Dynavax Posts Financial Results for 2016

Dynavax Technologies (NASDAQ:DVAX) reported its financial results for the fourth quarter and 2016 while also providing a company update.
As quoted in the press release:

The net loss for the year ended December 31, 2016 was $112.4 million, or $2.92 per share, compared to $106.8 million, or $3.25 per share, for the year ended December 31, 2015.

The Company had $81.4 million in cash, cash equivalents and marketable securities as of December 31, 2016, compared to $196.1 million at December 31, 2015. In addition, in the first quarter of 2017 the Company received proceeds of $23.3 million from sales of common stock under an at-the-market sales agreement.

“We are pleased with the continued progress of our immuno-oncology portfolio during 2016 and the recent promising clinical results from our combination trial in melanoma,” said Eddie Gray, chief executive officer for Dynavax. “With the expansion of SD-101 into Phase 2 in both melanoma and head and neck cancer this quarter, our marketing application for HEPLISAV-B under review by the FDA and our strong cash balance, we are in position to deliver key outcomes for several programs during 2017.”

Overview

During the last few years, the company has steadily advanced on its objective to evolve into an immuno-oncology company as it prepared for an anticipated launch of HEPLISAV-B™. Following receipt of the HEPLISAV-B Complete Response Letter (CRL) from the FDA in November 2016, the company was restructured to focus resources on the immuno-oncology portfolio and to enable HEPLISAV-B to advance through the FDA review process to an approval decision.

Recent Progress

SD-101

In early March, Dynavax presented promising clinical data from the dose escalation phase of an ongoing Phase 1b/2 study investigating SD-101 in combination with KEYTRUDA® (pembrolizumab), an anti-PD-1 therapy developed by Merck, known as MSD outside the United States and Canada, in patients with metastatic melanoma. Encouraging overall response rates and complete response rates in patients naïve to anti-PD-1 therapy were observed.

Based on the results of the initial dose escalation phase this trial is being expanded into Phase 2 studies in both melanoma and head and neck cancer. Patients will be enrolled in two cohorts, those naïve to anti-PD-1 treatment and patients who have progressive disease on anti-PD-1 therapy. The trial is designed to build on the encouraging results seen in the anti-PD-1 naïve patient group while allowing for continued dose escalation in patients who have progressive disease on anti-PD-1 therapies.

HEPLISAV-B

In February, Dynavax filed its responses to the November 2016 CRL issued by the FDA for HEPLISAV‐B, the company’s vaccine candidate intended for immunization against hepatitis B infection in adults 18 years of age and older. The FDA has established August 10, 2017 as the Prescription Drug User Fee Act (PDUFA) action date.

As part of the January restructuring, the company suspended manufacturing activities, commercial preparations and other longer term investment related to HEPLISAV-B during the regulatory review period and reduced its global workforce by approximately 40%. If the product is approved, Dynavax plans to satisfy anticipated initial demand from existing stockpiled inventory and to scale up commercial activities based on market demand and investment priorities.

Financials

Total revenues were $7.3 million for the fourth quarter of 2016 and $11.0 million for the full year of 2016 compared to $0.7 million and $4.1 million for the same periods in 2015. The increase was primarily due to recognition of $7.2 million under the research collaboration and license agreement with AstraZeneca related to the initiation of a Phase 2a clinical trial by AstraZeneca.

Research and development expenses were $18.4 million for the fourth quarter of 2016 and $84.5 million for the full year of 2016 compared to $20.9 million and $86.9 million for the same periods in 2015. This decrease was primarily due to a reduction in outside services expense associated with the completion of the HBV-23 clinical study in the fourth quarter of 2015, partially offset by an increase in headcount as well as regulatory and manufacturing activities in preparation for the anticipated commercial launch of HEPLISAV-B.

General and administrative expenses were $8.2 million for the fourth quarter of 2016 and $37.3 million for the full year of 2016 compared to $6.7 million and $22.2 million for the same periods in 2015. This increase was primarily due to costs related to preparation for the anticipated commercial launch of HEPLISAV-B including additional headcount, information technology systems and infrastructure to support commercial development as well as costs related to sourcing a debt financing commitment.

About Dynavax

Dynavax is a clinical-stage immunology company focused on leveraging the power of the body’s innate and adaptive immune responses through toll-like receptor (TLR) stimulation. Dynavax is developing product candidates for use in multiple cancer indications, as a vaccine for the prevention of hepatitis B and as a disease modifying therapy for asthma. Dynavax’s lead product candidates are SD-101, an investigational cancer immunotherapeutic currently in Phase 1/2 studies, and HEPLISAV-B, a Phase 3 investigational adult hepatitis B vaccine. For more information visit www.dynavax.com.

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