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Item 1. Business

2024-02-28 compared with 2023-02-27 · 316 added, 303 removed, 691 unchanged (47% of the section changed)

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Our goal is to discover, develop and deliver therapeutics to defeat degeneration.

We are a clinical stage biopharmaceutical company developing a broad portfolio of product candidates engineered to cross the blood-brain barrier (“BBB”) for neurodegenerative diseases and lysosomal storage diseases.

We have a diversified and differentiated portfolio of both small molecule and biotherapeutic medicines, comprising seven product candidates in clinical development across eight indications as well as more than a dozen preclinical therapeutic candidates.

We have a diversified and differentiated portfolio of both small molecule and biotherapeutic medicines, comprising seven product candidates in clinical development across seven indications as well as more than a dozen preclinical therapeutic candidates.

Each of our programs has been engineered for efficient delivery across the BBB to increase drug exposure in the brain after systemic administration.

We have discovered and developed a proprietary platform technology called the Transport Vehicle or “TV”, which we have used in developing our portfolio of brain-penetrant therapies based on our Enzyme Transport Vehicle (“ETV”), A ntibody Transport Vehicle (“ATV”), Protein Transport Vehicle (“PTV”), and Oligonucleotide Transport Vehicle (“OTV”).

We have discovered and developed a proprietary platform technology called the Transport Vehicle (“TV”), which we have used in developing our portfolio of brain-penetrant therapies based on our Enzyme Transport Vehicle (“ETV”), A ntibody Transport Vehicle (“ATV”), Protein Transport Vehicle (“PTV”), and Oligonucleotide Transport Vehicle (“OTV”).

We believe the combination of a clinically validated delivery platform and a maturing therapeutic portfolio will position us for long-term success in our goal to advance next-generation, targeted medicines for people living with neurodegenerative diseases.

We plan to further grow our discovery and clinical development capabilities and intend to build internal manufacturing capabilities and commercial infrastructure in a staged manner that is aligned with the progression of our portfolio.

We plan to further grow our discovery and clinical development capabilities, focusing on TV-enabled biotherapeutics programs for neurodegenerative diseases, and intend to build internal manufacturing capabilities and commercial infrastructure in a staged manner that is aligned with the progression of our portfolio.

We aim to serve patients as a fully integrated global organization.

Key Achievements Since Company Founding in 2015

• Built a broad portfolio comprised of seven clinical-stage programs of which three are currently late-stage and a fourth program expected to enter late-stage development in 2023

• Invented and developed proprietary BBB TV technology with potential to deliver enzymes, antibodies, proteins and oligonucleotides via systemic administration

◦ Advanced three TV-enabled programs to clinical development and established biomarker proof of concept with ETV:IDS

◦ Achieved preclinical proof of concept for TV-enabled brain delivery of antisense oligonucleotides

• Advanced 10 investigational new drug applications and clinical trial applications for new molecules to enter clinical development

• Entered into three strategic collaborations totaling $1.3 billion in upfront payments and over $3 billion in potential milestones

• Published over 20 peer-reviewed papers in top-tier scientific journals

• Granted over 90 patents worldwide

• Three of our female leaders were recognized by various publications as leaders in the field

We have three late-stage development programs:

DNL310 (ETV:IDS) for MPS II (Hunter syndrome);

tividenofusp alfa (DNL310, ETV:IDS) for mucopolysaccharidosis II (" MPS II ", or " Hunter syndrome ");

BIIB122/DNL151 (LRRK2 inhibitor) for Parkinson’s disease;

and SAR443820/DNL788 (CNS-penetrant RIPK1 inhibitor) for amyotrophic lateral sclerosis (“ALS”).

In addition, we have initiated planning for a Phase 2/3 study of DNL343 (eIF2B activator) as part of the HEALEY Platform Trial in ALS.

SAR443820/DNL788 is also being evaluated in a Phase 2 study for multiple sclerosis.

We are conducting first-in-human studies of TAK-920/DNL919 (ATV:TREM2) for Alzheimer’s disease and TAK-594/DNL593 (PTV:PGRN) for frontotemporal dementia-granulin (“FTD-GRN”).

SAR443122/DNL758 (peripheral RIPK1 inhibitor) is in two Phase 2 studies for cutaneous lupus erythematosus (“CLE”) and ulcerative colitis ("UC").

and DNL343 (eIF2B activator) for amyotrophic lateral sclerosis (“ALS”).

SAR443820/DNL788 (RIPK1 inhibitor) is being evaluated in a Phase 2 study for multiple sclerosis ("MS").

In addition, we are conducting a Phase 1/2 study of TAK-594/DNL593 (PTV:PGRN) for frontotemporal dementia-granulin (“FTD-GRN”) and a Phase 1/2 study of DNL126 (ETV:SGSH) for MPS IIIA (Sanfilippo syndrome).

Eclitasertib (SAR443122/DNL758, peripheral RIPK1 inhibitor) is in a Phase 2 study for ulcerative colitis ("UC").

As our portfolio matures and our company scales, we plan to maintain a deep focus on science to guide our efforts to discover, develop and deliver medicines to patients.

Our discovery and development strategy is guided by three overarching principles that we believe will significantly increase the probability of success and accelerate the timing to bring effective therapeutics to people living with neurodegenerative diseases:

• Degenogene Pathways – each of our programs addresses a molecular target or biological pathway that is genetically validated to cause or increase the risk for neurodegenerative diseases.

• Engineering Brain Delivery – we engineer our product candidates to cross the BBB and act directly in the brain by following a rigorous approach in designing small molecules and by using our proprietary TV platform technology to effectively deliver large therapeutic molecules, such as enzymes, proteins, antibodies, and oligonucleotides, across the BBB after intravenous administration.

• Biomarker-Driven Development – we discover, develop and use biomarkers to inform dose selection, assess clinical activity, and identify patients most likely to respond to our therapies.

Our target indications include diseases with large patient populations, such as Alzheimer’s disease and Parkinson’s disease, as well as rare indications, such as Hunter syndrome, FTD-GRN and ALS.

• Degenogenes:

Genetic Pathway Realization – each of our programs addresses a molecular target or biological pathway that is genetically validated to cause or increase the risk for neurodegenerative diseases.

• Brain Delivery:

Validation and Optionality – we engineer our product candidates to cross the BBB and act directly in the brain.

Our proprietary TV platform technology is designed to effectively deliver large therapeutic molecules, such as enzymes, proteins, antibodies, and oligonucleotides, across the BBB after intravenous administration.

• Biomarker-Driven Development and Approval – we discover, develop and use biomarkers to inform dose selection, assess clinical activity, and identify patients most likely to respond to our therapies.

We are actively engaged in discussions with health authorities regarding the potential use of biomarkers as primary clinical endpoints to support faster paths to approval.

Our target indications include diseases with large patient populations, such as Alzheimer’s disease and Parkinson’s disease, as well as rare indications, such as MPS II (Hunter syndrome), MPS IIIA (Sanfilippo syndrome Type A), FTD-GRN and ALS.

We expect our first potential product launches will be in rare disease categories.

Launching first in rare indications gives us the opportunity to build and establish our commercial organization so that we are poised for success in larger indications over time.

Our most advanced TV-enabled program, DNL310 (ETV:IDS), is intended to replace the standard of care in Hunter syndrome, which belongs to a group of rare lysosomal storage diseases (“LSDs”).

LSDs affect more than 30,000 individuals worldwide for whom central nervous system (“CNS”) manifestations and many peripheral symptoms continue to remain unaddressed by the current standard of care, if available at all.

Our most advanced TV-enabled program, tividenofusp alfa (DNL310, ETV:IDS), is intended to replace the standard of care in Hunter syndrome, which belongs to a group of rare LSDs.

LSDs affect more than 30,000 individuals worldwide for whom central nervous system (“CNS”) manifestations and many somatic symptoms continue to remain unaddressed by the current standard of care, if available at all.

We aim to leverage certain efficiencies of scale to support the commercialization of additional product candidates to create an LSD franchise.

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Notable active arrangements include those with Biogen Inc.’s subsidiaries, Biogen MA Inc.

(“BIMA”) and Biogen International GmbH (“BIG”) (BIMA and BIG, collectively, “Biogen”), and Takeda Pharmaceutical Company Limited ("Takeda"), and Genzyme Corporation, a wholly owned subsidiary of Sanofi S.A.

(“BIMA”) and Biogen International GmbH (“BIG”) (BIMA and BIG, collectively, “Biogen”), Takeda Pharmaceutical Company Limited ("Takeda"), and Genzyme Corporation, a wholly owned subsidiary of Sanofi S.A.

We hold significant development and commercialization rights to all of our CNS programs, including the programs which are subject to our collaboration agreements with Biogen, Sanofi and Takeda, where we share responsibility for clinical development and share commercialization rights in the United States and China.

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• Lysosomal Function – Dysfunction of the lysosomal system, the disposal and recycling compartment of the cell, is associated with several neurodegenerative diseases, including Parkinson's disease and neurodegeneration in the context of LSDs.

Degenogenes linked to lysosomal function include leucine-rich repeat kinase 2 ("LRRK2"), progranulin ("PGRN"), alpha-synuclein ("aSyn"), and lysosomal enzymes, including iduronate 2-sulfatase ("IDS"), sulfamidase ("SGSH"), and glucocerebrosidase ("GBA").

Degenogenes linked to lysosomal function include leucine-rich repeat kinase 2 ("LRRK2"), progranulin ("PGRN"), alpha-synuclein ("αSyn"), and lysosomal enzymes, including iduronate 2-sulfatase ("IDS"), sulfamidase ("SGSH"), and glucocerebrosidase ("GBA").

• Glial Biology – Glial cells, the resident immune cells of the brain, serve various functions including supporting neuronal health, pruning neuronal synapses, and providing immune surveillance and response in the brain.

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it has been estimated that approximately 98% do not cross the BBB.

We rigorously design our small molecule therapeutic candidates to be orally bioavailable with chemical and physical properties that enable them to be readily absorbed from the gut and to penetrate the BBB while avoiding transporter-mediated efflux.

We have rigorously designed our small molecule therapeutic candidates to be orally bioavailable with chemical and physical properties that enable them to be readily absorbed from the gut and to penetrate the BBB while avoiding transporter-mediated efflux.

We invented, developed, and continue to optimize a proprietary technology, called the Transport Vehicle, to deliver our large molecule biotherapeutic candidates to the brain after systemic administration.

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Our TV technology is modular and enables several classes of biotherapeutics to more effectively cross the BBB, including enzymes, antibodies, proteins and oligonucleotides.

The TV technology is engineered to engage specific BBB transport receptors, such as the transferrin receptor (“TfR”), which are highly expressed in brain capillaries and facilitate transport of proteins into the brain ( Figure 1 ) in a process called receptor mediated transcytosis, or RMT.

The TV technology is engineered to engage specific BBB transport receptors, such as the transferrin receptor (“TfR”) and CD98 heavy chain ("CD98hc"), which are highly expressed in brain capillaries and facilitate transport of proteins into the brain ( Figure 1 ) in a process called receptor mediated transcytosis, or RMT.

Engineering brain delivery.

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Our pipeline of TV-enabled programs currently includes three clinical-stage programs and more than a dozen programs in preclinical development.

We demonstrated proof of concept with safety and pharmacokinetic and pharmacodynamic data from the ongoing Phase 1/2 study with DNL310 (ETV:IDS), and pharmacokinetic data from the ongoing Ph1 study with DNL593, as well as data from several preclinical studies in mouse and nonhuman primate models.

We demonstrated proof of concept with safety and pharmacokinetic and pharmacodynamic data from the ongoing Phase 1/2 study with DNL310 (ETV:IDS), and pharmacokinetic data from the ongoing Phase 1 study with TAK-594/DNL593 (PTV:PGRN), as well as data from several preclinical studies in mouse and nonhuman primate models.

Preclinical studies demonstrated robust and sustained pharmacodynamic effects in the brain after intravenous dosing of TV-enabled antibodies, enzymes, proteins, and antisense oligonucleotides ("ASOs"), while standard antibodies, enzymes, proteins and ASOs had no or minimal pharmacodynamic effects.

These data show that TV-enabled product candidates have the potential to achieve therapeutically relevant concentrations in the brain after systemic administration, making them potentially superior to traditional biologic therapeutics in targeting neurodegenerative diseases.

Our TV technology is differentiated from other BBB technologies through its engineering approach, which may provide superior stability and safety and higher exposure of drug candidates in the brain ( Figure 2 ).

Our TV technology is differentiated from other BBB technologies through its engineering approach, which may provide superior therapeutic efficacy and safety through higher stability, exposure, and biodistribution of drug candidates in the brain ( Figure 2 ).

Denali’s TV technology is modular and highly differentiated

Our most advanced TV-enabled program, DNL310 (ETV:IDS), is currently in an ongoing Phase 2/3 study, and we have advanced two additional TV-enabled molecules into clinical testing, namely, PTV:PGRN (TAK-594/DNL593) and ATV:TREM2 (TAK-920/DNL919).

In addition, we plan to submit an IND application for another ETV-enabled molecule, DNL126 (ETV:SGSH) in the first half of 2023.

We believe that we can further expand our portfolio leveraging the modularity of the TV technology.

Our most advanced TV-enabled program, DNL310 (ETV:IDS), is currently in an ongoing Phase 2/3 study for MPS II, and we are conducting Phase 1/2 studies of TAK-594/DNL593 (PTV:PGRN) and DNL126 (ETV:SGSH) for FTD-GRN and MPS IIIA, respectively.

In addition, OTV:MAPT, targeting tau for Alzheimer’s disease, and OTV:SNCA, targeting αSyn for Parkinson’s disease, are our two lead IND-enabling stage OTV programs.

Biogen licensed our ATV:Abeta program targeting amyloid beta for Alzheimer's disease, which is in the IND-enabling stage.

We believe that we can further expand our portfolio leveraging the modularity of the TV technology as well as additional BBB receptors.

In addition to our current focus on neurodegenerative diseases and LSDs, we are exploring programs in oncology (ATV:HER2) and infectious diseases as well as other neurological and neuromuscular indications ( Figure 3 ).

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Denali’s TV technology provides opportunities for platform expansion.

Biomarker-Driven Development

In addition to TfR, we are targeting CD98hc, an amino acid transporter highly expressed on the BBB ( Figure 4 ).

Our preclinical studies have established TV CD98hc as a modular brain delivery platform with favorable kinetic, biodistribution, and safety properties distinct from previously reported BBB platforms.

We believe that the distinct properties of our two TV platforms, TV TfR and TV CD98hc may enable selection of the optimal platform for a given drug target thereby expanding our portfolio opportunities.

TV CD98hc targets the CD98hc an amino acid transporter, which is highly expressed on the BBB, for brain delivery of biotherapeutics.

Biomarker-Driven Development and Approval

As part of our strategy, we identify and validate biomarkers which are relevant for both animal models and human trials and are critical for selecting patients, predicting and measuring target engagement, supporting dose selection and enabling decisions on progression of product candidates to the next phase of development.

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In these indications, regulatory authorities may require us to run additional clinical trials prior to expanding the label for approval that includes a broader patient population.

We recognize the urgency for patients living with neurodegenerative and LSDs to have effective treatment options.

Biomarkers have successfully been used as primary clinical endpoints to secure a faster path to approval in indications, such as ALS and Alzheimer’s disease.

We are actively engaged in efforts, which include collaboration with our patient communities, advocacy groups and other drug developers, to press for more regulatory flexibility in using biomarker data as the basis for approval in disease indications where the unmet medical need is high and treatment options are few or non-existent.

These efforts are in addition to ongoing discussions with health authorities regarding the potential use of biomarkers as primary clinical endpoints to support faster paths to approval for our product candidates.

The following table summarizes key information about our clinical programs and pipeline:

Denali’s current development pipeline.

We are developing a broad portfolio of targeted therapeutic candidates for neurodegenerative diseases.

We are developing a broad portfolio of targeted therapeutic candidates for neurodegenerative diseases and LSDs.

Our programs are at different stages of clinical and preclinical development.

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We discuss our most advanced programs in further detail below.

Our Transport Vehicle (TV)-Enabled Programs

DNL310 ETV:IDS Enzyme Replacement Therapy Program for MPS II (Hunter Syndrome)

Late-Stage And Mid-Stage Clinical Programs

Tividenofusp alfa (DNL310, ETV:IDS) Enzyme Replacement Therapy Program for MPS II (Hunter Syndrome)

MPS II, also called Hunter syndrome, is a rare genetic disease that affects over 2,000 individuals, primarily males, world-wide, and leads to behavioral, cognitive, and physical symptoms ultimately resulting in shortened lifespan.

MPS II is caused by mutations in the iduronate-2-sulfatase ( IDS ) gene, which leads to a deficiency of the IDS enzyme.

Symptoms often begin emerging around age two and include physical complications, including organ dysfunction, joint stiffness, hearing loss and impaired growth, and neurocognitive symptoms with impaired development.

The disease is characterized by a buildup of glycosaminoglycans (GAGs) in lysosomes — the part of the cell that breaks down materials including GAGs.

The current standard of care enzyme replacement therapy partially treats the physical symptoms but does not cross the blood-brain barrier, and as a result, cognitive and behavioral symptoms experienced by the majority of patients with MPS II are not addressed.

Therapies that address behavioral, cognitive, and physical manifestations of the disease are one of the greatest unmet needs for this community.

DNL310 is an investigational fusion protein composed of IDS fused to Denali’s proprietary ETV, which is engineered to cross the blood-brain barrier via receptor-mediated transcytosis into the brain.

Preclinical studies demonstrate that DNL310 delivers IDS to lysosomes, where it is needed to break down GAGs.

DNL310 is engineered for broad delivery of IDS into cells and tissues throughout the body, including the brain with the goal of addressing the behavioral, cognitive, and physical manifestations of MPS II.

MPS II is caused by mutations in the iduronate-2-sulfatase ( IDS ) gene, which leads to a deficiency of the IDS enzyme responsible for the breakdown of the glycosaminoglycans (GAGs) heparan and dermatan sulfate in lysosomes.

Symptoms often begin emerging around age two and include physical complications, including organ dysfunction, joint stiffness, hearing loss and impaired growth leading to short stature, and neurocognitive symptoms with impaired development.

The disease is characterized by a buildup of GAGs in lysosomes — the part of the cell that breaks down materials including GAGs.

The current standard of care enzyme replacement therapy (" ERT ") partially treats the physical symptoms but does not cross the blood-brain barrier, and as a result, cognitive and behavioral symptoms experienced by the majority of patients with MPS II are not addressed.

Therapies that address behavioral, cognitive, and somatic manifestations of the disease are one of the greatest unmet needs for this community.

DNL310 is a fusion protein composed of IDS fused to Denali’s proprietary ETV, which is engineered to cross the BBB via receptor-mediated transcytosis into the brain and to enable broad delivery of IDS into cells and tissues throughout the body with the goal of addressing the behavioral, cognitive, and physical manifestations of MPS II.

In March 2021, the U.S.

Food and Drug Administration granted Fast Track designation to DNL310 for the treatment of patients with MPS II.

In May 2022, the European Medicines Agency granted DNL310 Priority Medicines designation.

In May 2022, the European Medicines Agency ("EMA") granted DNL310 Priority Medicines designation.

DNL310 is an investigational product candidate and has not been approved by any Health Authority.

Based on supportive clinical and preclinical data to date, we are conducting the Phase 2/3 COMPASS study in North America, South America, and Europe ( Figure 5 ).

Based on supportive clinical and preclinical data to date, we are enrolling the Phase 2/3 COMPASS study in North America, South America, and Europe.

The Phase 2/3 COMPASS study is expected to enroll 54 participants with MPS II, with and without neuronopathic disease.

The participants will be randomized 2:1 to receive either DNL310 or idursulfase, respectively.

Cohort A will include children ages ≥2 to <6 years with neuronopathic disease;

cohort B will include children ages ≥6 to <17 without neuronopathic disease.

The participants are randomized 2:1 to receive either DNL310 or idursulfase, respectively.

Cohort A includes children ages ≥2 to <6 years with neuronopathic disease;

cohort B includes children ages ≥6 to <17 without neuronopathic disease.

Upon completion of the ongoing Phase 1/2 study, and together with data from the global COMPASS study, this combined data package is intended to support registration.

DNL310 Phase 2/3 COMPASS Study design

In parallel with the Phase 2/3 COMPASS study, we are also conducting a Phase 1/2 trial for DNL310 in patients with MPS II as a multicenter, multiregional, open-label, single-arm trial to assess the safety, pharmacokinetics, and pharmacodynamics of DNL310 administered once weekly by intravenous infusion.

We have previously reported interim analyses from the Phase 1/2 study and most recently at the 2023 WORLD Symposium in February 2023.

The presentation included data as of the September 2022 data cut off from the 28 participants enrolled in the Phase 1/2 study, all but one with neuronopathic MPS II, and having a median age of 5 years (range 2 to 12) at enrollment.

Participants received weekly intravenous doses of DNL310 starting on day 1 of the study, with no wash-out period for those switching from idursulfase.

We have previously reported interim analyses from the Phase 1/2 study and most recently at the 2024 WORLD Symposium TM in February 2024.

Key results are summarized below.

The data reported at the 2023 WORLD Symposium continued to demonstrate that DNL310 enables rapid and sustained normalization of heparan sulfate in cerebrospinal fluid (CSF) with mean reductions from baseline of 91% and 90% at weeks 24 and 49, respectively.

Normalization of CSF heparan sulfate was observed even in participants with high levels of preexisting anti-iduronate-2-sulfatase antibodies.

( Figure 6 ).

Rapid normalization or near normalization of CSF HS was observed in all participants, was sustained at week 49, and remained normal in the three participants tested at week 104.

Sustained reduction of lysosomal lipid biomarkers in CSF was also observed, which is consistent with improved lysosomal function.

At week 24, the mean decline in levels of gangliosides GM2, GM3, and glucosylsphingosine lipids were 64%, 54%, and 57%, respectively, which was sustained at week 49 (63%, 49%, and 48%, respectively).

After switching from idursulfase to DNL310, a mean decline from baseline of 85% and 89% was observed for heparan sulfate and dermatan sulfate biomarkers in the urine, respectively, at week 49, suggesting DNL310 has added peripheral activity over approved enzyme replacement therapy.

Exploratory clinical outcomes data from Vineland Adaptive Behavior Scales (VABS)-II ( Figure 7 ) and Bayley Scales of Infant and Toddler Development (BSID)-III assessments ( Figure 8 ) were reported for the first time at the 2023 WORLD Symposium and positive mean changes in raw scores over one year with DNL310 treatment relating to adaptive behavior and cognitive skill gains were observed, respectively.

These raw score results are consistent with previously reported one-year findings from the Clinician Global Impression Scales of Change and Caregiver Global Impression Scales of Change, showing that most participants demonstrated improvement or stabilization across all domains at week 49 of study treatment.

Hearing, as assessed by auditory brainstem response (ABR) testing, numerically improved over time after initiation of DNL310 across all frequencies.

The additional data reported at the 2024 WORLD Symposium TM demonstrated that DNL310 enabled rapid and sustained normalization of heparan sulfate in cerebrospinal fluid ("CSF") with mean reductions from baseline of approximately 90% at weeks 24, 49, and 104.

Normalization of CSF heparan sulfate was observed even in participants with high levels of preexisting serum anti-iduronate-2-sulfatase antibodies ( Figure 6 ).

In urine, a high-magnitude and sustained reduction of heparan sulfate and dermatan sulfate after switching from standard-of-care ERT to DNL310 suggested added peripheral activity.

Normal levels of CSF HS were achieved and sustained over time, including in those with pre-existing high serum ADA.

Following treatment with DNL310, mean reductions of 64%, 60%, and 71%, representing near normalization or complete normalization, were observed in levels of gangliosides GM2 and GM3 and glucosylsphingosine lipids, respectively, at week 104 in participants receiving DNL310, which is consistent with improved lysosomal function.

Robust and sustained reduction in serum neurofilament light ("NfL"), a marker of neuronal damage, was observed, reaching statistical significance after 61 weeks and a reduction of 64% after two years of treatment with DNL310 ( Figure 7 ).

Changes in serum and CSF NfL from baseline to week 104 were correlated;

at week 104, there was a statistically significant 54% mean reduction from baseline in CSF NfL.

Robust reduction of serum NfL, a marker of neuronal damage, was observed with long-term dosing.

Exploratory clinical outcomes data from Vineland Adaptive Behavior Scales (VABS)-II and Bayley Scales of Infant and Toddler Development (BSID)-III assessments out to 104 weeks of treatment with DNL310 were reported for the first time at the 2024 WORLD Symposium TM .

Continued improvement and stabilization of adaptive behavior and cognitive scores suggest DNL310 has positive effects ( Figure 8 ).

Continued improvement and stabilization in sum of VABS-II scores and cognitive scores suggest DNL310 has positive effects.

Hearing, as assessed by auditory brainstem response ("ABR") testing, numerically improved over time after initiation of DNL310 across all frequencies ( Figure 9 ).

At week 104, ABR thresholds showed statistically significant improvements across three of the four frequencies, with a trend toward greater improvement at higher frequencies.

The safety profile of DNL310 remains consistent with standard of care, now with data up to two years of treatment with DNL310.

Changes of ABR thresholds with DNL310 treatment suggest improved hearing.

Generally positive somatic activity on multiple endpoints was observed in participants receiving DNL310.

Liver volume in standard-of-care ERT-naïve participants decreased by a mean of 25% from baseline at weeks 24 and 49.

In standard-of-care ERT-experienced participants liver volume decreased by a mean of 5% from baseline at week 49.

Spleen volume was normal in all participants at weeks 24 and 49 of DNL310 treatment.

At baseline, spleen volume was normal in all participants except 1 standard-of-care ERT-naïve participant, who had normal spleen volumes at weeks 24 and 49 of DNL310 treatment.

DNL310 continues to be generally well tolerated (median treatment duration 100 weeks and maximum treatment duration 161 weeks).

The most frequent treatment-emergent adverse events were infusion related reactions, which decreased in frequency and severity with continued dosing.

An independent data monitoring committee met in October 2022 and recommended that the study may continue without modifications.

An independent data monitoring committee met in December 2023 and recommended that the study may continue without modifications.

2024 expected progress and milestones:

• Presentation of additional interim Phase 1/2 data at the Society for the Study of Inborn Errors of Metabolism (SSIEM) Annual Symposium.

• Continued recruitment of participants with MPS II in the global Phase 2/3 COMPASS study.

Over 49 weeks, mean VABS-II raw scores increased across subdomains, including those particularly relevant to MPS families, reflecting adaptive behavior skill gain.

Mean increases were observed in BSID III Cognitive Raw Scores at Week 49 and were larger in magnitude when accounting for participants cognitively capable of completing the Kaufman Assessment Battery for Children.

• Complete enrollment of global Phase 2/3 COMPASS study in MPS II.

DNL343 eIF2B Activator Program for ALS

We are developing DNL343 as a novel eIF2B activator with first-in-class potential for the treatment of ALS and other indications.

eIF2B is an intracellular protein complex that regulates protein synthesis and is required for neuronal health and function.

When neurons experience stress, activation of the integrated stress response ("ISR") pathway leads to suppression of eIF2B activity, resulting in impaired protein synthesis and formation of stress granules.

Stress granules are thought to be a precursor of TDP-43 aggregation, which is a hallmark pathology in ALS.

DNL343 is designed to activate eIF2B and thereby restore protein synthesis, disperse TDP-43 aggregates, and improve neuronal survival.

In May 2023, the first participant with ALS was dosed with DNL343 (Regimen G) in the Phase 2/3 HEALEY ALS Platform Trial led by the Sean M.

Healey & AMG Center for ALS ("Healey Center") at Massachusetts General Hospital ("MGH") in collaboration with the Northeast ALS Consortium ("NEALS") clinical trial network.

The HEALEY ALS Platform Trial is a large-scale collaborative effort made possible by contributions from patients and families, clinical trial sites, industry partners and research collaborators to evaluate multiple investigational therapies simultaneously with the goal of accelerating the development of potential new treatments for ALS.

Therapeutic candidates that enter the platform trial are chosen by a group of expert ALS scientists and members of the Healey & AMG Center.

Recruitment is ongoing in Regimen G (DNL343) of the Phase 2/3 HEALEY ALS Platform Trial.

Late-stage development of DNL343 is supported by results of Phase 1/1b studies in 95 healthy volunteers and 28 participants with ALS.

In April 2023, we presented final data from the 28-day treatment period of the Phase 1b study of DNL343 in participants with ALS at the 75th Annual Meeting of the American Academy of Neurology ("AAN").

The Phase 1b study is a multicenter, randomized, placebo-controlled, double-blind, 28-day trial followed by an 18-month open-label extension, designed to evaluate the safety, pharmacokinetics and pharmacodynamics of DNL343 participants with ALS.

Study results have demonstrated that once-daily oral dosing with DNL343 for 28 days was generally well tolerated and demonstrated extensive CSF penetration.

In addition, robust inhibition of biomarkers associated with the ISR pathway was observed in blood samples from study participants ( Figure 10 ).

Phase 1b results demonstrated 28-day dosing with DNL343 reduced ISR biomarkers (e.g., ATF4 protein and CHAC1 mRNA) in blood samples from ALS patients.

2024 expected progress and milestones:

• Complete enrollment of participants in Regimen G (DNL343) in Phase 2/3 HEALEY ALS Platform Trial.

SAR443820/DNL788 RIPK1 Inhibitor Program for CNS Disease:

As described in more detail in “Business - Licenses and Collaborations” below, we are collaborating with Sanofi on the development of small molecules that inhibit RIPK1, a critical signaling protein in the tumor necrosis factor (“TNF”) receptor pathway and a regulator of inflammation and cell death.

Increased RIPK1 activity in the brain drives neuroinflammation and cell necroptosis and contributes to neurodegeneration.

RIPK1 inhibition has been shown to have beneficial effects in preclinical models of ALS, MS, Alzheimer's disease, and other diseases.

SAR443820/DNL788 is our lead CNS-penetrant RIPK1 inhibitor in clinical development.

Sanofi completed a Phase 1 trial of SAR443820/DNL788 in healthy volunteers, which demonstrated high brain penetrance and robust target engagement at doses that were generally well tolerated.

In February 2024, Sanofi informed us that the Phase 2 HIMALAYA study evaluating SAR443820/DNL788 in participants with amyotrophic lateral sclerosis (ALS) did not meet the primary endpoint of change in ALS Functional Rating Scale-Revised (ALSFRS-R).

Sanofi intends to present the detailed efficacy and safety results of the ALS Phase 2 HIMALAYA study at a future scientific forum.

Sanofi is evaluating SAR443820/DNL788 in another Phase 2 clinical trial in participants with multiple sclerosis (MS), and the outcome of HIMALAYA study has no impact on the ongoing MS study.

2024 expected progress and milestones:

• Continue Phase 2 K2 study in MS

BIIB122/DNL151 LRRK2 Inhibitor Program for Parkinson's disease

Parkinson's disease is one of the most common brain diseases, affecting approximately 10 million people worldwide.

It is considered to be a movement disorder because patients can experience tremors, slowness of movement, stiffness and difficulty with walking and balance.

In addition, Parkinson's patients can have other non-motor type problems such as constipation, depression and memory loss.

The Parkinson symptoms are a result of the loss of dopamine-producing cells in the brain, which is currently thought to be caused by a combination of genetic and environmental risk factors.

Mutations in the LRRK2 gene are one of the most common genetic risk factors for Parkinson's disease.

LRRK2 is involved in maintaining a healthy cellular environment by regulating lysosomal function through modification of Rab proteins.

Increased levels of LRRK2 kinase activity lead to lysosomal dysfunction, which is believed to contribute to neurodegeneration.

Inhibition of LRRK2 activity has the potential to slow the progression of Parkinson’s disease in patients, with and without known genetic risks based on restoration of lysosomal function.

As described in more detail in “Business - Licenses and Collaborations” below, we are collaborating with Biogen to co-develop and co-commercialize our small molecule inhibitors of LRRK2 for Parkinson's disease.

BIIB122/DNL151 is the most clinically advanced small molecule inhibitor of LRRK2 currently in clinical testing for Parkinson's disease.

Biogen is conducting the global Phase 2b LUMA study, which commenced in May 2022 and is evaluating the efficacy and safety of BIIB122/DNL151 as compared to placebo in approximately 640 participants with early-stage Parkinson's disease.

Results from Phase 1 and Phase 1b trials of BIIB122/DNL151 in healthy volunteers and patients with Parkinson's disease, respectively, showed robust target and pathway engagement as measured by pS935 LRRK2 and pT73 Rab10 (“pRab10”), respectively.

Furthermore, reduction in total LRRK2 in the CSF demonstrated central target engagement, and a dose-dependent reduction in urine of the lysosomal lipid 22:6-bis[monoacylglycerol] phosphate (“BMP”), a biomarker of lysosomal function, suggested improvement of lysosomal function.

BIIB122/DNL151 was generally well tolerated across a broad range of doses for up to 28 days, the longest treatment duration in both studies.

In June 2023, Denali in conjunction with Biogen, and based on review of portfolio timelines and resource prioritization, announced plans to revise the clinical development program for BIIB122/DNL151.

Prior to the planned revisions, the BIIB122 clinical development program encompassed two global late-stage clinical trials:

the Phase 2b LUMA study in participants with early-stage Parkinson’s disease noted above;

and the Phase 3 LIGHTHOUSE study in participants with Parkinson’s disease related to pathogenic variants of LRRK2, which commenced in September 2022.

In consideration of the LIGHTHOUSE study’s complexity, including the long timeline with anticipated study completion in 2031, we and Biogen agreed to refocus efforts to enable a timely readout on efficacy in idiopathic early-stage Parkinson’s disease while gaining further clinical data in Parkinson’s disease with and without pathogenic variants in LRRK2.

The planned revisions to the BIIB122 clinical development program were not based on any safety or efficacy data from studies of BIIB122.

We have since modified the LUMA study’s enrollment criteria to allow for inclusion of eligible participants with Parkinson’s disease and a confirmed pathogenic variant of LRRK2, in addition to continuing to enroll eligible participants with idiopathic early-stage Parkinson’s disease.

In February 2024, we announced the execution of a Collaboration and Development Funding Agreement in January 2024 with a third party related to a global Phase 2a study of BIIB122/DNL151, which Denali plans to solely operationalize to evaluate safety and biomarkers associated with BIIB122 in participants with Parkinson’s disease and confirmed pathogenic variants of LRRK2.

This agreement includes committed funding of $75.0 million, of which $12.5 million was received in January 2024, and the remainder will be triggered based on time and operational milestones in the study.

Biogen will continue to conduct the ongoing global Phase 2b LUMA study in early-stage Parkinson’s disease.

Denali and Biogen will co-commercialize BIIB122/DNL151 assuming regulatory approval.

The third party will be eligible to receive low single-digit royalties from Denali on annual worldwide net sales of LRRK2 inhibitors for the treatment of Parkinson’s disease, with royalty amounts varying based on the scope of the label .

2024 expected progress and milestones:

• Continue Phase 2b LUMA study in early-stage PD.

• Initiate Phase 2a study in PD related to pathogenic variants of LRRK2.

Other LRRK2 Compounds

Genetic and functional studies have linked LRRK2 and other proteins that modulate lysosomal function to Crohn's disease.

Excessive LRRK2 activity leads to a reduction in lysosomal function, which contributes to the inflammation and intestinal dyshomeostasis that are characteristic of this disorder.

We have discovered potent and selective small molecule inhibitors of LRRK2 and have selected a lead clinical candidate (DNL975) for treatment of Crohn's disease.

As described in more detail in “Business - Licenses and Collaborations” below, we are collaborating with Biogen on the Peripheral LRRK2 program.

Eclitasertib (SAR443122/DNL758) RIPK1 Inhibitor Program for Peripheral Inflammatory Diseases:

As part of our parallel development strategy, we have also developed a number of other structurally diverse CNS-penetrant and peripherally-restricted RIPK1 inhibitor molecules, which are included as part of the collaboration agreement with Sanofi, described in more detail in “Business - Licenses and Collaborations” below.

Sanofi is solely responsible for the development and commercialization of peripherally restricted RIPK1 inhibitors.

In October 2023, Sanofi announced that the development of eclitasertib in cutaneous lupus erythematosus (CLE) was being discontinued because the Phase 2 proof-of-concept study did not meet its primary endpoint (percent change from baseline in Cutaneous Lupus Erythematosus Disease Area

and Severity Index-A (CLASI-A) at week 12).

Eclitasertib was found to be generally well-tolerated.

Sanofi is conducting a Phase 2 study of eclitasertib in patients with ulcerative colitis.

Recruitment for the trial is ongoing.

2024 expected progress and milestones:

• Continue Phase 2 UC study.

EARLY-STAGE CLINICAL AND PRECLINICAL PROGRAMS

TAK-594/DNL593 (PTV:PGRN) Program for FTD-GRN

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There are currently no approved medicines to stop or slow the progression of FTD or FTD-GRN.

As described in more detail in “Business - Licenses and Collaborations” below, we are collaborating with Takeda to co-develop and co-commercialize TAK-594/DNL593 (PTV:PGRN), an investigational, brain-penetrant PGRN replacement therapy enabled by Denali's PTV platform and designed to restore normal levels of PGRN in the brain without interfering with normal PGRN transport and processing.

Preclinical proof of concept demonstrates that PTV enhances brain uptake of recombinant PGRN as well as uptake by multiple cell types in the brain, including neurons and microglia, as compared to non-TV PGRN.

As described in more detail in “Business - Licenses and Collaborations” below, we are collaborating with Takeda to co-develop and co-commercialize TAK-594/DNL593 (PTV:PGRN), an investigational, brain-penetrant PGRN replacement therapy enabled by Denali's PTV platform and designed to restore PGRN levels in the brain without interfering with normal PGRN transport and processing.

Preclinical proof of concept demonstrates that PTV enhances uptake of recombinant PGRN by multiple cell types in the brain, including neurons and microglia, as compared to non-PTV PGRN.

In addition, TAK-594/DNL593 rescued both neurodegeneration and microglial dysfunction in PGRN-deficient mice.

Our improved mechanistic understanding of the role of PGRN in lysosomal function indicates that direct delivery of TAK-594/DNL593 to the brain may be an effective therapeutic approach to increase PGRN levels in lysosomes for the potential treatment of people with certain types of FTD, especially FTD-GRN caused by PGRN deficiency.

Our improved mechanistic understanding of the role of PGRN in lysosomal function indicates that intravenous delivery of TAK-594/DNL593 followed by PTV-enhanced transport to the brain may be an effective therapeutic approach to increase PGRN levels in lysosomes.

Together with Takeda, we initiated a Phase 1/2 clinical trial of TAK-594/DNL593 for FTD-GRN in 2022.

Interim results from Part A of this study evaluating DNL593 in healthy subjects were presented at the Frontotemporal Dementia Prevention Initiative meeting in November 2022 and demonstrated that single doses of DNL593 resulted in substantial increases in CSF PGRN levels suggesting brain delivery of DNL593 was achieved and has the potential to address PGRN deficiency, which drives FTD-GRN disease progression ( Figure 9 ).

Single doses of DNL593 were generally well tolerated, based on blinded safety analysis.

The data support the ongoing recruitment of participants with FTD-GRN in Part B (ascending multiple doses) of the Phase 1/2 study.

2023 expected progress and milestones:

• Final data from Phase 1/2 Part A healthy volunteer study in mid 2023.

• Continued recruitment of participants with FTD-GRN in Part B (ascending multiple doses) of the Phase 1/2 study.

Dose-dependent increase in CSF PGRN in healthy volunteers with intravenous DNL593.

TAK-920/DNL919 (ATV:TREM2) Program for Alzheimer's disease

Dementia affects more than 50 million people worldwide.

Alzheimer's disease is the most common cause of dementia accounting for 60-70% of cases.

TREM2 is a receptor expressed on microglia, the resident immune cells of the brain.

Loss of function TREM2 genetic mutations are strongly associated with an increased risk for Alzheimer's disease;

therefore, activating the receptor could be an efficacious therapeutic strategy.

As described in more detail in “Business - Licenses and Collaborations” below, w e are collaborating with Takeda to co-develop and co-commercialize TAK-920/DNL919 (ATV:TREM2), an investigational, brain-penetrant TREM2 agonist enabled by Denali's PTV platform and designed to activate TREM2 and improve microglial function.

Animal model data demonstrate enhanced brain uptake and biodistribution with TAK-920/DNL919 as compared to a non-ATV TREM2 antibody and improved pharmacodynamic response, including enhanced microglia metabolism and mitochondrial respiration ( Figure 10 ).

ATV:TREM2 shifts most microglia to responsive states compared to standard anti-TREM2 and a control ATV (ATV:CNTL) in mice.

Single cell RNAseq UMAP plots of brain microglia 24h post 10 mg/kg dose in a APP KI;TfR KI mouse model.

Nature Neuroscience , January 12, 2023.

Together with Takeda, we initiated a Phase 1 single ascending dose study in healthy volunteers in the Netherlands in 2022 which is actively enrolling participants.

In January 2022, we announced that the TAK-920/DNL919 Investigational New Drug ("IND") application had been placed on clinical hold by the U.S.

Food and Drug Administration ("FDA").

We plan to continue to engage with the FDA and regulatory authorities in Europe to define the path forward for the TAK-920/DNL919 clinical program, including plans to advance into a Phase 1b study in patients with Alzheimer's disease.

Results from Part A of this study evaluating TAK-594/DNL593 in healthy subjects were presented at the Alzheimer's Association International Conference in July 2023.

Single doses of TAK-594/DNL593 were generally well-tolerated and resulted in substantial increases in CSF PGRN levels, suggesting that brain delivery of TAK-594/DNL593 was achieved and that TAK-594/DNL593 has the potential to address PGRN deficiency ( Figure 11) .

Dose-dependent increase in CSF PGRN in healthy volunteers with intravenous TAK-594/ DNL593.

In January 2024, Denali announced that enrollment and dosing were voluntarily paused in Part B (n=9 dosed to date) of the TAK-594/DNL593 Phase 1/2 study in participants with FTD-GRN to implement protocol modifications.

The pause was based on infusion-related reactions (IRRs) reported in two study participants, one Grade 2 and one Grade 3 in severity and both deemed serious adverse events.

Both study participants’ IRRs resolved within the same day with infusion discontinuation and standard treatment measures.

TAK-594/DNL593 was otherwise well-tolerated in the study, with all other adverse events reported as mild in severity.

The protocol modification will allow for premedication and other measures aimed at reducing the risk of IRRs.

2024 expected progress and milestones:

• Data from the Phase 1 single ascending dose study in healthy volunteers by year-end 2023.

• Resume Part B of the Phase 1/2 study in FTD-GRN.

DNL126 (ETV:SGSH) Program for MPS IIIA (Sanfilippo Syndrome A)

DNL126 (ETV:SGSH) is our second most advanced ETV program following DNL310 (ETV:IDS).

DNL126 is in development for the potential treatment of MPS IIIA (Sanfilippo syndrome A), a rare lysosomal storage disease that causes fatal brain damage.

MPS IIIA is caused by genetic defects that result in a reduction in the lysosomal activity of SGSH, an enzyme responsible for degrading heparan sulfates in the lysosome.

DNL126 is an investigational therapy in development for the potential treatment of MPS IIIA (Sanfilippo syndrome A), a rare LSD that causes fatal brain damage.

MPS IIIA is caused by genetic defects that result in a reduction in the activity of SGSH, an enzyme responsible for degrading heparan sulfates in the lysosome.

There are no approved treatments for MPS IIIA.

Preclinical data demonstrated that DNL126 reduced heparan sulfate in a dose-dependent manner in brain, cerebrospinal fluid and liver in an MPS IIIA model ( Figure 11 ).

Submission of an IND application is planned for the first half of 2023.

In January 2024, we commenced dosing in a Phase 1/2 study of DNL126 in MPS IIIA.

This is a small, multicenter, open-label, Phase 1/2 study to assess the safety, tolerability, pharmacokinetics, pharmacodynamics, and exploratory clinical efficacy of DNL126 in participants with Sanfilippo syndrome Type A (MPS IIIA).

The core study period is 25 weeks (approximately 6 months) and is followed by a 72-week (approximately 18 month) open-label extension.

In February 2024, we presented supportive preclinical data at the 2024 WORLD Symposium TM demonstrating that DNL126 improved lysosomal and microglial morphology, neurodegeneration, and cognitive function in adult MPS IIIA mice.

As shown in ( Figure 12), peripheral treatment with ETV:SGSH lowered substrate accumulation (heparan sulfate) in the brain and in CSF, which was correlated with improved cognitive behavioral performance in adult MPS IIIA mice.

(A) In MPS IIIA mice, treatment with ETV:SGSH (low and high doses) lowered accumulation of heparan sulfate (HS) in the brain and in CSF compared to vehicle-treated mice.

Bar graphs display mean ± SEM and p values:

one-way ANOVA with Dunnett’s multiple comparison test;

**p < 0.01, ****p < 0.0001.

(B) Lower HS levels were correlated with improved cognitive performance of adult MPS IIIA mice on a spatial learning and memory assay, the active place avoidance (APA) task.

Correlations were calculated using nonparametric Spearman’s correlation coefficient with two-tailed 95% confidence intervals.

Correlation graphs depict linear regression line.

2024 expected progress and milestones:

• Submission of an IND application in the first half and Phase 1/2 recruitment activities in the second half of 2023.

12 weekly doses of ETV:SGSH reduces brain, CSF, and liver HS levels in a MPS IIIA mouse model.

• Biomarker proof of concept and safety data from the Phase 1/2 study in late 2024.

DNL622 (ETV:IDUA) for MPS I (Hurler syndrome)

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DNL622 is currently in the IND-enabling stage of preclinical development.

Antibody Transport Vehicle Amyloid beta (ATV:Abeta) program

Targeting Abeta plaques in the brain has been investigated by the field as a therapeutic approach to treat AD, and two Abeta-targeted antibodies have received accelerated approval from the U.S.

These accelerated approvals were based on clinical data demonstrating that treatment was associated with a reduction in the accumulation of Abeta plaque in the brain, a defining feature of AD.

Subsequently, the U.S.

FDA converted one of the antibodies to traditional approval following a determination that a confirmatory trial verified clinical benefit.

Our ATV:Abeta program utilizes the TfR TV platform to enable increased brain exposure and target engagement of anti-Abeta.

In preclinical studies in mice, superior amyloid plaque binding ( Figure 13A ) and reduction ( Figure 13B ) with ATV:Abeta was demonstrated compared to a conventional Abeta antibody, which may enable a wider therapeutic window in treating AD as compared to conventional anti-Abeta therapy.

In addition, Biogen has shown in a mouse model of AD the potential for ATV:Abeta to reduce the risk of amyloid-related imaging abnormalities (ARIA) associated with the treatment of Alzheimer’s disease ( Figure 13C ).

Preclinical data showing superior amyloid plaque binding (A), superior plaque reduction (B), and fewer to no ARIA events (C).

In April 2023, Biogen exercised its exclusive option to license ATV:Abeta using TV TfR and is responsible for its development and commercialization.

2024 expected progress and milestones:

• IND-enabling studies.

Oligonucleotide Transport Vehicle ("OTV") Platform

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Direct injection into the CSF (e.g., intrathecal injection) or certain brain regions has not achieved the robust biodistribution into deep brain tissue, which may be necessary for effective therapeutic activity.

Nonhuman primate data demonstrated that intravenous delivery of an ASO enabled by our OTV technology resulted in broad brain biodistribution of the ASO ( Figure 12 ) and knockdown of target gene expression in all brain cell types, which was superior to intrathecal administration of the ASO.

Nonhuman primate data demonstrated that intravenous delivery of an ASO enabled by our OTV technology resulted in broad brain biodistribution of the ASO ( Figure 14 ), which was superior to intrathecal administration of the ASO.

These data support the potential of our OTV platform to enable peripheral administration of oligonucleotide therapeutics and to address a wide range of neurodegenerative and other neurological diseases.

Denali has selected five ASO targets for further development with a near-term focus on advancing two OTV candidates towards clinical development ( Figure 13 ).

Broad brain biodistribution of an intravenously administered ASO enabled by our OTV technology (right) as compared to limited brain biodistribution of ASO delivered intrathecally (left).

OTV is designed to open a large potential indication space in neurodegeneration and beyond by enabling superior biodistribution of ASOs across brain regions, providing superior knockdown of target gene expression across all cell types, and enabling intravenous dosing of oligonucleotide therapeutics.

Five ASO targets have been selected for further development with a near-term focus on advancing two OTV candidates towards clinical development.

In January, we announced that OTV:MAPT targeting tau for Alzheimer’s disease and OTV:SNCA targeting αSyn for Parkinson’s disease are the first programs in the IND-enabling stage of development.

( Figure 15 ).

As shown in ( Figure 16 ), we have optimized lead ASOs to achieve robust knock-down of human MAPT expression in the hTau x TfRmu/hu mouse brain.

OTV is designed to open a large potential indication space in neurodegeneration and beyond by enabling superior biodistribution of ASOs across brain regions, providing superior knockdown of target gene expression across cell types, and enabling intravenous dosing of oligonucleotide therapeutics for CNS delivery.

OTV:MAPT and OTV:SNCA are lead OTV programs in the IND-enabling stage of development .

OTV:MAPT in an unmodified format achieves approximately 20% knockdown.

After optimizing the OTV molecule through protein, linker, and/or oligonucleotide engineering, the five new OTV:MAPT Leads (L1-L5) provided >50% human MAPT knockdown in hTau x TfRmu/hu KI mice, with L4 providing 75% human MAPT knockdown.

2024 expected progress and milestones:

• IND-enabling studies with OTV:MAPT and OTV:SNCA.

Other TV-Enabled Discovery Programs

Our portfolio includes additional preclinical programs, including programs targeting amyloid beta ("Abeta") (“ATV:Abeta”) and HER2 (“ATV:HER2”).

Targeting Abeta plaques in the brain has been investigated by the field as a therapeutic approach to treat AD, and two Abeta-targeted antibodies, lecanemab and aducanumab, have been approved by the FDA using the Accelerated Approval pathway.

These accelerated approvals were based on clinical data demonstrating that treatment was associated with a reduction in the accumulation of Abeta plaque in the brain, a defining feature of AD.

Our ATV:Abeta utilizes the TV platform to enable increased brain exposure and target engagement of anti-Abeta.

In preclinical studies in mice, we demonstrated a notable difference in ATV:Abeta localization with plaques, and quantification revealed up to a 17-fold increase in ATV:Abeta signal colocalization with plaques compared to a non-TV-enabled Abeta antibody.

This significant increase in target engagement compared to the standard antibody could indicate potential for superior efficacy or an improved therapeutic window.

Biogen has an exclusive option to license ATV:Abeta, which option may be exercised up to the initiation of IND-enabling studies.

Denali continues to use deep scientific expertise in neurodegeneration biology and the BBB to discover and develop medicines and platforms with the focus on programs enabled by the TV and targeting common neurodegenerative disease, including Alzheimer’s and Parkinson’s, and LSDs.

Our portfolio includes additional preclinical programs, including programs targeting TREM2 (“ATV:TREM2”) and HER2 (“ATV:HER2”).

In August 2023 we announced that, in agreement with Takeda, the companies would discontinue clinical development of TAK-920/DNL919 (ATV:TREM2) in Alzheimer’s disease.

This was a strategic decision based on the totality of clinical data emerging from the single ascending dose Phase 1 study of TAK-920/DNL919 in healthy volunteers and in consideration of the rapidly evolving treatment landscape for Alzheimer's disease whereby an understanding of drug combinations with newly approved therapies will be important.

A preliminary analysis of Phase 1 data indicated robust target engagement and effects on microglial biomarkers (e.g., CSF1R, SPP1, IL1RA, IP10, MIP1b, MCP-1), which were consistent with preclinical studies that demonstrated that ATV:TREM2 induced robust changes to a responsive microglial cell state (van Lengerich B, et al.

Nat Neurosci.

In the Phase 1 study, TAK-920/DNL919 was clinically well tolerated at doses with demonstrated changes in CSF biomarkers and there were no serious adverse events or severe treatment emergent adverse events;

however, safety signals of moderate, reversible hematologic effects were observed at the highest dose tested, suggesting a narrow therapeutic window for the Alzheimer’s disease patient population.

The Phase 1 safety findings are believed to be specific to properties of TAK-920/DNL919 and TREM2 biology.

Denali and Takeda will continue to focus research efforts on molecules in preclinical development, including exploration of potential combination therapy given recent new drug approvals in Alzheimer's disease.

Human epidermal growth factor receptor 2 ("HER2") is a growth factor receptor that is over-expressed in multiple cancers, including breast, colorectal, and gastric cancer.

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The data support the potential for ATV:HER2 to treat HER2-positive peripheral tumors and brain metastases and to further validate the potential for TV applications in oncology.

Our Brain-Penetrant Small Molecule Programs

BIIB122/DNL151 LRRK2 Inhibitor Program for Parkinson's disease

Parkinson's disease is one of the most common brain diseases, affecting approximately 10 million people worldwide.

It is commonly thought of as a movement disorder because patients can experience tremors, slowness of movement, stiffness and difficulty with walking and balance.

In addition, Parkinson's patients can have other non-motor type problems such as constipation, depression and memory loss.

The disease results from the loss of dopamine-producing cells in the brain and is likely caused by a combination of genetic and environmental risk factors.

Mutations in the LRRK2 gene are one of the most common genetic risk factors for Parkinson's disease.

LRRK2 is involved in maintaining a healthy cellular environment by regulating lysosomal function through modification of Rab proteins.

Increased levels of LRRK2 kinase activity lead to lysosomal dysfunction, which contributes to neurodegeneration.

Inhibition of LRRK2 activity may slow the progression of Parkinson’s disease in patients, with and without known genetic risks based on restoration of lysosomal function.

BIIB122/DNL151 is the most clinically advanced small molecule inhibitor of LRRK2 currently in clinical testing for Parkinson's disease.

In addition, a dose-dependent reduction in urine of the lysosomal lipid 22:6-bis[monoacylglycerol] phosphate (“BMP”), a biomarker of lysosomal function, was achieved with BIIB122/DNL151 treatment, providing evidence supporting improvement of lysosomal function.

BIIB122/DNL151 was generally well tolerated across a broad range of doses for up to 28 days, the longest treatment duration in both studies.

Biogen is conducting two global late-stage clinical trials of BIIB122/DNL151:

the Phase 2b LUMA study, which commenced in May 2022 and is evaluating the efficacy and safety of BIIB122/DNL151 as compared to placebo in approximately 640 participants with early-stage Parkinson's disease;

and the Phase 3 LIGHTHOUSE study in approximately 400 participants with Parkinson's disease with a confirmed LRRK2 pathogenic variant, which commenced dosing in September 2022.

2023 expected progress and milestones:

• Continued recruitment of participants with Parkinson's disease in the Phase 2b LUMA and Phase 3 LIGHTHOUSE studies.

Other LRRK2 Compounds

Genetic and functional studies have linked LRRK2 and other proteins that modulate lysosomal function to Crohn's disease.

Excessive LRRK2 activity leads to a reduction in lysosomal function, which contributes to the inflammation and intestinal dyshomeostasis that are characteristic of this disorder.

We have discovered potent and selective small molecule inhibitors of LRRK2 and have selected a lead clinical candidate (DNL975) for treatment of Crohn's disease.

As described in more detail in “Business - Licenses and Collaborations” below, we are collaborating with Biogen on the Peripheral LRRK2 program.

SAR443820/DNL788 RIPK1 Inhibitor Program for CNS Disease

Increased RIPK1 activity in the brain drives neuroinflammation and cell necroptosis and contributes to neurodegeneration.

RIPK1 inhibition has been shown to have beneficial effects in preclinical models of ALS, multiple sclerosis (“MS”), Alzheimer's disease, and other diseases.

SAR443820/DNL788 is our lead CNS-penetrant RIPK1 inhibitor in clinical development.

Sanofi completed a Phase 1 trial of SAR443820/DNL788 in healthy volunteers in which robust target engagement was demonstrated at doses that were generally well tolerated.

In 2022, Sanofi commenced dosing in the HIMALAYA global Phase 2 study of SAR443820/DNL788 and expects to enroll approximately 260 participants with ALS.

A Phase 2 study of SAR443820/DNL788 in MS was initiated in January 2023 and is expected to enroll approximately 168 patients.

In addition, we are leading preclinical exploration of SAR443820/DNL788 as a potential treatment for AD.

2023 expected progress and milestones:

• Completion of recruitment of participants with ALS in the Phase 2 HIMALAYA study.

• Ongoing recruitment of MS Phase 2 study.

DNL343 eIF2B Activator Program for ALS

We are developing DNL343 as a novel eIF2B activator with first-in-class potential for the treatment of ALS and other indications.

eIF2B is an intracellular protein complex that regulates protein synthesis and is required for neuronal health and function.

When neurons experience stress, activation of the integrated stress response (ISR) pathway leads to suppression of eIF2B activity, resulting in impaired protein synthesis and formation of stress granules.

Stress granules are thought to be a precursor of TDP-43 aggregation, which is a hallmark pathology in ALS.

DNL343 is designed to activate eIF2B and thereby restore protein synthesis, disperse TDP-43 aggregates, and improve neuronal survival.

Results from a Phase 1 study in healthy volunteers demonstrated that DNL343 was generally well tolerated for up to 14 days of dosing, with robust distribution in the CNS.

Furthermore, biomarker assessments of DNL343 treatment confirmed ISR pathway engagement, demonstrating modulation of ISR-dependent genes and proteins in a dose-dependent manner.

We are conducting a Phase 1b multicenter, randomized, placebo-controlled, double-blind, 28-day trial followed by an 18-month open-label extension, designed to evaluate the safety, pharmacokinetics and pharmacodynamics of DNL343 participants with ALS.

Enrollment in the study is complete with 29 participants.

An interim analysis was performed after 20 participants randomized to receive either DNL343 or placebo had completed the double-blind period of the study.

The interim results demonstrated that once-daily oral dosing with DNL343 for 28 days was generally well tolerated and demonstrated extensive BBB penetration as well as robust inhibition of biomarkers associated with the ISR pathway (ATF4 protein levels and CHAC1 gene expression) in blood samples from study participants at both doses levels of DNL343 ( Figure 14 ).

An interim analysis (n=20) from the ongoing Phase 1b study demonstrated 28-day dosing with DNL343 reduced ISR biomarkers in blood samples from ALS patients.

The data to date continue to support late-stage development of DNL343.

The design phase of the DNL343 regimen is underway for entry into the Phase 2/3 HEALEY ALS Platform Trial led by the Sean M.

Healey & AMG Center for ALS ("Healey Center") at Massachusetts General Hospital ("MGH") in collaboration with the Northeast ALS Consortium ("NEALS") clinical trial network.

Therapeutic candidates that enter the platform trial are chosen by a group of expert ALS scientists and members of the Healey & AMG Center.

2023 expected progress and milestones:

• Final data from the 28-day double-blind, placebo-controlled portion of the Phase 1b study in mid 2023.

• Initiation of Phase 2/3 study in the HEALEY ALS Platform Trial in mid 2023.

Other Programs

SAR443122/DNL758 RIPK1 Inhibitor Program for Peripheral Inflammatory Diseases

Sanofi is conducting two Phase 2 studies of the peripherally-restricted RIPK1 inhibitor SAR443122/DNL758 (eclitasertib), one in patients with CLE and the other in patients with UC.

Sanofi is solely responsible for the development and commercialization of peripherally restricted RIPK1 inhibitors.

2023 expected progress and milestones:

• Primary completion of Phase 2 CLE study in June 2023.

• Continued recruitment of participants with UC in the Phase 2 study.

Licenses and Collaborations

Biogen License and Collaboration Agreement and Right of First Negotiation, Option and License Agreement

In August 2020, we entered into a binding Provisional Collaboration and License Agreement (“Provisional Biogen Collaboration Agreement”) with Biogen Inc.’s subsidiaries, Biogen MA Inc.

(“BIMA”) and Biogen International GmbH (“BIG”) (BIMA and BIG, collectively, “Biogen”) pursuant to which we granted Biogen a license to co-develop and co-commercialize our small molecule LRRK2 inhibitor program (the “LRRK2 Program”), an option to our amyloid beta program utilizing our TV technology platform to cross the BBB as well as one other unnamed program also utilizing our TV technology platform (the “Option Programs”), and a right of first negotiation ("ROFN") with respect to two additional unnamed programs for indications within Alzheimer’s disease, Parkinson’s disease, ALS and MS utilizing our TV technology platform (the “ROFN Programs”), should we decide to seek a collaboration with a third party for such programs.

In October 2020, we entered into a Definitive LRRK2 Collaboration and License Agreement (“LRRK2 Agreement”) and a Right of First Negotiation, Option and License Agreement (the “ROFN and Option Agreement”) with Biogen (collectively the "Biogen Collaboration Agreement").

The material terms of the LRRK2 Agreement and the ROFN and Option Agreement were consistent with, and superseded, the Provisional Biogen Collaboration Agreement.

In October 2020, we entered into a Definitive LRRK2 Collaboration and License Agreement (“LRRK2 Agreement”) pursuant to which we granted Biogen a license to co-develop and co-commercialize our small molecule LRRK2 inhibitor program (the "LRRK2 Program"), and a Right of First Negotiation, Option and License Agreement (the "ROFN and Option Agreement"), pursuant to which we granted an option and right of first negotiation to certain of our programs utilizing our TV technology platform, including our amyloid beta program (collectively the "Biogen Collaboration Agreement"), with Biogen Inc.’s subsidiaries, Biogen MA Inc.

(“BIMA”) and Biogen International GmbH (“BIG”) (BIMA and BIG, collectively, “Biogen”).

In August 2023, we executed an Amendment to the Definitive LRRK2 Collaboration and License Agreement and Waiver of and Amendment to Right of First Negotiation, Option, and License Agreement (the "Biogen Amendment").

LRRK2 Agreement

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Such milestone payments include $375.0 million in development, $375.0 million upon first commercial sale, and $375.0 million in net sales-based milestones.

The Biogen Amendment changed certain milestone criteria while the total amount of development, regulatory, and commercial milestones across all indications remained the same.

We will share profits and losses equally with Biogen for LRRK2 Products in the United States and will share profits and losses in China with Biogen sharing 60% of such profits and losses and us sharing 40% of such profits and losses.

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We and Biogen are jointly developing LRRK2 Products pursuant to a clinical development plan set forth within the LRRK2 Agreement.

We and Biogen share responsibility and costs for global development of LRRK2 Products pursuant to a mutually agreed development plan and budget ("LRRK2 Development Activities"), with Biogen funding 60% of such costs and us funding 40% of such costs.

We and Biogen share responsibility and costs for global development of LRRK2 Products pursuant to a mutually agreed development plan and budget, with Biogen funding 60% of such costs and us funding 40% of such costs.

We have the ability to opt out of the development cost sharing arrangement, as further described below.

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During the term of the LRRK2 Agreement, neither we nor Biogen may conduct preclinical, clinical or commercial activities involving any small molecule that targets LRRK2 as its primary mechanism of action anywhere in the world, unless such molecule is included under the collaboration and only to the extent such activity is permitted under the LRRK2 Agreement or, with respect to Biogen, the molecule is an ASO product that is the subject of a collaboration between Biogen and a particular third party.

Each party may terminate the LRRK2 Agreement in its entirety, if the other party remains in material breach of the LRRK2 Agreement following a cure period to remedy the material breach.

After giving a specified amount of prior notice to us, Biogen may terminate the LRRK2 Agreement for convenience in its entirety, or with respect to one or more specified regions of the world.

We may terminate the LRRK2 Agreement if Biogen fails to conduct meaningful activities to advance the development or commercialization of any LRRK2 Products for a specified period of time, unless Biogen cures such failure within a certain period of time or if Biogen challenges any patents licensed to it under the LRRK2 Agreement.

We and Biogen may each terminate the LRRK2 Agreement in its entirety if the other party is declared insolvent or in similar financial distress.

Following any termination of the LRRK2 Agreement with respect to a particular region (or regions) of the world or termination of the LRRK2 Agreement in its entirety, our rights to each of our LRRK2 inhibitors that were licensed to Biogen will revert to us.

Biogen will conduct certain development, manufacturing and commercialization activities on a transitional basis following termination of the LRRK2 Agreement, as outlined in the LRRK2 Agreement.

If the LRRK2 Agreement is terminated, Biogen will grant us an exclusive license to certain intellectual property controlled by Biogen with respect to such LRRK2 inhibitors.

ROFN and Option Agreement

Option Programs

In addition to the LRRK2 Program, Biogen also received an exclusive option to license two preclinical programs enabled by our TV technology platform, including our ATV:Abeta program and a second program utilizing our TV technology for an undisclosed target, excluding small molecules, AAVs and oligonucleotides (each, an "Option Program").

Biogen’s option may be triggered up to initiation of IND-enabling studies for each program and continues for each program until a specified period of time after delivery of an option data package or 30 business days after the 5th anniversary of the effective date of the Provisional Biogen Collaboration Agreement, whichever is earlier.

ROFN Programs

Further, Biogen will have the right of first negotiation on two additional TV-enabled therapeutics within the fields of Alzheimer’s disease, Parkinson’s disease, ALS and MS should we decide to seek a collaboration with a third party for such programs, but this does not include any of our small molecule, AAVs or oligonucleotide programs.

The ROFN period continues until seven years after the effective date of the Provisional Biogen Collaboration Agreement or the date on which we have offered Biogen two ROFN Programs and for which Biogen has agreed to trigger a ROFN for such program, whichever is earlier.

However, if we do not execute an agreement with a third party with respect to a particular ROFN Program offered to Biogen within a specified amount of time, then Biogen will have one additional right to exercise the ROFN again with respect to such ROFN Program.

Under the ROFN and Option Agreement, Biogen paid us a $160.0 million upfront payment in October 2020.

With respect to the options granted by us to Biogen, if exercised, Biogen is obligated to pay to us an aggregate of up to $270.0 million in option exercise and development milestone payments and an aggregate of up to $325.0 million upon first commercial sale, and up to $290.0 million of net sales-based milestone payments, following the achievement of certain prespecified milestone events and if Biogen exercises both of its options.

Furthermore, Biogen is obligated to pay us royalties in the mid-single digit to mid-teens percentages, depending on the program for which Biogen exercises its option and upon the achievement of certain sales thresholds.

In addition, if Biogen exercises its ROFN with respect to an eligible Denali program, the parties are obligated to negotiate in good faith for a specified period of time regarding the financial and other terms of an agreement pursuant to which Biogen would obtain rights to such program.

License Grant to Option Programs

If Biogen exercises its option with respect to an Option Program, then we will grant Biogen an exclusive, worldwide license under certain intellectual property that we control that is specific to that Option Program, and a non-exclusive license under certain intellectual property that we control that pertains to our TV platform, in each case to develop, manufacture and commercialize products that are the subject of such Option Program.

Option & ROFN Programs

In April 2023, Biogen exercised its option to develop and commercialize our ATV:Abeta program.

As Biogen exercised its option with respect to the ATV:Abeta Program, we granted Biogen an exclusive, worldwide license under certain intellectual property to develop, manufacture, and commercialize products that are the subject of the ATV:Abeta Program.

In August 2023, Biogen agreed to waive the remaining option upon execution of the Biogen Amendment.

In August 2023, upon execution of the Biogen Amendment, Biogen also agreed to waive its right of first negotiation on two additional TV-enabled therapeutics, which we initially granted to Biogen under the ROFN and Option Agreement.

Under the ROFN and Option Agreement, Biogen paid us a $160.0 million upfront payment in October 2020 and a $5.0 million option exercise payment in April 2023 for the ATV:Abeta program.

With respect to the ATV:Abeta license granted by us to Biogen, Biogen is obligated to pay to us an aggregate of up to $142.5 million in development milestone payments, an aggregate of up to $180.0 million upon first commercial sale, and up to $190.0 million of net sales-based milestone payments.

Furthermore, Biogen is obligated to pay us royalties in the mid-single digit percentages, upon the achievement of certain sales thresholds.

Exclusivity of ROFN and Option Agreement

If the applicable option is exercised by Biogen, then until termination or expiration of the ROFN and Option Agreement, neither party may conduct preclinical, clinical or commercial activities involving certain therapeutic products directed to the same target, unless the therapeutic is included under the collaboration and only to the extent such activity is permitted under the ROFN and Option Agreement or the therapeutic is a product that includes AAVs, oligonucleotides or small molecules.

Each party may terminate the ROFN and Option Agreement in its entirety, if the other party remains in material breach of the ROFN and Option Agreement following a cure period to remedy the material breach.

After giving a specified amount of prior notice to us, Biogen may terminate the ROFN and Option Agreement for convenience in its entirety or with respect to any Option Program for one or more specified regions or in its entirety.

We may terminate the ROFN and Option Agreement if Biogen challenges any patents licensed to it under the ROFN and Option Agreement.

We and Biogen may each terminate the ROFN and Option Agreement in its entirety if the other party is declared insolvent or in similar financial distress.

Following any termination of the ROFN and Option Agreement in its entirety or with respect to an Option Program (including with respect to a region), the licenses that we granted to Biogen with respect to each such terminated Option Program will be terminated.

Biogen will conduct certain development, manufacturing and commercialization activities for certain of such products on a transitional basis following termination of the ROFN and Option Agreement, as outlined in the ROFN and Option Agreement.

If the ROFN and Option Agreement is terminated following exercise of the applicable option with respect to an Option Program, Biogen will grant us an exclusive license to certain intellectual property controlled by Biogen with respect to certain of such products that were the subject of such Option Program.

Until termination or expiration of the ROFN and Option Agreement, neither party may conduct preclinical, clinical or commercial activities involving certain therapeutic products directed to ATV TfR :Abeta, unless the therapeutic is included under the collaboration and only to the extent such activity is permitted under the ROFN and Option Agreement or the therapeutic is a product that includes AAVs, oligonucleotides or small molecules.

Each party may terminate the Biogen Collaboration Agreement in its entirety, if the other party remains in material breach of the Biogen Collaboration Agreement following a cure period to remedy the material breach.

After giving a specified amount of prior notice to us, Biogen may terminate the Biogen Collaboration Agreement for convenience in its entirety or, in the case of the LRRK2 Agreement, with respect to one or more specified regions of the world, and in the case of the Biogen Collaboration Agreement, with respect to any Option Program for one or more specified regions or in its entirety.

We may terminate the Biogen Collaboration Agreement if Biogen challenges any patents licensed to it under the Biogen Collaboration Agreement.

We and Biogen may each terminate the Biogen Collaboration Agreement in its entirety if the other party is declared insolvent or in similar financial distress.

Common Stock Purchase Agreement

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

In connection with the sale of shares, we entered into a standstill and stock restriction agreement (the “Standstill Agreement”) with Biogen, pursuant to which Biogen agreed to certain transfer and standstill restrictions, which have now expired, with the exception of certain volume limitations.

Biogen remains entitled to certain demand registration rights for the shares received in the transaction under the terms of the Standstill Agreement.

In August 2020, in connection with our collaboration with Biogen, we entered into a common stock purchase agreement with BIMA, pursuant to which we sold 13,310,243 shares of our common stock to BIMA for an aggregate purchase price of $465.0 million in September 2020.

In connection with the sale of shares, we entered into a standstill and stock restriction agreement (the "Biogen Standstill Agreement") with Biogen, pursuant to which Biogen agreed to certain transfer and standstill restrictions, which have now expired, with the exception of certain volume limitations.

Biogen remains entitled to certain demand registration rights for the shares received in the transaction under the terms of the Biogen Standstill Agreement.

Sanofi Collaboration and License Agreement

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The Sanofi Collaboration Agreement became effective in November 2018 when the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 were satisfied.

We and Sanofi are jointly developing products containing RIPK1 Inhibitors for neurological indications, such as Alzheimer’s disease, ALS and MS, and Sanofi is developing products containing RIPK1 Inhibitors for systemic inflammatory indications, such as CLE and UC.

We and Sanofi are jointly developing products containing RIPK1 Inhibitors for neurological indications, such as Alzheimer’s disease and MS, and Sanofi is developing products containing RIPK1 Inhibitors for systemic inflammatory indications, such as UC.

The Sanofi Collaboration Agreement includes our and Sanofi’s RIPK1 Inhibitors that measurably penetrate the BBB ("CNS Products"), and our and Sanofi’s RIPK1 Inhibitors that do not measurably penetrate the BBB ("Peripheral Products").

The two most advanced RIPK1 Inhibitors in the collaboration

are SAR443820/DNL788 and SAR443122/DNL758.

SAR3443820/DNL788 is a CNS Product that was discovered by us and licensed to Sanofi who has completed Phase 1 trials in healthy volunteers, and is leading two distinct Phase 2 clinical trials in patients with ALS and MS.

SAR443122/DNL758 is a Peripheral Product discovered by us, and licensed to Sanofi who is leading two distinct Phase 2 clinical trials in patients with CLE and UC.

The two most advanced RIPK1 Inhibitors in the collaboration are SAR443820/DNL788, and eclitasertib (SAR443122/DNL758).

SAR443820/DNL788 is a CNS Product that was discovered by us and licensed to Sanofi who has completed Phase 1 trials in healthy volunteers, and is leading a Phase 2 clinical trial in patients with MS.

Eclitasertib is a Peripheral Product discovered by us, and licensed to Sanofi who is leading a Phase 2 clinical trial in patients with UC.

License Grant

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Under the Sanofi Collaboration Agreement, Sanofi is required to make milestone payments up to approximately $1.1 billion upon achievement of certain clinical, regulatory and sales milestone events.

Such milestone payments include $215.0 million in clinical milestone payments and $385.0 million in regulatory milestone payments for CNS Products, as defined, that are developed and approved in the United States, by the European Medicines Agency ("EMA") and in Japan for three indications, including Alzheimer's disease.

Sanofi has made milestone payments of $40.0 million for CNS clinical milestones through December 31, 2022, with an additional $25.0 million earned and received in January 2023 upon commencement of dosing in the Phase 2 study of SAR443820/ DNL788 in patients with MS.

The cumulative earned and potential milestones include $120.0 million in clinical milestone payments, $175.0 million in regulatory milestone payments and $200.0 million in commercial milestone payments for Peripheral Products, as defined, that are developed and approved in the United States, by the EMA and in Japan for three indications.

Sanofi has made milestone payments of $35.0 million for peripheral clinical milestones through December 31, 2022 .

Such milestone payments include $215.0 million in clinical milestone payments and $385.0 million in regulatory milestone payments for CNS Products, as defined, that are developed and approved in the United States, Europe and in Japan for three indications, including Alzheimer's disease.

Sanofi has made payments of $65.0 million for CNS clinical milestones through December 31, 2023.

Sanofi has made payments of $35.0 million for peripheral clinical milestones through December 31, 2023 .

We will share profits and losses equally with Sanofi for CNS Products sold in the United States and China, and receive variable royalties on net sales for CNS Products sold outside of the United States and China and for Peripheral Products sold worldwide, each as further described below.

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We will be responsible, at our cost, for conducting Phase 1 and Phase 2 trials for CNS Products for Alzheimer’s disease and any activities required to support such clinical trials and specific for Alzheimer’s disease.

Sanofi is responsible, at its cost, for all other Phase 1 and Phase 2 trials for CNS Products, including for ALS and MS.

Sanofi is responsible, at its cost, for all other Phase 1 and Phase 2 trials for CNS Products, including for MS.

Sanofi will lead the conduct of all Phase 3 and later stage development trials for CNS Products, with Sanofi and us funding 70% and 30% of such costs, respectively.

The Sanofi Collaboration Agreement contains certain protections for us with respect to Phase 3 development costs not included in the initial budget for the CNS Development Plan agreed by the parties, including a deferral mechanism for costs incurred above the budgeted amounts for such trials and for costs incurred in respect of Phase 3 and other clinical trials not contemplated in the initial CNS Development Plan.

The Sanofi Collaboration Agreement contains certain protections for us with respect to Phase 3 development costs not included in the initial budget for the CNS Development Plan agreed to by the parties, including a deferral mechanism for costs incurred above the budgeted amounts for such trials and for costs incurred in respect of Phase 3 and other clinical trials not contemplated in the initial CNS Development Plan.

In addition, we have the ability to opt out of the cost-profit sharing provisions of the Sanofi Collaboration Agreement, as further described below.

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The option period continued for each target until the first biologic product candidate directed to the relevant target was IND-ready or about five years after selection of the target, whichever was earlier.

Takeda was obligated to pay us up to an aggregate of $25.0 million with respect to each of the programs under the Takeda Collaboration Agreement directed to a target and based upon the achievement of certain preclinical milestone events, up to $55.0 million in total after the ATV:Tau program termination, all of which was received by December 31, 2022 .

Collaboration Activities Following Takeda’s Option Exercise

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We closed the sale to Takeda in February 2018.

At closing, we also entered into a standstill and stock restriction agreement (the “Standstill Agreement”) with Takeda.

Pursuant to the terms of the Standstill Agreement, Takeda agreed to certain transfer and standstill restrictions for a specified period of time following the closing of the sale, which have now expired.

At closing, we also entered into a standstill and stock restriction agreement (the “Takeda Standstill Agreement”) with Takeda.

Pursuant to the terms of the Takeda Standstill Agreement, Takeda agreed to certain transfer and standstill restrictions for a specified period of time following the closing of the sale, which have now expired.

Takeda remains entitled to certain demand registration rights with respect to the Shares following termination of the transfer restrictions if the Shares cannot be resold without restriction pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended (the "Securities Act").

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These include up to $3.0 million in preclinical contingent payments, $30.0 million in clinical contingent payments, $60.0 million in regulatory contingent payments and $150.0 million in commercial contingent payments.

In June 2019, we made a payment of $1.5 million to F-star Ltd upon the achievement of a specified preclinical milestone in the Company's ETV:IDS program.

We have made payments of $49.8 million through December 31, 2023 in the aggregate consisting of up-front, preclinical and clinical contingent consideration.

This contingent consideration payment fully satisfies the Company's clinical contingent consideration obligations under the Purchase Agreement.

Under the terms of the original F-star Collaboration Agreement, we could nominate up to three Fcab targets (“Accepted Fcab Targets”) within the first three years of the date of the F-star Collaboration Agreement.

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Our financial obligations upon entering the agreement with Genentech included an upfront payment of $8.5 million and a technology transfer fee of $1.5 million .

In addition, we may owe Genentech milestone payments upon the achievement of certain development, regulatory and commercial milestones, up to a maximum of $315.0 million in the aggregate.

In addition, we may owe Genentech milestone payments upon the achievement of certain development, regulatory and commercial milestones, up to a maximum of $315.0 million in the aggregate, which are subject to equal cost sharing with Biogen since execution of the Biogen Collaboration Agreement.

These milestones include up to $37.5 million in clinical milestone payments, $102.5 million in regulatory milestone payments and $175.0 million in commercial milestone payments.

In the year ended December 31, 2022, we paid Genentech $12.5 million in milestone payments triggered upon the achievement of specified clinical milestone events in the company's LRRK2 program being developed in collaboration with Biogen, with milestones totaling $15.0 million earned through December 31, 2022 .

We have made milestone payments to Genentech of $15.0 million through December 31, 2023.

In addition, we are obligated to pay royalties on net sales of licensed products ranging from low to high single-digit percentages, with the exact royalty rate dependent on various factors, including (i) whether the compound incorporated in the relevant licensed product is a Genentech-provided compound or a compound acquired or developed by us, (ii) the date a compound was first discovered, derived or optimized by us, (iii) the existence of patent rights covering the relevant licensed product in the relevant country, (iv) the existence of orphan drug exclusivity covering a licensed product that is a Genentech-provided compound and (v) the level of annual net sales of the relevant licensed product.

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We do not currently operate facilities for product manufacturing, storage, distribution or testing.

In August 2021 we entered into, and subsequently amended, a lease for a clinical manufacturing site in Salt Lake City, Utah.

In April 2023 we entered into, and subsequently amended, a lease for a clinical manufacturing site in Salt Lake City, Utah after terminating our previous SLC lease in March 2023.

We plan to use the facility to expand our clinical manufacturing capabilities for biologic therapeutics including the manufacture of materials for toxicology studies and drug substance for early human clinical studies, with the goal of increasing flexibility and speed in advancing new investigational therapies into clinical trials.

The build-out of the Utah site is in process, and we currently expect to gain access to the facility in 2023 and begin manufacturing in 2024.

The build-out of the Utah site is in process, and we currently expect to begin operations and manufacturing at the facility in 2024.

We currently do not need commercial manufacturing capacity.

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Commercialization Plan

We do not currently have any approved drugs and we do not expect to have any approved drugs in the near term.

We do not currently have any approved drugs and we do not expect to have any approved drugs in 2024.

Therefore, we have no sales, marketing or commercial product distribution capabilities at the current time.

Our vision, however, is to become a fully integrated, independent global leader in neurodegeneration with capabilities spanning discovery, development, manufacturing and commercial in order to optimize speed, quality and level of patient access to our medicines.

We look to grow strategically both in terms of therapeutic areas of high unmet need, starting with lysosomal storage diseases with CNS pathology and expanding into large neurodegenerative disorders, as well as from a geographic perspective, with an initial focus on establishing a commercial presence in the United States and the European Union ("EU"), with subsequent global expansion (including China).

We look to grow strategically both in terms of therapeutic areas of high unmet need, starting with LSDs with CNS pathology and expanding into large neurodegenerative disorders, as well as from a geographic perspective, with an initial focus on establishing a commercial presence in the United States and the European Union ("EU"), with subsequent global expansion (including China).

For programs covered by collaboration agreements (including those with Takeda, Sanofi and Biogen), we expect to commercialize only in certain geographies, as defined by the terms of the agreements with the counterpart, and rely on our partners to provide commercialization infrastructure for the rest of the world.

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• Alzheimer’s Disease:

Potentially disease modifying therapeutics are being developed by several large and specialty pharmaceutical and biotechnology companies, including Biogen, Eli Lilly (including Prevail Therapeutics, its wholly owned subsidiary) , Eisai, Roche (including Genentech, its wholly owned subsidiary), Alector and Abbvie in various stages of development.

Treatments currently approved in some geographies for Alzheimer’s Disease include amyloid beta-directed antibody therapies from Biogen and Eisai.

Additionally, potentially disease modifying therapeutics are being developed by several large and specialty pharmaceutical and biotechnology companies, including Eli Lilly (including Prevail Therapeutics, its wholly owned subsidiary), Roche (including Genentech, its wholly owned subsidiary), Alector, and AbbVie in various stages of development.

• Parkinson’s Disease:

Potentially disease modifying therapeutics are being developed by several large and specialty pharmaceutical and biotechnology companies, including Prothena/Roche (including Genentech, its wholly owned subsidiary), Novartis/UCB, Biogen, Ionis, Eli Lilly (including Prevail Therapeutics, its wholly owned subsidiary), AstraZeneca, Takeda, Oncodesign/Servier, and Neuron 23 in various stages of development.

Potentially disease modifying therapeutics are being developed by several large and specialty pharmaceutical and biotechnology companies, including Biogen, Ionis, Amylyx (FDA & Health Canada approval of Relyvrio/Albrioza), AB Science, Novartis, Bristol Myers Squibb, and Calico/Abbvie in various stages of development.

Potentially disease modifying therapeutics are being developed by several large and specialty pharmaceutical and biotechnology companies, including Alector/GSK, Eli Lilly (including Prevail Therapeutics, its wholly owned subsidiary), Passage Bio, Arkuda Therapeutics, Biomarin, Orchard Therapeutics in various stages of development.

• Lysosomal Storage Diseases:

Treatments currently approved in some geographies for ALS include Relyvrio/Albrioza (Amylyx Pharmaceuticals), Radicava (Mitsubishi Tanabe Pharma) and Qalsody (Biogen).

Additionally, potentially disease modifying therapeutics are being developed by several large and specialty pharmaceutical and biotechnology companies, including Clene Nanomedicine, AB Science, Novartis, Bristol Myers Squibb, and Calico/AbbVie in various stages of development.

Potentially disease modifying therapeutics are being developed by several large and specialty pharmaceutical and biotechnology companies, including Alector/GSK, Eli Lilly (including Prevail Therapeutics, its wholly owned subsidiary), Passage Bio, AviadoBio, Vesperbio, Arkuda Therapeutics, Biomarin, and Orchard Therapeutics in various stages of development.

The currently approved treatments for LSDs are enzyme-based therapies.

Various BBB-penetrant and direct to CNS delivered ERTs and gene therapies are being developed by several large and specialty pharmaceutical and biotechnology companies, including JCR Pharmaceuticals, RegenxBio, Homology Medicines, Orchard Therapeutics, Takeda and Ultragenyx in various stages of development.

Various BBB-penetrant and direct to CNS delivered ERTs and gene therapies are being developed by several large and specialty pharmaceutical and biotechnology companies, including JCR Pharmaceuticals, RegenxBio, Kyowa Kirin/Orchard Therapeutics, and Ultragenyx in various stages of development.

In addition, there are companies that are developing technologies that would compete directly with our technologies, including:

• Blood-Brain Barrier Technology:

There are several large and specialty pharmaceutical and biotechnology companies developing BBB delivery technologies that utilize RMT, including Abbvie, biOasis Technologies, ABL Bio, BioArtic, JCR Pharmaceuticals and Roche (including Genentech, its wholly owned subsidiary), among others.

There are several large and specialty pharmaceutical and biotechnology companies developing BBB delivery technologies that utilize RMT, including JCR Pharmaceuticals, Roche (including Genentech, its wholly owned subsidiary), Alector, Bioarctic, Bicycle Therapeutics among others.

Intellectual Property

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For our product candidates and our BBB platform technology, we generally pursue or in-license patent protection covering compositions of matter, methods of use, and manufacture.

We own ten patent families related to our BBB platform technology.

These include a family directed to the composition and sequences of our TfR-binding TVs, which, if issued are expected to expire in 2038, not including any patent term adjustments and any patent term extensions.

We also have two issued U.S.

We own 11 patent families related to our BBB platform technology.

These include a family directed to the composition and sequences of our TfR-binding TVs, the earliest of which are expected to expire in 2038, not including any patent term adjustments and any patent term extensions.

We also have 3 issued U.S.

patents, which are also expected to expire in 2038, not including any patent term adjustments and any patent term extensions, as well as pending patent applications, to other BBB platform technology.

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In addition, we license multiple patent families from F-star, the earliest issued patents of which are expected to expire in 2026, not including any patent term adjustments and any patent term extensions.

ETV Platform, ETV:IDS, and ETV:

SGSH Programs

We own seven patent families directed to our ETV platform and related products, including ETV:IDS and ETV:

This includes an issued U.S.

ETV Platform, ETV:IDS, and ETV:SGSH Programs

We own 10 patent families directed to our ETV platform and related products, including ETV:IDS, ETV:

SGSH, and ETV:IDUA.

This includes 1 issued U.S.

patent, which is expected to expire in 2038, not including any patent term adjustments and any patent term extensions, directed to the composition of matter of our ETV:IDS molecules, including DNL310.

We also own five additional patent families directed to various aspects of our DNL310 program, which if issued, are expected to expire in 2039 or later, all not including any patent term adjustments and any patent term extensions.

Of the seven patent families, two families relate to the composition of matter of our ETV:SGSH structures, including DNL126.

We also own 6 additional patent families directed to various aspects of our DNL310 program, which if issued, are expected to expire in 2039 or later, all not including any patent term adjustments and any patent term extensions.

Of the 10 patent families, 2 families relate to the composition of matter of our ETV:SGSH structures, including DNL126.

Any patents issuing from these families are expected to expire in 2039 and 2041, respectively, not including any patent term adjustments and any patent term extensions.

PTV:PGRN Program

We own four patent families directed to our PTV:PGRN program.

These include two families directed to the composition of matter of our PTV:PGRN structures, including TAK-594/DNL593, which, if issued, are expected to expire in 2039 and 2040, respectively, not including any patent term adjustments and any patent term extensions.

We own 4 patent families directed to our PTV:PGRN program.

This includes an issued U.S.

patent, which is expected to expire in 2040, not including any patent term adjustments and any patent term extensions, directed to the composition of matter of our PTV:PGRN molecules, including TAK-594/DNL593.

We also own an additional patent family directed to the composition of matter of our PTV:PGRN structures, including TAK-594/DNL593, the earliest of which are expected to expire in 2039, not including any patent term adjustments and any patent term extensions.

We also own additional patent families directed to various aspects of our TAK-594/DNL593 program, which, if issued, are expected to expire in 2039 or later, all not including any patent term adjustments and any patent term extensions.

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ATV:TREM2 Program

We own five patent families related to our ATV:TREM2 program.

We own 6 patent families related to our ATV:TREM2 program.

These families include a granted U.S.

patent, which is expected to expire in 2041, not including any patent term adjustments and any patent term extensions, directed to the composition of matter of our ATV:TREM2 molecules, including TAK-920/DNL919.

The other four patent families, if issued, are expected to expire between 2038 and 2040, all not including any patent term adjustments and any patent term extensions.

patent, which is expected to expire in 2041, not including any patent term adjustments and any patent term extensions, directed to the composition of matter of our ATV:TREM2 molecules .

The other 5 patent families, if issued, are expected to expire between 2038 and 2043, all not including any patent term adjustments and any patent term extensions.

Our ATV:TREM2 program is subject to our Takeda collaboration.

Oligonucleotide Transport Vehicle Platform

We own two patent families related to our OTV platform.

These families are directed to compositions and methods of use of our OTVs, and if issued, are expected to expire in 2042 and 2043, not including any patent term adjustments and any patent term extensions.

We own 3 patent families related to our OTV platform.

These families are directed to compositions and methods of use of our OTVs, and if issued, are expected to expire between 2042 and 2043, not including any patent term adjustments and any patent term extensions.

LRRK2 Inhibitor Program

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Furthermore, we own additional patent families that have projected expiration dates in 2038 or later, not accounting for any patent term adjustments and any patent term extensions, related to the LRRK2 program.

We also own a patent family that includes three issued U.S.

We also own a patent family that includes 3 issued U.S.

patents, which are expected to expire in 2037, not including any patent term adjustments and any patent term extensions, directed to the composition of matter of BIIB122/DNL151 and methods of treatment using BIIB122/DNL151, respectively, as well as pending patent applications and granted patents in jurisdictions outside the U.S.

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Our RIPK1 program is subject to our collaboration agreement with Sanofi.

We own five patent families directed to our RIPK1 inhibitor program.

We own 7 patent families directed to our RIPK1 inhibitor program.

These include a family with one issued U.S.

patent, directed to the composition of matter of our current RIPK1 lead, SAR443820/DNL788, which is expected to expire in 2038, not including any patent term adjustments and any patent term extensions.

We also own a patent family that includes two issued U.S.

patents, which are expected to expire in 2037, not including any patent term adjustments and any patent term extensions, and pending patent applications, which are directed to the composition of matter of SAR443122/DNL758 as well as other RIPK1 inhibitor compounds.

We also own a patent family that includes 2 issued U.S.

patents, which are expected to expire in 2037, not including any patent term adjustments and any patent term extensions, and pending patent applications, which include those directed to the composition of matter of eclitasertib (SAR443122/DNL758), as well as other RIPK1 inhibitor compounds.

eIF2b Activator Program

We own seven patent families directed to our eIF2B activator program, including two patent families directed to DNL343 that are expected to expire in 2038 or later, with the remaining families directed to other eIF2B compounds expiring between 2038 and 2040, not including any patent term adjustments and any patent term extensions.

We own 9 patent families directed to our eIF2B activator program, including 4 patent families directed to DNL343 that are expected to expire in 2038 or later, with the remaining families directed to other eIF2B compounds expiring between 2038 and 2040, not including any patent term adjustments and any patent term extensions.

We cannot guarantee that our owned and licensed pending patent applications, or any patent applications that we may in the future file or license from third parties, will result in the issuance of patents.

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• Compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy ("REMS"), and the potential requirement to conduct post-approval studies.

The data required to support an NDA or BLA are generated in two distinct developmental stages:

preclinical and clinical.

The preclinical and clinical testing and approval process requires substantial time, effort and financial resources, and we cannot be certain that any approvals for any future product candidates will be granted on a timely basis, or at all.

Preclinical Studies and IND

The preclinical developmental stage generally involves laboratory evaluations of drug chemistry, formulation and stability, as well as studies to evaluate toxicity in animals, which support subsequent clinical testing.

The preclinical developmental stage generally involves laboratory evaluations of drug chemistry, formulation and stability, as well as studies to evaluate pharmacology, pharmacokinetics and toxicity in animals, which support subsequent clinical testing.

The sponsor must submit the results of the preclinical studies, together with manufacturing information, analytical data, any available clinical data or literature, and a proposed clinical protocol, to the FDA as part of the IND.

An IND is a request for authorization from the FDA to administer an investigational product to humans, and must become effective before human clinical trials may begin.

Preclinical studies include laboratory evaluation of product chemistry and formulation, as well as in vitro and animal studies to assess the potential for adverse events and in some cases to establish a rationale for therapeutic use.

Preclinical studies include laboratory evaluation of product chemistry and formulation, as well as in vitro and animal studies to assess the pharmacology, pharmacokinetics, and potential for adverse events and in some cases to establish a rationale for therapeutic use.

The conduct of preclinical studies is subject to federal regulations and requirements, including GLP regulations for safety/toxicology studies.

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The FDA will accept a well-designed and well-conducted foreign clinical trial not conducted under an IND if the trial was conducted in accordance with GCP requirements and the FDA is able to validate the data through an onsite inspection if deemed necessary.

Clinical trials in the United States generally are conducted in three sequential phases, known as Phase 1, Phase 2 and Phase 3, and may overlap.

Clinical trials in the United States generally are conducted in three sequential phases, known as Phase 1, Phase 2 and Phase 3, which may overlap or be combined:

• Phase I clinical trials generally involve a small number of healthy volunteers or disease-affected patients who are initially exposed to a single dose and then multiple doses of the product candidate.

The primary purpose of these clinical trials is to assess the metabolism, pharmacologic action, and initial side effect tolerability and safety of the drug.

• Phase II clinical trials involve studies in disease-affected patients to determine the dose required to produce the desired benefits.

At the same time, safety and further PK and Parkinson's disease information is collected, possible adverse effects and safety risks are identified, and a preliminary evaluation of efficacy is conducted.

• Phase II clinical trials involve studies in a limited number of disease-affected patients to evaluate the preliminary efficacy, optimal dosages, and dosing schedule and to identify possible adverse side effects and safety risks.

• Phase III clinical trials generally involve a large number of patients at multiple sites and are designed to provide the data necessary to demonstrate the effectiveness of the product for its intended use, its safety in use and to establish the overall benefit/risk relationship of the product and provide an adequate basis for product approval.

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The duration of treatment is often extended to mimic the actual use of a product during marketing.

When these phases overlap or are combined, the trials may be referred to as Phase 1/2 or Phase 2/3.

Post-approval trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval.

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Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that our product candidates do not undergo unacceptable deterioration over their shelf life.

As a result of the COVID-19 pandemic, we may be required to develop and implement additional clinical trial policies and procedures designed to help protect subjects from the COVID-19 virus.

For example, the FDA has issued guidance on conducting clinical trials during the pandemic, which describes a number of considerations for sponsors of clinical trials impacted by the pandemic, including certain reporting requirements, and additional guidance on the good manufacturing practice considerations for responding to COVID-19 infection and other topics.

Recently, President Biden announced that the administration intends to end the COVID-19 national and public health emergencies on May 11, 2023.

The full impact of the termination of the public health emergencies on FDA and other regulatory policies and operations are unclear.

The extent to which the COVID-19 pandemic impacts our business, directly or indirectly through impacts on our contractors and suppliers, preclinical studies and clinical trials will depend on future developments, which are highly uncertain and cannot be predicted with confidence.

We may be required to develop and implement additional clinical trial policies and procedures designed to help protect subjects from the novel coronavirus disease (COVID-19).

For example, in March 2020, the FDA issued guidance, which the FDA subsequently updated, on conducting clinical trials during the pandemic, which describes a number of considerations for sponsors of clinical trials impacted by the pandemic.

In 2021 and 2022, the FDA published a number of industry guidance documents, including updates to previous guidance, related to Good Manufacturing Practices, remote interactive evaluations of drug manufacturing and bioresearch monitoring facilities, and drug product manufacturing and supply chain inspections, among others.

The extent to which the COVID-19 pandemic impacts our business, preclinical studies and clinical trials will depend on future developments, which are highly uncertain and cannot be predicted with confidence.

We may be required to develop and implement additional clinical trial policies and procedures designed to help protect subjects from public health concerns, such as the COVID-19 pandemic.

For example, the FDA has issued various guidance documents on conducting clinical trials during the pandemic, including certain reporting requirements and additional guidance on good manufacturing practice considerations for responding to COVID-19 infection.

NDA/BLA Review Process

Following completion of the clinical trials, data are analyzed to assess whether the investigational product is safe and effective for the proposed indicated use or uses.

The results of preclinical studies and clinical trials are then submitted to the FDA as part of an NDA or BLA, along with proposed labeling, chemistry and manufacturing information to ensure product quality and other relevant data.

The results of preclinical studies and clinical trials are then submitted to the FDA as part of an NDA or BLA, along with the proposed labeling, and information relating to the product's chemistry, manufacturing, and controls, among other information, to ensure consistent product quality, safety, and efficacy.

In short, the NDA or BLA is a request for approval to market the drug or biologic for the specified indication(s) and must contain proof of safety and efficacy for a drug or safety, purity and potency for a biologic.

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Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than we interpret the same data.

If regulatory approval of a product is granted, such approval will be granted for particular indications and may entail limitations on the indicated uses for which such product may be marketed.

For example, the FDA may approve the BLA with a Risk Evaluation and Mitigation Strategy, or REMS, to ensure the benefits of the product outweigh its risks.

A REMS is a safety strategy to manage a known or potential serious risk associated with a product and to enable patients to have continued access to such medicines by managing their safe use, and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

The FDA also may condition approval on, among other things, changes to proposed labeling or the development of adequate controls and specifications.

Once approved, the FDA may withdraw the product approval if compliance with pre- and post-marketing requirements is not maintained or if problems occur after the product reaches the marketplace.

The FDA may require one or more Phase 4 post-market studies and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization, and may limit further marketing of the product based on the results of these post-marketing studies.

Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biological product intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making the product available in the United States for this type of disease or condition will be recovered from sales of the product.

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Orphan drug status in the EU has similar, but not identical, requirements and benefits.

In Catalyst Pharms., Inc.

In view of the court decision in Catalyst Pharms., Inc.

Becerra , 14 F.4th 1299 (11th Cir.

2021), the court disagreed with the FDA’s longstanding position that the orphan drug exclusivity only applies to the approved use or indication within an eligible disease, and not to all uses or indications within the entire disease or condition.

In particular, the circuit court held that the orphan-drug exclusivity for Catalyst’s drug blocked FDA’s approval of another drug for all uses or indications within the same orphan-designated disease, or Lambert-Eaton myasthenic syndrome (LEMS), even though Catalyst’s drug was approved at that time only for use in the treatment of LEMS in adults.

Accordingly, the court ordered the FDA to set aside the approval of a drug indicated for LEMS in children.

This decision created uncertainty in the application of the orphan drug exclusivity.

On January 24, 2023, the FDA published a notice in the Federal Register to clarify that while the agency complies with the court’s order in Catalyst, the FDA intends to continue to apply its longstanding interpretation of the regulations to matters outside of the scope of the Catalyst order – that is, the agency will continue tying the scope of orphan-drug exclusivity to the uses or indications for which a drug is approved, which permits other sponsors to obtain approval of a drug for new uses or indications within the same orphan designated disease or condition that have not yet been approved.

2021), in January 2023, the FDA published a notice in the Federal Register to clarify that while the agency complies with the court’s order in Catalyst, the FDA intends to continue to apply its longstanding interpretation of the regulations to matters outside of the scope of the Catalyst order – that is, the agency will continue tying the scope of orphan-drug exclusivity to the uses or indications for which a drug is approved, which permits other sponsors to obtain approval of a drug for new uses or indications within the same orphan designated disease or condition that have not yet been approved.

It is unclear how future litigation, legislation, agency decisions, and administrative actions will impact the scope of the orphan drug exclusivity.

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If the FDA concludes that a drug or biologic shown to be effective can be safely used only if distribution or use is restricted, it may require such post-marketing restrictions, as it deems necessary to assure safe use of the product.

In December 2022, the Consolidated Appropriations Act, 2023, including the Food and Drug Omnibus Reform Act (FDORA), was signed into law.

FDORA made several changes to the FDA’s authorities and its regulatory framework, including, among other changes, reforms to the accelerated approval pathway, such as requiring the FDA to specify conditions for post-approval study requirements and setting forth procedures for the FDA to withdraw a product on an expedited basis for non-compliance with post-approval requirements.

Further, the Food and Drug Omnibus Reform Act made several changes to the FDA’s authorities and its regulatory framework, including, among other changes, requiring the FDA to specify conditions for post-approval study requirements and setting forth procedures for the FDA to withdraw a product on an expedited basis for non-compliance with post-approval requirements.

Fast track designation, breakthrough therapy designation, priority review, and accelerated approval do not change the standards for approval, but may expedite the development or approval process.

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Similar to the United States, the various phases of preclinical and clinical research in the EU are subject to significant regulatory controls.

Although the EU Clinical Trials Directive 2001/20/EC has sought to harmonize the EU clinical trials regulatory framework, setting out common rules for the control and authorization of clinical trials in the EU, the EU Member States have transposed and applied the provisions of the Directive differently.

This has led to significant variations in the member state regimes.

Under the current regime, before a clinical trial can be initiated it must be approved in each of the EU countries where the trial is to be conducted by two distinct bodies:

the National Competent Authority ("NCA"), and one or more ECs.

Under the current regime all suspected unexpected serious adverse reactions to the investigated drug that occur during the clinical trial have to be reported to the NCA and ECs of the Member State where they occurred.

The EU clinical trials legislation currently is undergoing a transition process mainly aimed at harmonizing and streamlining clinical-trial authorization, simplifying adverse-event reporting procedures, improving the supervision of clinical trials and increasing their transparency.

Clinical Trials Regulation EU No 536/2014, which went into effect on January 31, 2022, will ensure that the rules for conducting clinical trials in the EU will be identical.

In the EU, a clinical trial application, or CTA, must be submitted to each country’s national health authority and an independent ethics committee, respectively.

Once the CTA is approved in accordance with a country’s requirements, clinical study development may proceed.

The clinical studies must be conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.

The Clinical Trials Regulation EU No 536/2014, which replaced the Clinical Trials Directive, entered into application on January 31, 2022.

The Clinical Trials Regulation harmonizes the processes for assessment and supervision of clinical trials throughout the EU.

Under the Regulation, sponsors can submit one online application via a single online platform known as the Clinical Trials Information System (CTIS) for approval to run a clinical trial in several European countries, making it more efficient to carry out such multinational trials.

A transition period applies to clinical trial submissions under the Regulation.

For example, from 31 January 2023 onwards, clinical trial sponsors need to apply via the Clinical Trials Information System to start a clinical trial.

From 31 January 2025, any trials approved under the Clinical Trials Directive that continue running will need to comply with the Clinical Trials Regulation and their sponsors must enter information on the trials in the CTIS.

European Union Drug Review and Approval

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Proposals set forth in the new MHRA guidance will take effect through legislative changes that are subject to parliamentary approval, which may increase the amount of resources and time needed for obtaining regulatory approval in the UK and delay our clinical development and commercialization.

On January 1, 2024, MHRA plans to launch a new streamlined international recognition framework, which will replace the current European Commission Decision Reliance Procedure (ECDRP) and allow the MHRA to rely on or give regard to a European decision or decision of other regulators to grant a new marketing authorization for a product.

On January 1, 2024, MHRA launched a new streamlined international recognition framework replacing the current European Commission Decision Reliance Procedure (ECDRP) and allow the MHRA to rely on or give regard to a European decision or decision of other regulators to grant a new marketing authorization for a product.

Coverage and Reimbursement

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Congressional inquiries and proposed federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs.

For example, under the American Rescue Plan Act of 2021, effective January 1, 2024, the statutory cap on Medicaid Drug Rebate Program rebates that manufacturers pay to state Medicaid programs will be eliminated.

Elimination of this cap may require pharmaceutical manufacturers to pay more in rebates than it receives on the sale of products, which could have a material impact on our business.

In August 2022, Congress passed the Inflation Reduction Act of 2022, which includes prescription drug provisions that have significant implications for the pharmaceutical industry and Medicare beneficiaries, including allowing the federal government to negotiate a maximum fair price for certain high-priced single source Medicare drugs, imposing penalties and excise tax for manufacturers that fail to comply with the drug price negotiation requirements, requiring inflation rebates for all Medicare Part B and Part D drugs, with limited exceptions, if their drug prices increase faster than inflation, and redesigning Medicare Part D to reduce out-of-pocket prescription drug costs for beneficiaries, among other changes.

The impact of these legislative, executive, and administrative actions and any future healthcare measures and agency rules implemented by the Biden administration on us and the pharmaceutical industry as a whole is unclear.

These include allowing the federal government to negotiate a maximum price paid by Medicare for certain single source drugs responsible for significant Medicare spending, imposing penalties and excise tax for manufacturers that fail to comply with the drug price negotiation requirements, requiring inflation rebates for all Medicare Part B and Part D drugs, with limited exceptions, if their drug prices increase faster than inflation, and redesigning Medicare Part D to reduce out-of-pocket prescription drug costs for beneficiaries, among other changes.

Various industry stakeholders, including certain pharmaceutical companies and the Pharmaceutical Research and Manufacturers of America, have initiated lawsuits against the federal government asserting that the price negotiation provisions of the IRA are unconstitutional.

The impact of these judicial challenges, legislative, executive, and administrative actions, and any future healthcare measures and agency rules implemented by the Biden administration on us and the pharmaceutical industry as a whole is unclear.

The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our product candidates if approved.

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What changed 10-K

Item 1. Business