Dynavax Technologies Corporation (NASDAQ: DVAX), a
biopharmaceutical company focused on commercializing novel
vaccines, today reported financial results for the second quarter
ended June 30, 2019.
“HEPLISAV-B net product revenue was $8.3 million for the second
quarter of this year, which was in line with our expectations,”
said Ryan Spencer, Co-President and Senior Vice President of
Commercial for Dynavax. “Hepatitis B is a highly infectious and
potentially fatal disease, which can be prevented with effective
vaccination. Although hepatitis B vaccines have been available for
decades, recently cases of hepatitis B have been on the rise. We
believe there is a need for a vaccine that provides higher and
faster rates of protection, and that HEPLISAV-B, as the only
two-dose hepatitis B vaccine approved by the FDA, has the potential
to become the standard of care hepatitis B adult vaccine in the
U.S. and we are focused on reaching that goal.”
Second Quarter and Recent Business
Highlights
HEPLISAV-B® [Hepatitis B Vaccine (Recombinant),
Adjuvanted]
- Second quarter 2019 sales of $8.3 million compared to $5.6
million in the first quarter 2019
- The company has achieved sales into 6 of the 7 top national
retail pharmacy chains, and contracting efforts are underway to
secure additional pharmacy partners
- More than 1,790 individual customers have purchased HEPLISAV-B
since launch
- 17 of the top 20 Integrated Delivery Networks (IDNs) have made
HEPLISAV-B available to order
- 668 of our targeted accounts, which represent 59% of the total
doses in our targeted customers, have made HEPLISAV-B available to
order
- 187 of the top 300 targeted customers have ordered
HEPLISAV-B
Financial Results
Product Revenue, Net. Dynavax’s first
commercial product, HEPLISAV-B, was launched in the first quarter
of 2018. Net product revenue for the second quarter of 2019 was
$8.3 million, compared to $1.3 million for the second quarter of
2018. Net product revenue for the six months ended June 30, 2019,
was $13.9 million, compared to $1.4 million for the six months
ended June 30, 2018. Product revenue from sales is recorded at the
net sales price, which reflects reductions for estimated product
returns, chargebacks, discounts and other fees.
Cost of Sales - Product. Cost of sales
- product, for the second quarter of 2019 was $2.1
million, compared to $5.2 million for the second quarter of 2018.
Cost of sales - product, for the six months ended
June 30, 2019, was $3.9 million, compared to $5.4 million for same
period in 2018. The quarter ended June 30, 2018 included costs
relating to excess capacity at the company’s manufacturing facility
in Düsseldorf, Germany, which were previously included in research
and development expense. The 2018 excess capacity charge is a
result of costs associated with resuming operating activities at
the Düsseldorf facility after receiving regulatory approval of
pre-filled syringes (“PFS”) of HEPLISAV-B in late March 2018.
Included in cost of sales – product for both
periods are fill, finish and overhead costs for HEPLISAV-B incurred
after U.S. Food and Drug Administration (FDA) approval. A higher
percentage of HEPLISAV-B inventory sold in 2019 used components
manufactured after FDA approval compared to 2018, when most of the
expense associated with product sold was expensed to research and
development prior to approval. The company expects HEPLISAV-B cost
of sales will increase in future periods, both in absolute dollars
and as a percentage of product revenue, as we produce and then sell
inventory that reflects the full cost of manufacturing the
product.
R&D Expenses. Research and development
expenses for the second quarter of 2019 were $16.2 million,
compared to $16.3 million for the second quarter of 2018. Research
and development expenses for the six months ended June 30, 2019,
were $37.4 million, compared to $35.2 million for the same period
in 2018. In May 2019, the company announced a strategic
organizational restructuring to align its operations around its
vaccine business and significantly curtail further investment in
immuno-oncology research and development.
SG&A Expenses. Selling, general and
administrative expenses for the second quarter of 2019 were $17.9
million, compared to $15.7 million for the second quarter of 2018.
Selling, general and administrative expenses for the six months
ended June 30, 2019 were $36.2 million, compared to $32.5 million
for the same period in 2018. The increase was due primarily to
additional personnel in support of HEPLISAV-B commercial
activities.
Restructuring and Related Expenses. On May 23,
2019, the company implemented a strategic organizational
restructuring to principally align its operations around its
vaccine business. The company is exploring strategic alternatives
for its immuno-oncology portfolio. The total restructuring costs
related to the restructuring are estimated to be $9.4 million, of
which $5.3 million is related to severance, other termination
benefits and outplacement services and $4.1 million is related to
stock-based compensation expense as a result of accelerated vesting
of stock awards and extension of exercise period of stock options.
During the three months ended June 30, 2019, the company recognized
restructuring charges of $8.8 million and the remaining $0.6
million is expected to be recognized by the end of 2019. The
workforce reduction is expected to reduce compensation and benefits
cost by approximately $16 million annually. After all existing
oncology trials and commitments are complete, the company estimates
its operating expenditures related to external oncology costs will
be reduced by approximately $8 million per quarter as compared to
the first quarter ended March 31, 2019.
Net Loss. Net loss for the second quarter of
2019 was $42.7 million, or $0.66 per basic and diluted share,
compared to a net loss of $39.4 million, or $0.63 per basic and
diluted share, for the second quarter of 2018. Net loss for the six
months ended June 30, 2019, was $82.4 million, or $1.28 per basic
and diluted share, compared to a net loss of $78.4 million, or
$1.26 per basic and diluted share for the six months ended June 30,
2018.
Cash Position. Cash, cash equivalents and
marketable securities totaled $140.5 million at June 30, 2019.
2019 HEPLISAV-B Revenue Expectations
Dynavax expects HEPLISAV-B® net product revenue of $32-$36
million for the full year 2019.
Conference Call and Webcast Information
Dynavax will hold a conference call today at 4:30 p.m. ET/1:30
p.m. PT. To access the call, participants may dial (877) 423-9813
(domestic) or (201) 689-8573 (international) and refer to
conference ID 13693069. The live call will be webcast and can be
accessed in the "Investors and Media" section of the company's
website at www.dynavax.com. A replay of the webcast will be
available for 30 days following the live event.
About Hepatitis BHepatitis B is a viral disease
of the liver that can become chronic and lead to cirrhosis, liver
cancer and death. The hepatitis B virus is 50 to 100 times more
infectious than HIV,i and transmission is on the rise. There is no
cure for hepatitis B, but effective vaccination can prevent the
disease.
In adults, hepatitis B is spread through contact with infected
blood and through unprotected sex with an infected person. The CDC
recommends vaccination for those at high risk for infection due to
their jobs, lifestyle, living situations and travel to certain
areas.ii Because people with diabetes are particularly vulnerable
to infection, the CDC recommends vaccination for adults age 19 to
59 with diabetes as soon as possible after their diagnosis, and for
people age 60 and older with diabetes at their physician's
discretion.iii Approximately 20 million U.S. adults have diabetes,
and 1.5 million new cases of diabetes are diagnosed each
year.iv
About HEPLISAV-BHEPLISAV-B is an adult
hepatitis B vaccine that combines hepatitis B surface antigen with
Dynavax’s proprietary Toll-like Receptor (TLR) 9 agonist to enhance
the immune response. Dynavax has worldwide commercial rights to
HEPLISAV-B.
For more information about HEPLISAV-B, visit
http://heplisavb.com/.
About Dynavax Dynavax is a biopharmaceutical
company focused on leveraging the power of the body's innate and
adaptive immune responses through toll-like receptor (TLR)
stimulation. Dynavax discovers, develops and commercializes novel
vaccines. The Company launched its first commercial product,
HEPLISAV-B® [Hepatitis B Vaccine (Recombinant), Adjuvanted], in
February 2018, following U.S. FDA approval for prevention of
infection caused by all known subtypes of hepatitis B virus in
adults age 18 years and older. For more information, visit
www.dynavax.com.
Forward-Looking Statements
Statements contained in this press release regarding matters
that are not historical facts are “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements regarding Dynavax’s full-year 2019
net product revenue guidance and HEPLISAV-B. These forward-looking
statements are based upon management’s current expectations, are
subject to known and unknown risks, and involve assumptions that
may never materialize or may prove to be incorrect. Actual results
and the timing of events could differ materially from those
anticipated in such forward-looking statements as a result of
various risks and uncertainties, including, without limitation, the
uncertainty of future commercial sales and related items that would
impact net product sales during 2019; risks related to Dynavax’s
ability to successfully commercialize HEPLISAV-B, which among other
things will require Dynavax to successfully negotiate and enter
into contracts with wholesalers, distributors, group purchasing
organizations, and other parties, and maintain those contractual
relationships, maintain and build its commercial infrastructure,
and access prescribers and other key health care providers to
discuss HEPLISAV-B; risks related to market adoption and competing
therapies; and risks related to whether payors will cover and
provide timely and adequate reimbursement for HEPLISAV-B.
These and other risks and uncertainties are described in Dynavax’s
Quarterly Report on Form 10-Q for the quarter ended June 30, 2019
under the heading “Risk Factors”. Dynavax undertakes no obligation
to revise or update information herein to reflect events or
circumstances in the future, even if new information becomes
available.
_____________________________________________________________________________________i
CDC. https://www.cdc.gov/hepatitis/hbv/bfaq.htm.ii CDC.
https://www.cdc.gov/hepatitis/hbv/hbvfaq.htm.iii CDC.
https://www.cdc.gov/diabetes/pubs/pdf/hepb_vaccination.pdf.iv CDC.
https://www.cdc.gov/diabetes/pdfs/data/statistics/national-diabetes-statistics-report.pdf.
DYNAVAX TECHNOLOGIES
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except per share
amounts)(Unaudited)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenues, net |
|
$ |
8,301 |
|
|
$ |
1,254 |
|
|
$ |
13,928 |
|
|
$ |
1,419 |
|
Collaboration revenue |
|
|
- |
|
|
|
- |
|
|
|
146 |
|
|
|
- |
|
Total
revenues |
|
|
8,301 |
|
|
|
1,254 |
|
|
|
14,074 |
|
|
|
1,419 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales – product |
|
|
2,141 |
|
|
|
5,177 |
|
|
|
3,941 |
|
|
|
5,382 |
|
Cost of sales - amortization of
intangible assets |
|
|
2,297 |
|
|
|
2,298 |
|
|
|
4,570 |
|
|
|
4,715 |
|
Research and development |
|
|
16,196 |
|
|
|
16,273 |
|
|
|
37,402 |
|
|
|
35,239 |
|
Selling, general and
administrative |
|
|
17,861 |
|
|
|
15,653 |
|
|
|
36,209 |
|
|
|
32,544 |
|
Restructuring |
|
|
8,777 |
|
|
|
- |
|
|
|
8,777 |
|
|
|
- |
|
Total operating
expenses |
|
|
47,272 |
|
|
|
39,401 |
|
|
|
90,899 |
|
|
|
77,880 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(38,971 |
) |
|
|
(38,147 |
) |
|
|
(76,825 |
) |
|
|
(76,461 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
979 |
|
|
|
1,153 |
|
|
|
1,714 |
|
|
|
1,893 |
|
Interest expense |
|
|
(4,598 |
) |
|
|
(2,691 |
) |
|
|
(7,332 |
) |
|
|
(3,852 |
) |
Other income (expense), net |
|
|
(123 |
) |
|
|
241 |
|
|
|
58 |
|
|
|
18 |
|
Net loss |
|
$ |
(42,713 |
) |
|
$ |
(39,444 |
) |
|
$ |
(82,385 |
) |
|
$ |
(78,402 |
) |
Basic and diluted net
loss per share |
|
$ |
(0.66 |
) |
|
$ |
(0.63 |
) |
|
$ |
1.28 |
) |
|
$ |
(1.26 |
) |
Weighted average shares
used to compute basic and diluted net loss per share |
|
|
65,088 |
|
|
|
62,346 |
|
|
|
64,436 |
|
|
|
62,047 |
|
DYNAVAX TECHNOLOGIES CORPORATION
SELECTED BALANCE SHEET DATA(In
thousands)(Unaudited)
|
|
June 30, |
|
|
December 31, |
|
|
|
2019 |
|
|
2018 |
|
Assets |
|
|
|
|
|
|
|
|
Cash, cash equivalents and
marketable securities |
|
$ |
140,494 |
|
|
$ |
145,536 |
|
Inventories, net |
|
|
36,629 |
|
|
|
19,022 |
|
Property and equipment, net |
|
|
34,393 |
|
|
|
17,064 |
|
Intangible assets, net |
|
|
7,147 |
|
|
|
11,717 |
|
Goodwill |
|
|
2,131 |
|
|
|
2,144 |
|
Other assets |
|
|
46,287 |
|
|
|
15,401 |
|
Total
assets |
|
$ |
267,081 |
|
|
$ |
210,884 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
|
|
|
Total current liabilities |
|
$ |
44,573 |
|
|
$ |
38,033 |
|
Total long-term liabilities |
|
|
211,920 |
|
|
|
109,786 |
|
Stockholders’ equity |
|
|
10,588 |
|
|
|
63,065 |
|
Total liabilities and
stockholders’ equity |
|
$ |
267,081 |
|
|
$ |
210,884 |
|
Contact:
Heather Rowe
Vice President, Investor Relations & Corporate Communications
hrowe@dynavax.com
510-665-7269
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