Denali Therapeutics (DNLI): Reassessing Valuation After $275m Royalty Deal and Hunter Syndrome Launch Progress

Denali Therapeutics (DNLI) just locked in a $275 million synthetic royalty deal with Royalty Pharma, providing a major shot of non dilutive cash ahead of a potential tividenofusp alfa launch for Hunter syndrome.

See our latest analysis for Denali Therapeutics.

That funding news lands after a strong run, with a 1 month share price return of 27.35% and a 3 month share price return of 23.14%. However, the 1 year total shareholder return remains a weak negative 18.52%, so momentum looks to be rebuilding from a low base.

If this kind of setup interests you, it could be worth scanning other innovative biotech names through healthcare stocks to see what else the market might be re rating next.

With the stock still trading well below consensus targets despite a sharp recent rebound, is Denali now an underappreciated way to play a potential Hunter syndrome launch, or is the market already baking in that growth?

Price to Book of 3x, Is it Justified?

On a price to book basis, Denali trades at roughly 3 times book value at the last close of $19, pointing to a slight premium versus biotech peers.

Price to book compares the company’s market value with the net assets on its balance sheet. It is often used for early stage or unprofitable biotechs where earnings-based metrics are less meaningful. For Denali, this lens highlights how much investors are willing to pay today for its pipeline, partnerships and future optionality despite negligible current revenue.

Relative to peers, Denali screens attractively against a broad group of companies with an average price to book around 13.3 times. This suggests investors are not aggressively overpaying for its story. However, it still looks a bit expensive versus the narrower US biotechs industry average of 2.5 times. That mix of discount and premium suggests a market that acknowledges Denali’s growth potential yet remains cautious while the business is loss making and is expected to remain unprofitable for several years.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price to Book of 3x (ABOUT RIGHT)

However, investors still face clear risks, including potential setbacks in pivotal Hunter syndrome data and prolonged losses if broader pipeline milestones slip or disappoint.

Find out about the key risks to this Denali Therapeutics narrative.

Build Your Own Denali Therapeutics Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a personalized thesis in just a few minutes: Do it your way.

A great starting point for your Denali Therapeutics research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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