What changed in this filing

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Item 1A. Risk Factors

2020-11-05 compared with 2020-08-07 · 16 added, 23 removed, 1286 unchanged (3% of the section changed)

15 unchanged sentences

We have incurred significant net losses since our inception and anticipate that we will continue to incur net losses for the foreseeable future.

We have incurred significant net losses since our inception, including net losses of $58.8 million and $115.5 million for the three and six months ended June 30, 2020, respectively, and $58.3 million and $97.3 million for the three and six months ended June 30, 2019, respectively.

As of June 30, 2020, we had an accumulated deficit of $541.1 million .

We have incurred significant net losses since our inception, including net losses of $58.2 million and $173.7 million for the three and nine months ended September 30, 2020, respectively, and $46.3 million and $143.6 million for the three and nine months ended September 30, 2019, respectively.

As of September 30, 2020, we had an accumulated deficit of $599.3 million .

We have invested significant financial resources in research and development activities, including for our preclinical and clinical product candidates and our TV platform.

96 unchanged sentences

Our operations have required substantial amounts of cash since inception.

We fund our operations primarily with the proceeds from our IPO, our follow-on offering completed in January 2020, and payments received from our Takeda Collaboration Agreement and Sanofi Collaboration Agreement.

We fund our operations primarily with the proceeds from our IPO, our follow-on offering completed in January 2020, the Stock Purchase Agreement with Biogen and payments received from our Takeda Collaboration Agreement, Sanofi Collaboration Agreement and Biogen Collaboration Agreement.

We are currently advancing three product candidates, DNL151, DNL343, and DNL310 through clinical development, and have several other product candidates in preclinical development, as well as early-stage research projects.

1 unchanged sentence

Even if we are successful in developing our product candidates, obtaining regulatory approvals and launching and commercializing any product candidate will require substantial additional funding.

As of June 30, 2020, we had $556.8 million in cash, cash equivalents and marketable securities.

As of September 30, 2020, we had $981.5 million in cash, cash equivalents and marketable securities.

We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our projected operations through at least the next 12 months.

45 unchanged sentences

For instance, in 2016, we initiated a Phase 1 clinical trial in a former RIPK1 inhibitor product candidate, DNL104, which we subsequently discontinued based on liver test abnormalities in some clinical trial healthy volunteer participants.

Further, in June 2020, together with our partner Sanofi, we paused clinical activities with DNL747 to accelerate development of DNL788, in part due to DNL747 preclinical chronic toxicity studies.

Further, in June 2020, together with our collaboration partner Sanofi, we paused clinical activities with DNL747 to accelerate development of DNL788, in part due to DNL747 preclinical chronic toxicity studies.

We may in the future advance product candidates into clinical trials and terminate such trials prior to their completion.

121 unchanged sentences

Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.

Adverse changes between interim data and final data could significantly harm our

business and prospects.

Adverse changes between interim data and final data could significantly harm our business and prospects.

Further, additional disclosure of interim data by us or by our competitors in the future could result in volatility in the price of our common stock.

9 unchanged sentences

There are a number of large pharmaceutical and biotechnology companies that are currently pursuing the development of products for the treatment of the neurodegenerative disease indications for which we have research programs, including Alzheimer’s disease, Parkinson’s disease and ALS.

Companies that we are aware are developing therapeutics in the neurodegenerative disease area include companies with significant financial resources, such as AbbVie, Alector, AstraZeneca, Biogen, Celgene, Eli Lilly, E-Scape Bio, GlaxoSmithKline, Ionis, JCR Pharmaceuticals, Johnson & Johnson, Novartis, Prevail Therapeutics, Roche, Sanofi and Takeda.

Companies that we are aware are developing therapeutics in the neurodegenerative disease area include companies with significant financial resources, such as AbbVie, Alector, AstraZeneca, Biogen, Bristol-Myers Squibb, Eli Lilly, E-Scape Bio, GlaxoSmithKline, Ionis, JCR Pharmaceuticals, Johnson & Johnson, Novartis, Prevail Therapeutics, Roche, Sanofi and Takeda.

In addition to competition from other companies targeting neurodegenerative indications, any products we may develop may also face competition from other types of therapies, such as gene-editing therapies.

439 unchanged sentences

If a present or future collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our development or commercialization program under such collaboration could be delayed, diminished, or terminated.

In August 2020, we entered into the Provisional Collaboration Agreement with Biogen to co-develop and co-commercialize our small molecule inhibitors of LRRK2 for Parkinson’s disease, and in connection therewith Biogen will make an equity investment in us.

The transaction is contingent on satisfaction of requirements under applicable antitrust laws, including the HSR Antitrust Improvements Act of 1976, as amended, in the U.S., and other customary closing conditions, and with respect to the collaboration, execution of a definitive collaboration agreement.

We cannot provide any assurance that the closing conditions will be satisfied or that we will be able successfully complete the transaction.

We may face significant competition in seeking appropriate collaborations.

11 unchanged sentences

We currently rely and expect to continue to rely on third parties, such as CROs, clinical data management organizations, medical institutions, and clinical investigators, to conduct some aspects of our research and preclinical testing and our clinical trials.

Any of these third parties may terminate their

engagements with us or be unable to fulfill their contractual obligations.

Any of these third parties may terminate their engagements with us or be unable to fulfill their contractual obligations.

If we need to enter into alternative arrangements, it would delay our product development activities.

41 unchanged sentences

Given that the development of our technology and product candidates is at an early stage, our intellectual property portfolio with respect to certain aspects of our technology and product candidates is also at an early stage.

For example, as of June 30, 2020, we do not own or in-license any issued patents in the United States directed to the composition of matter of any of the antibodies or enzymes that we have thus far developed using our BBB platform technology.

For example, as of September 30, 2020, we do not own or in-license any issued patents in the United States directed to the composition of matter of any of the antibodies or enzymes that we have thus far developed using our BBB platform technology.

In addition, we cannot be certain that any patents we own or in-license in the United States adequately cover the Fc domain portion of our BBB platform technology that binds to transferrin receptor, or adequately cover the antibodies, enzymes or proteins being developed in our ATV:TREM2, ETV:IDS or PTV:PGRN programs.

45 unchanged sentences

We are heavily reliant upon licenses to certain patent rights and proprietary technology from third parties that are important or necessary to the development of our BBB platform technology and product candidates.

For example, in June 2016, we entered into a license agreement with Genentech pursuant to which we received an exclusive license to certain of Genentech’s intellectual property relating to our LRRK2 program, including our DNL201 and DNL151 product candidates.

Our agreements with F-star and other license agreements may not provide exclusive rights to use certain licensed intellectual property and technology in all relevant fields of use and in all territories in which we may wish to develop or commercialize our technology and products in the future.

3 unchanged sentences

For example, under our agreements with F-star and Genentech, the licensors control prosecution and, in the case of F-star and in specified circumstances, enforcement of certain of the patents and patent applications licensed to us.

Also, under our agreement with Sanofi, they control prosecution, and in specified circumstances, enforcement of certain of the patents and patent applications licensed to them.

Also, under our agreements with Takeda, Sanofi and Biogen, they control prosecution, and in specified circumstances, enforcement of certain of the patents and patent applications licensed to them.

We cannot be certain that our in-licensed or out-licensed patents and patent applications that are controlled by our licensors or licensees will be prepared, filed, prosecuted, maintained, enforced, and defended in a manner consistent with the best interests of our business.

222 unchanged sentences

We will need to grow the size and capabilities of our organization, and we may experience difficulties in managing this growth.

As of June 30, 2020, we had 276 emplo yees, all of whom were full-time.

As of September 30, 2020, we had 281 emplo yees, all of whom were full-time.

As our development plans and strategies develop, we must add a significant number of additional managerial, operational, financial, and other personnel.

18 unchanged sentences

Further, on October 29, 2018, we entered into the Sanofi Collaboration Agreement.

In August 2020, we entered into the Provisional Collaboration Agreement with Biogen, and in connection therewith we will issue and sell to Biogen 13,310,243 shares of our common stock for an aggregate purchase price of $465 million, subject to satisfaction of customary closing conditions.

In August 2020, we entered into the Provisional Biogen Collaboration Agreement, and in connection therewith we sold $13,310,243 shares of our common stock to Biogen in September 2020 for an aggregate purchase price of $465.0 million.

Any acquisition or strategic partnership may entail numerous risks, including:

88 unchanged sentences

• commencement or termination of collaborations for our product development and research programs;

for instance, without limitation, failure to complete in a timely manner or at all the proposed transaction with Biogen;

• failure to achieve development, regulatory or commercialization milestones under our collaborations;

37 unchanged sentences

We may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances and licensing arrangements.

For example, in August 2020, we entered into the Provisional Collaboration Agreement with Biogen, and in connection therewith we will issue and sell to Biogen 13,310,243 shares of our common stock for an aggregate purchase price of $465 million, subject to satisfaction of customary closing conditions.

For example, in August 2020, we entered into the Provisional Biogen Collaboration Agreement, and in connection therewith issued and sold 13,310,243 shares of our common stock to Biogen in September 2020 for an aggregate purchase price of $465 million.

We, and indirectly, our stockholders, will bear the cost of issuing and servicing all such securities.

14 unchanged sentences

Our principal stockholders and management own a significant percentage of our stock and will be able to exercise significant influence over matters subject to stockholder approval.

As of June 30, 2020, our directors, executive officers, holders of more than 5% of our outstanding stock and their respective affiliates beneficially own shares representing more than 50.0% of our outstanding common stock.

As of September 30, 2020, our directors, executive officers, holders of more than 5% of our outstanding stock and their respective affiliates beneficially own shares representing more than 50.0% of our outstanding common stock.

As a result, these stockholders, if they act together, may significantly influence all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions.

47 unchanged sentences

Our amended and restated certificate of incorporation further provides that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.

These exclusive-forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may

discourage lawsuits against us and our directors, officers, and other employees.

If a court were to find either exclusive-forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action or we do not enforce such provision, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could seriously harm our business.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors