Denali Stock Plunges 7.2% Despite FDA BLA Submission

On April 3, 2025, Denali's stock experienced a significant drop of 7.2% in pre-market trading, marking a notable decline in its share price.

Denali Therapeutics has made significant strides in its regulatory journey with the initiation of a rolling submission for a biologics license application (BLA) for tividenofusp alfa, aimed at treating Hunter syndrome (MPS II). This submission, received by the FDA's Center for Drug Evaluation and Research (CDER), includes alignment on using cerebrospinal fluid heparan sulfate as a surrogate endpoint for accelerated approval. The company anticipates completing the BLA submission by the first half of May 2025, with a potential U.S. commercial launch in late 2025 or early 2026.

Denali's progress is further bolstered by its collaboration with CDER through the START program, focusing on an accelerated development and approval path for DNL126, a treatment for Sanfilippo syndrome. This dual-program advancement underscores the potential scalability of Denali's Enzyme Transport Vehicle platform across multiple lysosomal storage disorders, suggesting a broader application of their technology.

The acceptance of the rolling BLA submission by the FDA represents a critical regulatory milestone for Denali, significantly de-risking their pathway to potential commercialization. This regulatory certainty provides a well-defined roadmap to commercialization and removes significant uncertainty from the development process. The projected BLA completion by May 2025, with a potential launch in late 2025 or early 2026, indicates confidence in the submission package and suggests productive pre-submission interactions with regulators.

Denali's tividenofusp alfa is designed to cross the blood-brain barrier using the company's proprietary Enzyme Transport Vehicle technology, potentially addressing the neurological symptoms that current therapies cannot effectively treat. This same platform technology is being leveraged for DNL126 in Sanfilippo syndrome, validating the broader application of their scientific approach. The defined regulatory pathway, including the acceptance of surrogate endpoints, substantially reduces execution risk. Rare disease therapies typically command premium pricing, and with Hunter syndrome affecting approximately 1 in 100,000-170,000 males, even a small patient population could translate to meaningful revenue.