Dynavax at Barclays Healthcare: Strategic Growth and Market Expansion

On Tuesday, 11 March 2025, Dynavax Technologies Corporation (NASDAQ: DVAX) presented at the Barclays 27th Annual Global Healthcare Conference, discussing its robust financial performance and strategic plans for future growth. CEO Ryan Spencer highlighted the company’s strong revenue growth, while addressing potential market challenges and opportunities for expansion.

Key Takeaways

• Dynavax reported $268 million in total revenue for Q4, with significant contributions from HEPLISAV B.
• The company projects product revenue of $305 million to $325 million for 2025.
• Dynavax aims to capture over 60% of the hepatitis B vaccine market by 2030.
• A $200 million share repurchase program is underway, with $100 million already accounted for.
• The company is advancing its shingles vaccine program, with data expected in Q3.

Financial Results

• Q4 Revenue: Dynavax reported $268 million in total revenue, driven by HEPLISAV B.
• 2025 Projections: The company forecasts product revenue between $305 million and $325 million, with an adjusted EBITDA of $75 million.
• Market Expansion: The hepatitis B vaccine market is expected to reach $900 million by 2030, with Dynavax targeting a 60% market share.
• Balance Sheet: Dynavax ended the year with $714 million in cash.
• Share Repurchase: A $200 million share repurchase program has begun, with $100 million already reflected in the balance sheet.

Operational Updates

• HEPLISAV B Strategy: Focuses on retail pharmacies and integrated delivery networks (IDNs), which are expected to make up 70% of the adult hepatitis B vaccine market by 2030.
• Market Share Goal: Aims for over 60% market share in the hepatitis B vaccine sector.
• Medicare and IDNs: Benefits from Medicare’s inclusion of hepatitis B in roster billing for retail pharmacies and the addition of Hep D as a HEDIS measure.
• Pipeline Development: Progresses with the shingles vaccine program, with Phase 1/2 trial data anticipated in Q3, and continues the plague vaccine program with a $30 million Department of Defense contract.

Future Outlook

• HEPLISAV B Growth: Targets the vaccination of 130 million unvaccinated adults aged 18-60.
• Shingles Vaccine Program: Aims to improve tolerability compared to existing vaccines, with further development informed by upcoming trial data.
• Capital Allocation: Prioritizes HEPLISAV, organic R&D, share buyback completion, and inorganic opportunities in late-stage infectious disease assets.

Q&A Highlights

• Vaccine Perceptions: CEO Ryan Spencer addressed concerns about vaccine sentiment, emphasizing the importance of hepatitis B prevention.
• Hemodialysis Label Expansion: Plans to update HEPLISAV’s label for the hemodialysis population using real-world evidence.
• Shingles Vaccine Data: Focuses on immunogenicity and tolerability, with CD4 positive T cell responses as a key efficacy indicator.
• Business Development: Seeks late-stage infectious disease assets that align with Dynavax’s commercial and manufacturing strengths.

In conclusion, Dynavax is poised for significant growth with strategic initiatives and robust financial health. For more details, refer to the full transcript below.

Full transcript - Barclays 27th Annual Global Healthcare Conference:

Balaji Prasad, Senior Analyst, Barclays: Good morning, everyone. Thanks for joining us for the next session of the Barclays Health Care Conference on the SPECT Pharma track. My name is Balaji Prasad. I’m the Senior Analyst for the Specialty Pharmaceutical Sector. And I’m delighted to have with us Ryan Spencer, the CEO of Dynavax with us.

Ryan, thank you so much for joining us and welcome to the conference. Thank you very much for having me. Yes. So, Ryan, you recently reported Q4 results and can you maybe just as a prelude to our discussions, can you walk us through the key points and highlights and what’s been the focus of these results, especially from an investor perspective? And what will how to dig into some

Ryan Spencer, CEO, Dynavax: of these? Sure. So, yes, we again, thank you for having us at your conference. I appreciate the chance to talk. We recently reported our Q4 earnings or full year earnings where we had again demonstrated really solid top line revenue growth reporting two sixty eight million dollars of total revenue and product revenue for HEPLISAV B, which is another year of great progress.

As part of this long term view of the world, we’re really excited about the opportunity to continue to focus on our mission to help protect the world against infectious diseases through our novel adjuvant technology, which is the backbone for our emerging pipeline. So in addition to our product revenue for HEPLISAV, we’ve also shared continued focus on growth with projection of overall revenue for next year for product revenue of $3.00 $5,000,000 to $325,000,000 as well as continued growth and demonstrated $75,000,000 of adjusted EBITDA for 2025. So pretty excited for not only our earnings and progress in Q4, but what we have looking forward into ’twenty five.

Balaji Prasad, Senior Analyst, Barclays: Great. Thank you for that, Ryan. And as you think about your mission to protect the population, I do want to take that and discuss a broader level overarching question around vaccines, companies and all. And clearly, there have been some issues that have been weighing on the vaccine space in general. So I’d love to get your thoughts around the new administration, its policies on vaccines and how do you see the risk to vaccine recommendations, if any, to development, to public perception of vaccines.

So kind of touching on a lot of things there, but I think important to address that.

Ryan Spencer, CEO, Dynavax: Yes. It’s a common question. I think it’s top of mind to everybody. The reality is we can only focus on the things that we know and what we know. And I probably should have mentioned in opening remarks, our core asset or our lead asset is an adult hepatitis B vaccine.

And we know that there’s no cure for hepatitis B, but you can’t prevent it with effective vaccination. We know that vaccines are one of the biggest and most valuable medical advancements for prevention in human history really. We also are very confident in the data that we generated to support our approval. We know the importance of eliminating hepatitis B as a public health threat and we believe all of these things will continue to support our progress against our goals. And so with that, we’re pretty confident around the value of vaccines in general as well as specifically how excited we are to continue to grow and penetrate the adult market with our adult hepatitis B vaccine.

Balaji Prasad, Senior Analyst, Barclays: Got it. And do you think that you’ll need to articulate this message or the company needs to get the message out there and if you’re doing anything towards that?

Ryan Spencer, CEO, Dynavax: Yes, we can I mean, constantly? I mean, we have executed very well commercially and we continue to drive the market growth, which we’ve been doing since the ACIP approved the broad recommendation back in 2022. So continued penetration of market share as well as driving the growth and independent of administration changes, we don’t see that trajectory changing.

Balaji Prasad, Senior Analyst, Barclays: Got it. Maybe touching upon the core asset, Iplacao. So clearly, it’s done very well over the last few years. And you recently mentioned that you expect the market, the hepatitis B vaccines market to continue to expand to a peak of 900,000,000 by 02/1930. And within that, of course, HEPLISAV would have at least 60% of market share over the time.

So help us better understand the key dynamics driving this expansion and also your own confidence in reaching this goal of 60% market share within this growing market?

Ryan Spencer, CEO, Dynavax: Yes. Well, we’re pretty confident. The items that are driving it really, it starts with the ACIP recommended that all adults who have not been previously vaccinated should get vaccinated against hep B. This is back in 2022. This is eighteen to sixty year olds as well as a permissive recommendation for those 60 with risk factors.

That fundamentally changed the hepatitis B market. And that’s the opportunity for growth. As you noted, our long term guidance is over $900,000,000 by 02/1930, and we believe we can achieve a 60 over 60% market share in that setting. So the key drivers of that growth really are two major main market segments, which is the retail pharmacy, which has seen significant growth for our product, but for its capabilities overall since the pandemic, as well as integrated delivery networks where we see continued consolidation of healthcare services. So those two markets we believe are the main growth drivers given the institutional nature and the systems they have available to continue to identify patients that are appropriate for vaccination.

We believe those markets will continue to grow and ultimately by 02/1930 be approximately seventy percent of the overall adult hepatitis B vaccine market. So the fact that we’re able to target those markets very efficiently and effectively with our field sales team as well as like I said, the supportive recommendation by the ACIP gives us confidence that we can drive the growth as well as continue to drive that meaningful market share growth.

Balaji Prasad, Senior Analyst, Barclays: Got it. And for those not familiar with the narrative, can you help us understand how YDNs or delivery networks help you achieve that goal? And what do you need to do to tap into the potential there?

Ryan Spencer, CEO, Dynavax: Yes. Well, one, so again, IDN versus retail pharmacy, integrated delivery networks operate with a lot of there’s a lot of systems overarching that versus independent clinics. Independent clinics also, if it’s a very large clinic, it could be a call point, but the reality is the majority of large clinics are part of the integrated delivery networks. And so it provides an opportunity for us to leverage system level information sharing and organization to help again, like I said, identify appropriate patients, whether it’s through effective utilization of electronic medical records or health systems that can influence care all the way down to the provider level, formulary decisions, appropriate contracting and things like that to allow us to really leverage the institution and the one control where available, but also the institution’s ability to share knowledge down to their providers. And so we believe that’s a critical piece to help drive this growth.

Balaji Prasad, Senior Analyst, Barclays: Got it. Maybe on the market itself, can you remind us what proportion of the key eligible populations within these adult segments are waxed already? And as we discussed about these longer term goals, how much market penetration are you assuming in these

Ryan Spencer, CEO, Dynavax: long term guidance? Adult hep B is relatively low vaccine coverage rate, given the prior recommendation was a risk based recommendation. So we are seeing expansion of those coverage rates. But the reality is there’s about 130,000,000 adults that were recommended for vaccination that were not previously vaccinated out of the adult market. And that’s in that 18 60 year old bucket.

So there’s even more when you go 60. So it’s a pretty large number of people that need to still be vaccinated. It’s one of the highest recommended largest recommended population in the adult vaccine market kind of behind flu and COVID, but higher than even pneumococcal given the relatively low vaccine coverage rates. So we look at analog products to project reasonable coverage rates that support our long term projections. Again, we’re pretty confident that we’ll have we have the right dynamics in place to drive those long term projections.

Notably, just this year actually, Medicare added hepatitis B to roster billing for retail pharmacies. So now Medicare patients can receive hepatitis B vaccine in the retail setting just like they can for pneumococcal and flu. Previously prior to January 1 that was not paid for by Medicare. TWINRIX was utilized in that setting and that was reimbursed under pharmacy services. But now all monovalent adult hep B products can be utilized there as well, which provides a great opportunity for Dynavax to leverage its capabilities and infrastructure to drive utilization in that setting for Medicare patients.

And then additionally, recently, hep D was added as a HEDIS measure, which is very important for overall IDNs. So HEDIS is a nationally recognized quality measure. Many IDNs build process and protocols around these quality measures to demonstrate appropriate care for their patients. And so we see that as another lever, basically highlighting the importance of hep B prevention to these systems. So this all kind of helps us build our confidence around being able to penetrate that large unvaccinated population.

Balaji Prasad, Senior Analyst, Barclays: Got it. Maybe a final question around those. I think you recently mentioned that you received FDA feedback regarding your potential to conduct a real world evidence study to support SBLA on file. So can you walk us through the journey for this expansion up until now? And what are the next steps?

And how significant would an expansion of the hemodialysis segment be?

Ryan Spencer, CEO, Dynavax: Sure. So as we had ran a clinical trial in this population and submitted it to the agency for to kind of update our label for the hemodialysis population using a four dose regimen of HEPLISAV. We received the CRL on that initial filing and have been working with the agency since to respond with our goal is to run a retrospective study. There has been utilization of HEPLISAV in the dialysis segment utilizing a four dose regimen. And this provides a unique opportunity to look at real world evidence comparing patients’ populations prior to adopting HEPLISAV and post adoption.

And so we’re working with the agency on the suitability of that database to generate a clinical retrospective trial that would be label enabling. So right now, we’re in the process of working with the agency on that to make sure the database is suitable and that we can align on a protocol that would achieve our goal of getting this important information into our label. There is already utilization, as I mentioned, in dialysis that we don’t actively promote to that segment, but they can choose to use the product. And we do expect with the label update, we will continue to be able to expand market share in that important setting.

Balaji Prasad, Senior Analyst, Barclays: Got it. Shifting towards the pipeline side of things, I mean, a couple of programs there, the shingles vaccine. To ’25. Help us understand the opportunity for this program and how excited are you about it?

Ryan Spencer, CEO, Dynavax: Yes. It’s a great opportunity. So currently, shingles product is a multibillion dollar market with one real player globally. So we see this as a very unique opportunity. The value in the product that’s on the market is basically an adjuvant and a protein, which is very a very reasonable approach for us given that our core technology is an adjuvant.

One of the hallmarks of our adjuvant is very favorable tolerability across all the clinical trials that we’ve conducted, evidenced by HEPLISAV even. We wouldn’t have the success we have with HEPLISAV if the product was very reactogenic. And so we believe there’s a great opportunity to improve on the existing vaccine, which has a fairly reactogenic profile driving high levels of adverse local and systemic adverse events. And so, ultimately, we believe there’s an opportunity to have a product that can improve the tolerability profile, meet the current product where it is on efficacy to really make an impact on this patient population.

Balaji Prasad, Senior Analyst, Barclays: Understood. So when we see the top line data towards in the second half of this year and if the data looks supportive of a commercially differentiated profile, so how quickly can you advance this to a late stage? And from there, how long would development take place for B2C this is a commercial launch?

Ryan Spencer, CEO, Dynavax: Right. So where we are right now is we conducted a Phase one study a couple years ago. We’re doing a Phase onetwo now to select the final adjuvant formulation as well as the concentration of antigen in the product. So, that trial we noted will read out in Q3, the first part of that trial. And so once we have that information that will actually unlock further development for our 70 old plus extension study as well as an opportunity to engage with regulators and business development partners to determine the with regulators the long term plan and the final clinical trial design.

And the data from the 70 plus extension study will be a great it’s a Phase II extension essentially using the finalized dosing regimen. So that’s really the key next step in the

Balaji Prasad, Senior Analyst, Barclays: program. Got it. And what do you expect to see in the top line that will potentially help you position this as a possible best in class product?

Ryan Spencer, CEO, Dynavax: Yes. So we believe the key there is no correlate. So this is an important element. We’re running immunogenicity study. There’s no correlate for efficacy like we had with HEPLISAV.

So the proof of concept study that we’re running now is really focused on immunogenicity, and as well as the tolerability profile. So what we’ll be looking at we’ve already demonstrated a fairly very tolerable profile in our last study, as well as good immunogenicity. But what we’ll be looking at in this study is both antibody responses and CD4 positive T cell responses. We believe the CD4 positive T cell responses are critical to demonstrating likelihood of efficacy and having the Shingrix product as a head to head comparison in the study will be very helpful.

Balaji Prasad, Senior Analyst, Barclays: Got it. We’ll look forward to it. Maybe shifting from shingles towards the plague vaccine program, Walk us through the opportunity for this program and the recent developments, what are the recent developments been and more importantly upcoming key upcoming milestones for this?

Ryan Spencer, CEO, Dynavax: So the Plague program is a program that’s fully partnered with the Department of Defense to develop an improved really plague vaccine using our adjuvant. The concept for this program would be to support stockpile for Department of Defense to protect against a bio threat for pneumonic plague basically. And so if we can develop a vaccine that would protect our troops that would be very useful in certain scenarios. We’ve conducted a Phase II study previously and based on some of the data that we had there, the DoD decided to extend the program to conduct another Phase II study. So, we’ll be working on that.

And that actually came with a $30,000,000 contract that runs we signed at the very end of last year and it runs until the first part of twenty twenty seven.

Balaji Prasad, Senior Analyst, Barclays: Got it. Maybe a quick some comments around the balance sheet side of things and your capital allocation. So remind us currently of your balance sheet strength. And also, I know that you recently started a $200,000,000 share repurchase program in number. So, how is the program likely to evolve in 2025?

And what are your goals with this capital allocation program?

Ryan Spencer, CEO, Dynavax: Yes. So the balance sheet, we ended the year at $714,000,000 You already noted the $200,000,000 share buyback, which that the end of year number actually included in the first one hundred million dollars of that share buyback. So that was already accounted for there. And so the balance sheet is very healthy. Our capital allocation strategy continues to be one that’s balanced focused first on HEPLISAV, making sure we’re allocating appropriate capital and focusing attention to that key asset.

Next, our organic R and D pipeline, which as we already talked about is kind of led by our shingles advancement as well as some other plague and some other preclinical efforts. And then continuing to focus capital allocation on, again, as you noted, the share buyback completing the share buyback as well as supporting our pursuit for external inorganic opportunities to leverage our fully integrated commercial capabilities for late stage infectious disease assets. Got it. Maybe I’ll just pick

Balaji Prasad, Senior Analyst, Barclays: up on the last part of your capital allocation priority. So in terms of BD again, can you give us more color around the kind of assets that you’re looking for commercial or just close to commercial stage assets? What kind of areas? And what is your comfort level in terms of ticket size that you’re comfortable with? Sure.

Ryan Spencer, CEO, Dynavax: So, I mean, like I’ve said before, I think we’ve been pretty clear about. We believe that the company has demonstrated significant capability from a commercial execution and strategy perspective. Additionally, we have a fully integrated organization around regulatory, clinical development. We manufacture our own products, so high quality manufacturing, consistent high quality manufacturing. And this all plays into demonstrating our late stage capabilities on the back of a commercial company platform.

And so we believe that provides an opportunity for us to leverage that with again a focus on late stage assets in the infectious disease area. Obviously, adult vaccines is ideal. Sure. And we but we also recognize that what we’ve demonstrated and learned as from our experience with HEPLISAV can be applied to other niche infectious disease opportunities as well. As far as price tag, I mean, that depends on the underlying asset to the extent it has any sort of execution risk in regulatory or clinical development.

That’s very different than an on market product depending on the current size of the product. So we really can’t comment on specifics, but we’ve always been fairly disciplined here. We have a very, very high bar for something that we would consider being accretive that makes sense for us. And so we’re judicious in how we approach those activities and those opportunities, recognizing that we’re very confident with the risk profile of the company currently and we want to strengthen that and not weaken it through excessively aggressive corporate development.

Balaji Prasad, Senior Analyst, Barclays: Great. I think we went through most of our questions there, Ryan, very helpful. Would you want to leave with some closing comments for us?

Ryan Spencer, CEO, Dynavax: Always, always. Any chance to add more. So I was pretty light on my opening comments, so I’ll be a little heavier on my closing comments. So obviously, the company has, in my view, has done a really good job growing into our vaccine focus. The way we the current activities to leverage our adjuvants with very reasonable and valuable R and D efforts, our balanced capital allocation strategy continuing to run this organization with tremendous financial discipline, while creating opportunities for long term growth beyond just what our current very successful and continuing to grow asset in EPOSAT is.

We really feel confident that the company is well positioned to run this balanced approach to growing our business inorganically and organically. I think we’re capitalized to do it. I think the team is built and ready to go. So it’s a pretty exciting time for Dynavax. I see 2025 as being a transformational year for us.

So thank you for giving us a chance to share our story.

Balaji Prasad, Senior Analyst, Barclays: Of course, fantastic. Thank you for attending our conference and I wish you a very productive conference, Ryan. So you are hearing more of your progress. Thank you.

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