Acquisition, License Agreement and Research and Development Funding Collaboration Agreement

12 Months Ended

Dec. 31, 2025

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Acquisition, License Agreement and Research and Development Funding Collaboration Agreement

Acquisition, License Agreement and Research and Development Funding Collaboration Agreement

Acquisition of F-star Gamma

In May 2018, the Company exercised an option to acquire all of the outstanding shares of F-star Gamma Limited ("F-star Gamma") pursuant to a prenegotiated buy-out option agreement (the "Acquisition"). As a result of the Acquisition, F-star Gamma became a wholly-owned subsidiary of the Company and the Company changed the entity’s name to Denali BBB Holding Limited. In addition, the Company became a direct licensee of certain intellectual property of F-star Biotechnology Limited (“F-Star Ltd”) by way of the Company’s assumption of F-star Gamma’s license agreement with F-star Ltd, dated August 24, 2016, (the “F-star Gamma License”). The transaction was accounted for as an asset acquisition.

The Acquisition obligates the Company to make certain contingent payments to former shareholders and under the F-star Gamma license. In 2023, the Company incurred $30.0 million in R&D expenses upon the achievement of a clinical milestone. There was no contingent consideration expense recognized for the years ended December 31, 2025 or 2024. Under this arrangement, the Company may be required to make additional contingent consideration payments of up to $210.0 million, consisting of up to $60.0 million in regulatory contingent payments, including $36.0 million due upon regulatory approval of tividenofusp alfa in the United States, and up to $150.0 million in commercial contingent payments.

Genentech License Agreement

In June 2016, the Company entered into an Exclusive License Agreement with Genentech, Inc. (“Genentech”), giving the Company access to Genentech’s LRRK2 inhibitor small molecule program for Parkinson's disease. The Company may owe Genentech milestone payments upon the achievement of certain development, regulatory, and commercial milestones, up to a maximum of $315.0 million in the aggregate, including up to $37.5 million in clinical milestone payments, $102.5 million in regulatory milestone payments and $175.0 million in commercial milestone payments. In addition, the Company may owe royalties on net sales of licensed products ranging from low to high single-digit percentages.

The Company has made a total of $25.0 million in consideration payments under the Genentech agreement. The Company did not recognize expenses under this agreement in the years ended December 31, 2025, 2024 or 2023.

Collaboration and Development Funding Agreement

In January 2024, the Company entered into a Collaboration and Development Funding Agreement with an unrelated third party, which obligates this third party to provide up to $75.0 million of funding and collaborate with the Company to conduct a global Phase 2a study of BIIB122/DNL151 in patients with Parkinson’s disease and confirmed pathogenic variants of LRRK2.

Pursuant to this agreement, the Company has received payments totaling $50.0 million as of December 31, 2025, with the remainder to be paid upon achievement of operational milestones in the study. After the full $75.0 million in consideration has been paid, the third party will be eligible to receive low single-digit royalties from the Company on annual worldwide net sales of LRRK2 inhibitors for the treatment of Parkinson’s disease.

The Company determined that this arrangement is an R&D funding arrangement under ASC 730. As the third party is sharing in the risk associated with research and development activities with the Company, the development funding is recognized as an obligation to perform contractual services. Accordingly, payments received are recorded as a liability, and recognized by the Company as a reduction to research and development expenses over the estimated Phase 2a study period as the underlying research and development costs are incurred. Under this arrangement, the Company recognized an offset to research and development expenses of $18.0 million and $10.9 million in the Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2025 and 2024, respectively. The Company recorded current deferred research and development funding liabilities of $21.1 million and $14.1 million on the Consolidated Balance Sheets as of December 31, 2025, and 2024, respectively