|Denali CEO Ryan Watts|
What're they building in there?
CEO: Ryan Watts
Based: South San Francisco
Clinical focus: Neurodegeneration
The scoop: As head-turning company launch announcements go, it's hard to top coming out of stealth with a $217 million Series A fundraise. And, upping the ante, Denali Therapeutics is putting that money toward finding new treatments for Alzheimer's disease, a field that has long bedeviled biopharma and has an R&D rap sheet littered with decades of failure. But the group of Genentech veterans behind Denali believe they have the ideas and experience to change the narrative in neurodegenerative disease with an ambitious effort to advance multiple clinical candidates.
What makes Denali Therapeutics Fierce: The company made its glitzy debut about four months ago and has essentially maintained radio silence ever since. At launch, Denali's story boiled down to this: A trio of neuroscience experts with stints at Genentech in common had grown frustrated with the industry's tepid approach to neurodegeneration, characterized by hedged bets on individual drugs for broad populations. In contrast, Denali wanted to take a sweeping approach to the field, spotlighting recently discovered genetic drivers of disease and then diving into translational research to see where the science takes them. That pitch caught the attention of some A-list biotech investors, and thus a record-setting fundraise was born.
Now the company is divulging a few more details about its plans without compromising the commitment to confidentiality that CEO Ryan Watts said is key to how Denali does business.
Starting with Genentech: The story of that company's success, told in brief, hinges on the discovery of the molecular mechanisms that differentiate various cancers once thought to be monolithic. Homing in on the genetic drivers of tumor growth, the company developed revolutionary targeted treatments that changed the standard of care. That, more or less, is what Denali wants to do in neuroscience, Watts said. The neurodegeneration field is about a decade behind oncology, but the ongoing discovery of the so-called degenogenes that drive cognitive decline has spotlighted promising new therapeutic targets, he said.
The industry has a long record of failure in the likes of Alzheimer's and Parkinson's diseases in part because recent projects have "lacked this translational rigor that we had in oncology," Watts said, pressing into Phase III with a make-or-break asset and few if any validated biomarkers to adequately measure progress. That model often disincentivizes researchers to get to what Watt calls "the key experiment." If your solitary drug doesn't actually move the needle on its biological target, you don't have a company anymore.
Denali wants to do things differently. Instead of buckling down on a single candidate, the biotech is developing about a dozen, focusing on intracellular trafficking pathways, inflammation, axon degeneration and synapse elimination, among other areas. "There are many targets to harvest now," Watts said, and Denali has identified four of those programs as core assets. The company isn't disclosing any more details about the science behind its pipeline, and Watts declined to specify a timeline for getting into the clinic, saying only that Denali wants to do so "sooner than later."
But Denali will say that it plans to build a wide portfolio of first-in-class treatments for neurodegeneration, advancing on multiple fronts with the help of its unspecified academic collaborators. The goal, in short, is to become the Genentech of neuroscience, an admittedly lofty ambition that helped inform the company's name, Watts said.
Such an expansive approach to neurodegeneration requires a lot of capital and some patient investors, and Denali has both. That combination frees up management to recruit the necessary talent, Watts said, and the company recently added fellow Genentech veterans Carole Ho, as chief medical officer, and Steve Krognes, who serves as chief financial officer. Denali has a staff of about 20, and the company is looking for drug hunters to fill out its ranks, Watts said, scouting for scientists who can match its commitment to finding new therapies.
"We're in it for the long haul," he said. "This is our life's work."
Investors: Fidelity Biosciences, ARCH Venture Partners, Flagship Ventures, the Alaska Permanent Fund and undisclosed others
Ex-Genentech dream team garners $217M to launch neurodegenerative player Denali
-- Damian Garde (email | Twitter)