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

DYNAVAX TECHNOLOGIES CORPORATION

(Exact name of registrant as specified in charter)

Delaware		000-50577		33-0728374
(State or other jurisdiction of		(Commission File Number)		(I.R.S. Employer
incorporation)				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))

 

 

TABLE OF CONTENTS

Item 2.02. Results of Operations and Financial Condition.
Item 9.01. Financial Statements and Exhibits.
SIGNATURES

Item 2.02.   Results of Operations and Financial Condition.

On February 19, 2008, Dynavax Technologies Corporation issued a press release announcing its fiscal 2007 fourth quarter and year end financial results and provided its 2008 financial outlook. 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.

(d) Exhibits.

Exhibit No.		Description
99.1		Press release, dated February 19, 2008 entitled “Dynavax Announces Fourth Quarter and Year End 2007 Financial Results and Provides 2008 Financial Outlook.”

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.

		2929 Seventh Street, Suite 100
		Berkeley, CA 94710

Contact
Deborah A. Smeltzer
VP Operations & Chief Financial Officer
Phone: (510) 665-7222
Email: dsmeltzer@dynavax.com

DYNAVAX ANNOUNCES FOURTH QUARTER AND YEAR-END 2007 FINANCIAL
RESULTS AND PROVIDES 2008 FINANCIAL OUTLOOK

Revenues Increase for Quarter and Year-End, Per Share Net Loss Narrows

BERKELEY, Calif. - February 19, 2008 - Dynavax Technologies Corporation (Nasdaq: DVAX) today reported financial results for the fourth quarter and year ended December 31, 2007.

As of December 31, 2007, Dynavax reported cash, cash equivalents, marketable securities and investments held by Symphony Dynamo, Inc. (SDI) totaling $88.2 million. This compares to $86.2 million at December 31, 2006.

For the fourth quarter 2007, total revenues were $9.3 million, compared to $2.4 million reported for the fourth quarter in 2006. Total revenues were $14.1 million for the year ended December 31, 2007, compared to total revenues of $4.8 million reported last year. The significant increase in revenues for the final quarter and the year reflects research and development funding for the TLR9-based hepatitis B vaccine and asthma programs provided to Dynavax from two collaborative pharma partners, Merck and AstraZeneca. Additionally, revenues include an increase in NIH grant revenue primarily for the Dynavax universal flu program. The reported revenues do not include collaboration funding from Symphony Dynamo Inc. (SDI) for cancer and HCV clinical activities. On a pro forma basis, including the collaboration funding from SDI, revenues were $11.4 million for the fourth quarter 2007, compared to $6.9 million for the fourth quarter 2006; and revenues were $24.7 million for the year ended December 31, 2007, compared to $14.5 million for the same period in 2006.

For the fourth quarter 2007, total operating expenses were $23.3 million compared to $24.4 million for the fourth quarter 2006. For the year ended December 31, 2007, total operating expenses were $85.2 million compared to $69.8 million for the same period in 2006. The increase in operating expenses for the year resulted primarily from: increased clinical development and licensing activities related to the Company’s product candidate HEPLISAV™ that was licensed to Merck in the fourth quarter of 2007; overall organizational growth including the operations of Dynavax Europe; and reimbursable expenses related to SDI programs. The 2007 operating expenses included a one-time $5 million patent license payment for the commercialization of HEPLISAV, and non-cash charges for stock-based compensation and amortization of intangible assets. Excluding

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Dynavax 4Q 2007 Results
February 19, 2008
Page 2 of 6

one-time and non-cash charges, pro forma operating expenses were $22.0 million for the fourth quarter 2007 compared to $23.3 million for the fourth quarter 2006; and pro forma operating expenses were $75.7 million for the year ended December 31, 2007, compared to $61.7 million for the same period in 2006.

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 $12.1 million, or $0.30 per share, reported for the fourth quarter 2007 was less than the net loss of $16.5 million, or $0.44 per share, for the same period in 2006. For the fourth quarter, the improvement in net loss reflected the increase in revenues, in particular, revenue associated with the signing of the Merck collaboration. Net loss for the year ended December 31, 2007 was $60.0 million, or $1.51 per share, compared to a net loss of $52.1 million, or $1.61 per share, for the same period in 2006. The year’s wider net loss was due primarily to increased clinical development expenditures and overall organizational growth, offset somewhat by the significant increase in collaboration revenue. The increase in shares used to compute net loss per share resulted from the Company’s equity financing activities completed in the fourth quarter 2006.

“Dynavax’s TLR9-based products significantly advanced in 2007, highlighted by an important new worldwide research and development collaboration with Merck for HEPLISAV, the enhanced HBV vaccine now in Phase 3, and a restart of the TOLAMBA™ clinical program, both in the fourth quarter. Despite increased total operating expenses, we ended the year with an estimated two years of cash. Importantly, the HEPLISAV collaboration provided a $31.5 million upfront fee, reimbursement of late-stage development expenses and significant potential milestones. With TOLAMBA financed by Deerfield Management, we have funding for a trial that should provide threshold data for advancing the ragweed program to pivotal studies. Going forward, we expect to identify appropriate financing strategies for several of our TLR9-based internal programs, as well as an appropriate commercialization strategy for TOLAMBA,” said Dino Dina, MD, president and chief executive officer.

2008 Financial Outlook

The following statements are forward-looking and are based on current expectations. Actual results may differ materially. These statements do not include the potential impact of any equity offerings, new business collaborations, or other transactions that may be closed or entered into after February 19, 2008.

The Company’s consolidated cash, cash equivalents, marketable securities and investments held by SDI, or total cash, is projected to be in the range of $40 to $44 million at the end of 2008.

Total pro forma revenues for 2008 are expected to be in the range of $42 to $46 million.

Total pro forma operating expenses for 2008 are expected to be in the range of $80 to $88 million.

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Dynavax 4Q 2007 Results
February 19, 2008
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Dynavax Webcast and Conference Call

Dynavax will webcast its conference call today at 4:15 p.m. ET (1:15 p.m. PT) to discuss its 4Q and Year-End 2007 Financial Results and 2008 Outlook. The live webcast can be accessed by visiting the Investors/Events section of the Company’s website at www.dynavax.com or by linking directly to http://investors.dynavax.com/events.cfm. A replay of the webcast will be available on the Dynavax web site approximately two hours after the call is completed and will be archived for two weeks on the Investor/Events page of the Dynavax website.

About Dynavax

Dynavax Technologies Corporation discovers, develops, and intends to commercialize innovative TLR9 agonist-based products to treat and prevent infectious diseases, allergies, cancer, and chronic inflammatory diseases using versatile, proprietary approaches that alter immune system responses in highly specific ways. Our TLR9 agonists 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. Our product candidates include: HEPLISAV, a hepatitis B vaccine in Phase 3 partnered with Merck & Co., Inc.; TOLAMBA, a ragweed allergy immunotherapy in Phase 2; a therapy for metastatic colorectal cancer in Phase 1; and a therapy for hepatitis B in Phase 1. Our preclinical asthma and COPD program is partnered with AstraZeneca. The NIH partially funds our preclinical work on a vaccine for influenza. SDI funds our colorectal cancer and hepatitis C therapeutic programs, and Deerfield Management has committed funding for our allergy programs. While Deerfield, NIH and SDI provide program support, Dynavax has retained rights to seek strategic partners for future development and commercialization. For more information, please visit http://www.dynavax.com.

This press release contains forward-looking statements that are subject to a number of risks and uncertainties, including statements about our projected cash position and operating results. Actual results may differ materially from those set forth in this press release due to the risks and uncertainties inherent in our business, including: achievement of our Merck agreement collaboration objectives and milestones and regulatory approvals under our third party funding arrangements; continuation of our third party collaboration and funding arrangements; difficulties or delays in research and 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; 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.

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Dynavax 4Q 2007 Results
February 19, 2008
Page 4 of 6

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

		Three Months Ended								Year Ended
		December 31,								December 31,
		2007				2006				2007				2006
Revenues:
Collaboration revenue		$	7,097			$	1,391			$	9,315			$	1,557
Grant revenue			1,198				222				3,046				1,549
Service and license revenue			1,000				825				1,732				1,741
Total revenues			9,295				2,438				14,093				4,847
Operating expenses:
Research and development (2)			18,183				19,981				65,888				50,116
General and administrative (3)			4,879				4,197				18,293				14,836
Acquired in-process research and development			—				—				—				4,180
Amortization of intangible assets			250				251				1,004				698
Total operating expenses (1)			23,312				24,429				85,185				69,830
Loss from operations			(14,017	)			(21,991	)			(71,092	)			(64,983	)
Interest and other income, net			1,571				1,125				4,165				3,287
Interest expense			(1,631	)			(30	)			(1,719	)			(99	)
Loss including noncontrolling interest in Symphony Dynamo, Inc.			(14,077	)			(20,896	)			(68,646	)			(61,795	)
Amount attributed to noncontrolling interest in Symphony Dynamo, Inc.			2,001				4,441				8,675				9,743
Net loss		$	(12,076	)		$	(16,455	)		$	(59,971	)		$	(52,052	)
Basic and diluted net loss per share.		$	(0.30	)		$	(0.44	)		$	(1.51	)		$	(1.61	)
Shares used to compute basic and diluted net loss per share			39,765				37,645				39,746				32,339

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Dynavax 4Q 2007 Results
February 19, 2008
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DYNAVAX TECHNOLOGIES CORPORATION
RECONCILIATION OF GAAP REVENUES TO PRO FORMA REVENUES
(In thousands)
(Unaudited)

		Three Months Ended								Year Ended
		December 31,								December 31,
		2007				2006				2007				2006
GAAP revenues		$	9,295			$	2,438			$	14,093			$	4,847
ADD:
Collaboration funding incurred under SDI programs			2,115				4,414				10,602				9,702
Pro forma revenues (1)		$	11,410			$	6,852			$	24,695			$	14,549

DYNAVAX TECHNOLOGIES CORPORATION
RECONCILIATION OF GAAP OPERATING EXPENSES TO PRO FORMA OPERATING EXPENSES
(In thousands)
(Unaudited)

		Three Months Ended								Year Ended
		December 31,								December 31,
		2007				2006				2007				2006
GAAP operating expenses		$	23,312			$	24,429			$	85,185			$	69,830
LESS:
Licensing fee			—				—				5,000				—
Stock-based compensation expense			1,050				917				3,531				3,283
Acquired in-process research and development			—				—				—				4,180
Amortization of intangible assets			250				251				1,004				698
Pro forma operating expenses (2)		$	22,012			$	23,261			$	75,650			$	61,669

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Dynavax 4Q 2007 Results
February 19, 2008
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DYNAVAX TECHNOLOGIES CORPORATION
SELECTED BALANCE SHEET DATA
(In thousands)

		December 31,				December 31,
		2007				2006
		(unaudited)
Assets
Cash and cash equivalents and marketable securities (1)		$	88,248			$	86,194
Property and equipment, net			7,314				5,200
Goodwill			2,312				2,312
Other intangible assets, net			3,239				4,382
Other assets			19,336				4,802
Total assets		$	120,449			$	102,890
Liabilities, noncontrolling interest and stockholders’ equity
Current liabilities		$	19,904			$	13,701
Noncurrent portion of deferred revenue			40,792				10,000
Liability from Program Option exercised under the SDI collaboration			15,000				—
Other long-term liabilities			5,622				117
Noncontrolling interest in Symphony Dynamo, Inc.			8,341				2,016
Stockholders’ equity			30,790				77,056
Total liabilities, noncontrolling interest and stockholders’ equity		$	120,449			$	102,890

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