash than debt, as reflected by one of the InvestingPro Tips. Additionally, despite a projected sales decline in the current year, four analysts have revised their earnings upwards for the upcoming period, signaling potential optimism in the company's future performance.
Denali's stock has been performing robustly in the market, trading near its 52-week high and showcasing strong returns over the last month and three months. This momentum is mirrored in the price total return of 14.86% over the last month and 21.53% over the last three months. The company does not pay dividends, which may be a consideration for income-focused investors. Moreover, the company's current valuation reflects a high revenue multiple, which could suggest a premium market expectation of its growth or technology.
For investors seeking a deeper dive into Denali's financials and future prospects, InvestingPro offers additional tips, including analysis on gross profit margins and the expectation that the company will not be profitable this year. To explore more expert insights and tips, which currently number over 10 for Denali, interested parties can visit InvestingPro's dedicated page for DNLI at https://www.investing.com/pro/DNLI.
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