NASDAQ:DVAX Dynavax Technologies Q2 2023 Earnings Report $11.33 -0.15 (-1.31%) Closing price 05/2/2025 04:00 PM EasternExtended Trading$11.26 -0.07 (-0.66%) As of 05/2/2025 05:39 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Dynavax Technologies EPS ResultsActual EPS$0.03Consensus EPS -$0.09Beat/MissBeat by +$0.12One Year Ago EPSN/ADynavax Technologies Revenue ResultsActual Revenue$60.25 millionExpected Revenue$51.03 millionBeat/MissBeat by +$9.22 millionYoY Revenue GrowthN/ADynavax Technologies Announcement DetailsQuarterQ2 2023Date8/3/2023TimeN/AConference Call DateThursday, August 3, 2023Conference Call Time4:30PM ETUpcoming EarningsDynavax Technologies' Q1 2025 earnings is scheduled for Tuesday, May 6, 2025, with a conference call scheduled at 4:30 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Dynavax Technologies Q2 2023 Earnings Call TranscriptProvided by QuartrAugust 3, 2023 ShareLink copied to clipboard.There are 10 speakers on the call. Operator00:00:00Day, ladies and gentlemen, and welcome to Dynavax Technologies Second Quarter 2023 Financial Results. As a reminder, this conference is being recorded. At the end of the company's prepared remarks, we will open the call for questions and provide specific instructions at that point. I would now like to turn the call over to Paul Cox, Vice President, Investor Relations and Corporate Communications, you may begin. Speaker 100:00:23Thank you all for participating in today's call. Joining me today from Dynavax are Ryan Spencer, Chief Executive Officer Don Cassell, Chief Commercial Officer Rob Jansen, Chief Medical Officer and Kelli McDonald, Chief Financial Officer. Earlier today, Dynavax released financial results For the Q2 ended June 30, 2023. Copies of the press release and a supplementary slide presentation are available on Dynavax's Web Before we begin, I advise you that we will be making forward looking statements today based on our current expectations and beliefs, Including, but not limited to, potential market sizes, market segmentation, effective marketing efforts, Future expected market share and related growth rates and related ACF IP recommendation impact on each. Financial guidance and trends, including revenue, profitability, cash flow and sufficiency of current capitalization, Timing and results of FDA submissions, clinical trial starts and data readouts and potential future uses of or demand for our CPG-ten eighteen adjuvant. Speaker 100:01:38These statements involve risks and uncertainties, and our actual results may differ materially. These risks are summarized in today's press release and detailed in the Risk Factors section of our SEC filings, including today's quarterly report on Form 10 Q. Our forward looking statements speak as of today, and we undertake no obligation to update such statements. And with that, I will now turn the call over to Ryan. Speaker 200:02:07Thanks, Paul. Good afternoon, everyone, and thank you for taking the time to join us to review Dynavax's results for the Q2 of 2023. We are pleased to share the results of yet another impressive quarter for Dynavax, including outstanding progress for HEPLISAV B, Our adult hepatitis B vaccine, which delivered $56,000,000 in quarterly net product revenue. These results reflect our team's success In the first half of twenty twenty three, along with the growing enthusiasm that we see in the market, we are significantly raising our revenue expectations for the full year. We now expect HEPLISAV B net product revenue to be in the range of $200,000,000 to $215,000,000 compared to the prior range $165,000,000 to $185,000,000 Last year HEPLISAV B revenue doubled compared to 2021. Speaker 200:03:07And with our increased guidance range, we now expect growth of 58% to 70% this year. Based on our exceptional commercial execution, we have strengthened our financial position with cash and investments Increasing to $682,000,000 at quarter end. And we expect positive free cash flow for 2023 in total. This position enables us to support our efforts to maximize the HEPLISAVI opportunity, while making the appropriate investments to advance our clinical portfolio. We continue to make progress in advancing our clinical pipeline of 3 vaccine candidates for Tdap, shingles and plague. Speaker 200:03:46Rob will take I'll walk through our achievements and expectations for our clinical programs in a few minutes. Additionally, we continue to identify and review strategic opportunities to External opportunities in the following two categories: 1st, commercial or late stage assets in the vaccine space to leverage our expertise in the field And our fully integrated capabilities and second, high synergy commercial assets within the infectious disease that would broaden our focus to include therapeutic modalities We remain focused on disciplined capital allocation strategy in our efforts to generate significant value and accelerate growth. And we look forward to providing updates on this front in the future. I'll now turn the call over to Don, so he can provide more details on the tremendous HEPLISAVI performance in the second Speaker 300:04:44Thank you, Ryan. I'm excited to share more details about another very strong quarterly performance for HEPLISAV B And our continued progress in driving overall market growth as well as capturing market share within what we believe is the best in class hepatitis B vaccine. The hepatitis C market continues to grow in the U. S. Following the ACIP's universal recommendation for hepatitis C vaccination, which now represents a large and growing market opportunity. Speaker 300:05:13We believe this recommendation will be a significant catalyst for growth And estimate the hepatitis C market opportunity in the U. S. Could grow to over $800,000,000 by 2027. We continue to see indicators of market expansion with hepatitis B vaccine market growth of approximately 40% year over year in Q2. HEPLISAV B continues its positive trend towards securing a majority market share within the expanding hepatitis B market. Speaker 300:05:44We are demonstrating gains in market share and estimate that HEPLISAVY's total market share increased to approximately 39% compared to approximately 32% at the end of the Q2 last year. As Ryan stated, HEPLISAV B's performance in the 2nd quarter exceeded expectations. In the quarter, net product revenue for HEPLISAV B grew 73% year over year. These quarterly results were once again driven by HEPLISAV B's strong performance in 2 critical market segments, Retail Pharmacy And Integrated Delivery Networks or IDN. For IDN, at the end of the second quarter, HEPLISAV B's market share increased to 53% compared to approximately 39% at the end of the Q2 last year. Speaker 300:06:30In the IDN segment, We are seeing strong conversion from large customers that have started to adopt the universal recommendation, driving meaningful increases in their hepatitis B vaccine purchases And vaccination in appropriate patients that exceeded 2019 pre pandemic levels. We are working with these large health systems and others to drive ongoing adoption of the universal recommendation during the second half of the year. In the Retail Pharmacy segment, We continue to make tremendous progress. During the quarter, HEPLISAV B dose volume increased 78% year over year. We are excited about this result as market growth is the number one indicator that retail pharmacy customers are adopting the universal recommendation. Speaker 300:07:18Driving market growth in retail will be our primary sales and marketing focus moving forward. Although our market share for the quarter remain consistent at 45% year over year as a result of buying patterns of several top retail chains. We are extremely confident in our ability To be the market leader within this critical segment, we have well established strong collaborative relationships across the top retail chain and have launched key headquarter sponsored marketing initiatives and tactics across the segment. Given this, we will be optimizing our sales force to expand our promotional reach in the segment to drive market expansion. This expanded sales force reach will call on headquarters, Divisional, regional and district leaders across the top retail chain. Speaker 300:08:06In addition to increasing our sales force reach, We are also excited to see the full impact of the collaborative marketing initiatives launched at the end of the Q2. We anticipate these headquarter sponsored initiatives Plus our expanded sales force reach will enable continued strong market growth and market leadership within this important segment. We are focusing our efforts on the Retail Pharmacy and IDN segment as we expect to see most of the anticipated market growth from the ACIP Universal Recommendations in these segments. Both segments have required institutional control, Infrastructure, capabilities and patient volume that can help drive universal uptake. We expect these 2 segments will represent approximately 60% of the hepatitis B market by 2027 compared to approximately 44% in 2022. Speaker 300:08:58We are well positioned in both segments with HEPLISAV B now capturing approximately 50% of the market share in these segments combined. In summary, we had an outstanding quarter reaffirming our confidence that HEPLISAV B becoming the market leader in the expanding hepatitis B vaccine market. We are encouraged by our progress and momentum in the key segments of retail pharmacy and IDN, both of which Significantly contributed to the performance of HEPLISAV B exceeding expectations for the Q2. This quarter's record HEPLISAV B revenue results reflect The continued expansion of the hepatitis B vaccine market and growing demand from physicians, pharmacists and patients for our best in class hepatitis B vaccine, Both made possible by our team's strong commercial execution. I will now turn the call over to Rob to take you through our clinical pipeline. Speaker 400:09:53Thank you, Dawn. Over the Q2, we made important progress on our pipeline, and I am pleased to provide our recent advance boots And our plans for continued execution throughout 2023. I'll start with our shingles vaccine program in Z1012. In June, we presented the results from a Phase 1 randomized active controlled adjuvant dose escalation trial To evaluate the safety, tolerability and immunogenicity of Z1018 at the 2023 Annual Conference on Vaccinology Research. In the study, we demonstrated that V1018 showed favorable tolerability without observed safety concerns in healthy adults aged 50 to 69 years. Speaker 400:10:39All V1018 groups demonstrated high antibody and CD4 positive T cell responses. These results demonstrate the opportunity to develop a Schindler's vaccine with improved tolerability and comparable efficacy And they support the continued development of Z-ten eighteen. In the second half of twenty twenty three, we plan to assess the regulatory pathway with the FDA To support the initiation of a Phase onetwo trial in early 2024. So let's turn to our TDAP-two nineteen program. It's an investigational vaccine candidate intended for active booster immunization against tetanus, pteria and pertussis or TDAP. Speaker 400:11:22We're focused on improving the durability and protection against pertussis by leveraging our CPG-ten eighteen adjuvant in a novel CDAP booster vaccine. We recently completed a pertussis challenge study in the non human primate model, which demonstrated protection from disease And robust TH1 responses. We also recently received type B pre AUMV feedback from the FDA On the TDAP-ten eighteen clinical development and regulatory pathways, together results from our Phase 1 study And our human primate study, non human primate study, as well as feedback from FDA support proceeding to a human challenge study. We expect to submit an investigational new drug application to FDA in the Q4 of 2023 To support the initiation of the human challenge study. Moving on to the PLED program, we're conducting a Phase 2 trial evaluating the immunogenicity, safety and tolerability of a 2 dose PLED vaccine This is a collaboration with and funded by the U. Speaker 400:12:33S. Department of Defense. The CPG-ten eighteen adjuvant injectable candidate's mechanism Action has the potential to speed up time to protection with fewer doses compared to the 3 dose alimony of antitaxine under development By the Department of Defense. Earlier this year, we completed enrollment in Part 2 of the Phase 2 program With top line data expected in 2024. In July, Dynavax and the Department of Defense executed a contract modification To support advancement into a non human primate challenge study with the agreement now totaling $33,700,000 through 2025. Speaker 400:13:16We look forward to continuing to make progress across these programs during the rest of this year. In addition, we're excited to announce the establishment of our Scientific Advisory Board comprised of renowned leaders in vaccine research and development We look forward to working with this advisory board in our advancing pipeline as well as supporting the evaluation of internal and external opportunities. I'll now turn the call over to Kelly to review our financial results. Speaker 500:13:50Thank you, Rob. I'm thrilled to report on another strong quarter. I'll review the key financial results for the Q2 and then review our updated guidance for the full year. Please note that all financial comparisons are versus the prior year period unless otherwise noted. Please also refer to our press release and Form 10 Q for the detailed financial information. Speaker 500:14:10Starting with revenue. Total revenues for the Q2 of 2023 were $60,000,000 driven by HEPLISAV B net product revenue of $56,000,000 Compared to the Q2 of last year, HEPLISAV B net product revenue grew by 73%. We're excited about the uptake trajectory for HEPLISAV B, including our continued growth in key market segments and are therefore raising our HEPLISAV B net product revenue guidance for the all year to $200,000,000 to $216,000,000 compared to the prior guidance of $165,000,000 to $185,000,000 This represents an almost 20% increase at the midpoint, reflecting our confidence in the continued product growth this year. We are also pleased with the continued trend in the margin profile for HEPLISAV B, with gross margins of approximately 70 percent in Q2 compared to about 69% last year, and we continue to expect gross margins to average in the mid-70s for the full year. Other revenue was $4,000,000 for the 2nd quarter, representing revenue related to the PLAY vaccine program in collaboration with and fully funded by the U. Speaker 500:15:18S. Now turning to our research and development expenses for the quarter, these increased to $13,000,000 compared to $10,000,000 for the prior period. The increase was driven by continued advancement in our clinical pipeline program. Selling, general and administrative expenses for the quarter were $37,000,000 compared to $36,000,000 for the prior period. The increase was primarily driven by higher personnel related costs and an overall increase in targeted marketing efforts drive HEPLISAV B market share and drive market expansion in key segments that we believe will disproportionately benefit HEPLISAV B. Speaker 500:15:54Now turning to net income, we recorded GAAP net income of $3,000,000 or $0.03 per share basic and diluted in Q2, Compared to GAAP net income of $129,000,000 or $1.02 per share basic and $0.87 per share diluted for the prior year period. Moving to the balance sheet. We ended the 2nd quarter with cash, cash equivalents and marketable securities of approximately $682,000,000 An increase compared to our year end balance of $624,000,000 Based on our current operating plan, we continue to expect to finish 2023 for the positive free cash flow for the year. Additionally, we continue to believe this level of capital is sufficient to support our core business, enabling us to drive sustainable growth in HEPLISAV B to capture a majority market share and bring our R and D portfolio of vaccine candidates forward Without needing to return to capital markets, we are also pleased to update our full year 2023 financial guidance expectation. As mentioned, we are raising our HEPLISAV B net product revenue expectations to be between $200,000,000 $215,000,000 We are maintaining our operating expense guidance of R and D expenses between $55,000,000 $70,000,000 as well as SG and A expenses between $135,000,000 $155,000,000 We do expect to come in at the lower end of our R and D expense range due to the timing of TDAP program clinical trial start up activities taking place later this year and into early 2024. Speaker 500:17:33In closing, we are proud of another successful quarter marked by continued HEPLISAV B out performance, further strengthening of our financial position and pipeline progress. We also continue to be extremely thoughtful in how we allocate our capital To accelerate growth and build beyond our current base business, our strong capital position and commercial execution has provided us with strategic flexibility To identify and pursue external opportunities to complement our organic growth as we strive to deliver long term value to our shareholders, We are excited about our progress to date and we look forward to continuing to deliver on our goals for 2023. Thank you everyone for your attention today. Operator, we would now like to open the Q and A portion of today's call. Operator00:18:19Thank you. One moment for our first question. Our first question comes from the line of Matthew Phipps with William Blair. Your line is now open. Speaker 600:18:44Good afternoon. Just really congrats on a great quarter for you guys. Great to I guess, first for Don, given what you some of the commentary you had around kind of retail growth and just where your market share is, Is the overall market expanding as you expected or is it maybe even a little bit faster than you expected to get to that $800,000,000 I guess I I thought it'd be a little bit slower in this 1st year, picking up a little bit later. Curious where you think you are in that kind of trajectory to get to 800,000,000 Speaker 300:19:19Hey, Matt. Yes, thanks for the question. Regarding market growth, as I mentioned on the comments, market growth is so critical, Obviously, retail and IDN, but specifically to answer your question, market growth is actually accelerating more so than we forecasted. We're really pleased to see the uptake with the recommendation in both segments, both retail and IDN. And so that's something that we're really excited about in those segments. Speaker 600:19:49Great. Thanks. And curious on the Tdap non human challenge study, Did that study include a control arm such as Boostrix? Speaker 700:20:00It did. Speaker 600:20:02Can you comment on any of that? Or will you do you plan to present that at some meeting coming up? Speaker 200:20:10We don't have any plans to present that non human primate data at a meeting on its own. But in general, we saw Strong T cell responses, which would be adjuvant compared to the STRIPs compared to the control arm. So We are pleased with the results compared to the comparator. Yes. And then just to put a final point On Don's question before Matt, just so you're clear, as he mentioned, it's accelerated faster than we projected. Speaker 200:20:39We haven't at this point changed The overall time on our long term guidance around the peak, so we're going to have to watch that and see how that Kind of continues to evolve over time to see if it's accelerated or the shape of the curve just got a little steep in the front end. Speaker 600:20:58Yes, understood. Thank you all and congrats again. Speaker 200:21:02Thank you so much. Operator00:21:03Thank you. One moment for our next question please. Our next question comes from the line of Ernesto Rodriguez Dumont with Cowen. Your line is now open. Speaker 100:21:17Hi, and congratulations on a great quarter. Thank you for taking my questions. Speaker 800:21:23So one question and I'll help this out. You have guided previously for gross margins in the low 70s. Now you reported margins on the mid high 70s. Is that something that we should Consider looking forward maybe improvement in your estimate in gross margin or Speaker 100:21:46is that something more short term? Speaker 200:21:50Ellie, you want to take that one? Speaker 500:21:51Sure. Hi, Ernie. Thanks for the question. As you know and as you've seen sort of in the lumpiness over the last couple of years in COGS, We made pretty meaningful investments in our manufacturing facility over in Germany. So we're really excited to see So the yield improvement translating to improved margins, especially in this quarter. Speaker 500:22:12To answer your question directly, we would expect Margins in this level that continue here on out with mid-70s percent margin for the year on average. Speaker 800:22:24Got it. Thank you. That's helpful. And if I may, on the shingles vaccine on the presentation, Any feedback that you got from the presentation from physicians? And in particular, Do you have you disclosed also the Grade 3 OR Grade 4 AEs that were presented, in particular, the one that led to the discontinuation of treatment? Speaker 200:22:59Rob, do you want to answer that one? Speaker 400:23:02Yes, we did. The grades 3 and 4 were similar between the two groups. And the ones that led there was a one that led to discontinuation in the lowest The 10 18 group, but it wasn't related to vaccine. It was sorry, it was thought to be related to vaccine from Pardon me, by the investigator, by the sponsor, we would not consider it to be related. Speaker 100:23:34Got it. Okay. Thank you. Appreciate it. Congrats again. Speaker 100:23:38Thank you. Operator00:23:40Thank you. One moment for our next question, please. Our next question comes from the line of Roy Buchanan with JMP Securities. Your line is now open. Speaker 700:23:53Hi. Thanks for taking the question. Great quarter. First one, I guess, on the play, the new brand, just How much was left in the original part of the brand? Do you have access to that entire amount? Speaker 700:24:06And then how far Does the new total get you, I think the PR says, starting the non human primate challenge trial, but seems like it probably gets you Quite a bit beyond that. And then I guess can you just help us understand what the load from the non human primate challenge trial As far as getting you to an approval? Speaker 300:24:30Thank you. If you recall, Speaker 200:24:32the original contract is $22,000,000 that we will have full access to that content. That was to focus on the completion of the Phase 2 trial. So there's a number of amendments that expanded the contract by about $11,000,000 in total, with the largest piece being the non human primate study, which is I think to get to your real the crux of your question is how far does that get us? That's one component of a longer term pathway To support eventual approval that would leverage non human primate challenge studies. So that's the first step in that process, which is covered by This particular contract expansion. Speaker 700:25:14Great. And then just a quick one on shingles. I know you guys So need to talk to the FDA and probably will have more to say after that. But I guess, I'm just curious your thoughts around if you have to go ex U. S. Speaker 700:25:25For the next trial, is that Leverageable for a U. S. Approval or is it base case assumption that you might have to forego the U. S. Market? Speaker 700:25:34And if the latter is the case, Does it make the most sense to license the candidate out? Speaker 200:25:40Yes. Our current strategy is definitely to include the U. S. Market. So as you Indicated, we will have to still talk to the agency about our opportunities for a pathway in the U. Speaker 200:25:51S. But anything any sort of strategy that took us into ex U. S. Markets for efficacy Speaker 700:26:05Okay. Thank you. Speaker 500:26:08Thank you. Operator00:26:09One moment for our next question, please. Our next question comes from the line of John Miller with Evercore ISI. Your line is now open. Speaker 900:26:21Hey, guys. Thanks so much for taking my question. I guess I'll join everybody else in congratulating you on a great quarter. As a new analyst covering the story, I can only assume every quarter will be as exciting as this one. Speaker 200:26:35Thanks. I appreciate that. Speaker 900:26:38And that's my question. No, Maybe just one question from me. When you say you're optimizing your commercial efforts for retail and IDN segments as the fastest growing segments, Can you maybe give me a little more color on what levers are available to you there versus other segments and maybe what The biggest drivers of share growth there will be and given the rapid growth you've seen since the ACIP RAC, are you seeing any signs That pushback from payers, price sensitivity or anything like that in the retail segment that may be influencing further growth there? Speaker 200:27:17Why don't we break this up? I'll take the second question quickly and then let Dawn provide some more insight around the optimization within retail. But in general, and this is really important as it relates to the vaccine business, there's very little payer involvement or engagement in the vaccine business. It's generally good medicine and Seeing as being, it's welcome by payers typically. So we have not seen any pushback as it relates to the recommendation from a payer or pricing perspective. Speaker 200:27:44So and I don't we don't expect that would have any impact on the ability for the market To grow, that really comes down to physician recommendation and patient acceptance. But as it relates to the operational changes within The field team and the marketing I'm sorry, the retail segment, I'll turn it over to Don. Speaker 300:28:05Yes. Hey, Don. So, yes, regarding the optimizing Sales force, optimization of sales force, mainly as it relates specifically to retail, as I mentioned on the call, the targets will be around not only headquarters, which We've been quite a bit for quite some time establishing relationships that allows us to deploy marketing initiatives, but also Engaging at the regional, the divisional and the district levels of these retail chains, which is so critical Speaker 900:28:31to pull through Speaker 300:28:32initiatives whatever maybe to increase identification and recommendation of hepatitis B vaccine. So the whole point there is to really engage the retailer At those different levels and that's part of this process ensuring we have the right sales force attack to allow us to drive forward the recommendations throughout the top chain. At the same time within the hospital segment, IDN segment, we've gone to a more vertical structure that allows account executives to own the decision makers At Speaker 200:29:02the top as well as pull through at Speaker 300:29:03the clinic level, to drive the recommendation. So we feel really good about where we're at And a lot of it's based upon a lot of the learnings we've been able to gather over the last several years in launching HEPLISAV B. Speaker 900:29:19Great. That makes sense. And maybe on the TDEP program, Good evening, what color on that challenge study that you're planning on starting by the end of the year? How big it's going to be and how that will Support further development of that program? Speaker 200:29:36Yes, we haven't commented on actual size just yet, but as far as the how it fits Into the whole picture, obviously, demonstrating that the product can be protective in humans is critical And it will allow us to then have a immunogenicity endpoint that we can use to bridge back to a larger study. So this is an initial Challenge study, it's likely and expected that we would have to do larger challenge studies in addition to this one as part of the longer term development plan. It's important to also recognize this isn't this is a new study design that hasn't really been done before with a vaccine for pertussis. So We are working with an investigator now to help support his development of a challenge model where we can use a vaccine And allows disease to progress to identify and test efficacy for humans. And so this pilot study is important on a number of fronts, one for our product and also Speaker 900:30:37That makes sense. Thanks so much. Speaker 200:30:39Absolutely. Thank you for the question. Operator00:30:41Thank you. And we have no further questions at this time. I would like to hand the conference back over to Mr. Ryan Spencer, Chief Executive Officer for closing remarks. You may begin. Speaker 200:30:54Thank you, operator, and thank you all for joining us today. We appreciate your interest in Dynavax. We are very excited about our continued progress and the strength of our position, which we believe allows us to focus on executing our long term objectives Operator00:31:16Thank you. Ladies and gentlemen, thank you for joining us today. This concludes today's conference call. You may now disconnect. Everyone, have a wonderful day.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallDynavax Technologies Q2 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Dynavax Technologies Earnings HeadlinesDynavax Announces Nationwide Harris Poll Survey Results Finding Americans Underestimate the Serious Consequences of Hepatitis B and Vaccine Protection BenefitsMay 1 at 8:00 AM | prnewswire.comDynavax Highlights Superior Board Leadership Overseeing Long-Term Value Creation StrategyApril 29, 2025 | prnewswire.comThe Trump Dump is starting; Get out of stocks now?The first 365 days of the Trump presidency… Will be the best time to get rich in American history.May 4, 2025 | Paradigm Press (Ad)Dynavax Technologies (NASDAQ:DVAX) & Lotus Pharmaceuticals (OTCMKTS:LTUS) Head to Head SurveyApril 29, 2025 | americanbankingnews.comDynavax to Report First Quarter 2025 Financial Results and Host Conference Call on May 6, 2025April 22, 2025 | prnewswire.comDynavax shareholder Deep Track files proxy statementApril 21, 2025 | msn.comSee More Dynavax Technologies Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Dynavax Technologies? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Dynavax Technologies and other key companies, straight to your email. Email Address About Dynavax TechnologiesDynavax Technologies (NASDAQ:DVAX), a commercial stage biopharmaceutical company, focuses on developing and commercializing vaccines in the United States. It markets HEPLISAV-B, a hepatitis B vaccine for prevention of infection caused by all known subtypes of hepatitis B virus in age 18 years and older in the United States and Europe. The company also manufactures and sells CpG 1018, the adjuvant used in HEPLISAV-B. Dynavax Technologies Corporation has a collaboration agreement with Valneva Scotland Limited; Zhejiang Clover Biopharmaceuticals, Inc.; Clover Biopharmaceuticals (Hong Kong) Co., Limited; Biological E. Limited; PT Bio Farma; Medigen Vaccine Biologics; and Serum Institute of India Pvt. Ltd. The company was formerly known as Double Helix Corporation and changed its name to Dynavax Technologies Corporation in September 1996. 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There are 10 speakers on the call. Operator00:00:00Day, ladies and gentlemen, and welcome to Dynavax Technologies Second Quarter 2023 Financial Results. As a reminder, this conference is being recorded. At the end of the company's prepared remarks, we will open the call for questions and provide specific instructions at that point. I would now like to turn the call over to Paul Cox, Vice President, Investor Relations and Corporate Communications, you may begin. Speaker 100:00:23Thank you all for participating in today's call. Joining me today from Dynavax are Ryan Spencer, Chief Executive Officer Don Cassell, Chief Commercial Officer Rob Jansen, Chief Medical Officer and Kelli McDonald, Chief Financial Officer. Earlier today, Dynavax released financial results For the Q2 ended June 30, 2023. Copies of the press release and a supplementary slide presentation are available on Dynavax's Web Before we begin, I advise you that we will be making forward looking statements today based on our current expectations and beliefs, Including, but not limited to, potential market sizes, market segmentation, effective marketing efforts, Future expected market share and related growth rates and related ACF IP recommendation impact on each. Financial guidance and trends, including revenue, profitability, cash flow and sufficiency of current capitalization, Timing and results of FDA submissions, clinical trial starts and data readouts and potential future uses of or demand for our CPG-ten eighteen adjuvant. Speaker 100:01:38These statements involve risks and uncertainties, and our actual results may differ materially. These risks are summarized in today's press release and detailed in the Risk Factors section of our SEC filings, including today's quarterly report on Form 10 Q. Our forward looking statements speak as of today, and we undertake no obligation to update such statements. And with that, I will now turn the call over to Ryan. Speaker 200:02:07Thanks, Paul. Good afternoon, everyone, and thank you for taking the time to join us to review Dynavax's results for the Q2 of 2023. We are pleased to share the results of yet another impressive quarter for Dynavax, including outstanding progress for HEPLISAV B, Our adult hepatitis B vaccine, which delivered $56,000,000 in quarterly net product revenue. These results reflect our team's success In the first half of twenty twenty three, along with the growing enthusiasm that we see in the market, we are significantly raising our revenue expectations for the full year. We now expect HEPLISAV B net product revenue to be in the range of $200,000,000 to $215,000,000 compared to the prior range $165,000,000 to $185,000,000 Last year HEPLISAV B revenue doubled compared to 2021. Speaker 200:03:07And with our increased guidance range, we now expect growth of 58% to 70% this year. Based on our exceptional commercial execution, we have strengthened our financial position with cash and investments Increasing to $682,000,000 at quarter end. And we expect positive free cash flow for 2023 in total. This position enables us to support our efforts to maximize the HEPLISAVI opportunity, while making the appropriate investments to advance our clinical portfolio. We continue to make progress in advancing our clinical pipeline of 3 vaccine candidates for Tdap, shingles and plague. Speaker 200:03:46Rob will take I'll walk through our achievements and expectations for our clinical programs in a few minutes. Additionally, we continue to identify and review strategic opportunities to External opportunities in the following two categories: 1st, commercial or late stage assets in the vaccine space to leverage our expertise in the field And our fully integrated capabilities and second, high synergy commercial assets within the infectious disease that would broaden our focus to include therapeutic modalities We remain focused on disciplined capital allocation strategy in our efforts to generate significant value and accelerate growth. And we look forward to providing updates on this front in the future. I'll now turn the call over to Don, so he can provide more details on the tremendous HEPLISAVI performance in the second Speaker 300:04:44Thank you, Ryan. I'm excited to share more details about another very strong quarterly performance for HEPLISAV B And our continued progress in driving overall market growth as well as capturing market share within what we believe is the best in class hepatitis B vaccine. The hepatitis C market continues to grow in the U. S. Following the ACIP's universal recommendation for hepatitis C vaccination, which now represents a large and growing market opportunity. Speaker 300:05:13We believe this recommendation will be a significant catalyst for growth And estimate the hepatitis C market opportunity in the U. S. Could grow to over $800,000,000 by 2027. We continue to see indicators of market expansion with hepatitis B vaccine market growth of approximately 40% year over year in Q2. HEPLISAV B continues its positive trend towards securing a majority market share within the expanding hepatitis B market. Speaker 300:05:44We are demonstrating gains in market share and estimate that HEPLISAVY's total market share increased to approximately 39% compared to approximately 32% at the end of the Q2 last year. As Ryan stated, HEPLISAV B's performance in the 2nd quarter exceeded expectations. In the quarter, net product revenue for HEPLISAV B grew 73% year over year. These quarterly results were once again driven by HEPLISAV B's strong performance in 2 critical market segments, Retail Pharmacy And Integrated Delivery Networks or IDN. For IDN, at the end of the second quarter, HEPLISAV B's market share increased to 53% compared to approximately 39% at the end of the Q2 last year. Speaker 300:06:30In the IDN segment, We are seeing strong conversion from large customers that have started to adopt the universal recommendation, driving meaningful increases in their hepatitis B vaccine purchases And vaccination in appropriate patients that exceeded 2019 pre pandemic levels. We are working with these large health systems and others to drive ongoing adoption of the universal recommendation during the second half of the year. In the Retail Pharmacy segment, We continue to make tremendous progress. During the quarter, HEPLISAV B dose volume increased 78% year over year. We are excited about this result as market growth is the number one indicator that retail pharmacy customers are adopting the universal recommendation. Speaker 300:07:18Driving market growth in retail will be our primary sales and marketing focus moving forward. Although our market share for the quarter remain consistent at 45% year over year as a result of buying patterns of several top retail chains. We are extremely confident in our ability To be the market leader within this critical segment, we have well established strong collaborative relationships across the top retail chain and have launched key headquarter sponsored marketing initiatives and tactics across the segment. Given this, we will be optimizing our sales force to expand our promotional reach in the segment to drive market expansion. This expanded sales force reach will call on headquarters, Divisional, regional and district leaders across the top retail chain. Speaker 300:08:06In addition to increasing our sales force reach, We are also excited to see the full impact of the collaborative marketing initiatives launched at the end of the Q2. We anticipate these headquarter sponsored initiatives Plus our expanded sales force reach will enable continued strong market growth and market leadership within this important segment. We are focusing our efforts on the Retail Pharmacy and IDN segment as we expect to see most of the anticipated market growth from the ACIP Universal Recommendations in these segments. Both segments have required institutional control, Infrastructure, capabilities and patient volume that can help drive universal uptake. We expect these 2 segments will represent approximately 60% of the hepatitis B market by 2027 compared to approximately 44% in 2022. Speaker 300:08:58We are well positioned in both segments with HEPLISAV B now capturing approximately 50% of the market share in these segments combined. In summary, we had an outstanding quarter reaffirming our confidence that HEPLISAV B becoming the market leader in the expanding hepatitis B vaccine market. We are encouraged by our progress and momentum in the key segments of retail pharmacy and IDN, both of which Significantly contributed to the performance of HEPLISAV B exceeding expectations for the Q2. This quarter's record HEPLISAV B revenue results reflect The continued expansion of the hepatitis B vaccine market and growing demand from physicians, pharmacists and patients for our best in class hepatitis B vaccine, Both made possible by our team's strong commercial execution. I will now turn the call over to Rob to take you through our clinical pipeline. Speaker 400:09:53Thank you, Dawn. Over the Q2, we made important progress on our pipeline, and I am pleased to provide our recent advance boots And our plans for continued execution throughout 2023. I'll start with our shingles vaccine program in Z1012. In June, we presented the results from a Phase 1 randomized active controlled adjuvant dose escalation trial To evaluate the safety, tolerability and immunogenicity of Z1018 at the 2023 Annual Conference on Vaccinology Research. In the study, we demonstrated that V1018 showed favorable tolerability without observed safety concerns in healthy adults aged 50 to 69 years. Speaker 400:10:39All V1018 groups demonstrated high antibody and CD4 positive T cell responses. These results demonstrate the opportunity to develop a Schindler's vaccine with improved tolerability and comparable efficacy And they support the continued development of Z-ten eighteen. In the second half of twenty twenty three, we plan to assess the regulatory pathway with the FDA To support the initiation of a Phase onetwo trial in early 2024. So let's turn to our TDAP-two nineteen program. It's an investigational vaccine candidate intended for active booster immunization against tetanus, pteria and pertussis or TDAP. Speaker 400:11:22We're focused on improving the durability and protection against pertussis by leveraging our CPG-ten eighteen adjuvant in a novel CDAP booster vaccine. We recently completed a pertussis challenge study in the non human primate model, which demonstrated protection from disease And robust TH1 responses. We also recently received type B pre AUMV feedback from the FDA On the TDAP-ten eighteen clinical development and regulatory pathways, together results from our Phase 1 study And our human primate study, non human primate study, as well as feedback from FDA support proceeding to a human challenge study. We expect to submit an investigational new drug application to FDA in the Q4 of 2023 To support the initiation of the human challenge study. Moving on to the PLED program, we're conducting a Phase 2 trial evaluating the immunogenicity, safety and tolerability of a 2 dose PLED vaccine This is a collaboration with and funded by the U. Speaker 400:12:33S. Department of Defense. The CPG-ten eighteen adjuvant injectable candidate's mechanism Action has the potential to speed up time to protection with fewer doses compared to the 3 dose alimony of antitaxine under development By the Department of Defense. Earlier this year, we completed enrollment in Part 2 of the Phase 2 program With top line data expected in 2024. In July, Dynavax and the Department of Defense executed a contract modification To support advancement into a non human primate challenge study with the agreement now totaling $33,700,000 through 2025. Speaker 400:13:16We look forward to continuing to make progress across these programs during the rest of this year. In addition, we're excited to announce the establishment of our Scientific Advisory Board comprised of renowned leaders in vaccine research and development We look forward to working with this advisory board in our advancing pipeline as well as supporting the evaluation of internal and external opportunities. I'll now turn the call over to Kelly to review our financial results. Speaker 500:13:50Thank you, Rob. I'm thrilled to report on another strong quarter. I'll review the key financial results for the Q2 and then review our updated guidance for the full year. Please note that all financial comparisons are versus the prior year period unless otherwise noted. Please also refer to our press release and Form 10 Q for the detailed financial information. Speaker 500:14:10Starting with revenue. Total revenues for the Q2 of 2023 were $60,000,000 driven by HEPLISAV B net product revenue of $56,000,000 Compared to the Q2 of last year, HEPLISAV B net product revenue grew by 73%. We're excited about the uptake trajectory for HEPLISAV B, including our continued growth in key market segments and are therefore raising our HEPLISAV B net product revenue guidance for the all year to $200,000,000 to $216,000,000 compared to the prior guidance of $165,000,000 to $185,000,000 This represents an almost 20% increase at the midpoint, reflecting our confidence in the continued product growth this year. We are also pleased with the continued trend in the margin profile for HEPLISAV B, with gross margins of approximately 70 percent in Q2 compared to about 69% last year, and we continue to expect gross margins to average in the mid-70s for the full year. Other revenue was $4,000,000 for the 2nd quarter, representing revenue related to the PLAY vaccine program in collaboration with and fully funded by the U. Speaker 500:15:18S. Now turning to our research and development expenses for the quarter, these increased to $13,000,000 compared to $10,000,000 for the prior period. The increase was driven by continued advancement in our clinical pipeline program. Selling, general and administrative expenses for the quarter were $37,000,000 compared to $36,000,000 for the prior period. The increase was primarily driven by higher personnel related costs and an overall increase in targeted marketing efforts drive HEPLISAV B market share and drive market expansion in key segments that we believe will disproportionately benefit HEPLISAV B. Speaker 500:15:54Now turning to net income, we recorded GAAP net income of $3,000,000 or $0.03 per share basic and diluted in Q2, Compared to GAAP net income of $129,000,000 or $1.02 per share basic and $0.87 per share diluted for the prior year period. Moving to the balance sheet. We ended the 2nd quarter with cash, cash equivalents and marketable securities of approximately $682,000,000 An increase compared to our year end balance of $624,000,000 Based on our current operating plan, we continue to expect to finish 2023 for the positive free cash flow for the year. Additionally, we continue to believe this level of capital is sufficient to support our core business, enabling us to drive sustainable growth in HEPLISAV B to capture a majority market share and bring our R and D portfolio of vaccine candidates forward Without needing to return to capital markets, we are also pleased to update our full year 2023 financial guidance expectation. As mentioned, we are raising our HEPLISAV B net product revenue expectations to be between $200,000,000 $215,000,000 We are maintaining our operating expense guidance of R and D expenses between $55,000,000 $70,000,000 as well as SG and A expenses between $135,000,000 $155,000,000 We do expect to come in at the lower end of our R and D expense range due to the timing of TDAP program clinical trial start up activities taking place later this year and into early 2024. Speaker 500:17:33In closing, we are proud of another successful quarter marked by continued HEPLISAV B out performance, further strengthening of our financial position and pipeline progress. We also continue to be extremely thoughtful in how we allocate our capital To accelerate growth and build beyond our current base business, our strong capital position and commercial execution has provided us with strategic flexibility To identify and pursue external opportunities to complement our organic growth as we strive to deliver long term value to our shareholders, We are excited about our progress to date and we look forward to continuing to deliver on our goals for 2023. Thank you everyone for your attention today. Operator, we would now like to open the Q and A portion of today's call. Operator00:18:19Thank you. One moment for our first question. Our first question comes from the line of Matthew Phipps with William Blair. Your line is now open. Speaker 600:18:44Good afternoon. Just really congrats on a great quarter for you guys. Great to I guess, first for Don, given what you some of the commentary you had around kind of retail growth and just where your market share is, Is the overall market expanding as you expected or is it maybe even a little bit faster than you expected to get to that $800,000,000 I guess I I thought it'd be a little bit slower in this 1st year, picking up a little bit later. Curious where you think you are in that kind of trajectory to get to 800,000,000 Speaker 300:19:19Hey, Matt. Yes, thanks for the question. Regarding market growth, as I mentioned on the comments, market growth is so critical, Obviously, retail and IDN, but specifically to answer your question, market growth is actually accelerating more so than we forecasted. We're really pleased to see the uptake with the recommendation in both segments, both retail and IDN. And so that's something that we're really excited about in those segments. Speaker 600:19:49Great. Thanks. And curious on the Tdap non human challenge study, Did that study include a control arm such as Boostrix? Speaker 700:20:00It did. Speaker 600:20:02Can you comment on any of that? Or will you do you plan to present that at some meeting coming up? Speaker 200:20:10We don't have any plans to present that non human primate data at a meeting on its own. But in general, we saw Strong T cell responses, which would be adjuvant compared to the STRIPs compared to the control arm. So We are pleased with the results compared to the comparator. Yes. And then just to put a final point On Don's question before Matt, just so you're clear, as he mentioned, it's accelerated faster than we projected. Speaker 200:20:39We haven't at this point changed The overall time on our long term guidance around the peak, so we're going to have to watch that and see how that Kind of continues to evolve over time to see if it's accelerated or the shape of the curve just got a little steep in the front end. Speaker 600:20:58Yes, understood. Thank you all and congrats again. Speaker 200:21:02Thank you so much. Operator00:21:03Thank you. One moment for our next question please. Our next question comes from the line of Ernesto Rodriguez Dumont with Cowen. Your line is now open. Speaker 100:21:17Hi, and congratulations on a great quarter. Thank you for taking my questions. Speaker 800:21:23So one question and I'll help this out. You have guided previously for gross margins in the low 70s. Now you reported margins on the mid high 70s. Is that something that we should Consider looking forward maybe improvement in your estimate in gross margin or Speaker 100:21:46is that something more short term? Speaker 200:21:50Ellie, you want to take that one? Speaker 500:21:51Sure. Hi, Ernie. Thanks for the question. As you know and as you've seen sort of in the lumpiness over the last couple of years in COGS, We made pretty meaningful investments in our manufacturing facility over in Germany. So we're really excited to see So the yield improvement translating to improved margins, especially in this quarter. Speaker 500:22:12To answer your question directly, we would expect Margins in this level that continue here on out with mid-70s percent margin for the year on average. Speaker 800:22:24Got it. Thank you. That's helpful. And if I may, on the shingles vaccine on the presentation, Any feedback that you got from the presentation from physicians? And in particular, Do you have you disclosed also the Grade 3 OR Grade 4 AEs that were presented, in particular, the one that led to the discontinuation of treatment? Speaker 200:22:59Rob, do you want to answer that one? Speaker 400:23:02Yes, we did. The grades 3 and 4 were similar between the two groups. And the ones that led there was a one that led to discontinuation in the lowest The 10 18 group, but it wasn't related to vaccine. It was sorry, it was thought to be related to vaccine from Pardon me, by the investigator, by the sponsor, we would not consider it to be related. Speaker 100:23:34Got it. Okay. Thank you. Appreciate it. Congrats again. Speaker 100:23:38Thank you. Operator00:23:40Thank you. One moment for our next question, please. Our next question comes from the line of Roy Buchanan with JMP Securities. Your line is now open. Speaker 700:23:53Hi. Thanks for taking the question. Great quarter. First one, I guess, on the play, the new brand, just How much was left in the original part of the brand? Do you have access to that entire amount? Speaker 700:24:06And then how far Does the new total get you, I think the PR says, starting the non human primate challenge trial, but seems like it probably gets you Quite a bit beyond that. And then I guess can you just help us understand what the load from the non human primate challenge trial As far as getting you to an approval? Speaker 300:24:30Thank you. If you recall, Speaker 200:24:32the original contract is $22,000,000 that we will have full access to that content. That was to focus on the completion of the Phase 2 trial. So there's a number of amendments that expanded the contract by about $11,000,000 in total, with the largest piece being the non human primate study, which is I think to get to your real the crux of your question is how far does that get us? That's one component of a longer term pathway To support eventual approval that would leverage non human primate challenge studies. So that's the first step in that process, which is covered by This particular contract expansion. Speaker 700:25:14Great. And then just a quick one on shingles. I know you guys So need to talk to the FDA and probably will have more to say after that. But I guess, I'm just curious your thoughts around if you have to go ex U. S. Speaker 700:25:25For the next trial, is that Leverageable for a U. S. Approval or is it base case assumption that you might have to forego the U. S. Market? Speaker 700:25:34And if the latter is the case, Does it make the most sense to license the candidate out? Speaker 200:25:40Yes. Our current strategy is definitely to include the U. S. Market. So as you Indicated, we will have to still talk to the agency about our opportunities for a pathway in the U. Speaker 200:25:51S. But anything any sort of strategy that took us into ex U. S. Markets for efficacy Speaker 700:26:05Okay. Thank you. Speaker 500:26:08Thank you. Operator00:26:09One moment for our next question, please. Our next question comes from the line of John Miller with Evercore ISI. Your line is now open. Speaker 900:26:21Hey, guys. Thanks so much for taking my question. I guess I'll join everybody else in congratulating you on a great quarter. As a new analyst covering the story, I can only assume every quarter will be as exciting as this one. Speaker 200:26:35Thanks. I appreciate that. Speaker 900:26:38And that's my question. No, Maybe just one question from me. When you say you're optimizing your commercial efforts for retail and IDN segments as the fastest growing segments, Can you maybe give me a little more color on what levers are available to you there versus other segments and maybe what The biggest drivers of share growth there will be and given the rapid growth you've seen since the ACIP RAC, are you seeing any signs That pushback from payers, price sensitivity or anything like that in the retail segment that may be influencing further growth there? Speaker 200:27:17Why don't we break this up? I'll take the second question quickly and then let Dawn provide some more insight around the optimization within retail. But in general, and this is really important as it relates to the vaccine business, there's very little payer involvement or engagement in the vaccine business. It's generally good medicine and Seeing as being, it's welcome by payers typically. So we have not seen any pushback as it relates to the recommendation from a payer or pricing perspective. Speaker 200:27:44So and I don't we don't expect that would have any impact on the ability for the market To grow, that really comes down to physician recommendation and patient acceptance. But as it relates to the operational changes within The field team and the marketing I'm sorry, the retail segment, I'll turn it over to Don. Speaker 300:28:05Yes. Hey, Don. So, yes, regarding the optimizing Sales force, optimization of sales force, mainly as it relates specifically to retail, as I mentioned on the call, the targets will be around not only headquarters, which We've been quite a bit for quite some time establishing relationships that allows us to deploy marketing initiatives, but also Engaging at the regional, the divisional and the district levels of these retail chains, which is so critical Speaker 900:28:31to pull through Speaker 300:28:32initiatives whatever maybe to increase identification and recommendation of hepatitis B vaccine. So the whole point there is to really engage the retailer At those different levels and that's part of this process ensuring we have the right sales force attack to allow us to drive forward the recommendations throughout the top chain. At the same time within the hospital segment, IDN segment, we've gone to a more vertical structure that allows account executives to own the decision makers At Speaker 200:29:02the top as well as pull through at Speaker 300:29:03the clinic level, to drive the recommendation. So we feel really good about where we're at And a lot of it's based upon a lot of the learnings we've been able to gather over the last several years in launching HEPLISAV B. Speaker 900:29:19Great. That makes sense. And maybe on the TDEP program, Good evening, what color on that challenge study that you're planning on starting by the end of the year? How big it's going to be and how that will Support further development of that program? Speaker 200:29:36Yes, we haven't commented on actual size just yet, but as far as the how it fits Into the whole picture, obviously, demonstrating that the product can be protective in humans is critical And it will allow us to then have a immunogenicity endpoint that we can use to bridge back to a larger study. So this is an initial Challenge study, it's likely and expected that we would have to do larger challenge studies in addition to this one as part of the longer term development plan. It's important to also recognize this isn't this is a new study design that hasn't really been done before with a vaccine for pertussis. So We are working with an investigator now to help support his development of a challenge model where we can use a vaccine And allows disease to progress to identify and test efficacy for humans. And so this pilot study is important on a number of fronts, one for our product and also Speaker 900:30:37That makes sense. Thanks so much. Speaker 200:30:39Absolutely. Thank you for the question. Operator00:30:41Thank you. And we have no further questions at this time. I would like to hand the conference back over to Mr. Ryan Spencer, Chief Executive Officer for closing remarks. You may begin. Speaker 200:30:54Thank you, operator, and thank you all for joining us today. We appreciate your interest in Dynavax. We are very excited about our continued progress and the strength of our position, which we believe allows us to focus on executing our long term objectives Operator00:31:16Thank you. Ladies and gentlemen, thank you for joining us today. This concludes today's conference call. You may now disconnect. Everyone, have a wonderful day.Read morePowered by