Denali Wins FDA Nod for Hunter Syndrome Drug, Stock Up

Denali Therapeutics, Inc. DNLI secured a major regulatory win with the FDA approval of lead pipeline candidate tividenofusp alfa-eknm, under the brand name Avlayah, for the treatment of Hunter Syndrome.

The FDA granted accelerated approval to Avlayah, marking the first new treatment option in nearly 20 years for patients with Hunter syndrome, a rare lysosomal storage disorder. It is also the first approved therapy in a new class of biologics designed to cross the blood-brain barrier by targeting the transferrin receptor.

The continued approval for this indication may be contingent upon verification of clinical benefit in a confirmatory trial.

More on DNLI’s First Commercial Drug

Developed by Denali, Avlayah is enabled by its TransportVehicle platform, which facilitates delivery of biologics throughout the body, including the brain. The approval also comes with a Rare Pediatric Disease Priority Review Voucher.

Hunter syndrome is caused by a deficiency of the iduronate 2-sulfatase enzyme, leading to the buildup of harmful substances in tissues, including the brain, and resulting in progressive cognitive, motor and organ damage.

Avlayah is an enzyme replacement therapy indicated for pediatric patients with Hunter syndrome (MPS II), targeting neurological symptoms when initiated early.

Approval was based on strong biomarker data, showing a 91% reduction in cerebrospinal fluid heparan sulfate levels (CSF HS), a key disease marker.

In a phase I/II study, treatment led to a 91% reduction in CSF HS levels from baseline at 24 weeks (95% CI: 89%–92%). By that time, 93% of patients (41 of 44) achieved CSF HS levels within the normal range.

The ongoing global phase II/III COMPASS study is expected to provide confirmatory data and support regulatory filings worldwide, including in young adult patients with Hunter syndrome.

Positive outcomes from this study could further expand the drug’s commercial potential and reinforce Denali’s position in the rare neurodegenerative disease market.

This milestone represents a major advancement for the Hunter syndrome community, addressing longstanding unmet needs, particularly neurological complications. Avlayah is administered weekly and is expected to become available in the United States shortly, supported by patient access programs from Denali.

What Does This Mean for DNLI?

Shares of Denali gained 7.15% on March 25, following the news of FDA approval.

In the past six months, Denali stock has gained 54.8% compared with the industry’s growth of 11.6%.

Image Source: Zacks Investment Research

The approval marks the company’s first commercial product and a potential inflection point for its long-term growth story.

While the successful commercialization holds the key, the approval of Avlayah underscores the potential of Denali’s TransportVehicle platform to address the longstanding challenge of delivering biologic therapies across the blood-brain barrier, with the goal of transforming treatment for a broad range of neurodegenerative diseases, lysosomal storage disorders and other serious conditions affecting millions worldwide.

DNLI’s Deep Pipeline Also Boosts Growth Study

Denali boasts a deep pipeline. One promising asset is DNL126, being developed for Sanfilippo syndrome type A, a rare pediatric neurodegenerative disorder. DNLI is also evaluating DNL628 (OTV:MAPT) for Alzheimer’s disease.

Strategic partnerships further strengthen Denali’s development capabilities and help mitigate financial and clinical risk.

Denali is developing other candidates in partnership with Takeda TAK, Biogen BIIB and Sanofi SNY.

Denali and Takeda have collaborated to develop DNL593, an investigational therapeutic designed to deliver progranulin across the blood-brain barrier for the treatment of granulin (GRN) mutation-associated frontotemporal dementia (FTD-GRN).
Denali and Biogen continue co-development of BIIB122.

Biogen is leading the global phase IIb LUMA study, evaluating BIIB122's impact on disease progression in early-stage PD. Data is expected in mid-2026.

Denali is conducting the phase IIa BEACON study, specifically enrolling participants with LRRK2-associated PD to assess how LRRK2 inhibition may impact this disease.

In October, Denali submitted an investigational new drug application (IND) for DNL952 (ETV:GAA) to begin clinical studies in Pompe disease. Last month, Denali announced that the FDA has lifted the clinical hold on the investigational new drug (IND) application for DNL952. Phase I study start-up activities are underway.

Sanofi is developing eclitasertib for the treatment of moderate-to-severe ulcerative colitis. Data from the phase II study is expected in the first half of the year.

The company’s sound cash position is a positive and underscores its ability to fund ongoing programs.

Zacks Rank

Denali currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks Names #1 Semiconductor Stock

This under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.

With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.

See This Stock Now for Free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Sanofi (SNY): Free Stock Analysis Report

Biogen Inc. (BIIB): Free Stock Analysis Report

Denali Therapeutics Inc. (DNLI): Free Stock Analysis Report

Takeda Pharmaceutical Co. (TAK): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research