Dynavax Technologies Corporation (Nasdaq: DVAX) today reported
financial results for the fourth quarter and year ended December
31, 2008 and provided a corporate update and financial outlook for
2009.
�We are making progress in our discussions with the regulatory
authorities in the United States and Europe regarding the
development of HEPLISAVTM, our Phase 3 hepatitis B vaccine that has
demonstrated significant clinical benefits based on our trials,�
commented Dino Dina, M.D., President and Chief Executive Officer of
Dynavax. �Our pharmaceutical partnerships, funding agreements, and
stringent management of our cash provide Dynavax with the resources
to reach several value inflection points for our diversified
pipeline of products over the next 12 to 24 months.�
Dynavax reported $68.5 million in cash, cash equivalents,
marketable securities and investments held by Symphony Dynamo, Inc.
(SDI), cumulatively referred to as total cash, at December 31,
2008. This compared to $64.3 million at September 30, 2008 and
$88.2 million at December 31, 2007. Total cash at December 31, 2008
included an initial payment of $10 million from GlaxoSmithKline as
part of a worldwide strategic alliance.
Total revenues were $11.9 million for the fourth quarter 2008,
compared to $9.3 million for the fourth quarter 2007. Total
revenues were $37.1 million for the year ended December 31, 2008,
compared to $14.1 million for the same period of 2007. The
significant increase in revenues for the fourth quarter and full
year 2008 primarily was attributable to research and development
funding for HEPLISAV and to a lesser extent the recognition of
non-cash deferred revenue following the December 2008 termination
of the Merck & Co., Inc. collaboration for HEPLISAV.
On a pro forma basis, including collaboration funding from SDI,
revenues were $12.7 million for the fourth quarter 2008, compared
to $11.4 million for the fourth quarter 2007, and $42.4 million for
the full year 2008, compared to $24.7 million for the full year
2007.
Total operating expenses were $10.1 million for the fourth
quarter 2008, compared to $23.3 million for the fourth quarter
2007. Total operating expenses were $61.2 million for the year
ended December 31, 2008, compared to $85.2 million for the same
period of 2007. The decrease in operating expenses for the fourth
quarter and full year 2008 was primarily due to a reduction in
clinical development costs associated with HEPLISAV and the
discontinuation of clinical development for the TOLAMBA ragweed
allergy program. Total operating expenses for 2007 also included a
one-time payment for a license to certain patent rights for the
commercialization of HEPLISAV.
On a pro forma basis, excluding the one-time and other non-cash
charges for stock-based compensation and amortization of intangible
assets, operating expenses were $9.1 million for the fourth quarter
2008, compared to $22.0 million for the fourth quarter 2007, and
$57.0 million for the full year 2008, compared to $75.7 million for
the full year 2007.
The tables included as part of this press release provide a
reconciliation of GAAP revenues and operating expenses to pro forma
revenues and operating expenses.
Net income was $3.1 million, or $0.08 per share, for the fourth
quarter 2008, compared to a net loss of $12.1 million, or $0.30 per
share, for the fourth quarter 2007. Net loss for the year ended
December 31, 2008 was $20.8 million, or $0.52 per share, compared
to a net loss of $60.0 million, or $1.51 per share, for the same
period of 2007. The net income for the fourth quarter and
improvement in net loss for the full year 2008 reflected the
increase in revenues from the Company�s collaboration agreements
and decrease in operating expenses. The net income for the fourth
quarter 2008 is due to revenue recognized from non-recurring events
and Dynavax does not expect to report quarterly net income during
2009.
Corporate Update
Phase 3 HEPLISAV hepatitis B vaccine � Dynavax is seeking
clarification of the remaining regulatory requirements for
development and licensure of HEPLISAV in the United States and
Europe and expects to have sufficient information in the first half
of 2009 to determine a path forward, if any. Concurrently, Dynavax
is pursing potential pharmaceutical partnerships and financing
arrangements to complete clinical development if the regulatory
feedback is positive. Dynavax also expects to report complete Phase
3 PHAST clinical study data from healthy adults in the second
quarter of 2009.
Phase 1b SD-101 hepatitis C therapy � In mid-year 2009,
Dynavax expects to report top-line data from an ongoing Phase 1b
trial for SD-101 therapy for hepatitis C virus (HCV). This trial is
being funded entirely under the SDI arrangement.
Phase 1b DV-601 hepatitis B therapy � In mid-year 2009,
Dynavax expects to begin enrolling patients in a Phase 1b trial for
DV-601 therapy for hepatitis B virus (HBV).
Phase 1a studies � In the second half of 2009, Dynavax
expects phase 1a studies will be initiated for AZD1419 for asthma,
under a partnership with AstraZeneca, and DV1079 for autoimmune and
inflammatory diseases, under a partnership with GlaxoSmithKline. In
the first half of 2010, the Company plans to initiate a Phase 1a
study for its Universal Flu vaccine, which is under a supply and
option agreement with Novartis.
2009 Financial Outlook
The following statements are forward-looking and are based on
current expectations as of the date of this press release. Actual
results may differ materially and Dynavax undertakes no duty to
update these statements.
The Company's total cash is projected to be approximately $50
million at December 31, 2009, compared to $68.5 million at December
31, 2008. These projections do not include the potential impact of
any new collaborations or other transactions that may be closed or
entered into after March 2, 2009.
Total pro forma revenues for 2009 are expected to be in the
range of $48 to $56 million, compared to $42.6 million for 2008.
The pro forma revenues for 2009 include approximately $28 million
of non-cash deferred revenue to be recognized following the
termination of the HEPLISAV collaboration.
Total pro forma operating expenses for 2009 are projected to be
in the range of $52 to $60 million, compared to $57.0 million for
2008.
About Dynavax
Dynavax Technologies Corporation, a clinical-stage
biopharmaceutical company, discovers and develops a diversified
pipeline of novel Toll-like Receptor (TLR) based product
candidates. Based on Dynavax�s proprietary technologies, these
products specifically modify the innate immune response to
infectious, respiratory, autoimmune, and inflammatory diseases.
Dynavax has partnerships with leading pharmaceutical companies such
as GlaxoSmithKline, AstraZeneca AB, and Novartis as well as funding
from Symphony Dynamo, Inc. and the National Institutes of Health.
For more information visit www.dynavax.com.
Forward Looking Statements
This press release contains �forward-looking statements,� that
are subject to a number of risks and uncertainties, including
statements related to the nature and timing of communications with
the FDA regarding the current HEPLISAV clinical hold, planned
initiation and completion of other clinical trials, and our
projected cash position and operating results. Actual results may
differ materially from those set forth in this press release due to
the risks and uncertainties inherent in our business, including
whether the provision of additional information requested by the
FDA is found to be satisfactory, whether HEPLISAV can be further
developed, or even if further development is permitted, that
successful clinical development can occur in a timely manner or
without significant additional studies and difficulties or delays
in development, initiation and completion of clinical trials of our
product candidates, the results of clinical trials and the impact
of those results on the initiation and completion of subsequent
trials and issues arising in the regulatory process; obtaining
regulatory approval for HEPLISAV; our ability to obtain additional
financing to support our operations; and other risks detailed in
the �Risk Factors� section of our Annual Report on Form 10-K and
our Quarterly Report on Form 10-Q. We undertake no obligation to
revise or update information herein to reflect events or
circumstances in the future, even if new information becomes
available.
DYNAVAX TECHNOLOGIES
CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per share
amounts)
(Unaudited)
�
Three Months Ended
December
31,
�
Year Ended
December
31,
2008 � �
2007 �
2008 � �
2007 � Revenues:
Collaboration revenue $ 10,231 $ 7,097 $ 31,666 $ 9,315 Grant
revenue 972 1,198 2,999 3,046 Service and license revenue �
742 � �
1,000 � �
2,429 � �
1,732 � Total revenues 11,945 9,295 37,094 14,093 �
Operating expenses: Research and development (1) 6,249 18,183
44,771 65,888 General and administrative (2) 3,559 4,879 15,463
18,293 Amortization of intangible assets �
245 � �
250 � �
980 � �
1,004 �
Total operating expenses (3) �
10,053 � �
23,312 � �
61,214 � �
85,185
� � Income (loss) from operations 1,892 (14,017 ) (24,120 ) (71,092
) � Interest and other income, net 284 1,571 1,741 4,165 Loan
forgiveness � � 5,000 � Interest expense �
(16 ) �
(1,631 ) �
(9,157 ) �
(1,719
) � Income (loss) including noncontrolling interest in SDI. 2,160
(14,077 ) (26,536 ) (68,646 ) � Amount attributed to noncontrolling
interest in SDI �
939 � �
2,001 � �
5,707 � �
8,675 � � Net income (loss)
$ 3,099 �
$
(12,076 ) $
(20,829 ) $
(59,971 ) � Basic and diluted net income
(loss) per share
$ 0.08 �
$
(0.30 )
$ (0.52 )
$ (1.51 ) Shares used to compute basic
and diluted net income (loss) per share �
39,854 � �
39,765 � �
39,819 � �
39,746
� �
(1) Research and development
expenses included non-cash stock-based compensation charges of $0.4
million and $1.4 million for the fourth quarter and year ended
December 31, 2008, respectively. Research and development expenses
included non-cash stock-based compensation charges of $0.3 million
and $1.1 million for the fourth quarter and year ended December 31,
2007, respectively.
(2) General and administrative
expenses included non-cash stock-based compensation charges of $0.4
million and $1.8 million for the fourth quarter and year ended
December 31, 2008, respectively. General and administrative
expenses included non-cash stock-based compensation charges of $0.7
million and $2.4 million for the fourth quarter and year ended
December 31, 2007, respectively.
(3) Total operating expenses
excluding non-cash stock-based compensation charges were $9.3
million and $58.0 million for the fourth quarter and year ended
December 31, 2008, respectively. Total operating expenses excluding
non-cash stock-based compensation charges were $22.3 million and
$81.7 million for the fourth quarter and year ended December 31,
2007, respectively.
�
DYNAVAX TECHNOLOGIES
CORPORATION
RECONCILIATION OF GAAP REVENUES
TO PRO FORMA REVENUES
(In thousands)
(Unaudited)
�
Three Months Ended
December
31,
�
Year Ended
December
31,
2008 �
2007
2008 �
2007 � GAAP revenues
$ 11,945 $ 9,295 $ 37,094 $ 14,093 ADD:
Collaboration funding incurred
under SDI programs
�
744 �
2,115 �
5,349 �
10,602 Pro forma revenues (1)
$
12,689 $ 11,410
$ 42,443 $
24,695 �
(1) These pro forma amounts are
intended to illustrate the company�s revenues to be inclusive of
collaboration funding provided for the SDI programs. The
collaboration funding is reflected in the amount attributed to the
noncontrolling interest in SDI in the company�s consolidated
statement of operations, but would have been reported as revenue if
SDI�s results of operations were not consolidated with those of the
company. Management of the company believes the pro forma results
are a more useful measure of the company�s revenues because it
provides investors the ability to evaluate the company�s operations
in the manner that management uses to assess the continued progress
of programs funded under the SDI arrangement. These pro forma
results are not in accordance with, or an alternative for,
generally accepted accounting principles and may be different from
pro forma measures used by other companies.
�
DYNAVAX TECHNOLOGIES
CORPORATION
RECONCILIATION OF GAAP
OPERATING EXPENSES TO PRO FORMA OPERATING EXPENSES
(In thousands)
(Unaudited)
�
Three Months Ended
December
31,
�
Year Ended
December
31,
2008 �
2007
2008 �
2007 � GAAP
operating expenses $ 10,053 $ 23,312 $ 61,214 $ 85,185 LESS:
Licensing fee
� � � 5,000 Stock-based compensation expense 717 1,050 3,205 3,531
Amortization of intangible assets �
245 �
250 �
980 �
1,004 Pro forma
operating expenses (2)
$ 9,091
$ 22,012 $
57,029 $ 75,650 �
(2) These pro forma amounts are
intended to illustrate the company�s operating expenses excluding
certain one-time and non-cash charges in accordance with the
financial statements that management uses to evaluate the company�s
operations. These pro forma results are not in accordance with, or
an alternative for, generally accepted accounting principles and
may be different from pro forma measures used by other
companies.
�
DYNAVAX TECHNOLOGIES
CORPORATION
SELECTED BALANCE SHEET
DATA
(In thousands)
�
December 31, �
December 31,
2008 2007 Assets
(unaudited) (audited) Cash and cash equivalents and marketable
securities (1) $ 68,476 $ 88,248 Property and equipment, net 9,510
7,314 Goodwill 2,312 2,312 Other intangible assets, net 2,259 3,239
Other assets �
8,066 �
19,336 Total
assets
$ 90,623 $
120,449 �
Liabilities, noncontrolling interest and
stockholders� equity Accounts payable $ 905 $ 4,418
Accrued liabilities 6,816 12,059 Current portion of deferred
revenue 33,133 3,427 Noncurrent portion of deferred revenue 18,512
40,792 Liability from Program Option exercised under the SDI
collaboration 15,000 15,000 Other long-term liabilities 101 5,622
Noncontrolling interest in SDI 2,634 8,341 Stockholders� equity �
13,522 �
30,790 Total liabilities,
noncontrolling interest and stockholders� equity
$
90,623 $ 120,449 �
(1) These amounts also include
investments held by SDI of $25.1 million and $31.6 million as of
December 31, 2008 and 2007, respectively.
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