On August 6, 2020 Dynavax Technologies Corporation (Nasdaq: DVAX), a biopharmaceutical company focused on developing and commercializing novel vaccines, reported financial results for the second quarter of 2020 (Press release, Dynavax Technologies, AUG 6, 2020, View Source [SID1234563039]).

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"Vaccines play a crucial role in protecting people, particularly those at high risk, from infectious diseases," commented Ryan Spencer, Chief Executive Officer of Dynavax. "The current global pandemic highlights the need for continued development of new and improved vaccines. Our first product, HEPLISAV-B, provides adults protection from hepatitis B, a highly infectious deadly virus which, thankfully, can be prevented with effective vaccination. With a demonstrated profile that 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, "As expected from the pandemic driven disruption to non-COVID medical care, the adult hepatitis B vaccine market experienced a significant decline early in the second quarter. Despite the short-term impact, we continue to be optimistic about HEPLISAV-B’s long-term value, particularly with the global focus on vaccination efforts as a result of the pandemic. Additionally, we see tremendous opportunity for CpG 1018, our advanced vaccine adjuvant. We have entered into numerous collaborations to develop adjuvanted vaccines across multiple indications, including COVID-19, pertussis, and universal flu. Adjuvanted coronavirus vaccines may play a critical role in providing protection to older adults and people with other chronic conditions, who are at greater risk for COVID-19 and have historically been less responsive to vaccinations."

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

Net product revenue for second quarter 2020 of $2.4 million declined from $8.3 million for the second quarter of 2019, due to the COVID-19 pandemic. Overall adult hepatitis B vaccine utilization declined significantly beginning in late March, reached a low in the middle of the second quarter, and improved in the later part of the quarter.
Interim data were reported from the ongoing study of HEPLISAV-B in patients on hemodialysis showing HEPLISAV-B was well tolerated with a seroprotection rate of 86.4% in 44 patients.
CpG 1018 proprietary toll-like receptor 9 (TLR9) agonist adjuvant
·Announced collaborations with Sinovac Biotech, Valneva SE, Medicago, Medigen Vaccine Biologics and Mount Sinai to further advance CpG 1018 in adjuvanted vaccines. A summary of CpG 1018 collaborations is provided below:

Indication Collaborator Status
COVID-19 Clover Biopharmaceuticals Phase 1
Medicago Phase 1
Medigen Vaccine Biologics Preclinical
Sinovac Biotech Preclinical
Valneva SE Preclinical
Pertussis Serum Institute of India Preclinical
Universal Influenza Mount Sinai Preclinical

Additional Corporate Updates

Completed an $80.5 million public offering of common stock
Appointed Ms. Julie Eastland and Mr. Brent MacGregor to Board of Directors
Entered into a purchase agreement with TriSalus Lifesciences for SD-101 and related assets for $9 million in cash payments, up to an additional $250 million in development and commercial milestone payments and low double-digit royalties on potential future sales
2020 Milestones

Final immunogenicity data from the ongoing study of HEPLISAV-B in patients on hemodialysis anticipated in the fourth quarter with publication planned in the first quarter of 2021.
Completion of safety follow-up for HEPLISAV-B post-marketing studies in the fourth quarter.
Completion of Phase 1-enabling animal studies and toxicology for an improved pertussis vaccine with CpG 1018 is planned for the fourth quarter.
Preliminary safety and immunogenicity results from Phase 1 COVID-19 studies with Clover Biopharmaceuticals and Medicago expected by September and October, respectively.
Financial Results

Product Revenue, Net. Product revenue, net decreased to $2.4 million in the second quarter of 2020 compared to $8.3 million in the same period in 2019, due to lower sales volume caused by the COVID-19 global pandemic. For much of the second quarter, medical centers and physician practices restricted activities at their facilities. This led to a significant decline in adult hepatitis B vaccine utilization, which fell as much as approximately 70% in April. For HEPLISAV-B, product sales to distributors were lower than end user demand as distributors elected to reduce inventory levels during the quarter. With states beginning to reopen, medical centers have gradually expanded their services under strict social distancing rules. Adult hepatitis B vaccine utilization began to increase in mid-June, reached approximately 60% of pre-COVID levels in July and is expected to continue growing as the U.S. returns to more normal conditions.

Cost of Sales – Product. Cost of sales – product for the second quarter 2020 decreased to $1.0 million, compared to $2.1 million for the second quarter of 2019, primarily due to lower sales volume and lower overhead following the May 2019 restructuring, partially offset by higher unit costs as we produce and then sell inventory that reflects the full cost of manufacturing.

Research and Development Expenses. Research and development (R&D) expenses for the second quarter of 2020 decreased to $5.9 million, compared to $16.2 million for the second quarter of 2019 as personnel costs, facilities overhead cost allocations and non-cash stock-based compensation decreased due to lower R&D headcount because of our restructuring in May 2019 and outside services costs decreased with the winding down of our immuno-oncology programs.

SG&A Expenses. Selling, general and administrative (SG&A) expenses for the second quarter of 2020 were $19.0 million, compared to $17.9 million for the second quarter of 2019 as compensation and related personnel costs decreased due to lower headcount and business travel decreased due to COVID-19 travel restrictions, offset by increased administrative expense, expenses related to the post-marketing studies and facility costs due to higher overhead allocation to SG&A.

Loss from Operations and Net Loss. Loss from operations for the second quarter of 2020 decreased to $23.3 million from $39.0 million in the second quarter of 2019. Net loss for the second quarter of 2020 was $51.6 million, or $0.53 per basic and diluted share, compared to a net loss of $42.7 million, or $0.66 per basic and diluted share, for the second quarter of 2019. The net loss in the quarter ended June 30, 2020 includes expense of $25.7 million due to an increase in the estimated fair value of outstanding warrants.

Cash Position. Cash, cash equivalents and marketable securities totaled $200.7 million at June 30, 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 800-939-4079 or 212-231-2911 and refer to conference ID 21967375. 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%).

For full Prescribing Information for HEPLISAV-B, click here.

About CpG 1018
CpG 1018 is the adjuvant used in HEPLISAV-B, an adult hepatitis B vaccine approved by the U.S. Food and Drug Administration (FDA). Dynavax developed CpG 1018 to provide an increased vaccine immune response, which has been demonstrated in HEPLISAV-B. In pre-clinical and clinical studies, results demonstrated that the addition of CpG 1018 increases antibody concentrations, stimulates helper (CD4+) and cytotoxic (CD8+) T cell populations and generates robust T and B cell memory responses. Additionally, CpG 1018 strongly favors development of the Th1 subset of helper T cells, the type of helper T cell that is essential for protection from infections with viruses and intracellular bacteria. CpG 1018 targets a single, well defined receptor (TLR9) expressed on only a few key cell types and the mechanisms of action as an adjuvant are quite well understood. CpG 1018 provides a well- developed technology and a significant safety database, potentially accelerating the development and large-scale manufacturing of a COVID-19 vaccine. Upon completion of on-going scale up activities, the existing equipment capacity for CpG 1018 will be 600 million to 1.2 billion adjuvant doses annually, depending on final dose selected.