DVAX - Earnings call transcript Q2 2020 | Dynavax Technologies Corporation

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Operator

Good day, ladies and gentlemen, and welcome to the Dynavax Technologies Second 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 questions and provide specific instructions at that point. I would now like to turn the conference over to Nicole Arndt, Senior Manager, Investor Relations.

You may begin.

Nicole Arndt

operator. you, Thank Good afternoon. quarter conference second financial and Dynavax results XXXX update the call. corporate to Welcome

the are Janssen, call Executive on Development; me Joining today President, Vice Ostrach, Senior President Commercial. Financial Donn Officer, Casale, Officer; Ryan Chief Officer; Medical Robert Chief Vice Clinical Michael Chief Spencer,

to potential making completion regarding commercial begin, expectations, profile, cause I be potential that CpG of including and today, with peak we you we statements statements development actual risks statements to the post-marketing These revenue vaccine studies number Before a will could in CEO XX-K filed now and with results revenue, are advise forward-looking to today’s XXXX. regarding detailed the HEPLISAV-B’s and uncertainties subject of in Risk encourage summarized the SEC, Factors Ryan over periodic Spencer, reports which our risks all will materially. Dynavax. and I differ we to section review. are XX-Q turn are press release you call and of of the These current

Ryan Spencer

And Nicole. for ongoing to to for update quarter thank all you, for global the spread has vaccines the Thank diseases. infectious need of today certainly XXXX and effective our second pandemic highlighted on review The prevent joining an current Dynavax us results. you

adjuvants from a brought populations. age are essential becoming health system also to other While addressing on case it disease is risk less clear against It advanced increasingly that in these critical greatest a play vaccines immune often responsive vaccines patients clearly people unfortunately weakened vaccine an protecting role severe due of is conditions. or role patient that chronic the play to in infectious disease, with the

number can expanding achieve the needed by the global to of amount populations, desired of the vaccine because to contribute adjuvants doses address results. required the reducing addition, available antigen scale to of In

reduce to the this effective Dynavax B of provide industry years, adjuvants vaccine provide of vaccines have from focused likely antigen address to is on patients. advancements is of hepatitis of vaccines, our demand. developing amount an immune Currently, Over developing response in is all focused COVID-XX. the adjuvanted on We high levels flu, and believe the necessary recent and adjuvants. seen to protection all to use to use prevent an shingles improved we the global

first CpG adult Our is commercialized HEPLISAV-B an B hepatitis adjuvanted product vaccine with XXXX.

are through multiple focused on expanding XXXX including HEPLISAV-B adjuvanted pertussis We developing vaccines, use of the universal and beyond CpG COVID-XX, influenza. currently collaboration,

in adult current in hepatitis review rates. highly over in studies be for the B market vaccination. the B in approved in FDA, deadly first increasing by and regimen over B of adults Let compared the our adjuvanted prevented potentially people leader. rates vaccine. has adult it is Thankfully, advancement worldwide progress two-dose XXX,XXX HEPLISAV-B, the protection me one higher people our opportunity that hepatitis are and three-dose of HEPLISAV-B hepatitis is month. first vaccine U.S. B hepatitis only virus the years. just with effective infection the offering infected HEPLISAV-B to demonstrated against with is head-to-head It vaccination XXX adult the million infectious XX and to has a with Hepatitis can clinical been Over B. protection

only challenges over regimen approximately completing XX% months. three-dose with are known six well compliance with the patients product’s Importantly, legacy XX% of to

means for compliance opportunity offers in As you that month an greater two-dose can imagine, from the regimen protection for patients. HEPLISAV-B a one potential improvement

responsive become the to where rates and XX% XX% XX% characteristics, seroprotection we and who addition, compared adult unmatched And This are HEPLISAV-B standard will compared these competitor care patients product. hepatitis to of to the In of of B seroprotection living are competitor XX of profile in for in years U.S. us even HEPLISAV-B the market seroprotection because vaccination was to vaccines difference between diabetes, regimen the leader in dosing confident with XX confidence long-term in XX% less old be HEPLISAV-B. rates people HEPLISAV-B larger product of success for gives commercial and known provided the seen and provided with

The HEPLISAV-B second disruption of HEPLISAV-B sector the of was year vaccine was for Net and the to quarter adult pandemic $X.X this decline period the line market. with vaccine million. entire second significant our The user B across quarter of XXXX demand a The revenue in a business. product hepatitis ongoing significant HEPLISAV-B adult overall the caused for in utilization declined end COVID-XX market. in

these in a demand, portion fulfilled was resulting a our inventory accounts further end of unprecedented Despite share the distributors field tumultuous existing addition and sales in quarter. decrease reduced remained of to consistent HEPLISAV-B the in in million million user the market In our $X levels, $X.X reduction out by to as revenue from stock. targeted force channel previous our times, for demand

a are we market have of and latter will the part optimistic rebound we in to that in growth the are that see this Finally, pleased the begun to quarter trend report continue.

with commercial future. during thought Based makers and second maintained adoption Our the a leading of leaders decision quarter. level national advance customers towards on in interactions, will these the at to that high have national key team confidence continue engagement we and near we accounts retail

trend and extended also national We during quarter targets. decision and progress across setting effective addition saw increased promotional the to calls In our activity key in leaders deliver with week the highly sales able field accounts, a the was remote makers thought all each in a with in efforts coming team remote of confident have quarter, consistently to expect productivity confident will and the focus the are the vaccination for this on this of HEPLISAV-B that rebound particularly we with COVID-XX pandemic. headwinds value, long-term remain second strong remainder of HEPLISAV-B’s the we out continue to year. the Despite

second Now, CpG asset, XXXX. to let’s our turn

broad CpG a are platform. vaccine We developing adjuvant XXXX as

to drive adjuvants global response a of cells. establish to and of a strategy a helping embarked vaccines by capability boost may at response variety to types demonstrating the CpG to of system may We’ve collaborations enhance immune XXXX to from a you know, to of antigens. particular immune As efficacy on are vaccine vaccine aimed the enhance the the added immune response

approach collaboration open collaborations underscoring across multiple to these approaches multiple span allows vaccine development varied support technology Our indications. And CpG development XXXX’s versatility, to vaccine efforts. us

with been approach CpG currently multiple in so successful has develop Our far XXXX collaborations vaccines. to adjuvanted

we During vaccine the new collaborations adjuvanted second Medicago. and Valneva, COVID-XX Medigen, quarter, announced Sinovac with

collaboration We October, September respectively. entered we expect their strategic our in have expect to relationships future. of Medicago and announce from Clover and the Biopharmaceuticals, in clinical and trials additional human testing, first by results Two X Phase partners,

Phase year. expected later partners, this our more X testing addition, of Medigen In two begin collaboration are Valneva and to

in protect the with could adjuvanted collaborations, our with hope with influenza Sinai of also season. area broaden Medicine valuable under Icahn universal CpG people recently case novel the to in to collaboration they a we in of against which universal CDC vaccine Sinai’s Dynavax’s The influenza COVID-XX an School beyond pandemic. announced Mount a potential Moving of U.S. adjuvant. the funded current work is were infected a against develop the influenza combination It XXXX-XXXX all vaccine. is at strains is protection have this influenza Mount Sinai with a XXXX developed CIVICs National U.S. to Innovation the Mount program. Vaccine award estimates be influenza The that evaluate Influenza in approach influenza Centers designed during Allergy team contract XX million a of and Institute Infectious from Collaborative novel or their will as Disease, of CIVICs part

and the potential Our for some adjuvant commercialization. collaborations for Michael investment it with Dynavax in to over a confident broad and will opportunities as of and we discuss provide see we summary, the Dynavax a vaccine potential XXXX I suite turn the now of for have CpG are business our cases opportunity financial of CpG to pipeline in the prospects lead HEPLISAV-B the adjuvanted XXXX, us and model, call long-term to development results. vaccine supplier In represents.

Michael Ostrach

Good afternoon, everyone. Ryan. Thank you,

release Our afternoon. are issued this the financial detailed results press in we

So, I’ll period million the in in compared caused same highlights and just additional second volume $X.X sales due quarter pandemic. to to the COVID-XX HEPLISAV-B the XXXX revenue in color. $X.X product million by some was lower provide

in centers physician in their the And which quarter, fell practices of activities much XX% decline as utilization, restricted medical April. as hepatitis vaccine led this second significant adult much For facilities. to approximately a and at B

expected potential to for expanded reopen, medical distancing to lower sale to elected user we those XXXX. of on by for inventory to end to and to increased path should wound post-marketing second is compared decrease million returns expenses result call to Ryan. year. quarter, than $X.X quarter the With of quarter second I as their immuno-oncology million gradually by year, if the reduce May we to due stock Dynavax approximately about XXXX is expenses its now the social efforts began a reductions second related week, million we X% quarter and of sales administrative states last mention to announced growing benefit of continue The demand have expenses rules. costs our outside With to product HEPLISAV-B, in vaccine increased to personnel to this of several R&D U.S. more the our cancer from services earlier under lower to following compensation programs. last strict as and securities SG&A a R&D the decrease TriSalus SD-XXX comparable cost normal And to hepatitis back expense, distributors decreased the utilization turn as as secured reached to XXXX were and lower of beginning SD-XXX XX% addition, quarter. SG&A due adult allocation at increase a services and centers to pre-COVID Lifesciences. that the costs offset the distributors by levels $XX.X July equivalents, this In headcount travel to during caused and a levels patients well transaction, totaled personnel conditions. headcount mid-June, B realize in COVID-XX XX% travel higher XX, June in restrictions. succeed. for cash, decrease marketable overhead, in resulting business the due factors, the allocations, in stockholders from studies non-cash $XXX.X overhead restructuring, Cash, I’ll facility in the related facilities and a costs, by as compensation and costs the

Ryan Spencer

in value and market to preventable growth. attention understanding current Q&A around as finally, and you to represent opportunity updating has to offer for CpG several hemodialysis the steady XXXX, the of expected QX quarter the to development a as large as in importance Thanks, of adjuvants, getting expect from pertussis strategic a Dynavax the XXXX investors the the on ongoing for leading first adult on along and they now planned HEPLISAV-B XXXX; adjuvanted leading healthcare vaccine and track hepatitis commitment a on adjuvant. B vaccine the Vaccines coming in our studies the company and with build a the members with call. our protecting build in in X of all clear leveraging safety vaccine fourth disruptions today’s CpG relationships vaccine of more a of of vaccine immunogenicity like HEPLISAV-B XXXX remain pandemic our their final to focused of Despite completion pandemic. XXXX follow-up We business to completion X XXXX; Phase tremendous recurring important milestones, our patients a is recommendation valuable coronavirus clinical into opportunities collectively animal enabling thank ACIP announce accomplishments in for adjuvant portion a and that this in we FDA two consideration data against Operator, ongoing of commercial commercialization mitigate with which this system, initial approved diseases, pandemic with from look we by the we open for Michael. stage We with XXXX; the the also is establishing on for supports preferential progress developing to diseases with multiple additional revenue. future potential company. of vaccine work we this for endemic CpG Dynavax pipeline leading drivers goal. expertise publication months; post-marketing the the our and Phase vaccine long-term forward studies and of including improved an quarter we studies of year, advancing study data toxicology CpG and year team vaccine as The would in expected a

Operator

Phil is ahead. our Nadeau Please & [Operator Instructions] And question of first line Company. Cowen the from with go

is open. Your line

Phil Nadeau

afternoon. questions. for Good taking Thanks my

a disrupted on First, new bit to vaccine maybe the institutions or calls more you was the was commercial, the or one that shut in may Were the arena not for get market that the using order to group to you quarter, progress much were sales HEPLISAV’s purchasers on acknowledging the efforts access make the Can vaccine you in about during centers formularies? QX. virtual that gotten talk able and disrupted very in may traction down? HEPLISAV and new some medical have on despite fact the your

Ryan Spencer

Yes.

So, elements. to us, probably dive explain into to bit. obviously, team. we that But a were that we cover little much have in engage a further. with There more two little opportunity can nation is which environment, customers a Donn I’ll fact great our willing the let is remote for a given the bit

But Donn, actually some saw don’t So, efficiency. little we a why bit? elaborate you

Donn Casale

engaging the actually, I through we every week, kind success a find point, productivity week-over-week. did bit mean, conferences. as increasing found of video my Ryan of our we And during to found, efficiencies. a quite remotely lot Phil, of we And quarter, mentioned, Yes.

seen over continue manage roughly cycle. the to challenging phase. quarter customers advance, a advance trying frontline. they many though to are customers, We departments have What’s themselves COVID these implementation XXX We sales longer advance as obviously they to the is saw

been So, flow. the we standpoint, ebb we’ve we promotional But, a highly of saw a success of over the from kind believe lot quarter. effective and we find and

Ryan Spencer

and add at I I’ll it’s very but actually our been some different, call volume remote says we coronavirus. this closely, it’s in above the just When able of to actually activity the Donn prior Phil, activity increasing from that on, we’ve previous activities, things And found call review been person, because interesting looking to increasing, it’s environment. in our not not because of of increase low, a increasing

Phil Nadeau

give anything on COVID as there signed get said in XXXX maybe been or question specifically you That’s you’ve do CpG very framework, economics you negotiated. believe, in of receive I your been to that of potential frequently from have any you think is had on to value that to can second, we one try vaccine? past, Then that economic the that we efforts, have a report, economic the the helpful. Is COVID nothing contracts partners. any us you the quite

Ryan Spencer

report as to yet defined nothing as There’s far contracts.

the regions products different the to clinic that have and and product The We’re is in. which of knowing two areas we’ll obviously our in sold entering with critical behind. more two which collaborators, right hopefully, be and part going here these building are

relates to talking One economics approach about of it is the our challenges global. generically as is

up -- countries. to we’re So, going used around and being to spans reality which front the territories. familiar this and demand, the adjuvant hopefully low will global different very And end address high with versus income pricing regions many look help you

forward, we move So, have programs. as that’s to of variety supplying something a the we to adjuvant navigate

The that the I economics. are until point to main to which more you success. we like get like is then, us on a into bit premature we success But goal and clarity like which conversation, we’ll we’d So, said programs highlight a on on I -- update little and And of think when when. had have it’s advancing we that programs millions many I’d for number I before shots of this give have doses. hundreds when think like to looks here

do to able coronavirus programs. extent to will And value can the we so, be believe generate we that supply large Dynavax significant

later for of bit the breadth we’re down economics happy now, with pretty the little So, get into collaborations. the we’ll a road. But our

Phil Nadeau

can be idea last Have point XXXX of question possible? manufacture what volume given success, there CpG you next a made. how one have year? And was you of you would many disclosed Great. any that If just to doses you

Ryan Spencer

mean, you figure thing and to start quantities make, when high -- stockpile you element. it a there’s you start, going much The that’s on how when right? risk help manufacturing out at Yes. I depends interesting because can

CpG that capacity. CMO to Our significant produce we work install has with XXXX

obviously working be pandemic for much support. smaller scale made would to which from a adjuvant We’re move what the now on is up, global which right scale up scale HEPLISAV, for we to needed

not and scale capacity. well. very up facilities going Because we’re existing is installed that here, work using ongoing building again, So it’s new we’re

billion around between capacity choose XXX how a downstream related used is and estimated have installed and of capacity. million just are investments processing. we other staffing that what to with available So, matter we It’s X make doses existing to

when So, better X require to would bit the that I the And insight demand. beyond range think wouldn’t beyond us I a be into able is we a billion. XXX even a out go little creative. rule But, then, that to to being have more

Phil Nadeau

very is progress. helpful. for and congrats That my Thanks taking questions on

Ryan Spencer

Thanks, Phil.

Operator

with ahead. line question next of the Please go Blair. William from Matt Phipps Our is

Your line now open. is

Matt Phipps

a my bit call. question. might taking a This for of be Thanks Hi. rambling

apologize both in results that And at adjuvant. maybe some upcoming evaluating two be the So, without and I dosages from guys COVID-XX these you is of XXXX, vaccines And different we I are different [indiscernible] of have from GSK’s think, XXXX they’ll really or CpG it’s programs. some mentioned interesting pandemic But, you advance. collaborators. looking and point, your also of with schedules CpG

would to of maybe where the can provide population something where So, into is a if really to at it’d elderly separation when what just right risk more at it a greater or wondering or a and tease kind of volunteer healthy other to you in little hard you really, And for looking differences that’s get the bat, out, hopefully be from bit CpG be populations constructs? us XXXX expect. we’re think something help about going

Ryan Spencer

we to adjuvants? We relates if going know. to Well, see comparison other what to I don’t are as the mean, the it question is the

the couple is factors of are a think, here. I different there reality

greatest healthy where difference, to the we the an -- of be the for difference But see that highlighted could anyway, demand that volunteers be could beyond possible. hard products probably out could Elderly a issue the -- difference, clinical a lot are there’s even differentiation also young a harder -- come to A show out which there’s it’s right? one, within area could healthy would this. the tease show lot You between adjuvant. be, of going a populations could adjuvant, what a there’s that’s

supply always forward Dynavax collaborators. as to too, it with And how so, of all going relates be moves are the components our I think to critical

the we’ll don’t mentioned how focused the now, being So, that data in overall And then on trials trials? we But we’re make we to and to we’ll our the demand. the need you to Phase on see two And what at they’re to the we going fit the clinical Matt. collaborators to seen to deliver be this prepared to up, how X what to global have talk we’ll coming see population or to decision. these that have speak is have have But, what to programs it let adjuvant for itself hard the see point, it’s from data available. we’ll would tell for when

Matt Phipps

And but to million drawdown just the demand of could of demand catch-up… not you distributors line kind forward, I obviously -- to call or in of reduced kind if kind pre-pandemic way a levels of any maybe up maybe pre-pandemic inventory level, that as QX, you their potentially work be they you with in think could yet, kind going curious to recover, the there or do X.X of And But, question gradually with COVID. we’re guess, X the on million mentioned whatever want to from kind it. volumes seeing

Ryan Spencer

-- be with line have I will that in periods future demand. fully expect will

inventory drastically sales. on trailing -- excessive I drop it up ended was have issue so we to that the somewhat on demand saw think with to don’t based think we’re -- where hand that deal distributors’ that becoming I going

continue to end So, user gone. work out, on distributor as from levels. I demand will go we to back inventory normal expect here the that’s match

Donn Casale

case. And that is the is what

So, case. it’s currently the

Ryan Spencer

I mean, seeing what now. Yes. that’s we’re

Operator

you. Thank

with Our Please next White question ahead. line from the H.C. is go Ed of Wainwright.

Your line is now open.

Ed White

pandemic Ryan, thinking vaccines So, on update Phase mentioned how Michael. of for us COVID just then, mentioned lastly, about in you sales the administrative should you begin press -- you to be and just -- were bit there. additional to maybe in referring give question the that the reduction. see And, briefly that other an Thank And wanted of X a the are to flu. outside costs little the year and more strategic headcount we’ll And just universal pertussis, force Maybe, a headcount that you due get opportunities, for lower a XXXX you opportunities how flu? about was other you or and last COVID thinking headcount? XXXX? any on about Is can from couple if was But, then, outside you. for we release Do going when forward? think, in of

Ryan Spencer

to year. was in year pertussis. next So, Ed, advance plan The your regarding early Phase early X a into study pertussis is next first in -- question the by

that the early early steps. being we to stage year. But next We see we’re in work, our to impacting and understanding looking be that profile animal preclinical able the colonization something clinic product important developing, aside, early be and is understanding in trial work influence it have will in noted milestones that which next relates exactly now planning are right we’re as will the are work. we But, for our the to pertussis completing updates the what with animal on just colonization stage that --

more as little bit far a this other As is complex. vaccines,

have obviously response. and the energy We into been lot putting time coronavirus a of

to you see from should able on And other of so, similar collaborations vaccines a types us approach identify. to time dependent that we’re over to what is different expect the

has you that perspective an the we’ve to seen we’ve target a from for been for elderly mean, product. could elderly where or adjuvanted a areas an enhanced seeing population flu, Pertussis, vaccines there’s population. number possibly sort I mentioned already. are of seasonal an area even So, the like of RSV those envision obvious that’s,

there. I a from be reasonable by even that vaccine the launched would recently something expect I target adjuvanted RSV program So, there an product. but for think adjuvanted improvements is you see shingles some GSK And could could as an

move the forward into for that I’m think can rapidly, adjuvanted how be we highlighting advanced. will to just about So, these way of you collaborations aren’t promises areas but

more provide those we’ll COVID-XX focus So, some the beyond But, think think we flu things you the of areas kinds pertussis. year strategic should move about. as into are details I next around of and

Michael Ostrach

that And difference be difference And And people. count XX% vacancies, the overall a so, given in just we’ve -- activities normal is or about frankly, as we difference, head a try other expenditures. up to result to careful It’s nothing COVID, new very This hires with of tried directed tighten SG&A? and headcount it commercial XX% of than it’s briefly, has fluctuations. to sprinkling do not to possible or our there replacing than variation. -- other

Operator

Thank you.

further time. this the no would to CEO, closing have I We like at Spencer, questions to remarks. over for Ryan now call turn

go may You ahead.

Ryan Spencer

adjuvants everyone, adjuvants We multiple XXXX or all as including effective or critical advanced of solution with you, play the development these components but new the for of data seen for chronic discussed we on promising and those find weakened populations. a immune elderly vaccines. vaccines through for critical Thank for improving recent effective conditions. the With immune the patient COVID-XX the often war all potential is systems, believe win essential populations, vaccines about be To particularly CpG gets for HEPLISAV-B, protect with a is lost the of been not such response protection as what those have whether of must all to COVID-XX, of such reduction vaccination a the to hardest role with as required ensure shown doses in to operator. people,

are for effective Advanced as this ensure well-positioned adjuvants, vaccines. supply there’s Additionally, need. public adequate we CpG to health must address such XXXX

While the sales. believe U.S. forward to soon. vaccine priority, with growth the the us of of also may speaking again adult fight a million to will with an we today. currently overall which standard again HEPLISAV-B through key will opportunity end time HEPLISAV-B the call. COVID-XX in the care our sales, net your forward against continue We Operator, exceeding business we for look $XXX is in drive you market you Thank become spending

Operator

thank call. That for and gentlemen. that and disconnect participation ladies you you, today’s conclude ask your your We you Thank lines. I please does

Dynavax Technologies (DVAX) 6 Aug 202020 Q2 Earnings call transcript