Baillie Gifford-backed Denali secures Takeda as partner
Baillie Gifford-backed US-biotech Denali Therapeutics has secured its first corporate out-licensing deal, just weeks after completing its Nasdaq IPO. Denali, which features in the Scottish Mortgage Investment Trust SMT portfolio, has signed a development deal with Takada covering three programmes for the treatment of Alzheimer’s disease and other neuro-degenerative diseases. These utilise Denali’s Antibody Transport Vehicle (ATV) technology to enhance blood-brain barrier (BBB) penetration.
Under the terms, Takeda will pay Denali $150m — part cash upfront and part an equity buy-in — with further undisclosed payments on achievement of development and commercial milestones, including $90m in preclinical milestones and opt-in payments. These figures are unusually high figure for a preclinical stage deal.
Baillie Gifford was the lead investor in Denali’s $130m Series B financing round in 2016, investing c£20m on behalf of SMT at the equivalent of $4/share. Although the company’s IPO in December was at $18, the shares have since declined and currently trade at $16.70. Nevertheless, SMT is still sitting on a substantial paper profit on its original investment.
The IPO for the neuro-degeneration focused biotech was notable for the sum raised – $250m – and the resulting capitalisation of Denali at $1.7bn, both much larger sums that is typical in a US biotech IPO. The Takeda deal comes immediately ahead of the annual JP Morgan Healthcare conference, the industry’s largest biotech investor conference and one where companies by tradition try to set investor expectations for the rest of the year. Denali will give its first presentation as a public company at the conference on Tuesday.
Pharmaceuticals and biotech represented 11.6% of the SMT’s NAV at the company’s March 2017 balance sheet date, although is likely to represent a higher figure currently. The trust’s largest biotech holding is in Bluebird Bio, a US biotech involved in gene therapy. Bluebird presents at the JP Morgan conference on Tuesday at 7.30am PST (3.30pm GMT) and webcast live.
Baillie Gifford-backed biotech secures Takeda as partner