Ryan Watts is the co-founder and CEO of Denali Therapeutics, a South San Francisco-based biotech he founded after leading neuroscience research at Genentech. At a time when the industry was retreating from neurodegeneration, Watts bet on solving the fundamental barrier of getting biologic medicines into the brain. A decade later, that bet has been validated with an FDA approval for the first novel treatment for Hunter syndrome in 20 years. In this interview, Watts reflects on his entrepreneurial journey, the potential of Denali’s modular TransportVehicle™ platform in other disease areas, and what it takes to carry a biotech through the valley of death in one of medicine's most challenging fields.
What was the motivation behind leaving Genentech to found Denali in a space that has historically been one of the most challenging in drug development?
Eleven years ago, many companies were exiting neuroscience broadly, and neurodegeneration specifically. There had been a series of failures in the Alzheimer’s space and in other neurodegenerative programs, and founding a company focused on the brain was not a popular move at the time.
My background is in neuroscience. I trained as a developmental neurobiologist before entering industry and spent a number of years at Genentech, joining at a point when the organization was harvesting the early fruits of its oncology efforts. It was an extraordinary environment where rigorous science was leading to genuinely transformative medicines, and we believed the same could be true in neuroscience.
The challenge with the brain was multifold. First off, we lacked good biomarkers. Unlike oncology, where you can image a tumor and watch it shrink in response to treatment, the brain does not give you that kind of readout. We also had a limited understanding of the underlying causes of these diseases, though genetics has since improved that considerably. But the biggest challenge, particularly for molecularly targeted medicines, was getting biotherapeutics across the blood-brain barrier.
I started working on that problem 20 years ago, combining my developmental neurobiology background with what I had learned in oncology. Biologic medicines are extraordinary tools because they work with the body’s own systems, but therapeutic antibodies do not readily cross into the brain. Addressing that challenge became the central focus of our research. And so, despite it being counterintuitive to leave an organization like Roche/ Genentech for a field defined by its failures, we took a deliberate, stepwise approach. That was the entry point for founding Denali eleven years ago.
Can you introduce the Denali’s unique scientific platform and the learning process that came with its development?
When we founded Denali eleven years ago, we identified three areas we had to solve: delivery, biology, and biomarkers. We made a deliberate early decision to start with monogenic diseases like Hunter syndrome, Sanfilippo syndrome, and other lysosomal storage diseases as the biology in these conditions is more linear. They are single-gene diseases where the origin is known and the mechanism is a loss of enzyme function. That gave us high confidence that if we could get the right enzyme into the brain, we could address the neurologic manifestations of the disease. It reduced the biological risk and made the challenge primarily a technological one. The question was could we invent a delivery platform that we could then apply across many different medicines?
The TransportVehicle™ (TV) platform is what I think of as the next generation of blood-brain barrier crossing technology. The first generation was proposed in the late 1980s, when researchers identified the possibility of using the iron transporter transferrin receptor to carry therapeutics across the barrier. It has taken over 40 years to take that idea and industrialize it, which gives you a sense of the timeline involved in this kind of work.
When we founded Denali, we had the advantage of decades of prior engineering effort to learn from, even though nobody had cracked the code yet. What is distinctive about our TV platform is that we engineered the binding into the Fc region of a human antibody, the leg of the antibody structure, leaving the arms free for other functions. That allows us to attach different types of cargo or remove the arms entirely to create Fc fusion proteins, which are a well-established class of biologic medicine.
The goal from the beginning was a modular platform capable of transporting different types of biologic medicines into the brain such as enzymes, antibodies, and oligonucleotides. We achieved the core Fc engineering within the first year of founding Denali, and then the question became what cargo to deliver first. That is what led us to Hunter syndrome, where an approved enzyme therapy already existed but could not readily cross into the brain. It was the ideal proof of concept.
What does the FDA approval of tividenofusp alfa-eknm mean for Hunter syndrome patients and their families?
The only previously approved medicine for Hunter syndrome was an enzyme replacement therapy approved in 2006. Hunter syndrome is caused by a mutation in a gene called idursulfase (IDS). It is an X-linked disease, which means it primarily affects boys. These children develop relatively normally up to around age two, learning to walk, to talk, and engaging with their families. Then, typically by ages three and four, neurodevelopment begins to slow, particularly in patients with severe mutations and even on the existing standard of care. Neurologic manifestations emerge. By ages five, six, or seven, many of these patients lose the ability to speak and eventually to walk. Even with the standard of care, the average life expectancy for severe mutations is around 15 years.
The existing enzyme was doing its job in organs like the liver and spleen, where sulfated sugars accumulate, but not in the brain. Brain levels of heparan sulfate, which is both the substrate of the enzyme and the key biomarker for treatment response, remained very high. The idea behind tividenofusp alfa-eknm was to fuse that enzyme to the TransportVehicle and treat the whole body, brain included, through an IV infusion similar in delivery to conventional enzyme replacement therapy.
What we saw, and published in the New England Journal of Medicine, was a dramatic reduction in heparan sulfate in both the brain and the body, alongside improvements in behavior, cognition, and hearing. The biomarker data was definitive. We achieved normalization of heparan sulfate, and we also saw normalization of neurofilament light chain, a marker of neurodegeneration, with a roughly 75 percent reduction. That tells us we are halting neurodegeneration at the cellular level. The most common adverse reaction in the study was infusion-related reactions, which are a known risk of enzyme replacement therapy. That data formed the basis of the filing package that led to the approval of tividenofusp alfa-eknm in March.
Will Denali be leading commercialization and access efforts directly?
It is so exciting to invent a medicine, develop it, and then deliver it to patients yourself. What is unique about some of these rare diseases is that the patient population is defined enough that a single company can do all of that. Our plan is absolutely to manufacture and commercialize tividenofusp alfa-eknm ourselves.
The last three months have been extraordinary. We had our medicine labeled and in channel within two weeks of approval, and our first patient was dosed in a commercial setting within three and a half weeks. The enthusiasm from the patient community has been incredible.
The goal now is to build on this foundation. We have established the Enzyme TransportVehicle platform, which fuses our enzymes to the TransportVehicle, starting with Hunter syndrome and now working on approvals for Sanfilippo syndrome and Pompe disease. That business can be self-sustaining and fund the broader portfolio we will get to in time. Over the last two years we have built a small but focused commercial team to make this launch happen.
What does it take commercially to ensure every eligible patient can access treatment in a rare disease like Hunter syndrome?
Rare diseases are very distinct from common diseases when it comes to the strategy of getting a medicine to patients. It is all about the community. The patient community is involved from the very beginning, including in proving that the medicine works. It is a partnership for the very beginning. Our patient advocacy team has been deeply engaged throughout the process, and being present as the medicine reaches the people it was designed for has personally been the most rewarding part of this entire journey.
In a community like the one living with Hunter syndrome (mucopolysaccharidosis type II, or MPS II), this is an area that has been waiting for real innovation for nearly 20 years. Roughly 70 percent of patients with MPS II have severe neurologic manifestations, and nearly all have some form of neurologic involvement. Whether they experience hearing loss, cognitive changes, behavioral issues, or visual impairment, the unmet need around the neurological component has been enormous. What has been central to our approach is treating the whole body, brain included, and building that case alongside the community rather than presenting it to them after the fact.
A product launch in the rare space is not about marketing. It is about relationships built on trust, rigorous science, and real patient experiences. In smaller disease areas, that is what drives adoption. What has been uniquely motivating for a company like Denali is that many of the scientists who invented these technologies, myself included, are now getting to see what they do at the patient and community level. That is a rare thing in this industry, and it makes you want to do it again.
We see a dozen areas where the TransportVehicle technology can be applied, and we will continue expanding the enzyme franchise into conditions like Sanfilippo syndrome and Pompe disease. It is absolutely doable for a company of our size. While the dynamics are different from a large disease area, in many ways that is an advantage.
Beyond Denali’s own work, what broader developments in neuroscience give you confidence that the field is becoming less challenging and more capable of delivering results in areas that have historically seen very high failure rates?
I keep coming back to the three barriers for success in neurodegenerative drug development: biology, biomarkers, and brain delivery. Working first in rare diseases with neurologic manifestations like Hunter syndrome allowed us to take biology off the table, focus on the brain delivery and biomarker challenges, and then return to the harder biology questions in diseases like Alzheimer’s, Parkinson’s, and ALS with better tools and a clearer framework.
The most dramatic change in the last 20 years has been the evolution of our understanding of the biology and biomarkers of these common diseases, and the foundation for that has been human genetics. In some ways genetics has allowed us to carve out subgroups of rare disease within common diseases. There are mutations that reliably lead to Alzheimer’s, such as mutations in amyloid precursor proteins (APP) that increase amyloid beta production or alter how it aggregates, and those genetic findings have generated a reproducible story about disease causation that extends insights into a much broader patient population. The same is happening in Parkinson’s and, to a lesser extent, ALS.
I think about the potential targets in Alzheimer’s in terms of the trigger, the executioner, and the contributors. The trigger is amyloid beta. There has been debate in the field but the genetic evidence has consistently shown that anything that increases amyloid beta production increases Alzheimer’s risk, and anything that decreases it can be protective. Before founding Denali, we were part of the discovery of a mutation in APP, known as the Icelandic mutation, that reduces amyloid beta production and is highly protective.
The executioner is tau. Recent data increasingly suggests that lowering tau protein levels and tau pathology may be another meaningful way to slow cognitive decline. And then there are the contributors. Many of them are microglial genes which are involved in the brain’s innate immune system and likely influence the link between amyloid and tau. I believe these will represent the drug targets of the future and we are now at a point where several approved medicines can lower amyloid plaque and slow cognitive decline.
The exciting next step is prevention. We now have blood-based biomarkers that can identify amyloid accumulation in the brain even in the absence of overt symptoms. It’s very exciting to think we can intervene at an early stage and delay Alzheimer’s by a decade or two by removing amyloid even before any cognitive deficit appears. Overlay blood-brain barrier delivery technologies that allow faster and more efficient amyloid clearance, and that is where companies like Denali can come in to play.
I was very excited about what’s happening in the Alzheimer’s space. I expect we will see similar progress in Parkinson’s and ALS as the genetics continue to deepen our understanding and the biology becomes less of an unknown.
Can you walk us through the broader Denali pipeline, from Sanfilippo syndrome through to larger indications like Parkinson’s and Alzheimer’s?
What is unique about Denali today is that we have proof of concept with our first approved product, a validated platform that enabled it, and a pipeline that platform can now unlock. We are often asked whether we will stay focused on lysosomal storage diseases. But the company was built around a foundational goal of engineering brain delivery and defeating neurodegeneration. We are achieving that in Hunter syndrome, and we expect to achieve it in Sanfilippo syndrome, which is an even more aggressive degenerative disease. These patients decline rapidly and show very significant volumetric brain changes. It is another compelling area to go after.
The platform has three modalities: enzymes, antibodies, and oligonucleotides. The oligonucleotide story is particularly interesting because we did not initially think it would be achievable to take an oligonucleotide, inject it systemically, get it across the blood-brain barrier, into a specific brain cell, whether a neuron, astrocyte, or microglia, and modulate gene expression. We published that work in Science Translational Medicine in 2024, and we now have our first Oligonucleotide TransportVehicle (DNL628) being tested in humans with Alzheimer’s disease, targeting tau, the executioner I mentioned earlier. We also have an amyloid beta-targeting Antibody TransportVehicle (DNL921) that will begin dosing in humans very soon.
Tividenofusp alfa-eknm has validated the platform, and we now have a robust pipeline behind it. We will continue building out the enzyme franchise because the unmet need remains large and we believe our TransportVehicle is uniquely suited to enzyme delivery. We also believe, as we build momentum from the Hunter syndrome launch, that we can commercialize those subsequent products ourselves as well.
Having worked in a space defined by long timelines and high failure rates, how have you approached investor communication and funding in what has become an increasingly risk-averse biotech environment?
It is very important for Denali that we span multiple areas like rare disease, neuroscience, neurodegeneration, platform biology, and biologics. We have built deep expertise across all of them. But one of the most valuable things we did was study successful biotech companies. I call it a survivor’s analysis, which helped identify what actually leads to a successful biotech. What we learned is that the great success stories took time, great science, resilience, multiple partnerships, and an evolution of the investor base over time. We built Denali with the goal of being one of those companies, not just surviving, but ultimately thriving.
To do that we needed novelty, the ability to invent something that had not been invented before, and we needed to apply it in an area of high unmet need. Starting with enzyme replacement therapies was a deliberate choice. The probability of success for enzyme replacement therapies approaches 90 percent, which is unlike almost any other area in medicine. Oncology has a 93 percent failure rate. Alzheimer’s has historically been close to 99 percent, though recent approvals of amyloid antibodies will start to improve that. We needed a high-probability foundation to build early examples of success before moving into those harder areas.
If I am an investor looking at Denali, that is what I would want to see. A proven enzyme franchise as the foundation, with a clear path to expanding into larger indications like Alzheimer’s and Parkinson’s. We were deliberate about crossing the proverbial valley of death, but we were always thinking about how to thrive long term, not just survive it.
We are now at the most exciting point in Denali’s history. We spent the last decade proving the platform works. Now it is about application, applying the TransportVehicle across a growing pipeline to create best-in-class medicines, in some cases in areas where a therapy already exists but where better delivery, faster onset, or unlocking previously inaccessible targets can meaningfully improve on what is available to patients today.
Has Denali’s first approval generated a positive reaction from investors and Wall Street?
Wall Street is made up of extraordinarily intelligent people, often scientists, physicians, or very seasoned investors, whose goal is to identify years in advance the companies that will survive and ultimately thrive. Over Denali’s eleven years, we have had a strong investor base, and over the last three years we have seen a meaningful evolution of that base, bringing in investors who have watched this space for decades and see the upside clearly.
The short answer is yes, approval always brings increased enthusiasm. And the transition to a commercial company opens the door to a new category of investor, one focused on revenue-generating businesses building toward a broader product portfolio. It is a great time to be at Denali, to be leading it, and to be part of its story.
What is the legacy you are looking to build with Denali, and what kind of company are you building for the long term?
It is great to be recognized as the first to definitively cross the blood-brain barrier with an FDA approved medicine, but that is just the beginning. You cannot rest on solving the delivery problem once. The question now is the application of this technology across many medicines, and that is how we want to be seen. Denali is a company that can execute on that application at scale.
I have been working on the blood-brain barrier for 20 years, and having an FDA-approved platform is an extraordinary milestone. But the most exciting time is still ahead. The platform is proven. Now it is about what we build with it.
Is there any final message you would like to share on behalf of Denali?
Twenty years ago, the first medicine for Hunter syndrome was approved. Twenty years ago, many of us started working on the blood-brain barrier for the first time. Today, we can say we have the first FDA-approved blood-brain barrier delivery technology. But what is truly exciting is what comes next. We have an enzyme franchise with a clear growth path, and real potential in diseases like Alzheimer’s, Parkinson’s, and ALS.
Having worked in Alzheimer’s for two decades, my vision for the future is that through biomarkers we will be able to identify risk early. A blood-based test or genetic test will be able to tell us we are accumulating amyloid plaque. Then we can remove it safely before it causes damage and delay or even prevent the onset of Alzheimer’s altogether. That is what I believe is possible, but it will require delivery technologies that are safe and easy to administer, and biomarkers we trust to translate to clinical benefit. We can already see that working in Hunter syndrome and the application of that same framework to more common diseases is going to be very powerful.
