On November 3, 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 ended September 30, 2022 (Press release, Dynavax Technologies, NOV 3, 2022, View Source [SID1234622964]).
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"For the third quarter, we demonstrated another quarter of successful execution on our key priorities and remain on track for profitability with record revenues anticipated for both HEPLISAV-B and our CpG 1018 adjuvant in 2022," commented Ryan Spencer, Chief Executive Officer of Dynavax. "We believe we are well capitalized to invest in driving revenue growth for HEPLISAV-B and to deliver progress across our clinical pipeline, focusing on high value vaccine programs where our proven adjuvant may provide meaningful differentiation."
THIRD-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. Hepatitis B vaccination is universally recommended for adults aged 19-59 in the U.S.
HEPLISAV-B vaccine achieved net product revenue of $37.5 million for the third quarter of 2022, up 65% compared to $22.7 million for the third quarter of 2021.
Market share in the accounts targeted by the Dynavax field sales team increased to approximately 43%, with total market share increasing to approximately 32% in the third quarter of 2022, up from approximately 32% and 25%, respectively, in the third quarter of 2021.
CpG 1018 Adjuvant Supply for COVID-19 Vaccines
Dynavax has established a global portfolio of CpG 1018 adjuvant commercial supply agreements (CSAs) currently supporting the development of COVID-19 vaccines across a variety of vaccine platforms.
CpG 1018 adjuvant revenue for the third quarter of 2022 was $126.3 million, up 50% compared to $84.3 million for the third quarter of 2021.
The Company reiterates its expectation of 2022 full-year CpG 1018 adjuvant COVID-19 supply revenue to be between $550 million and $600 million, based on committed orders under our CSAs, 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:
In October, the Company presented adult and adolescent safety data from the Phase 1 clinical trial demonstrating the Tdap vaccine candidate was well tolerated without safety concerns. Immunogenicity in adults was consistent with the Company’s expectations and support its plan to continue advancement of this clinical program. These clinical results were presented at ID Week.
Shingles vaccine program:
In August, enrollment was completed in the ongoing randomized Phase 1 clinical trial evaluating the safety, tolerability, and immunogenicity in adults of the Company’s shingles vaccine candidate adjuvanted with CpG 1018 compared to the leading marketed shingles vaccine in the U.S.
Data from this clinical trial is anticipated before the end of 2022.
Plague vaccine candidate:
In August, the first participant was dosed in the Phase 2 clinical trial evaluating the immunogenicity, safety and tolerability in adults of a plague (rF1V) vaccine candidate adjuvanted with CpG 1018. The clinical trial is being conducted in collaboration with, and funded by, the U.S. Department of Defense.
THIRD-QUARTER FINANCIAL HIGHLIGHTS
Total Revenues and Product Revenue, Net.
Total revenues for the third quarter of 2022 were $167.7 million, compared to $108.3 million for the third quarter of 2021.
HEPLISAV-B vaccine product revenue, net was $37.5 million for the third quarter of 2022, compared to $22.7 million for the third quarter of 2021.
CpG 1018 adjuvant product revenue, net was $126.3 million in the third quarter of 2022 compared to $84.3 million in the third quarter of 2021.
Selected financial highlights from CpG 1018 adjuvant product supply partnerships for COVID-19 vaccines and vaccine candidates:
The Company recorded approximately $87.5 million in CpG 1018 adjuvant product revenue under its CSA with Clover.
The Company recorded approximately $27.6 million in CpG 1018 adjuvant product revenue under its CSA with Biological E.
The Company recorded approximately $11.2 million in CpG 1018 adjuvant product revenue under its CSA with Bio Farma.
Cost of Sales – Product. Cost of sales – product for the third quarter of 2022 increased to $61.3 million, compared to $60.1 million for the third quarter of 2021. The increase was due to manufacturing costs for increased volumes of CpG 1018 adjuvant sold to COVID-19 supply partners, an inventory write-down of $14.5 million related to the reduction in demand for CpG 1018 and increased HEPLISAV-B vaccine sales volume.
Research and Development Expenses (R&D). R&D expenses for the third quarter of 2022 increased to $13.0 million, compared to $6.2 million for the third 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 for TDAP, shingles and plague.
Selling, General, and Administrative Expenses (SG&A). SG&A expenses for the third quarter of 2022 increased to $32.0 million, compared to $26.9 million for the third quarter of 2021. The increase was primarily driven by compensation and related personnel costs, including non-cash stock-based compensation coupled with increased external commercial and marketing activities related to the universal recommendation for hepatitis B vaccination.
Net Income. GAAP net income was $63.8 million, or $0.50 per share (basic) and $0.43 per share (diluted) in the third quarter of 2022, compared to GAAP net loss of $28.4 million, or $0.24 per share (basic) and $0.24 per share (diluted) in the third quarter of 2021.
Cash and Marketable Securities. Cash and marketable securities were $586.5 million as of September 30, 2022.
2022 Financial Guidance
Dynavax anticipates 2022 revenues, operating expenses, and other costs to be in the ranges shown below, consistent with the Company’s previous financial guidance provided on August 4, 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, November 3, 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%).