In December 2017, Denali Therapeutics pulled off what was then biotech’s biggest IPO, pocketing $250 million to develop drugs for Alzheimer’s and Parkinson’s disease. Now, it’s signing on a partner for its Parkinson’s program and netting more than $1 billion in the process.
The South San Francisco-based biotech picks up a $560 upfront payment and a $465 million investment from Biogen, with the potential for another $1.125 billion in milestones if all goes well. Under the deal, the duo will co-develop and co-commercialize small-molecule drugs for Parkinson’s that target mutations in the LRRK2 gene. That includes DNL151, which is expected to enter late-stage clinical trials in 2021.
Biogen also grabs the exclusive option to two preclinical-stage programs for neurodegenerative diseases, as well as the right of first negotiation for two more programs based on Denali’s platform. The partners are keeping details on those under wraps.
If any drugs that come out of the collaboration get approved, Biogen and Denali will sell them together in the U.S. and China, with Biogen taking the rest of the world. They will split development costs 60-40, with Biogen taking the bigger share. As for profits and losses, they’ll divide those along the same lines in China, but 50-50 in the U.S.
“This collaboration will allow us to accelerate the development of our LRRK2 program and gives us the resources to build a fully integrated company with the goal of bringing transformative medicines to patients suffering from neurodegenerative diseases,” said Denali CEO Ryan Watts, Ph.D., in a statement.
The LRRK2 gene codes for a protein called dardarin, which plays a role in the function of lysosomes, commonly thought of as the cell’s garbage disposal. Researchers have identified more than 100 mutations in the LRRK2 gene in patients with Parkinson’s disease. Denali figures that these mutations can impede lysosomal function and may contribute to neurodegeneration.
“Denali’s LRRK2 program is highly complementary to our existing Parkinson’s disease pipeline and its successful development would enhance Biogen’s portfolio of medicines for treating serious neurological and neurodegenerative diseases,” said Biogen CEO Michel Vounatsos, in the statement. “We look forward to leveraging our neurology capabilities and infrastructure with Denali’s scientific expertise to accelerate advancement of this program.”
The partnership comes as Biogen awaits an FDA decision on adcanumab, its once-failed Alzheimer’s candidate, and as it pushes its latest prospect for amyotrophic lateral sclerosis (ALS) through the clinic. And earlier this year, the Big Biotech bet $350 million on a suite of preclinical gene-regulating programs from Sangamo that target multiple central nervous system diseases, including Alzheimer’s and Parkinson’s.