Collaboration Agreements

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Biogen

In October 2020, the Company entered into a Definitive Collaboration and License Agreement (“LRRK2 Agreement”), pursuant to which it granted Biogen a license to co-develop and co-commercialize its small molecule LRRK2 inhibitor program (the “LRRK2 Program”), and a Right of First Negotiation, Option and License Agreement (the “ROFN and Option Agreement”), pursuant to which it granted an option and right of first negotiation to certain of the Company's programs utilizing our TV technology platform, including its amyloid beta program (collectively the "Biogen Collaboration Agreement"), with Biogen Inc.’s subsidiaries, Biogen MA Inc. (“BIMA”) and Biogen International GmbH (“BIG”) (BIMA and BIG, collectively, “Biogen”). The details of the Biogen Collaboration Agreement and the payments the Company has received, and is entitled to receive, are further described in Note 5, "Collaboration Agreements", to the consolidated financial statements in the 2023 Annual Report on Form 10-K. In August 2023, the Company and Biogen executed an Amendment (the “Biogen Amendment”) to the Biogen Collaboration Agreement. Pursuant to the Biogen Amendment, the schedule of potential LRRK2 Agreement milestones was amended, while maintaining the same total value of milestones that Denali is eligible to receive. In addition, under the Biogen Amendment, Biogen waived its option right to the second option program and waived its rights of first negotiation for two other TV-enabled programs under the ROFN and Option Agreement. The Company has no remaining performance obligations under the Biogen Collaboration Agreement, and therefore no contract liability remained on the Condensed Consolidated Balance Sheets as of March 31, 2024 or December 31, 2023.

There were no changes to the terms of the Biogen Collaboration Agreement during the three months ended March 31, 2024 or 2023. As of December 31, 2023, Biogen was no longer considered a related party as defined in ASC 850.

The Company recorded $4.8 million and $4.2 million of cost sharing payments to Biogen for LRRK2 development activities in research and development expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2024 and 2023, respectively. Cost sharing payments due to Biogen of $4.8 million and $3.2 million were recorded within accounts payable on the Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023, respectively.

As of March 31, 2024, the Company had earned $5.0 million in option fee payments, but had not recorded milestone revenue or product sales under the Biogen Collaboration Agreement.

Sanofi

In October 2018, the Company entered into a Collaboration and License Agreement ("Sanofi Collaboration Agreement") with Genzyme Corporation, a wholly owned subsidiary of Sanofi S.A. ("Sanofi"). The details of the Sanofi Collaboration Agreement and the payments the Company has received, and is entitled to receive, are further described in Note 5, "Collaboration Agreements", to the consolidated financial statements in the Company's 2023 Annual Report on Form 10-K. The Company has no remaining performance obligations under the Sanofi Collaboration Agreement, and therefore no contract liability remains on the Condensed Consolidated Balance Sheets as of March 31, 2024 or December 31, 2023.

There were no changes to the terms of the Sanofi Collaboration Agreement during the three months ended March 31, 2024 or 2023. As of March 31, 2024, the Company had earned milestone payments of $100.0 million and had not recorded any product sales under the Sanofi Collaboration Agreement.

Takeda

PTV:PGRN and ATV:TREM2 Collaboration Agreements

In January 2018, the Company entered into a Collaboration and Option Agreement ("Takeda Collaboration Agreement") with Takeda Pharmaceutical Company Limited ("Takeda"). The details of the Takeda Collaboration Agreement are further described in Note 5, "Collaboration Agreements", to the consolidated financial statements in the Company's 2023 Annual Report on Form 10-K. There are no remaining performance obligations or potential payments remaining under the initial Takeda Collaboration Agreement.

The opt-in by Takeda on the PTV:PGRN and ATV:TREM2 programs represented two new contracts with a customer for accounting purposes (the "PTV:PGRN Collaboration Agreement" and the "ATV:TREM2 Collaboration Agreement"), both of which became effective in December 2021. The details of the PTV:PGRN Collaboration Agreement and the ATV:TREM2 Collaboration Agreement are further described in Note 5, "Collaboration Agreements", to the consolidated financial statements in the Company's 2023 Annual Report on Form 10-K.

There were no changes to the terms of the ATV:TREM2 or PTV:PGRN Collaboration Agreements during the three months ended March 31, 2024 or 2023.

The Company recorded $1.2 million and $1.5 million of cost sharing reimbursements for PTV:PGRN development activities, and $0.5 million and $1.7 million for ATV:TREM2 development activities, for the three months ended March 31, 2024 and 2023, respectively, as offsets to research and development expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Cost sharing reimbursements of $1.9 million and $2.7 million were recorded as a receivable within prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023, respectively.

As of March 31, 2024, the Company had earned an aggregate of $10.0 million in option fee payments and $10.0 million in milestone payments from Takeda under the PTV:PGRN and ATV:TREM2 Collaboration Agreements, and had not recorded any product sales under either agreement.

Collaboration Revenue

Revenue disaggregated by collaboration agreement and performance obligation is as follows (in thousands):


	Three Months Ended March 31,
	2024		2023
Takeda Collaboration Agreement:

PTV:PGRN Collaboration Agreement(1)	$	—	$	10,000

Total Takeda Collaboration Revenue	—		10,000
Sanofi Collaboration Agreement
CNS Program License(2)	—		25,000



Total Sanofi Collaboration Revenue	—		25,000
Biogen Collaboration Agreement


Option Research Services(3)	—		141
Total Biogen Collaboration Revenue	—		141
Total Collaboration Revenue	$	—	$	35,141

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(1)Revenue for the three months ended March 31, 2023 from a specified clinical milestone in the Phase 1/2 clinical of DNL593 in patients with frontotemporal dementia-granulin (FTD-GRN).

(2)Revenue for the three months ended March 31, 2023 from a milestone payment triggered and received in January 2023 upon the commencement of dosing in a Phase 2 study of SAR443820/DNL788 in individuals with multiple sclerosis.

(3)Revenue for the three months ended March 31, 2023 was included in the contract liability balance at the beginning of the period.