Dive Brief:
- Neurodegenerative disease drugmaker Denali Therapeutics announced Tuesday it is raising an expected $500 million through a private financing deal with existing investors.
- Through the deal, the company will sell over 3 million shares of its common stock at $17.07 apiece and issue warrants for more than 26 million additional shares at $17.06 each. The deal is expected to close Feb. 29, with the proceeds to be used for ongoing research and development as well as other operational expenses.
- The announcement comes days after Denali reported a study setback in ALS and follows a published report from Fierce Biotech that the company is reorganizing. Denali hasn’t disclosed the exact number of employees affected, but told Fierce the restructuring would impact “considerably less than 10%” of its staff.
Dive Insight:
Delivering medicines across the blood-brain barrier for central nervous system diseases, such as ALS, has historically been a challenge for drug developers. Denali believes its technology could make that task easier.
Its primary technology, dubbed the "transport vehicle” platform, is designed to shepherd larger molecules such as antibodies and proteins across the blood-brain barrier. Denali has used that technology to amass a pipeline of experimental treatments for neurological diseases including multiple sclerosis and Parkinson’s. It’s also secured partnerships with companies like Sanofi and Biogen.
The company has dealt with some setbacks, though. Earlier this month, a drug it developed with Sanofi for ALS failed a Phase 2 trial. The company is also streamlining its research efforts, announcing last month plans to spin out a new, independent company that’ll house its preclinical small molecule drugs. Denali will continue to work on the small molecules already in clinical testing.
In an email to BioPharma Dive, a Denali spokesperson said the planned layoffs were related to the spinout, not its setback in ALS. The private investment deal announced Tuesday will fund Denali, meanwhile, extending its cash runway into 2028.
The cash infusion was announced alongside the company’s yearly earnings report. Denali had about $1 billion in cash on hand at the end of 2023.
Shares rose by about 26% in early trading Tuesday.