Subsequent Event

6 Months Ended

Jun. 30, 2020

Subsequent Events [Abstract]

Subsequent Event

Subsequent Event

On August 5, 2020, the Company entered into a binding Provisional Collaboration and License Agreement (“Provisional Collaboration Agreement”) with Biogen Inc.’s subsidiaries Biogen MA, Inc. and Biogen International GmbH (collectively “Biogen”), to co-develop and co-commercialize Denali’s small molecule inhibitors of LRRK2 for Parkinson’s disease. In addition to the LRRK2 program, Biogen will also receive an exclusive option to license two preclinical programs from our TV platform, which aims to improve brain uptake of biotherapeutics, including our Antibody Transport Vehicle (“ATV”): Abeta program (ATV enabled anti-amyloid beta program) and a second program utilizing our TV technology. Further, Biogen will have right of first negotiation on two additional TV-enabled therapeutics, currently at a preclinical stage, should we decide to seek a collaboration for such programs.

Under the terms of the agreement, Biogen will make an upfront payment to Denali of $560 million. Should the LRRK2 program achieve certain development and commercial milestones, Denali will be eligible to receive milestone payments exceeding $1.1 billion as well as profit sharing and royalties. Biogen and Denali will share responsibility and costs for global development (60 percent Biogen; 40 percent Denali), and will share responsibility and costs as well as profits and losses for commercialization in the U.S. (50 percent Biogen; 50 percent Denali) and China (60 percent Biogen and 40 percent Denali). Outside the U.S. and China, Biogen will be responsible for commercialization and pay Denali tiered royalties.

Further, under an associated common stock purchase agreement, Denali will receive proceeds of $465 million for the sale of approximately 13.3 million newly issued shares of Denali common stock at $34.94 per share, representing approximately 11.2 percent of Denali’s outstanding stock.

Closing of the transaction is contingent on satisfaction of requirements under applicable antitrust laws, including the HSR Antitrust Improvements Act of 1976, as amended, in the U.S., and other customary closing conditions, and with respect to the collaboration, execution of a definitive collaboration agreement.