On May 7, 2020 Dynavax Technologies Corporation (Nasdaq: DVAX), a biopharmaceutical company focused on developing and commercializing novel vaccines, reported financial results for the first quarter of 2020 (Press release, Dynavax Technologies, MAY 7, 2020, View Source [SID1234557277]).

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"Now more than ever, the world is acutely aware of the crucial role vaccines play in protecting our families, communities, and those at high risk for infectious disease," commented Ryan Spencer, Chief Executive Officer of Dynavax. "Hepatitis B is a highly infectious deadly virus which, thankfully, can be prevented with effective vaccination. Our first product, HEPLISAV-B, provides adults higher levels of protection from hepatitis B in one month, compared to other hepatitis B vaccines that require six months. We believe that HEPLISAV-B has the potential to become the standard of care for adult hepatitis B vaccination in the U.S."

Mr. Spencer added, "With uncertainty spawned by the current pandemic, our focus in 2020 remains driving revenue growth of HEPLISAV-B, generating data to support a unique dosing regimen for patients on hemodialysis, and supporting policy initiatives aimed at protecting more adults through adoption of a two-dose regimen, all of which position HEPLISAV-B for substantial long-term growth. Additionally, we have established multiple research collaborations leveraging our proprietary vaccine adjuvant, CpG 1018, to support the development of coronavirus vaccines. Despite the short-term disruptions of this year, Dynavax’s long-term value proposition remains intact with the added potential to accelerate the utilization of CpG 1018 globally."

HEPLISAV-B [Hepatitis B Vaccine (Recombinant), Adjuvanted]

Despite sales reductions at the end of March due to coronavirus pandemic response, Dynavax achieved first quarter 2020 net product revenue of $10.5 million compared to $5.6 million for the first quarter of 2019.
Dynavax has exceeded the HEPLISAV-B minimum product revenue covenant in its Term Loan Agreement of $30 million for the annual measurement period ending June 30, 2020.
On-going clinical trial evaluating immunogenicity and safety of 4-dose regimen of HEPLISAV-B in adults with end-stage renal disease (ESRD) who are initiating or undergoing hemodialysis:
Seroprotection rate of 86.4% demonstrated in interim analysis of 44 patients
Safety and efficacy have not been established in this population; full study data anticipated in the second half of 2020
COVID-19 Response
Dynavax has focused on four key areas in addressing uncertainty related to the COVID-19 pandemic:

Protecting the health and safety of Dynavax’s employees and customers
Ensuring access to HEPLISAV-B with a secure supply chain able to meet U.S. market demand
Continuing to advance the Company’s on-going clinical trials of HEPLISAV-B
Leveraging the Company’s proprietary toll-like receptor 9 (TLR9) agonist adjuvant, CpG 1018, in collaborations to develop additional adjuvanted vaccines. Dynavax has established multiple such research collaborations to develop a coronavirus (COVID-19) vaccine:
Vaccine Approach Collaborator Country
Protein Subunit University of Queensland Australia
Clover Biopharmaceuticals China
Inactivated Virus Sinovac Biotech China
Valneva France

2020 Milestones

Interim data from ongoing study of HEPLISAV-B in patients on hemodialysis reported in April 2020; final immunogenicity data anticipated in the second half of 2020
Completion of Phase 1-enabling animal studies and toxicology for an improved pertussis vaccine with CpG 1018
Inclusion of CpG 1018 in at least one coronavirus vaccine advanced to Phase 1 clinical evaluation
Entrance into multiple strategic relationships focused on initial research in a variety of vaccine candidates to establish CpG 1018 as a leading adjuvant
Completion of safety follow-up for HEPLISAV-B post-marketing studies in Q4 2020
Financial Results
Product Revenue, Net. Product revenue, net increased to $10.5 million in the first quarter of 2020 compared to $5.6 million in the same period in 2019 due to higher sales volume as additional healthcare providers completed operational activities required to switch to HEPLISAV-B and existing customers placed repeat orders. Although there was a modest impact from COVID-19 on HEPLISAV-B net product sales in the first quarter, most medical centers restricted access to their facilities and focused on providing care to only the most severely affected patients by mid-March. This has resulted in significantly reduced utilization of vaccines, including HEPLISAV-B, which is likely to continue until the U.S. returns to more normal conditions.

Cost of Sales – Product. Cost of sales – product for the first quarter 2020 was $2.4 million, compared to $1.8 million for the first quarter of 2019. The increase is due to higher sales volume and higher unit costs as we produce and then sell finished product inventory that includes components for which a portion of the cost has previously been expensed to research and development prior to approval of the pre-filled syringe presentation in March 2018.

Research and Development Expenses. Research and development expenses for the first quarter of 2020 were $4.7 million, compared to $21.2 million for the first quarter of 2019. Excluding non-cash stock-based compensation, R&D expenses decreased to $6.2 million in the first quarter of 2020, compared to $19.0 million in the first quarter of 2019. Stock-based compensation for the three months ended March 31, 2020 included reversal of expenses related to cancellation of certain equity grants.

SG&A Expenses. Selling, general and administrative (SG&A) expenses for the first quarter of 2020 were $20.9 million, compared to $18.3 million for the first quarter of 2019. The increase for the three months ended March 31, 2020 compared to 2019, was primarily related to costs related to the HEPLISAV-B post-marketing study, an increase in facility costs due to higher overhead allocation to SG&A functions and changes in non-cash stock-based compensation resulting from the restructuring.

Net Loss. Net loss allocable for the first quarter of 2020 was $12.6 million, or $0.15 per basic share and $0.25 per diluted share, compared to a net loss of $39.7 million, or $0.62 per basic and diluted share, for the first quarter of 2019.

Cash Position. Cash, cash equivalents and marketable securities totaled $129.5 million at March 31, 2020.

Conference Call and Webcast Information
Dynavax will hold a conference call today 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 www.dynavax.com. Alternatively, participants may dial (866) 420-4066 (domestic) or (409) 217-8237 (international) and refer to conference ID 1178679. A replay of the webcast will be available for 30 days following the live event.

Please see Important Safety Information below.

For more information about HEPLISAV-B, visit View Source

About Hepatitis B
Hepatitis B is a viral disease of the liver that can become chronic and lead to cirrhosis, liver cancer and death. The hepatitis B virus is 50 to 100 times more infectious than HIV,I and transmission is on the rise. There is no cure for hepatitis B, but effective vaccination can prevent the disease.

In adults, hepatitis B is spread through contact with infected blood and through unprotected sex with an infected person. The U.S. Centers for Disease Control (CDC) recommends vaccination for those at high risk for infection due to their jobs, lifestyle, living situations and travel to certain areas.II Because people with diabetes are particularly vulnerable to infection, the CDC recommends vaccination for adults age 19 to 59 with diabetes as soon as possible after their diagnosis, and for people age 60 and older with diabetes at their physician’s discretion.III Approximately 20 million U.S. adults have diabetes, and 1.5 million new cases of diabetes are diagnosed each year.IV

About HEPLISAV-B
HEPLISAV-B is an adult hepatitis B vaccine that combines hepatitis B surface antigen with Dynavax’s proprietary Toll-like Receptor (TLR) 9 agonist CpG 1018 to enhance the immune response. Dynavax has worldwide commercial rights to HEPLISAV-B.

Indication and Use
HEPLISAV-B is indicated for prevention of infection caused by all known subtypes of hepatitis B virus in adults age 18 years and older.

Important Safety Information (ISI)
Do not administer HEPLISAV-B to individuals with a history of 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%).