Dynavax Technologies Corporation (Nasdaq:DVAX) today reported
financial results for the third quarter and nine months ended
September 30, 2009.
Dynavax reported $46.4 million in cash, cash equivalents,
marketable securities and investments held by Symphony Dynamo, Inc.
(SDI), collectively referred to as total cash, at September 30,
2009. This compared to $53.0 million at June 30, 2009.
“During the third quarter, we began the first of two planned
Phase 3 registration trials for our lead product HEPLISAVTM and our
goal is to complete these trials within 24 months,” commented Dino
Dina, M.D., President and Chief Executive Officer of Dynavax. “With
our commercialization strategy focused on directly serving
high-value markets in the U.S. and a partnering strategy to expand
into broader market segments and internationally, HEPLISAV can
become a company-building product for Dynavax.”
Total revenues for the third quarter 2009 were $2.9 million,
compared to $8.9 million reported for the third quarter in 2008.
The decline in total revenues for the third quarter was primarily
due to a decrease in collaboration revenue following the
termination of the Merck & Co., Inc. collaboration for
HEPLISAV. Total revenues were $38.1 million for the nine months
ended September 30, 2009, compared to $25.1 million for the same
period in 2008. The increase in revenues for the nine months ended
September 30, 2009 was primarily attributable to the recognition of
$28.5 million of non-cash deferred revenue that was accelerated
upon the termination of the Merck collaboration.
On a pro forma basis, including collaboration funding from SDI
and excluding the non-cash deferred revenue from the Merck
collaboration, revenues were $3.9 million and $12.2 million,
respectively, for the third quarter and nine months ended September
30, 2009, compared to $9.9 million and $27.9 million for the same
period in 2008.
Total operating expenses were $13.6 million for the third
quarter 2009, compared to $14.6 million for the third quarter 2008.
Total operating expenses were $41.6 million for the nine months
ended September 30, 2009, compared to $51.2 million for the same
period in 2008. The decrease in operating expenses for 2009 was
primarily due to a reduction in clinical development costs
associated with HEPLISAV and the discontinuation of development for
the TOLAMBA ragweed allergy program in May 2008.
On a pro forma basis, excluding the non-cash charges for
stock-based compensation and amortization of intangible assets,
operating expenses were $12.5 million and $38.8 million,
respectively, for the third quarter and nine months ended September
30, 2009, compared to $13.3 million and $47.9 million for the same
periods in 2008.
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.
The net loss of $9.5 million, or $0.24 per share, reported for
the third quarter 2009 increased from the net loss of $5.4 million,
or $0.14 per share, for the same period in 2008. The increase in
net loss for third quarter is due to a decrease in collaboration
revenue partially offset by a decrease in total operating expenses.
The net loss of $0.3 million, or $0.01 per share, reported for the
nine months ended September 30, 2009 significantly improved
compared to the net loss of $23.9 million, or $0.60 per share, for
the same period in 2008. The improvement in net loss for the nine
months ended September 30, 2009 is due to the recognition of
non-cash deferred revenue and a decrease in total operating
expenses.
HEPLISAV Phase 3 Hepatitis B Vaccine - In a previously
completed pivotal Phase 3 trial, HEPLISAV provided increased, rapid
protection with fewer doses than current licensed vaccines. To
complete the registration trials for HEPLISAV, Dynavax has begun
vaccinating chronic kidney disease patients in a Phase 3 trial and
expects to begin a Phase 3 lot-to-lot consistency trial in adults
over 40 years of age in early 2010. Dynavax will present chronic
kidney disease patient data for HEPLISAV at the Infectious Disease
Society of America (IDSA) meeting in Philadelphia, Pennsylvania,
October 29 through November 1, 2009.
Phase 1b Hepatitis C Therapy - SD-101 is a second
generation TLR-9 agonist which is being developed in an ongoing
Phase 1b trial funded through the SDI agreement. Dynavax and
Symphony Capital are evaluating future development options for this
hepatitis C therapy.
Phase 1b Hepatitis B Therapy - In 2009, Dynavax plans to
begin a Phase 1b trial of DV-601, the first hepatitis B therapy to
combine both surface and core HBV antigens.
Preclinical Programs – Dynavax’s preclinical programs
include a unique Universal Flu vaccine and programs partnered with
pharmaceutical partners AstraZeneca and GlaxoSmithKline.
Conference Call
Dynavax will webcast a conference call today at 4:30 p.m. EDT
(1:30 p.m. PDT). The live and archived webcast can be accessed by
visiting the investor relations section of the Company's Web site
at http://investors.dynavax.com/newsevents.cfm.
About Dynavax
Dynavax Technologies Corporation, a clinical-stage
biopharmaceutical company, discovers and develops novel products to
prevent and treat infectious diseases. The Company’s lead product
candidate is HEPLISAV, a Phase 3 investigational adult hepatitis B
vaccine designed to provide more rapid and increased protection
with fewer doses than current licensed vaccines. 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 relating to planned clinical trials and our
commercialization strategy for HEPLISAV. 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
successful clinical and regulatory development and approval of
HEPLISAV can occur in a timely manner or without significant
additional studies or difficulties or delays in development,
whether the studies can support registration for commercialization
of HEPLISAV, initiation and completion of clinical trials of the
Company’s other 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; the
Company's ability to obtain additional financing to support the
development and commercialization of HEPLISAV and its other
operations, possible claims against the Company based on the patent
rights of others; and other risks detailed in the “Risk Factors”
section of our current periodic reports with the SEC. We undertake
no obligation to revise or update information herein to reflect
events or circumstances in the future, even if new information
becomes available.
Information on Dynavax’s website at www.dynavax.com is not
incorporated by reference in the Company’s current periodic reports
with the SEC.
DYNAVAX TECHNOLOGIES
CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per share
amounts)
(Unaudited)
Three Months
EndedSeptember
30,
Nine Months
EndedSeptember
30,
2009
2008
2009
2008
Revenues: Collaboration revenue $ 1,791 $ 7,960 $ 34,079 $ 21,435
Grant revenue 887 581 2,921 2,027 Service and license revenue
223 316
1,129
1,687 Total revenues 2,901 8,857
38,129 25,149 Operating expenses: Research and development
(1) 9,631 10,456 29,202 38,522 General and administrative (2) 3,736
3,913 11,693 11,904 Amortization of intangible assets
245 245
735 735 Total
operating expenses (3)
13,612
14,614 41,630
51,161 Loss from operations (10,711 )
(5,757 ) (3,501 ) (26,012 ) Interest income 18 313 174 1,461
Loan Forgiveness — 5,000 — 5,000 Interest expense (93 ) (6,457 )
(120 ) (9,141 ) Other income (expense)
80
(232 )
(40 ) (4
) Net loss. (10,706 ) (7,133 ) (3,487 ) (28,696
) Add: Losses attributed to noncontrolling interest in SDI
1,200 1,713
3,192 4,768
Net loss attributable to Dynavax
$
(9,506 ) $
(5,420 ) $ (295
) $ (23,928 )
Basic and diluted net loss per share
$
(0.24 ) $ (0.14
)
$ (0.01 ) $
(0.60 ) Shares used to compute basic and
diluted net loss per share
40,153
39,831 39,990
39,807
(1) Research and development
expenses included non-cash stock-based compensation charges of $0.4
million and $0.8 million for the three and nine months ended
September 30, 2009, respectively. Research and development expenses
included non-cash stock-based compensation charges of $0.5 million
and $1.0 million for the three and nine months ended September 30,
2008, respectively.
(2) General and administrative
expenses included non-cash stock-based compensation charges of $0.5
million and $1.3 million for the three and nine months ended
September 30, 2009, respectively. General and administrative
expenses included non-cash stock-based compensation charges of $0.6
million and $1.4 million for the three and nine months ended
September 30, 2008, respectively.
(3) Total operating expenses
excluding non-cash stock-based compensation charges were $12.7
million and $39.5 million for the three and nine months ended
September 30, 2009, respectively. Total operating expenses
excluding non-cash stock-based compensation charges were $13.6
million and $48.7 million for the three and nine months ended
September 30, 2008, respectively.
DYNAVAX TECHNOLOGIES
CORPORATION
RECONCILIATION OF GAAP REVENUES
TO PRO FORMA REVENUES
(In thousands)
(Unaudited)
Three Months
EndedSeptember
30,
Nine Months
EndedSeptember
30,
2009
2008
2009
2008
GAAP revenues $ 2,901 $ 8,857 $ 38,129 $ 25,149 ADD:
Collaboration funding incurred
under SDI programs
1,009 1,642 2,551 4,605 LESS:
Non-cash deferred revenue from
Merck collaboration
— 596 28,485
1,879 Pro forma revenues (1)
$ 3,910
$ 9,903 $ 12,195 $ 27,875
(1) These pro forma amounts are
intended to illustrate the Company’s revenues including
collaboration funding provided for the SDI programs and excluding
certain non-cash items. 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 operating programs. 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
EndedSeptember
30,
Nine Months
EndedSeptember
30,
2009
2008
2009
2008
GAAP operating expenses $ 13,612 $ 14,614 $ 41,630 $ 51,161
LESS:
Stock-based compensation
expense
916 1,052 2,102 2,488 Amortization of intangible assets
245 245 735
735 Pro forma operating expenses (2)
$ 12,451 $
13,317 $ 38,793
$ 47,938
(2) These pro forma amounts are
intended to illustrate the Company’s operating expenses excluding
certain 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)
September 30, December 31,
2009
2008
Assets (unaudited) Cash and cash equivalents and marketable
securities (1) $ 46,432 $ 68,476 Property and equipment, net 8,507
9,510 Goodwill 2,312 2,312 Other intangible assets, net 1,524 2,259
Other assets
2,869 8,066
Total assets
$ 61,644 $
90,623 Liabilities and stockholders’
equity Accounts payable $ 1,037 $ 905 Accrued liabilities
7,356 6,816 Current portion of deferred revenue 3,127 33,133
Noncurrent portion of deferred revenue 17,440 18,512 Liability from
Program Option exercised under the SDI collaboration 15,000 15,000
Other long-term liabilities 160 101 Stockholders’ equity
17,524 16,156 Total liabilities
and stockholders’ equity
$ 61,644
$ 90,623
(1) These amounts also included
investments held by SDI of $21.7 million and $25.1 million as of
September 30, 2009 and December 31, 2008, respectively.
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