Denali Therapeutics Inc (NASDAQ:DNLI) announced earlier this month that it secured a collaborative deal, as well as a share purchase agreement with Biogen Inc (NASDAQ:BIIB).
The announcement reveals an interesting scenario where two pharmaceutical companies tap into their synergies to achieve a common goal. In this case, the collaboration between the two is a Definitive LRRK2 Collaboration that features a Right of First Negotiation and a license agreement through which they will develop treatments for neurodegenerative diseases. The new collaborative deal is related to the provisional partnership and license deal between Biogen and Denali which aims to focus on therapies for neurodegenerative diseases.
Biogen will pay an upfront $560 million to Denali as part of the recently signed deal. Biogen also acquired 13,310,243 newly issued Denali common shares on September 22 as part of their share purchase agreement, at $34.94 per share.
What type of project will the two companies be working on?
The two biopharma will develop LRRK2, a small molecule leucine-rich repeat kinase 2 that Denali developed. The goal is to focus on LRRK2 as a potential treatment for Parkinson’s disease. Once they achieve the pipeline or developmental goals, the next phase of the partnership will be to commercially roll out the treatment in China and the U.S. The two companies will share the global development costs for LRRK2. They will also share any profits or losses that will be related to their joint pursuits.
Denali will handle the LRRK2 commercialization in the U.S and China while Biogen will handle commercialization in other global markets. However, Biogen will pay tier loyalties to Denali as per their agreement. Denali will also receive $1.125 billion upon the fulfillment of various developmental milestones for Parkinson’s disease treatment.
Biogen will also have exclusive option rights to exercise two neurodegenerative disease programs that use Denali’s technology platform called BBB-crossing transport vehicle (TV ). Biogen will also have the rights to two extra TV platform programs that have not yet been named in case Denali decides to be part of such programs. Biogen will however have a limited time window to exercise the options.