On August 4, 2022 Dynavax Technologies Corporation (Nasdaq: DVAX), a commercial-stage biopharmaceutical company developing and commercializing innovative vaccines, reported financial results and provided a business update for the quarter ending June 30, 2022 (Press release, Dynavax Technologies, AUG 4, 2022, View Source [SID1234617532]).
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"During the second quarter, we continued to successfully execute on our key priorities and are on track for another profitable year with record revenues for both HEPLISAV-B and CpG 1018 adjuvant," commented Ryan Spencer, Chief Executive Officer of Dynavax. "We are well capitalized to continue to invest in programs that drive revenue growth and deliver progress across our clinical pipeline with a focus on high value vaccine programs where our proven adjuvant may provide meaningful advantages."
SECOND-QUARTER CORPORATE HIGHLIGHTS
HEPLISAV-B [Hepatitis B Vaccine (Recombinant), Adjuvanted]
HEPLISAV-B vaccine is the first and only adult hepatitis B vaccine approved in the U.S. and EU that enables series completion with only two doses in one month.
HEPLISAV-B vaccine achieved net product revenue of $32.7 million for the second quarter of 2022, up 139% compared to $13.7 million for the second quarter of 2021.
Market share in the accounts targeted by the Dynavax field sales team increased to approximately 39%, with total market share increasing to approximately 32% in the second quarter of 2022, up from approximately 30% and 19% respectively, in the second quarter of 2021.
CpG 1018 Adjuvant Supply for COVID-19 Vaccines
Dynavax has established a global portfolio of CpG 1018 adjuvant commercial supply agreements (CSA) currently focused on the development of COVID-19 vaccines across a variety of vaccine platforms.
CpG 1018 adjuvant revenue for the second quarter of 2022 was $222.6 million, up 471% compared to $39.0 million for the second quarter of 2021.
The Company now expects 2022 full-year CpG 1018 adjuvant COVID-19 supply revenue to be between $550 million and $600 million, based on committed orders, with an anticipated full-year gross margin of approximately 60%.
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.
Tetanus, diphtheria and pertussis (Tdap) vaccine program: Previously reported interim adult data from an on-going Phase 1 clinical trial evaluating the Company’s adjuvanted Tdap vaccine candidate demonstrated it was well tolerated without safety concerns with immunogenicity data supporting continued advancement. The Company anticipates adolescent data from the same trial in the fourth quarter of 2022.
Shingles vaccine program: The Company recently completed enrollment in the ongoing Phase 1 study evaluating the safety, tolerability, and immunogenicity in adults compared to Shingrix, the leading marketed shingles vaccine in the U.S. Topline data is anticipated in the fourth quarter of 2022.
Plague vaccine candidate: The Company anticipates that in August the first participant will be dosed in a Phase 2 clinical trial evaluating the immunogenicity, safety and tolerability of a plague vaccine candidate utilizing CpG 1018 adjuvant. The clinical trial is being conducted in collaboration with, and funded by, the U.S. Department of Defense.
SECOND-QUARTER FINANCIAL HIGHLIGHTS
Total Revenues and Product Revenue, Net.
Total revenues for the second quarter of 2022 were $256.5 million, compared to $52.8 million for the second quarter of 2021.
U.S. HEPLISAV-B vaccine product revenue, net was $32.7 million for the second quarter of 2022, compared to $13.7 million for the second quarter of 2021. Additionally, approximately $0.9 million was reported in HEPLISAV-B net product sales associated with sales to the Company’s commercialization partner in Germany, Bavarian Nordic.
CpG 1018 adjuvant product revenue, net was $222.6 million in the second quarter of 2022 compared to $39.0 million in the second quarter of 2021.
Selected financial highlights from CpG 1018 adjuvant product supply partnerships for COVID-19 vaccines and vaccine candidates:
The Company recorded approximately $68.0 million in CpG 1018 adjuvant product revenue under its CSA with Valneva. Dynavax does not have any further supply obligations under the CSA.
The Company recorded approximately $51.0 million in CpG 1018 adjuvant product revenue under its CSA with Biological E.
The Company recorded approximately $91.3 million in CpG 1018 adjuvant product revenue under its CSA with Clover.
The Company recorded approximately $12.3 million in CpG 1018 adjuvant product revenue under its CSA with Bio Farma. In May 2022, Dynavax and Bio Farma entered into a CSA for the supply of CpG 1018 adjuvant to be used in Bio Farma’s subunit COVID-19 vaccine candidate, currently in a Phase 3 immunogenicity and safety study.
Cost of Sales – Product. Cost of sales – product for the second quarter of 2022 increased to $83.4 million, compared to $14.8 million for the second quarter of 2021. The increase was primarily due to manufacturing costs for increased volumes of CpG 1018 adjuvant sold to COVID-19 supply partners and increased HEPLISAV-B vaccine sales volume.
Research and Development Expenses (R&D). R&D expenses for the second quarter of 2022 increased to $9.7 million, compared to $7.2 million for the second quarter of 2021. The increase was primarily driven by increased headcount-related compensation and personnel costs, including non-cash stock-based compensation, as well as investments in product candidates utilizing CpG 1018 adjuvant and additional discovery efforts.
Selling, General, and Administrative Expenses (SG&A). SG&A expenses for the second quarter of 2022 increased to $36.2 million, compared to $21.6 million for the second quarter of 2021. The increase was primarily driven by compensation and related personnel costs, including non-cash stock-based compensation, primarily associated with increased headcount as the Company expanded its field sales team to support HEPLISAV-B vaccine commercialization in mid-2021.
Interest Expense. Interest expense was $1.7 million in the second quarter of 2022, a decrease of $1.4 million from $3.1 million in the second quarter of 2021, reflecting a decreased interest rate associated with the Company’s convertible senior notes due 2026.
Net Income. GAAP net income was $128.8 million, or $1.02 per share (basic) and $0.87 per share (diluted) in the second quarter of 2022, compared to GAAP net income of $4.5 million, or $0.04 per share (basic) and $0.02 per share (diluted) in the second quarter of 2021.
Cash and Marketable Securities. Cash and marketable securities were $518.2 million as of June 30, 2022.
2022 Financial Guidance
Dynavax anticipates 2022 revenues, operating expenses, and other costs to be in the ranges shown below, updated from the Company’s previous financial guidance provided on May 5, 2022:
Full-year CpG 1018 adjuvant net product revenues of between $550 million and $600 million, with an associated gross margin anticipated to be approximately 60%
Research and development expenses to be between approximately $50-$60 million
Selling, general and administrative expenses to be between approximately $130-$140 million
Interest expense of approximately $7 million
Conference Call and Webcast Information
Dynavax will host a conference call and live audio webcast on Thursday, August 4, 2022, 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%).