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

All right. Hi, everyone. Thank you so much for joining the Citi's 15th Annual Biopharma Conference. My name is Neena Bitritto-Garg. I'm one of the mid-cap biotech analyst here at Citi. So for our next panel, I'm very pleased to be joined by CEOs from Denali, Passage Bio and Prevail Therapeutics. So from Denali, we have Ryan Watts. From Passage Bio, we have Bruce Goldsmith. And from Prevail, we have Asa -- sorry, I apologize, Abeliovich. And we're going talk today about neurodegenerative diseases and some of the emerging and new kind of therapeutic modalities and mechanisms that companies are working on to combat neurodegenerative disease. So to start off, I'd like to give everyone the opportunity to kind of just give a quick 1-minute intro kind of on the company, on -- and what you're working on right now. So if we want to start with -- maybe with Asa, and then we can go to Bruce and then Ryan.

Great. Well, Neena, thanks so much on a great panel and really appreciate the opportunity. So yes, so Prevail's mission is really to develop disease-modifying gene therapies for the major neurodegenerative disorders of aging, so Parkinson's, dementia and others. We have a pipeline of products at this point, 2 clinical-stage products. Really, the entire pipeline, though, has a common theme to really very much take a precision genetic medicine approach. So we've taken on particularly well-validated human genetic targets, as have the other groups involved in the panel today, I believe. So these are targets where there's a deep understanding of the human genetics' kind of the underlying mechanism and even goes beyond that. With our lead targets, there's this gene dosage effect where there's even understanding quantitatively what needs to be done to potentially help these patients. And then that both informs our target selection but, of course, also the genetics then defines the patient subsets that we pursue. And the pipeline, we -- throughout our pipeline, we've also taken a common platform, which is the AV9 gene therapy technology platform simply because, really, we feel it derisks the program. This is, by far, the most validated gene therapy approach for the CNS at this point. And also, there's a commonality in the underlying mechanisms across our indications, which is around lysosome dysfunction. And then -- PR001 is, of course, our lead -- first lead therapy, which is a product, which is an AAV9 delivering the glucocerebrosidase gene, GBA1, which underlies Parkinson's disease and in 9% to 10% of Parkinson's patients, so up to 100,000 Americans alone. And we are in Phase I/II with a PROPEL study. Screening is ongoing and we can talk more about that. We're excited about the early data we've seen. And we've also -- the same therapy is also very optimal for neuronopathic Gaucher disease. And so patients with very severe mutations in both copies of this gene get neuronopathic Gaucher. And we've treated a couple of patients there also and in a compassionate use context and we're just getting rolling with the Phase I/II study there. And early studies that we're particularly thrilled about is that what we see is that taking these patients, who at baseline have undetectable levels of enzyme activity, we can really fully rescue activity in the CNS and the CSF. So we see -- really exciting in just very early results in terms of the primary pharmacological end point. And then a second product that we have where there's interest across these groups -- these companies is around frontotemporal dementia and progranulin mutations. It's a devastating disease where there's a tremendous need for groups like ours to take, I think, diverse approaches. And so we -- again, taking an AV9 approach to deliver progranulin to these patients. Again, a particularly well understood genetic cause with this gene dosage effect and tremendous need in patients, many thousands of Americans. So -- and I'll stop there. Thanks.

Great. Yes, Bruce, if you'd like to introduce Passage?

Yes, absolutely. Thanks for the opportunity, and thanks for inviting Passage Bio to participate in the panel, a very important one. And great to be here with our colleagues, Ryan and Asa. To pick up on Asa's themes, Passenger Bio was formed out of a deep partnership with the gene therapy program that's run by Jim Wilson at the University of Pennsylvania. And upon the foundation, he and the cofounders were really thinking about what patient focus to bring to bear. And that formed a theme that Asa highlighted so well to think about genetically defined patient subsets and to articulate how we can build a deep pipeline of genetic medicines that are potentially transformative, picking up on the same themes. I think one specific idea was to use that collaboration with Jim and his 300-plus or so researchers that span research, vector core manufacturing and IND-enabling studies, regulatory and clinical input, to kind of capitalize on that as our research group and really focusing our group on development and manufacturing, really, in tight collaboration with Jim and his team. The foundation then is really using all of their research to create a differentiated approach, sometime using known established vectors like AAV1 for FTD, which we can talk about, but also using kind of novel capsids for our different promoter combinations to optimize delivery, to optimize safety or to deliver a different -- slightly different package and to build on that. So appreciate the highlights that were made in terms of established portfolio, and we will do that at times, but then we'll use novel capsids when it -- when we think there's appropriate differentiation. And what we've done is built essentially, in Philadelphia, near Jim's group at University of Pennsylvania, a group that's now moving towards about 60 people. Post our IPO earlier this year, we moved from around -- a little over 20 people to about 60, primarily in clinical and manufacturing but also a nascent emerging group in kind of commercial and communication operations because the idea is to capitalize on the company from development all the way through commercialization. We also have a dedicated manufacturing suite in partnership with Catalent that, right now, we're in tight collaboration with the University of Pennsylvania on all those process development, quality, et cetera. But over time, we'll take that fully on board. And then we -- with our IPO, we do have cash runway into 2023. So we have time to move forward on some of the key milestones, moving the FTD program into Phase I sometime in the first half of next year. We also have a program at Krabbe that we'll move forward. And I know we'll talk a little bit later today because I saw some of the questions -- or sort of some of the questions in your -- as you're hosting some of the analyst meetings. We're obviously moving forward on GM1, which we filed an IND for and we are currently on clinical hold and we'll get into that a little bit more, if appropriate really focusing on the medical device, which we also share some commonalities with looking at intra-cisterna magna injection. So with that, I'll pause on the overall foundation. I do want to mention one other piece. When we look together at the broad pipelines we're all trying to develop and we have 17 options we can bring in from Penn, the other theme, I think, that comes out in all of our discussions is patient identification, whether in the subsets or working together. So FTD, for example, it would be great to talk about the potential for collaboration and moving generalized identification of dementia patients or patients with Alzheimer's into really the genetic basis. So Passage Bio by is really interested in working with either patient groups or physicians or other companies on GM1, Krabbe and these diseases to just identify patients because it's so critical across the field as we think about tailoring genetic medicines to those specific patients.

Great. Ryan?

Yes. Thank you, Neena. Really appreciate the opportunity to be here. So Denali is founded on the premise that the time is right in neurodegeneration. And as already mentioned by others on the call here, the genetic foundation is strong. And actually, our first scientific principle is what we call genetic pathway potential, so basically using genes to define our targets and our pathways. The second principle on the founding of the company and one of our major platforms is engineering brain delivery. In this case, we have both small molecule, large molecule and also an AAV effort around engineering brain delivery. This is an area that I've worked on for a number of years. Very excited that we're now in the clinic, treating Hunter syndrome patients with our first biotherapeutic engineered to cross the blood-brain barrier and a number of small molecules in our clinical portfolio. The third is biomarker-driven development. So these are the 3 scientific principles. In addition to that, when we founded the company, it was with Marc Tessier-Lavigne and Alex Schuth as co-founders. We have 3 business principles. One is a broad portfolio, and we'll talk about, I guess, 1 or 2 of our programs today. But we have a number of programs, including 4 or 5 clinical-stage programs. And the second is parallel investment. And then the third is strategic partnering. It's been a key to how we've built Denali, both bringing in intellectual property and biomarkers, but also entering into larger collaborations to enable our portfolio, to expand our portfolio as well as clinical development and commercial capabilities from partners. And with that, I'll pause, and I look forward to some great debates with my other panelists here.

Great. No, those were excellent intros. So I think we can jump right into some kind of specific questions now.

So starting with Parkinson's disease. So one of the common themes kind of between Denali and Prevail is working on Parkinson's disease driven by specific genetic mutations, right? So I guess, this question is directed toward both Asa and Ryan. Can you just talk a little bit about kind of the role that mutations in genes like LRRK2 and GBA1 play in the development and progression of Parkinson's disease? How patients with those genetic subsets may have slightly different manifestation of the disease, and kind of the approach that you're taking to actually target these genetic defects in these subtypes? And whoever wants to start, I don't know, Ryan or Asa?

I'm happy to. Yes, so there's been a tremendous need to understand the underlying cost of Parkinson's. There are, of course, symptomatic therapies that help patients with the motor symptoms, but there's absolutely nothing that slows or stops the progression. And particularly, as these patients progress, they develop nonmotor symptoms beyond the typical motor aspects of the disease and those can be devastating as well. So there's just this tremendous need for disease modification. And the genetics, especially over the past few years, have identified causative genes factors that we can finally go after. So I think these approaches, such as -- that Ryan will describe and what we're doing, I think, are tremendous opportunities for these families. And the familial context is a good place to start, in part because the diseases are a little more well-defined in these subsets. But the diseases -- the familial forms are very typical still. So with GBA mutations, about -- as I said, about 9% to 10% of Parkinson's patients in the U.S. have mutations in GBA1. And these are causative and they don't only impact risk, importantly, they impact every aspect of the disease. So they impact age of onset, severity of onset, progression and especially progression to dementia. And then there's this level of understanding, as I mentioned, this gene dosage effect where -- which really -- in a few cases we have this level of understanding of the genetics. So having 2 bad copies is worse than having 1 bad copy, having 1 bad copy and 1 bad copy is worse than no bad copies And then there's, again, an exquisite understanding of individual mutations. And some mutations have a more severe effect on the enzyme activity than others, and that correlates roughly with the presentation that these patients have in almost every respect. So there's this deep understand of biology and then -- of the genetics and then the biology also is very well elucidated. We know [indiscernible] take certain glycolipids and is required for healthy lysosome. So we have -- so having -- and having that deep understanding doesn't only allow us to pursue causative targets, which, of course, is the first requirement to have an effective therapy. But also, it defines patient subset. So specifically with PD GBA, it's a subset that does progress more -- somewhat more predictably. And so it's helpful for us in trying to identify to what extent we're helping patients. And then it's also critical that this can help us with biomarkers, and both we -- and Ryan will describe that. But -- so in our case, we -- there's an exquisite understanding of the glycols lipids that we can measure and exactly what role they play. And the disease isn't necessarily completely elucidated, but we know that these are remarkably useful biomarkers that can inform how we're doing. So it really impacts really every aspect. And in both cases, ultimately, there's very strong rationale for pursuing these targets in the sporadic, more general disease, but it makes a lot of sense to start here. And then again, the strategy is very similar to the strategy that we take in other diseases. Ryan?

Great. Thanks, Asa. Appreciate the introduction there to genetics. I'm going to see here. I'm a visual learner, so I'm just going to share this very briefly, and I think it should work for everyone. This is basically the genetic discovery in Parkinson's disease with the first gene, alpha-synuclein, discovered in 1997. And what you can see, and I think this is to the point of why we're in the genetics -- genetic revolution, is at around 2008, there was a massive uptick in genetic discovery. And this actually correlates directly with the decreased cost of sequencing the human genome. We call these the degenogenes, which are genes, when mutated, that cause neurodegeneration. They're akin to the onco genes of cancer. And you'll see a number of our favorite targets. Asa has been discussing GBA. LRRK2 early on in 2004 was discovered in familial studies. And there are a number of mutations in LRRK2 that are causative. And in fact, some -- a variant that is also protective. So you have an allelic series. You have mutations that cause disease, you have variants that are protective. And the simple way to look at LRRK2 is that these mutations are hyperactivating. They basically cause the kinase to be hyperactivated, and as a result, you get lysosomal dysfunction. And so similar to Asa, we can actually take, for example, Gaucher patient fibroblast, treat with LRRK2 inhibitor and improve lysosomal function in these cells. But what's really interesting, Neena, about the genetic insight is that many other genes are associated with lysosomal functions. By far, the most common relationship in Parkinson's -- and let's not forget that Parkinson's was thought to be an environmental disease until this genetic revolution. And now there's -- you can see, almost 96 different genetic associations, about half of them are lysosomal in nature. And our goal will be to treat all of these patient populations with the LRRK2 inhibitor broadly enhancing lysosomal function. So I'll pause there and hand it back to you, Neena.

Great. No, that was super insightful from both of you. So I guess, just a specific question to you, Ryan, actually, is so you've had a number of updates on your LRRK2 portfolio this year. You've had some data. You recently announced a partnership. So I guess, can you talk a little bit about the rationale for why you selected 151 over 201 to kind of advance into late-stage studies? Yes, and kind of next steps?

The question that we often get is why advance 2 molecules so far? And we're hoping that data would be just readily obvious that one is superior over the other. And actually, frankly, it's -- 151 is slightly superior in terms of dosing. So we can do basically q.d. dosing versus b.i.d. But both are very effective at inhibiting LRRK2. We can inhibit greater than 90%, 95% at sort of Cmax and greater than 70% at trough, and so we have a wide range for both DNL201 and 151. But basically, in the whole partnering process, and we've recently announced a strategic partnership with Biogen, we also were discussing which of these 2 molecules we could take forward. Biogen shared the same vision we had. There was a preference to q.d. dosing. So at this point, in addition to announcing our partnership with Biogen, we also announced 151 as the formal lead. And I'll just comment that both molecules are ready to go into late-stage clinical trials. We actually continue to dose escalate 151 because we haven't reached a maximum tolerated dose in humans. And we have both -- we now have ongoing healthy volunteer as well as patient studies. And so basically, the rationale is largely around dosing and a somewhat preferred safety profile. Maybe just stepping back a little bit, I started working on LRRK2 in 2006, which was 2 years after its discovery. We were the first to enter clinical studies with a LRRK2 inhibitor, actually a LRRK2 therapeutic at all to first enter clinical studies. And we decided that we need a viable molecule to test the LRRK2 hypothesis in LRRK2 carriers as well as idiopathic Parkinson's, and thus, we invested in multiple molecules moving forward, and hence, the recent decision around 151. So thanks for the question.

Sure. So Asa, you recently presented some of the initial data from PR001. So just wondering if you can kind of walk us through the initial biomarker data. What the data suggests kind of about future development for PR001? And kind of what you saw in PD GBA versus Gaucher, understanding that there was some overlap kind of in one of the patients? But yes. So if you could just walk us through the biomarker data, that'd be great.

Thanks. Yes, so excited to start getting data. We have treated 2 babies with type 2 neuronopathic Gaucher, devastating rapidly progressive disease of infancy. So these patients present in the first months of life. They gain a couple of developmental milestones typically but rapidly lose those and typically don't survive past age 2. And it's really this one end of a continuum. So these are patients with the very lowest levels of enzyme activity. They have 2 very severe mutation in each of their chromosome copies and hardly any activity. And so we -- yes, the first patient we dosed around January, that was in Israel, and it was a pretty advanced patient. It took a while until we could get to a patient, and this is why we did it in an expanded access compassionate use context. And we since dosed the second patient also in a compassionate use context. And we're completely lined up in the next -- very near future, we'll start dosing within our actual clinical study. But we've tried not to wait with these patients. There are -- and there are more patients out there, although it is quite rare, of course, type 2 neuronopathic Gaucher disease. And then in the Parkinson's disease GBA context, we enrolled 2 patients, but -- 1 of which was randomized to Sham protocol, the other drug. That patient -- the study -- the PROPEL study includes both patients with mutations in a single chromosome or in both chromosome. Those are actually type 1 Gaucher disease. And as I mentioned, the patients with 2 -- mutations in both chromosomes do worse than the patients with mutations in 1 chromosome. So this is one of the more severe PD GBA. So long story short is, we had early data on the primary pharmacological endpoint this summer. So 3 -- actually 3 to 4 months data, which is about when you can start to see peak levels in these patients. And the primary endpoint has always been looking at CSF levels of enzyme activity. These patients, particularly the Gaucher -- Parkinson's or the Gaucher disease, they have very low levels, really below the limit of quantification -- detection at baseline in their CSF. And remarkably, in both of these patients, 3 to 4 months after dosing, the levels were fully normalized. They ended up in the middle of the normal range. We -- our preclinical data, and really the human genetics as well, pointed toward us needing to provide 20% to 30% of normal activity to have a very positive impact. So -- and we always saw full normalization as a huge upside. So we -- long story short, we're thrilled with that. It is consistent with what we saw in our preclinical studies, but it's not always that you translate your preclinical doses to clinical outcome. So we're thrilled about that. That's obviously early data still. We are looking at other biomarkers, and we'll present those medical -- at appropriate medical conferences and as we get more data. We anticipate about the middle of next year or earlier to be able to provide data on a subset of the patients in that study. We -- yes, and then we -- similarly, the patient -- the pediatric patient that we have data on, again, also there, we saw full normalization of activity. So that's where we're at. We, of course, want to look at substrate level over time. We will also -- there's other very clear data from natural history study, such as the Fox Foundation's PPMI study that over time, end points like synuclein and end points like [indiscernible] can be meaningful to follow. So we'll look at other biomarkers. Of course, we look -- we're looking at, of course, clinical rating scales, UPDRS and others. So -- but at this point, with the early initial pharmacological end point data we have, we're really excited.