On February 26, 2019 Dynavax Technologies Corporation (NASDAQ: DVAX), a fully-integrated biopharmaceutical company focused on discovering and developing novel vaccines and immuno-oncology therapeutics, reported financial results for the fourth quarter and year ended December 31, 2018 (Press release, Dynavax Technologies, FEB 26, 2019, View Source [SID1234533718]).
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"I am proud of our 2018 achievements, particularly the launch of HEPLISAV-B, which enabled us to generate revenue of $3.9 million in the fourth quarter," said Eddie Gray, chief executive officer of Dynavax. "HEPLISAV-B is the only two-dose hepatitis B vaccine, and it consistently protects more than 90% of adult patients. We are confident that it is poised to become the standard of care hepatitis B adult vaccine, and remain firm in our expectation that HEPLISAV-B operations will become profitable by the end of 2019."
Mr. Gray continued. "In immuno-oncology, we are focused on paths to approval where we believe our TLR9 technology has a competitive advantage. SD-101, in combination with pembrolizumab has consistently demonstrated response rates in melanoma and head and neck cancer that are higher than those reported for pembrolizumab alone. We are actively evaluating a number of opportunities, including partnerships, to advance SD-101 into registrational studies, and are committed to being thoughtful and diligent in determining the best path forward to drive value for our shareholders and provide better options for patients."
2018 and Recent Business Highlights
HEPLISAV-B [Hepatitis B Vaccine (Recombinant), Adjuvanted]
Fourth quarter 2018 sales of $3.9 million compared to $1.5 million in the third quarter 2018
More than 1,200 individual customers purchased HEPLISAV-B in 2018
More than 80% of doses sold to date were purchased by repeat customers
592 of the largest targeted customers, which represent more than 36% of the targeted doses, have received P&T committee approval; 354 have progressed to purchase
Purchase contracts have been executed with 3 of the top 10 retail pharmacies
Initial purchases by state and county health departments through the CDC Vaccines for Adults program began in the first quarter of 2019
Immuno-oncology
SD-101
SD-101 adds meaningful clinical benefit to KEYTRUDA (pembrolizumab) therapy.
In November, the company presented encouraging and consistent results from the Phase 1b/2 trial of SD-101 in combination with KEYTRUDA at the ESMO (Free ESMO Whitepaper) 2018 Congress:
In patients with advanced melanoma who are naïve to anti-PD-1 therapy
70% overall response rate (ORR) in the 2-milligram dose cohort
Tumor shrinkage occurred in both injected target lesions and non-injected target lesions; non-injected lesions demonstrated an ORR of 68%, including visceral metastases in the lung and liver
The ORR is identical to that reported at ASCO (Free ASCO Whitepaper) 2018, despite increasing the patient population by more than 50%, from 30 to 47 patients
85% 6-month progression-free survival (PFS) rate
Observed responses in injected lesions and non-injected distant lesions
Responses were independent of baseline PD-L1 expression
In patients with melanoma refractory or resistant to anti-PD-1 therapy
20.7% ORR in 29 patients in the 8-milligram dose cohort
In patients with head and neck squamous cell carcinoma who were naïve to anti-PD-1 therapy
27.3% ORR in 22 patients in the 8-milligram dose cohort
Dynavax has fully enrolled the 2-milligram cohort in patients with melanoma refractory or resistant to anti-PD-1 therapy and in patients with head and neck squamous cell carcinoma who were naïve to anti-PD-1 therapy. Data from these cohorts are expected later this year.
SD-101 and KEYTRUDA are being evaluated in a new randomized, controlled, investigational treatment arm for the ongoing I-SPY 2 TRIAL for neoadjuvant treatment of locally advanced breast cancer.
Adverse events related to SD-101 treatment have been transient, mild to moderate flu-like symptoms.
DV281
DV281 is a TLR9 agonist designed for delivery to lung cancer patients by inhalation.
Dynavax is conducting a Phase 1b/2 clinical trial in subjects with advanced non-small cell lung cancer to investigate the safety and tolerability of DV281 as monotherapy and in combination with OPDIVO (nivolumab) and to identify a recommended dose for the expansion part of the study.
Studies in preclinical animal models of metastatic cancer show that direct delivery of DV281 to tumor-bearing lungs results in induction of interferons and cytokines and infiltration of T cells, responses similar to those observed after intratumoral injection of SD-101.
Dynavax will present a poster (Abstract 8304) from the safety portion of the inhaled DV281 study at the AACR (Free AACR Whitepaper) Annual Meeting. The poster titled "Phase Ib/II, open label, multicenter study of inhaled DV281, a Toll-like receptor 9 agonist, in combination with nivolumab in patients with advanced or metastatic non small cell lung cancer (NSCLC)" will be presented Tuesday, April 2, 2019, from 1 to 5 p.m. ET.
Preclinical Research
Dynavax has multiple immuno-oncology preclinical research programs including a cancer vaccine program and a multi-pronged program to develop TLR7 and TLR8 agonists, both as anti-cancer agents and as vaccine adjuvants. The company is also evaluating additional candidates to leverage the hepatitis B 1018 adjuvant in additional vaccines.
Financial Results
Product Revenue, Net. Dynavax’s first commercial product, HEPLISAV-B, was launched in the first quarter of 2018. Net product revenue for the fourth quarter of 2018 was $3.9 million, compared to $1.5 million in the third quarter of 2018. Net product revenue for the full year 2018 was $6.8 million. Product revenue from sales is recorded at the net sales price, which includes estimates of product returns, chargebacks, discounts and other fees.
Cost of Sales, Product. Cost of sales, product, for the fourth quarter of 2018 was $1.6 million and $10.9 million for the year ended December 31, 2018. Included in cost of sales, product, are inventory reserves and fill, finish and overhead costs for HEPLISAV-B incurred after FDA approval. Also included are costs associated with resuming operations at the manufacturing facility in Düsseldorf after receiving regulatory approval for the pre-filled syringe presentation, which costs previously were included in research and development expense.
R&D Expenses. Research and development expenses for the fourth quarter of 2018 totaled $22.9 million compared to $17.4 for the fourth quarter 2017. Full year 2018 research and development expenses totaled $75.0 million compared to $65.0 million in 2017. The increase
reflects increased compensation and related personnel costs and clinical trial and research expenses related to the ongoing development of SD-101, DV281 and earlier stage oncology programs. Upon approval of pre-filled syringes in the first quarter 2018, costs associated with resuming activities at the manufacturing facility in Düsseldorf were charged to cost of sales, product while costs incurred to manufacture HEPLISAV-B for commercial sale were accounted for as inventory.
SG&A. Selling, general and administrative expenses for the fourth quarter of 2018 totaled $16.4 million compared to $9.3 million for the fourth quarter of 2017. Full year 2018 selling, general and administrative expenses totaled $64.8 million compared to $27.4 million in 2017. The increase in full year 2018 is primarily due to an overall increase in HEPLISAV-B sales, marketing and commercial activities, including full-deployment of a contract sales force, post-marketing studies and consultants for commercial development services.
Net Loss. Net loss for the fourth quarter of 2018 was $40.0 million, or $0.64 per basic and diluted share, compared to a net loss of $27.4 million, or $0.45 per basic and diluted share, for the fourth quarter of 2017. Full year 2018 net loss was $158.9 million, or $2.55 per basic and diluted share, compared to a net loss of $95.2 million, or $1.81 per basic and diluted share for the full year 2017.
Cash Position. Cash, cash equivalents and marketable securities totaled $145.5 million at December 31, 2018, compared to $191.9 million at December 31, 2017. Dynavax plans to borrow $75.0 million under its non-dilutive term loan agreement in the first quarter of 2019 to support commercial efforts and advance its immuno-oncology platform.
Conference Call and Webcast Information
Dynavax will hold a conference call today at 4:30pm ET/1:30pm PT. To access the call, participants must dial (877) 423-9813 in the U.S. or (201) 689-8573 internationally, and use the conference ID 13687416. The live call will be webcast and can be accessed in the "Investors and Media" section of the company’s website at www.dynavax.com. A replay of the webcast will be available for 30 days following the live event.
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. In 2015, new cases of acute hepatitis B increased by more than 20 percent nationally.ii 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 CDC recommends vaccination for those at high risk for infection due to their jobs, lifestyle, living situations and travel to certain areas.iii 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.iv Approximately 20 million U.S. adults have diabetes, and 1.5 million new cases of diabetes are diagnosed each year.v
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 to enhance the immune response. Dynavax has worldwide commercial rights to HEPLISAV-B.
For more information about HEPLISAV-B, visit View Source
About SD-101
SD-101, the Company’s lead clinical candidate, is a proprietary, second-generation, Toll-like receptor 9 (TLR9) agonist CpG-C class oligodeoxynucleotide. Dynavax is evaluating this intratumoral TLR9 agonist in several clinical studies to assess its safety and activity, including a Phase 1b/2 study in combination with KEYTRUDA (pembrolizumab), an anti-PD-1 therapy, in patients with advanced melanoma and in patients with head and neck squamous cell cancer, in a clinical collaboration with Merck. Dynavax maintains all commercial rights to SD-101.