SOURCE: Dynavax Technologies

Dynavax Technologies

March 16, 2010 08:00 ET

Dynavax Anticipates Earlier BLA Submission for HEPLISAV™

2009 Financial Results Reviewed

BERKELEY, CA--(Marketwire - March 16, 2010) - Dynavax Technologies Corporation (NASDAQ: DVAX) today said that its large-scale Phase 3 study of HEPLISAV™ is fully enrolled, with immunization of subjects proceeding in accordance with the pre-specified safety monitoring plan. Dynavax indicated that it expects immunization of all 2,000 subjects with HEPLISAV in the lot-to-lot consistency study will be completed in the near future, an achievement that creates the opportunity to submit a BLA in the third quarter of 2011, approximately six months earlier than previously projected.

According to Dino Dina, M.D., President and CEO, "The accelerated enrollment and immunization of subjects for the safety and consistency study of HEPLISAV is an important accomplishment that we expect will facilitate the successful conclusion of several ongoing financing discussions. Clearly, this is our highest priority to ensure the success of the program."

Dynavax separately reported $36.7 million in unrestricted cash and cash equivalents at December 31, 2009. This compares to $46.4 million at September 30, 2009, of which $21.7 million were investments held by Symphony Dynamo, Inc. (SDI). The $9.7 million burn for the fourth quarter primarily reflected intensified activities relating to the initiation of the two Phase 3 multi-center trials for HEPLISAV in the U.S., Canada and Germany. The year-end 2009 results do not include a $4.0 million payment due from Merck as announced this week. The results do not reflect a separate $1.8 million payment from AstraZeneca representing a reimbursement adjustment for 2009 and prior periods.

Today Dynavax filed its annual report on Form 10-K for the fiscal year ended December 31, 2009 with the Securities and Exchange Commission (SEC). As a result of the Company's current financial position, Dynavax's independent registered public accounting firm has included a statement regarding the Company's ability to continue as a going concern in its unqualified opinion contained in the Form 10-K. This announcement is being made in compliance with NASDAQ Marketplace Rule 4350(b)(1)(B), which requires separate disclosure of a recent audit opinion that contains "going concern" explanatory language. Management's plan to address the Company's liquidity requirements and a more detailed discussion of the financial results is provided in the Form 10-K.

The tables included as part of this press release provide a reconciliation of GAAP revenues and operating expenses to pro forma revenues and operating expenses.

About HEPLISAV

HEPLISAV is an investigational adult hepatitis B vaccine. The vaccine candidate is being evaluated in two Phase 3 studies that are directed toward fulfilling licensure requirements in U.S., Canada and Europe. In a completed pivotal Phase 3 trial, HEPLISAV demonstrated increased, rapid protection with fewer doses than current licensed vaccines. Dynavax has worldwide commercial rights to HEPLISAV and is developing the vaccine for large, high-value populations that are less responsive to current licensed vaccines, including individuals with chronic kidney disease. HEPLISAV combines hepatitis B surface antigen with a proprietary Toll-like Receptor 9 agonist known as ISS to enhance the immune response.

About Hepatitis B Vaccines

Currently available hepatitis B vaccines require three doses over six months to achieve full immunogenicity in healthy patient populations. Because compliance with this vaccine regimen is low, new vaccines are needed to provide increased protection in a shorter timeframe. Furthermore, currently available vaccines do not fully address the needs of several patient populations, including those with chronic kidney disease, HIV or chronic liver disease. In particular, patients with comprised immune systems require both rapid and enhanced protection, either because they are less responsive to conventional vaccine regimens or because they are at high risk of infection.

About Dynavax

Dynavax Technologies Corporation, a clinical-stage biopharmaceutical company, discovers and develops novel products to prevent and treat infectious diseases. The Company's lead product candidate is HEPLISAV, an investigational adult hepatitis B vaccine designed to enhance protection more rapidly and with fewer doses than current licensed vaccines. For more information visit www.dynavax.com.

Forward Looking Statements

This press release contains "forward-looking statements," that are subject to a number of risks and uncertainties, including statements relating to clinical trial status, BLA submission and financing. Actual results may differ materially from those set forth in this press release due to the risks and uncertainties inherent in our business, including whether successful clinical and regulatory development and approval of HEPLISAV can occur in a timely manner or without significant additional studies or difficulties or delays in development or clinical trial enrollment, whether the studies can support registration for commercialization of HEPLISAV; the results of clinical trials and the impact of those results on the initiation and completion of subsequent trials and issues arising in the regulatory process; the Company's ability to obtain additional financing to support the development and commercialization of HEPLISAV and its other operations, possible claims against the Company based on the patent rights of others; and other risks detailed in the "Risk Factors" section of our current periodic reports with the SEC. We undertake no obligation to revise or update information herein to reflect events or circumstances in the future, even if new information becomes available. Information on Dynavax's website at www.dynavax.com is not incorporated by reference in the Company's current periodic reports with the SEC.

- tables to follow -

                      DYNAVAX TECHNOLOGIES CORPORATION
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In thousands, except per share amounts)
                               (Unaudited)

                                 Three Months Ended   Twelve Months Ended
                                     December 31,         December 31,
                                --------------------  --------------------
                                  2009       2008       2009       2008
                                ---------  ---------  ---------  ---------
Revenues:
  Collaboration revenue         $   1,455  $  10,231  $  35,534  $  31,666
  Grant revenue                       556        972      3,477      2,999
  Service and license revenue         178        742      1,307      2,429
                                ---------  ---------  ---------  ---------
Total revenues                      2,189     11,945     40,318     37,094

Operating expenses:
  Research and development(1)       9,506      6,249     38,708     44,771
  General and administrative(2)     4,052      3,559     15,745     15,463
  Amortization of intangible
   assets                             245        245        980        980
                                ---------  ---------  ---------  ---------
Total operating expenses(3)        13,803     10,053     55,433     61,214
                                ---------  ---------  ---------  ---------

Loss from operations              (11,614)     1,892    (15,115)   (24,120)

Interest income                         4        170        178      1,631
Loan forgiveness                       --         --         --      5,000
Interest expense                       (4)       (16)      (124)    (9,157)
Other income (expense)                (26)       114        (66)       110
                                ---------  ---------  ---------  ---------

Net income (loss)                 (11,640)     2,160    (15,127)   (26,536)

Consideration paid in excess
 of carrying value of the
 noncontrolling interest in
 SDI                             (19,671)        --    (19,671)        --
Add: Losses attributed to
 noncontrolling interest in
 SDI                                1,041        939      4,233      5,707
                                ---------  ---------  ---------  ---------

Net income (loss)
 attributable to Dynavax        $ (30,270) $   3,099  $ (30,565) $ (20,829)
                                =========  =========  =========  =========

Basic net income (loss) per
 share attributable to
 Dynavax common stockholders    $   (0.73) $    0.08  $   (0.76) $   (0.52)
                                =========  =========  =========  =========

Shares used to compute basic
 net income (loss) per share
 attributable to Dynavax
 common stockholders               41,420     39,854     40,350     39,819
                                =========  =========  =========  =========


Diluted net income (loss) per
 share attributable to Dynavax
 common stockholders            $   (0.73) $    0.08  $   (0.76) $   (0.52)
                                =========  =========  =========  =========

Shares used to compute
 diluted net income (loss)
 per share attributable to
 Dynavax common stockholders       41,420     39,854     40,350     39,819
                                =========  =========  =========  =========

(1) Research and development expenses included non-cash stock-based compensation charges of $0.3 million and $1.1 million for the fourth quarter and year ended December 31, 2009, respectively. Research and development expenses included non-cash stock-based compensation charges of $0.4 million and $1.4 million for the fourth quarter and year ended December 31, 2008, respectively.

(2) General and administrative expenses included non-cash stock-based compensation charges of $0.6 million and $1.9 million for the fourth quarter and year ended December 31, 2009, respectively. General and administrative expenses included non-cash stock-based compensation charges of $0.4 million and $1.8 million for the fourth quarter and year ended December 31, 2008, respectively.

(3) Total operating expenses excluding non-cash stock-based compensation charges were $12.9 million and $52.4 million for the fourth quarter and year ended December 31, 2009, respectively. Total operating expenses excluding non-cash stock-based compensation charges were $9.3 million and $58.0 million for the fourth quarter and year ended December 31, 2008, respectively.

                     DYNAVAX TECHNOLOGIES CORPORATION
          RECONCILIATION OF GAAP REVENUES TO PRO FORMA REVENUES
                              (In thousands)
                                (Unaudited)



                                 Three Months Ended    Twelve Months Ended
                                     December 31,           December 31,
                                --------------------  --------------------
                                  2009       2008       2009       2008
                                ---------  ---------  ---------  ---------

GAAP revenues                   $   2,189  $  11,945  $  40,318  $  37,094

ADD:
Collaboration funding
 incurred under SDI programs          813        744      3,364      5,349
LESS:
Non-cash deferred revenue
 from Merck collaboration              --      3,086     28,485      4,965
                                ---------  ---------  ---------  ---------
Pro forma revenues(1)           $   3,002  $   9,603  $  15,197  $  37,478
                                =========  =========  =========  =========

(1) These pro forma amounts are intended to illustrate the Company's revenues including collaboration funding provided for the SDI programs and excluding certain non-cash items. The collaboration funding is reflected in the amount attributed to the noncontrolling interest in SDI in the Company's consolidated statement of operations, but would have been reported as revenue if SDI's results of operations were not consolidated with those of the Company. Management of the Company believes the pro forma results are a more useful measure of the Company's revenues because it provides investors the ability to evaluate the Company's operations in the manner that management uses to assess the continued progress of operating programs. These pro forma results are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from pro forma measures used by other companies.

                     DYNAVAX TECHNOLOGIES CORPORATION
RECONCILIATION OF GAAP OPERATING EXPENSES TO PRO FORMA OPERATING EXPENSES
                              (In thousands)
                                (Unaudited)

                                 Three Months Ended    Twelve Months Ended
                                     December 31,         December 31,
                                --------------------  --------------------
                                   2009       2008      2009        2008
                                ---------  ---------  ---------  ---------

GAAP operating expenses         $  13,803  $  10,053  $  55,433  $  61,214
LESS:
Stock-based compensation
 expense                              933        717      3,035      3,205
Amortization of intangible
 assets                               245        245        980        980
                                ---------  ---------  ---------  ---------
Pro forma operating expenses(2) $  12,625  $   9,091  $  51,418  $  57,029
                                =========  =========  =========  =========

(2) These pro forma amounts are intended to illustrate the Company's operating expenses excluding certain non-cash charges in accordance with the financial statements that management uses to evaluate the Company's operations. These pro forma results are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from pro forma measures used by other companies.

                       DYNAVAX TECHNOLOGIES CORPORATION
                        SELECTED BALANCE SHEET DATA
                              (In thousands)
                                (Unaudited)

                                                  December 31, December 31,
                                                      2009         2008
                                                  ------------ ------------
Assets
  Cash and cash equivalents and marketable
   securities(1)                                  $     36,720 $     68,476
  Property and equipment, net                            7,997        9,510
  Goodwill                                               2,312        2,312
  Other intangible assets, net                           1,279        2,259
  Other assets                                           2,162        8,066
                                                  ------------ ------------
Total assets                                      $     50,470 $     90,623
                                                  ============ ============

Liabilities and stockholders' equity
  Accounts payable                                $      1,686 $        905
  Accrued liabilities                                    7,507        6,816
  Warrant liability to Holdings                          2,567           --
  Current portion of deferred revenue                    2,718       33,133
  Noncurrent portion of deferred revenue                17,083       18,512
  Liability from program option exercised under
   the SDI collaboration                                    --       15,000
  Long-term note payable to Holdings                     9,342           --
  Long-term contingent liability to Holdings             3,040           --
  Other long-term liabilities                              151          101
  Stockholders' equity                                   6,376       16,156
                                                  ------------ ------------
Total liabilities and stockholders' equity        $     50,470 $     90,623
                                                  ============ ============

(1) These amounts also included investments held by SDI of zero and $25.1 million as of December 31, 2009 and 2008, respectively.

Contact Information

  • Contacts:
    Jennifer Lew
    Vice President, Finance
    510-665-7217
    Email Contact

    Michael Ostrach
    Vice President and Chief Business Officer
    510-665-7257
    Email Contact