The two lead molecules (DNL747 and DNL758) target a critical signaling protein known as the receptor-interacting serine/threonine-protein kinase 1 (RIPK1) in the TNF receptor pathway, which regulates inflammation and cell death in tissues throughout the body. The companies plan to study DNL747 in multiple sclerosis (MS), Alzheimer’s disease, and amyotrophic lateral sclerosis (ALS), and DNL758 in systemic inflammatory diseases such as rheumatoid arthritis and psoriasis.

Under the terms of the agreement, Sanofi will make an upfront cash payment to Denali of $125 million, with future development and commercial milestone payments that could exceed $1 billion. Sanofi and Denali will share commercial profits and losses from DNL747 in the U.S. and China equally, while Denali will receive a royalty from Sanofi for other territories for DNL747 and worldwide for DNL758.

Phase 1b and 2 clinical development costs for DNL747 will be fully funded by Sanofi for MS, ALS, and other neurological indications, except in Alzheimer’s disease, which will be funded by Denali. Phase 3 trials for all neurological indications will be jointly funded by Sanofi (70%) and Denali (30%). Sanofi will fully fund the clinical development costs for DNL758 in systemic inflammatory diseases.

“This collaboration with Denali is yet another example of Sanofi’s commitment to accelerate the development of transformative and best-in-class treatments for patients living with serious illnesses,” said Rita Balice-Gordon, Ph.D., global head of Rare and Neurologic Diseases Research at Sanofi. “We look forward to working with Denali on the RIPK1 program as we explore the potential of this mechanism in neurologic and inflammatory diseases.”