Dynavax Technologies Corporation (NASDAQ:DVAX) Q3 2021 Earnings Conference Call November 4, 2021 4:30 PM ET Company Participants Nicole Arndt - Senior Manager, IR Ryan Spencer - CEO Kelly MacDonald - CFO Robert Janssen - CMO Donn Casale - SVP, Commercial Conference Call Participants Matt Phipps - William Blair Phil Nadeau - Cowen and Company Robert Palermo - Goldman Sachs & Co. LLC Josh Schimmer - Evercore ISI Ed White - H.C. Wainwright Operator Good day, ladies and gentlemen, and welcome to the Dynavax Tec ...

PART I FINANCIAL INFORMATION This section presents the company's financial statements, management's analysis, market risk disclosures, and internal controls [Item 1. Financial Statements](index=8&type=section&id=Item%201.%20Financial%20Statements) The company's financial position significantly strengthened by September 30, 2021, with substantial asset and revenue growth driven by CpG 1018 sales, alongside a positive shift in operating cash flow despite a net loss from warrant liability changes [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet reflects significant growth in assets and liabilities, primarily driven by cash, receivables, and deferred revenue from CpG 1018 sales and new convertible notes Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2021 (unaudited) | Dec 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $246,351 | $32,073 | | Accounts and other receivables, net | $200,362 | $22,661 | | Total current assets | $852,670 | $290,015 | | **Total assets** | **$919,711** | **$353,272** | | **Liabilities & Equity** | | | | Deferred revenue (current) | $358,588 | $38,212 | | Warrant liability | $72,017 | $10,736 | | Total current liabilities | $528,935 | $77,411 | | Convertible Notes, net | $220,223 | - | | Long-term debt, net | - | $179,811 | | **Total liabilities** | **$852,135** | **$294,579** | | **Total stockholders' equity** | **$67,576** | **$58,693** | - The significant increase in assets was primarily driven by higher cash, accounts receivable, and prepaid manufacturing, while the rise in liabilities stemmed mainly from increased deferred revenue related to CpG 1018 adjuvant supply agreements and the issuance of new Convertible Notes, replacing previous long-term debt[41](index=41&type=chunk) [Condensed Consolidated Statements of Operations](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statements of operations show substantial revenue growth, primarily from CpG 1018 sales, leading to operating income but a net loss due to non-cash warrant liability expenses Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Total revenues** | **$108,270** | **$13,414** | **$244,372** | **$27,001** | | Product revenue, net | $106,996 | $13,276 | $242,558 | $26,195 | | Cost of sales - product | $60,090 | $4,031 | $99,560 | $7,352 | | R&D Expense | $6,186 | $8,521 | $21,111 | $19,058 | | SG&A Expense | $26,926 | $21,538 | $70,932 | $61,418 | | Income (loss) from operations | $16,068 | ($13,825) | $53,769 | ($56,476) | | Change in fair value of warrant liability | ($45,121) | $21,245 | ($68,576) | $4,200 | | **Net (loss) income** | **($28,430)** | **$4,401** | **($23,066)** | **($59,773)** | | Basic EPS | ($0.24) | $0.04 | ($0.20) | ($0.61) | | Diluted EPS | ($0.24) | ($0.15) | ($0.20) | ($0.65) | - The substantial increase in revenue for both the three and nine-month periods was driven by CpG 1018 adjuvant sales for COVID-19 vaccines, yet the company reported a net loss primarily due to a significant non-cash expense from the change in fair value of its warrant liability despite achieving operating income[45](index=45&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow statements reveal a significant positive shift in operating cash flow, largely due to advance payments for CpG 1018, and strategic financing activities Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $215,031 | ($76,508) | | Net cash used in investing activities | ($40,713) | ($40,874) | | Net cash provided by financing activities | $40,960 | $109,433 | | **Net increase (decrease) in cash** | **$214,265** | **($7,186)** | - The significant positive shift in operating cash flow was primarily driven by a **$320.4 million** increase in deferred revenue and a **$68.0 million** increase in long-term deferred revenue, largely from advance payments for CpG 1018 adjuvant supply[57](index=57&type=chunk) - Financing activities in 2021 primarily involved net proceeds of **$219.8 million** from issuing Convertible Notes, partially used to repay **$190.2 million** of long-term debt, contrasting with 2020's financing mainly from **$108.5 million** in common stock issuance[57](index=57&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's primary products, recent convertible note issuance, and significant supply agreements for its CpG 1018 adjuvant - The company's primary products are HEPLISAV-B® for hepatitis B prevention and CpG 1018®, an adjuvant used in HEPLISAV-B and in development for other vaccines like COVID-19, pertussis, and plague through collaborations[60](index=60&type=chunk) - In May 2021, the company issued **$225.5 million** in 2.50% convertible senior notes due 2026, using the proceeds to retire a previous loan agreement and purchase capped call transactions[64](index=64&type=chunk) - The company has entered into significant supply agreements for its CpG 1018 adjuvant with partners including CEPI, Clover, Biological E., Medigen, and Valneva, leading to substantial deferred revenue and contract assets on the balance sheet[129](index=129&type=chunk)[136](index=136&type=chunk)[142](index=142&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes significant revenue growth to CpG 1018 adjuvant sales and HEPLISAV-B gains, noting the pandemic's mixed impact, while a new convertible note strengthened liquidity, with sufficient funds expected for the next 12 months [Overview](index=41&type=section&id=Overview) This overview introduces Dynavax as a commercial-stage biopharmaceutical company with key products HEPLISAV-B and CpG 1018, highlighting its collaborations and the pandemic's mixed impact - Dynavax is a commercial-stage biopharmaceutical company with two main products: HEPLISAV-B, a hepatitis B vaccine, and CpG 1018, an adjuvant used in HEPLISAV-B and supplied to partners for developing vaccines against COVID-19, pertussis, and plague[212](index=212&type=chunk) - The company has established multiple collaborations for its CpG 1018 adjuvant, including agreements with CEPI, Biological E. Limited, Medigen, Valneva, and Clover, to support the development and commercialization of COVID-19 vaccines[216](index=216&type=chunk)[217](index=217&type=chunk)[223](index=223&type=chunk) - The COVID-19 pandemic has had a mixed impact, significantly reducing the utilization and sales of HEPLISAV-B but creating a major new market for the CpG 1018 adjuvant[226](index=226&type=chunk)[227](index=227&type=chunk) [Results of Operations](index=45&type=section&id=Results%20of%20Operations) The results of operations detail the dramatic revenue increase driven by CpG 1018 sales, corresponding cost of sales, and the impact of warrant liability changes on net income Revenue Breakdown (in thousands) | Revenue Source | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | % Change | | :--- | :--- | :--- | :--- | | HEPLISAV-B | $44,698 | $24,518 | 82% | | CpG 1018 | $197,860 | $1,677 | 11,698% | | **Total product revenue, net** | **$242,558** | **$26,195** | **826%** | | Other revenue | $1,814 | $806 | 125% | | **Total revenues** | **$244,372** | **$27,001** | **805%** | - The dramatic increase in total revenue was overwhelmingly driven by CpG 1018 adjuvant sales to collaboration partners for COVID-19 vaccine development and commercialization, which began in Q3 2020[243](index=243&type=chunk) - Cost of sales for CpG 1018 increased to **$81.6 million** for the nine months ended Sep 30, 2021, from **$0.8 million** in the prior year, corresponding with the surge in sales[248](index=248&type=chunk)[250](index=250&type=chunk) - The change in fair value of warrant liability resulted in a **$68.6 million** expense for the nine months ended Sep 30, 2021, compared to a **$4.2 million** income in the prior year, primarily due to the increase in the company's stock price[264](index=264&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity improved significantly with substantial cash from operations, driven by advance payments, and a strategic convertible note issuance to repay debt - As of September 30, 2021, the company had **$414.2 million** in cash, cash equivalents, and marketable securities[265](index=265&type=chunk) - The company generated **$215.0 million** in cash from operations in the first nine months of 2021, a significant improvement from a **$76.5 million** use of cash in the same period of 2020, primarily due to advance payments from collaboration partners for CpG 1018 adjuvant[269](index=269&type=chunk) - In May 2021, the company issued **$225.5 million** in Convertible Notes and used the proceeds to repay its previous long-term debt, resulting in a lower effective interest rate[267](index=267&type=chunk) - Management anticipates that current cash reserves and expected revenues will be sufficient to fund operations for at least the next 12 months[265](index=265&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company states that there were no material changes to its market risk disclosures during the nine months ended September 30, 2021, as compared to those presented in its Annual Report on Form 10-K for the year ended December 31, 2020 - There were no material changes to the company's market risk disclosures from the last annual report[285](index=285&type=chunk) [Item 4. Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of September 30, 2021, with no material changes to internal controls over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[287](index=287&type=chunk) - No material changes were made to the company's internal controls over financial reporting during the most recent fiscal quarter[288](index=288&type=chunk) PART II OTHER INFORMATION This section provides disclosures on legal proceedings, key risk factors, equity sales, other significant information, and a list of exhibits [Item 1. Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not currently aware of any material legal proceedings involving the company - The company is not currently involved in any material legal proceedings[291](index=291&type=chunk) [Item 1A. Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including HEPLISAV-B commercialization challenges, high reliance on unpredictable CpG 1018 sales, manufacturing dependencies, intellectual property vulnerabilities, and financial risks from convertible debt and stock volatility [Risks Related to Business and Capital Requirements](index=55&type=section&id=Risks%20Related%20to%20Business%20and%20Capital%20Requirements) This section outlines business and capital risks, including HEPLISAV-B commercialization uncertainty, reliance on CpG 1018 sales, manufacturing dependencies, and the need for future capital - The commercial success of HEPLISAV-B is uncertain due to significant competition, unpredictable market uptake, and the negative impact of the COVID-19 pandemic on adult vaccine utilization[293](index=293&type=chunk)[301](index=301&type=chunk) - The company's financial results may fluctuate significantly due to a heavy reliance on CpG 1018 adjuvant sales, which are difficult to predict and dependent on the success of collaborators' vaccine programs[322](index=322&type=chunk)[323](index=323&type=chunk) - Dynavax relies on its Düsseldorf facility and a limited number of third-party suppliers for manufacturing, posing a risk of supply chain disruption for both HEPLISAV-B and CpG 1018[325](index=325&type=chunk)[327](index=327&type=chunk) - Despite recent profitability, the company has a history of annual net losses and may continue to incur significant losses, requiring substantial additional capital to finance operations[358](index=358&type=chunk)[360](index=360&type=chunk) [Risks Related to Intellectual Property](index=74&type=section&id=Risks%20Related%20to%20Intellectual%20Property) Intellectual property risks include the lack of composition of matter patent protection for key products, reliance on third-party licenses, and potential for costly infringement litigation - The company's HEPLISAV-B and CpG 1018 adjuvant lack composition of matter patent protection, forcing reliance on method-of-use patents and trade secrets, which may provide weaker protection and limit the ability to prevent competition[426](index=426&type=chunk) - The business depends on licenses from third parties, and the failure to maintain these licenses or disputes over them could severely harm operations[417](index=417&type=chunk)[418](index=418&type=chunk) - The company may face costly intellectual property litigation from third parties claiming infringement, which could result in substantial damages or prevent the commercialization of products[419](index=419&type=chunk)[420](index=420&type=chunk) [Risks Related to Debt and Common Stock](index=76&type=section&id=Risks%20Related%20to%20Debt%20and%20Common%20Stock) Risks related to debt and common stock include significant cash requirements for convertible notes, potential stock dilution from conversions, and high stock price volatility - Servicing the **$225.5 million** in Convertible Notes requires significant cash, and the company's business may not generate sufficient cash flow to meet these debt obligations[438](index=438&type=chunk) - The conversion of the Convertible Notes, which became an option for holders as of October 1, 2021, could dilute the ownership interest of existing stockholders and depress the stock price[442](index=442&type=chunk)[443](index=443&type=chunk) - The company's stock price is subject to high volatility due to factors such as clinical trial results, regulatory decisions, financial performance, and broader market fluctuations[431](index=431&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=82&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities during the period - None[463](index=463&type=chunk) [Item 5. Other Information](index=82&type=section&id=Item%205.%20Other%20Information) On October 29, 2021, the company amended its supply agreement with Valneva, canceling two purchase orders for CpG 1018 while retaining advance payments, and establishing a new, smaller order for 2022 delivery, following the UK Government's termination of its vaccine supply agreement with Valneva - On October 29, 2021, Dynavax amended its supply agreement with Valneva following the UK Government's termination of its own supply agreement with Valneva[464](index=464&type=chunk)[465](index=465&type=chunk) - The amendment cancels two outstanding purchase orders, allows Dynavax to retain the associated advance payments, and replaces them with a new, smaller purchase order for 2022 delivery[466](index=466&type=chunk)[467](index=467&type=chunk) [Item 6. Exhibits](index=83&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, debt agreements, material contracts, and certifications by the company's principal officers - This section provides a list of all exhibits filed as part of the quarterly report, including newly filed agreements such as a commercial lease in Düsseldorf and an amendment to the manufacturing agreement with Baxter[471](index=471&type=chunk)

Dynavax Technologies Corporation (NASDAQ:DVAX) Q2 2021 Results Conference Call August 5, 2021 4:30 PM ET Company Participants Nicole Arndt - Senior Manager, IR Ryan Spencer - CEO Kelly MacDonald - CFO Robert Janssen - CMO Donn Casale - SVP, Commercial. Conference Call Participants Phil Nadeau - Cowen and Company Matt Phipps - William Blair Josh Schimmer - Evicore Ed White - H.C. Wainwright Operator Good day, ladies and gentlemen, and welcome to the Dynavax Technologies Second Quarter 2021 Conference Call. A ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number: 001-34207 Dynavax Technologies Corporation (Exact name of registrant as specified in its charter) Delaware 33-0728374 (State or ot ...

Dynavax Technologies Corporation (NASDAQ:DVAX) Q1 2021 Earnings Conference Call May 6, 2021 4:30 AM ET Company Participants Nicole Arndt - Senior Manager, IR Ryan Spencer - CEO Kelly MacDonald - CFO Rob Janssen - CMO Donn Casale - SVP, Commercial. Conference Call Participants Matt Phipps - William Blair Operator Good day, ladies and gentlemen, and welcome to the Dynavax Technologies First Quarter 2021 Conference Call. As a reminder, this conference call is being recorded. At the end of the Company’s prepare ...

Financial Performance - Total revenues for the three months ended March 31, 2021, were $83.335 million, a significant increase from $10.919 million for the same period in 2020, representing a growth of approximately 663%[22] - Product revenue, net for the same period was $82.885 million, compared to $10.514 million in the prior year, indicating a year-over-year increase of about 687%[22] - The company reported a net income of $891,000 for the three months ended March 31, 2021, compared to a net loss of $12.595 million for the same period in 2020[22] - For the three months ended March 31, 2021, Dynavax reported a net income of $0.9 million, a significant improvement compared to a net loss of $12.6 million for the same period in 2020[39] - Net cash provided by operating activities was $38.0 million for the three months ended March 31, 2021, compared to a net cash used of $26.9 million in the same period of 2020[31] - Selling, general and administrative expenses totaled $22,423,000 for the three months ended March 31, 2021, representing a 7% increase from $20,926,000 in the same period of 2020[173] Assets and Liabilities - Total current assets increased to $427.533 million as of March 31, 2021, up from $290.015 million at December 31, 2020, reflecting a growth of approximately 47.5%[19] - Total liabilities increased to $390.357 million as of March 31, 2021, compared to $294.579 million at December 31, 2020, marking an increase of about 32.5%[19] - The company’s accumulated deficit decreased slightly to $1.293 billion as of March 31, 2021, from $1.294 billion at December 31, 2020[19] - Cash and cash equivalents, along with marketable securities available-for-sale, totaled $79.055 million as of March 31, 2021, compared to $32.073 million at December 31, 2020, representing an increase of approximately 146%[19] - The company had cash, cash equivalents, and marketable securities totaling $232.7 million as of March 31, 2021[38] - Total cash, cash equivalents, and marketable securities amounted to $232,674,000 as of March 31, 2021, an increase from $165,036,000 on December 31, 2020, representing a growth of 41%[76] Research and Development - Research and development expenses for the three months ended March 31, 2021, were $7.758 million, up from $4.653 million in the same period of 2020, reflecting a year-over-year increase of about 66%[22] - The company expects to continue incurring substantial expenses as it invests in the commercialization of HEPLISAV-B and the development of its adjuvant[39] - Manufacturing costs incurred prior to regulatory approval are expensed as research and development costs[59] Revenue Recognition - Product revenue from CpG 1018 adjuvant sales is recognized under ASC 606 when control is transferred to customers[54] - Collaboration and manufacturing service revenue is recorded in other revenue, with revenue allocated to each performance obligation at contract inception[56] - In the first quarter of 2021, the company recognized CpG 1018 product revenue of $64.9 million, with $14.2 million reported as deferred revenue as of December 31, 2020[100] Customer Concentration and Risks - For the three months ended March 31, 2021, one customer represented approximately 87% of CpG 1018 product revenue, indicating significant customer concentration risk[109] - The ongoing COVID-19 pandemic has significantly impacted adult vaccine utilization, affecting sales of HEPLISAV-B[151] - The pandemic has caused disruptions in business operations, affecting the ability to conduct sales and marketing activities effectively[210] - The company faces risks related to maintaining a consistent supply of HEPLISAV-B due to potential impacts from COVID-19 restrictions on manufacturing facilities[214] Financing Activities - Proceeds from the issuance of common stock, net, amounted to $28.2 million for the three months ended March 31, 2021[31] - The company completed a public offering of 16,100,000 shares at a price of $5.00 per share, resulting in net proceeds of approximately $75.4 million[123] - Net cash provided by financing activities was $32.3 million for the three months ended March 31, 2021, compared to $14.5 million in the same period of 2020[184] Agreements and Collaborations - The company entered into an agreement with CEPI in January 2021 for the manufacture and reservation of CpG 1018 Materials, allowing for potential sales to third parties if not purchased by CEPI partners[94] - CEPI has agreed to provide advance payments of up to $99.0 million in the form of an interest-free, unsecured, forgivable loan for reserving CpG 1018 Materials[95] - The company entered into an agreement with CEPI for the manufacture and reservation of CpG 1018, with advance payments of up to $99 million, and an amendment for an additional $77.4 million[147][148] Stockholder Equity - The company’s total stockholders' equity increased to $99.762 million as of March 31, 2021, from $58.693 million at December 31, 2020, indicating a growth of approximately 69.9%[19] - The weighted average common stock outstanding was 112,035,000 shares, with diluted shares increasing to 113,469,000 due to stock-based compensation plans[114] Market Conditions and Competition - HEPLISAV-B has been launched in the U.S. and approved in the EU, but the company faces significant competition and unpredictable uptake and distribution efforts[199] - The company must recruit and retain effective sales personnel and maintain relationships with healthcare providers to successfully commercialize HEPLISAV-B[202] - The COVID-19 pandemic has led to reduced utilization of adult vaccines, including HEPLISAV-B, significantly impacting sales since March 2020[211]

Dynavax Technologies Corporation (NASDAQ:DVAX) Q4 2020 Results Conference Call February 25, 2021 4:30 AM ET Company Participants Nicole Arndt - Senior Manager, Investor Relations Ryan Spencer - Chief Executive Officer Michael Ostrach - Chief Financial Officer Rob Janssen - Chief Medical Officer Donn Casale - Vice President, Commercial Conference Call Participants Matt Phipps - William Blair & Company Edward White - H.C. Wainwright Operator Good day, ladies and gentlemen, and welcome to the Dynavax Technolog ...

Dynavax Technologies Corporation (NASDAQ:DVAX) Q3 2020 Earnings Conference Call November 5, 2020 4:30 PM ET Company Participants Nicole Arndt - Senior Manager, IR Ryan Spencer - CEO Michael Ostrach - CFO Donn Casale - VP, Commercial Conference Call Participants Operator Good day, ladies and gentlemen, and welcome to the Dynavax Technologies Third Quarter 2020 Conference Call. As a reminder, this conference call is being recorded. At the end of the Company’s prepared remarks, we will open the call for questi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number: 001-34207 Dynavax Technologies Corporation (Exact name of registrant as specified in its charter) Delaware 33-0728374 (State ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number: 001-34207 Dynavax Technologies Corporation (Exact name of registrant as specified in its charter) Delaware 33-0728374 (State or ot ...