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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2011	Feb. 29, 2012	Jun. 30, 2011
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Trading Symbol	DVAX
Entity Registrant Name	DYNAVAX TECHNOLOGIES CORP
Entity Central Index Key	0001029142
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		155,815,117
Entity Public Float			$ 154,205,000

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 31,941	$ 22,453
Marketable securities	82,020	49,701
Accounts receivable	9,527	1,001
Prepaid expenses and other current assets	1,130	1,360
Total current assets	124,618	74,515
Property and equipment, net	6,163	6,404
Goodwill	2,312	2,312
Other intangible assets, net		299
Restricted cash	647	652
Other assets	362	67
Total assets	134,102	84,249
Current liabilities:
Accounts payable	2,040	2,329
Accrued liabilities	8,159	10,159
Deferred revenues	4,210	1,429
Note payable to Symphony Dynamo Holdings LLC (Holdings)	12,810
Total current liabilities	27,219	13,917
Deferred revenues, noncurrent	6,386	5,655
Long-term note payable to Holdings		10,939
Long-term contingent liability to Holdings		843
Other long-term liabilities	617	784
Commitments and contingencies (Note 10)
Stockholders' equity:
Preferred stock: $0.001 par value; 5,000 shares authorized and no shares issued and outstanding at December 31, 2011 and 2010
Common stock: $0.001 par value; 250,000 and 150,000 shares authorized at December 31, 2011 and 2010, respectively; 154,626 and 115,611 shares issued and outstanding at December 31, 2011 and 2010, respectively	155	116
Additional paid-in capital	466,276	369,686
Accumulated other comprehensive loss:
Unrealized gain on marketable securities available-for-sale	(3)	(17)
Cumulative translation adjustment	(1,006)	(729)
Total accumulated other comprehensive loss	(1,009)	(746)
Accumulated deficit	(365,542)	(316,945)
Total stockholders' equity	99,880	52,111
Total liabilities and stockholders' equity	$ 134,102	$ 84,249

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Dec. 31, 2011	Dec. 31, 2010
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000	5,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	250,000	150,000
Common stock, shares issued	154,626	115,611
Common stock, shares outstanding	154,626	115,611

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Revenues:
Collaboration revenue	$ 17,190	$ 19,535	$ 35,534
Grant revenue	3,110	3,940	3,477
Service and license revenue	1,314	475	1,307
Total revenues	21,614	23,950	40,318
Operating expenses:
Research and development	51,322	53,680	38,708
General and administrative	17,570	16,879	15,745
Amortization of intangible assets	299	980	980
Total operating expenses	69,191	71,539	55,433
Loss from operations	(47,577)	(47,589)	(15,115)
Interest income	103	85	178
Interest expense	(1,957)	(1,654)	(124)
Other income (expense)	834	(8,150)	(66)
Net loss	(48,597)	(57,308)	(15,127)
Consideration paid in excess of carrying value of the noncontrolling interest in Symphony Dynamo, Inc. (SDI)			(19,671)
Add: Losses attributable to noncontrolling interest in SDI			4,233
Net loss attributable to Dynavax	$ (48,597)	$ (57,308)	$ (30,565)
Basic and diluted net loss per share attributable to Dynavax common stockholders	$ (0.39)	$ (0.69)	$ (0.76)
Shares used to compute basic and diluted net loss per share attributable to Dynavax common stockholders	125,101	82,463	40,350

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Dividend Payment 1st	Dividend Payment 2nd	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Total Dynavax Stockholders' Equity	Noncontrolling Interest in SDI	Noncontrolling Interest in SDI Dividend Payment 1st	Noncontrolling Interest in SDI Dividend Payment 2nd
Beginning Balances (in shares) at Dec. 31, 2008				39,854
Beginning Balances at Dec. 31, 2008	$ 16,156			$ 40	$ 262,579	$ (354)	$ (248,743)	$ 13,522	$ 2,634
Issuance of common stock upon financing (in shares)				13,000
Issuance of common stock upon financing	18,590			$ 13	18,577			18,590
Issuance of common stock upon exercise of stock options and restricted stock awards (in shares)				8
Issuance of common stock upon exercise of stock options and restricted stock awards	13				13			13
Issuance of common stock under Employee Stock Purchase Plan (in shares)				136
Issuance of common stock under Employee Stock Purchase Plan	72				72			72
Proceeds from issuances of common stock and warrants, net of issuance costs (in shares)				1,281
Proceeds from issuances of common stock and warrants, net of issuance costs	2,242			$ 1	2,241			2,242
Modification of warrants in conjunction with Deerfield agreement	84				84			84
Reclassification of warrant liability issued in conjunction with the SDI transaction	(2,567)				(2,567)			(2,567)
Issuance of warrants in conjunction with SDI agreements	1,764				1,764			1,764
Excess consideration paid for the noncontrolling interest in SDI	(19,671)				(19,671)			(19,671)
Stock compensation expense	3,035				3,035			3,035
Dividends paid to SDI shareholders		$ (335)	$ 1,934							$ (335)	$ 1,934
Comprehensive loss:
Change in unrealized gain on marketable securities	(49)					(49)		(49)
Cumulative translation adjustment	235					235		235
Net loss	(15,127)						(10,894)	(10,894)	(4,233)
Total comprehensive loss	(14,941)							(10,708)	$ (4,233)
Ending Balances (in shares) at Dec. 31, 2009				54,279
Ending Balances at Dec. 31, 2009	6,376			$ 54	266,127	(168)	(259,637)	6,376
Issuance of common stock upon exercise of stock options and restricted stock awards (in shares)				141
Issuance of common stock upon exercise of stock options and restricted stock awards	160			$ 1	159			160
Issuance of common stock under Employee Stock Purchase Plan (in shares)				121
Issuance of common stock under Employee Stock Purchase Plan	72				72			72
Proceeds from issuances of common stock and warrants, net of issuance costs (in shares)				59,994
Proceeds from issuances of common stock and warrants, net of issuance costs	87,399			$ 59	87,340			87,399
Reclassification of the warrant liability to Holdings into equity and the impact of the anti-dilution provision associated with the common stock and warrants issued to Holdings (in shares)				1,076
Reclassification of the warrant liability to Holdings into equity and the impact of the anti-dilution provision associated with the common stock and warrants issued to Holdings	13,580			$ 2	13,578			13,580
Stock compensation expense	2,410				2,410			2,410
Comprehensive loss:
Change in unrealized gain on marketable securities	(17)					(17)		(17)
Cumulative translation adjustment	(561)					(561)		(561)
Net loss	(57,308)						(57,308)	(57,308)
Total comprehensive loss	(57,886)							(57,886)
Ending Balances (in shares) at Dec. 31, 2010				115,611
Ending Balances at Dec. 31, 2010	52,111			$ 116	369,686	(746)	(316,945)	52,111
Issuance of common stock upon exercise of stock options and restricted stock awards (in shares)				308
Issuance of common stock upon exercise of stock options and restricted stock awards	10				10			10
Issuance of common stock under Employee Stock Purchase Plan (in shares)				106
Issuance of common stock under Employee Stock Purchase Plan	132				132			132
Proceeds from issuances of common stock and warrants, net of issuance costs (in shares)				38,601
Proceeds from issuances of common stock and warrants, net of issuance costs	91,298			$ 39	91,259			91,298
Stock compensation expense	5,189				5,189			5,189
Comprehensive loss:
Change in unrealized gain on marketable securities	14					14		14
Cumulative translation adjustment	(277)					(277)		(277)
Net loss	(48,597)						(48,597)	(48,597)
Total comprehensive loss	(48,860)							(48,860)
Ending Balances (in shares) at Dec. 31, 2011				154,626
Ending Balances at Dec. 31, 2011	$ 99,880			$ 155	$ 466,276	$ (1,009)	$ (365,542)	$ 99,880

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Operating activities
Net loss attributable to Dynavax	$ (48,597)	$ (57,308)	$ (30,565)
Adjustments to reconcile net loss to net cash used in operating activities:
Consideration paid in excess of carrying value of the noncontrolling interest in SDI			19,671
Amount attributed to noncontrolling interest in SDI			(4,233)
Depreciation and amortization	1,303	1,415	1,857
Amortization of intangible assets	299	980	980
(Gain) loss on disposal of property and equipment	20	(36)	12
Accretion of discounts and amortization of premiums of marketable securities	1,172	367	4
Non-cash interest associated with long-term note payable to Holdings	1,871	1,597
Fair value adjustment of the warrant and contingent liabilities to Holdings, including the impact of the anti-dilution provision associated with the common stock and warrants issued to Symphony	(843)	8,816
Interest associated with Deerfield financing agreement			84
Stock compensation expense	5,189	2,410	3,035
Changes in operating assets and liabilities:
Accounts receivable	(8,526)	(106)	5,512
Prepaid expenses and other current assets	230	(774)	405
Restricted cash and other assets	(290)	(38)	(13)
Accounts payable	(289)	643	781
Accrued liabilities and other long term liabilities	(2,167)	3,381	762
Deferred revenues	3,512	(12,717)	(31,844)
Net cash used in operating activities	(47,116)	(51,370)	(33,552)
Investing activities
Change in investments held by SDI			5,041
Purchases of marketable securities	(111,205)	(80,835)	(14,289)
Proceeds from maturities of marketable securities	77,729	30,750	29,500
Purchases of property and equipment, net	(1,142)	(420)	(377)
Net cash provided by (used in) investing activities	(34,618)	(50,505)	19,875
Financing activities
Cash acquired from the purchase of noncontrolling interest in SDI			19,732
Proceeds from issuances of common stock and warrants, net of issuance costs	91,298	87,399	2,242
Proceeds from exercise of stock options and restricted stock awards	10	160	13
Proceeds from employee stock purchase plan	132	72	72
Net cash provided by financing activities	91,440	87,631	22,059
Effect of exchange rate on cash and cash equivalents	(218)	(23)	235
Net increase (decrease) in cash and cash equivalents	9,488	(14,267)	8,617
Cash and cash equivalents at beginning of year	22,453	36,720	28,103
Cash and cash equivalents at end of year	31,941	22,453	36,720
Non-cash investing and financing activities:
Note payable issued to Holdings from purchase option exercised under the SDI collaboration			9,342
Liability from program option exercised under the SDI collaboration			(15,000)
Warrants issued in conjunction with the SDI transaction		6,638	1,764
Modification of warrants previously issued to Deerfield			84
Disposal of fully depreciated property and equipment	$ 1,181	42	1,215
Aspire Capital purchase agreement
Non-cash investing and financing activities:
Shares issued		1,200
SDI transaction
Non-cash investing and financing activities:
Shares issued		$ 1,551	$ 18,590

Organization

12 Months Ended

Dec. 31, 2011

Organization

1. Organization

Dynavax Technologies Corporation (“we,” “our,” “us,” “Dynavax” or the “Company”), a clinical-stage biopharmaceutical company, discovers and develops novel products to prevent and treat infectious and inflammatory diseases. Our lead product candidate is HEPLISAV, a Phase 3 investigational adult hepatitis B vaccine designed to provide higher and earlier protection with fewer doses than currently licensed vaccines.

Our pipeline of product candidates includes: HEPLISAV, our autoimmune program partnered with GlaxoSmithKline (“GSK”), our therapy for asthma partnered with AstraZeneca AB (“AstraZeneca”), and clinical-stage programs for our Universal Flu vaccine and hepatitis B therapy. We compete with pharmaceutical companies, biotechnology companies, academic institutions and research organizations in developing therapies to prevent or treat infectious diseases, asthma and inflammatory and autoimmune diseases. Our product candidates are based on the use of immunostimulatory sequences (“ISS”) and immunoregulatory sequences. We were incorporated in California in August 1996 under the name Double Helix Corporation, and we changed our name to Dynavax Technologies Corporation in September 1996. We reincorporated in Delaware in 2000.

Subsidiaries

In December 2009, we completed the acquisition of Symphony Dynamo, Inc. (“SDI”), which became a wholly-owned subsidiary (see Note 8). In April 2006, we completed the acquisition of Rhein Biotech GmbH (“Rhein”), a wholly-owned subsidiary in Düsseldorf, Germany. In October 2011, we formed Dynavax International, B.V., a wholly-owned subsidiary in Amsterdam, Netherlands.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

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-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2011

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. Prior to December 30, 2009, Dynavax also consolidated the financial results of SDI, as SDI was deemed a variable interest entity and we were deemed the primary beneficiary. All significant intercompany accounts and transactions have been eliminated. We have reclassified the prior year deferred rent balance of $0.8 million from current accrued liabilities to other long-term liabilities in order to conform to the current year presentation. We operate in one business segment, which is the discovery and development of biopharmaceutical products. We determine our segments based on the way we organize our business for making operating decisions and assessing performance. In fiscal years 2011, 2010 and 2009, 94%, 98% and 97% of our revenues were earned in the United States, respectively, and the remaining revenues were earned in Europe. As of December 31, 2011 and 2010, 14% and 17%, respectively, of our long-lived assets were located in the United States and the remaining assets were located in Germany.

Liquidity and Financial Condition

We have incurred significant operating losses and negative cash flows from operations since our inception. As of December 31, 2011, we had cash, cash equivalents and marketable securities of $114 million. We currently estimate that we have sufficient cash resources to meet our anticipated cash needs through at least the next 12 months based on cash and cash equivalents and marketable securities on hand as of December 31, 2011 and anticipated revenues and funding from existing agreements.

In order to continue development of our product candidates and if it is approved, to launch HEPLISAV, we will need to raise significant additional funds. This may occur through strategic alliance and licensing arrangements and/or future public or private financings. Sufficient additional funding may not be available on acceptable terms, or at all. Additional equity financings, if completed, could result in significant dilution or otherwise adversely affect the rights of existing shareholders. If adequate funds are not available in the future, we would need to delay, reduce the scope of, or put on hold the HEPLISAV program or our other development programs while we seek strategic alternatives.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from these estimates.

Foreign Currency

We consider the local currency to be the functional currency for our international subsidiary, Rhein. Accordingly, assets and liabilities denominated in foreign currencies are translated into U.S. dollars using the exchange rate on the balance sheet date. Revenues and expenses are translated at average exchange rates prevailing throughout the year. Currency translation adjustments are charged or credited to accumulated other comprehensive income (loss) in the consolidated balance sheets. For the years ended December 31, 2011, 2010 and 2009, we reported a loss of $0.3 million, a loss of $0.6 million, and a gain of $0.2 million, respectively. Realized gains and losses resulting from currency transactions are included in the consolidated statements of operations. We reported a $0.2 million gain resulting from currency transactions in our consolidated statements of operations for the year ended December 31, 2011.

Cash, Cash Equivalents and Marketable Securities

We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Management determines the appropriate classification of marketable securities at the time of purchase. We invest in short-term money market funds, government agency securities and corporate obligations, some of which are government-secured. We believe these types of investments are subject to minimal credit and market risk. We do not invest in auction rate securities or securities collateralized by home mortgages, mortgage bank debt, or home equity loans.

We have classified our entire investment portfolio as available-for-sale. We view our available-for-sale portfolio as available for use in current operations, and accordingly, have classified all investments as short-term. Available-for-sale securities are carried at fair value based on inputs that are observable, either directly or indirectly, such as quoted market prices for similar securities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the securities with unrealized gains and losses included in accumulated other comprehensive income (loss) in stockholders’ equity. Realized gains and losses and declines in value, if any, judged to be other than temporary on available-for-sale securities are included in interest income or expense. The cost of securities sold is based on the specific identification method. Management assesses whether declines in the fair value of investment securities are other than temporary. In determining whether a decline is other than temporary, management considers the following factors:

•

Length of time and the extent to which the market value has been less than cost;

•

The financial condition and near-term prospects of the issuer; and

•

Our intent and ability to retain our investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value.

When determining if there are any “other-than-temporary” impairments on our investments, we evaluate: (i) whether the investment has been in a continuous realized loss position for over 12 months, (ii) the duration to maturity of our investments, (iii) our intention to hold the investments to maturity and if it is not more likely than not that we will be required to sell the investment before recovery of the amortized cost bases, (iv) the credit rating of each investment, and (v) the type of investments made. Through December 31, 2011, we have not recognized any “other-than-temporary” losses on our investments.

To date, there have been no declines in fair value that have been identified as other than temporary.

Concentration of Credit Risk and Other Risks and Uncertainties

Financial instruments that are subject to concentration of credit risk consist primarily of cash and cash equivalents, marketable securities, and accounts receivable. Our policy is to invest cash in institutional money market funds and marketable securities of U.S. government and corporate issuers with high credit quality in order to limit the amount of credit exposure. We currently maintain a portfolio of cash equivalents and investments in a variety of securities, including money market funds, government agency securities and corporate obligations, some of which are government-secured. We do not invest in auction rate securities or securities collateralized by home mortgages, mortgage bank debt, or home equity loans. We have not experienced any losses on our cash and cash equivalents and marketable securities.

Trade accounts receivable are recorded at invoice value. We review our exposure to accounts receivable, including the potential for allowances based on management’s judgment. We have not historically experienced any significant losses. We do not currently require collateral for any of our trade accounts receivable.

Our future products will require approval from the U.S. Food and Drug Administration and foreign regulatory agencies before commercial sales can commence. There can be no assurance that our products will receive any of these required approvals. The denial or delay of such approvals would have a material adverse impact on our business.

We have relied on a limited number of suppliers to produce ISS for clinical trials and a single contract manufacturer to produce our 1018 ISS for HEPLISAV. The loss of our current supplier would have a significant effect on our ability to produce HEPLISAV for commercialization and development of our other product candidates. To date, we have manufactured only small quantities of ISS and 1018 ISS ourselves for development purposes.

We are subject to risks common to companies in the biopharmaceutical industry, including, but not limited to, new technological innovations, clinical development risk, establishing appropriate commercial partnerships, protection of proprietary technology, compliance with government and environmental regulations, uncertainty of market acceptance of products, product liability, the volatility of our stock price and the need to obtain additional financing.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. The assets held in our Berkeley facility have estimated useful lives of three years for computer equipment and furniture, and five years for laboratory equipment. The assets in our Düsseldorf, Germany facility have estimated useful lives of three years for computer equipment and thirteen years for furniture and laboratory equipment. Leasehold improvements in both facilities are amortized over the remaining life of the initial lease term or the estimated useful lives of the assets, whichever is shorter. Repair and maintenance costs are charged to expense as incurred.

Valuation of Long-Lived Assets and Intangible Assets

We evaluate the carrying value of long-lived assets, including intangible assets, whenever events or changes in business circumstances or our planned use of long-lived assets indicate that their carrying amounts may not be fully recoverable or that their useful lives are no longer appropriate. Intangible assets are subject to amortization and are amortized over their estimated period of benefit of five years. When an indicator of impairment exists, long-lived assets are written down to their respective fair values. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Significant management judgment is required in the forecast of future operating results that is used in the preparation of expected undiscounted cash flows. No impairments of purchased intangible assets have been identified during the years presented.

Goodwill

Goodwill is recorded as the excess purchase price over tangible assets, liabilities and intangible assets acquired based on their estimated fair value, by applying the acquisition method of accounting. Goodwill is not amortized but is subject to an annual impairment test which consists of a comparison of the fair value of a reporting unit against its carrying amount. If the carrying value exceeds the fair value, impairment is calculated and recorded as a charge in the consolidated statements of operations. We determined that we have only one operating segment and there are no components of that operating segment that are deemed to be reporting units. Since we are one reporting unit, we have allocated goodwill to that one reporting unit based on the relative fair value of the reporting unit. The ongoing evaluation for impairment of goodwill requires significant management estimates and judgment. We evaluate goodwill for impairment on an annual basis and on an interim basis if events or changes in circumstances between annual impairment tests indicate that the asset might be impaired.

Revenue Recognition

Our revenues are derived from collaborative and service agreements as well as grants. We enter into license and manufacturing agreements and collaborative research and development arrangements with pharmaceutical and biotechnology partners that may involve multiple deliverables. Our arrangements may include one or more of the following elements: upfront license payments, cost reimbursement for the performance of research and development, milestone payments, other contingent payments, contract manufacturing service fees, royalties and license fees. Each deliverable in the arrangement is evaluated to determine whether it meets the criteria to be accounted for as a separate unit of accounting or whether it should be combined with other deliverables. We recognize revenue when there is persuasive evidence that an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured.

On January 1, 2011, we adopted on a prospective basis Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2009-13, Multiple-Deliverable Revenue Arrangements, which amends the criteria related to identifying separate units of accounting and provides guidance on whether multiple deliverables exist, how an arrangement should be separated and the consideration allocated. The adoption of the standard did not impact our financial position or results of operations as of and for the year ended December 31, 2011. However, the adoption of this standard may result in revenue recognition patterns for future agreements that are different from those recognized for our existing multiple-element arrangements.

Non-refundable upfront fees received for license and collaborative agreements entered into prior to January 1, 2011 and other payments under collaboration agreements where we have continuing performance obligations related to the payments are deferred and recognized over our expected performance period. Revenue is recognized on a ratable basis, unless we determine that another methodology is more appropriate, through the date at which our performance obligations are completed. Management makes its best estimate of the period over which we expect to fulfill our performance obligations, which may include clinical development activities. Given the uncertainties of research and development collaborations, significant judgment is required to determine the duration of the performance period. We recognize cost reimbursement revenue under collaborative agreements as the related research and development costs are incurred, as provided for under the terms of these agreements.

On January 1, 2011, we elected to prospectively adopt the milestone method as described in FASB Issued ASU 2010-17, Milestone Method of Revenue Recognition. Under the milestone method, contingent consideration received from the achievement of a substantive milestone is recognized in its entirety in the period in which the milestone is achieved. A milestone is defined as an event having all of the following characteristics: (i) there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved, (ii) the event can only be achieved based in whole or in part on either management’s performance or a specific outcome resulting from management’s performance and (iii) if achieved, the event would result in additional payments being due to management.

Our license and collaboration agreements with our partners provide for payments to be paid to us upon the achievement of development milestones. Given the challenges inherent in developing biologic products, there was substantial uncertainty whether any such milestones would be achieved at the time we entered into these agreements. In addition, we evaluated whether the development milestones met the criteria to be considered substantive, when all of the conditions are met. The conditions include: (1) the development work is commensurate on either of the following: (a) the vendor’s performance to achieve the milestone and (b) the enhancement of the value of the deliverable item or items as a result of a specific outcome resulting from the vendor’s performance to achieve the milestone; (2) it relates solely to past performance and (3) it is reasonable relative to all the deliverable and payment terms within the arrangement. As a result of our analysis, we considered our development milestones to be substantive and, accordingly, we expect to recognize as revenue future payments received from such milestones as we achieve each milestone. The election to adopt the milestone method did not impact our financial position or results of operations as of and for the year ended December 31, 2011.

Milestone payments that were contingent upon the achievement of substantive at-risk performance criteria were recognized in full upon achievement of those milestone events in accordance with the terms of the agreement and assuming all other revenue recognition criteria were met. All revenue recognized to date under our collaborative agreements has been nonrefundable.

Our license and collaboration agreements with certain partners also provide for contingent payments to be paid to us based solely upon the performance of our partner. For such contingent payments we expect to recognize the payments as revenue upon receipt, provided that collection is reasonably assured and the other revenue recognition criteria have been satisfied.

Revenues from manufacturing services are recognized upon meeting the criteria for substantial performance and acceptance by the customer.

Revenue from royalty payments is contingent on future sales activities by our licensees. As a result, we recognize royalty revenue when reported by our licensees and when collection is reasonably assured.

Revenue from government and private agency grants are recognized as the related research expenses are incurred and to the extent that funding is approved. Additionally, we recognize revenue based on the facilities and administrative cost rate reimbursable per the terms of the grant awards.

Research and Development Expenses and Accruals

Research and development expenses include personnel and facility-related expenses, outside contracted services including clinical trial costs, manufacturing and process development costs, research costs and other consulting services, and non-cash stock-based compensation. Research and development costs are expensed as incurred. Amounts due under such arrangements may be either fixed fee or fee for service, and may include upfront payments, monthly payments, and payments upon the completion of milestones or receipt of deliverables. Non-refundable advance payments under agreements are capitalized and expensed as the related goods are delivered or services are performed.

We contract with third parties to perform various clinical trial activities in the on-going development of potential products. The financial terms of these agreements are subject to negotiation and vary from contract to contract and may result in uneven payment flows to our vendors. Payments under the contracts depend on factors such as the achievement of certain events, the successful enrollment of patients, completion of portions of the clinical trial or similar conditions. Our accruals for clinical trials are based on estimates of the services received and efforts expended pursuant to contracts with clinical trial centers and clinical research organizations. We may terminate these contracts upon written notice and we are generally only liable for actual effort expended by the organizations to the date of termination, although in certain instances we may be further responsible for termination fees and penalties.

Consolidation of Variable Interest Entities

Arrangements that are not controlled through voting or similar rights are accounted for as variable interest entities (“VIEs”). An enterprise is required to consolidate a VIE if it is the primary beneficiary of the VIE. The enterprise that is deemed to absorb a majority of the expected losses or receive a majority of expected residual returns of the VIE is considered the primary beneficiary.

We have concluded that under certain circumstances when we enter into agreements that contain an option to purchase assets or equity securities from an entity, or enter into an arrangement with a financial partner for the formation of joint ventures which engage in research and development projects, a VIE may be created. For each VIE created, we compute expected losses and residual returns based on the probability of future cash flows. If we are determined to be the primary beneficiary of the VIE, the assets, liabilities and operations of the VIE will be consolidated with our financial statements. Prior to the acquisition of all of the outstanding equity of SDI pursuant to the Amended Purchase Option on December 30, 2009, our consolidated financial statements include the accounts of SDI, a VIE, of which we were the primary beneficiary (refer to Note 8 below).

Stock-Based Compensation

Determining the appropriate fair value model and calculating the fair value of stock-based awards at the grant date requires judgment and estimates. The fair value of each option is amortized on a straight-line basis over the option’s vesting period, assuming an annual forfeiture rate of 15% for both the executive level and non-executive level employee groups, and is estimated on the date of grant using the Black-Scholes option valuation model, which requires the input of highly subjective assumptions, including the expected life of the option and expected stock price volatility. The expected life of options granted is estimated based on historical option exercise and employee termination data. Executive level and non-executive level employees were grouped and considered separately for valuation purposes. The expected life of the options for both groups of employees is 4 years. Expected volatility is based on historical volatility of our stock over the life of the options granted to executive and non-executive level employees. See Note 13, “Stockholder’s Equity” for further information on our equity incentive plans.

Income Taxes

We account for income taxes using the liability method under FASB issued Accounting Standards Codification (“ASC”) 740, Income Taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Additionally, we assess the likelihood that deferred tax assets will be recovered as deductions from future taxable income. We have provided a full valuation allowance on our deferred tax assets because we believe it is more likely than not that our deferred tax assets will not be realized as of the year ended in 2011 and 2010.

We have no provision for income taxes as we have incurred losses for the years ended December 31, 2011, 2010 and 2009.

We have no unrecognized tax benefits as of December 31, 2011, including no accrued amounts for interest and penalties. We do not anticipate that total unrecognized tax benefits will significantly change prior to December 31, 2012. Our policy will be to recognize interest and penalties related to income taxes, if any, as a component of general and administrative expense. We are subject to income tax examinations for U.S. federal and state income taxes from 1996 forward. We are subject to tax examination in Germany from 2010 forward. See Note 15 for further information on our tax position.

Recent Accounting Pronouncements

Accounting Standards Update 2011-04

In May 2011, the FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. This ASU is the result of joint efforts by the FASB and International Accounting Standards Board to develop a single, converged fair value framework. While this ASU is largely consistent with existing fair value measurement principles in U.S. GAAP, it expands ASC Topic 820, Fair Value Measurement existing disclosure requirements for fair value measurements and makes other amendments. Many of these amendments were made to eliminate unnecessary wording differences between U.S. GAAP and International Financial Reporting Standards, which could change how fair value measurement guidance in ASC 820 is applied. ASU No. 2011-04 is effective on a prospective basis for us on January 1, 2012. We are currently evaluating whether this new guidance will have a material impact on our consolidated financial statements.

Accounting Standards Update 2011-05

In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income. This ASU gives an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. ASU No. 2011-05 is effective on a retrospective basis for us on January 1, 2012. We do not expect that this new guidance will have a material impact on our consolidated financial statements.

Accounting Standards Update 2011-08

In September 2011, the FASB issued ASU No. 2011-08, Testing Goodwill for Impairment. This ASU will allow an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under this ASU, an entity would not be required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. This ASU includes a number of events and circumstances for an entity to consider in conducting the qualitative assessment. ASU No. 2011-08 is effective for us on January 1, 2012. We do not expect that this new guidance will have a material impact on our consolidated financial statements.

Fair Value Measurements

12 Months Ended

Dec. 31, 2011

Fair Value Measurements

3. Fair Value Measurements

ASC 820 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

•

Level 1—Quoted prices in active markets for identical assets or liabilities;

•

Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

•

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following table represents the fair value hierarchy for our financial assets (cash equivalents and marketable securities) and liabilities measured at fair value on a recurring basis as of December 31, 2011 and 2010 (in thousands):


	Level 1		Level 2		Level 3		Total
December 31, 2011
Assets:
Money market funds	$	17,171	$	—	$	—	$	17,171
U.S. government agency securities		—		28,495		—		28,495
Corporate debt securities		—		58,580		—		58,580

Total assets	$	17,171	$	87,075	$	—	$	104,246


	Level 1		Level 2		Level 3		Total
December 31, 2010
Assets:
Money market funds	$	18,980	$	—	$	—	$	18,980
U.S. government agency securities		—		49,039		—		49,039
Corporate debt securities		—		1,764		—		1,764

Total assets	$	18,980	$	50,803	$	—	$	69,783

Liabilities:
Long-term contingent consideration liability to Holdings	$	—	$	—	$	843	$	843

Total liabilities	$	—	$	—	$	843	$	843

Financial Assets

Money market funds are highly liquid investments and are actively traded. The pricing information on these investment instruments are readily available and can be independently validated as of the measurement date. This approach results in the classification of these securities as Level 1 of the fair value hierarchy.

Marketable securities are primarily comprised of U.S. Government sponsored and corporate debt securities which are measured at fair value using Level 2 inputs. We review trading activity and pricing for these investments as of the measurement date. When sufficient quoted pricing for identical securities is not available, we use market pricing and other observable market inputs for similar securities obtained from various third party data providers. These inputs represent quoted prices for similar assets in active markets or these inputs have been derived from observable market data. This approach results in the classification of these securities as Level 2 of the fair value hierarchy.

When determining if there are any “other-than-temporary” impairments on our investments, we evaluate: (i) whether the investment has been in a continuous realized loss position for over 12 months, (ii) the duration to maturity of our investments, (iii) our intention to hold the investments to maturity and if it is not more likely than not that the Company will be required to sell the investment before recovery of the amortized cost bases, (iv) the credit rating of each investment, and (v) the type of investments made. Through December 31, 2011, we have not recognized any “other-than-temporary” losses on our investments.

Financial Liabilities

We are obligated to make future contingent cash payments to the former Holdings shareholders related to certain payments received by us, if any, from future partnering agreements pertaining to our hepatitis C and cancer therapy programs. Refer to Note 8, “Symphony Dynamo Inc.” for further discussion. We estimated the valuation of this contingent liability using a discounted cash flow model. The discounted cash flow model was derived from management’s assumptions regarding the timing, amounts, and probability of potential upfront and milestone payments for the development and/or commercialization of the hepatitis C program based on transactions for similar stage programs by other companies. These cash flows were discounted at rates of 16% and 18% for the fiscal years ended December 31, 2010 and 2009, respectively.

Changes in the fair value of the contingent consideration liability are recognized in “other income (expense)” in the consolidated statements of operations in the period of the change. During the fiscal year ended December 31, 2010, we reduced the assumed probability of our receipt of upfront and milestone payments from a potential partnership and extended the timing of when these expected receipts would occur. In addition, based on our assumptions regarding our beta and risk free interest rate used in the discounted cash flow model, the change in fair value of the contingent consideration liability resulted in other income of $2.2 million for the fiscal year ended December 31, 2010. During the year ended December 31, 2011, we determined that we would not receive any upfront or milestone payments from a potential partnership for our hepatitis C therapy program and, therefore, estimated the fair value of the liability to be zero as of December 31, 2011 resulting in other income of $0.8 million. This fair value measurement was based on significant inputs not observed in the market and thus represents a Level 3 measurement.

The following table represents the changes in the fair value measurement of the contingent liability for the year ended December 31, 2011 (in thousands):


Contingent Liability to Holdings	Amount
Acquisition date fair value measurement at December 30, 2009	$	3,040
Adjustment to fair value measurement		(2,197	)

Balance as of December 31, 2010	$	843
Adjustment to fair value measurement		(843	)

Balance as of December 31, 2011	$	—

In connection with our purchase of all of the outstanding equity of SDI on December 30, 2009, we issued warrants to Holdings that were subject to certain anti-dilution protection in the event that we issued other equity securities within six months from December 30, 2009. Due to this adjustment provision, the warrants did not meet the criteria set forth in ASC 815 to be considered indexed to our own stock and therefore were recorded as a liability at fair value, which was estimated at the issuance date using the Black-Scholes Model. This fair value measurement was based on significant inputs not observed in the market and thus represents a Level 3 measurement. In connection with an equity offering completed in April 2010 prior to the expiration of the anti-dilution provision, Holdings received warrants to purchase 7,038,210 shares of common stock (“April 2010 Warrants”). The warrants issued on December 30, 2009 were cancelled upon the issuance of the April 2010 Warrants.

The incremental fair value of the April 2010 Warrants was remeasured at June 30, 2010 and resulted in an increase of $9.5 million to the warrant liability, which was reported as other expense in the consolidated statement of operations. Following the expiration of Symphony’s anti-dilution protection on June 30, 2010, the value of the April 2010 Warrants of $12 million was reclassified into stockholders’ equity in the consolidated balance sheet.

The following table represents the changes in the fair value measurement of the warrant liability (in thousands):


Warrant Liability to Holdings	Amount
Acquisition date fair value measurement at December 30, 2009	$	2,567
Adjustment to fair value measurement		9,462
Reclassification of warranty liability into equity		(12,029	)

Balance as of December 31, 2010	$	—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-Subparagraph a-d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19207-110258

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13537-108611

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13433-108611

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13504-108611

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19296-110258

+ Details

Available-for-Sale Securities

12 Months Ended

Dec. 31, 2011

Available-for-Sale Securities

4. Available-for-Sale Securities

The following is a summary of available-for-sale securities included in cash and cash equivalents and marketable securities as of December 31, 2011 and 2010 (in thousands):


	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
December 31, 2011
Certificates of deposit and money market funds	$	25,243	$	—	$	—		$	25,243
U.S. Government agency securities		28,501		—		(6	)		28,495
Corporate debt securities		58,577		9		(6	)		58,580

Total	$	112,321	$	9	$	(12	)	$	112,318

December 31, 2010
Certificates of deposit and money market funds	$	19,797	$	—	$	—		$	19,797
U.S. Government agency securities		49,056		—		(17	)		49,039
Corporate debt securities		1,764		—		—			1,764

Total	$	70,617	$	—	$	(17	)	$	70,600

There were no realized gains or losses from the sale of marketable securities in the years ended December 31, 2011, 2010 and 2009. As of December 31, 2011, all of our investments have a stated maturity date that is within one year of the current balance sheet date. All of our investments are classified as short-term and available-for-sale, as we may not hold our investments until maturity.

Property and Equipment

12 Months Ended

Dec. 31, 2011

Property and Equipment

5. Property and Equipment

Property and equipment as of December 31, 2011 and 2010 consist of the following (in thousands):


	December 31,
	2011			2010
Laboratory equipment	$	13,735		$	14,173
Computer equipment		1,498			1,341
Furniture and fixtures		1,001			1,518
Leasehold improvements		4,345			3,872

		20,579			20,904
Less accumulated depreciation and amortization		(14,416	)		(14,500	)

Total	$	6,163		$	6,404

Depreciation and amortization expense on property and equipment was $1.3 million, $1.4 million and $1.9 million for the years ended December 31, 2011, 2010 and 2009, respectively.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details

Intangible Assets

12 Months Ended

Dec. 31, 2011

Intangible Assets

6. Intangible Assets

Intangible assets consist primarily of manufacturing process and customer relationships. The manufacturing process derives from the methods for making proteins in Hansenula yeast, which is a process we use to make a key component in the production of hepatitis B vaccine. The customer relationships derive from Rhein’s ability to sell existing, in-process and future products to its existing customers. Purchased intangible assets other than goodwill are amortized on a straight-line basis over their respective useful lives. The following tables present details of the purchased intangible assets at December 31, 2011 and December 31, 2010 (in thousands):


			December 31, 2011							December 31, 2010
	Estimated Useful Life (In years)		Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Intangible Assets
Manufacturing process		5	$	3,670	$	(3,670	)	$	—	$	3,670	$	(3,446	)	$	224
Customer relationships		5		1,230		(1,230	)		—		1,230		(1,155	)		75

Total			$	4,900	$	(4,900	)	$	—	$	4,900	$	(4,601	)	$	299

Current Accrued Liabilities

12 Months Ended

Dec. 31, 2011

Current Accrued Liabilities

7. Current Accrued Liabilities

Current accrued liabilities as of December 31, 2011 and 2010 consist of the following (in thousands):


	December 31,
	2011		2010
Payroll and related expenses	$	3,224	$	2,485
Legal expenses		220		596
Third party research and development expenses		3,903		6,130
Other accrued liabilities		812		948

Total	$	8,159	$	10,159

Symphony Dynamo, Inc.

12 Months Ended

Dec. 31, 2011

Symphony Dynamo, Inc.

8. Symphony Dynamo, Inc.

On April 18, 2006, we, Symphony Capital Partners, L.P. and certain of its affiliates (together, “Symphony”) and Holdings entered into a transaction involving a series of related agreements providing for the advancement of certain of our immunostimulatory sequences-based programs for cancer, hepatitis B and hepatitis C therapy (collectively, the “Programs”). Pursuant to these agreements, Symphony formed SDI and invested $50 million to fund the Programs, and we licensed to Holdings our intellectual property rights related to the Programs, which were assigned to SDI. As a result of these agreements, Symphony owned 100% of the equity of Holdings, which owned 100% of the equity of SDI.

In connection with the transaction described above, Holdings granted to us an exclusive purchase option that gave us the right, but not the obligation, to acquire the outstanding equity securities of SDI, which would result in our reacquisition of the intellectual property rights that we licensed to Holdings (the “Original Purchase Option”). In exchange for the Original Purchase Option, we granted Holdings five-year warrants to purchase up to 2,000,000 shares of our common stock at an exercise price of $7.32 per share pursuant to a warrant purchase agreement (the “Original Warrants”), and granted certain registration rights to Holdings pursuant to a registration rights agreement. We also received an exclusive option to purchase either the hepatitis B or hepatitis C therapy program (the “Program Option”) during the first year of the arrangement. In April 2007, we exercised the Program Option for the hepatitis B program which resulted in the recognition of a $15.0 million liability to Symphony. We remained primarily responsible for the development of the cancer and hepatitis C therapy programs in accordance with a development plan and related development budgets that we agreed to with Holdings.

Prior to the acquisition of all of the outstanding equity of SDI pursuant to the Amended Purchase Option on December 30, 2009, as described below, we consolidated the financial position and results of operations of SDI. Net losses incurred by SDI and charged to Symphony’s noncontrolling interest were $4.2 million for the year ended December 31, 2009. In November 2009, we entered into an agreement with Holdings to modify the provisions of and to exercise the Original Purchase Option. We completed the acquisition of all of the outstanding equity of SDI on December 30, 2009. In exchange for all of the outstanding equity of SDI, we issued to Symphony and certain of its co-investors: (i) 13,000,000 shares of common stock (the “Shares”); (ii) 5-year warrants to purchase 2,000,000 shares of common stock with an exercise price of $1.94 per share (the “Warrants”); and (iii) a note in the principal amount of $15.0 million, due December 31, 2012, payable in cash, our common stock or a combination thereof at our discretion, which obligation was previously payable solely in cash on April 18, 2011. In addition, we agreed to contingent cash payments from us equal to 50% of the first $50 million from any upfront, pre-commercialization milestone or similar payments received by us from any agreement with any third party with respect to the development and/or commercialization of the cancer and hepatitis C therapies originally licensed to SDI. The Original Warrants held by Symphony were cancelled as part of this transaction.

We recorded the acquisition of all of the outstanding equity of SDI pursuant to the Amended Purchase Option as a return of equity to the noncontrolling interest. The acquisition was accounted for as a capital transaction that did not affect our consolidated net loss. However, because the acquisition was accounted for as a capital transaction, the consideration paid in excess of the carrying value of the noncontrolling interest in SDI is treated as a deemed dividend for purposes of reporting net loss and earnings per share, increasing net loss and net loss per share attributable to us for the year ended December 31, 2009. We ceased to charge net losses incurred by SDI against the noncontrolling interest upon our acquisition of SDI on December 30, 2009.

The fair value of our common stock issued to the Symphony investors was based on the closing sales price of our common stock on the NASDAQ Capital Market on December 30, 2009, the date the transaction was completed. The estimated fair values of the warrants transferred were calculated using the Black-Scholes valuation model.

The principal amount of the non-interest bearing note payable to Holdings of $15 million is due on December 31, 2012 and is payable in cash, our common stock or a combination thereof at our discretion. As of December 31, 2011, the estimated fair value of the note payable was $12.8 million and was classified as a short term liability. We estimated the fair value using a net present value model with a discount rate of 17%. Imputed interest was recorded as interest expense over the term of the loan using the interest rate method. If we elect to pay all or a portion of the note in shares of our common stock, the number of shares issued will be equal to the portion of the outstanding principal amount of the note to be repaid using our common stock, divided by the average closing price of our common stock for the thirty (30) trading days immediately preceding (but not including) the second trading day prior to the date of such payment multiplied by 1.15.

We estimated the fair value of the contingent consideration liability for potential future payments using a discounted cash flow model. The discounted cash flow model was derived from management’s assumptions regarding the timing, amounts, and probability of potential upfront and milestone payments for the development and/or commercialization of the hepatitis C program based on transactions for similar stage programs by other companies. These cash flows were discounted at a rate of 16%. Changes in the fair value of the acquisition-related contingent consideration liability subsequent to the December 30, 2009 acquisition date are recognized in other income and expense on our consolidated statement of operations in the period of the change.

The Shares and Warrants were subject to certain anti-dilution protection in the event that we issued other equity securities within six months from December 30, 2009. Due to this adjustment provision, the Warrants did not meet the criteria set forth in ASC 815, Derivatives and Hedging, to be considered indexed to the Company’s own stock and therefore were recorded as a liability at fair value, which was estimated at the issuance date using the Black-Scholes Model. As a result of an equity offering completed in April 2010 prior to the expiration of the anti-dilution provision, Symphony received an additional 1,076,420 shares of common stock (“April 2010 Shares”) and warrants to purchase 7,038,210 shares of common stock (“April 2010 Warrants”) having the same terms as the warrants sold in the offering, which have an exercise price of $1.50 per share and a term of five years. The Warrants issued on December 30, 2009 were cancelled upon the issuance of the April 2010 Warrants.

The fair value of the April 2010 Shares and incremental fair value of the April 2010 Warrants provided to Symphony, as measured upon issuance and remeasured at June 30, 2010, resulted in non-operating expense of $11.1 million in the second quarter of 2010. This also resulted in an increase of $9.5 million to the warrant liability and an increase of $1.6 million to additional paid in capital as of June 30, 2010. Following the expiration date of Symphony’s anti-dilution protection, on July 1, 2010, the value of the April 2010 Warrants of $12.0 million was reclassified into stockholders’ equity in the consolidated balance sheets. The April 2010 Warrants remained outstanding as of December 31, 2011.

- Definition

The entire disclosure for noncontrolling interest in consolidated subsidiaries, which could include the name of the subsidiary, the ownership percentage held by the parent, the ownership percentage held by the noncontrolling owners, the amount of the noncontrolling interest, the location of this amount on the balance sheet (when not reported separately), an explanation of the increase or decrease in the amount of the noncontrolling interest, the noncontrolling interest share of the net Income or Loss of the subsidiary, the location of this amount on the income statement (when not reported separately), the nature of the noncontrolling interest such as background information and terms, the amount of the noncontrolling interest represented by preferred stock, a description of the preferred stock, and the dividend requirements of the preferred stock.

+ References + Details

Financing Agreements

12 Months Ended

Dec. 31, 2011

Financing Agreements

9. Financing Agreements

On November 3, 2011, we completed an underwritten public offering of 27,600,000 shares of our common stock including 3,600,000 shares sold pursuant to the full exercise of an overallotment option previously granted to the underwriters at a price to the public of $2.50 per share. The net proceeds to us from this offering were $64.5 million, after deducting underwriting discounts and commissions and other offering expenses payable by us.

On November 2, 2010, we completed an underwritten public offering of 26,450,000 shares of our common stock including 3,450,000 shares sold pursuant to the full exercise of an overallotment option previously granted to the underwriters at a price to the public of $1.70 per share. The net proceeds to us from this offering were $42.0 million, after deducting underwriting discounts and commissions and other offering expenses payable by us.

On September 20, 2010, we entered into a Purchase Agreement with Aspire Capital, which provided that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital was committed to purchase up to an aggregate of $30.0 million of shares of our common stock (the “Purchase Shares”) over the 25-month term of the Purchase Agreement. Under the Purchase Agreement, we agreed to pay Aspire Capital a commitment fee equal to 4% of $30.0 million in consideration for Aspire Capital’s obligation to purchase up to $30.0 million of our common stock. We paid this commitment fee of $1.2 million by the issuance of 600,000 shares of our common stock and this fee was recorded as a cost of raising capital and netted against the gross proceeds from the Purchase Agreement in September 2010. During 2010, we sold 2,350,000 shares of common stock to Aspire Capital for $3.3 million and during 2011 we sold 10,995,210 shares of common stock for $26.7 million, which totaled the proceeds available to us of $30 million under the Purchase Agreement.

On April 16, 2010, we completed an underwritten public offering resulting in net proceeds of $41.1 million, after deducting the underwriting discount and offering expenses of approximately $3.0 million, from the sale of 30,293,000 units at a per unit price of $1.4525. Each unit consisted of one share of common stock and one warrant to purchase 0.5 of a share of common stock. Each warrant has an exercise price of $1.50 per share, and is exercisable for a period of five years from the date of issuance. From this offering, warrants to purchase an aggregate of 15,141,165 shares of our common stock were outstanding as of December 31, 2011.

On August 17, 2009, we entered into an equity distribution agreement with Wedbush Morgan Securities, Inc. (“Wedbush”) pursuant to which we could offer and sell shares of our common stock having an aggregate offering price of up to $15 million from time to time through Wedbush as our sales agent or to Wedbush as a principal. During the fiscal year ended December 31, 2009, we sold 1,281,100 shares of common stock under the agreement with Wedbush as our sales agent for aggregate net proceeds of $2.3 million after deducting commissions paid to Wedbush and offering expenses. On September 14, 2010, the Company terminated the agreement with Wedbush. Prior to the termination of the agreement on September 14, 2010, during the year ended December 31, 2010 we sold 900,860 shares of common stock under the agreement with Wedbush as our sales agent for net proceeds of $1.2 million.

In connection with a 2007 loan agreement that was subsequently terminated in 2008, we issued warrants to purchase up to 3,550,000 shares of our common stock as follows:


Warrant Issuance Date	Shares Issuable (in thousands)		Expiration Date		Exercise Price per Share
July 18, 2007		1,250		2/26/2014	$	5.13
October 18, 2007		1,300		2/26/2014	$	1.68
December 27, 2007		300		2/26/2014	$	5.65
December 27, 2007		700		2/26/2014	$	1.68

Total		3,550

Such warrants remained outstanding as of December 31, 2011.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies

10. Commitments and Contingencies

We lease our facilities in Berkeley, California (the “Berkeley Lease”), and Düsseldorf, Germany (the “Düsseldorf Lease”), under operating leases that expire in September 2017 and March 2023, respectively. Total net rent expense related to our operating leases for the years ended December 31, 2011, 2010 and 2009, was $1.7 million, $2.6 million and $2.5 million, respectively. Deferred rent was $0.6 million and $0.8 million as of December 31, 2011 and 2010, respectively.

Future minimum payments under the non-cancelable portion of our operating leases at December 31, 2011, excluding payments from sublease agreements of $0.1 million, are as follows (in thousands):


Years ending December 31,
2012	$	1,783
2013		1,804
2014		1,766
2015		1,803
2016		1,840
Thereafter		4,442

Total	$	13,438

During the fourth quarter of 2004, we established a letter of credit with Silicon Valley Bank as security for our Berkeley Lease in the amount of $0.4 million. The letter of credit remained outstanding as of December 31, 2011 and is collateralized by a certificate of deposit which has been included in restricted cash in the consolidated balance sheets as of December 31, 2011 and 2010. Under the terms of the Berkeley Lease, if the total amount of our cash, cash equivalents and marketable securities falls below $20.0 million for a period of more than 30 consecutive days during the lease term, the amount of the required security deposit will increase to $1.1 million, until such time as our projected cash and cash equivalents will exceed $20.0 million for the remainder of the lease term, or until our actual cash and cash equivalents remains above $20.0 million for a period of 12 consecutive months.

We established a letter of credit with Deutsche Bank as security for our Düsseldorf Lease in the amount of approximately 0.2 million Euros. The letter of credit remained outstanding as of December 31, 2011 and is collateralized by a certificate of deposit which has been included in restricted cash in the consolidated balance sheets as of December 31, 2011 and 2010.

In addition to the non-cancelable commitments included above, we have entered into contractual arrangements that obligate us to make payments to the contractual counterparties upon the occurrence of future events. In the normal course of operations, we have entered into license and other agreements and intend to continue to seek additional rights relating to compounds or technologies in connection with our discovery, manufacturing and development programs. Under the terms of the agreements, we may be required to pay future up-front fees, milestones and royalties on net sales of products originating from the licensed technologies. We consider these potential obligations to be contingent and have summarized all significant arrangements below.

We rely on research institutions, contract research organizations, clinical investigators and clinical material manufacturers. As of December 31, 2011, under the terms of our agreements, we are obligated to make future payments as services are provided of approximately $14.8 million through 2015. These agreements are terminable by us upon written notice. We are generally only liable for actual effort expended by the organizations at any point in time during the contract, subject to certain termination fees and penalties.

Under the terms of our exclusive license agreements with the Regents of the University of California, as amended, for certain technology and related patent rights and materials, we pay annual license or maintenance fees and will be required to pay milestones and royalties on net sales of products originating from the licensed technologies.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.25)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14435-108349

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 460
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 440
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

+ Details

Collaborative Research, Development, and License Agreements

12 Months Ended

Dec. 31, 2011

Collaborative Research, Development, and License Agreements

11. Collaborative Research, Development, and License Agreements

GlaxoSmithKline

In December 2008, we entered into a worldwide strategic alliance with GSK to discover, develop, and commercialize toll-like receptor (“TLR”) inhibitors. We received an initial payment of $10 million and agreed to conduct research and early clinical development in up to four programs. We are eligible to receive future development milestone payments which we have determined to be substantive milestones. GSK can exercise its exclusive option to license each program upon achievement of certain events, and we are eligible to receive contingent option exercise payments. If GSK exercises its option, GSK would carry out further development and commercialization of these products. We are eligible to receive tiered, up to double-digit royalties on sales, if any, and have retained an option to co-develop and co-promote one product under this agreement.

In 2011, we earned $15 million in milestone payments related to the initiation of Phase 1 and proof-of-mechanism clinical trials of DV1179 in systemic lupus erythematosus patients and the expansion of our collaboration with GSK to develop a TLR8 inhibitor. Revenue from the initial payment is deferred and is being recognized over the expected period of performance which is estimated to be seven years. For the years ended December 31, 2011, 2010 and 2009, we recognized revenue of $16.4 million, $1.4 million and $1.4 million, respectively, from this collaboration.

Absent early termination, the agreement will expire when all of GSK’s payment obligations expire. Either party may terminate the agreement early upon written notice if the other party commits an uncured material breach of the agreement. Either party may terminate the agreement in the event of insolvency of the other party. GSK also has the option to terminate the agreement without cause, upon prior written notice within a specified window of time dependent upon stage of clinical development of the programs.

AstraZeneca

In September 2006, we entered into a three-year research collaboration and license agreement with AstraZeneca for the discovery and development of TLR9 agonist-based therapies for the treatment of asthma and chronic obstructive pulmonary disease. We received an upfront payment of $10 million. In 2008, we received a milestone payment of $4.5 million for the nomination of the first candidate drug, AZD1419, for asthma. The research term of this agreement was extended through July 2010.

In October 2011, we amended our agreement with AstraZeneca for the development of AZD1419. Development expenses will be funded by AstraZeneca and we received an initial payment of $3.0 million to begin the clinical program. In December 2011, we agreed to advance AZD1419 into preclinical toxicology studies, which entitled us to receive a $2.6 million payment. Under the terms of the amended agreement, AstraZeneca will provide us with a total of approximately $20 million in payments to cover the cost of clinical development activities through Phase 2a. If AstraZeneca chooses to advance the program following completion of Phase 2a, we will receive a $20 million substantive milestone payment, and AstraZeneca will retain its rights to develop the candidate therapy and to commercialize the resulting asthma product. Additionally, we are eligible to receive potential future development payments, and upon commercialization, we are eligible to receive royalties based on product sales, if any. We have the option to co-promote in the United States products arising from the collaboration, if any. AstraZeneca has the right to sublicense its rights upon our prior consent.

Revenue from the upfront payment had been deferred until certain contractual obligations were amended in September 2010 when the $10 million was recognized. Revenue from the milestone payment for the nomination of the candidate drug was deferred and recognized ratably over the estimated performance period of the original research term through July 2010. Revenue from the 2011 amendment has been deferred and is being recognized as the development work is performed over the estimated performance period of approximately five years. For the years ended December 31, 2011, 2010, and 2009, we recognized revenue of $0.8 million, $14.1 million, and $5.1 million, respectively, from this collaboration.

Absent early termination, the agreement will expire when all of AstraZeneca’s payment obligations expire. AstraZeneca has the right to terminate the agreement at any time upon prior written notice and either party may terminate the agreement early upon written notice if the other party commits an uncured material breach of the agreement.

National Institutes of Health (“NIH”) and Other Funding

In July 2011, we were awarded a $0.6 million grant from the NIH that will be used to fund research to characterize the role of the phosphoinositide 3-kinase (PI3K) in preclinical models of skin autoimmune inflammation. For the year ended December 31, 2011 we recognized revenue of approximately $0.1 million related to this grant.

In August 2010, we were awarded a grant from the NIH’s National Institute of Allergy and Infectious Disease (“NIAID”) to take a systems biology approach to study the differences between individuals who do or do not respond to vaccination against the hepatitis B virus. This study will be one of several projects conducted under a grant to the Baylor Institute of Immunology Research in Dallas as part of the Human Immune Phenotyping Centers program, from which we received $0.5 million in 2011 and $0.1 million in 2010. For the years ended December 31, 2011 and December 31, 2010, we recognized revenue of approximately $0.5 million and $40 thousand, respectively, related to this grant.

In July 2010, we were awarded a $0.6 million grant from the NIH to explore the feasibility of developing a universal vaccine to prevent infection by human papilloma virus. For the years ended December 31, 2011 and December 31, 2010, we recognized revenue of approximately $0.2 million for each of the years, related to this grant.

In September 2008, we were awarded a five-year $17 million contract to develop our ISS technology using TLR9 agonists as vaccine adjuvants. The contract was awarded by NIAID to develop novel vaccine adjuvant candidates that signal through receptors of the innate immune system. The contract supports adjuvant development for anthrax as well as other disease models. NIAID is funding 100% of the total $17 million cost of our program under Contract No. HHSN272200800038C. For the years ended December 31, 2011, 2010, and 2009, we recognized revenue related to this program of approximately $2.3 million, $3.2 million and $1.6 million, respectively.

In July 2008, we were awarded a two-year $1.8 million grant from the NIH to develop a therapy for systemic lupus erythematosus, an autoimmune disease. For the years ended December 31, 2011, 2010, and 2009, we recognized revenue related to this program of approximately $0.1 million, $0.2 million, and $0.9 million, respectively.

Merck & Co., Inc. (“Merck”)

In October 2007, we entered into a global license and development collaboration agreement and a related manufacturing agreement with Merck to jointly develop HEPLISAV, our novel investigational hepatitis B vaccine. Under the terms of the agreement, Merck received worldwide exclusive rights to HEPLISAV, and agreed to fund future vaccine development and be responsible for commercialization. We received a non-refundable upfront payment of $31.5 million. Revenue from the initial payment was deferred and recognized ratably over the estimated performance period of the collaboration agreement. On December 18, 2008, Merck provided notice of its termination of the collaboration, at which time all development, manufacturing and commercialization rights to HEPLISAV reverted to us. As a result of Merck’s termination, we accelerated the applicable performance period over which we ratably recognized revenue from the upfront fee through the effective date of termination, which was in June 2009. For the year ended December 31, 2009, we recognized revenue of $28.5 million related to the upfront fee. Cost reimbursement revenue under this collaboration agreement totaled $0.3 million for the year ended December 31, 2009. Additionally, in March 2010, Merck agreed to make a $4.0 million payment to us in satisfaction of its obligations for the wind down period following Merck’s written notice of termination, which was recorded as collaboration revenue upon receipt.

Net Loss Per Share

12 Months Ended

Dec. 31, 2011

Net Loss Per Share

12. Net Loss Per Share

Basic net loss per share is calculated by dividing the net loss attributable to us by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss attributable to us by the weighted-average number of common shares outstanding during the period and dilutive potential common shares using the treasury-stock method. For purposes of this calculation, common stock subject to repurchase by us, options and warrants are considered to be dilutive potential common shares and are only included in the calculation of diluted net loss per share when their effect is dilutive.


	Years Ended December 31,
	2011			2010			2009
Basic and diluted net loss per share (in thousands, except per share amounts):
Numerator:
Net loss attributable to Dynavax	$	(48,597	)	$	(57,308	)	$	(30,565	)

Denominator for basic and diluted net loss per share attributable to Dynavax common stockholders:
Weighted-average common shares outstanding		125,101			82,463			40,350

Basic and diluted net loss per share attributable to Dynavax common stockholders	$	(0.39	)	$	(0.69	)	$	(0.76	)


	December 31,
	2011			2010			2009
Outstanding securities not included in diluted net loss per share calculation (in thousands):
Options to purchase common stock		7,882			7,288			5,561
Warrants		25,729			25,734			5,550

		33,611			33,022			11,111

Stockholders' Equity

12 Months Ended

Dec. 31, 2011

Stockholders' Equity

13. Stockholders’ Equity

Stock Plans

As of December 31, 2011, we had four share-based compensation plans: the 1997 Equity Incentive Plan; the 2004 Stock Incentive Plan, which includes the 2004 Non-Employee Director Option Program and the 2004 Employee Stock Purchase Plan; the 2010 Employment Inducement Award Plan; and the 2011 Equity Incentive Plan.

In January 1997, we adopted the 1997 Equity Incentive Plan (the “1997 Plan”). The 1997 Plan provides for the granting of stock options to employees and non-employees of the Company. Options granted under the 1997 Plan may be either incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”). ISOs may be granted to employees, including directors who are also considered employees. NSOs may be granted to employees and non-employees. Options under the 1997 Plan may be granted for periods of up to ten years and at prices no less than 85% of the estimated fair value of the shares on the date of grant as determined by the Board of Directors, provided, however, that (i) the exercise price of an ISO shall not be less than 100% of the estimated fair value of the shares on the date of grant, and (ii) the exercise price of an ISO granted to a 10% stockholder shall not be less than 110% of the estimated fair value of the shares on the date of grant. The options are exercisable immediately and generally vest over a four-year period (generally 25% after one year and in monthly ratable increments thereafter) for stock options issued to employees, directors and scientific advisors, and quarterly vesting over a four-year period or immediate vesting for stock options issued to all other non-employees. All unvested shares issued under the 1997 Plan are subject to repurchase rights by the Company under such conditions as agreed to by the Company and the optionee. The 1997 Plan expired in the first quarter of 2007. Upon expiration of the 1997 Plan, 273,188 shares previously available for grant expired. Any outstanding options under the 1997 Plan that are cancelled in future periods will automatically expire and will no longer be available for grant. As of December 31, 2011, options to purchase approximately 729,000 shares of common stock remained outstanding under the 1997 Plan.

In January 2004, the Board of Directors and stockholders adopted the 2004 Stock Incentive Plan (the “2004 Plan”) which became effective on February 11, 2004. Subsequently, we discontinued granting stock options under the 1997 Plan. The exercise price of all incentive stock options granted under the 2004 Plan is at least equal to 100% of the fair market value of the common stock on the date of grant. If, however, incentive stock options are granted to an employee who owns stock possessing more than 10% of the voting power of all classes of the Company’s stock or the stock of any parent or subsidiary of the Company, the exercise price of any incentive stock option granted must equal at least 110% of the fair market value on the grant date and the maximum term of these incentive stock options must not exceed five years. The maximum term of an incentive stock option granted to any other participant must not exceed ten years. The 2004 Stock Incentive Plan authorizes the issuance of various forms of stock-based awards including stock options, restricted stock, restricted stock units, and other equity awards to employees, consultants and members of the board of directors. As of December 31, 2011, options to purchase approximately 5.0 million shares of common stock remained outstanding under the 2004 Plan.

In January 2010, our Board of Directors adopted a 2010 Employment Inducement Award Plan (the “Inducement Plan”) to induce qualified individuals to join Dynavax. This Inducement Plan provides for the issuance of up to 1,500,000 shares of Dynavax Common Stock and became effective on January 8, 2010. Stockholder approval of the Inducement Plan is not required under NASDAQ Marketplace Rule 5635(c)(4). As of December 31, 2011, options to purchase approximately 850,000 shares of common stock remained outstanding under the Inducement Plan.

In January 2011, the Company’s stockholders approved the 2011 Equity Incentive Plan (the “2011 Plan”). The 2011 Plan provides for the issuance of up to 15,000,000 shares of our common stock to employees and non-employees of the Company and became effective on January 6, 2011. The 2011 Plan is administered by our Board of Directors (the “Board”), or a designated committee of the Board, and awards granted under the 2011 Plan have a term of 10 years unless earlier terminated by the Board. Under the 2011 Plan, no additional awards will be granted under either the 2004 Plan or the 2010 Inducement Plan. As of January 6, 2011, all shares subject to awards outstanding under the 1997 Plan, 2004 Plan or 2010 Inducement Plan that expire or are forfeited will be included in the reserve for the 2011 Plan to the extent such shares would otherwise return to such plans. As of December 31, 2011, options to purchase approximately 4.4 million shares of common stock remained outstanding under the 2011 Plan.

Activity under our stock plans is set forth below (in thousands, except price per share):


	Options and Awards Available for Grant			Options Outstanding			Weighted-Average Price Per Share
Balance at December 31, 2010		646			6,868		$	3.05
2011 Plan options authorized		15,000			—			—
2011 Plan options granted		(4,573	)		4,573		$	3.08
2010 Plan options exercised		—			(44	)	$	1.36
2004 Plan options exercised		—			(25	)	$	1.55
2004 Plan RSUs paid to the Company in settlement of taxes		66			—		$	2.77

Options cancelled:
2011 Plan options		148			(148	)	$	2.88
2010 Plan options		185			(185	)	$	1.50
2004 Plan options		36			(36	)	$	2.12
1997 Plan options		16			(16	)	$	6.12

Balance at December 31, 2011		11,524			10,987		$	3.10

Stock option activity is summarized as follows:


	Number of Options (In thousands)			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (In years)		Aggregate Intrinsic Value (In thousands)
Outstanding as of December 31, 2008 (2,536 exercisable at $5.09 weighted average price per share)		4,823		$	5.04		5.19
Granted		1,398		$	0.96
Cancelled and expired		(942	)	$	5.14
Exercised		(3	)	$	1.50			$	1

Outstanding as of December 31, 2009 (2,848 exercisable at $4.78 weighted average exercise price per share)		5,276		$	3.94		5.63
Granted		2,699		$	1.64
Cancelled and expired		(968	)	$	4.21
Exercised		(139	)	$	1.14			$	84

Outstanding as of December 31, 2010 (3,409 exercisable at $4.28 weighted average exercise price per share)		6,868		$	3.05		6.82
Granted		4,573		$	3.08
Cancelled and expired		(385	)	$	2.33
Exercised		(69	)	$	1.43			$	95

Outstanding as of December 31, 2011		10,987		$	3.10		7.27

Outstanding options vested and expected to vest as of December 31, 2011		10,169		$	3.14		7.15	$	7,633

Options exercisable as of December 31, 2011		4,219		$	3.94		5.01	$	2,919

Options outstanding as of December 31, 2011 are summarized as follows:


	Options Outstanding						Options Exercisable
Exercise Price Range	Number of Options (In thousands)		Weighted Average Remaining Contractual Life (In Years)		Weighted Average Exercise Price		Number of Options (In thousands)		Weighted Average Exercise Price
$0.54 - $1.48		1,341		7.46	$	0.86		538	$	0.71
1.50 - 1.59		1,150		7.40	$	1.58		315	$	1.56
1.65 - 2.33		1,238		8.10	$	1.93		575	$	2.04
2.40 - 3.00		1,171		5.14	$	2.85		639	$	2.99
3.14 - 3.14		3,789		8.98	$	3.14		50	$	3.14
3.20 - 9.85		2,298		4.92	$	5.85		2,102	$	5.95

		10,987		7.27	$	3.10		4,219	$	3.94

The fair value of options vested in 2011, 2010 and 2009 was $2.8 million, $4.6 million, and $4.1 million, respectively.

Restricted stock units activity is summarized as follows:


	Number of Shares (In thousands)			Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Life (In years)		Aggregate Intrinsic Value (In thousands)
Outstanding units as of December 31, 2010		420		$	2.54		0.94
Granted		—
Released		(305	)	$	2.75
Forfeited or expired		—

Outstanding units as of December 31, 2011		115		$	1.98		0.58	$	382

Employee Stock Purchase Plan

In January 2004, the Board of Directors and stockholders adopted the 2004 Employee Stock Purchase Plan (the “Purchase Plan”). The Purchase Plan provides for the purchase of common stock by eligible employees and became effective on February 11, 2004. The purchase price per share is the lesser of (i) 85% of the fair market value of the common stock on the commencement of the offer period (generally, the fifteenth day in February or August) or (ii) 85% of the fair market value of the common stock on the exercise date, which is the last day of a purchase period (generally, the fourteenth day in February or August).

As of December 31, 2011, 996,000 shares were reserved and approved for issuance under the Purchase Plan, subject to adjustment for a stock split, or any future stock dividend or other similar change in our common stock or capital structure. To date, employees have acquired 558,140 shares of our common stock under the Purchase Plan. At December 31, 2011, 437,860 shares of our common stock remained available for future purchases.

Preferred Stock Rights

On November 4, 2008, our Board of Directors declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of our Common Stock, par value $0.001 per share (the “Common Shares”). The dividend was payable on November 17, 2008 to the stockholders of record on that date. Each Right entitles the registered holder to purchase from us one one-hundredth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share (the “Preferred Shares”), at a price of $6.00 per one one-hundredth of a Preferred Share, subject to adjustment. Upon the acquisition of, or announcement of the intent to acquire, 20 percent or more of our outstanding Common Shares by a person, entity or group of affiliated or associated persons (“Acquiring Person”), each holder of a Right, other than Rights held by the Acquiring Person, will have the right to purchase that number of Common Shares having a market value of two times the exercise price of the Right. If we are acquired in a merger or other business combination transaction or 50 percent or more of its assets or earning power are sold to an Acquiring Person, each holder of a Right will thereafter have the right to purchase, at the then current exercise price of the Right, that number of shares of common stock of the acquiring company which at the time of such transaction will have a market value of two times the exercise price of the Right. The Rights plan is intended to maximize the value of the Company in the event of an unsolicited attempt to take over the Company in a manner or on terms not approved by the Company’s Board of Directors. The Rights will expire on November 17, 2018, unless the Rights are earlier redeemed or exchanged by the Company.

Stock-Based Compensation

Under our stock-based compensation plans, option awards generally vest over a 4-year period contingent upon continuous service and expire 10 years from the date of grant (or earlier upon termination of continuous service). The Company has also granted performance-based equity awards to certain of our employees under the 2011 Plan, 2004 Plan and Inducement Plan. As of December 31, 2011, 1,269,832 shares related to outstanding options and restricted stock units were subject to performance-based vesting criteria. The fair value of each option is estimated on the date of grant using the Black-Scholes option valuation model and the following weighted-average assumptions:


	Stock Options									Employee Stock Purchase Plan
	Years Ended December 31,									Years Ended December 31,
	2011			2010			2009			2011			2010			2009
Weighted-average fair value	$	2.76		$	1.49		$	0.55		$	2.09		$	1.47		$	0.88
Risk-free interest rate		1.3	%		1.7	%		1.7	%		0.3	%		0.4	%		0.7	%
Expected life (in years)		4.0			4.0			4.0			1.2			0.9			1.1
Volatility		1.6			1.6			1.6			1.6			1.6			1.6

Expected volatility is based on historical volatility of our stock. The expected life of options granted is estimated based on historical option exercise and employee termination data. Executive level employees, who hold a majority of the options outstanding, and non-executive level employees were grouped and considered separately for valuation purposes. In 2009, based on employee termination data we adjusted the expected life of the options for both groups of employees to 4 years and this has remained consistent through the year ended December 31, 2011. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield is 0% for all years and is based on our history and expectation of dividend payouts.

Compensation expense is based on awards ultimately expected to vest and reflects estimated forfeitures. For equity awards with time-based vesting, the fair value is amortized to expense on a straight-line basis over the vesting periods. For equity awards with performance-based vesting criteria, the fair value is amortized to expense when the achievement of the vesting criteria becomes probable. As of December 31, 2011, the unrecognized compensation cost related to non-vested stock options, net of estimated forfeitures, amounted to $7.6 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.8 years. As of December 31, 2011, the unrecognized compensation cost related to non-vested restricted stock units was nominal.

We recognized the following amounts of stock-based compensation expense (in thousands):


	Years Ended December 31,
	2011		2010		2009
Employees and directors stock-based compensation expense	$	5,185	$	2,378	$	3,014
Non-employees stock-based compensation expense		4		32		21

Total	$	5,189	$	2,410	$	3,035


	Years Ended December 31,
	2011		2010		2009
Research and development	$	2,103	$	632	$	1,139
General and administrative		3,086		1,778		1,896

Total	$	5,189	$	2,410	$	3,035

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
-Paragraph 10
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph d

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 43
-Chapter 1
-Section B
-Paragraph 7, 11A
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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-Name Regulation S-X (SX)
-Number 210
-Section 08
-Article 4

Reference 7: http://www.xbrl.org/2003/role/presentationRef
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-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 29, 30, 31
-Article 5

Reference 9: http://www.xbrl.org/2003/role/presentationRef
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-Name Staff Accounting Bulletin (SAB)
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
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-Name Staff Accounting Bulletin (SAB)
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Reference 11: http://www.xbrl.org/2003/role/presentationRef
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Reference 22: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Employee Benefit Plan

12 Months Ended

Dec. 31, 2011

Employee Benefit Plan

14. Employee Benefit Plan

We maintain a 401(k) Plan (the “401(k) Plan”), which qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under the 401(k) Plan, participating employees may defer a portion of their pretax earnings. We may, at our discretion, contribute for the benefit of eligible employees. To date, we have not contributed to the 401(k) Plan.

- Definition

The entire disclosure for pension and other postretirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
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Reference 11: http://www.xbrl.org/2003/role/presentationRef
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes

15. Income Taxes

Consolidated income (loss) before provision for income taxes consisted of the following (in thousands):


	Years Ended December 31,
	2011			2010			2009
U.S.	$	(49,990	)	$	(56,379	)	$	(11,369	)
Non U.S.		1,393			(929	)		475

Total	$	(48,597	)	$	(57,308	)	$	(10,894	)

For the year ended December 31, 2009, the U.S. loss included losses attributable to the noncontrolling interest in SDI but did not include $19.7 million of consideration paid in excess of carrying value of the noncontrolling interest in SDI.

No income tax expense was recorded for the years ended December 31, 2011, 2010 and 2009 due to net operating losses and valuation allowances to offset the net income at Dynavax Europe. The difference between the consolidated income tax benefit and the amount computed by applying the federal statutory income tax rate to the consolidated loss before income taxes was as follows (in thousands):


	Years Ended December 31,
	2011			2010			2009
Income tax benefit at federal statutory rate	$	(16,523	)	$	(19,486	)	$	(3,722	)
State tax		(2,586	)		(1,617	)		(1,727	)
Tax credits		(1,394	)		(2,172	)		(1,473	)
Deferred compensation charges		595			318			439
Change in valuation allowance		18,099			19,863			6,873
Change in foreign tax rates		(34	)		22			11
Change in NOL		—			—			(1,439	)
Change in the fair value measurements		286			2,997			—
Non-deductible debt discount		509			420			—
Deemed dividend		273			—			—
Limitation of NOLs		—			—			628
Other		775			(345	)		410

	$	—		$	—		$	—

Deferred tax assets and liabilities as of December 31, 2011 and 2010 consisted of the following (in thousands):


	December 31,
	2011			2010
Deferred tax assets:
Net operating loss carry forwards	$	103,119		$	92,253
Research tax credit carry forwards		17,477			15,664
Accruals and reserves		6,818			5,492
Capitalized research costs		17,278			12,415
Deferred revenue		2,189			2,726
Other		1,455			1,732

		148,336			130,282
Less valuation allowance		(148,266	)		(130,167	)

Total deferred tax assets		70			115

Deferred tax liabilities:
Acquired intangible assets.		(27	)		(115	)
Other		(43	)		—

Total deferred tax liabilities		(70	)		(115	)

Net deferred tax assets	$	—		$	—

ASC 740, Income Taxes, requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on our ability to generate sufficient taxable income within the carryforward period. Because of our recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a full valuation allowance. The valuation allowance increased by $18.1 million, $19.9 million and $6.9 million during the years ended December 31, 2011, 2010 and 2009, respectively. The amount of the valuation allowance for deferred tax assets associated with excess tax deductions from stock based compensation arrangements that will be allocated to contributed capital if the future tax benefits are subsequently recognized is $0.4 million.

We have not recorded deferred income taxes applicable to undistributed earnings of a foreign subsidiary that are indefinitely reinvested in foreign operations. Generally, such earnings become subject to U.S. tax upon the remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of the deferred tax liability on such undistributed earnings.

As of December 31, 2011, we had federal net operating loss carryforwards of approximately $259.0 million, which will expire in the years 2016 through 2031 and federal research and development tax credits of approximately $11.2 million, which expire in the years 2018 through 2031.

As of December 31, 2011, we had net operating loss carryforwards for California state income tax purposes of approximately $180.3 million, which expire in the years 2012 through 2031, and California state research and development tax credits of approximately $9.5 million which do not expire.

As of December 31, 2011, we had net operating loss carryforwards for foreign income tax purposes of approximately $29 million, which do not expire.

The Tax Reform Act of 1986 limits the annual use of net operating loss and tax credit carryforwards in certain situations where changes occur in stock ownership of a company. In the event the Company has a change in ownership, as defined, the annual utilization of such carryforwards could be limited. Due to past equity issuances and changes in ownership of Dynavax common stock, we believe that our ability to use some our net operating losses and tax credits in the future may be limited. We are conducting an analysis under Sections 382 and 383 of the Internal Revenue Code as enacted by the Tax Reform Act of 1986, and if necessary, we will reduce our net operating losses and tax credits by any applicable limitation when our analysis is complete.

We concluded a limited scope audit by the Internal Revenue Service (“IRS”) for the tax year 2008 which resulted in a no change report. The IRS also examined our 2009 amended return and issued a no change report. Additionally, we concluded an audit in Germany for the tax years 2005 to 2009 and there were no material differences as a result of the audit.

In November 2010, we received a one-time $0.7 million payment under The Patient Protection and Affordable Care Act of 2010 covering research and development costs from 2009 and 2010 for three of our qualified therapeutic discovery projects including HEPLISAV. The funds received as a result of this award were recorded as other income in the year ended December 31, 2010.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319

Reference 5: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

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-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

+ Details

Selected Quarterly Financial Data (Unaudited; in thousands, except per share amounts)

12 Months Ended

Dec. 31, 2011

Selected Quarterly Financial Data (Unaudited; in thousands, except per share amounts)

16. Selected Quarterly Financial Data (Unaudited; in thousands, except per share amounts)


	Year Ended December 31, 2011												Year Ended December 31, 2010
	Q1			Q2			Q3			Q4			Q1			Q2			Q3			Q4
Revenues	$	1,744		$	7,269		$	1,174		$	11,427		$	8,344		$	2,191		$	11,649		$	1,766
Net loss attributable to Dynavax	$	(18,466	)	$	(10,635	)	$	(15,229	)	$	(4,267	)	$	(9,184	)	$	(28,004	)	$	(4,998	)	$	(14,953	)
Basic and diluted net loss per share attributable to Dynavax common stockholders	$	(0.16	)	$	(0.09	)	$	(0.12	)	$	(0.03	)	$	(0.17	)	$	(0.34	)	$	(0.06	)	$	(0.14	)
Shares used to compute basic and diluted net loss per share		115,726			117,864			124,069			142,482			54,364			82,012			86,826			106,035

- Definition

The entire disclosure for the quarterly financial data in the annual financial statements. The disclosure may include a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income or loss before extraordinary items and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished.

+ References + Details