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Denali Rises With $217M and Genentech Alumni to Fight Brain Diseases

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use its war chest to bring work in from the outside. Watts and Schuth declined to say where they were looking. When asked if they would license work from Genentech, where they both worked for a decade or more, they declined to comment. “We’re open to partnering with anyone,” says Schuth. “Partnering will be a central part of our strategy, especially in the beginning.” (Genentech’s parent company Roche is not an investor in Denali, Schuth says.)

Several factors have come together to make Denali possible. First, the biotech boom has opened an unprecedented financing window. Second, the cost of genomic sequencing has dropped while the sophistication has increased, opening new insights into disease biology. And a third factor, which Denali will lean on heavily, is a better ability to spot patients who are just showing signs of disease or aren’t showing symptoms at all. Denali, like many drug developers, wants to identify the right patients before embarking upon costly clinical trials. As recent failed Alzheimer’s trials have shown, treating people who are deep into the course of disease seems to have no effect.

“The earlier we can start a treatment, the more likely we are to change the course of disease,” says Denali board member Stacie Weninger. Weninger is executive director of the Fidelity Biosciences Research Initiative, which is part of financial giant Fidelity Investments’ biotech fund.

Other board members are Stephen Knight of Fidelity Biosciences, Doug Cole of Flagship Ventures, Illumina CEO Jay Flatley, Harvard Business School professor Vicki Sato, and Agios Pharmaceuticals CEO David Schenkein.

When asked about Flagship’s investment, the Cambridge, MA-based firm’s CEO Noubar Afeyan had this to say:

“We’ve been very reticent to be in this area for all the reasons that have caused many pharma companies to get out, but we don’t mind being contrarian when the conditions are ripe,” Afeyan said. “And we think that this has pretty interesting potential to be disruptive in an area where the need is huge.”

Marc Tessier-Lavigne

Marc Tessier-Lavigne

The Fidelity commitment is personal. The founder of the financial giant, Edward Johnson II, died of Alzheimer’s disease in 1984, prompting his son and successor, Edward “Ned” Johnson III, to start a huge commitment to fighting the disease. (One of those commitments has been Forum Pharmaceuticals, solely owned by Fidelity Biosciences for most of the past 14 years. As Xconomy reported last month, Forum, in part because of Fidelity’s transition to new CEO Abigail Johnson—Ned’s daughter—wants to bring new investors on board.)

Nelsen said he and Tessier-Lavigne have been talking for some time about starting a neuroscience company. Tessier-Lavigne is on the board of Juno and Agios, which Arch and Flagship both helped start. (He is giving up his board seat at Pfizer (NYSE: PFE).

“I’ve been wanting my entire career to do the ultimate CNS company,” said Nelsen, using the shorthand for “central nervous system,” “but the science was never ready.”

Photo of Denali courtesy of flickr user Nic McPhee via Creative Commons.

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