Dynavax Technologies Corporation (NASDAQ: DVAX), today announced a
strategic restructuring to prioritize its vaccine business by
focusing on the company’s first commercial product HEPLISAV-B®
[Hepatitis B Vaccine (Recombinant), Adjuvanted]. As part of the
restructuring, the company will explore strategic alternatives for
its immuno-oncology portfolio and will reduce the company’s
workforce and operations to focus resources on HEPLISAV-B
commercialization. While the company’s near-term focus will be on
HEPLISAV-B sales execution, the company is assessing additional
opportunities to leverage its 1018 adjuvant, as well as evaluating
other opportunities for growth. “Following a comprehensive analysis
of our assets, strengths and opportunities, we have determined we
should focus our resources on our approved vaccine, HEPLISAV-B,
which, as the only two-dose hepatitis B vaccine, is gaining market
share and is well positioned to become the new standard of care in
the U.S,” said Eddie Gray, chief executive officer of Dynavax. “We
plan to curtail further investment in our immuno-oncology portfolio
and will seek strategic alternatives for these programs. As a
result, the board and management have made the difficult decision
to reduce our workforce. We want to express our deepest
appreciation to our employees for their invaluable contributions.”
Mr. Gray continued. “I am proud of the role our employees and
collaborators have played to advance Dynavax’s immuno-oncology
portfolio of innate immune TLR9, 7/8 agonists and antigen-enhanced
immunotherapy. Encouraging clinical data to date highlight the
importance of recruiting both innate and adaptive immune effectors
to elicit an integrated anti-tumor response and to eradicate
established tumors. Local induction of innate immunity holds
tremendous promise and will likely be instrumental in advancing the
treatment of cancer. The decision to seek strategic alternatives
expands the pool of potential investment options to further
development of these important assets. Dynavax will work with
investigators to wind down the immuno-oncology trials with an
emphasis on patient care.”
“In addition, given this strategic decision to separate our two
businesses, I’ve determined it’s the optimal time for me to
transition from the company and so I will retire as CEO and as a
Director of Dynavax, as of August 1, 2019. It has been my pleasure
to lead Dynavax through pivotal milestones, including FDA approval
of HEPLISAV-B, and I look forward to watching its future success,”
Mr. Gray added.
The company’s board of directors has created an interim Office
of the President and has appointed David Novack, currently Senior
Vice President, Operations, and Ryan Spencer, currently Senior Vice
President, Commercial, as Co-Presidents, effective immediately.
“On behalf of the Board, I would like to thank Eddie for his
dedication and many contributions to Dynavax. We will miss his
leadership and professionalism,” said Arnold L. Oronsky, Ph.D.,
Chairman of the Board of Directors of Dynavax. “The board is very
pleased to have such experienced executives to step in to lead the
new vaccine-focused company. David and Ryan have been critical
contributors to the launch of HEPLISAV-B. David, who leads
operations and manufacturing, has more than 20 years of direct
vaccine industry experience. Ryan, who has extensive finance
experience, has skillfully built and led our commercial
organization. Their collective expertise will be instrumental to
the future success of the company.”
Mr. Novack has been at Dynavax since 2013, and has led the
company’s technical operations, supply chain, and quality teams
through FDA approval, launch and commercialization of HEPLISAV-B.
Mr. Novack has more than 30 years of relevant industry experience,
with more than 20 years of direct vaccine industry experience.
Prior to Dynavax, Mr. Novack was at Novartis where he served in
various roles, including Global Head of Technical Operations and
Supply Chain for Diagnostics, and Global Head of Manufacturing
Strategy for Vaccines.
Mr. Spencer, who joined Dynavax in 2006, has spearheaded the
commercialization of HEPLISAV-B, including creating and managing
HEPLISAV-B commercial operations. Throughout his time at Dynavax,
Mr. Spencer has held a variety of positions with increasing
responsibility, building from a foundation in corporate finance to
business strategy and investor relations and culminating in his
current role as Senior Vice President, Commercial, responsible for
leading the launch and commercialization of HEPLISAV-B.
The board will conduct a search for the company’s next CEO and
will consider both internal and external candidates.
In connection with the decision to focus on the vaccine business
the company is eliminating approximately 82 current positions,
representing approximately 37% of its current U.S. workforce. The
company is providing severance, continuation of employee benefits
and outplacement assistance to the employees affected by the
restructuring. The positions eliminated are primarily related to
research and clinical development for the immuno-oncology programs
and general and administrative functions. Restructuring costs and
retirement costs related to compensation and benefit expenses as
well as severance costs, are expected to be approximately $5.5
million, exclusive of stock compensation. The company may incur
additional restructuring expenses including retirement of fixed
assets and facility-related costs.
The workforce reduction is expected to reduce compensation and
benefits cost by approximately $16 million dollars 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. The
company will be responsible for certain wind-down costs and
committed contractual costs for the immuno-oncology programs,
including the I-SPY trial that will run through the second quarter
of next year.
As of March 31, 2019, the company reported cash, cash
equivalents and marketable securities totaling $183.2 million.
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
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 StatementsThis press release
contains "forward-looking" statements, including statements
regarding the commercialization of HEPLISAV-B and exploring
strategic alternatives for our immuno-oncology programs and
anticipated costs and cost savings. 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
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; our ability to
successfully explore strategic alternatives for our immuno-oncology
programs; and the actual amount of costs and cost savings resulting
from the restructuring , 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 March 31, 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.
_____________________________________________________________________________________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.
Contact:
Heather Rowe
Vice President, Investor Relations & Corporate Communications
hrowe@dynavax.com
510-665-7269
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