Denali Therapeutics' (DNLI) investors will now look at its other pipeline assets and broader platform validation after its phase 2b trial for BIIB122 treating idiopathic Parkinson's disease failed to meet the primary and secondary endpoints, Morgan Stanley said in a Friday note.
Despite clear target engagement, the lack of clinical benefit has led to the halt of BIIB122 development in idiopathic Parkinson's disease, according to the note. Denali will independently continue development of the phase 2a study for the drug, now called DNL151, in carriers of a pathogenic LRRK2 variant, according to the note.
The company's TransportVehicle platform is designed to enable large-molecule biologics to cross into the brain, in contrast with the small-molecule approach of the original trial, Morgan Stanley analysts noted.
In the new phase 2a study, clinical efficacy remains unproven, and biomarker success may not result in positive outcomes, according to the note. The new study is not likely to offset the failure of the original trial in the near term, the analysts said.
Morgan Stanley revised its 2026 GAAP EPS estimates to $2.80 from $2.93, 2027 estimates to $2.07 from $2.63, and 2028 estimates to $1.72 from $2.36.
Morgan Stanley maintained the company's stock rating at overweight and lowered the price target to $35 from $40.
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