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Prepared By R.R. Donnelley Financial -- Form 8-K
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported):  11/03/2010
 
Dynavax Technologies Corporation
(Exact name of registrant as specified in its charter)
 
Commission File Number:  001-34207
 
Delaware
  
33-0728374
(State or other jurisdiction of
  
(IRS Employer
incorporation)
  
Identification No.)
 
2929 Seventh Street, Suite 100
Berkeley, CA 94710-2753
(Address of principal executive offices, including zip code)
 
(510) 848-5100
(Registrant’s telephone number, including area code)
 
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[  ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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

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

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

 
Item 2.02.    Results of Operations and Financial Condition
 
On November 4, 2010, Dynavax Technologies Corporation ("Dynavax"), issued a press release announcing its financial results for third quarter ended September 30, 2010. A copy of the press release is attached as Exhibit 99.1 to this current report and is incorporated herein by reference.

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

 
 
Item 5.02.    Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
 
On November 3, 2010, Stephen F. Tuck, Ph.D., joined Dynavax Technologies Corporation ("Dynavax" or the "Company") as the Company's Vice President, Global Technical Operations. Dr. Tuck, age 48, was an independent consultant to biotechnology and pharmaceutical clients from 2007 to 2010, which included Dynavax. From 1997 until 2007, Dr. Tuck was an employee of Dynavax where he held a series of positions with increasing responsibility and ultimately served as our Vice President of Biopharmaceutical Development. Prior to joining Dynavax in November 1997, Dr. Tuck was employed by Chiron Corporation, where he had served in various capacities in the Technical Affairs and Process Development departments. At Chiron, Dr. Tuck was involved in the development of Fluad(R), a novel adjuvanted influenza vaccine, various subunit vaccines, adjuvants and protein therapeutics. Prior to joining Chiron, Dr. Tuck was a post-doctoral fellow at Johns Hopkins University School of Medicine and the University of California, San Fr ancisco. He has over 20 years of experience in pharmaceutical chemistry. Dr. Tuck received his Ph.D. and B.Sc. from Imperial College, University of London.

Under the terms of his at-will offer letter, Dr. Tuck will be paid an annual salary of $325,000. Dr. Tuck is also eligible to earn annual incentive compensation of up to 50% of his annual salary. In addition, for starting work not later than November 3, 2010, Dr. Tuck will receive a sign-on bonus of $50,000, subject to repayment if he voluntarily terminates his employment prior to the first anniversary of his start date. In addition, subject to board approval, the Company will grant Dr. Tuck two stock options to purchase 125,000 shares and 50,000 shares, respectively, of the Company's Common Stock. The first option will vest in four equal annual installments. The second option will vest upon achievement of certain performance goals prior to the end of 2012. The options will have an exercise price not less than the fair market value of the underlying stock on the date of grant. In addition, subject to board approval, the Company will grant Dr. Tuck a restricted stock unit award for 75,000 shares of the Company's Common Stock, which will vest based on the achievement of certain performance milestones. All compensation offered to Dr. Tuck is subject to applicable tax withholdings.

Dr. Tuck has entered into the Company's standard form of a Management Continuity and Severance Agreement, dated as of November 3, 2010 (the "Agreement"). The form of the Agreement was filed with the Securities and Exchange Commission ("SEC") as exhibit 10.38 to the Company's Form 10-K, as filed with the SEC on March 6, 2009. The Agreement provides severance payments and benefits to Dr. Tuck upon an involuntary termination of employment, as well as certain change in control benefits. If Dr. Tuck's employment is involuntarily terminated other than following a change in control, Dr. Tuck will receive (i) a lump-sum cash payment equal to six months of the executive's then effect ive annual base salary, (ii) a payment that may be used toward the cost of health care continuation coverage for up to six months, and (iii) six months accelerated vesting of unvested options to purchase Dynavax Common Stock. If Dr. Tuck's employment is involuntarily terminated within twenty-four months following a change in control, Dr. Tuck will receive (i) a lump-sum cash payment equal to twelve months of the executive's then effective annual base salary, (ii) a lump-sum cash payment equal to his target bonus, (iii) a payment that may be used toward the cost of health care continuation coverage for up to twelve months, and (iv) the ability to exercise his then outstanding vested options to purchase Dynavax Common Stock for up to three years following his termination. In addition, if, in connection with a change in control, Dr. Tuck is offered and accepts a position with the acquirer, or is not offered a comparable position with the acquirer, then, as of immediately prior to the closing of the change in co ntrol, his then outstanding but unvested options to purchase Dynavax Common Stock will become vested as to the number of shares underlying each such option that would have vested, in the ordinary course, in the following two years.

 
 
Item 9.01.    Financial Statements and Exhibits
 
(d) Exhibit
Exhibit No.        Description
99.1        Press Release, dated November 4, 2010 titled "Dynavax Reports 2010 Third Quarter Financial Results."
 

 

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
           
Dynavax Technologies Corporation
 
 
Date: November 08, 2010
     
By:
 
/s/    Jennifer Lew
               
Jennifer Lew
               
Vice President, Finance
 
 

 

EXHIBIT INDEX
 
Exhibit No.
  
Description
EX-99.1
  
Press Release, dated November 4, 2010 titled "Dynavax Reports 2010 Third Quarter Financial Results."
DC9591.pdf -- Converted by SEC Publisher 4.2, created by BCL Technologies Inc., for SEC Filing

Exhibit 99.1

DYNAVAX

DYNAVAX TECHNOLOGIES
2929 Seventh Street, Suite 100
Berkeley, CA 94710

  Contact:
Jennifer Lew
Vice President, Finance
510-665-7217
jlew@dynavax.com

DYNAVAX REPORTS 2010 THIRD QUARTER FINANCIAL RESULTS

BERKELEY, CA – November 4, 2010 – Dynavax Technologies Corporation (NASDAQ: DVAX) today reported financial results for the third quarter ended September 30, 2010, including $47.2 million in cash, cash equivalents and marketable securities. This compared to $57.4 million at June 30, 2010. In November 2010, the Company received $42.7 million from the successful completion of a public offering and a grant covering certain research costs, resulting in current cash, cash equivalents and marketable securities in excess of $83 million as of the date of this release.

In particular, the $47.2 million in reported cash at September 30, 2010 does not reflect the net proceeds of $42.0 million from the Company’s public offering and $0.7 million in grants under The Patient Protection and Affordable Care Act of 2010 covering research and development costs from 2009 and 2010 for three of the Company’s qualified therapeutic discovery projects including HEPLISAVTM. The $10.2 million net cash usage reported for the third quarter 2010 included a $2.0 million initial purchase of the Company’s common stock by Aspire Capital Fund, LLC that the Company received upon executing its September 2010 financing arrangement.

Total revenues of $11.6 million for the third quarter 2010 included recognition of the $10.0 million upfront payment received from AstraZeneca in 2006 following the recent amendment of our collaboration agreement. This compared to $2.9 million reported for the third quarter in 2009.

Total operating expenses of $18.4 million for the third quarter 2010, driven by continued clinical and manufacturing activities for HEPLISAV, were consistent with the $18.5 million reported for the second quarter 2010. Total operating expenses for the third quarter 2009 of $13.6 million were lower prior to restarting the HEPLISAV clinical program in September 2009.

The tables included as part of this press release provide a reconciliation of GAAP revenues and operating expenses to pro forma revenues and operating expenses.

About Dynavax

Dynavax Technologies Corporation, a clinical-stage biopharmaceutical company, discovers and develops novel products to prevent and treat infectious diseases. The company's lead product candidate is HEPLISAV, a Phase 3 investigational adult hepatitis B vaccine designed to enhance protection more rapidly and with fewer doses than current licensed vaccines. For more information visit www.dynavax.com.

– tables to follow –

                                                                 DYNAVAX TECHNOLOGIES CORPORATION             
CONSOLIDATED STATEMENTS OF OPERATIONS             
                                                                   (In thousands, except per share amounts)             
(Unaudited)                         
 
        Three Months Ended    Nine Months Ended 
        September 30,             September 30, 
        2010         2009       2010        2009 
Revenues:                             
     Collaboration revenue    $    10,402    $    1,791    $ 19,164    $    34,079 
     Grant revenue        1,218        887    2,697        2,921 
     Service and license revenue        29        223    323        1,129 
Total revenues        11,649        2,901    22,184        38,129 
 
Operating expenses:                             
     Research and development        14,204        9,631    40,729        29,202 
     General and administrative        3,951        3,736    12,694        11,693 
     Amortization of intangible assets        245        245    735        735 
Total operating expenses        18,400        13,612    54,158        41,630 
 
Loss from operations        (6,751)        (10,711)    (31,974)        (3,501) 
 
Interest income        12        18    53        174 
Interest expense        (399)        (93)    (1,229)        (120) 
Other income (expense)        2,140        80    (9,036)        (40) 
 
Net loss        (4,998)        (10,706)    (42,186)        (3,487) 
 
Add: Losses attributed to noncontrolling interest in                             
 SDI        —        1,200    —        3,192 
 
Net loss attributable to Dynavax    $    (4,998)    $    (9,506)    $ (42,186)    $    (295) 
 
Basic and diluted net loss per share attributable to                             
 Dynavax stockholders    $    (0.06)    $    (0.24)    $ (0.57)    $    (0.01) 
Shares used to compute basic and diluted net loss                             
per share attributable to Dynavax stockholders        86,826        40,153    74,519        39,990 
 
– more –                             

                                                                 DYNAVAX TECHNOLOGIES CORPORATION                 
                             RECONCILIATION OF GAAP REVENUES TO PRO FORMA REVENUES         
(In thousands)                             
(Unaudited)                                 
 
    Three Months Ended    Nine Months Ended 
         September 30,         September 30, 
        2010        2009        2010        2009 
 
GAAP revenues    $     11,649    $    2,901    $     22,184    $    38,129 
 
ADD:                                 
Collaboration funding incurred under SDI programs                 —        1,009                     —        2,551 
 
LESS:                                 
Non-cash deferred revenue from collaborations         10,000        —         10,000        28,485 
Pro forma revenues (1)    $    1,649    $    3,910    $     12,184    $    12,195 

(1)      These pro forma amounts are intended to illustrate the Company’s revenues including collaboration funding provided for the SDI programs and excluding certain non-cash items. The collaboration funding is reflected in the amount attributed to the noncontrolling interest in SDI in the Company’s consolidated statement of operations, but would have been reported as revenue if SDI’s results of operations were not consolidated with those of the Company. Management of the Company believes the pro forma results are a more useful measure of the Company’s revenues because it provides investors the ability to evaluate the Company’s operations in the manner that management uses to assess the continued progress of operating programs.
 
  These pro forma results are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from pro forma measures used by other companies.
 

DYNAVAX TECHNOLOGIES CORPORATION

RECONCILIATION OF GAAP OPERATING EXPENSES TO PRO FORMA OPERATING EXPENSES

(In thousands) (Unaudited)

    Three Months Ended    Nine Months Ended 
    September 30,    September 30, 
    2010    2009    2010    2009 
 
GAAP operating expenses    $ 18,400    $ 13,612    $ 54,158    $ 41,630 
LESS:                 
Stock-based compensation expense    586    916    1,552    2,102 
Amortization of intangible assets    245    245    735    735 
Pro forma operating expenses (2)    $ 17,569    $ 12,451    $ 51,871    $ 38,793 

(2)      These pro forma amounts are intended to illustrate the Company’s operating expenses excluding certain non-cash charges in accordance with the financial statements that management uses to evaluate the Company’s operations. These pro forma results are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from pro forma measures used by other companies.
 

– more –

DYNAVAX TECHNOLOGIES CORPORATION
SELECTED BALANCE SHEET DATA
(In thousands)
(Unaudited)
 
    September 30,    December 31, 
        2010        2009 
Assets                 
 Cash and cash equivalents and marketable securities    $    47,231    $    36,720 
 Property and equipment, net        6,634        7,997 
 Goodwill        2,312        2,312 
 Other intangible assets, net        544        1,279 
 Other assets        5,069        2,162 
Total assets    $    61,790    $    50,470 
 
Liabilities and stockholders’ equity                 
 Accounts payable    $    2,067    $    1,686 
 Accrued liabilities        17,530        7,507 
 Warrant liability to Holdings        —        2,567 
 Current portion of deferred revenue        1,429        2,718 
 Noncurrent portion of deferred revenue        6,012        17,083 
 Long-term note payable to Holdings        10,540        9,342 
 Long-term contingent liability to Holdings        944        3,040 
 Other long-term liabilities        60        151 
 Stockholders’ equity        23,208        6,376 
Total liabilities and stockholders’ equity    $    61,790    $    50,470 

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