Morgan Stanley Keeps Overweight Rating on Denali, PT Down to $30

Morgan Stanley Keeps Overweight Rating on Denali, PT Down to $30

Denali Therapeutics Inc. (DNLI) has received a favorable rating from Morgan Stanley, which has kept its overweight rating on the biopharmaceutical company while reducing its price target to $30. The investment bank's decision comes amid significant clinical advancements and regulatory milestones achieved by Denali Therapeutics in recent quarters.

In the latest earnings report, Denali Therapeutics reported a net loss of $124.1 million for the second quarter of 2025, up from $99.0 million in the same period last year. The company's research and development expenses increased to $102.7 million, reflecting its ongoing investment in innovative therapies targeting neurodegenerative and lysosomal storage diseases [1].

One of the key highlights of Denali Therapeutics' performance was the FDA acceptance of its Biologics License Application (BLA) for tividenofusp alfa with priority review for Hunter syndrome, with a PDUFA date of January 5, 2026. The company also reached FDA alignment on an accelerated approval path for DNL126 for Sanfilippo syndrome Type A, indicating the potential for significant market opportunities in the near future [1].

Morgan Stanley's decision to maintain an overweight rating on Denali Therapeutics reflects the investment bank's confidence in the company's pipeline of innovative therapies and its proprietary TransportVehicle™ platform technology. The platform is designed to deliver various therapeutic molecules across the blood-brain barrier, addressing the unmet needs of patients suffering from neurodegenerative and lysosomal storage diseases.

Despite the company's strong cash position of $977.4 million, Morgan Stanley has reduced its price target to $30, indicating a more cautious outlook on the company's valuation. The reduction in price target may be a reflection of the increased competition in the biopharmaceutical sector and the potential risks associated with the development of new therapies.

In conclusion, Morgan Stanley's decision to maintain an overweight rating on Denali Therapeutics, while reducing its price target, reflects the investment bank's balanced view on the company's prospects. The company's continued progress in clinical trials and regulatory milestones, along with its innovative platform technology, positions Denali Therapeutics as a key player in the biopharmaceutical industry.

References:
[1] https://www.stocktitan.net/news/DNLI/