On February 22, 2024 Dynavax Technologies Corporation (Nasdaq: DVAX), a commercial-stage biopharmaceutical company developing and commercializing innovative vaccines, reported financial results for the fourth quarter and full year ended December 31, 2023 (Press release, Dynavax Technologies, FEB 22, 2024, View Source [SID1234640385]).
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"2023 was characterized by record revenue growth for HEPLISAV-B, and the achievement of becoming the market share leader in the two largest growth segments, demonstrating important progress toward our goal of establishing HEPLISAV-B as the leading vaccine in the U.S. adult hepatitis B vaccine market," said Ryan Spencer, Chief Executive Officer of Dynavax. "We expect 2024 to be an important year in building a vaccine portfolio of best-in-class products, including further growing the HEPLISAV-B brand as well as advancing our pipeline programs into clinical trial initiations and data readouts. Importantly, our strong financial position provides us with the optionality to continue to build value across our business, including through investing to drive the HEPLISAV-B market opportunity, advancing and expanding our R&D efforts, and pursuing strategic opportunities to accelerate our growth."
BUSINESS UPDATES
HEPLISAV-B [Hepatitis B Vaccine (Recombinant), Adjuvanted]
HEPLISAV-B vaccine is the first and only adult hepatitis B vaccine approved in the U.S., the European Union and Great Britain that enables series completion with only two doses in one month. Hepatitis B vaccination is universally recommended for adults aged 19-59 in the U.S.
HEPLISAV-B vaccine net product revenue for the fourth quarter and full year 2023 were approximately $51.1 million and $213.3 million, respectively, representing year-over-year growth of approximately 46% and 69% compared to the fourth quarter and full year 2022.
HEPLISAV-B total market share in the U.S. increased to approximately 42% at the end of 2023, compared to approximately 35% at the end of 2022.
HEPLISAV-B market share in the retail pharmacy segment increased to approximately 58% at the end of 2023, compared to approximately 42% at the end of 2022. HEPLISAV-B market share in the Integrated Delivery Networks (IDNs) and Large Clinics segment increased to approximately 56% at the end of 2023, compared to approximately 47% at the end of 2022.
A supplemental Biologic License Application (sBLA) for HEPLISAV-B vaccination of adults on hemodialysis is currently under review by the U.S. Food and Drug Administration (FDA) with a Prescription Drug User Fee Act (PDUFA) action date planned for May 13, 2024.
Driven by the Centers for Disease Control and Prevention’s Advisory Committee of Immunization Practices (ACIP) universal recommendation for adult hepatitis B vaccination, the hepatitis B vaccine market continues to expand in the U.S. and Dynavax believes the U.S. market has the potential to grow to approximately $800 million by 2027, with HEPLISAV-B well-positioned to achieve a majority market share.
Clinical Pipeline
Dynavax is advancing a pipeline of differentiated product candidates that leverage its CpG 1018 adjuvant, which has demonstrated its ability to enhance the immune response with a favorable tolerability profile in a wide range of clinical trials and real-world commercial use.
Shingles vaccine program:
Z-1018 is an investigational vaccine candidate being developed for the prevention of shingles in adults aged 50 and older.
Dynavax recently submitted an Investigational New Drug Application (IND) to the U.S. FDA to support initiation of a Phase 1/2 trial of Z-1018 in the first half of 2024.
Tdap vaccine program:
Tdap-1018 is an investigational vaccine candidate intended for active booster immunization against tetanus, diphtheria, and pertussis (Tdap).
Dynavax plans to submit an IND to the U.S. FDA to support the initiation of a Phase 2 human challenge study of Tdap-1018 in the second half of 2024, upon completion of the independent study conducted by the Canadian Center for Vaccinology to establish the human challenge dose.
Plague vaccine program:
Dynavax is developing a plague (rF1V) vaccine candidate adjuvanted with CpG 1018 currently in a Phase 2 clinical trial in collaboration with, and fully funded by, the U.S. Department of Defense.
Dynavax anticipates top line data for the randomized, active-controlled Phase 2 clinical trial evaluating immunogenicity, safety, and tolerability of the plague vaccine candidate in 2024.
FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL HIGHLIGHTS
Total Revenues and Net Product Revenue.
HEPLISAV-B vaccine net product revenue was $51.1 million for the fourth quarter of 2023, compared to $34.9 million for the fourth quarter of 2022, and $213.3 million for the full year 2023, compared to $125.9 million for the full year 2022.
Other revenue was $4.5 million for the fourth quarter of 2023, compared to $2.3 million for the fourth quarter of 2022, and $19.0 million for the full year 2023, compared to $9.0 million for the full year 2022. Other revenue primarily includes revenue from the plague vaccine agreement with the U.S. Department of Defense. The increase was primarily driven by the advancement into a nonhuman primate challenge study.
No CpG 1018 adjuvant product revenue was recorded in the fourth quarter and full year 2023, compared to $147.2 million and $587.7 million in the same periods of 2022, respectively, due to completion of all obligations and product delivery under the Company’s CpG 1018 adjuvant COVID-19 collaboration agreements as of the end of 2022.
Total revenues for the fourth quarter of 2023 were $55.6 million, compared to $184.5 million for the fourth quarter of 2022, and $232.3 million for the full year 2023, compared to $722.7 million for the full year 2022.
Cost of Sales – Product. Cost of sales – product for HEPLISAV-B the fourth quarter of 2023 decreased to $8.7 million, compared to $12.4 million for the fourth quarter of 2022, and $50.2 million for the full year 2023, compared to $40.1 million for the full year 2022.
Research and Development Expenses (R&D). R&D expenses for the fourth quarter of 2023 increased to $14.1 million, compared to $12.9 million for the fourth quarter of 2022, and $54.9 million for the full year 2023, compared to $46.6 million for the full year 2022. The increase was primarily driven by continued investments in advancing our clinical and preclinical development programs and collaborations.
Selling, General, and Administrative Expenses (SG&A). SG&A expenses for the fourth quarter of 2023 increased to $41.3 million, compared to $31.0 million for the fourth quarter of 2022, and $152.9 million for the full year 2023, compared to $131.4 million for the full year 2022. The increase was primarily driven by higher compensation and related personnel costs and an overall increase in targeted commercial and marketing efforts designed to increase HEPLISAV-B market share and maximize the opportunities presented by the ACIP’s universal recommendation.
Net Income. GAAP net income was $0.2 million, or less than $0.01 per share (basic and diluted) in the fourth quarter of 2023, compared to GAAP net income of $67.7 million, or $0.53 per share (basic) and $0.45 per share (diluted) in the fourth quarter of 2022. GAAP net loss was $6.4 million, or $0.05 per share (basic and diluted) for the full year 2023, compared to GAAP net income of $293.2 million, or $2.32 per share (basic) and $1.97 per share (diluted) for the full year 2022.
Cash and Marketable Securities. Cash, cash equivalents and marketable securities were $742.3 million as of December 31, 2023.
2024 FINANCIAL GUIDANCE
Dynavax is providing the following full year 2024 financial guidance, based on the Company’s current operating plan:
HEPLISAV-B net product revenue between approximately $265 – $280 million, including approximately $3 million in ex-U.S. sales through commercialization agreement with Bavarian Nordic in Germany
HEPLISAV-B gross margin of approximately 80% for full year 2024
Research and development expenses between approximately $60 – $75 million
Selling, general and administrative expenses between approximately $160 – $180 million
Expect to be cash flow positive for full year ended December 31, 2024
Conference Call and Webcast Information
Dynavax will host a conference call and live audio webcast on Thursday, February 22, 2024, at 4:30 p.m. ET/1:30 p.m. PT. The live audio webcast may be accessed through the "Events & Presentations" page on the "Investors" section of the Company’s website at View Source A replay of the webcast will be available for 30 days following the live event.
To dial into the call, participants will need to register for the call using the caller registration link. It is recommended that participants dial into the conference call or log into the webcast approximately 10 minutes prior to the call.
Important U.S. Product Information
HEPLISAV-B is indicated for the prevention of infection caused by all known subtypes of hepatitis B virus in adults aged 18 years and older.
For full U.S. Prescribing Information for HEPLISAV-B, click here.
Important U.S. Safety Information (ISI)
Do not administer HEPLISAV-B to individuals with a history of a severe allergic reaction (e.g., anaphylaxis) after a previous dose of any hepatitis B vaccine or to any component of HEPLISAV-B, including yeast.
Appropriate medical treatment and supervision must be available to manage possible anaphylactic reactions following administration of HEPLISAV-B.
Immunocompromised persons, including individuals receiving immunosuppressant therapy, may have a diminished immune response to HEPLISAV-B.
Hepatitis B has a long incubation period. HEPLISAV-B may not prevent hepatitis B infection in individuals who have an unrecognized hepatitis B infection at the time of vaccine administration.
The most common patient-reported adverse reactions reported within 7 days of vaccination were injection site pain (23% to 39%), fatigue (11% to 17%), and headache (8% to 17%).