Dynavax Technologies Corporation Q4 FY2024 earnings call

• HEPLISAV-B Performance: Achieved record fourth quarter and annual revenue, advanced strategic priorities including profitability and share repurchases. Expected net product sales for HEPLISAV-B in 2025 to be between $305 million to $325 million.
• Pipeline Progress:
  • Shingles program (Z1018): Ongoing Phase I/II trial with data expected in Q3 2025 on one-month post-second dose immunogenicity and safety; aims to select dose regimen for Phase II extension study in patients over 70.
  • Plague vaccine program: Partnered with DoD, new agreement for ~$30 million through first half of 2027, plans to initiate Phase II clinical trial in Q3 2025.
  • HEPLISAV-B hemodialysis regimen: FDA issued complete response letter, working with FDA to resubmit sBLA this year.
• Market Dynamics:
  • Medicare Part B roster billing for hepatitis B vaccines since January 2025 supports HEPLISAV-B retail growth.
  • Adult hepatitis B vaccination included in HEDIS measure from 2025, likely enhancing focus in IDNs and large clinics, aligning with HEPLISAV-B's 2-dose regimen.

HEPLISAV-B was the key segment. In the fourth quarter of 2024, HEPLISAV-B net sales were $71 million, up 39% year-over-year. For the full year 2024, HEPLISAV-B net sales reached $268 million, up 26% year-over-year. HEPLISAV-B gross margin was 82% for the full year 2024, an increase from 76% in 2023, and is expected to remain around 80% in 2025. HEPLISAV-B contributes significantly to the company's revenue, driving the overall financial performance.

• HEPLISAV-B net product revenue expected to be in the range of $305 million to $325 million in 2025.
• Adjusted EBITDA, excluding stock-based compensation, expected to be at least $75 million in 2025.
• R&D expenses expected to increase by high teens percent in 2025 compared to 2024.
• SG&A expenses expected to be roughly flat in 2025.

• Forward-looking statements involve risks and uncertainties, including potential market size, marketing efforts, financial guidance, FDA submissions, clinical trial outcomes, and demand for CpG-1018 adjuvant. These risks are detailed in SEC filings.
• Market competition, regulatory approval timelines, and the outcome of clinical trials pose risks to the company's pipeline progress and financial performance.

Q: Curious about market share growth in 2025 and barriers.

A: Donn Casale mentioned Medicare patient population access in retail and the HEDIS measure focusing on serious completion as key events supporting market share gains, and continuing to work with customers in critical segments.

Q: What is the non-inferiority level for the shingles program?

A: Rob Janssen discussed that the 75% is about 75% of the median quantity for T cell quantity as well as full change, looking at a constellation of data including T cell quantity, full change, and other immunogenetic markers rather than a simple objective measure of CD4 T cell frequencies alone.

Q: How much can be told from one-month post second dose results in terms of durability for the shingles program?

A: Ryan Spencer stated that we don't have long-term data from prior initial Phase I, but the Phase I/II trial is designed with six-month and 12-month follow-up data, and we'll look at initial response at one-month post second dose along with other data to assess durability.

Q: What is the logic of the extension study in older adults for the shingles program?

A: Rob Janssen said it's because the highest risk for shingles increases with age, so immunogenicity in the 70 years and older age group is important to work well, and to collect safety data on this age group before Phase III study.

Q: How is the appetite for additional buybacks potentially earlier than the end of 2025?

A: Kelly MacDonald said buybacks are a tool to return capital when IRR is favorable, primary objective is to drive long-term value, will consider additional buybacks if it makes sense as they continue with the current program and learn more through the year.

Q: Confidence in finding good BD deals?

A: Ryan Spencer said they continue to evaluate the landscape, believe there are reasonable targets, have a clear strategy, and are confident in executing it to find high-value transactions.

Q: Level of safety differentiation commercially relevant for shingles and HBV?

A: Ryan Spencer said improved safety profile is critical, specific levels not commented on now but prior Phase 1 showed significant differences, and commercial execution is equally important.

Q: Seasonality in HEPLISAV-B business and Medicare reimbursement impact?

A: Donn Casale said Q1 2025 is progressing strong with customers focusing on non-respiratory vaccines earlier than past years, and Medicare reimbursement change allows HEPLISAV-B equal access in retail pharmacy setting, supporting market share gains.

Q: Hierarchy of response elements for shingles program?

A: Ryan Spencer said CD4 are critically important, but all elements of immune responses have to be considered as there's no correlate, and Rob Janssen added CD4 response itself will probably be a little more important than everything else but all elements matter.