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Denali climbs to the top of the IPO mountain
Posted on Thursday, 07 December 2017 13:55
Denali Therapeutics, a biotechnology company focused on neurodegenerative diseases such as Alzheimer's and Parkinson's, is now gunning for an initial public offering on Nasdaq worth as much as USD 303.47 million.

The Californian life sciences player has upped the ante by increasing the size of its sale from 8.33 million shares at USD 17.00 to USD 19.00 each, plus an overallotment option, to 13.89 million and a 2.08 million green shoe.

Its decision to raise more money may signal a revival in hopes that drugs could be found to treat some of the toughest brain-wasting diseases, an area in which many have tried, and failed, to tackle.

At the top end of the price range and with the overallotment, the IPO could be the largest announced this year by a biotechnology and nanotechnology research company, according to Zephyr, the M&A database published by Bureau van Dijk.

Founded by several former executives of Genentech, Denali is using proceeds and existing resources to drive its programmes through 2019.

This includes funding the costs of phase 1 trials for each of DNL201 and DNL151 and a phase 1b study in LRRK2 mutation-carrying Parkinson’s disease patients.

It should be noted DNL201 is on a partial clinical hold from the Food and Drug Administration because of toxicity concerns found in early research findings.

Unsurprisingly, Denali has incurred net losses in each reporting period since inception, including recording red ink of USD 86.70 million and USD 16.80 million for the years ended 31st December 2016 and 2015, respectively.

The group posted a net loss of USD 65.30 million for the first nine months of 2017, and had an accumulated deficit of USD 168.80 million, as of 30th September 2017.

It is bankrolled by Arch Venture, Flagship Ventures and Fidelity Biosciences; they all took part in what Zephyr shows was the largest-ever first round of venture financing for a biotech company, at USD 217.00 million in May 2015.

This record was overtaken by Immunocore, a UK T cell-based immunotherapies developer which raised USD 320.00 million just months later, in July 2015.

© Zephus Ltd