Denali Therapeutics has raised more than $248 million in its stock market debut, marking the largest biotech IPO of the year. The company will use the cash to support work on its experimental drugs for Parkinson’s disease and other neurodegenerative disorders.
South San Francisco, CA-based Denali priced its offering of 13.8 million shares at $18 apiece late Thursday, right at the midpoint of the $17-$19 per share range it had planned earlier. Denali shares are set to begin trading on the Nasdaq exchange later today under the stock symbol “DNLI.”
In addition to the size of the stock offering, Denali’s IPO is notable for another reason: the company does not yet have clinical data for any of its drugs. Denali’s most advanced compound, Parkinson’s disease drug candidate DNL201, is in Phase 1 studies. The company’s prospectus says IPO proceeds will finance more clinical research on that drug, as well as the start of clinical trials for a second Parkinson’s compound, DNL151. Denali expects to spend up to $25 million on both Parkinson’s compounds.
Another Denali compound, DNL747, is being readied for early-stage clinical trials in both Alzheimer’s disease and amyotrophic lateral sclerosis (ALS), also known as Lou Gehrig’s disease. In Alzheimer’s, Denali will begin a Phase 1 study. The company says the IPO proceeds will also lay the groundwork for mid-stage clinical trials in both Alzheimer’s and ALS. Denali expects to spend up to $35 million on DNL747. Another $45 million to $50 million is earmarked for preclinical research in the company’s antibody and enzyme replacement programs. Last year, Denali spent a total of $75.7 million on research and development, according to the company’s IPO filing.
Denali was founded by former Genentech executives Marc Tessier-Lavigne and Ryan Watts. Tessier-Lavigne, Denali’s chairman and the current president of Stanford University, had previously worked as Genentech’s chief scientific officer. Watts, Denali’s CEO, brings to the position his experience as Genentech’s former director of neuroscience. Alexander Schuth is Denali’s third co-founder and its chief operating officer. At Genentech, he was head of neuroscience partnering.
Before its IPO, Denali had raised nearly $350 million in equity financing from a group of investors that include the state of Alaska’s Permanent Fund, Arch Venture Partners, Flagship Ventures, F-Prime Capital Partners, and FIL Limited.