Wolfe Research has opened coverage on Denali Therapeutics Inc. (NASDAQ: DNLI) and assigned a Peerperform rating, according to the firm. At the time of the initiation, the stock was trading at $20.95 and Denali carried a market capitalization of $3.25 billion. The shares have risen 8.2% in the last week and 35% over the past six months.
The research note emphasized Denali’s TransportVehicle platform, which Wolfe described as delivering 10 to 30 times greater brain exposure compared with conventional delivery methods across multiple modalities, including enzymes, oligonucleotides, and antibodies. That increased central nervous system exposure has attracted collaborations with multiple biopharmaceutical companies, the firm said.
Wolfe Research took a measured view of the company’s near-term commercial prospects for mucopolysaccharidoses, noting that the immediate opportunity is constrained by small, competitive markets and the presence of multiple gene therapies in development. The firm wrote that Denali’s lead candidate, tividenofusp alfa, is on track for approval in MPS II by the PDUFA date of April 5, 2026, based on biomarker data. The company estimates the patient population for MPS II at roughly 2,000 patients worldwide.
The research note also outlined a second near-term program: DNL126, which remains on schedule to submit a biologics license application next year for MPS IIIA. Wolfe cited an estimated global patient pool for MPS IIIA of about 1,500 individuals. Collectively, Wolfe Research modeled the total MPS franchise to reach approximately $1 billion in global sales over time, a scale that the firm said should support commercial infrastructure and reduce platform-level risk.
Beyond the MPS programs, Wolfe highlighted BIIB122, a LRRK2 inhibitor that the firm considers among the most advanced disease-modifying programs for Parkinson’s disease. Phase 2b LUMA data for BIIB122 is expected this year, the firm noted. Wolfe also said it will monitor Denali’s blood-brain barrier-enabled Alzheimer’s disease programs aimed at both amyloid beta and tau, with early data expected in 2027.
The initiation sits alongside continued positive sentiment from other investment banks. Analysts maintain price targets for Denali spanning $25 to $40. InvestingPro analysis, however, indicates the stock is currently slightly overvalued relative to its Fair Value.
Additional company activity highlighted in the note includes preparations for a potential commercial rollout of tividenofusp alfa for Hunter syndrome should the April 5, 2026 regulatory decision be favorable. Denali has been presenting clinical results at the 22nd Annual WORLDSymposium, showing progress in its Enzyme Transport Vehicle programs for rare diseases such as Hunter syndrome and Sanfilippo syndrome type A.
Several other firms have issued Buy ratings on Denali. Goldman Sachs reiterated a Buy rating with a $35.00 price target, citing progress with the TransportVehicle platform. UBS initiated coverage with a Buy rating and a $25.00 price target, pointing to expectations for FDA approval of DNL310 for Hunter syndrome. Jefferies maintains a Buy rating and a $40.00 price target, while expressing 70% to 80% confidence in FDA approval of Denali’s therapy by the April 5, 2026 PDUFA date.
These analyst views underscore Denali’s strategic focus on advancing its pipeline and achieving key regulatory and clinical milestones through 2026 and into 2027. Wolfe Research’s Peerperform initiation frames the company as a technology-driven biopharma with near-term rare-disease opportunities and a longer-term development agenda targeting neurodegenerative disease mechanisms.
Key points
- Wolfe Research initiated coverage of Denali with a Peerperform rating; stock trading at $20.95 and market cap at $3.25 billion.
- TransportVehicle platform reported to deliver 10-30x greater brain exposure for enzymes, oligonucleotides, and antibodies; platform has attracted external collaborations.
- Near-term focus on MPS franchise with tividenofusp alfa facing an April 5, 2026 PDUFA date; analysts hold price targets from $25 to $40.
Risks and uncertainties
- Regulatory outcome uncertainty tied to the April 5, 2026 PDUFA date for tividenofusp alfa could affect potential commercial launch plans and timing.
- Near-term commercial opportunity for mucopolysaccharidoses is limited by small patient populations and competition from multiple gene therapies in development.
- Market valuation concerns: InvestingPro analysis flags the stock as slightly overvalued relative to Fair Value, which may affect investor expectations and the stock’s performance.