Denali Therapeutics Inc. Common Stock Morgan Stanley 24th Annual Global Healthcare Conference

Great to be here. Yep.

Yeah, I think that it's a great question, and it's a relevant question, and it's a question that we ask in really two levels. One is a biotech community, and specifically here in the U.S., how do we view China from a competitive perspective? Then in our case, talking about it around invention and the blood-brain barrier specifically. I think there's varying views, and I often refrain from talking too much about my general feelings about either politics or regional considerations. But I will say that my general impression is that competition is almost always considered, in my opinion, a good thing, because it will ultimately lead to the very best medicines for patients. The more competition there is, the more invention there is in order to either stay ahead or to find the next best medicine.

That's ultimately who wins in that category are the patients. As a company, you view it a little differently. You'd love to be on an island and have a technology that no one else in the world has, and that technology is essentially needed, and no one else can access it. That's not how biotech works. We all live in this biotech world, and when something shows promise, almost everyone starts pursuing it, from big pharma to mid-size biotech, even academic labs will start going into it. When I look back 20 years ago, when we started working on blood-brain barrier, there was essentially very few or no one working on it. There were a couple academic labs and some obscure companies that were working on blood-brain barrier technologies.

We picked this up 20 years ago, this is prior to the founding of Denali, and just made everything that was in the patent literature and that had been published and asked, "Do any of these technologies get medicines into the brain?" Usually what happens is, if there's not a lot of people working on it, what was first published doesn't really work. People tried the same thing. They made it didn't work. That's not where we are today. With blood-brain barrier technologies, you're now seeing the first FDA-approved medicine in Avlayah, which we launched earlier this year. You're seeing exciting data in Alzheimer's disease, where you can take a standard antibody and put a blood-brain barrier technology on it and get three times faster plaque reduction. As a reality to that, everyone's going to start pursuing it, including in China.

The question is how to stay ahead, how to continue to invent. I think importantly, when you're pioneering a field, it's important to really lay that solid foundation with great science. Recognize you should fear the competition, but if you don't have competition, you're probably going in the wrong direction. My expectation is that China's competition is just going to heat up, including in the blood-brain barrier space, and I think ultimately it should be great for patients.

Yeah. Yeah. It's a timely question as AI starts to take over the world, even in an unmonitored way.

We, I think like many, have started to experience the absolute value in efficiency, and in some cases accuracy, but really efficiency of AI. I think the most important thing is to take repetitive tasks or tasks that may be prone to bias and implement AI in that context. You can do that in the preclinical setting, you can do it in the clinical setting. I know for me personally, I use it all the time in terms of my analysis. I actually sometimes like to compare or even compete with AI to see do I have the ability to still make those independent decisions that maybe my project and Claude couldn't make. The reality is, it's extraordinary. It really accelerates the mundane.

I don't know yet if it's going to accelerate the actual fundamental discovery. Part of that is because you need the data to train it, and biology's complexity is such that I don't know if we have enough data to really train Sure to have that independent thought.

But that doesn't matter. In our world, especially now, we have a proven platform, and that platform we need to apply. So application with example is a great place to use AI. We use it in all aspects of our business. In fact, we reward it, we accelerate it, we find any way we can use it. But I think there are areas where it's more advantageous than others, and I think it's really those repetitive tasks where you're looking for consistency.

Yeah, I think in some ways, I want to say that we had the foresight to do this, but maybe we did, maybe we didn't. But we decided to onshore manufacturing in the U.S. Part of it is, if you look at the cycle of invention and application across biotech, it was the case that everyone externalized manufacturing. I mean, why build your own manufacturing? It's expensive. It takes time. What ended up happening is what used to be inexpensive and super efficient to outsource manufacturing has become extraordinarily expensive because when those are made available, what happens, those companies are trying to really maximize their margins in the way that they interact with biotech. So we made the decision now four years ago to onshore manufacturing.