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Denali Stock Surges After Biogen Collaboration

Shares of Denali Therapeutics Inc. (DNLI) were gaining 48 percent in Thursday regular trading, after Biogen Inc. (BIIB) announced a $465 million equity investment as part of a collaboration on Denali's treatment for Parkinson's disease.

As per terms of the deal, Biogen will make an upfront payment to Denali of $560 million, as well as the equity investment by purchasing 13.3 million newly issued shares of Denali at $34.94 per share, which represents 11.2 percent of Denali's pro-forma outstanding stock.

Biogen and Denali will co-develop and co-commercialize Denali's small molecule inhibitors of leucine-rich repeat kinase 2 or LRRK2 for Parkinson's disease.

Denali will be eligible to receive up to $1.125 billion in potential milestone payments, if LRRK2 program achieve certain development and commercial milestones.

Biogen will also receive rights to opt into two programs and a right of first negotiation for two additional programs, in each case for neurodegenerative diseases leveraging Denali's Transport Vehicle (TV) technology platform to cross the blood-brain barrier (BBB).

Biogen and Denali will co-commercialize the LRRK2 product in the U.S. and China, and Biogen will commercialize in all other markets.

Biogen will receive exclusive option rights to two programs for neurodegenerative diseases utilizing Denali's blood-brain barrier crossing TV technology platform, including for amyloid beta, plus right of first negotiation for two additional unnamed TV platform programs.

In Thursday regular trading, DNLI was trading at $34.50, up $11.26 or 48.45 percent.

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