EX-10.18



 Exhibit 10.18 

DENALI THERAPEUTICS INC. 

STANDSTILL AND STOCK RESTRICTION AGREEMENT 

This Standstill and Stock Restriction Agreement (this “Agreement”) is made as of February 23, 2018 (“Effective
Date”) by and among Denali Therapeutics Inc., a Delaware corporation (the “Company”) and Takeda Pharmaceutical Company Limited, a corporation organized under the laws of Japan (the “Investor”). 

WHEREAS, the Investor has agreed to purchase shares of the Company’s Common Stock (the “Shares”) pursuant to that
certain Common Stock Purchase Agreement of even date herewith, by and between the Company and the Investor (the “Purchase Agreement”). 

WHEREAS, it is a condition to the Closing (as defined in the Purchase Agreement) of the sale of the Shares that the Company and Investor
execute and deliver this Agreement. 
 NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, and other
consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows: 

1.    Standstill. Investor hereby agrees that, without the prior approval of the Board (as defined in the
Purchase Agreement), Investor shall not and shall not permit or cause any Affiliate (as defined in the Purchase Agreement) or Representative of Investor to: 

(a)    acting alone or with others, acquire, offer to acquire, or agree to acquire, directly or indirectly, by purchase,
merger, business combination or in any other manner, any voting securities or direct or indirect rights to acquire any securities of the Company or any subsidiary thereof, or of any successor to or person in control of the Company if after such
acquisition Investor, together with its Affiliates, would own more than 10% of the outstanding capital stock of the Company or voting power of the Company, or any assets of the Company or any subsidiary or division thereof or of any such successor
or controlling person; provided that any investment by Investor or an Affiliate of Investor in third-party mutual funds or other similar passive investment vehicles that hold interests in securities of the Company or any of its Affiliates shall not
be taken into account for the purpose of this subparagraph (a); 
 (b)    enter into any voting agreements, trusts or
similar arrangements with respect to voting securities of the Company other than as set forth herein; 
 (c)    make, or
in any way participate, directly or indirectly, in any “solicitation” of “proxies” to vote (as such terms are used in the rules promulgated by the Securities and Exchange Commission (the “Commission”)), or seek
to advise or influence any person or entity with respect to the voting by any third party of any voting securities of the Company; 







 (d)    make any public announcement, directly or indirectly, with respect to,
or submit a proposal for, or offer of (with or without conditions) any extraordinary transaction involving the Company or any of its securities or assets; 

(e)    form, join or in any way participate in a “group” as defined in Section 13(d)(3) (a “13D
Group”) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in connection with any of the foregoing; 

(f)    act, alone or in concert with others, to seek to control, advise, change or influence the management, Board,
governing instruments, policies or affairs of the Company; 
 (g)    disclose any intention, plan or arrangement
inconsistent with the foregoing; 
 (h)    have any discussions or enter into any arrangement with, or advise, assist or
encourage any other person in connection with any of the foregoing events; 
 (i)    take any action that could
reasonably be expected to require the Company to make a public announcement regarding the possibility of any of the events described in clauses (a) through (h) above; or 

(j) request the Company or any of its agents or Representatives, directly or indirectly, in any public manner, to amend or waive any of the
foregoing provisions. 
 For the purposes of this Agreement, “Representatives” means as to any person, its directors,
officers, employees, agents and advisors (including, without limitation, financial advisors, attorneys and accountants) and debt and/or equity financing sources and their advisors. 

Notwithstanding the foregoing, it is understood and agreed that Investor shall not be prohibited from entering into an agreement and having
discussions with legal, accounting or financial advisors for the limited purposes of evaluating any of the transactions contemplated by this Section 1, and Investor and/or its Affiliates may initiate private discussions
with the Company that Investor and/or its Affiliates alone, and not in concert with any third party, would be interested in engaging in discussions with the Company that could result in a negotiated transaction otherwise prohibited by this
Section 1; provided, however, that any such discussions shall be expressly conditioned on approval of such proposal by the Board and will not reasonably be expected to require public disclosure. 

2.    Transfer Restrictions. 

(a)    Notwithstanding anything to the contrary in the Purchase Agreement, Investor shall not, directly or indirectly,
sell, transfer, pledge, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, transfer the economic risk of ownership of, or otherwise dispose of (each, a
“Transfer”) any securities of the Company except: 
 (i)    to the Company; 

  
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 (ii)    in response to a bona fide public tender offer or
exchange offer subject to Regulation 14D or Rule 13e-3 of the rules promulgated under the Exchange Act by the Commission, for cash or other consideration which is made by or on behalf of the Company; 

(iii)    in connection with a Change in Control (as defined below) of the Company which has received the
Board’s approval; or 
 (iv)    to an Affiliate of Investor in one or more transactions, so long as
prior to or concurrent with any such Transfer such Affiliate agrees in writing to be bound by the terms of this Agreement. 

3.    Termination of Standstill and Transfer Restrictions. 

(a)     The restrictions set forth in Section 1 (Standstill) shall terminate upon the earliest to
occur of the following: 
 (i)    merger, consolidation or other business combination or transaction to
which the Company is a party if the stockholders of the Company immediately prior to the effective date of such merger, consolidation or other business combination or transaction, as a result of such share ownership, have beneficial ownership of
voting securities of the Company representing less than 50% of the total number of votes which may be cast in the election of members of the Board if all securities entitled to vote in the election of such directors are present and voted
(“Total Voting Power”) of the surviving entity following such merger, consolidation or other business combination or transaction; (ii) an acquisition by any person, entity or 13D Group (other than a 13D Group of which Investor
or any of its Affiliates is a member) of direct or indirect beneficial ownership of voting securities of the Company representing 50% or more of the Total Voting Power; (iii) a sale of all or substantially all of the assets of the Company; or
(iv) a liquidation or dissolution of the Company (collectively, a “Change of Control”); or 

(ii)    the 18 month anniversary of the Effective Date. 

(b)     The restrictions set forth in Section 2 (Transfer Restrictions) shall terminate upon the
earliest to occur of the following: 
 (i)    a Change of Control; 

(ii)    the expiration or earlier termination of the Option and Collaboration Agreement (as defined in the
Purchase Agreement); or 
 (iii)    the 18 month anniversary of the Effective Date. 

  
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 (c)    The restrictions set forth in Section 1
(Standstill) and the restrictions set forth in Section 2 (Transfer Restrictions) shall be suspended and shall not apply to or otherwise restrict the Investor’s actions in respect of the Company’s securities for so
long as a Significant Event has occurred and is continuing. For purposes of this Section 3(c), a “Significant Event” shall mean any of the following not involving a violation of
Section 1: (i) the public announcement of a proposal to acquire, or the acquisition, by any person or 13D Group of beneficial ownership of voting securities of the Company representing 15% or more of the then outstanding
voting securities of the Company, or all or substantially all of the assets of the Company; (ii) the commencement, by any person or 13D Group of a tender or exchange offer, to acquire voting securities of the Company which, if successful, would
result in such person or 13D Group owning, when combined with any other voting securities of the Company owned by such person or 13D Group, 15% or more of the then outstanding voting securities of the Company; or (iii) the entry into by the
Company, or the public announcement by the Company of a determination to enter into or commence or continue any discussions relating to, any merger, sale or other business combination transaction, or an agreement therefor, pursuant to which the
outstanding shares of capital stock of the Company would be converted into cash, other consideration or securities of another person or 13D Group or 50% or more of the then outstanding shares of capital stock of the Company would be owned by persons
other than the then current holders of shares of capital stock of the Company, or which would result in all or a substantial portion of the Company’s assets being sold to any person or 13D Group. 

4.    Registration Rights 

(a)    Rule 144 Reporting. With a view to making available to the Investor the benefits of certain rules and regulations of
the Commission which may permit the sale of the Shares to the public without registration, the Company agrees to use commercially reasonable efforts to: 

(i)    make and keep public information available, as those terms are understood and defined in Rule 144
promulgated under the Securities Act of 1933, as amended (the “Securities Act”); 

(ii)    file with the Commission in a timely manner all reports and other documents required of the Company
under the Exchange Act; and 
 (iii)    furnish the Investor forthwith upon request (A) a written
statement by the Company as to its compliance with the public information requirements of said Rule 144, (B) a copy of the most recent annual or quarterly report of the Company, and (C) such other reports and documents as may be reasonably
requested in availing the Investor of any rule or regulation of the Commission permitting the sale of any such securities without registration. 

(b)    Registration.

(i)    If, upon termination of the restrictions set forth in Section 2 (Transfer
Restrictions) pursuant to the terms hereof, the Shares cannot be sold without restriction pursuant to Rule 144 promulgated under the Securities Act, then upon Investor’s written request, the Company will use commercially reasonable efforts to
register the Shares for 

  
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resale under the Securities Act on a Registration Statement on Form S-3 (the “Registration Statement”), filed within 90 days of such
written request, and will use commercially reasonable efforts to have such Registration Statement promptly declared effective by the Commission.  

(ii)    The Company will use commercially reasonable efforts to keep the Registration Statement
continuously effective under the Securities Act for one hundred eighty (180) days following the initial effectiveness of such Registration Statement or, if earlier, until the date all of the Shares covered by such Registration Statement have
been sold or can be sold publicly without restriction or limitation under Rule 144. 
 (iii)    The
Investor shall furnish to the Company such information regarding the Investor, and the distribution proposed by the Investor, as the Company may reasonably request in writing and as shall be required in connection with the Registration Statement.

 (iv)    The Company shall pay all fees and expenses incident to the performance of or compliance with
this Section 4(b) by the Company. 
 (v)    Notwithstanding the foregoing
obligations, if the Company furnishes to Investor a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Board it would be materially detrimental to the Company and its stockholders for such
registration statement to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would (a) materially interfere with a significant acquisition,
corporate reorganization, or other similar transaction involving the Company; (b) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (c) render the
Company unable to comply with requirements under the Securities Act or Exchange Act, then the Company shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall
be tolled correspondingly, for a period of not more than sixty (60) days after the request of Investor is given; provided, however, that the Company may not invoke this right more than twice in any twelve (12) month period;
and provided further that the Company shall not register any securities for its own account or that of any other stockholder during such sixty (60) day period (other than (1) a registration relating to the sale of securities
to employees of the Company or a subsidiary pursuant to a stock option, stock purchase, or similar plan; (2) a registration relating to an SEC Rule 145 transaction; (3) a registration on any form that does not include substantially
the same information as would be required to be included in a registration statement covering the sale of the Shares; or (4) a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt
securities that are also being registered). 
 (vi)    The Company shall not be obligated to effect, or
to take any action to effect, any registration pursuant to Section 4(b) (a) during the period that is thirty (30) days before the Company’s good faith estimate of the date of filing of, and ending on a
date that is ninety (90) days after the effective date of, a Company-initiated registration, provided that 

  
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the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; or (ii) if the Company has previously effected one
registration pursuant to this Section 4(b). 
 (vii)    This Section 4
(Registration Rights) shall terminate upon the earliest to occur of the following: (a) a Change of Control or (b) the 18 month anniversary of the termination of the restrictions set forth in Section 2 (Transfer Restrictions). 

5.    Indemnification. If the Shares are included in a registration statement pursuant to
Section 4(b), then, subject to the provisions of this Section 5, the Company will indemnify and hold the Investor and its directors, officers, shareholders, members, partners, employees and agents,
each person or entity who controls the Investor (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) and the directors, officers, shareholders, agents, members, partners or employees of such
controlling persons (each, an “Indemnified Person”) harmless from any and all Indemnified Losses (as defined below), provided that the Company shall not be liable for any Indemnified Losses to the extent that they arise out of or
are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of any Investor, controlling person, or other aforementioned person expressly for use in connection with a registration of
securities. Promptly after receipt by any Indemnified Person of notice of any demand or claim from any person or entity that would or might give rise to a claim or the commencement of any action, proceeding or investigation in respect of which
indemnification may be sought pursuant to this Section 5 (a “Third Party Claim”), such Indemnified Person shall promptly notify the Company in writing, and in reasonable detail, of such Third Party Claim,
but in no event shall the Company be liable for any Indemnified Losses to the extent such Indemnified Losses arose from any delay in the Indemnified Person providing notice the Company. Thereafter, the Indemnified Person will deliver to the Company,
within five (5) business days after the Indemnified Person’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Person relating to the Third Party Claim. If notice of a Third Party
Claim is delivered to the Company, the Company will be entitled, if it so chooses, to assume the defense thereof (subject to a reservation of rights) with counsel selected by the Company by giving the Indemnified Person written notice within twenty
(20) days of the Company’s receipt of notice of the Third Party Claim pursuant to this Section 5. If the Company does not give such notice to the Indemnified Person of the Company’s intent to assume the
defense of the Third Party Claim, the Indemnified Person shall be entitled to assume the defense thereof. Should the Company so elect to assume the defense of a Third Party Claim, the Company will not be liable to the Indemnified Person for legal
expenses subsequently incurred by the Indemnified Person in connection with the defense thereof. If the Company assumes such defense, the Indemnified Person will have the right to participate in the defense thereof and to employ counsel, at its own
expense, separate from the counsel employed by the Company, it being understood, however, that the Company will control such defense, except to the extent that (i) the employment thereof has been specifically authorized by the Company in
writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is a material conflict on any material issue between the position of the Company and the
position of such Indemnified Person, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel 

  
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for all Indemnified Persons entitled to indemnification hereunder. If the Company chooses to defend any Third Party Claim, then all the Parties will cooperate in the defense or prosecution of
such Third Party Claim. The Indemnified Person will not admit any liability with respect to, or settle, compromise or discharge, any Third Party Claim without the prior written consent of the Company. Notwithstanding any other provision of this
Agreement, the Company shall not enter into settlement of any Third Party Claim without the prior written consent of the Indemnified Person (which consent shall not be unreasonably withheld), unless such settlement requires only the payment of money
that the Company is obligated to pay. For purposes of this Section 5, “Indemnified Losses” means any loss, damage, claim or liability (joint or several) to which an Indemnified Person hereto may become
subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, claim or liability (or any action in respect thereof) arises out of or is based upon: (i) any untrue statement or alleged untrue
statement of a material fact contained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) an omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the Company (or any of its agents or Affiliates) of the Securities Act, the
Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law. For the avoidance of doubt, nothing contained in this Section 5 shall
diminish or otherwise affect the rights of Investor or any other Indemnified Party (as defined in the Option and Collaboration Agreement) of Investor to indemnification pursuant to the terms of the Option and Collaboration Agreement. 

6.    Miscellaneous Provisions. 

(a)    Amendment. Any term of this Agreement may be amended, terminated or waived only with the written consent
of the Company and the Investor. Any amendment or waiver effected in accordance with this Section 6(a) shall be binding upon the Investor and each transferee of the Shares, each future holder of all such securities, and the
Company. 
 (b)    Notices. All notices and other communications given or made pursuant to this Agreement
shall be in writing and shall be deemed effectively given upon the earlier of actual receipt, or (a) personal delivery to the party to be notified, (b) when sent, if sent by electronic mail or facsimile during normal business hours of the
recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1)
business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as
set forth on the signature page or otherwise furnished to the Company at Closing, or to such e-mail address, facsimile number or address as subsequently modified by written notice given in accordance with this
Section 6(b). If notice is given to the Company, a copy shall also be sent to Wilson Sonsini Goodrich and Rosati, PC, 650 Page Mill Road, Palo Alto, CA 94304, Attn: Tony Jeffries, Esq., and if notice is given to the
Investor, a copy shall also be given to: (i) Millennium Pharmaceuticals, Inc., 300 Massachusetts Ave, Cambridge, MA 02139, Attn: Head of Global R&D Finance; and (ii) Cooley LLP, 3175 Hanover Street, Palo Alto, 94304, Attn: Lila Hope,
Esq. 

  
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 (c)    Governing Law. This Agreement shall be governed by the
internal law of the State of Delaware without regard to principles of conflicts of law. 
 (d)    Dispute
Resolution: The parties (i) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of the state of Delaware and to the jurisdiction of the United States District Court for the District of Delaware for the
purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (ii) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the state courts of the state of
Delaware or the United States District Court for the District of Delaware, and (iii) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject
personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding
is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court. 
 WAIVER OF JURY TRIAL: EACH PARTY
HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING
NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER
WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. 

(e)    Successors and Assigns. Except as otherwise provided herein, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto. 

(f)    Entire Agreement. This Agreement, the Option and Collaboration Agreement, and the other Transaction
Agreements (each as defined in the Purchase Agreement), constitute the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter
hereof existing between the parties are expressly canceled. 

  
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 (g)    Delays or Omissions. Except as expressly provided
herein, no delay or omission to exercise any right, power or remedy accruing to any party to this Agreement upon any breach or default of any other party under this Agreement shall impair any such right, power or remedy of such non-defaulting party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement,
or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or
otherwise afforded to any party to this Agreement, shall be cumulative and not alternative. 

(h)    Severability. If any provision of this Agreement becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement, and such court will replace such illegal, void or unenforceable
provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision. The balance of this Agreement shall be
enforceable in accordance with its terms. 
 (i)    Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties that execute such counterparts, and all of which together shall constitute one instrument. 

(j)    Telecopy, Execution and Delivery. A facsimile, telecopy or other reproduction of this Agreement may be
executed by one or more parties hereto and delivered by such party by facsimile or any similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen. Such execution and delivery shall be considered
valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute and deliver an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof. 

(k)    Further Assurances. Each party hereto agrees to execute and deliver, by the proper exercise of its
corporate, limited liability company, partnership or other powers, all such other and additional instruments and documents and do all such other acts and things as may be necessary to more fully effectuate this Agreement. 

(l)    Stop Transfer Instructions. The Company may issue appropriate “stop transfer” instructions to
enforce the covenants set forth in this Agreement. 
 [Remainder of page intentionally left blank] 

  
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 IN WITNESS WHEREOF, the parties have executed this Standstill and Stock Restriction Agreement as
of the Effective Date. 
  

			
	COMPANY:
	
	 DENALI THERAPEUTICS INC.
 a
Delaware corporation

		
	By:	 	 /s/ Ryan Watts, Ph.D.

		 	Ryan Watts, Ph.D.
		 	President and CEO
	
	151 Oyster Point Boulevard
	South San Francisco, CA 94080



  

(Signature Page to Standstill and Stock Restriction Agreement) 








 IN WITNESS WHEREOF, the parties have executed this Standstill and Stock Restriction Agreement as
of the Effective Date. 
  

			
	INVESTOR:
	
	 TAKEDA PHARMACEUTICAL

COMPANY LIMITED

		
	By:	 	 /s/ Fumihiko Sato

	Name:	 	Fumihiko Sato
	Title:	 	Head of Portfolio Strategic Relations
	
	Address:
	 1-1, Doshomachi

4-chome, Chuo-ku, Osaka, Japan




  

(Signature Page to Standstill and Stock Restriction Agreement)