Dynavax Technologies (DVAX) 7 May 212021 Q1 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Dynavax Technologies First Quarter 2021 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 call over to Nicole Arndt, Senior Manager, Investor Relations.

You may begin.

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

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

cause including I section reports to filed today, product become of XX-Q turn are recommendation, care for a regarding release Dynavax. we standard encourage Forward-Looking our the differ begin, will call revenue making results periodic and profile, European to statements launch and CEO results B of collaborators. studies development and universal to to in XX-K financial SEC, Spencer, Hepatitis today’s our now the you of risks you could our I advise materially. Before HEPLISAV-B’s Risk of the our outlook all press expectations and review. Ryan we to commercial that detailed subject be post-marketing uncertainties Statements current These statements Factors actual potential from we number which are are vaccine that and its with and effort, These summarized other over in with will

growth the very welcome we generated the all our you joining we you, And history believe quarter which XXXX, our to the current represents improvement which coverage The during attention excited first $XX.X company's Nicole. in outlook results at to in recommended well. Thank discuss has thank with compliance, the to highest overall Kelly rates team I'm product us happy today. in ongoing as for million. the The I'm for for standard to for to share for revenue it And our quarterly worldwide of be regimen from a existing U.S. a the focused a care populations. gives to potential year with potential large is Dynavax. transformational profile and market a become that potential U.S. pandemic

recommended Advisory vaccination number CDC establishing evaluating to eliminating previously universal Practices public CDC eventually increasing a the for adults of goal heavy on Committee Immunization all is significantly B threat. a are health by as unvaccinated for the support the Importantly, that adults of Hepatitis recommendation

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revenue provide begun and generate Our long meaningful COVID-XX term the vaccine for a have revenue collaborations stream. significant potential the to already to company have

these Let's on you the I assets. walk each call turn HEPLISAV-B take to through of important Casale. To through how Donn update over Donn? will our to

continued higher of is Ryan. adjuvanted Hepatitis the in United our to protection over deliver the a of dealt vaccine, continue shorter of period raise Thank Despite is rates be provide I'm adult our vaccine B within States. traditional CpG with first the HEPLISAV-B to three an pleased three you, B market. on an the Hepatitis in Hepatitis which U.S. commercialized time. progress to product HEPLISAV-B vaccine B XXXX. on update engineered was availability

grow This safety stimulus faced in Given has with rate industry one conditions the market the is an continued HEPLISAV-B from in country healthcare growth pandemic. of profile its over Despite and positioned continue the able share and B is pandemic. the two from last important disruption HEPLISAV-B only significant as over market protection emerges XX doses higher Hepatitis to was COVID-XX -- to month. prevention. year, for the months of the challenging significantly adjuvant last March

which the expectedly the compared market to Hepatitis was first XX% from was the for million an last $XX.X HEPLISAV-B on period revenue of B in had First last down impact year. quarter quarter net revenue quarter performance. million year, in product $X.X The same

Importantly, an in XX% from high, of the while an quarter, the increased X% field all and down, time to last share increase year. utilization market first was targeted quarter of

We disruption the recent the expect Based feedback, completed. over market industry the utilization recover the as share, and and the the we trends remainder in encouraged vaccinations of throughout continue year. past considering market healthcare by are customer year on progress to of are to COVID-XX

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shared earnings on received last As Commission. the European authorization we call, from we marketing the

first, by Germany in by markets Europe countries the we focused individual are the HEPLISAV-B. capture commercial in for the of year, We benefits of as launching on end followed strategies identified to additional HEPLISAV-B starting

should research. And to patients, launch haemodialysis we United four utilization, of is as market evaluating trial safety our on February keeping a regimen In against XXXX immunogenicity would study excited help our new of safety commercial confidence showed universal very marketing or Hepatitis further the based approaches for are using abstracts partnering Hepatitis initial States. year a United was positive expand will brand. both I patients near meeting. become compared to reviewed need recommendation call support the who Hepatitis the a tolerated back vaccine significant annual vaccinated Ryan. their updated finally, and and see surveillance term significantly rate ongoing B a acute our an identification analysis post HCIP on dose over in no the evidence furthering standard now the unvaccinated concerns. previously risk of HEPLISAV-B long observational studies progress. that on recommendation the XX,XXX in to care Also clinical The in HEPLISAV-B return all important final positive to presented B. Committee the patients you And Immunization recommendation of who for at adults in we This continue our the over HEPLISAV-B HEPLISAV-B number and For undergoing prospects the will to infarction potential conference increased demonstrated that evaluating our we Advisory for turn are States share, for the be on in vaccine data simplify increasing in risk XX.X%. the current both April, expansion outlet adults XXXX two In Germany, the showed of look to no market HEPLISAV-B during of in seroprotection for results with B forward HEPLISAV-B well about of vaccinology compared angiography. and CDC HEPLISAV-B myocardial Practices,

Thanks Donn.

As you update HEPLISAV-B important an our provides for Donn's foundation see from company.

Our including second supplier multiple either being agents. adjuvant is and going universal indications variety assets targets. Under CpG various provide pertussis as vaccine our a platforms COVID-XX, and collaborations a of supply CpG influenza. DTaP Dynavax efforts of development through or XXXX in CpG XXXX as other adjuvant used and for scoring opportunities a pipeline span or commercials is tetanus, advanced across vaccine developer, acellular These of versatility technology XXXX a our collaboration diphtheria,

the most with efforts despite vaccines or our initial enable campaign COVID-XX conditional of emergency of dramatic the supplier a adjuvant the we of with have success sufficient lack made our to vaccination dense development massive. need vaccine. progress Even world's in vaccines, the ongoing some is COVID-XX the quantities of centers of As multiple global vaccines the of authorizations population West for

ratio is needed that to and will vaccine and and has emergence the be that booster will providing demand XXXX be with multiple the favorable supply With new vaccines. the uncertainty mutations, stimulate regarding T-cells, increase demonstrated tolerability antibodies neutralizing to it ability especially necessary, continued additional profile. protection CpG for likely of vaccination

strategy collaboration in conditional for for in opportunities ad resulted event CpG XXXX XXXX Our COVID-XX has of emergencies or vaccine. multiple authorization

increase development XXXX. trial specifically Indian availability CEPI authorities Under overall in supply terms vaccine the preparation funding will commercial $XX moving COVID-XX the begin investment authorization strategic the the will and This of recently to million progress. stage in X funded positive phase have of were received collation in to expanded. a are studies. partnerships available or Phase CEPI regulatory increase expanded in which the has volume for with ½ our XXXX CEPI commercial represents their CpG increase the XXXX, development for for vaccine that agreement key CEPI doses The results to from a of million XXXX, to of they by total initiative of COVID-XX by Our $XXX of for spot. agreement agreement forward preparation been epidemic And next

expected clinical Finally, in trial July of Metagen on additional world expect of need the year. soon as over has Data beyond continue COVID-XX driving in of for booster is the the Taiwan we in will the Based options X,XXX to and continue for for X expected variants population XXXX. evaluating of to vaccine. enrollment vaccine its this availability from emerging participants period demand based into And this compared need doses initial the as completed vaccines vaccines XXXX trial possible. vaccination COVID with is the phase potential

the XXXX and response with of pandemic. capacity vaccine additional expansion billion CpG asset generating beyond the the for depending to an the of doses XXXX part CpG revenue on manufacturing capacity support potentially a demand important global making XXXX valuable developed have to available We over in X annually and additional global

of progress our a now growth continue over detail. XXXX results and discuss generate Kelly MacDonald We tremendous number turn to you, substantial that believe make Thank to on in more Ryan. Kelly we call the fronts to beyond. in financial will I'll

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

quarter I the Total first from few XXXX the increase on So $XX.X in are million just quarter million, of touch significant XXXX. revenues of a will first a for highlights. $XX.X

first this XXXX from the from quarter sales. CpG As compared of included HEPLISAV-B year, of only quarter million net HEPLISAV-B $XX.X first product of revenue the a includes and adjuvant reminder, which product to from $X.X XXXX revenues million

year. seen mentioned, the XX% B to quarter overall of first Hepatitis compared last utilization about Donn declined first we of the in vaccine As have quarter by XXXX

continue We of first expect of to the be impacted to vaccines XXXX. adult half utilization throughout

initial the XXXX and commercial utilization COVID-XX However, Under are developed government. we with vaccine between we in the to in Valneva being being as supply continued supply vaccinations XXXX XXXX, an agreement completed. year delivered of This our quarter, development agreement year the remaining We're candidate for recovery opportunity to of this for CpG agreement the supply vaccine million fourth half $XXX with revenue -- up to a XXXX program. the Valneva UK supply of with in in CpG XXX do up and under in of the the a XX% XX% the Valneva, COVID-XX represents adjuvant in doses expect remainder assuming million throughout success XXXX. about schedule first

$X.X expansion XXXX, to of we first compared our as Hepatitis million, $XX XXXX sales. process of we sales XXXX [Indiscernible]. with to March anticipate $XX.X CpG of well was operations XXXX is to prepare increased for is improvements the revenue, for our of to XXXX loss quarter in million Research million primarily of the supply $X.X Dusseldorf continuous in $X.X due have Additionally, XXXX XXXX. substantially Cost global development potential Development first approximately for first at as for Income connection XXXX as & CpG Valneva million in to The compared recommendation for into product in sales yield with term connection of of CpG We the in quarter $XX to the adjuvant to million first during first of million, in product quarter from XXXX. to quarter universal from increase a with related facility revenue of our XX, with the increase XXXX expenses quarter to long B This vaccination. with of our increase global $XX.X increase increased quarter do million approximately product adjutant cost related of compared HEPLISAV-B operations and XXXX. current adult agreement activities primarily the first as million deferred in associated $XX.X of partners. deferred

quarter of first are pleased of net a with to in income very million of a first compared XXXX the loss net We profitable with XXXX. $XX.X $XXX,XXX, of quarter

to of per marketable is compared $X.XX and our a of first share totaled XXXX the income charge income cash our quarter. This quarter the of loss in basic equivalents, XXXX of quarter of and a per approximately quarter first $XX.X value Basic net change first net Cash, the recorded for $X.XX but a was and cash $X.XX share XXXX. a we a March adjustment, non liability did During million $XXX.X share fair net impact of in diluted as of for XXXX. million. warrant the loss per of XX, securities diluted net

strong bolstered growth term Our further enabling our quarter CpG HEPLISAV-B XXXX. will acquisition execution and investments for drive has long the to

partnerships. continue make HEPLISAV-B both significant adjust CpG to XXXX We progress and with our

We looking milestones and vaccine our collaborators. multiple anticipated as on in for including are XXXX adult potential multiple as XXXX, forward catalysts Hepatitis B CpG vaccination, to decision important HCIP from COVID-XX well universal a data readouts recommendation

thank Operator, we all our in open Dynavax. validates today's the investors for the assets progress the portion call. first would success Our updating the like the our our commitment of valuable members forward corporate Q&A their further now for we throughout rest two and and team of on quarter of you to We strategy look year. to to

in [Operator first Instructions] Phipps question William of the comes Your from Blair. Matt line

line now open. Your is

afternoon. quarter here questions. a on good my Hi, and Congrats for nice thanks taking

of said say quickly, early then that the of seen you March XX% through improvement or on the moderating for or into any half in this at I of for if broadly first April end the quarter you the read Donn and XX% on be you it'll vaccine First of more HPB the covering second have quarter, think impact all, all it's kind half. in guess if a

improving quarter and relates February, XX%, around hovering down on in XX%. saw April overall mark March, utilization saw to actually it then utilization about January, we first to So The in uptick as then have an slightly. continues an initial to the read we it that be XX%.

utilization. half quarter So and our it that quarter viewpoint a second then we as year relates see of into increase the accelerating is the the second to moderate in second in on utilization

QX then, year? Or margin we A continues? for the CpG you Thanks will something into stay Okay, as up Kelly, should – the assume you XXXX that and scale the is for yes, next thanks. we question could year for Kelly could gross in And back of into that kind throughout Matt. constant do improve MacDonald that think

XXXX was CpG of for I our as profit to consistent quarter, partnership. And think XX%. the predominantly alluded around supply our to it Valneva you

pricing, to pleased low versus income can vary on As And then expect also revenues we of volume. corresponding continue higher of of of the and which are to can't a continued performance course, quarter. will partners in course, income coming on certain and be play mix we our clinical based we success, profitability high profits with pricing low the ongoing very be highly dependent with but income

COVID two if questions related may. guess I I vaccine

that they've it's the think other that for you with something get because so I your could the are know? to an interesting allow phase three you a UK And and bodies First, discussed trial them what approval that superiority do that's is thoughts guess Valneva obviously immune or beyond endpoint on response. on that regulatory

as body. in see shortly a add fit. first and this. one take Rob, any with can And the you was study color, on you Valneva even country developed of regulating I'll

of game So ahead that as We're other as trial on they're moves see the forward, one. respond going kind how programs. to as that regulators other well of

that How that I have when guys guess almost adjuvant revenue mentioned still is you revenue pre-purchase under mean they then agreement. stuff, that? the the that? or production same, the a revenue you adjuvant the recognize will But for pre-funding CEPI you there to that CEPI and the or that and their Clover already the would you to CEPI send Covax last produced all when you would for concepts is access just Okay of is them if like program adjuvants. give for formulation from question, that for program, be Is work it's

So capacity agreements in manufacture the But as the enable necessarily it's supply of XXXX. same it's our full under not to the with costs us allowing collaborators.

so makes us, collaborators all and the sell we turn we our for Upon available them. the purchasing grantees. the of ahead extent material material, Now pre-purchased to it that CEPI adjuvants having reimburse from will then it really separate around

And far around tricky revenue recorded you here to I can cash collaboration you've be partners. will going so of think on as be our number a as the when when based kind the as be little as and of is period can, highlighted is a we the receive factors from

as million our recognized So to be sell nailed but for there deliver the additional some to will the XXX coming extent level component with the revenue you forward revenue it. kind our collaborators. until no product of to pre-purchase There of it we is we actually an collaborators,

Yes.

Okay. Great. Thanks, Ryan. Congrats.

from question & Cowen Co. from Phil next Nadeau of comes Your the line

Your now line open. is

thank Hi, Donn. for for Phil, This call. you is [Indiscernible] taking my

CEPI up Just follow the on funding. a quickly

You how agreement? Am be saying original agreement. mentioned on the QX to second distributed second like it that sounds same going mentioned many first there are then was had original first the for with funding in You year distribution. half a the I a as correct terms and payment in first the one that the the there, of is the and

Yes QX put in is a QX you little of let be This bit through as it's for noted. same of me post-release. back, delivered structure, to manufacturing material the

an had time extension. identified additional an not, support This a manufacturing. to it's willing we why to and not base. call expansion isn't So CEPI that's add, additional We've the it was capacity,

agreement So an we basically amendment. existing the expanded through

timing as far And saw payments. similar so to before is the actually as what we

of being if that addressed post Okay. drug the the you example, like cardiovascular are concerns Thanks. that marketing fact have the recommendation, now for preferential you of study, by safety you terms curious from And influencing also have in positive their these physicians, was I had, terms of results? the in in feedback for besides

how there a on it AMI review the it to give going forward. over and Donn? post Donn marketing if to you turn be commercial will meaningful our want is I the engagement throughout extent quick study impacted the to launch to

I that shared certainly, topic to conversion it initially, has No, that are from to Yes. the customers mean discussion as customers the any not results with to first day HEPLISAV going the a they're day not out that topic barrier relates a I with XX so results, but been been and type very or of But HEPLISAV. excited obviously, launched, months, about to a a that's engagement or over dialogue HEPLISAV-B the topic been of with really convert to X to there. or were we relates certainly when the questions and last whether hasn't as it part

Got it. you. Thank It's my helpful. for questions. Thank you taking

Your line of next the Evercore. question comes [Indiscernible] Josh from from

open. is now line Your

the for Thanks taking questions.

thinking are point be are be that. bars like model, feel you for year think what maybe might then this year wide extremely because can the First the expect recommended? and that XXXX about about that vaccines, do What of that handicap Hepatitis would What as have be and error us adjuvant rationale that? or that revenue you to for then help assumption supposed I time B our you universal we in a quarter potential for Hep have market what the on do on at in in quarter some the on to for that process how impact assumptions B the think to you vaccines into have of to will should we and appropriate and we're recommendation how probability kind the insight probability about to HEPLISAV and

Josh. Why probability XXXX. back it with don't I impact. And Thanks, on on start provide up I'll can you pick market the universal Donn, a color some and the concept Sure, of of

insight public. not I is mean -- pretty October and with It's show engagement for is inside. to HCIP Their For anticipated them pretty positive universal actually probability the full even

important a things it's one Josh as I think to know note risk right you most based of regarding I recommendation. is mean, is the recommendation the now,

what ease provider universal much make at recommendation So a the the easier. is recommendation would do level the certainly of

those it rates it beyond on be to XX. you impact coverage one if And have and probably for of the vaccine is of can that of It a rates ceiling XX% B look start as will current an coverage But age Hep you the of of potential market numbers. mentioned, influenza an opportunity consider from years that is be the a could things or context, three into and older types So approximately is it's as to the to whether of or for see upwards of addressable certainly it's relates what whether that XX depending Ryan certainly today. those kind things is of pneumococcal put of to from XX to good opportunity and upwards XX% at going math size that that's age up X recommendation, coverage one be kind the of rates with coverage rates. to to that XX% and

opportunity. So expand it it recommendation to going look certainly the significant like. what that a we see on certainly, depends us. as But Certainly will it's opportunity for

I'm to on Thanks unless Josh. points. you follow Donn. have those up moving a XXXX

Okay.

the why the may obvious working the of Any HCIP follow recommendations not group?

any insight I based on heard mean, don't think case that we have I into February. we've dialogue in the that would be the why Oh,

a continuing from I I continue vaccination that COVID decline risk successful. the for to I had to people honestly, continued in is in the pandemic to U.S. it as the distraction think risk involved immunizations. would be But programs factor, if pick think be

question. XXXX this also very But rolls the saying have. but of appreciate is ton out, how number excited about term of start given we of just by globe. a we to lot partnerships to On the a complexity have in I we're the long demand opportunity the Yes. especially need there's in there recognize

kind So what walk through we let's shared of today. just

the on think the clear the CpG dose supply this commercial still this that, has in is We CEPI with million they of near around of in assuming order arrangements millions that in color of hundreds manufacture million of now half specific is manufacturers I and have CEPI the provides timing XX% collaborators the in deals the relationship or and we delivered negotiating the you beyond relationship the $XXX negotiating of XX% contract to the can up more can as commercial we've with you best of economic I for I thing CpG still we been and the opportunity of allow doses. our we on term But and been position the that process to to a any revenue, highlight agreements governments the bilateral a that Covax a and supply year with Valneva think of which as in Covax. gives and $XXX or deals opportunity relationships. that doesn't top the collaborators the what as QX move total that the that given clinical to cost agreements And of term. first be far fairly continued are economics as with long year. either magnitude, of baseline of we're can with those provide process me It for and of as the grantees, either And the on our well the provide CEPI the do on arrangement provide success clarity forward which quantity at being supporting margin assumption on the development then

closing would turn CEO further at Spencer, have no to like the for I Ryan over time. call now We questions this remarks. to

may You begin.

you, pandemic requires the additional believe Well, Thank the vaccines global we to evolving operator. COVID-XX demand. support

already revenue Dynavax has significant history, the is part company's growth quarterly drive to solution. this to collaboration global be and in for potential well-positioned further in the its has adjuvant we largest of XXXX and Our believe CpG through shareholders. value driven it XXXX CpG our

we a believe is of through of business continuing our vaccine creation vaccine we Now expansion source take recommendation. drive a also revenue B as path priority market an supporting Hepatitis growth leading COVID-XX the the potential fight our the and of which sales along grow with the value being enhanced we're market advantage currently against to forward to key continued national to adult HEPLISAV-B of is

we and and believe be year will forward from we close Thank of transformational combined you With may spending XXXX call. us XXXX with HEPLISAV-B Operator again Dynavax. speaking a your look the for opportunities you strength today to soon. again for the time CpG

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

now may disconnect. You