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

Great. Welcome, everyone. Good afternoon. My name is Jess Fye. I'm a biotech analyst at JPMorgan, and we're continuing our 44th Annual Healthcare Conference today with Denali. First, you're going to hear a presentation from the CEO, and then we're going to go into a little Q&A. If you're in the room here and you want to ask a question, just raise your hand, someone will bring a microphone over. If you're listening at home, you can submit questions through the portal, and I'll read them off on stage. But with that out of the way, let me pass it over to Denali's CEO, Ryan Watts.

Thank you, Jessa. Great to be back here at JPMorgan. It's an exciting year ahead for Denali. So I'm looking forward to presenting today and telling you about our path to patients. So just a reminder that we founded Denali to really deliver biotherapeutics to the brain. And our adventure has led us to actually many regions, not just the brain, but throughout the whole body with the transport vehicle technology. And a lot of the data has really come -- has matured over the last several years, both clinical data and preclinical data, telling us the power of using transferrin receptor to enable biotherapeutics to access the brain and beyond. It's also become a very exciting and competitive field. So it's great to see many colleagues and friendly competitors here today at JPMorgan. So let's dive in. Today's key messages. I think importantly, that we believe that the transport vehicle is one of the most validated and differentiated and clinically proven BBB platforms. And we now are seeing -- we're moving our fourth and fifth transport vehicle-enabled program into the clinic and generating a fair amount of clinical data showing the power of this technology to get medicines into the brain. We're also on the cusp of our first approval with that and in Hunter syndrome and in Sanfilippo, we believe that we can capture $1 billion-plus market with these rare disease launches as we continue to expand the portfolio. Also in the past year, we filed for one of our first Alzheimer's medicines, OTV-MAPT. And at the beginning of this year, we'll also file for ATV:Abeta in terms of starting clinical studies with these technologies with these medicines using transferrin receptor, and this is in the Alzheimer's space. So obviously, expanding beyond rare disease. We've also learned a lot. In the first 5 years of Denali, we invented the transport vehicle. I think a novel approach to crossing the blood-brain barrier using this technology. The last 5 years, we've proven clinically that it can work. We filed our first BLA. And I think exciting for us in the next 3 to 5 years, it's around delivering and bringing many more of these transport vehicle-enabled programs forward. So what do we expect for this year? And I'm sure this is where we'll end as Jess asked questions, but we're on the cusp of our first approval with tivi and Hunter. We'll present data on ETV-SGSH at World. And then we have a number of clinical studies that we're initiating in MAPT, Abeta as well as GAA and then obviously, our readout for LRRK2 in the first half of this year as well. Okay. So what is the transport vehicle? So the transport vehicle is an engineered approach to getting medicines into the brain using transferrin receptor as a carrier. We have 3 franchises, the enzyme franchise, the oligonucleotide and the antibody franchise. The enzyme has matured most quickly. It was also the most linear way to go after this technology to prove the technology was using enzymes, which are proven clinical modality with approximately 85% success rate in terms of development, but have a challenge in terms of crossing the blood-brain barrier. And so this is where we started first with the transport vehicle technology. We recently held an R&D Day where we described the next 3 years, what happens at Denali as we've evolved from a really science-heavy organization to now development and ultimately commercial. And these are our D3x3 goals. The first is to deliver 2 growing brands in Hunter and Sanfilippo. The second in develop is to have 5 clinical proof of concepts. This is over the next 3 years. And this year, we have chances of this with several readouts and then bring an additional 4 to 6 programs into the clinic as part of our discovery efforts. Our discovery team has actually evolved pretty substantially from inventing the platform, going deep in the science in the lysosome and in Alzheimer's disease now to applying this transport vehicle technology across various targets that are known to be clinically validated, but actually could be enhanced using the transport vehicle technology. Here is our broad portfolio, now maturing in lysosomal storage disease as well as common neurodegenerative diseases. And so today, I'll focus the first half of my presentation on lysosomal storage diseases and the second half on the common degenerative diseases and then talk a bit about how is the transport vehicle different than other blood-brain barrier technologies that are also being developed in this exciting field. So let's talk a little bit about the transport vehicle itself. This is an Fc-engineered molecule, meaning the IgG Fc portion is engineered to bind to the transferrin receptor. What you see in this image is a butterfly shaped receptor and the apical domain is where we have the binding site, the most validated domain for at least clinically, showing that we can basically enhance brain uptake using -- targeting this particular domain. The goal here is IV and/or subcu injection depending on what medicine we're developing, systemic delivery and then obviously crossing the blood-brain barrier using basically transferrin receptor, receptor-mediated transcytosis. So this is one of my favorite images basically comparing a standard antibody distribution throughout an animal and the brain compared to the transport vehicle. On the left-hand side is a basically a control IgG. On the right-hand side is an antibody using the transferrin receptor. What I'm going to show you now is basically the comparison and the biodistribution in the brain primarily, and then we're going to talk a little bit about the body. So what you see first is that standard antibodies have very high concentration in perivascular spaces. I think this is very relevant in Alzheimer's disease and some of the safety observations around ARIA in particular. However, a transferrin receptor-enabled molecule has this even distribution throughout the brain as it crosses capillary beds, but it also lacks the high concentration in these perivascular spaces. What's unique about this particular image is we've also look at biodistribution across the entire animal. And the first thing you can see is basically very little antibody in brain. In the bottom left-hand corner, we're looking at the entire mouse versus high concentrations in brain on the right-hand side in the entire mouse. But what you also see is biodistribution to bone and muscle and to other tissues in which transferrin receptor is expressed. And this has actually become very relevant for us in diseases like Hunter syndrome, where they are somatic diseases. They not -- they don't just affect the brain, but also other parts of the body, and we see enhanced biodistribution throughout the body. So this is just a little bit more detail around the actual transport vehicle technology. And there are 4 areas that we focused on when we first invented this. First was modularity. We wanted the ability to deliver something more than just antibodies and so we went on to show we could deliver enzymes and ultimately oligonucleotides. And we're very excited to advance our first oligonucleotide program into the clinic using this technology, which at first, we didn't think was possible to get an oligonucleotide across the blood-brain barrier and then also affect gene expression in various cells in the brain. The second is to optimize brain uptake. And the key here is that most biologics will get into the brain. The question is how much and for how long. And I think most importantly, is there a therapeutically relevant concentration of drug that gets in the brain. And for most biologics, there's not enough, even with like a relatively high systemic dose. A good example is enzyme replacement therapies, even if you give very high doses, they have -- they're rapidly cleared, will not readily access the brain. The third area is around safety and engineering the Fc, allowing us to turn on or off effector function depending on what target we're going after. And then finally, I think integrated into all of this is the actual architecture and the stability of the molecule to build binding actually in as opposed to tagging, for example, Fabs to an Fc. I think I've already mentioned that this -- we have the potential to have the first FDA-approved TfR-enabled therapeutic as we await the decision on the BLA for tivi and Hunter syndrome. Now 5 clinical stage programs using this technology. We've demonstrated the ability to halt neurodegeneration, basically normalize NfL in Hunter syndrome. And then a number of other, I think, interesting points. We've given over 11,000 doses of the transport vehicle across these multiple clinical programs. So let's start first with the ETV franchise or the enzyme transport vehicle franchise. And the goal here is really replacing enzyme replacement therapies, which have been around for over 30 years. However, it's been several decades where there's been a lack of invention to really treat the unmet need of the central nervous system in these diseases. So most enzyme replacement therapies do not readily cross the blood-brain barrier. And so we have about 30,000 people worldwide with lysosomal storage disease, 2/3 of which have neurological deficits. Using the transport vehicle technology, we can now, as I've shown before, access the brain, but also enhance distribution to other organs as well. So here is our portfolio in totality. So many enzyme replacement therapies advancing. Today, because of time, I'm going to focus on the clinical stage programs, our tivi program, SGSH for Sanfilippo, progranulin for FTD granulin and then finally, GAA and Pompe. So let's start first with Hunter syndrome. Hunter syndrome monogenic disease affecting an enzyme, IDS. It affects mainly boys. It's an X-linked disease. Standard of care for 20 years, idursulfase delivered systemically, treating somatic disease, not crossing the blood-brain barrier. And the goal here is that tivi can solve both somatic as well as CNS disease. Excited to report that at the end of this year beginning -- or the beginning of this year, we published in New England Journal of Medicine, the clinical data around tivi. And I'm pulling the exact data as presented in the NGM paper. So I think importantly, just to summarize in terms of safety, first, infusion-related reactions are the most common adverse event. And as you can see in this graph, these dramatically decline over time as you build tolerance. This is just keeping at the same steady dose of 15 mg per kg. We also see a slight dip in hemoglobin, which then also returns. We believe that this may be some of the frequent blood draws. I think importantly, we've engineered these molecules to be immune silent, so not affect reticulocytes in particular. This is a summary of the safety data as published in the New England Journal paper. This is now the biomarker data. And by the way, these are the data that represent the data in the BLA filing for tivi. And so what you can see is a robust and sustained normalization of CSF heparan sulfate, which is the primary substrate for tivi for idursulfase. Also normalization of NfL, which is a marker of neurodegeneration. You can see a delay in time. So you rescue first the primary substrate, and then you see this halting of neurodegeneration as measured by serum NfL. What's also notable and actually very interesting is that we get a robust reduction in urine heparan sulfate. And the reason why this is interesting is that more than 70% of patients in this study were on standard of care and then immediately switched to tivi, meaning that we have a more robust somatic effect as well using tividenofusp alfa. And then in terms of the clinical endpoints, these are also obviously what's most relevant to patients, improvement in behavior, improvement in cognition and also improvement in hearing. I think it's interesting because, obviously, behavior and cognition are mainly neuronopathic effects, but hearing seems to affect all patients broadly. And therefore, we're seeing robust improvements on these endpoints as well. So what's next? We're waiting -- we have a PDUFA date, April 5. We're actively engaged with the FDA on this filing. As I mentioned before, the data that I just summarized as published in New England Journal is what constitutes the BLA filing data. We also have an ongoing Phase III study, the COMPASS study, a Phase II/III study. We completed enrollment of the neuronopathic cohort at the end of last year, which we expanded last year. We added more patients last year to the neuronopathic cohort. And I think importantly, the field is ready. And I just want to emphasize this New England Journal editorial where it was commented that this is a critical turning point. And specifically, tivi is designed to address both systemic and neurologic findings in Hunter syndrome. Okay. So let's move on to SGSH for Sanfilippo, a similarly engineered molecule. In this case, it's a dimer. So you have basically 2 enzymes fused to the transport vehicle. Here, we have an ongoing Phase I/II study. This program was selected for START. And I will say that it's been fantastic to be part of START, regular engagement with the FDA as we align on an accelerated approval path, but also as we align on the Phase III study design in Sanfilippo. We recently announced, I guess, it was the middle of last year that after that alignment on accelerated approval, what is -- that we're now moving forward, completing enrollment of the Phase I/II study, which will be a total of 20 patients with a 49-week endpoint here, again, looking at CSF heparan sulfate. We will be presenting data, although we've top line the data last year, we'll present data at World in early February and looking forward to sharing these data in the coming month. Ultimately, our goal is to submit the BLA and to have an approval by 2027. Now shifting to DNL593. This is PTV progranulin. This is progranulin engineered across the blood-brain barrier. We've seen a very significant increase in interest in this area as the competitive landscape has shifted. And here, I just want to emphasize, similar to the enzyme replacement therapies or the ETVs, our goal is to replace progranulin in individuals that carry one less copy of progranulin. So this will be systemic delivery crossing the blood-brain barrier similar to the ETVs. Also happy to report that we've completed enrollment in this Phase I/II study. We've completed the enrollment of the MAPT cohort, and we plan to share data -- biomarker data around this program by the end of this year. And if you're interested in what biomarkers we're looking at, I would say take a look at the literature and which we published on PTV progranulin in cell, describing the role of progranulin in the lysosome and rescuing it with PTV progranulin and looking at a number of both proximal and distal biomarkers. Now shifting to GAA. This is DNL952. This recently cleared the IND, and we'll begin dosing soon. This is a program. This is actually our first shift out of like traditional CNS, I'll call it that, even though Hunter and Sanfilippo have -- obviously, it's a lysosomal storage disease with broader neurological deficits. In this case, our goal is to go after all of Pompe, including muscle. We've presented data in the past that delivering GAA with the transport vehicle enhances efficacy in muscle in particular. And so here, we'll have a very similar to our other studies, we'll enroll patients and we'll go through dose escalation, and we'll look at standard biomarkers well known in the Pompe field, and we expect to have our initial biomarker data by 2027 with this program. So in summary, when we look at the ETV franchise, there's great opportunity looking at both MPS II and MPS IIIA, but also many other programs that we can bring forward, 2 of which -- 2 additional I focused on today. We believe that there's a high probability of success and also it's time for new invention to improve medicines for enzyme replacement therapies, and we believe the transport vehicle is the ideal way to do that. So let's shift gears to Alzheimer's disease and just highlight 2 of our programs, ATV:Abeta and OTV:MAPT. And I'll just highlight briefly here that we published on ATV:Abeta. I'll share a bit of data from that publication as we've continued to advance this particular program and also on the oligonucleotide transport vehicle published in 2024. So let's start first with ATV:Abeta. So in a mouse model in which we can look at what we call MRI lesions that are similar to ARIA, what we see is using the transport vehicle technology, substantially less ARIA. And the mechanism that we propose is highlighted on the right-hand side is basically this point I made earlier on that transport vehicle gives you even distribution throughout the brain as opposed to high perivascular localization. So the graph on the left-hand side actually quantifies the amount of MRI incidence you see with a standard Abeta antibody as compared to the ATVs, although you get about two to threefold better plaque reduction with the ATVs. So we proposed the actual mechanism for reduced ARIA in this publication in science in August of last year. So I want to talk a little bit more about optimizing the actual transport vehicle and what makes the TV different than standard brain shuttles. And here, I'm going to show 3 pieces of data: brain concentration, reticulocyte number and then actually intact molecule. And I think this is really important as we see this landscape evolving rapidly. This is maybe one of the first times in which we're comparing in the exact same animal model, which is a humanized mouse model that expresses the human apical domain of transferrin receptor across these different platform types. And I think point number one, we actually expected that brain concentration would be very similar. You're using transferrin receptor, and that's actually the limiting factor for brain uptake is how much transferrin receptor is expressed and how readily does it transport. But what we do see is about a twofold better uptake with the transport vehicle technology. Now the reason we believe that's the case is actually on the graph on the right-hand side. So let's shift to the far right and look at this graph. And what we see is that when you tag these Fab molecules, these things are readily clipped. And therefore, at 24 hours, we're not seeing stability of these Fab molecules. This has actually been previously reported in the literature, but now we're looking across different Fabs with different epitopes. And then in the center, and I think really importantly, is the ability of the transport vehicle to maintain effector function, but when bound to transferrin receptor not engage the immune system. So what we see is we don't see a reduction in reticulocytes. However, molecules that can engage the immune system and bind transferrin receptor robustly reduced reticulocytes as shown in the dark blue dots in the middle graph here. So this is -- if you're interested in more differentiation, our recent Analyst Day, we go into great depth about the various epitopes and affinities, but definitely an exciting time in the BBB field for additional invention. So let's talk about our ATV:Abeta, the clinical approach that we're taking here. So this is DNL921 and just a little bit about the Abeta arms themselves, they are preferentially binding oligomeric and aggregated Abeta, including plaque. Our belief right now is that data that's in the clinic that has shown plaque reduction, molecules have shown plaque reductions or those that correlate best with clinical benefits. So ideally, we're driving plaque reduction, but we're also capturing oligomers and less binding to monomers. We're running a single ascending dose healthy volunteer study and then into patients in this MAD study and our -- we expect data in 2027 using this molecule. We're actually filing the first half of this year. Now on to DNL628. The other end of the spectrum for Alzheimer's disease, I've just referenced that the first one was targeting Abeta when the hallmark pathologies in Alzheimer's. This one is targeting tau, which makes up neurofibrillary tangles. And what we see here is the ability to actually knock down tau gene expression and protein and have a very prolonged effect in reducing tau protein levels. This particular model is, again, the human transferrin receptor apical domain crossed to human MAPT transgenic, and we see this robust and sustained knockdown of tau. So we've now filed the CTA. This is cleared. We'll begin dosing for our OTV MAPT program. And here, we're going directly to patients in a multi-ascending dose study, the endpoints here are focused on CSF biomarkers such as tau and then ultimately, tau PET imaging, again, expecting data in 2027 for this program. So I'll end with talking about our evolving business and where we're going. I mentioned that the first decade of discovery and development has now evolved to delivery, building our commercial organization and commercial infrastructure, preparing to launch in rare disease, which is very exciting. We've also built our own in-house manufacturing, which allows us to move much quicker and substantially cheaper across all of these various transport vehicle molecules. And I think the last point is that we continue to invest heavily in blood-brain barrier research. We have over 30 scientists that have focused in this area now for over almost 15 to 20 years, but it's exciting to see how this field has evolved. We have the capital to execute. I think importantly, and here, the key is to invest strategically across various therapeutic areas, drive for that Phase I data. Obviously, efficiency is key. What we learned in the Hunter program as we took a lot of risk in that initial transport vehicle, we can apply those learnings to our other programs, such as Sanfilippo and others to move faster. We're in a strong financial position to be able to execute on this portfolio in the next 3 years. And I'll just end by highlighting again our goals. Our goals are to have 2 growing brands, 5 clinical proof of concepts and then bring additional molecules in the clinic as we advance this transport vehicle technology. So I think with that, I'd like to thank everyone who's here, especially thank everyone at Denali, who has worked on these programs for over a decade. All the patients that we interact with and the patient families, especially in the Hunter and Sanfilippo community. It's been an incredible privilege to work with all of you as we advance our medicines. And with that, I'll call our team up here to answer questions.

Great. Thanks for the presentation. And as a reminder, anyone in the room who has a question can just raise your hand and someone will bring along a microphone. Maybe just starting with tivi for Hunter syndrome. Can you elaborate on the reason behind the PDUFA extension? Has -- whatever that issue has been addressed to the FDA satisfaction at this point?

Yes, I'm happy to do that. So the PDUFA extension was based on a molecular weight miscalculation in a public database. So we've gave some detail about this when we receive that. Extend the PDUFA date to April 5 from January 5, that has been addressed, in fact, addressed rapidly. I think importantly, the FDA continued -- continue to review. It's been actually really good engagement with the FDA. We've finished the late cycle meeting and at this point, basically, we're in discussions around the label, post-marketing commitments, and we continue on path here, we hope for approval by April.

Okay. And what are the key elements of your launch strategy for that product? And how should we think about the ramp in Hunter syndrome?

Great. Thanks. So as we think about Hunter, the market is already -- a majority of the market is already using standard of care. So 95% of patients are on treatment. So for us, the launch strategy is really driving a seamless switch. And our focus here is on engaging with the centers of excellence. There's about 100 geneticists that is carrying for MPS II. Our field team has already been deployed and has been engaging them, our MSL team in exchange -- in scientific exchange and of course, our commercial field team doing the profiling. So it will be really important for us to continue to drive the value proposition and the clinical benefit of tivi with the centers of excellence. The other area, of course, that's really important for launch is ensuring fast payer coverage so ensuring that the payer understand the value proposition. Of course, our patient services have to be executed well to ensure that patients have support on the treatment journey to get access to the medicine. And then the last piece that's really important for the MPS community is this partnership. It's a very tight, small-knit -- small community where patients and families get most of their information from patient advocacy groups and the broader community and where if they support us in the clinical messaging, this is where they will be highly influenced by what the community thinks of tivi. And your second question was related to ramp. So in terms of the uptake in adoption curve, we expect -- in a rare disease launch, we expect to see an S-shape adoption curve. So in 2026, this year, we're going to be very much working through the mechanics of launch, which is ensuring that patients get access as quickly as possible, but knowing that coverage is not going to be immediate. So for 2026, we expect revenues to be minimal. But as coverage expands and experience continues to drive adoption, we expect to see a strong inflection point in 2027.

And I guess, considering the product's profile, how are you approaching pricing for tivi? And can you also talk about the payer mix in Hunter in the U.S.?

Yes. So at Denali, we think about pricing in 4 key dimensions. So for pricing, we want to make sure there's going to be broad access for patients. We also think about affordability, which is why our patient support services are going to be really important that they can support the patient so that they can afford the medicine. And of course, thinking about the clinical value that our product brings and the revenue that we generate must be able to support further innovation at Denali. So given these 4 dimensions, we feel pretty confident that we'll be pricing at a premium compared to the current standard of care, given what we offer. Now what's unique about our market, our payer dynamics is that in rare disease, it's not uncommon to have high Medicaid payer coverage for patients. In our case, it's about 50%. 50% commercial, 50% Medicaid, almost no Medicare, which is why I talked about the S-shape curve. There's going to be some mechanics of access and reimbursement. That will take some time in the early year of launch.

Maybe switching to DNL126, the Sanfilippo product. Can you talk about how you're going to kind of leverage the experience with tivi to compress the time line for 126? And maybe related to that, how the selection for 126 in the START program kind of factors into the development strategy?

Yes. Peter, answer that.

Sure. So tividenofusp alfa, our development program has taught us a lot that allows us to gain efficiencies in the Sanfilippo program with DNL126. So first and foremost, the work that we did with the FDA, along with the MPS community to establish CSF heparan sulfate as a surrogate biomarker that is reasonably likely to predict clinical efficacy that's at the stage for us to have that discussion with FDA with the DNL126 program as well. Also the data that Ryan showed earlier that was published in the New England Journal shows the validation of our ETV platform. And so we have a high degree of confidence that we're able to address the neurological manifestations of Sanfilippo based on our ability to reduce heparan sulfate with the tivi as well as peripheral biomarkers. So that is an important piece that informs the design of our program and our filing strategy. We also have had a lot of learnings on designing and executing rare disease protocols and lysosomal storage disorders as well as establishing relationships with the community. And so we're leveraging those for the Sanfilippo program as well. In a nutshell, the tividenofusp program kind of created a playbook for us to be able to execute additional LSD and rare disease development programs with more efficiency, including more capital efficiency. So we anticipate delivering this program to market potentially 1.5 years earlier than the tividenofusp approval and at half the cost. In terms of your second question with respect to the START program, as Ryan alluded to, this has been highly beneficial to our ability to engage with the FDA on the program. It's given us an ability to accelerate, to engage early and to focus our interactions. And we have an ability to plan the schedule of interactions in a predictable way in addition to having ad hoc meetings. And so we've been able to engage and de-risk a lot of the concerns that the FDA may have or perspectives that the FDA may have in terms of the heterogeneity of the patient population end points that might be meaningful and study designs, both in the Phase I/II as well as the Phase III, as Ryan alluded to. So it's definitely given us an opportunity to accelerate.

Can you just take us through what data you plan to generate to support a filing for this product?

Ryan showed the high-level slide earlier. The filing for DNL126 for accelerated approval is going to be based on the Phase I/II study that is ongoing. This is an open-label study with extended follow-up. There are dose-finding cohorts as was shown earlier as well as key efficacy cohorts. And the totality of that data is a 20-patient study. All patients -- at the time of filing, all patients will have at least 49 weeks of follow-up with some as anticipated to go as far as 2.5 years. And so that will provide durability of response as well as evidence for chronic safety.

Great. And how big is the Sanfilippo Type A population in the U.S., Europe and elsewhere? And how does that compare to the Hunter syndrome?

I'm happy to answer that. So it's very similar. There's about 2,000 patients worldwide for Hunter, 500 of which are in the U.S. and Sanfilippo is probably about the same, maybe a little less. You'll see more variability in those numbers in part because there's no standard of care. So we'll obviously get a much better sense upon approval as -- and there's a medicine available, but that's roughly the epidemiology.

Are there any patients for whom 126 wouldn't be appropriate?

Our hope and our aim is to be able to treat all patients with MPS IIIA.

And I think if you look at the biomarker data for both Hunter and Sanfilippo regardless of timing of intervention, you see a robust biomarker effect, right? So the one thing we have learned and I think as we've shared before, and we'll share again in the upcoming world even in Hunter, earlier is better. right? And especially as you look at like neurofilament and halting neurodegeneration, but I think that's become obvious, although we now have data to show that. But the goal would be basically all patients for both Sanfilippo and Hunter. One other note is that Sanfilippo is large -- I mean, largely a CNS disease, there are peripheral manifestations, which we'll be able to treat with a systemic enzyme replacement therapy, which I think are important and maybe become more obvious if you only treated the central nervous system, but it is believed to be mainly a neurological disease, and certainly, there's robust decline in neurologic and robust neurological symptoms in Sanfilippo.

And for the Phase III, are you going to be using natural history data for the control?

Natural history data has been very helpful in helping us to understand the progression of disease and patient heterogeneity. That said, based on the ongoing discussions with health authorities, it's likely that our Phase III core study will be based on a single-arm study.

And baseline comparator, basically.

Maybe zooming out a little bit. What's your criteria for selecting the diseases to address with the tivi platform? And just how do you prioritize what to pursue first?

Yes. Alex.

Yes. I'll take that. Jess, that is a fantastic question. So we know now from the clinical data and the preclinical data that the transport vehicle is effective wherever efficacy is limited by efficient tissue distribution. So we know the transport vehicle delivers biologics into the brain, but also delivers biologics more efficiently into other tissues, specifically into bone, muscle and others. Now as we look at that set of opportunities, how we prioritize is those where the biology is well understood, where there are biomarkers readily available so that we can efficiently and fast drive to clinical proof of concept and also those opportunities where there is a significant unmet need, so off a certain size. And those are the criteria that you will see in the next wave of programs that we take forward into the clinic. So Ryan highlighted already in the slides a significant effort at Denali for efficient execution and capital allocation, and that will influence how we think about the selection of new indications.

You guys have had a couple of programs in ALS. I'm just curious what's your stance on those and future programs in the disease?

Yes. We remain very interested in ALS. I think about 1.5 years ago, we made the decision -- well, actually 2 years ago, we made the decision to focus entirely on the transport vehicle technology. And part of that was the data we generated in Hunter. So we spun out our efforts in small molecules, which is where our initial efforts were in ALS. We now remain very interested in ALS, but for us, it's the right target likely a genetic medicine using oligonucleotides. So we -- that's where we're keeping our eyes open on where to go next. You may recall that we had a study with RIP kinase and ALS, which failed that was led by Sanofi and eIF2B, which is -- which also failed actually multiple programs, ours and another company failed in parallel. Those were disappointments, no doubt, especially with the integrated stress response sort of implicated in ALS, but I think there's still great hope for some genetic medicines at least in subtypes of ALS. And there, we'd use your OTV to target it.

Maybe thinking about the kind of next wave of assets and heading into the data for DNL593 for FTD. What will represent encouraging results when you get that initial data?

Yes, I think as I highlighted, for FTD granulin, there's really 2 parts of how we've approached it. First was to understand what granulin loss of function really is. And there, we've discovered a role for granulin in lysosomes and lysosomal biology. And it's fortuitous because we have a lot of work in lysosomal storage diseases, but actually, it's many of the same biomarkers that we're seeing for other enzyme replacement therapies like glucose glucosylsphingosine. So success for us, the primary success is some change and correction of the proximal biomarkers. This is highlighted in the paper that I referenced. The long-term success is the distal biomarkers, GFAP and NFL. I think ultimately, as a medicine works, you'll see a correction of these distal biomarkers as we've shown in Hunter syndrome. So those are the 2 areas. The question is, how long do you need to treat. There's a really interesting study that was alluded to at CTAD that NFL has a very long half-life like 260 days. So it's maybe not surprising that for us, we can normalize substrate and then we see a shift. And then over time, we see NFL also decreasing. So we need to keep that in mind in this neurodegeneration field to be patient when you correct the substrate that you may ultimately halt neurodegeneration, but it may take some time. But those are the areas that we're most interested in, in FTD granulin.

Great. So it looks like we're out of time. So we'll stop there. Thank you.

Thank you.