Denali Therapeutics Inc. (DNLI) Earnings Call Transcript & Summary

The Annual Meeting of Stockholders of Denali Therapeutics Inc. is called to order. My name is Ryan Watts, and as provided in the company's bylaws, I will act as Chairman of the meeting. Dr. Alex Schuth, Chief Operating Officer and Secretary of Denali, will act as Secretary of the meeting. This year, we are holding a virtual Annual Meeting of Stockholders. We are sensitive to the health, safety and travel concerns of our stockholders and the regulations, protocols and other requirements that federal, state and local governments have imposed in response to the COVID-19 pandemic. The virtual meeting enables our stockholders no matter where they are located in the world today to participate in the annual meeting virtually. If you have an 11-digit voting control number issued by American Stock Transfer & Trust Company, LLC, our company's transfer agent, and wish to vote during this meeting, you may do so by clicking the proxy vote link on the left-hand panel of your screen. You may also ask questions during the meeting if you're registered with your 11-digit voting control number. Please refer to the chatbox icon located on the top of the left-hand panel of your screen to submit a written question. A digital company of the Notice and Proxy Statement is also available for your review. You may access that document by clicking on the link named Annual Report Proxy Statement on the left-hand side of your screen. An agenda that outlines the order of business for the meeting is displayed on the screen. At this time, I would like to introduce the other Directors and Director nominees in attendance: David Schenkein, Director Nominee; Peter Klein, Director; Dr. Vicki Sato, Director; Dr. Marc Tessier-Lavigne, Director. I'd also like to introduce the other corporate officers who are in attendance: Steve Krognes, Chief Financial Officer and Treasurer; Dr. Carol Ho, Chief Medical Officer. Also with us today are representatives from Ernst & Young LLP and the company's independent registered public accounting firm and Wilson Sonsini, the company's outside legal counsel as well as Joshua McGinn, representing American Stock Transfer & Trust Company. And now I will ask our Secretary to make his report.

Thank you, Ryan. I want to remind you that attendance at this meeting is by invitation only, and I trust everyone has registered prior to joining this meeting. If there is anyone here who is not a stockholder of the company, a designated proxy of a stockholder of the company or expressly invited by the company to attend this meeting, please leave the meeting. I confirm that the notice of Internet availability of proxy materials was mailed in the Proxy Statement, and the Annual Report were made available beginning on or about. April 22, 2020, to the holders of our outstanding common stock of record at the close of business on April 13, 2020. A list of the stockholders of record entitled to vote at this meeting has been certified by the American Stock Transfer & Trust Company as transfer agent for the company and will be kept open for examination by any stockholder at all times during the meeting. Joshua McGinn has been authorized to act on behalf of American Stock Transfer and Trust Company as Inspector of Election for this meeting. And he has signed an oath to execute faithfully the duties of Inspector of Election at this meeting. The Inspector of Election has advised me that we have present in person or by proxy a sufficient number of shares to constitute a quorum.

Thank you, Alex. I, therefore, declare a quorum to be present and that this meeting is duly convened and ready to transact business.

Thank you, Ryan. As set forth in the Notice of Internet Availability of Proxy Materials made available to each of the stockholders and further described in the company's Proxy Statement, the business of this meeting is to, one, elect 3 nominees to the company's Board of Directors as Class III directors; two, ratify Ernst & Young as the company's independent registered public accounting firm; three, approve on an advisory basis, the compensation of the company's named executive officers; and four, approve on an advisory basis the frequency of future advisory votes on compensation of the company's named executive officers.

The first item of business is the Election of Directors. The company's Board of Directors is divided into 3 classes, each with a 3-year term. The Class III Directors will be elected at today's meeting. The 3 nominees receiving the highest number of votes of the shares present in person or represented by proxy at this meeting and entitled to vote will be elected as directors to hold office until 2023 Annual Meeting of Stockholders or until their successors are duly elected and qualified. The nominees for election designated by the company's Board of Directors are: Jennifer Cook, David Schenkein and myself, Ryan Watts. The Board of Directors recommends a vote for each of its nominees. The second item of business is to ratify the appointment of Ernst & Young as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020. The Audit Committee of the Board of Directors has selected Ernst & Young as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020. While stockholder ratification is not required by the company's bylaws, the Board of Directors is submitting this to the stockholders for ratification as a matter of good corporate practice. If the stockholders do not approve the selection of Ernst & Young as independent auditors, the Audit Committee will reconsider the appointment. The Board of Directors recommends a vote in favor of the ratification of Ernst & Young. The third item of business is to approve the compensation of the company's named executive officers as described in the Proxy Statement. This proposal is a nonbinding stockholder advisory vote. The Board of Directors recommends a vote in favor of this proposal. The last item of business is to approve the frequency of future stockholder advisory votes on the compensation of the company's named executive officers. This proposal is a nonbinding stockholder advisory vote. The Board of Directors recommend a vote to uphold future stockholder advisory vote on the compensation of the company's named executive officers every 1 year.

We will now proceed to the question and the comment period. I remind you that the meeting has been called for the purpose of considering the items of business previously described. Please confine your questions and comments to those matters. If you registered with your 11-digit voting control number, you may now ask questions regarding the proposals previously described. Please refer to the chatbox item -- icon located on the top of the left-hand panel of your screen to submit a written question or comment at the dialogue box at the bottom of the screen. Tyler Nielsen, VP of Corporate Finance, will be monitoring submitted questions via the Virtual Stockholder Meeting administrative tool and reading them to the management team to answer.

There are no questions at this time, Alex.

Thank you, Tyler. If there are no additional questions or comments, we will now proceed with the voting.

I direct that the vote be taken by ballot among all those who have not already voted upon the matters before the meeting. The polls are now open at 10:08 a.m.

Please note that we will vote by proxy and by ballot. Each holder of common stock is entitled to 1 vote for each share held of record at the close of business on the record date. If you have previously submitted your proxy and you do not intend to change your vote, you don't need to do anything else. Your vote will be counted. If you're eligible to vote and have not submitted your proxy or if you want to change your vote, you may do so now using your 11-digit voting control number issued by American Stock Transfer & Trust Company, LLC, our company's transfer agent. If you wish to vote during this meeting, you may do so by clicking the proxy voting link on the left-hand panel of your screen. We will now wait 20 seconds for everyone to cast their voting. [Voting]

Now that everyone has had the opportunity to vote, I hereby declare the polls closed at 10:10 a.m. with respect to each matter to be voted on at this meeting.

The Inspector will now tabulate the votes and will submit his report.

Mr. Secretary, I present my report.

Thank you, Mr. McGinn. At this time, I'm pleased to report that based on the current tabulation of votes, a majority of the shares present by proxy or in person have voted to elect all 3 nominees to the Board of Directors as Class III directors; ratify the appointment of Ernst & Young to act as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020; approved, on an advisory basis, the compensation of the company's named executive officers; and approved, on an advisory basis, to hold future stockholder advisory vote on the compensation of the company's named executive officers every 1 year. These are the preliminary results of voting. The final count may vary following final examination of the votes. I direct that the report of the Inspector of Election will be filed with the minutes of this meeting. The final results will also be reported in our filings with the SEC.

This concludes the meeting, and the meeting is now adjourned. Thank you.