Third quarter 2026
Filed Nov 3, 2026Denali Therapeutics Reports Third Quarter 2026 Financial Results and Business Highlights
AVLAYAH generated $17.8 million of net product revenue in its second full commercial quarter and Denali guided to $30.0 million to $32.0 million for the fourth quarter, while quarterly net income of $70.1 million was driven by a one-time $194.0 million net gain on the sale of a Priority Review Voucher. Research and development and selling, general and administrative expenses increased year over year, and the company reported a loss from operations of $126.8 million.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Product revenue, net, three months ended September 30, 2026GAAP | $17.78M | – | – |
| Total revenue, three months ended September 30, 2026GAAP | 17,778 | – | – |
| Cost of goods sold, three months ended September 30, 2026GAAP | 192 | – | – |
| Research and development, three months ended September 30, 2026GAAP | 106,102 | – | increase of approximately $4.1 million |
| Selling, general and administrative, three months ended September 30, 2026GAAP | 37,485 | – | $2.0 million increase |
| Intangible asset amortization, three months ended September 30, 2026GAAP | 750 | – | – |
| Total operating expenses, three months ended September 30, 2026GAAP | 144,529 | – | – |
| Loss from operations, three months ended September 30, 2026GAAP | (126,751) | – | – |
| Gain on sale of priority review voucher, net, three months ended September 30, 2026GAAP | 194,000 | – | – |
| Interest and other income, net, three months ended September 30, 2026GAAP | 2,877 | – | – |
| Total other income, three months ended September 30, 2026GAAP | 196,877 | – | – |
| Net income (loss), three months ended September 30, 2026GAAP | $70.13M | – | – |
| Basic net income (loss) per share, three months ended September 30, 2026GAAP | $ 0.37 | – | – |
| Diluted net income (loss) per share, three months ended September 30, 2026GAAP | $ 0.37 | – | – |
| Weighted-average shares used in calculating basic net income (loss) per share, three months ended September 30, 2026GAAP | 188,387,660 | – | – |
| Weighted-average shares used in calculating diluted net income (loss) per share, three months ended September 30, 2026GAAP | 192,077,855 | – | – |
| Product revenue, net, nine months ended September 30, 2026GAAP | $21.38M | – | – |
| Total revenue, nine months ended September 30, 2026GAAP | 21,382 | – | – |
| Cost of goods sold, nine months ended September 30, 2026GAAP | 285 | – | – |
| Research and development, nine months ended September 30, 2026GAAP | 306,967 | – | – |
| Selling, general and administrative, nine months ended September 30, 2026GAAP | 107,279 | – | – |
| Intangible asset amortization, nine months ended September 30, 2026GAAP | 1,500 | – | – |
| Total operating expenses, nine months ended September 30, 2026GAAP | 416,031 | – | – |
| Loss from operations, nine months ended September 30, 2026GAAP | (394,649) | – | – |
| Gain on sale of priority review voucher, net, nine months ended September 30, 2026GAAP | 194,000 | – | – |
| Interest and other income, net, nine months ended September 30, 2026GAAP | 14,775 | – | – |
| Total other income, nine months ended September 30, 2026GAAP | 208,775 | – | – |
| Net income (loss), nine months ended September 30, 2026GAAP | −$185.9M | – | – |
| Basic net income (loss) per share, nine months ended September 30, 2026GAAP | $ (0.99) | – | – |
| Diluted net income (loss) per share, nine months ended September 30, 2026GAAP | $ (0.99) | – | – |
| Weighted-average shares used in calculating basic net income (loss) per share, nine months ended September 30, 2026GAAP | 187,452,793 | – | – |
| Weighted-average shares used in calculating diluted net income (loss) per share, nine months ended September 30, 2026GAAP | 187,452,793 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| AVLAYAHThe U.S. launch gained significant momentum, driven by strong demand from families across the eligible patient population, physicians committed to treating their patients and rapidly expanding payer coverage. | $17.8M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Fourth quarter 2026 outlook
- Revenue$30.0 million to $32.0 million
- NoteData from the COMPASS study are expected in the first half of 2028.
- NoteA Biologics License Application submission in 2027 seeking accelerated approval for zafinofusp alfa is on track.
- NoteDenali plans to present additional zafinofusp alfa Phase 1/2 data at a medical congress in the first quarter of 2027.
- NoteDNL593 data are expected in the first half of 2027.
- NoteInitial clinical data for DNL952 are expected in 2027.
- NoteInitial clinical biomarker data for DNL628 are expected in the first half of 2027.
- NoteSafety and clinical proof-of-concept data for DNL921 are expected in 2027.
- NoteData from the DNL151 Phase 2a BEACON study are expected in the first half of 2027.
What drove it
- AVLAYAH net product revenue was $17.8 million in its second full quarter of commercial availability.
- Coverage now exceeds 70% of U.S. commercial lives, up from more than 50% in the prior quarter, and 20 state Medicaid programs have published coverage of AVLAYAH.
- A permanent J-code became effective October 1, 2026, streamlining billing and reimbursement for treatment centers.
- Cost of goods sold was $0.2 million because manufacturing costs incurred prior to FDA approval of AVLAYAH were expensed as research and development.
- The $194.0 million net gain on the sale of a Priority Review Voucher was the principal contributor to quarterly net income.
- Research and development expense increased primarily because of higher external research and development expenses for TV programs.
- Selling, general and administrative expense increased primarily because of higher commercial and medical affairs costs supporting the AVLAYAH launch, along with higher site and personnel costs.
Concerns
- The quarter's $70.1 million net income included a one-time $194.0 million net gain recognized on the sale of a Priority Review Voucher.
- Denali reported a loss from operations of (126,751) for the third quarter of 2026.
- The company reported a net loss of $ (185,874) for the nine months ended September 30, 2026.
- Future AVLAYAH revenue is subject to quarterly variability, and the filing notes the risk that revenue growth may not continue at recent rates.
- Except for AVLAYAH, Denali's product candidates are investigational, and their safety and efficacy profiles have not yet been established.
- Accelerated approval and confirmatory-study risks apply to AVLAYAH and the planned zafinofusp alfa BLA submission.
What to watch
- Fourth-quarter 2026 AVLAYAH net product revenue guidance of $30.0 million to $32.0 million.
- Further AVLAYAH payer coverage expansion following coverage exceeding 70% of U.S. commercial lives and published coverage from 20 state Medicaid programs.
- Additional zafinofusp alfa Phase 1/2 data planned for a medical congress in the first quarter of 2027 and the planned 2027 BLA submission.
- Data expected in the first half of 2027 for DNL593, DNL628 and DNL151.
- Data expected in 2027 for DNL952 and DNL921.
- COMPASS study data expected in the first half of 2028.
Balance sheet and cash flow
- Cash and cash equivalents were $ 102,870 as of September 30, 2026, compared to $ 205,326 as of December 31, 2025.
- Short-term marketable securities were 413,326 as of September 30, 2026, compared to 662,553 as of December 31, 2025.
- Long-term marketable securities were 491,376 as of September 30, 2026, compared to 98,322 as of December 31, 2025.
- Cash, cash equivalents and marketable securities were approximately $1.0 billion as of September 30, 2026.
- Accounts receivable, net were 18,882 as of September 30, 2026, compared to — as of December 31, 2025.
- Inventory was 26,275 as of September 30, 2026, compared to — as of December 31, 2025.
- Total assets were $ 1,256,035 as of September 30, 2026, compared to $ 1,144,854 as of December 31, 2025.
- Total current liabilities were 95,258 as of September 30, 2026, compared to 98,351 as of December 31, 2025.
- Liability related to the revenue participation right agreement was 209,661 as of September 30, 2026, compared to — as of December 31, 2025.
- Total liabilities were 329,648 as of September 30, 2026, compared to 131,093 as of December 31, 2025.
- Total stockholders' equity was 926,387 as of September 30, 2026, compared to 1,013,761 as of December 31, 2025.
Analysis
Denali's third-quarter results reflect the early commercial ramp of AVLAYAH. Net product revenue was $17.8 million in the product's second full quarter of commercial availability, and the company stated that its U.S. launch gained significant momentum. Coverage exceeded 70% of U.S. commercial lives, compared with more than 50% in the prior quarter, while 20 state Medicaid programs had published coverage. The permanent J-code that became effective October 1, 2026 is intended to streamline billing and reimbursement for treatment centers.
The earnings result was not representative of operating profitability. Denali recorded a loss from operations of (126,751), with total operating expenses of 144,529 against total revenue of 17,778. Net income of $70,126 included a one-time gain on sale of priority review voucher, net, of 194,000. Research and development was 106,102 versus 101,950 in the prior-year quarter, primarily reflecting higher external research and development expense for TV programs. Selling, general and administrative expense rose to 37,485 from 35,484, driven by commercial and medical affairs costs for the AVLAYAH launch and higher site and personnel costs.
Product economics during the launch remain affected by pre-approval inventory accounting. Cost of goods sold was 192, and Denali said manufacturing costs incurred before FDA approval had been expensed as research and development. Intangible asset amortization was 750, versus zero in the prior-year quarter, reflecting amortization of the developed technology intangible asset recognized upon AVLAYAH's FDA approval in March 2026.
Liquidity was reported at approximately $1.0 billion of cash, cash equivalents and marketable securities as of September 30, 2026. The balance sheet also carried a liability related to the revenue participation right agreement of 209,661. For the nine months ended September 30, 2026, Denali reported a net loss of $ (185,874), although this was narrower than $ (383,991) in the prior-year period, and research and development expense was 306,967 versus 320,873.
The commercial outlook is centered on fourth-quarter 2026 AVLAYAH net product revenue of $30.0 million to $32.0 million. Pipeline timing is concentrated in 2027: Denali expects data from DNL593, DNL628 and DNL151 in the first half, and data from DNL952 and DNL921 during the year. Zafinofusp alfa remains on track for a 2027 BLA submission seeking accelerated approval, while AVLAYAH's COMPASS confirmatory study data are expected in the first half of 2028.
Management, verbatim
Families and physicians are telling us that AVLAYAH is making a difference for children with Hunter syndrome, and the results this quarter reflect that.
Ryan Watts, Ph.D., Chief Executive Officer of Denali Therapeutics
The positive responses to AVLAYAH across patients, physicians and payers, and our team’s strong commercial execution, show what is possible for our TransportVehicle portfolio.
Ryan Watts, Ph.D., Chief Executive Officer of Denali Therapeutics
Not in the filing
stated, not guessed- Non-GAAP revenue, earnings, operating income, net income, EPS, or other non-GAAP financial measures were not reported.
- Gross profit and gross margin were not reported.
- Operating cash flow and free cash flow were not reported.
- Share repurchases and dividends were not reported.
- A conventional debt balance was not reported.
- Tax expense, tax rate, and tax-rate guidance were not reported.
- Prior-quarter financial comparisons were not reported in the financial statements.
- Prior-period outlook was not provided, so guidance comparisons cannot be made.
- Quantified operating-expense guidance was not reported.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.