UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):   February 26, 2019

 

Dynavax Technologies Corporation

(Exact name of registrant as specified in its charter)

 

Commission File Number:  001-34207

 

2929 Seventh Street, Suite 100

Berkeley, CA 94710-2753

(Address of principal executive offices, including zip code)

(510) 848-5100

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

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Item 2.02.    Results of Operations and Financial Condition

On February 26, 2019, Dynavax Technologies Corporation ("Dynavax") issued a press release announcing its financial results for the quarter and year ended December 31, 2018. A copy of the press release is attached as Exhibit 99.1 to this current report and is incorporated herein by reference.

The information with respect to item 2.02 in this current report and its accompanying exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained in this current report and in the accompanying exhibit shall not be incorporated by reference into any filing with the U.S. Securities and Exchange Commission made by Dynavax, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

Item 9.01.    Financial Statements and Exhibits

(d) Exhibits. The following exhibit is furnished herewith:

 

 

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Exhibit 99.1

 

DYNΛVAX

INNOVATING IMMUNOLOGY

 

 

Dynavax Announces Fourth Quarter 2018 and Full Year 2018 Financial Results

 

BERKELEY, CA – February 26, 2019 – Dynavax Technologies Corporation (NASDAQ: DVAX), a fully-integrated biopharmaceutical company focused on discovering and developing novel vaccines and immuno-oncology therapeutics, today reported financial results for the fourth quarter and year ended December 31, 2018.

 

“I am proud of our 2018 achievements, particularly the launch of HEPLISAV-B, which enabled us to generate revenue of $3.9 million in the fourth quarter,” said Eddie Gray, chief executive officer of Dynavax. “HEPLISAV-B is the only two-dose hepatitis B vaccine, and it consistently protects more than 90% of adult patients. We are confident that it is poised to become the standard of care hepatitis B adult vaccine, and remain firm in our expectation that HEPLISAV-B operations will become profitable by the end of 2019.”

 

Mr. Gray continued. “In immuno-oncology, we are focused on paths to approval where we believe our TLR9 technology has a competitive advantage. SD-101, in combination with pembrolizumab has consistently demonstrated response rates in melanoma and head and neck cancer that are higher than those reported for pembrolizumab alone. We are actively evaluating a number of opportunities, including partnerships, to advance SD-101 into registrational studies, and are committed to being thoughtful and diligent in determining the best path forward to drive value for our shareholders and provide better options for patients.”

 

2018 and Recent Business Highlights

 

HEPLISAV-B® [Hepatitis B Vaccine (Recombinant), Adjuvanted]

 

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Immuno-oncology

 

SD-101

 

SD-101 adds meaningful clinical benefit to KEYTRUDA® (pembrolizumab) therapy.

 

 

 

 

 

 

 

 

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DV281

DV281 is a TLR9 agonist designed for delivery to lung cancer patients by inhalation.

Preclinical Research

Dynavax has multiple immuno-oncology preclinical research programs including a cancer vaccine program and a multi-pronged program to develop TLR7 and TLR8 agonists, both as anti-cancer agents and as vaccine adjuvants. The company is also evaluating additional candidates to leverage the hepatitis B 1018 adjuvant in additional vaccines.

 

Financial Results

 

Product Revenue, Net. Dynavax’s first commercial product, HEPLISAV-B, was launched in the first quarter of 2018. Net product revenue for the fourth quarter of 2018 was $3.9 million, compared to $1.5 million in the third quarter of 2018. Net product revenue for the full year 2018 was $6.8 million. Product revenue from sales is recorded at the net sales price, which includes estimates of product returns, chargebacks, discounts and other fees.

 

Cost of Sales, Product. Cost of sales, product, for the fourth quarter of 2018 was $1.6 million and $10.9 million for the year ended December 31, 2018. Included in cost of sales, product, are inventory reserves and fill, finish and overhead costs for HEPLISAV-B incurred after FDA approval. Also included are costs associated with resuming operations at the manufacturing facility in Düsseldorf after receiving regulatory approval for the pre-filled syringe presentation, which costs previously were included in research and development expense.

 

R&D Expenses. Research and development expenses for the fourth quarter of 2018 totaled $22.9 million compared to $17.4 for the fourth quarter 2017. Full year 2018 research and development expenses totaled $75.0 million compared to $65.0 million in 2017. The increase

 

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reflects increased compensation and related personnel costs and clinical trial and research expenses related to the ongoing development of SD-101, DV281 and earlier stage oncology programs. Upon approval of pre-filled syringes in the first quarter 2018, costs associated with resuming activities at the manufacturing facility in Düsseldorf were charged to cost of sales, product while costs incurred to manufacture HEPLISAV-B for commercial sale were accounted for as inventory.

 

SG&A. Selling, general and administrative expenses for the fourth quarter of 2018 totaled $16.4 million compared to $9.3 million for the fourth quarter of 2017. Full year 2018 selling, general and administrative expenses totaled $64.8 million compared to $27.4 million in 2017. The increase in full year 2018 is primarily due to an overall increase in HEPLISAV-B sales, marketing and commercial activities, including full-deployment of a contract sales force, post-marketing studies and consultants for commercial development services.

 

Net Loss. Net loss for the fourth quarter of 2018 was $40.0 million, or $0.64 per basic and diluted share, compared to a net loss of $27.4 million, or $0.45 per basic and diluted share, for the fourth quarter of 2017. Full year 2018 net loss was $158.9 million, or $2.55 per basic and diluted share, compared to a net loss of $95.2 million, or $1.81 per basic and diluted share for the full year 2017.

 

Cash Position. Cash, cash equivalents and marketable securities totaled $145.5 million at December 31, 2018, compared to $191.9 million at December 31, 2017. Dynavax plans to borrow $75.0 million under its non-dilutive term loan agreement in the first quarter of 2019 to support commercial efforts and advance its immuno-oncology platform.

 

Conference Call and Webcast Information

 

Dynavax will hold a conference call today at 4:30pm ET/1:30pm PT. To access the call, participants must dial (877) 423-9813 in the U.S. or (201) 689-8573 internationally, and use the conference ID 13687416. The live call will be webcast and can be accessed in the "Investors and Media" section of the company's website at www.dynavax.com. A replay of the webcast will be available for 30 days following the live event.

 

About Hepatitis B

Hepatitis B is a viral disease of the liver that can become chronic and lead to cirrhosis, liver cancer and death. The hepatitis B virus is 50 to 100 times more infectious than HIV,ⁱ and transmission is on the rise. In 2015, new cases of acute hepatitis B increased by more than 20 percent nationally.ⁱⁱ There is no cure for hepatitis B, but effective vaccination can prevent the disease.

 

In adults, hepatitis B is spread through contact with infected blood and through unprotected sex with an infected person. The CDC recommends vaccination for those at high risk for infection due to their jobs, lifestyle, living situations and travel to certain areas.ⁱⁱⁱ Because people with diabetes are particularly vulnerable to infection, the CDC recommends vaccination

 

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for adults age 19 to 59 with diabetes as soon as possible after their diagnosis, and for people age 60 and older with diabetes at their physician's discretion.^iv Approximately 20 million U.S. adults have diabetes, and 1.5 million new cases of diabetes are diagnosed each year.^v

 

About HEPLISAV-B

HEPLISAV-B is an adult hepatitis B vaccine that combines hepatitis B surface antigen with Dynavax’s proprietary Toll-like Receptor (TLR) 9 agonist to enhance the immune response. Dynavax has worldwide commercial rights to HEPLISAV-B.

 

For more information about HEPLISAV-B, visit http://heplisavb.com/.

 

About SD-101

SD-101, the Company's lead clinical candidate, is a proprietary, second-generation, Toll-like receptor 9 (TLR9) agonist CpG-C class oligodeoxynucleotide. Dynavax is evaluating this intratumoral TLR9 agonist in several clinical studies to assess its safety and activity, including a Phase 1b/2 study in combination with KEYTRUDA® (pembrolizumab), an anti-PD-1 therapy, in patients with advanced melanoma and in patients with head and neck squamous cell cancer, in a clinical collaboration with Merck. Dynavax maintains all commercial rights to SD-101.

 

About Dynavax

Dynavax is a fully-integrated biopharmaceutical company focused on leveraging the power of the body's innate and adaptive immune responses through toll-like receptor (TLR) stimulation. Dynavax discovers and develops novel vaccines and immuno-oncology therapeutics. The Company launched its first commercial product, HEPLISAV-B® [Hepatitis B Vaccine (Recombinant), Adjuvanted], in February 2018, following U.S. FDA approval for prevention of infection caused by all known subtypes of hepatitis B virus in adults age 18 years and older. Dynavax's lead immunotherapy product, SD-101, is an investigational cancer immunotherapeutic currently being evaluated in Phase 1/2 studies and its second cancer immunotherapeutic, DV281, is in Phase 1 development. For more information, visit www.dynavax.com.

Forward-Looking Statements

This press release contains "forward-looking" statements, including statements regarding the commercialization of HEPLISAV-B, conduct of clinical trials of SD-101, including results from the Phase 1b/2 trial and potential value of SD-101 across multiple tumor types, conduct of clinical trials of DV281, and a planned borrowing under its existing term loan agreement. 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 we are able to continue to build the commercial infrastructure required to increase adoption of HEPLISAV-B; whether payers will provide timely reimbursement for HEPLISAV-B; whether prescribers and other key decision-makers will switch to HEPLISAV-B; whether we can timely provide adequate clinical supplies; initiation, enrollment and completion of clinical trials of SD-101 and DV281; the results of clinical trials and the impact of those results on the initiation or continuation of subsequent trials and issues arising in the regulatory process; the ability to successfully develop and commercialize SD-101 and DV281;

 

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and whether or not Dynavax and parties with whom we are collaborating, or other parties, may reach any future agreement on further studies or a more extensive collaboration beyond the clinical trials contemplated under the existing agreements, as well as other risks detailed in the "Risk Factors" section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, as well as discussions of potential risks, uncertainties and other important factors in our other filings with the U.S. Securities and Exchange Commission. 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 our current periodic reports with the SEC.

 

KEYTRUDA is a registered trademark of Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc.

 

Contact:

Heather Rowe
Vice President, Investor Relations & Corporate Communications
hrowe@dynavax.com
510-665-7269

 

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ⁱ CDC. https://www.cdc.gov/hepatitis/hbv/bfaq.htm.

ⁱⁱ CDC. https://www.cdc.gov/hepatitis/statistics/2015surveillance/index.htm#tabs-5-8. Fig 3.2

ⁱⁱⁱ CDC. https://www.cdc.gov/hepatitis/hbv/hbvfaq.htm.

^iv CDC. https://www.cdc.gov/diabetes/pubs/pdf/hepb_vaccination.pdf.

^v CDC. https://www.cdc.gov/diabetes/pdfs/data/statistics/national-diabetes-statistics-report.pdf.

 

 

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DYNAVAX TECHNOLOGIES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 

 

 

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DYNAVAX TECHNOLOGIES CORPORATION

SELECTED BALANCE SHEET DATA

(In thousands)

(Unaudited)