Dynavax Technologies Corporation (Nasdaq: DVAX), a
biopharmaceutical company focused on developing and commercializing
novel vaccines, today reported financial results for the second
quarter of 2020.
“Vaccines play a crucial role in protecting
people, particularly those at high risk, from infectious diseases,”
commented Ryan Spencer, Chief Executive Officer of Dynavax. “The
current global pandemic highlights the need for continued
development of new and improved vaccines. Our first product,
HEPLISAV-B, provides adults protection from hepatitis B, a highly
infectious deadly virus which, thankfully, can be prevented with
effective vaccination. With a demonstrated profile that provides
adults higher levels of protection from hepatitis B in one month,
compared to other hepatitis B vaccines that require six months, we
believe that HEPLISAV-B has the potential to become the standard of
care for adult hepatitis B vaccination in the U.S.”
Mr. Spencer added, “As expected from the
pandemic driven disruption to non-COVID medical care, the adult
hepatitis B vaccine market experienced a significant decline early
in the second quarter. Despite the short-term impact, we
continue to be optimistic about HEPLISAV-B’s long-term value,
particularly with the global focus on vaccination efforts as a
result of the pandemic. Additionally, we see tremendous opportunity
for CpG 1018, our advanced vaccine adjuvant. We have entered into
numerous collaborations to develop adjuvanted vaccines across
multiple indications, including COVID-19, pertussis, and universal
flu. Adjuvanted coronavirus vaccines may play a critical role in
providing protection to older adults and people with other chronic
conditions, who are at greater risk for COVID-19 and have
historically been less responsive to vaccinations.”
HEPLISAV-B® [Hepatitis B Vaccine
(Recombinant), Adjuvanted]
- Net product revenue for second
quarter 2020 of $2.4 million declined from $8.3
million for the second quarter of 2019, due to the COVID-19
pandemic. Overall adult hepatitis B vaccine utilization declined
significantly beginning in late March, reached a low in the middle
of the second quarter, and improved in the later part of the
quarter.
- Interim data were reported from the
ongoing study of HEPLISAV-B in patients on hemodialysis showing
HEPLISAV-B was well tolerated with a seroprotection rate of 86.4%
in 44 patients.
CpG 1018 proprietary toll-like receptor
9 (TLR9) agonist adjuvant·Announced collaborations with
Sinovac Biotech, Valneva SE, Medicago, Medigen Vaccine Biologics
and Mount Sinai to further advance CpG 1018 in adjuvanted vaccines.
A summary of CpG 1018 collaborations is provided below:
Indication |
Collaborator |
Status |
COVID-19 |
Clover Biopharmaceuticals |
Phase 1 |
Medicago |
Phase 1 |
Medigen Vaccine Biologics |
Preclinical |
Sinovac Biotech |
Preclinical |
Valneva SE |
Preclinical |
Pertussis |
Serum Institute of India |
Preclinical |
Universal Influenza |
Mount Sinai |
Preclinical |
Additional Corporate
Updates
- Completed an $80.5 million public offering of common stock
- Appointed Ms. Julie Eastland and Mr. Brent MacGregor to Board
of Directors
- Entered into a purchase agreement with TriSalus Lifesciences
for SD-101 and related assets for $9 million in cash payments, up
to an additional $250 million in development and commercial
milestone payments and low double-digit royalties on potential
future sales
2020 Milestones
- Final immunogenicity data from the ongoing study of HEPLISAV-B
in patients on hemodialysis anticipated in the fourth quarter with
publication planned in the first quarter of 2021.
- Completion of safety follow-up for HEPLISAV-B post-marketing
studies in the fourth quarter.
- Completion of Phase 1-enabling animal studies and toxicology
for an improved pertussis vaccine with CpG 1018 is planned for the
fourth quarter.
- Preliminary safety and immunogenicity results from Phase 1
COVID-19 studies with Clover Biopharmaceuticals and Medicago
expected by September and October, respectively.
Financial Results
Product Revenue, Net. Product
revenue, net decreased to $2.4 million in the second quarter of
2020 compared to $8.3 million in the same period in 2019, due to
lower sales volume caused by the COVID-19 global pandemic. For much
of the second quarter, medical centers and physician practices
restricted activities at their facilities. This led to a
significant decline in adult hepatitis B vaccine utilization, which
fell as much as approximately 70% in April. For HEPLISAV-B, product
sales to distributors were lower than end user demand as
distributors elected to reduce inventory levels during the quarter.
With states beginning to reopen, medical centers have gradually
expanded their services under strict social distancing rules. Adult
hepatitis B vaccine utilization began to increase in mid-June,
reached approximately 60% of pre-COVID levels in July and is
expected to continue growing as the U.S. returns to more normal
conditions.
Cost of Sales - Product.
Cost of sales - product for the second quarter 2020 decreased to
$1.0 million, compared to $2.1 million for the second quarter of
2019, primarily due to lower sales volume and lower overhead
following the May 2019 restructuring, partially offset by higher
unit costs as we produce and then sell inventory that reflects the
full cost of manufacturing.
Research and Development
Expenses. Research and development (R&D) expenses for
the second quarter of 2020 decreased to $5.9 million, compared to
$16.2 million for the second quarter of 2019 as personnel costs,
facilities overhead cost allocations and non-cash stock-based
compensation decreased due to lower R&D headcount because of
our restructuring in May 2019 and outside services costs decreased
with the winding down of our immuno-oncology programs.
SG&A Expenses. Selling,
general and administrative (SG&A) expenses for the second
quarter of 2020 were $19.0 million, compared to $17.9 million for
the second quarter of 2019 as compensation and related personnel
costs decreased due to lower headcount and business travel
decreased due to COVID-19 travel restrictions, offset by increased
administrative expense, expenses related to the post-marketing
studies and facility costs due to higher overhead allocation to
SG&A.
Loss from Operations and Net
Loss. Loss from operations for the second quarter of 2020
decreased to $23.3 million from $39.0 million in the second quarter
of 2019. Net loss for the second quarter of 2020 was $51.6 million,
or $0.53 per basic and diluted share, compared to a net loss of
$42.7 million, or $0.66 per basic and diluted share, for the second
quarter of 2019. The net loss in the quarter ended June 30, 2020
includes expense of $25.7 million due to an increase in the
estimated fair value of outstanding warrants.
Cash Position. Cash, cash
equivalents and marketable securities totaled $200.7 million at
June 30, 2020.
Conference Call and Webcast
InformationDynavax 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 800-939-4079 or 212-231-2911
and refer to conference ID 21967375. A replay of the webcast will
be available for 30 days following the live event.
Please see Important Safety Information
below.
For more information about HEPLISAV-B, visit
http://heplisavb.com.
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 U.S. Centers for Disease Control (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 CpG 1018 to enhance the immune response. Dynavax has
worldwide commercial rights to HEPLISAV-B.
Indication and UseHEPLISAV-B is indicated for
prevention of infection caused by all known subtypes of hepatitis B
virus in adults age 18 years and older.
Important Safety Information
(ISI)Do not administer HEPLISAV-B to individuals with a
history of severe allergic reaction (e.g., anaphylaxis) after a
previous dose of any hepatitis B vaccine or to any component of
HEPLISAV-B, including yeast. Appropriate medical treatment and
supervision must be available to manage possible anaphylactic
reactions following administration of HEPLISAV-B. Immunocompromised
persons, including individuals receiving immunosuppressant therapy,
may have a diminished immune response to HEPLISAV-B. Hepatitis B
has a long incubation period. HEPLISAV-B may not prevent hepatitis
B infection in individuals who have an unrecognized hepatitis B
infection at the time of vaccine administration. The most common
patient reported adverse reactions reported within 7 days of
vaccination were injection site pain (23% to 39%), fatigue (11% to
17%) and headache (8% to 17%).
For full Prescribing Information for HEPLISAV-B,
click here.
About CpG 1018CpG 1018 is the
adjuvant used in HEPLISAV-B®, an adult hepatitis B vaccine approved
by the U.S. Food and Drug Administration (FDA). Dynavax developed
CpG 1018 to provide an increased vaccine immune response, which has
been demonstrated in HEPLISAV-B. In pre-clinical and clinical
studies, results demonstrated that the addition of CpG 1018
increases antibody concentrations, stimulates helper (CD4+) and
cytotoxic (CD8+) T cell populations and generates robust T and B
cell memory responses. Additionally, CpG 1018 strongly favors
development of the Th1 subset of helper T cells, the type of helper
T cell that is essential for protection from infections with
viruses and intracellular bacteria. CpG 1018 targets a single, well
defined receptor (TLR9) expressed on only a few key cell types and
the mechanisms of action as an adjuvant are quite well understood.
CpG 1018 provides a well- developed technology and a significant
safety database, potentially accelerating the development and
large-scale manufacturing of a COVID-19 vaccine. Upon completion of
on-going scale up activities, the existing equipment capacity for
CpG 1018 will be 600 million to 1.2 billion adjuvant doses
annually, depending on final dose selected.
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. Dynavax is also
developing CpG 1018 as an advanced vaccine adjuvant through
research collaborations and partnerships. Current
collaborations are focused on adjuvanted vaccines for COVID-19,
pertussis and universal influenza. For more information, visit
www.dynavax.com and follow the company on LinkedIn.
Forward-Looking Statements This
press release contains "forward-looking" statements, including
statements regarding the potential for HEPLISAV-B to become the
standard of care adult hepatitis B vaccine in the U.S., long-term
growth of HEPLISAV-B, the impact of COVID-19 on the utilization of
vaccines, including HEPLISAV-B, the timing of enrollment in and
completion of clinical studies, the adequacy of current capital,
the results of clinical studies and what the results will
demonstrate or support, developing an improved pertussis vaccine, a
vaccine for COVID-19, a universal flu vaccine, and other vaccines,
entering into strategic relationships and expected results of such
relationships, and establishing CpG 1018 as a leading adjuvant.
Actual results may differ materially from those set forth in this
press release due to the risks and uncertainties inherent in our
business, including the risk that the vaccine market and/or the
adult hepatitis B market may not grow as expected, the risk that
COVID-19 will continue to have a significant negative impact on the
use of vaccines, including HEPLISAV-B, until the U.S. returns to
more normal conditions, the adverse effects of the recent
coronavirus pandemic on our ability to access customers and on
customer decision making, adoption and implementation, the risk
that HEPLISAV-B may not provide the anticipated benefits and may
not become the standard of care adult hepatitis B vaccine in the
U.S., the risk that our growth initiatives may not be successful,
risks related to 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, risks related to the development and clinical
testing of vaccines and whether use of CpG 1018 will prove to be
beneficial in other vaccines, and risks related to whether existing
or future collaborations will be successful; 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, 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
DYNAVAX TECHNOLOGIES
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except per share
amounts)(Unaudited)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenues, net |
|
$ |
2,405 |
|
|
$ |
8,301 |
|
|
$ |
12,919 |
|
|
$ |
13,928 |
|
Other revenue |
|
|
263 |
|
|
|
- |
|
|
|
668 |
|
|
|
146 |
|
Total
revenues |
|
|
2,668 |
|
|
|
8,301 |
|
|
|
13,587 |
|
|
|
14,074 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales - product |
|
|
967 |
|
|
|
2,141 |
|
|
|
3,321 |
|
|
|
3,941 |
|
Cost of sales - amortization of
intangible assets |
|
|
202 |
|
|
|
2,297 |
|
|
|
2,500 |
|
|
|
4,570 |
|
Research and development |
|
|
5,884 |
|
|
|
16,196 |
|
|
|
10,537 |
|
|
|
37,402 |
|
Selling, general and
administrative |
|
|
18,954 |
|
|
|
17,861 |
|
|
|
39,880 |
|
|
|
36,209 |
|
Restructuring |
|
|
- |
|
|
|
8,777 |
|
|
|
- |
|
|
|
8,777 |
|
Total operating
expenses |
|
|
26,007 |
|
|
|
47,272 |
|
|
|
56,238 |
|
|
|
90,899 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(23,339 |
) |
|
|
(38,971 |
) |
|
|
(42,651 |
) |
|
|
(76,825 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
331 |
|
|
|
979 |
|
|
|
921 |
|
|
|
1,714 |
|
Interest expense |
|
|
(4,732 |
) |
|
|
(4,598 |
) |
|
|
(9,463 |
) |
|
|
(7,332 |
) |
Sublease income |
|
|
1,927 |
|
|
|
- |
|
|
|
3,853 |
|
|
|
- |
|
Change in fair value of warrant
liability |
|
|
(25,655 |
) |
|
|
- |
|
|
|
(17,045 |
) |
|
|
- |
|
Other |
|
|
(111 |
) |
|
|
(123 |
) |
|
|
211 |
|
|
|
58 |
|
Net loss |
|
$ |
(51,579 |
) |
|
$ |
(42,713 |
) |
|
$ |
(64,174 |
) |
|
$ |
(82,385 |
) |
Basic and diluted net
loss per share |
|
$ |
(0.53 |
) |
|
$ |
(0.66 |
) |
|
$ |
(0.70 |
) |
|
$ |
(1.28 |
) |
Weighted average shares
used to compute basic and diluted net loss per share |
|
|
97,339 |
|
|
|
65,088 |
|
|
|
91,408 |
|
|
|
64,436 |
|
DYNAVAX TECHNOLOGIES CORPORATION
SELECTED BALANCE SHEET DATA(In
thousands)(Unaudited)
|
|
June 30, |
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
Assets |
|
|
|
|
|
|
|
|
Cash, cash equivalents and
marketable securities |
|
$ |
200,708 |
|
|
$ |
151,055 |
|
Inventories, net |
|
|
54,392 |
|
|
|
41,332 |
|
Property and equipment, net |
|
|
30,476 |
|
|
|
32,022 |
|
Intangible assets, net |
|
|
- |
|
|
|
2,500 |
|
Operating lease right-of-use
assets |
|
|
27,871 |
|
|
|
30,252 |
|
Goodwill |
|
|
2,103 |
|
|
|
2,081 |
|
Other assets |
|
|
13,764 |
|
|
|
19,826 |
|
Total
assets |
|
$ |
329,314 |
|
|
$ |
279,068 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
|
|
|
Total current liabilities |
|
$ |
53,222 |
|
|
$ |
53,047 |
|
Total long-term liabilities |
|
|
217,797 |
|
|
|
217,731 |
|
Stockholders’ equity |
|
|
58,295 |
|
|
|
8,290 |
|
Total liabilities and
stockholders’ equity |
|
$ |
329,314 |
|
|
$ |
279,068 |
|
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