Dynavax Technologies Q1 2025 Earnings Report

Dynavax Technologies EPS Results

• Actual EPS: -$0.11
• Consensus EPS: $0.03
• Beat/Miss: Missed by -$0.14
• One Year Ago EPS: N/A

Dynavax Technologies Revenue Results

• Actual Revenue: $68.16 million
• Expected Revenue: $70.01 million
• Beat/Miss: Missed by -$1.85 million
• YoY Revenue Growth: N/A

Dynavax Technologies Announcement Details

• Quarter: Q1 2025
• Date: 5/6/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, May 6, 2025
• Conference Call Time: 4:30PM ET

Dynavax Technologies (NASDAQ:DVAX) is a biopharmaceutical company focused on the development and commercialization of novel vaccines and immunotherapies. Headquartered in Emeryville, California, the company specializes in leveraging its proprietary Toll-like receptor (TLR) agonist platform to enhance immune responses. Its lead product, HEPLISAV-B, is a two-dose hepatitis B vaccine approved by the U.S. Food and Drug Administration that incorporates the CpG 1018 adjuvant to stimulate a rapid and robust antibody response in adults.

Founded in 1993, Dynavax has built a pipeline that extends beyond hepatitis B to include candidates targeting seasonal influenza, respiratory syncytial virus (RSV) and emerging infectious diseases. The company’s approach centers on pairing antigen constructs with adjuvant technologies designed to improve efficacy, durability and overall immunogenicity. In parallel, Dynavax is exploring immuno-oncology applications by investigating how its TLR agonists can synergize with checkpoint inhibitors and other cancer therapies.

Dynavax maintains a presence in North America and Europe, both through direct commercialization efforts and strategic partnerships. In addition to its Emeryville headquarters, the company operates research and development facilities in the United Kingdom and collaborates with global pharmaceutical firms to broaden the reach of its vaccine and adjuvant technologies. These alliances have enabled Dynavax to navigate regulatory requirements and facilitate supply chain distribution in multiple regions.

Under the leadership of President and Chief Executive Officer Tony Wood, who joined the company in 2017, Dynavax continues to advance its development programs and expand commercial opportunities. The company’s scientific team includes experts in immunology, infectious disease and vaccine manufacturing, supporting a disciplined approach to clinical research and regulatory strategy. As Dynavax progresses its pipeline through clinical milestones, it aims to address unmet medical needs in both prophylactic and therapeutic settings.

Dynavax Technologies Q1 2025 Earnings Call Transcript

Key Takeaways

• Record Q1 net revenue for HEPLISAV-B was $65 M, up 36% year-over-year, positioning the company to hit the upper half of its full-year sales guidance.
• Pipeline advancements include a Phase 1/2 shingles vaccine readout in Q3, imminent Phase 1/2 pandemic influenza trial initiation, and a new Lyme disease program targeting clinical entry in 2027.
• R&D expenses rose to $19 M (up from $14 M) and the company recorded an $11 M bad debt allowance related to a legacy COVID-19 agreement, contributing to a $96 M GAAP net loss.
• Over 85% of the $200 M share repurchase program has been executed as of May 5, demonstrating active capital return to shareholders.
• Full-year guidance of $300 M–$325 M HEPLISAV-B revenue was reiterated with confidence to achieve the top half of the range, alongside an adjusted EBITDA target of at least $75 M.

Presentation

[Operator]

Good day, ladies and gentlemen, and welcome to the Dynavax Technologies First Quarter twenty twenty five Financial Results Conference Call. As a reminder, this call is being recorded. At the end of the company's prepared remarks, we will open the call for questions and provide specific participation instructions at that time. I would now like to hand the call over to Paul Cox, Vice President, Investor Relations and Corporate Communications. You may now begin.

[Paul Cox, VP of IR and Corporate Communications at Dynavax]

Thank you for participating in today's call. Joining me from Dynavax are Ryan Spencer, Chief Executive Officer Don Cassell, Chief Commercial Officer Rob Jansen, Chief Medical Officer and Kelly McDonnell, our Chief Financial Officer. Earlier today, Dynavax released financial results for the first quarter ended 03/31/2025. Copies of the press release and a supplementary slide presentation are available on Dynavax's website. 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, effect of marketing efforts, future expected market share and related growth rates and related ACIP 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. These 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 to update such statements. Our earnings press release and this call will include discussion of certain non GAAP information.

[Paul Cox, VP of IR and Corporate Communications at Dynavax]

You can find our earnings press release, including relevant non GAAP reconciliations on the Investors section of our corporate website at dynavax.com. And with that, I will now turn the call over to Ryan.

[Ryan Spencer, CEO & Director at Dynavax]

Thanks, Paul. Thank you all for joining us this afternoon. Twenty twenty five is off to a strong start, including delivering our highest ever first quarter net revenue for HEPLISAV B of $65,000,000 which was an increase of 36% compared to last year. We believe this performance early in the year puts us on track to achieve the top half of our full year HEPLISAV B guidance range of net product sales between $3.00 $5,000,000 to $325,000,000 We're also excited to advance our development pipeline, which leverages our vaccine adjuvant technology, CpG ten eighteen. We have key clinical trial milestones this year for our shingles and plague vaccine programs, while further broadening our pipeline with new programs announced today in pandemic influenza and Lyme disease.

[Ryan Spencer, CEO & Director at Dynavax]

All of our pipeline programs intentionally follow a similar philosophy of utilizing proven antigens and our CpG ten eighteen adjuvant, creating lower risk development pathways to advance products with significant commercial potential. So, let's start with our shingles program, which is our most advanced clinical program. We see significant opportunity for a differentiated shingles vaccine, which is currently a multibillion dollar global annual market dominated by a single product. To be successful, a differentiated vaccine will require similar efficacy and meaningfully improved tolerability compared to the existing market leading products. As a reminder, we've already completed a dose ranging phase one study where we saw comparable immunogenicity and meaningfully lower rates of post injection reactions compared to Shingrix.

[Ryan Spencer, CEO & Director at Dynavax]

For our ongoing phase onetwo study, we expect to report our top line readout for part one of the study in the third quarter, which will be based on one month data following the last vaccine dose in the study for the fifty to sixty nine year old patient cohort. Turning to our new pandemic influenza adjuvant program. Pandemic influenza remains one of the most persistent and unpredictable global health threats. Yet while vaccine adjuvants play an essential role in the pandemic response, the global supply of proven adjuvants remains limited compared to the global antigen production capacity. Our goal is to generate clinical proof of concept data for pandemic influenza vaccines using CpG ten eighteen.

[Ryan Spencer, CEO & Director at Dynavax]

We believe this is an attractive opportunity for us to leverage our expertise and capabilities as a supplier of CpG ten eighteen in five COVID-nineteen vaccines used around the world. We are on track to initiate a phase onetwo trial combining third party source blue antigen with CpG ten eighteen in the coming weeks. This data will allow us to begin business development efforts with global flu manufacturers, governments and non government organizations focused on supplying our adjuvant to support global pandemic preparedness and response. The second new program announced today is investigational protein subunit vaccine for the prevention of Lyme disease, which is a bacterial infection that is the most common vector borne illness in the Northern Hemisphere. We see a unique opportunity for Dynavax to develop a best in class Lyme disease vaccine.

[Ryan Spencer, CEO & Director at Dynavax]

The mechanism of action for Lyme disease vaccines is well understood, in which high levels of antibodies are required for protection. Current vaccine candidates in late stage clinical development require a challenging three to four dose series followed by annual boosters. A Lyme disease vaccine adjuvanted with CpG ten eighteen offers the potential for a differentiated product requiring fewer doses or less frequent boosters. We are excited to progress this program into IND enabling studies to generate preclinical proof of concept data in nonhuman primates with plans to enter the clinic in 2027. Rob will speak in more detail about our clinical pipeline in a few minutes.

[Ryan Spencer, CEO & Director at Dynavax]

We continue to focus on maintaining a disciplined approach to capital allocation, including executing on over 85% of our $200,000,000 share repurchase program as of May 5, while evaluating external opportunities that leverage our unique business platform, including our fully integrated commercial stage infrastructure and capabilities to generate additional long term growth for our shareholders. We are proud of the company we're building around our core assets of HEPLISAV B and CpG ten eighteen, which have together helped protect millions of people around the world. Our performance thus far sets us up for even greater success in 2025, which we expect to be a banner year for Dynavax. I look forward to providing you with updates on our progress along the way. Next, I'd like to turn the call over to Don.

[Donn Casale, Chief Commercial Officer at Dynavax]

Thanks, Ryan. At Dynavax, we are proud to be the leader in The U. S. Hepatitis C adult vaccine market. Since its launch in 2018, HEPLISAV BN has disrupted the market due to what we believe is a differentiated and best in class profile, securing its position as the market leader.

[Donn Casale, Chief Commercial Officer at Dynavax]

In 2022, the ACIP universal recommendation transformed The US adult hepatitis B vaccine market, expanding it into one of the largest addressable patient populations for vaccines in The US. The market continues to adopt these expanded guidelines with Q1 total market dose volume increasing approximately 16%

[Ryan Spencer, CEO & Director at Dynavax]

year over year.

[Donn Casale, Chief Commercial Officer at Dynavax]

Hepatitis B's strong performance in this expanding market has resulted in record first quarter performance, with net revenue of $65,000,000 a 36% year over year increase. This strong start to the year positions us well to achieve the top half of our annual revenue guidance range for 2025. The Retail segment delivered strong year over year growth in the first quarter, with market volume increasing approximately 70% compared to Q1 twenty twenty four. This strong momentum has carried into the second quarter with purchasing and utilization rates surpassing our expectations. Our commercial strategies are resonating with customers and adoption is steadily expanding across the market. We anticipate additional upside during hepatitis awareness month in May as we activate targeted campaigns and collaborations to further accelerate hepatitis B vaccination.

[Donn Casale, Chief Commercial Officer at Dynavax]

HEPLISAV B's estimated U. S. Market share rose to 43% in Q1, up from 41% in the same period last year. This growth was driven by broad based gains, including consistent annual market share increases across all major retail customers. We expect to see similar year over year market share gains throughout the remainder of 2025, in line with our long term expectations.

[Donn Casale, Chief Commercial Officer at Dynavax]

Our positive outlook is supported by strong market growth in retail and other key customer segments where HEPLISAV B holds a leading position. We are encouraged by the ongoing adoption of HEPLISAV B. Our partners continue to track with our long term outlook for HEPLISAV B market opportunity in The U. S, which we expect to peak to over $900,000,000 by 02/1930, with HEPLISAV B capturing at least 60% market share. This long term guidance reflects our expectation of double digit annual growth in product net sales through 02/1930.

[Donn Casale, Chief Commercial Officer at Dynavax]

We expect the HEPLISAV B market opportunity to remain durable beyond 02/1930, driven by ongoing vaccination of the eligible adult population, observed revaccination practices by healthcare providers, and continued market share gains. We are excited about the future for HEPLISAV B. The strength we see across our business reinforces our belief in the long term growth opportunity. The execution by our commercial team has been outstanding and the momentum we have built in the first quarter sets a strong foundation for continued success this year and beyond. I will now turn the call over to Rob to take you through our clinical pipeline.

[Robert Janssen, Chief Medical Officer, SVP Clinical Development, Regulatory and Medical Affairs at Dynavax]

Thank you, Don. As Ryan summarized earlier, we're very pleased with how our clinical development pipeline continues to advance and expand as we focus on leveraging our core adjuvant technology to develop differentiated vaccines. Our internal R and D programs focus on well established antigens in biology with clear regulatory pathways where CpG ten eighteen adjuvant can provide a meaningful improvement. Additionally, we provide CpG ten eighteen to support external collaborations in a variety of programs. We believe this maximizes the opportunity for CpG1018 to be utilized in novel vaccine development initiatives.

[Robert Janssen, Chief Medical Officer, SVP Clinical Development, Regulatory and Medical Affairs at Dynavax]

For our shingles vaccine program, we previously reported results from our phase one clinical trial evaluating our investigational shingles vaccine V1018 compared to Shingrix in 150 participants. We saw similar immunogenicity results and a favorable tolerability profile compared with Shingrix. Importantly, this was an adjuvant dose ranging study that allowed us to select the dose of CpG ten eighteen to advance into phase onetwo. Now we're currently conducting part one of that phase onetwo study in adults aged 50 to 69 years. We completed enrollment of four forty one subjects in the trial at the end of last year, and we expect to report our top line readout in the third quarter.

[Robert Janssen, Chief Medical Officer, SVP Clinical Development, Regulatory and Medical Affairs at Dynavax]

It will be based on one month data following the last vaccine dose in the study. Now, this is an antigen dose ranging study to select the dose level to further optimize the formulation and schedule for our vaccine. Our goals for Part one are first, select the antigen dosing schedule to advance into Part two of the Phase onetwo study by demonstrating similar immunogenicity to Shingrix based primarily on vaccine response rate measured by both antibody and CD4 positive T cells. Second, demonstrate improved tolerability with lower rates of moderate and severe post injection reactions compared to Shingrix. And third, demonstrate the durability of CD4 positive T cells at six and twelve months follow-up with data readouts expected next year in 2026.

[Robert Janssen, Chief Medical Officer, SVP Clinical Development, Regulatory and Medical Affairs at Dynavax]

Now following positive one month data, we plan to advance the selected vaccine formulation schedule into part two of this study, which is in adults 70 years of age and older. In the Shingrix pivotal study, participants over seven years of age had a lower vaccine efficacy than in a study in a younger age. Thus, our study in adults over age 70 will provide a more stringent assessment of Z1018 immunogenicity than in the younger age group. This portion of the trial will have a higher number of subjects to more fully support assessment of the vaccine response rate compared to Shingrix. We believe the part two data, along with the longer term follow-up from part one in the younger age group, that both of which are expected next year, will provide a comprehensive data package to provide confidence in advancing into a pivotal efficacy trial.

[Robert Janssen, Chief Medical Officer, SVP Clinical Development, Regulatory and Medical Affairs at Dynavax]

And regarding our Plug Vaccine Program, it's in collaboration with and fully funded by the US Department of Defense. We continue to plan to initiate a phase two clinical trial in the third quarter of this year. Given that the program is focused on preventing the spread of pneumonic play in a biological attack, our goal in the phase two study is to maximize a rapid antibody response through dose ranging of the CpG1018 adjuvant and optimizing the dosing regimen. Now for the pandemic influenza adjuvant program, as Ryan mentioned, we expect to initiate the first in human clinical trial in the second quarter of this year. This will be a randomized active control phase onetwo study to evaluate the safety and immunogenicity of an investigational H5N1 avian pandemic influenza vaccine adjuvanted with CpG1018 and Allen.

[Robert Janssen, Chief Medical Officer, SVP Clinical Development, Regulatory and Medical Affairs at Dynavax]

We believe this could enable us to generate clinical proof of concept in an efficient and low cost manner. Part one of the phase onetwo trial will enroll approximately 98 participants aged 18 to 49 years to receive either a single dose or two doses of the investigational vaccine with the intent to select the optimal formulations of CBG1018 for part two of the phase onetwo trial. I'll now turn the call over to Kelly to review our financial results.

[Kelly MacDonald, CFO at Dynavax]

Thank you, Rob. Before I get started, a reminder to please refer to our press release and Form 10 Q filed earlier today for more detailed financial information. Financial highlights for the first quarter include HEPLISAV B net sales of $65,000,000 for the first quarter, up 36% year over year, and $68,000,000 in total revenues, up 34% year over year. Additionally, HEPLISAV B gross margin was 79% for the first quarter of twenty twenty five, an increase compared to 77% in the first quarter of twenty twenty four. We continue to expect HEPLISAV B gross margin of approximately 80% for full year 2025.

[Kelly MacDonald, CFO at Dynavax]

Turning to expenses. R and D expenses were $19,000,000 for the first quarter, up compared to $14,000,000 in the first quarter last year. Looking ahead for R and D expenses, as we continue to progress our clinical stage pipeline through key milestones in 2025, notably our shingles data readout in Q3, our pandemic influenza clinical initiation in Q2, and our PLAGUE program Phase II initiation in Q3, we expect R and D expenses to increase by at least high teens as a percentage compared to 2024. If our shingles program readout supports moving into Part II of the Phase III trial, we would expect a further step up in R and D expenses in the second half of the year to reflect investments in launching that study. SG and A expenses were $48,000,000 in the first quarter, up from $44,000,000 in the first quarter of last year, with the increase primarily due to incremental proxy related expenses.

[Kelly MacDonald, CFO at Dynavax]

Excluding any potential further proxy contest related costs, we expect SG and A expenses to be roughly flat in 2025, reflecting our ongoing commitment to disciplined expense management. During the first quarter, we also recorded an allowance for doubtful accounts of $11,000,000 relating to our legacy COVID-nineteen adjuvant commercial supply agreement with Clover Biopharmaceuticals. This bad debt expense reflects our assessment of heightened credit risk from Clover due to their recently reported liquidity position as of 12/31/2024. We expect to continue to pursue these amounts from Clover in connection with our agreement with CEPI, who, as a reminder, provided us with a fully forgivable funding to support this arrangement during the pandemic. Moving to the bottom line, we had GAAP net loss of $96,000,000 for the first quarter of twenty twenty five, compared to GAAP net loss of $9,000,000 for the first quarter of twenty twenty four.

[Kelly MacDonald, CFO at Dynavax]

The net loss in the first quarter of twenty twenty five was primarily due to the GAAP accounting treatment of our debt refinancing, which required us to recognize the one time adjustment reflecting the difference between fair value and FAR value in connection with the extinguishment of our 2026 convertible notes. Lastly, on the P and L. Non GAAP adjusted EBITDA improved to negative $4,000,000 for the first quarter compared to negative $7,000,000 in the first quarter of last year. Please see our press release issued earlier today for a reconciliation of GAAP to non GAAP results and accompanying disclosure. Transitioning to the balance sheet.

[Kelly MacDonald, CFO at Dynavax]

We ended the first quarter with cash, cash equivalents and marketable securities of $661,000,000 compared to $714,000,000 at the end of twenty twenty four. The decrease in our cash position reflects the continued execution of our stock repurchase program, which included aggressive execution in the open market during periods of significant market volatility during the quarter. To date, the company has repurchased over $172,000,000 worth of common stock under the authorized $200,000,000 share repurchase program, or over 85% of the program executed. And we anticipate completing the remaining purchases by the end of the year. In March 2025, we opportunistically refinanced a majority of our outstanding 2026 convertible senior notes, which extended the maturity date of most of our existing debt to mid-2030s.

[Kelly MacDonald, CFO at Dynavax]

Also lowered our overall cost of capital with meaningfully improved terms, reduced basic and diluted shares outstanding, and accelerated the execution of our share buyback program. Following this successful debt refinancing, we believe we have the right sized capital structure to support our strategy to protect and deliver long term value for shareholders. Turning to our financial guidance for the full year 2025. We reiterate our expectation of HEPLISAV E net product revenue to be in the range of $3.00 $5,000,000 to $325,000,000 representing 17% year over year growth at the midpoint. We do now expect to achieve the top half of that range due to our strong start to the year.

[Kelly MacDonald, CFO at Dynavax]

We also reiterate our expectation for adjusted EBITDA to be at least $75,000,000 demonstrating our ability to grow adjusted EBITDA at more than two times the rate of product revenue and further strengthening our ability to deliver on our strategic priorities in 2025. In closing, we are very excited about our strong start to the year, consisting of a record first quarter for HEPLISAV B, our advancing pipeline with key milestones and new programs this year, and our strong financial profile with a balanced capital allocation strategy. We are very proud of this progress and we're also excited about our growth prospects as outlined on the call today. Thank you everyone for your time. Operator, we would now like to open the Q and A portion of today's call.

[Operator]

Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 1, 1 again. Please standby while we compile the Q and A roster.

[Operator]

Our first question comes from Matthew Zipps from William Blair. Your line is open.

[Matt Phipps, Group Head - Biotechnology at William Blair]

Hi, good afternoon. Thanks for taking my questions. And I'm seeing the new programs announced. I guess first just a quick question, talking about hitting the upper half of guidance, why not officially raise the lower end of guidance then if confidence in hitting that upper half?

[Ryan Spencer, CEO & Director at Dynavax]

Hey, Matt, thanks for the question. At this point, we're only one quarter through the year, so we think it's prudent to maintain our overall guidance range as our official guidance and just try to color that we have seen good progress to start the year off the intention with the commentary around the upper half of the range.

[Matt Phipps, Group Head - Biotechnology at William Blair]

Yeah, okay. And then maybe a higher picture question. Ryan, There's obviously been some investor debates on the best path to long term value creation for Dynavax. And wondering just particularly if you could share your view around kind of capital allocation and business development now that you're almost to the first shingles readout. You obviously had previously discontinued the TDAP program, but now announcing two new preclinical programs.

[Matt Phipps, Group Head - Biotechnology at William Blair]

Just how do these all fit into the longer term play of and particularly around does this signal maybe less appetite for or less interest in a near term external business development bringing forward kind of two new preclinical programs?

[Ryan Spencer, CEO & Director at Dynavax]

Yeah, I mean, look, I mean, starting with the capital allocation philosophy, we've been pretty clear about our view that we have a balanced strategy and what underpins that is our desire to create value by leveraging our core assets as you kind of picked up on here, Matt, with the preclinical programs focused on leveraging ten eighteen and also fully leveraging our infrastructure and capabilities, which plays into our commentary around value creation through corporate development, on late stage commercial assets. So, and then sort of the third leg of that picture around our capital allocation strategy is to focus on our existing asset with HEPLISAV B. In addition, we also do look for opportunities, as you noted, as we noted with our share buyback program to return capital to shareholders. So when we balance all these things out, we believe there's room and we're actually quite proud of this fact that we've been able to return capital to shareholders while also creating enough room for us to advance our internal development programs. And we still believe there's an opportunity for us to identify high value assets to leverage our full commercial capability.

[Ryan Spencer, CEO & Director at Dynavax]

So, we're going to continue to run that strategy and as we advance forward.

[Matt Phipps, Group Head - Biotechnology at William Blair]

Thanks, Ryan. Okay, I'll hop back in queue.

[Ryan Spencer, CEO & Director at Dynavax]

Thank you.

[Operator]

Thank you for your question. One moment, please. Our next question comes from Philip Nadeau from TD Cowen. The floor is yours.

[Phil Nadeau, Managing Director, Health Care – Biotechnology Research Analyst at TD Cowen]

Good afternoon. Thanks for taking our questions. Couple from us too. First on the quarterly performance, there definitely seem to be less seasonality in the winter of 'twenty four, 'twenty five than in the past. What are you seeing along those lines?

[Phil Nadeau, Managing Director, Health Care – Biotechnology Research Analyst at TD Cowen]

Do you expect what we saw this year to be the new normal? Or was there anything special about this past winter?

[Donn Casale, Chief Commercial Officer at Dynavax]

Phil, it's Don. Yeah, thanks for the question. What we saw, particularly in retail, a pretty fast start with focus on non flu vaccines, including hepatitis B vaccine this year versus in years past. So, it was very purposeful by our leading retailers to really prioritize these kind of expanded vaccines for the first quarter. So, that really contributed to the growth we saw in Q1.

[Donn Casale, Chief Commercial Officer at Dynavax]

As I mentioned, we saw 70% growth year over year in the retail segment alone. So, that helped kind of flatten out that seasonality that we typically saw in years past.

[Phil Nadeau, Managing Director, Health Care – Biotechnology Research Analyst at TD Cowen]

Perfect. Then two questions on the pipeline. First, on the upcoming shingles data release. It sounds like if I interpreted your prepared remarks correctly that the data we get in Q3 will be informative but not necessarily sufficient to make a gono go decision. You're looking more for the more fulsome data releases, the longer term data releases in 2026 to fully inform that decision.

[Phil Nadeau, Managing Director, Health Care – Biotechnology Research Analyst at TD Cowen]

Is that correct? That's the first question. And then the second question, just more broadly, a lot of debate on what's happening in Washington with vaccines and the regulatory environment for those. Given that you're starting or talking about starting the development of two new programs, presumably you're having interactions with the FDA. Can you characterize those meetings and whether there's been any issues due to the changes at the FDA and HHS? Thanks.

[Ryan Spencer, CEO & Director at Dynavax]

All right. Why don't I take the first one first, Phil? So, no, this readout is important, but I think you're highlighting the difference between sort of the stage development decision making and then the ultimate decision making to move into a pivotal program. And so what you can pick up on our remarks today was trying to provide the right clarity for what this initial readout does, and then what the longer term projection is to have a fulsome package to make a decision to go into a pivotal program. So the first readout this year is important. We need remember, we're using our developed antigen here, and we're using it to determine the optimized schedule and formulation. We still are going to be looking at that data to ensure that we're delivering a comparable vaccine response rate.

[Ryan Spencer, CEO & Director at Dynavax]

And with that positive data, that would unlock additional investment to advance CMC activities and clinical development into the next part of that study. So, I want be very careful here. There is a decision to be made here based on the information like we've said in the past. What we've added to the discussion today is to help you understand the bigger picture and the longer term decision and the data required to support what I think is the ultimate decision around moving forward into a pivotal study. And that information, we're going to require more information, including long term durability of the T cell response, which we've consistently highlighted the importance of, as well as a comparable vaccine response rate in the hardest to vaccinate population, which is just over 70 years old.

[Ryan Spencer, CEO & Director at Dynavax]

We think this provides the most stringent analysis to provide confidence in advancing to the pivotal trial. So, there's multiple stage gates in the program ahead of us.

[Phil Nadeau, Managing Director, Health Care – Biotechnology Research Analyst at TD Cowen]

Got it. That is very helpful. And then any issues with your discussions with the FDA?

[Ryan Spencer, CEO & Director at Dynavax]

Yes. Yeah. So, I'll comment generally and then Rob, if you have any specific to add. But we actually find ourselves somewhat insulated for some of the immediate changes right now. If you think about the order of magnitude of our engagement, the next big engagement with the FDA will be end of phase two on the shingles program, and that'll be in the back half of twenty six.

[Ryan Spencer, CEO & Director at Dynavax]

So I do think kind of access for whatever reason falling into a good spot there in that the near term immediate kind of activities will have time to settle out by the time we're engaging with the agency. And we're going to have the benefit of engaging with this agency before we embark on critical pivotal programs. As it relates to other, I'll call more operational activities, Rob, do you have any comments?

[Robert Janssen, Chief Medical Officer, SVP Clinical Development, Regulatory and Medical Affairs at Dynavax]

Yeah, just we haven't had a lot of interactions recently, but those interactions we've had with the review team really haven't been affected at this point.

[Phil Nadeau, Managing Director, Health Care – Biotechnology Research Analyst at TD Cowen]

That's helpful. Thanks for taking our questions.

[Ryan Spencer, CEO & Director at Dynavax]

Thanks, Phil.

[Operator]

Thank you for your question. One moment, please. Our next question comes from John Miller from Evercore. Your line is open.

[Jonathan Miller, Managing Director at Evercore ISI]

Hi guys, congrats on the progress. Thanks for taking my question. I'd love to follow-up first on that FDA question. We recently heard that the agency is considering requiring placebo controlled trials for all new vaccines. Do you think that's going to be relevant to your programs which obviously are mostly designed head to head versus existing vaccines and what do you think those comments are specifically referring to?

[Jonathan Miller, Managing Director at Evercore ISI]

And then secondly, on the Lyme vaccine, I am personally very interested in, how do you conceive of the relevance of the commercial benefits you're going to provide relative to the competitive vaccines given pivotal trials from the competitors are coming end of this year, and obviously they're well ahead. What do you think that market looks like by the time you're approaching commercialization?

[Ryan Spencer, CEO & Director at Dynavax]

Great. Thanks, John. I'll let me present framing comments on the FDA and placebo controlled trials, Robin, please feel free to jump in if there's more to add. But I think you have to go back to, again, our latest stage program is shingles. And if you recall, some of our prior dialogue on shingles was the fact that we are proposing a placebo controlled study, which was viewed to be a question mark. Will the agency accept it, which we did get positive feedback prior to the change in administration around the opportunity to have a placebo controlled efficacy study for shingles. So, I think ultimately for that program, there's really no change. It's supportive.

[Ryan Spencer, CEO & Director at Dynavax]

We will also conduct a head to head study, but that's focused on tolerability. And that's an endpoint that we're interested from a commercial labeling perspective, and we expect that would be supported as well. As it relates to additional programs in the future, it's too soon to tell. I think while there was remarks shared on the intention of placebo controlled trials, I do think there's other elements of development that we have to consider, especially ethical concerns. And so, you know, at this point, we don't see it being a major challenge to any of our ongoing programs or future development.

[Ryan Spencer, CEO & Director at Dynavax]

You know, we might find ourselves in a situation where we're doing placebo controlled arms as well as head to head arms to support labeling and competition, and just figuring out the right balance between those. Rob, anything to add to that? Okay, and then the Lyme disease product, I'm glad you mentioned this honestly, because while, you know, this is a very interesting evolution where the programs in late stage development are going to be demonstrating the ability for circulating antibodies to provide a protective response, you have to go through quite a challenging dosing regimen, which could significantly limit uptake in the marketplace. All right, so we believe there's a couple elements of our program, which is why we're so interested in advancing it. Not only do we believe we can establish the profile very early on in nonhuman primates to, again, provide a very valuable, very early stage step to demonstrate some level of proof of concept.

[Ryan Spencer, CEO & Director at Dynavax]

But additionally, we believe the product profile will support taking a leading market share position, but also actually grow the market because it creates an opportunity for a regimen that is much more approachable for the population. So, you know, I think ultimately, this is a perfect example of where having an adjuvant that is safe and well tolerated can be incredibly beneficial to augment a proven mechanism of action.

[Jonathan Miller, Managing Director at Evercore ISI]

Do you guys expect there to be the current Phase III to establish a reliable correlative protection? And would you expect then to be able to move forward with that sort of an endpoint in your own program?

[Ryan Spencer, CEO & Director at Dynavax]

No. We're not expecting that. We'll have to see how data plays out over time. But I do think even without a correlative protection, I do think it will the ongoing data, as well as our challenge work, will provide an awareness of the level of antibodies needed to be effective, or at least a threshold by which you would measure your early stage studies with, even though it might fall short of a regulatory approval correlate, I do think it will provide incredible information on being able to measure whether or not we're having a meaningful impact with fewer doses.

[Jonathan Miller, Managing Director at Evercore ISI]

Makes sense.

[Operator]

Thank you for your One moment, please. Our last question comes from Roy Buchanan from Citizens. The floor is yours.

[Roy Buchanan, Equity Research Analyst at Citizens]

Hey, thanks for taking the questions. Just to make sure I'm clear on the shingles readout next quarter. You guys have previously said, you know, 75% threshold median CD4 T cell level versus Shingrix. If you do not see that in the one month data next quarter, are you going to stop the program or what's the thinking there?

[Ryan Spencer, CEO & Director at Dynavax]

Thanks for the question, Roy. And Rob, again, please comment. But Roy, as we continue to evaluate the right way to think about immunogenicity data to support the goal really here, which is identifying how we compare to Shingrix from an efficacy perspective. We've continued to work with leaders in the space and review the scientific information available. And now you've heard my comments today, T cell frequency is very important.

[Ryan Spencer, CEO & Director at Dynavax]

However, we believe the best measure of that is not at one month, but at six and twelve months where you have the opportunity to see the contraction of T cells back to a baseline level that's going to be maintained over time, as opposed to the level of rapid expansion. And so our current plan for this study is to focus on the vaccine response rate, including the CD for vaccine response rate. And frankly, importantly, the CD for vaccine response rate with ultimate T cell frequencies at one month being informative, but not as critical as six months and twelve months. Rob, you have any other comments around because of the expansion and contraction and why this is a

[Robert Janssen, Chief Medical Officer, SVP Clinical Development, Regulatory and Medical Affairs at Dynavax]

So, Roy, CD4s expand very quickly after vaccination, but they also drop very quickly, especially over the first twelve months. Then the curve begins to flatten out over that period of time. An example is the Shingrix studies where CD4 counts dropped more than fifty percent over the first year, and at that time, the efficacy was ninety seven percent. Over a three year period, they dropped two thirds. The efficacy only dropped five percent.

[Robert Janssen, Chief Medical Officer, SVP Clinical Development, Regulatory and Medical Affairs at Dynavax]

So yeah, we're using CD4 frequency, but it's not a clear direct measure of what's happening with incidents. And it does drop fast, but as I said, at twelve months it begins to stabilize and doesn't drop as fast. So we think a twelve month measurement of CD4 frequency is probably more informative than the one month.

[Roy Buchanan, Equity Research Analyst at Citizens]

Okay, great. That's very helpful. Thanks. And then a couple on HEPLISAV. Investors have said that the total market share is paused, maybe it's paused, maybe it's growing less quickly, but either way, is there an explanation for the potentially slower growth?

[Roy Buchanan, Equity Research Analyst at Citizens]

It's definitely slower than the growth you've seen in previous quarters. Is GSK pushing back anything there? Then how much of HEPLISAV B revenue is due to Medicare? Thanks.

[Donn Casale, Chief Commercial Officer at Dynavax]

Hey, Roy. It's Don. Regarding market share, obviously, when we think about market share, year over year comparisons are most appropriate given the seasonality of hep B market versus say a quarter over quarter assessment of market share. We continue to expect year over year growth every quarter in 2025. We're on track exactly how we had planned for market share growth that supports not only 2025, but our long term view of achieving at least 60% market share.

[Donn Casale, Chief Commercial Officer at Dynavax]

And part of that's due on the back of retail pharmacy. That's going to be the fastest growing segment where we have very high market share and continue to increase that market share. So we feel very comfortable and very proud where we're at with market share and continue to expect that market share gain year over year.

[Ryan Spencer, CEO & Director at Dynavax]

Maybe I'll just add to I mean, that's exactly the right answer, the year over year comparison. But Roy, just to give you some context why the quarterly we don't do the quarterly comparison, have different channels and different customers where we have different levels of share. And when we see the channel mix change quarter over quarter, for example, retail drop in Q1 compared to Q4 where we have very high share, it impacts the overall share for that quarter when lower share parts of the market are more static. And so we've said this for the last I don't know how many years, the quarterly fluctuation due to channel mix changes or one off procurement dynamics in the beginning or end of a quarter are not appropriate comparisons. And we're going to continue to stand by that.

[Ryan Spencer, CEO & Director at Dynavax]

But we are excited when we look at the annual growth each quarter. So happy to continue to show those kinds of details as we progress for these things that aren't necessarily intuitive, but we do want to continue to draw the comparison to the prior quarter for the same period in the prior year.

[Donn Casale, Chief Commercial Officer at Dynavax]

And then regarding Medicare, it is an important part of the market. Retailers are very excited about having access now to HEPLISAV as well as all hepatitis B vaccines. It will take some time as it relates to Medicare access through Medicare Advantage plans. We anticipate probably the second half of the year, there'll be open access for all hep B vaccines, including HEPLISAV B. And so we're continuing to work with our retailers around prioritizing appropriate patients within the Medicare segment, but it will be an important part of our growth strategy.

[Donn Casale, Chief Commercial Officer at Dynavax]

And the good news, obviously, retail is a big part of that, where we have a very strong footprint and engagement strategy.

[Roy Buchanan, Equity Research Analyst at Citizens]

Got it. Thank you.

[Operator]

Thank you for your question. We have no further questions at this time. I would now like to turn the call over to Ryan Spencer, CEO, for closing remarks. You may begin.

[Ryan Spencer, CEO & Director at Dynavax]

Thank you, operator, and thank you all for joining us today. We appreciate your interest in Dynavax. We are excited about our recent accomplishments and the strength of our position. We look forward to updating you on the progress and focus on protecting the world against infectious diseases. Operator, you may end the call.

[Operator]

Ladies and gentlemen, thank you for joining us today. This does conclude today's conference. You may now disconnect.

[Kelly MacDonald, CFO at Dynavax]

Goodbye.

Participants

Executives

• Ryan Spencer, CEO & Director
• Robert Janssen, Chief Medical Officer, SVP Clinical Development, Regulatory and Medical Affairs

Analysts

• Paul Cox, VP of IR and Corporate Communications at Dynavax
• Donn Casale, Chief Commercial Officer at Dynavax
• Kelly MacDonald, CFO at Dynavax
• Matt Phipps, Group Head - Biotechnology at William Blair
• Phil Nadeau, Managing Director, Health Care – Biotechnology Research Analyst at TD Cowen
• Jonathan Miller, Managing Director at Evercore ISI
• Roy Buchanan, Equity Research Analyst at Citizens