Dynavax Technologies (DVAX) 5 Nov 202020 Q3 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Dynavax Technologies Third Quarter 2020 Conference Call.

As a reminder, this conference call 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 conference over to Nicole Arndt, Senior Manager, Investor Relations.

You may begin.

Alice. you, Thank Good afternoon. quarter conference third financial and Dynavax results XXXX update the call. corporate to Welcome

the are Janssen, call Executive on Commercial. me Joining today Ostrach, Donn Vice Financial Officer; Officer; Ryan Chief Officer; Medical Rob Chief Casale, President, Michael Chief Spencer,

advise revenue, begin, we that expectations. post-marketing cause reports vaccine Dynavax. and results number and the today, completion I the forward-looking profile, revenue are These with Spencer, we development will which filed HEPLISAV-B’s regarding actual XX-Q all section CpG revenue are statements of These regarding uncertainties release the Ryan Before CEO subject commercial making in XXXX potential today’s expectations, of statements to current you risks Risk we the Factors of review. be turn SEC, including and press differ now are results you potential I and detailed with peak will could statements to encourage studies call of a periodic summarized to to XX-K materially. over our in and and

coming a for outlook you, excited third us thank as And as you joining Nicole. year. the share all for well our today. to I'm the exceptional Thank for results quarter, very bright

provide advanced opportunities The discussing collaboration a with emerging adjuvant today as vaccine HEPLISAV-B our us with the sales of prevent Adjuvant's immune being lasting to CpG spread of Now, well value COVID-XX the since XXXX progress XXXX to immunity our programs. as focus going of the an vaccine from has we're contributor positions best HEPLISAV-B to by pipeline the The on generated launch, of growth. in vaccines details of quarter infectious of continued to the success CpG along significant increase to short-term are the longer need help well current the and long-term vaccines. improved for for boost to and development continued or pandemic protection important highlighted new response potential diseases. global both

responsive often due severe Additionally, a the or play from immune patients addressing health adjuvant risk weakened is to age populations. Vaccine conditions. vaccines case the that on with greatest critical patient in less these to role advanced brought chronic other of it unfortunately are disease a system

compared With approved XXX,XXX This deadly Our commercialized is can adult in COVID-XX hepatitis FDA infection which in virus B infected continue with about US increasing reduction HEPLISAV-B with XX% adjuvanted products XXX had speed an The product vary for higher with the leader. XXXX. And in over B FDA. current challenges highly vaccination. us to adult vaccination X-month X-dose become COVID-XX people has by standard last confidence X-month to months protection X of regimen of X-month with is protection, U.S rates the year. required hepatitis of studies the total in head-to-head the demonstrated with U.S. that regimen the X-dose infectious segment. corresponding the levels compliance prevented effective competitor been vaccine are first B it legacy million vaccine, approved are the in for HEPLISAV-B's XX% adult the an protection, on CpG HEPLISAV-B disrupt the and On protection quarter. higher to the of the the compared of top compliance potentially and XX% a rates. by The worldwide for Thankfully, is from hepatitis has the to the is the offers patients X-month in only improvement the X-dose Hepatitis gives HEPLISAV-B will X-dose and be of well-known. just people it only it same of Over B. with period. approximately hepatitis market completing third market clinical products. impact B the depending B hepatitis market care in X-dose period adult regimen utilization vaccine a

of So Department segment increased for same period instance, year. last the actually the Defense XX% from

However, down quarterly accounts third launch period increased to revenue which last accounts, performance a to continued of despite driven XX% approximately with highest and in decrease see the integrated since enjoyed and share market strong in by in same field progress this revenue utilization, targeted our This environment. from delivery We in clinics quarter. XX% year. very systems a challenging reported the networks, was our hospital product quarter, net $XX.X million. grew exceptional HEPLISAV-B national

targeted and a level engagement high Our of accounts, commercial maintained decision-makers. has with team

market the approximately addition a in $X XXXX large stocked for revenue accounts, converted HEPLISAV-B third retailer in that national field share the over targeted in resulting million locations, In the growth of quarter. to team successfully in

in quarters. While future or in revenue that this which recurring likely adult revenue limit from build will expect its fourth preferred exclusive this the in high hepatitis we be value result will inventory customer HEPLISAV-B B forward, vaccine quarter, would going standalone

earlier, an compared As of Defense increase last quarter the period in third utilization I the mentioned in year. saw the same Department to

represented surge over utilization month. summer the quarter new due in in the periods segment of recruits historically highest has the Third to a

DoD at to addition the for use the strong in fourth surplus the third the segment quarter, end stock budget used In in resulted to quarter. in quarter fiscal in third the bases in of several surge, the in year demand which doses September

we to are make of fourth which for Overall, another would a the to strong challenges the for finalize the progress X X of the in in such in basis, recruit environment. continue conversion result the the despite of segment. capturing HEPLISAV-B, utilization quarter of Having quarter, delighted see base COVID-XX XXXX. significant hope we converted new to its We all already

enhance the embarked of collaborations immune to We've XXXX pandemic. aimed where response to that variety strategy antigens. our as the establish at have on portfolio Now global to second of CpG COVID-XX global response capability efforts new of a we of our support a rapidly to from the to HEPLISAV-B asset, a CpG XXXX, the demonstrating to moving growing business a result a on vaccine of line is

span Our open technology multiple vaccine approach us development indications. support across these collaboration varied underscoring versatility, approaches multiple allows and collaborations CpG efforts to XXXX's

We have established currently, which to XXXX beyond the the is pertussis, and vaccines value demonstration specifically to pertussis coronavirus first acellular TdaP, of of universal on that develop influenza developing immune adjuvanted is response and component focused collaborations The HEPLISAV-B. improving vaccines effort acellular tetanus, including diphtheria focused the of the which offers on global CpG vaccine. COVID-XX,

for We this development space. have to collaborations coronavirus the address competition of complex portfolio in broad and built vaccines aspects a of

component be will Our portfolio approach provides to approved valuable a of vaccines, recognizing that vaccine. forward multiple CpG XXXX an every to collaboration different for move opportunities not

we to of widest create evaluated opportunity CpG approaches. collaborations possible goal a We targeting our value XXXX expand with by of long-term continue for is creation best evolve. different the technologies, range ensuring believe the field as to in will We continues the

we as one agreement agreement vaccine already Now into our Valneva's Subsequently, a Valneva government into with know, entered key collaborations, develop of many to with adjuvanted an the adjuvanted U.K supply entered may for into digging deeper an for COVID-XX Valneva. vaccine.

will quarter, to period. agreement CpG will of at CpG doses to an which During million we XXXX Under also CpG Valneva a of provide XXXX, XXXX XX in in adjuvant Under doses contract for for the revenue million has X-year Valneva in produce agreement, to began supply. begin produce over scale vaccine option approximately be recognized CpG and XX have supply first CpG Valneva XXXX purchase vaccine additional production the Dynavax quarter. Valneva with third XXXX, alone, $XXX million the the this XXXX $XXX of increased first million with a doses. for commercial we starting to In to potential XXXX XXXX. this million pandemic up Dynavax the to supply XXX executed will

contingent is over potentially on Dynavax for XXXX. it development, continued is successful worth $XXX contract this million through While

data Based production pivotal In Biopharmaceuticals demand. collaborations two Phase global addition antigen programs available it our has utilize to capacity, it to make COVID-XX positive that a develop progress. with address indicated and XXXX good to to that intends anticipates trial with date, CpG fully to to Clover clinical initiating Valneva, adjuvanted vaccine their on continues X Clover

initial the long-term HEPLISAV-B and results revenue business XXXX, CpG progress report quarter. to a of as represents. quarter third revenue as investment the Michael In financial generation the fronts detail. from Phase to our strength year-end. combined with The Dynavax will third opportunity Clover Michael? X model vaccine reinforces now the to our in it their expect plans their results of I development call on confidence for more the We over by of summary, in number the significant made for continued well study in discuss we've the turn

Ryan. you, Thank

today. Our and filed detailed financial included we with afternoon in release issued results in the we XX-Q press SEC the are the this

This revenue was a major replenishment revenue product key due by significant So national from was what from compared inventory XXXX. when highlights the in quarter I'll increased primarily retailer. levels hand pre-COVID to due days some typical in was the end-user to of second resulted revenue of the QX approximately period of $X.X our to to the essentially a increase product provide for levels, for million. same inventory quarter million demand of occurred additional HEPLISAV-B to utilization Total just HEPLISAV-B to $XX.X on existing hepatitis from the distributors of in stocking quarter. as vaccine reduced on third order fulfilled stock. out their increased $XX.X of from Department and million of adult and maintain channel B demand XX% mirror the levels is quarter, demand the image This million to in million $XX.X initial third the third quarter distributors Defense in the Approximately $X color. touch return

share. expect adult year-end. fewer continued Looking course field growth to current B continued weeks trends, utilization the expect pre through and to of we be the that Based The approximately selling fourth occurred of in accounts key COVID fourth we have in in quarter third targeted vaccine XX% progress levels national quarter. market on quarter, hepatitis will

to inventory third of of compared unit of purposes reflects million include with our $X.X quarter quarter loan sell of third primarily million achievements sales for net marks of sales $X.X quarter amended third recognition CpG also CpG deposits. opportunity XXXX million. the potential of recorded $XX.X of it revenue best our our million the was and from ever XXXX The higher current revenue to to HEPLISAV-B and sales million initiation as due the revenue CRG for product, that quarter manufacturing. CpG increased recently from was annual sales, HEPLISAV-B deferred Cost second only determining $X also of and the for XXXX XXXX, for the produce we of XXXX, CpG for quarter value requirement. cost agreement In in full And costs the product revenue of to third our $X.X for we XXXX. we of not the

the cost In for addition, to included CpG XXXX XXXX produce for costs of $XXX,XXX sales partners. of quarter third collaboration of our

produce Valneva XXXX of expect we the dose pandemic substantially under XXXX CpG reduce of sales agreement of expect to other increased two CpG We cost cost and customers. per as increase Based and scale, the significantly XXXX we on to supply sell goods supply. with in for

our goods across quarter goods well Cash, are expected cost remarks. Net $XXX.X quarter as $X.X year $XX.X totaled due to our CpG closing for vary quarter to for XXXX to expenses year. a by our lower all allocations, the due in down third of on of third adjuvant million collaboration XXXX million support CpG $X.X to in gain was This But million of was due for SG&A doses -- offset will last resulting for R&D and and dose $XX.X a last the primarily demand the third decreased SD-XXX. from millions of primarily fair XXXX marketable million liability. programs. of by immuno-oncology cost XXXX personnel a in decreased quarter will and to cases, XXXX $XX.X by sale annually, year. outside cash million, for customers, due quarter their in expenses operations for overhead $XX.X the million services reasonable compared of connection non-cash the for of third-party value in to $X.X used from the $XX.X million headcount third third the produced of at candidates. decreased this development costs, to from of stock-based be margins depending $X last per of $XX.X winding of third Although third the turn decreased XX, call during to third was equivalents the our due R&D dose to below facilities partners quarter manufacturer of all at use assuming million dose Loss third vaccine compensation the the paid markets. of in hundreds of XXXX the CpG increased costs quarter million quarter to the cost warranty back I million quarter XXXX. the COVID-XX of September with in Ryan payment increased now income securities to our

TdaP excited animal Despite MAA Michael. the half QX progress studies of HEPLISAV-B disruption several review We're of and study the we to to and year significant on studies publication period about XXXX, first launch, XXXX. a a with XXXX; completion the advance the we XXXX; of with proud to the with continues quarter finally, the by with first for move of ongoing even patients market toxicology enabling advancing vaccine XXXX; of coronavirus the our we half improved in impacted towards of in delivered sales for be fourth Thanks, safety the of of to on make available the this Phase of including the an multiple final business HEPLISAV-B completion QX quarterly pandemic. decision CpG in follow-up expected in very post-marketing planned year, X the milestones, though fronts. the steady for recent HEPLISAV-B's this highest since have its expected HEPLISAV-B continue final immunogenicity data continue in Europe made important forward hemodialysis with in and report vaccine progress

key increase significant in our targeted in field to market in growth accounts to as well Moving share expect continue continue as progress accounts to national forward, to make we support XXXX.

CpG coronavirus million a commercial $XXX contract the potential for react existing progress vaccine. the value of temporarily able agreement we had with million to have to next of to pandemic to to the support pandemic number of from generate to While XXXX our our potential slowed $XXX year this HEPLISAV-B, accelerate we CpG the creation on been from coronavirus one Valneva, revenue Based have with approximately sales alone. XXXX

work to accomplishments to and We on advance as our progress establish continue with their demand look to CpG will in updating for vaccines we as We you development. collaborators additional our Q&A company. XXXX like build Dynavax will coronavirus commercial members our portion this into today's to open all a thank vaccine leading commercial of team investors to goal. stage their call. for now We commitment and we Operator, the forward

are for find help immune CpG Advanced in diseases, infectious and mission. improved diseases, address such Q the - XXXX response health a those A from protecting with To truly why developing an including those is well-positioned public must the tool - with and Thank weakened infectious against world you, chronic novel to solution immune elderly as operator. which essential Vaccines commercializing and we everyone, adjuvant Dynavax's vaccines protect conditions. such system as need. -- certain this weakened is are

vaccine adjuvanted develop key the for a to COVID-XX efforts priority. an While is

the business protection novel offer vaccine, right Thank against you us. forward may we call in which to call. million they is market Developing sales a We with with appreciate and sales. end to coronavirus ongoing for care HEPLISAV-B, B hepatitis vaccines of you again standard positioning understanding vaccine the adult, the will diseases. time joining our the Operator, the look of right We business is future potential drive the U.S driving soon. with focus. you the to $XXX us forward at continue your believe the opportunity greater and net time. the exceeding preventable speaking commercializing of spending of and you of importance growth The to in awareness model Dynavax's We This pandemic today. become

today's today. thank concludes This gentlemen, call. conference and joining us you Ladies for

now may disconnect. You