UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): July 27, 2006

DYNAVAX TECHNOLOGIES CORPORATION

(Exact name of registrant as specified in charter)

Delaware		000-50577		33-0728374
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

2929 Seventh Street, Suite 100
Berkeley, California 94710
(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (510) 848-5100

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:

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

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

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

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

 

 

Item 2.02.     Results of Operations and Financial Condition.

     On July 27, 2006, Dynavax Technologies Corporation issued a press release announcing its fiscal 2006 second quarter financial results. A copy of the press release is attached as Exhibit 99.1 to this current report and is incorporated herein by reference.

     The information in this current report and in the accompanying exhibit shall not be deemed to be “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 Technologies Corporation, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Item 9.01     Financial Statements and Exhibits.

Exhibit
Number		Description
99.1		Press Release, dated July 27, 2006, announcing Dynavax Technologies Corporation Fiscal 2006 Second Quarter Financial Results.

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.

INDEX TO EXHIBITS

Exhibit
Number		Description
99.1		Press Release, dated July 27, 2006, announcing Dynavax Technologies Corporation Fiscal 2006 Second Quarter Financial Results.

Exhibit 99.1

	2929 Seventh Street, Suite 100 Berkeley, CA 94710

Contact:
Dynavax Technologies Corporation
Jane M. Green, PhD
Corporate Communications
Phone (510) 665-4630
Email: jgreen@dvax.com

DYNAVAX ANNOUNCES SECOND QUARTER 2006
FINANCIAL RESULTS

BERKELEY, Calif. — July 27, 2006 — Dynavax Technologies Corporation (Nasdaq: DVAX) today reported financial results for the second quarter 2006.

During the second quarter 2006, Dynavax completed two significant transactions designed to expand the Company’s operations and advance its early-stage pipeline. These transactions as well as related charges are reflected in the Company’s consolidated financial statements.

•

Symphony Dynamo, Inc. (SDI) was created in connection with a collaboration with Symphony Capital Partners, LP to advance specific ISS-based programs for cancer, hepatitis B therapy and hepatitis C therapy through certain stages of clinical development. During the second quarter 2006, SDI received $20 million of the $50 million funding commitment. The results of operations of SDI are included in the consolidated results of Dynavax since the date of formation.

•

Dynavax acquired Rhein Biotech GmbH (Rhein), renamed Dynavax Europe, through which the Company gained ownership of a current European GMP-certified vaccine manufacturing facility, control over the production and supply of its hepatitis B surface antigen, and management and personnel with expertise in biopharmaceutical product development and production. The results of operations of Rhein are included in the consolidated results of Dynavax since the date of acquisition.

•

One-time cash payments totaling approximately $17 million were made during the quarter relating to these transactions.

Total revenues for the second quarter ended June 30, 2006 were $0.5 million compared to $1.0 million for the same period in 2005. Revenues in the second quarter 2006 consisted of services and license fees from Dynavax Europe for the first time and grants awarded by the National Institute of Allergy and Infectious Diseases and by the Alliance for Lupus Research. Total revenues for the six months ended June 30, 2006 were $0.8 million compared to $13.7 million for the same period in 2005. Collaboration revenue for the six months ended June 30, 2005 included accelerated recognition of $7.0 million in deferred revenue following the end of Dynavax’s collaboration with UCB Farchim in March 2005.

Total operating expenses were $18.5 million for the second quarter 2006 compared to $10.0 million for the same period in 2005. Total operating expenses for the six months ended June 30, 2006 were $27.7 million compared to $18.0 million for the comparable period in 2005. Total operating expenses in the second quarter 2006 increased by $8.5 million, which included a one-time charge of $4.2 million for acquired in-process research and development resulting from the April 2006 acquisition of Rhein, and $4.3 million from ongoing operating expenses. The growth in ongoing operating expenses resulted primarily from increased activities related to the Company’s lead product candidates TOLAMBA™ and HEPLISAV™, as well as the expansion of the Company’s operations from Dynavax Europe and programs funded by SDI.

Reimbursable expenses related to the SDI programs were $2.0 million for the three and six months ended June 30, 2006, as reflected in Loss attributed to noncontrolling interest in Symphony Dynamo, Inc. in the Company’s Condensed Consolidated Statement of Operations.

Net loss for the second quarter ended June 30, 2006 was $15.3 million, or $0.50 per diluted share, compared to net loss of $8.6 million, or $0.35 per diluted share, for the same period in 2005. The increase in net loss for the quarter ended June 30, 2006 was due primarily to increased operating expenses associated with the Company’s clinical programs and the non-recurring charge for acquired in-process research and development. Net loss for the six months ended June 30, 2006 was $23.4 million, or $0.77 per diluted share, compared to $3.5 million, or $0.14 per diluted share, for the same period in 2005.

As of June 30, 2006, Dynavax reported that cash, cash equivalents and marketable securities totaled $41.7 million compared to $75.1 million at December 31, 2005. In addition, the Company reported $19.0 million in investments held by SDI. Cash, cash equivalents and marketable securities declined over the six month period in 2006 due to the one-time cash payments totaling approximately $17 million associated with the Rhein acquisition and the formation of SDI, and $16 million of net cash used for ongoing operations.

“Dynavax had a productive second quarter of 2006,” said Dino Dina, MD, president and chief executive officer. “We implemented an innovative financing transaction with Symphony Capital Partners designed to advance our second-generation TLR-based pipeline. We completed the acquisition of Rhein as our European base of manufacturing operations. And, we rapidly and successfully initiated the TOLAMBA DARTT study, and expanded the enrollment due to the high level of interest among investigators and allergy sufferers in this novel, disease-modifying intervention. We anticipate additional important clinical activities over the coming months

including initiation of a pivotal Phase 3 trial for HEPLISAV and initiation of trials in solid tumors in our cancer program.”

Conference Call and Webcast Today

Dynavax will hold a conference call to discuss these financial results today at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time. Interested parties may listen to the webcast live at http://www.dynavax.com by clicking on the “Events” tab under the heading, “Investors.” The webcast is also being distributed over CCBN’s Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN’s individual investor center at http://www.fulldisclosure.com or by visiting any of the investor sites in CCBN’s Individual Investor Network. Institutional investors can access the call via CCBN’s password-protected event management site, StreetEvents, at http://www.streetevents.com. A telephonic replay will be available through August 3, 2006 by dialing 888.286.8010, access code: 67521357. International callers can dial 617.801.6888, access code: 67521357.

About Dynavax

Dynavax Technologies Corporation discovers, develops, and intends to commercialize innovative TLR-9 agonist-based products to treat and prevent allergies, infectious diseases, cancer, and chronic inflammatory diseases using versatile, proprietary approaches that alter immune system responses in highly specific ways. Our clinical development programs are based on immunostimulatory sequences, or ISS, which are short DNA sequences that enhance the ability of the immune system to fight disease and control chronic inflammation. Dynavax’s pipeline includes: TOLAMBA, a ragweed allergy immunotherapeutic, for which a major safety and efficacy trial is currently underway, and that is in a supportive clinical trial in ragweed allergic children; HEPLISAV, a hepatitis B vaccine that is currently in a Phase 3 clinical trial; SUPERVAX, a hepatitis B vaccine; a cancer therapy currently in a Phase 2 clinical trial and anticipated to enter clinical trials in solid tumors; an asthma immunotherapeutic that has shown preliminary safety and pharmacology in a Phase 2a clinical trial; and preclinical programs in hepatitis B therapy and hepatitis C therapy.

Dynavax cautions you that this press release contains forward-looking statements, including without limitation the plans to initiate a pivotal Phase 3 trial for HEPLISAV and clinical trials in solid tumors; and the potential for continued development of existing clinical programs. Actual results may differ materially from those set forth in this release due to the risks and uncertainties inherent in Dynavax’s business including, without limitation, risks relating to: the progress and timing of its current and anticipated clinical trials; difficulties or delays in developing, testing and manufacturing products to support clinical development plans; the scope and validity of patent protection for product candidates; competition from other companies working with ISS technologies and products; the ability to obtain additional financing to support operations; and other risks detailed in the “Risk Factors” section of Dynavax’s Annual Report on Form 10-K and Quarterly Report on Form 10-Q. All forward-looking statements are made as of the date hereof and Dynavax undertakes no obligation to revise or update information provided in this press release.

***

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

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2006				2005				2006				2005
Revenues:
Collaboration revenue		$	—			$	—			$	—			$	12,199
Service and license revenue			224				—				224				—
Grant revenue			305				953				593				1,452
Total revenues			529				953				817				13,651
Operating expenses:
Research and development			10,762				7,493				17,354				13,148
General and administrative			3,380				2,473				5,983				4,813
Acquired in-process research and development			4,180				—				4,180				—
Amortization of intangible assets			196				—				196				—
Total operating expenses			18,518				9,966				27,713				17,961
Loss from operations			(17,989	)			(9,013	)			(26,896	)			(4,310	)
Interest and other income, net			685				434				1,420				801
Loss including noncontrolling interest in Symphony Dynamo, Inc.			(17,304	)			(8,579	)			(25,476	)			(3,509	)
Loss attributed to noncontrolling interest in Symphony Dynamo, Inc.			2,031				—				2,031				—
Net loss		$	(15,273	)		$	(8,579	)		$	(23,445	)		$	(3,509	)
Basic and diluted net loss per share		$	(0.50	)		$	(0.35	)		$	(0.77	)		$	(0.14	)
Shares used to compute basic and diluted net loss per share			30,536				24,745				30,524				24,734

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

		June 30,				December 31,
		2006				2005
Assets
Cash and cash equivalents and marketable securities		$	41,703			$	75,110
Investments held by Symphony Dynamo, Inc.			19,044				—
Other current assets			2,393				2,374
Property and equipment, net			4,986				2,197
Goodwill			2,312				—
Other intangible assets, net			4,884				—
Other assets			1,302				412
Total assets		$	76,624			$	80,093
Liabilities, noncontrolling interest and stockholders’ equity
Current and long-term liabilities		$	8,593			$	5,730
Noncontrolling interest in Symphony Dynamo, Inc.			9,728				—
Stockholders’ equity			58,303				74,363
Total liabilities, noncontrolling interest and stockholders’ equity		$	76,624			$	80,093