Dynavax Announces Third Quarter 2008 Financial Results
BERKELEY, Calif., Nov 03, 2008 (BUSINESS WIRE) -- Dynavax Technologies Corporation (NASDAQ:DVAX) today reported financial results for the third quarter and nine months ended September 30, 2008.
Dynavax's cash, cash equivalents, marketable securities and investments held by Symphony Dynamo, Inc. (SDI) totaled $64.3 million at September 30, 2008. This compared to $63.1 million at June 30, 2008 and $88.2 million at December 31, 2007.
"Our increase in cash reflects the achievement of a $4.5 million milestone payment from AstraZeneca, increased revenues from our collaboration and funding agreements, and a commitment to aggressively manage our cash burn rate," said Dino Dina, M.D., President and Chief Executive Officer of Dynavax. "We expect to end this year with over $50 million in total cash, which gives us the flexibility to advance the development of our diversified pipeline of products for at least two years. For HEPLISAV(TM), we are working with our global partner Merck and expect to define our next steps by the end of this year, which may include the worldwide end-stage renal disease and adult markets outside of the U.S., representing a significant portion of the total opportunity for this investigational hepatitis B vaccine."
For the third quarter 2008, total revenues were $8.9 million, compared to $1.0 million reported for the third quarter of 2007. Revenues for the nine months ended September 30, 2008 were $25.1 million, compared to $4.8 million for the same period of 2007. The increase in revenues for the third quarter and nine months reflects research and development funding under the company's collaboration with Merck & Co. Inc. (Merck) for HEPLISAV. The reported revenues do not include collaboration funding from SDI for cancer and HCV clinical development. On a pro forma basis, including the collaboration funding from SDI, revenues were $10.5 million and $29.8 million for the three and nine months ended September 30, 2008, respectively, compared to $2.9 million and $13.3 million for the same periods of 2007.
For the third quarter 2008, total operating expenses were $14.6 million, compared to $20.2 million for the third quarter of 2007. Operating expenses for the nine months ended September 30, 2008 were $51.2 million, compared to $61.9 million for the same period of 2007. The decline in operating expenses for the third quarter and nine months resulted primarily from a reduction in clinical development costs. The operating expenses for the nine month period of 2007 also included a one-time license payment for the commercialization rights to HEPLISAV. Excluding the one-time and other non-cash charges for stock-based compensation and amortization of intangible assets, pro forma operating expenses were $13.3 million and $47.9 million for the three and nine months ended September 30, 2008, respectively, compared to $19.0 million and $53.6 million for the same periods of 2007.
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.
The net loss of $5.4 million, or $0.14 per share, reported for the third quarter 2008 improved from the net loss of $17.1 million, or $0.43 per share, for the same period of 2007. The net loss of $23.9 million, or $0.60 per share, reported for the nine months ended September 30, 2008 was also significantly less than the net loss of $47.9 million, or $1.21 per share, for the same period of 2007. For the third quarter and nine months, the improvement in net loss reflected the increase in revenues, in particular, revenue associated with the Merck collaboration for HEPLISAV.
Dynavax Technologies Corporation is a clinical-stage biopharmaceutical company that develops innovative products for the treatment of infectious diseases, respiratory diseases and cancer. The company's novel Toll-like Receptor 9 (TLR9) agonist products are based on its proprietary immunostimulatory sequences (ISS), which are short DNA sequences that stimulate the innate immune response. Dynavax's clinical product candidates include: HEPLISAV, a hepatitis B vaccine partnered with Merck & Co., Inc.; a therapy for hepatitis B; and therapies for cancer and hepatitis C funded by Symphony Dynamo, Inc. The company's preclinical pipeline includes an asthma and COPD drug candidate partnered with AstraZeneca AB and a Universal Flu vaccine. For more information, visit www.dynavax.com.
This press release contains "forward-looking statements," including statements about our projected cash position and usage and the timing of the definition of our next steps and clarification of the opportunity for HEPLISAV in certain markets, that are subject to a number of risks and uncertainties. Actual results may differ materially from those set forth in this press release due to the risks and uncertainties inherent in our business, including difficulties or delays in development, initiation and completion of clinical trials, 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, including whether and under what conditions the FDA clinical hold on HEPLISAV may be removed; maintaining our Merck collaborative agreement; potential for resuming development and obtaining regulatory approval for HEPLISAV; continuation of our other third party collaboration and funding arrangements; the scope and validity of patent protection and the possibility of claims against us based on the patent rights of others; our ability to obtain additional financing to support our operations; and other risks detailed in the "Risk Factors" section of our Quarterly Report on Form 10-Q. We undertake no obligation to revise or update information herein to reflect events or circumstances in the future, even if new information becomes available.
DYNAVAX TECHNOLOGIES CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2008 2007 2008 2007 Revenues: Collaboration revenue $ 7,960 $ 719 $ 21,435 $ 2,218 Grant revenue 581 133 2,027 1,848 Service and license revenue 316 162 1,687 732 Total revenues 8,857 1,014 25,149 4,798 Operating expenses: Research and development (2) 10,456 14,909 38,522 47,705 General and administrative (3) 3,913 5,029 11,904 13,414 Amortization of intangible assets 245 251 735 754 Total operating expenses (1) 14,614 20,189 51,161 61,873 Loss from operations (5,757 ) (19,175 ) (26,012 ) (57,075 ) Interest and other income 81 476 1,457 2,594 Loan forgiveness 5,000 -- 5,000 -- Interest expense (6,457 ) (23 ) (9,141 ) (88 ) Loss including noncontrolling interest in SDI (7,133 ) (18,722 ) (28,696 ) (54,569 ) Amount attributed to noncontrolling interest in SDI 1,713 1,621 4,768 6,674 Net loss $ (5,420 ) $ (17,101 ) $ (23,928 ) $ (47,895 ) Basic and diluted net loss per share $ (0.14 ) $ (0.43 ) $ (0.60 ) $ (1.21 ) Shares used to compute basic and diluted net loss per share 39,831 39,753 39,807 39,740 (1) Total operating expenses excluding non-cash stock-based compensation charges are $13.6 million and $48.7 million for the three and nine months ended September 30, 2008, respectively. Total operating expenses excluding non-cash stock-based compensation charges are $19.2 million and $59.4 million for the three and nine months ended September 30, 2007, respectively. (2) Research and development expenses included non-cash stock-based compensation charges of $0.5 million and $1.1 million for the three and nine months ended September 30, 2008, respectively. Research and development expenses included non-cash stock-based compensation charges of $0.3 million and $0.8 million for the three and nine months ended September 30, 2007, respectively. (3) General and administrative expenses included non-cash stock-based compensation charges of $0.6 million and $1.4 million for the three and nine months ended September 30, 2008, respectively. General and administrative expenses included non-cash stock-based compensation charges of $0.7 million and $1.7 million for the three and nine months ended September 30, 2007, respectively.
DYNAVAX TECHNOLOGIES CORPORATION RECONCILIATION OF GAAP REVENUES TO PRO FORMA REVENUES (In thousands) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2008 2007 2008 2007 GAAP revenues $ 8,857 $ 1,014 $ 25,149 $ 4,798 ADD: 1,642 1,855 4,605 8,487 Collaboration funding incurred under SDI programs Pro forma revenues (1) $ 10,499 $ 2,869 $ 29,754 $ 13,285 (1) These pro forma amounts are intended to illustrate the company's revenues to be inclusive of collaboration funding provided for the SDI programs. 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 programs funded under the SDI arrangement. 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 Nine Months Ended September 30, September 30, 2008 2007 2008 2007 GAAP operating expenses $ 14,614 $ 20,189 $ 51,161 $ 61,873 LESS: 1,052 984 2,488 2,481 Stock-based compensation expense Licensing fee -- -- -- 5,000 Amortization of intangible assets 245 251 735 754 Pro forma operating expenses (2) $ 13,317 $ 18,954 $ 47,938 $ 53,638 (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) September 30, December 31, 2008 2007 Assets (unaudited) Cash and cash equivalents and marketable securities (1) $ 64,261 $ 88,248 Property and equipment, net 10,241 7,314 Goodwill 2,312 2,312 Other intangible assets, net 2,504 3,239 Other assets 8,241 19,336 Total assets $ 87,559 $ 120,449 Liabilities, noncontrolling interest and stockholders' equity Current liabilities $ 19,890 $ 19,904 Noncurrent portion of deferred revenue 39,188 40,792 Liability from Program Option exercised under the SDI collaboration 15,000 15,000 Other long-term liabilities 106 5,622 Noncontrolling interest in SDI 3,573 8,341 Stockholders' equity 9,802 30,790 Total liabilities, noncontrolling interest and stockholders' $ 87,559 $ 120,449 equity (1) These amounts include investments held by SDI of $26.7 million and $31.6 million as of September 30, 2008 and December 31, 2007, respectively.
SOURCE: Dynavax Technologies Corporation
Dynavax Technologies Corporation Deborah A. Smeltzer, 510-665-7222 VP Operations & Chief Financial Officer firstname.lastname@example.org
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