Denali grants Takeda options to neurology antibodies

Denali Therapeutics Inc. (NASDAQ:DNLI) granted Takeda Pharmaceutical Co. Ltd. (Tokyo:4502) options to co-develop and co-commercialize neurodegenerative disorder candidates ATV:BACE1/Tau, ATV:TREM2 and an undisclosed discovery-stage program.

The biotech is to receive $40 million in upfront cash and a $5 million preclinical milestone upon the deal’s close. Takeda will also invest $110 million in Denali through the purchase of 4.2 million shares at $26.10. The price is a 62% premium to Denali’s close of $16.08 on Jan. 4, the day before the deal was announced. In total, Denali is eligible for another $15 million in option fees, $70 million in preclinical milestones, $707.5 million in clinical and regulatory milestones and $225 million in sales milestones.

Denali will conduct all pre-IND development. If Takeda exercises an option, Denali will take the candidate up to Phase II, after which Takeda will lead development; the companies will share costs and profits equally. Takeda will have exclusive commercialization rights to any approved products, except in the U.S. and China where the partners will share commercialization rights. Denali will have the right to lead U.S. commercialization for one of the candidates. Takeda will lead all commercialization in China.

ATV:BACE1/Tau is a bispecific antibody targeting beta-site APP-cleaving enzyme 1 (BACE1) and tau. The candidate uses Denali’s antibody transport vehicle (ATV) technology, which is designed to facilitate transportation of antibodies across the blood-brain barrier. This year, the company plans to start preclinical efficacy studies of ATV:BACE1/Tau to treat Alzheimer’s disease.

ATV:TREM2 is an ATV-enabled antibody targeting triggering receptor expressed on myeloid cells 2 (TREM2). Denali plans to submit an IND or clinical trial authorization for the candidate in 2020.

On Friday, Denali climbed $0.72 to $16.80. Last month, the company raised $287.5 million in its IPO, including the listing's overallotment. Denali had raised $379.3 million in private funding since its inception in 2015 (see BioCentury Extra, Dec. 8, 2017).