Dynavax Technologies Corporation (NASDAQ: DVAX), a
biopharmaceutical company focused on developing and commercializing
novel vaccines, today reported financial results for the third
quarter ended September 30, 2019.
“HEPLISAV-B net product revenue was $10.2
million for the third quarter of this year, prompting us to raise
our expectations for net product revenue to between $34-$36 million
for full year 2019,” commented Ryan Spencer, Co-President for
Dynavax. “We are very pleased with our progress in
transforming Dynavax into a commercially-focused vaccine company
and excited by the traction that HEPLISAV-B is gaining in the
market.”
Mr. Spencer added, “We estimate that
approximately 2.5 million adults are vaccinated against hepatitis B
annually in the U.S. resulting in a current total market
opportunity, based on our list price for HEPLISAV-B, of
approximately $500 million. HEPLISAV-B is the only approved 2-dose
adult hepatitis B vaccine and consistently protected more than 90%
of adult patients in clinical studies. Based on this clinical
profile and our commercial experience to date, we believe
HEPLISAV-B has the potential to become the standard of care adult
hepatitis B vaccine in the U.S.”
Third Quarter and Recent Business
Highlights
HEPLISAV-B® [Hepatitis B Vaccine (Recombinant),
Adjuvanted]
- Third quarter 2019 sales of $10.2 million compared
to $8.3 million in the second quarter 2019
- Market share in accounts targeted by the field sales team
increased to 18% in the third quarter of 2019 from 13% in the
second quarter 2019
- The Company has established purchase agreements with 9 of the
top 10 retail pharmacy chains
- In October, Kaiser Permanente Southern California completed
accrual of patients in the on-going HEPLISAV-B post-marketing
studies
Third Quarter Financial Results
Product Revenue, Net.
HEPLISAV-B was launched in the first quarter of 2018. Net product
revenue for the third quarter of 2019 was $10.2 million, compared
to $1.5 million for the third quarter of 2018. Net product revenue
for the nine months ended September 30, 2019, was $24.1 million,
compared to $2.9 million for the nine months ended September 30,
2018. Product revenue from sales is recorded at the net sales
price, which includes estimates of product returns, chargebacks,
discounts and other fees.
Cost of Sales - Product. Cost
of sales - product, for the third quarter of 2019 was $3.8 million,
compared to $3.9 million for the third quarter of 2018. Cost of
sales - product, for the nine months ended September 30, 2019, was
$7.8 million, compared to $9.3 million for same period in 2018.
R&D Expenses. Research and
development (R&D) expenses for the third quarter of 2019 were
$12.7 million, compared to $16.8 million for the third quarter of
2018. R&D expenses for the nine months ended September 30,
2019, were $50.1 million, compared to $52.1 million for the same
period in 2018. The decrease in R&D expenses is due to the
reduction in R&D headcount and related expenses and the winding
down of oncology clinical trial activity resulting from the
Company’s strategic organizational restructuring around its vaccine
business that was implemented in May 2019. R&D expenses
in the third quarter of 2019 included approximately $2.9 million in
external expenses related to oncology programs. These expenses are
expected to continue to decrease over the next three quarters as
these activities are completed.
SG&A Expenses. Selling,
general and administrative (SG&A) expenses for the third
quarter of 2019 were $18.5 million, compared to $ 15.8 million for
the third quarter of 2018. SG&A expenses for the nine months
ended September 30, 2019, were $54.7 million, compared to $48.3
million for the same period in 2018. The increase for both the
three and nine months ended September 30, 2019 compared to 2018 was
due primarily to increases in sales and marketing activities and
higher facility costs due to increased lease expense and an
increase in facility related overhead allocation to SG&A
functions following the May restructuring. In addition, the
third quarter of 2019 includes payments for completion of certain
milestones in the HEPLISAV-B post marketing study.
Restructuring. In May 2019, the
Company implemented a strategic organizational restructuring,
principally to align operations around its vaccine business and
significantly curtail further investment in its immuno-oncology
business. In connection with the restructuring, the Company reduced
its workforce by approximately 80 positions, or approximately 36%,
of U.S.-based personnel. The Company expects the
restructuring to be substantially complete and the costs incurred
and paid by December 31, 2019.
The total restructuring cost is estimated to be
$13.5 million, of which $6.4 million is related to severance, other
termination benefits and outplacement services, $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 and $3.0 million is related to accelerated
depreciation. During the three months ended September 30, 2019, the
Company recognized restructuring charges of $3.9 million and the
remaining $0.8 million is expected to be recognized by the end of
2019.
Net Loss. Net loss allocable to
common stockholders for the third quarter of 2019 was $36.7
million, or $0.49 per basic and diluted share, compared to a net
loss of $40.5 million, or $0.65 per basic and diluted share, for
the third quarter of 2018. Net loss allocable to common
stockholders for the nine months ended September 30, 2019, was
$119.1 million, or $1.75 per basic and diluted share, compared to a
net loss of $118.9 million, or $1.91 per basic and diluted share
for the nine months ended September 30, 2018.
Cash Position. Cash, cash
equivalents and marketable securities totaled $174.9 million at
September 30, 2019.
2019 HEPLISAV-B Revenue
ExpectationsDynavax expects HEPLISAV-B® net product
revenue of $34-$36 million for the full year 2019, an increase from
its previous expectation of $32-$36 million.
Conference Call and Webcast
Information
Dynavax will hold a conference call today at
4:30 p.m. ET/1:30 p.m. PT. The live audio webcast may be
accessed through the “Events & Presentations” page on the
“Investors” section of the Company’s website at
www.dynavax.com. Alternatively, participants may dial
800-479-1004 (domestic) or 720-543-0206 (international) and refer
to conference ID 5687867. 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 DynavaxDynavax is a
commercial stage biopharmaceutical company developing and
commercializing 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 and follow the company on LinkedIn.
Forward-Looking StatementsThis press release
contains "forward-looking" statements, including expectations for
2019 HEPLISAV-B revenues, statements regarding future potential
market opportunity for HEPLISAV-B, and statements regarding
the timing of the completion of the Company’s restructuring and
payment of costs incurred and paid in connection with the
restructuring. 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 full year 2019
HEPLISAV-B net product revenue will meet our expectations, whether
and when prescribers and other key decision-makers at potential
purchasing entities will make the decision to switch to HEPLISAV-B,
and the timing and quantity of actual purchases;, as well as other
risks detailed in the "Risk Factors" section of our Annual Report
on Form 10-K for the fiscal year ended December 31, 2018 and in our
Quarterly Report on Form 10-Q for the quarter ended September 30,
2019, as well as discussions of potential risks, uncertainties and
other important factors in our other filings with the U.S.
Securities and Exchange Commission. 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 our current periodic reports with
the SEC.
Contacts:Nicole Arndt, Senior Manager, Investor
Relationsnarndt@dynavax.com510-665-7264
Derek Cole, President Investor Relations Advisory Solutions
derek.cole@IRadvisory.com
_____________________________________________________________________________________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 |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenues, net |
|
$ |
10,158 |
|
|
$ |
1,461 |
|
|
$ |
24,086 |
|
|
$ |
2,880 |
|
Other revenue |
|
|
417 |
|
|
|
- |
|
|
|
563 |
|
|
|
- |
|
Total
revenues |
|
|
10,575 |
|
|
|
1,461 |
|
|
|
24,649 |
|
|
|
2,880 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales – product |
|
|
3,824 |
|
|
|
3,927 |
|
|
|
7.765 |
|
|
|
9,309 |
|
Cost of sales - amortization
of intangible assets |
|
|
2,324 |
|
|
|
3,823 |
|
|
|
6,894 |
|
|
|
8,538 |
|
Research and development |
|
|
12,660 |
|
|
|
16,820 |
|
|
|
50,062 |
|
|
|
52,059 |
|
Selling, general and
administrative |
|
|
18,459 |
|
|
|
15,788 |
|
|
|
54,668 |
|
|
|
48,332 |
|
Restructuring |
|
|
3,937 |
|
|
|
- |
|
|
|
12,714 |
|
|
|
- |
|
Total operating
expenses |
|
|
41,204 |
|
|
|
40,358 |
|
|
|
132,103 |
|
|
|
118,238 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(30,629 |
) |
|
|
(38,897 |
) |
|
|
(107,454 |
) |
|
|
(115,358 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
890 |
|
|
|
1,047 |
|
|
|
2,604 |
|
|
|
2,940 |
|
Interest expense |
|
|
(4,779 |
) |
|
|
(2,735 |
) |
|
|
(12,111 |
) |
|
|
(6,587 |
) |
Sublease income |
|
|
891 |
|
|
|
- |
|
|
|
891 |
|
|
|
- |
|
Other income, net |
|
|
168 |
|
|
|
57 |
|
|
|
226 |
|
|
|
75 |
|
Net loss |
|
|
(33,459 |
) |
|
|
(40,528 |
) |
|
|
(115,844 |
) |
|
|
(118,930 |
) |
Preferred stock deemed
dividend |
|
|
(3,267 |
) |
|
|
- |
|
|
|
(3,267 |
) |
|
|
- |
|
Net loss allocable to
common stockholders |
|
$ |
(36,726 |
) |
|
$ |
(40,528 |
) |
|
$ |
(119,111 |
) |
|
$ |
(118,930 |
) |
Basic and diluted net
loss per share allocable to common stockholders |
|
$ |
(0.49 |
) |
|
$ |
(0.65 |
) |
|
$ |
(1.75 |
) |
|
$ |
(1.91 |
) |
Weighted average
shares used to compute basic and diluted net loss per share
allocable to common stockholders |
|
|
75,106 |
|
|
|
62,650 |
|
|
|
68,032 |
|
|
|
62,250 |
|
DYNAVAX TECHNOLOGIES CORPORATION
SELECTED BALANCE SHEET DATA(In
thousands)(Unaudited)
|
|
September 30, |
|
|
December 31, |
|
|
|
2019 |
|
|
2018 |
|
Assets |
|
|
|
|
|
|
|
|
Cash, cash equivalents and
marketable securities |
|
$ |
174,946 |
|
|
$ |
145,536 |
|
Inventories, net |
|
|
39,356 |
|
|
|
19,022 |
|
Property and equipment, net |
|
|
31,461 |
|
|
|
17,064 |
|
Intangible assets, net |
|
|
4,823 |
|
|
|
11,717 |
|
Goodwill |
|
|
2,045 |
|
|
|
2,144 |
|
Other assets |
|
|
48,384 |
|
|
|
15,401 |
|
Total
assets |
|
$ |
301,015 |
|
|
$ |
210,884 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
|
|
|
Total current liabilities |
|
$ |
46,348 |
|
|
$ |
38,033 |
|
Total long-term liabilities |
|
|
215,511 |
|
|
|
109,786 |
|
Stockholders’ equity |
|
|
39,156 |
|
|
|
63,065 |
|
Total liabilities and
stockholders’ equity |
|
$ |
301,015 |
|
|
$ |
210,884 |
|
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