Earnings call transcript: Dynavax reports strong Q3 2025 earnings beat

Dynavax Technologies Corporation (DVAX) reported robust third-quarter earnings for 2025, significantly exceeding analysts’ expectations. The company announced an earnings per share (EPS) of $0.21, surpassing the forecasted $0.13 by 61.54%. Revenue reached $94.9 million, slightly above the anticipated $94.41 million. Following the earnings release, Dynavax’s stock rose by 2.49% in aftermarket trading, reflecting investor optimism. This performance continues the company’s strong revenue growth trend, which InvestingPro data shows reached 26.7% over the last twelve months, with a remarkable 5-year CAGR of 51%.

Key Takeaways

• Dynavax’s EPS exceeded expectations by 61.54%.
• Revenue increased by 18% year-over-year, reaching $95 million.
• The company’s stock price increased by 2.49% in aftermarket trading.
• Heplisav-B’s market share grew to 46%, with significant gains in the retail sector.
• Dynavax raised its full-year adjusted EBITDA guidance to at least $80 million.

Company Performance

Dynavax demonstrated strong performance in Q3 2025, with a notable 18% increase in total revenue compared to the same period last year. The company’s flagship product, Heplisav-B, continues to capture market share, particularly in the retail segment. This growth is set against a backdrop of a competitive U.S. adult hepatitis B vaccine market, where Dynavax aims to expand its market dominance.

Financial Highlights

• Revenue: $95 million, up 18% year-over-year.
• Net product revenue: $90 million, a 13% increase from Q3 2024.
• GAAP net income: $27 million, compared to $18 million in Q3 2024.
• Non-GAAP adjusted EBITDA: $36 million, up from $25 million in the previous year.
• Cash and equivalents: $648 million.

Earnings vs. Forecast

Dynavax achieved an EPS of $0.21, significantly higher than the forecasted $0.13, marking a 61.54% surprise. Revenue also slightly surpassed expectations, reaching $94.9 million compared to the forecast of $94.41 million. This positive earnings surprise is a continuation of the company’s trend of outperforming market predictions, driven largely by the success of Heplisav-B.

Market Reaction

Following the earnings announcement, Dynavax’s stock price rose by 2.49% in aftermarket trading, closing at $10.07. This movement reflects investor confidence in the company’s financial health and growth prospects. The stock’s performance remains within its 52-week range, between $9.20 and $14.63, indicating room for further growth.

Outlook & Guidance

Dynavax has raised its full-year 2025 adjusted EBITDA guidance to at least $80 million. The company expects Heplisav-B net product revenue to reach between $315 million and $325 million by year-end. Looking ahead, Dynavax is poised to achieve key pipeline milestones in the second half of 2026, with potential expansions in its COVID-19 and shingles vaccine programs.

Executive Commentary

"We are excited about the continued strength of Heplisav-B, coupled with our advancing pipeline with key upcoming milestones in the second half of 2026," stated Kelly MacDonald, CFO. CEO Ryan Spencer added, "We believe this data set is an important milestone and will provide the opportunity to explore strategic partnerships to realize the global value of this vaccine candidate."

Risks and Challenges

• Supply chain disruptions could impact production and distribution timelines.
• Market saturation in the hepatitis B vaccine segment may limit growth.
• Regulatory hurdles for new product approvals could delay market entry.
• Economic fluctuations could affect healthcare spending and vaccine uptake.
• Increased competition from emerging biotech firms could impact market share.

Q&A

During the earnings call, analysts inquired about Dynavax’s licensing strategy for the Vaxart COVID-19 vaccine and the potential for registrational studies for shingles and COVID-19 vaccines. Executives also addressed the seasonality impacts on Heplisav-B sales, providing insights into the company’s strategic planning and market positioning.

Full transcript - Dynavax Technologies Corporation (DVAX) Q3 2025:

Conference Call Operator: Good day, ladies and gentlemen, and welcome to the Dynavax Technologies Third Quarter 2025 Financial Results Conference call. As a reminder, this call is being recorded. At the end of the company’s prepared remarks, we will open the call for questions and provide specific participation instructions at that time. I would now like to turn the call over to Paul Cox, Vice President, Investor Relations and Corporate Communications. You may begin.

Paul Cox, Vice President, Investor Relations and Corporate Communications, Dynavax Technologies: Thank you for participating in today’s call. Joining me from Dynavax are Ryan Spencer, Chief Executive Officer; Don Casale, Chief Commercial Officer; Rob Janssen, Chief Medical Officer; and Kelly MacDonald, our Chief Financial Officer. Earlier today, Dynavax released financial results for the third quarter ended September 30, 2025. Copies of the press release and a supplementary slide presentation are available on Dynavax’s website. Before we begin, I advise you that we will be making forward-looking statements today based on our current expectations and beliefs, including but not limited to potential market sizes, market segmentation, effective marketing efforts, future expected market share and related growth rates, and related ACIP recommendation impact on each, financial guidance and trends, including revenue, profitability, cash flow, and sufficiency of current capitalization.

Timing and results of FDA submissions, clinical trial starts and data readouts, potential future uses of or demand for our CpG-1018 adjuvant, success of our strategic arrangements, including our license agreement with Vaxart, and anticipated benefits of our capital allocation strategy in general, including our share repurchase program. Our earnings press release in this call will include discussion of certain non-GAAP information. You can find our earnings press release, including relevant non-GAAP reconciliations, on the investor section of our corporate website at dynavax.com. With that, I will now turn the call over to Ryan.

Ryan Spencer, Chief Executive Officer, Dynavax Technologies: Thanks, Paul, and thank you all for joining us this afternoon. I’m excited to review the progress and accomplishments that we’ve made this quarter. We’ve executed across all areas of our business, including driving another quarter of top-line growth and market share expansion for Heplisav-B, advancing and creating momentum across multiple programs in our clinical stage pipeline, the execution of a strategic deal to access a phase 2b COVID-19 oral vaccine candidate from Vaxart, adding another near-term clinical catalyst in an area of high unmet need to our pipeline, and lastly, the authorization of a new $100 million share repurchase plan in connection with further clarity on our corporate progress and capital needs. This progress is underpinned by our continued commercial execution with $90 million.

In net product revenue this quarter from Heplisav-B, representing a 13% increase year over year while also further strengthening its leading market share position in the U.S. adult hepatitis B vaccine market. Heplisav-B remains a key focus for the organization, and we are excited to continue to grow the brand, and we remain on track to achieve our long-term goal of at least 60% total market share in the U.S. by 2030. We’ve made meaningful progress this quarter, advancing our internal pipeline candidates towards key value-inflecting milestones. We are excited to progress our shingles vaccine program into Part 2 of the phase 1-2 study focused on adults aged 70 years and older, which recently began enrolling and dosing. We look forward to sharing top-line immunogenicity and safety results from Part 2 and the 12-month follow-up data from Part 1 in the second half of 2026.

We believe this data set is an important milestone and will provide the opportunity to explore strategic partnerships to realize the global value of this vaccine candidate. In addition to shingles, we’ve made continued advancements across the rest of our pipeline, including a new Department of Defense award for our plague vaccine candidate and the completion of Part 1 of our phase 1-2 study in pandemic flu. Rob will discuss the pipeline update in more detail later on in the call. Beyond our operational success, we are also strategically deploying capital to expand our long-term growth opportunities. Earlier today, we announced an exclusive license agreement for Vaxart’s novel oral COVID-19 vaccine program. The program has enrolled over 5,400 subjects and is currently in an ongoing phase 2b safety and efficacy study comparing the vaccine candidate to an FDA-approved mRNA vaccine.

COVID-19 remains a significant and ongoing public health challenge in the United States, causing widespread severe illness, hundreds of thousands of hospitalizations, and tens of thousands of deaths each year. Despite the availability of vaccines, millions of adults at increased risk of severe disease remain unprotected, underscoring the continued need for innovation and better options for COVID-19 prevention. We’re excited to work with Vaxart to advance this potentially transformative vaccine candidate. The Vaxart oral COVID-19 vaccine candidate has the potential to provide improved protection through intestinal delivery, providing both systemic and mucosal immunity through a differentiated mechanism of action compared to the currently available vaccines. The head-to-head study is designed to show improvement over an existing mRNA vaccine, providing meaningful data to support disruption of the current vaccine market if successful.

This transaction brings a novel vaccine program with high potential upside into our pipeline that will fully leverage our experience in late-stage development and commercialization. Importantly, the deal was structured to provide clear de-risking steps before significant future spend on phase 3 development. Vaxart will continue to run the ongoing study, and we will have the right, but not the obligation, to proceed with development following our review of the phase 2b data and end-of-phase 2 regulatory feedback. Vaxart expects top-line data to be available by the end of 2026, with the end-of-phase 2 meeting occurring thereafter. In addition to deploying capital to support long-term growth opportunities, we also plan to return capital to shareholders through a new $100 million share repurchase program, reflecting our confidence in the company’s long-term growth and commitment to enhancing shareholder value. I’m very pleased with how we are executing on our strategic initiatives.

2025 continues to be a banner year for Dynavax, and we are excited about how we are setting up 2026 and beyond to drive long-term shareholder value through the strength of our base business and multiple opportunities in our pipeline. Now, I’d like to turn the call over to Don.

Don Casale, Chief Commercial Officer, Dynavax Technologies: Thank you, Ryan. I’m excited to walk you through Heplisav-B’s strong commercial performance and continued progress during the third quarter. The adult hepatitis B market continues to expand under the ACIP universal recommendation, supported by a large catch-up cohort of more than 100 million unprotected adults. We believe Heplisav-B is uniquely positioned to capture this growth, driven by its differentiated clinical profile and our proven track record of commercial execution. Over the third quarter, Heplisav-B generated approximately $90 million in net product revenue. Our estimated U.S. adult hepatitis B vaccine market share reached 46%, up from 44% in the prior year period. Within the retail segment, market share grew to 63%, compared with 59% in Q3 last year, highlighting continued expansion in this critical growth segment.

On a trailing 12-month basis, Heplisav-B achieved 45% total market share, including 59% in retail and 51% in the IDN segment. During the quarter, we continue to see strong progress across our two prioritized segments: retail and IDN. As we’ve shared previously, we expect retail to become the dominant channel for adult hepatitis B vaccination by 2030, representing at least half of all doses administered. Vaccines remain a strategic priority for our retail partners, who continue to expand their immunization infrastructure and capabilities to reach more adults and drive growth in adult vaccination. In parallel, we’ve increased our marketing investments and field sales team support to drive greater provider awareness and consumer activation. Together, these efforts position Heplisav-B for continued growth and further market share gains in this critical segment.

Across IDNs, adoption remains steady as Heplisav-B continues to become embedded within preventative care and employee health programs. With continued disciplined execution and the benefit of the universal adult recommendation, we anticipate consistent recurring volume and steady share gains in this segment. Looking ahead, we’re encouraged by the momentum underway, particularly in the retail segment. Retail chains continue to leverage flu visits to recommend adult immunizations, including hepatitis B. The later start and potentially extended flu season this year creates additional opportunities to identify more adults eligible for Heplisav-B. Supported by increased retail utilization and ongoing institutional demand, we anticipate a strong close to the year and remain confident in achieving our full-year 2025 guidance. Our performance continues to track with our long-term outlook for Heplisav-B, and we expect the overall market to peak at more than $900 million in the U.S.

by 2030, with Heplisav-B achieving at least 60% market share. This long-term view reflects our expectation of double-digit annual growth in net product sales through 2030, supported by expanding retail adoption, sustained IDN performance, and growing awareness of the ACIP universal recommendation. In summary, the third quarter demonstrated the strength of our commercial strategy and execution, delivering $90 million in net product revenue and 46% share in total market, our highest market share to date. I want to thank the entire commercial team and the broader Dynavax organization for their continued focus, commitment, and execution. These results demonstrate that our plan is working and that we are well-positioned to drive long-term growth. With that, I’ll turn the call over to Rob for a pipeline update.

Rob Janssen, Chief Medical Officer, Dynavax Technologies: Thank you, Don. We continue to make consistent progress across our pipeline portfolio, beginning with CpG 1018 for shingles. We recently had a late-breaker oral presentation at ID Week 2025. We presented the previously disclosed part 1 data from our CpG 1018 phase 1-2 clinical trial. In addition, we presented new data. It showed that CpG 1018 induced a high proportion of polyfunctional CD4-positive T cell responses exhibiting multiple gE-specific activation markers. These results, which were comparable to Shingrix, support the quality and breadth of the CpG 1018 cellular immune response. Also, we’re pleased to report that we’ve initiated part 2 of the study in adults 70 years of age and older, a key patient population that’s at the highest risk for shingles. We anticipate reporting top-line part 1 long-term follow-up results and part 2 immunogenicity and safety data in the second half of 2026.

Beyond shingles, our plague vaccine program, which is fully funded by the Department of Defense, is progressing. We were awarded $14 million of additional funding to support non-human primate studies. We also initiated and completed enrollment in Part 1 of the ongoing phase 2 trial. Now, additionally, we recently completed Part 1 of the pandemic influenza adjuvant program’s phase 1-2 study. Based on data from Part 1 that demonstrated high levels of seroconversion and seroprotection at multiple dose levels and regimens, we’re advancing selected optimal formulations of flu antigens and CpG 1018 to advance to Part 2 of the phase 1-2 trial. We expect top-line immunogenicity and safety data in 2026. Lastly, with regard to our supplemental BLA for Heplisav-B in adults on hemodialysis, we’ve continued to engage the FDA to finalize the study protocol needed to support the SBLA filing.

We will provide an update once a conclusion has been reached. I’ll now turn the call over to Kelly for a review of our financial results.

Kelly MacDonald, Chief Financial Officer, Dynavax Technologies: Thank you, Rob. Before I get started, a reminder to please refer to our press release and Form 10-Q filed earlier today for more detailed financial information and for a full reconciliation of GAAP to non-GAAP results and accompanying disclosure. As others have highlighted, Dynavax delivered another strong quarter, reflecting sound execution across all aspects of our business. We continued to drive commercial growth, advance our pipeline, manage expenses with discipline, execute against our financial guidance, and strategically deploy capital to expand our late-stage pipeline, all while maintaining a strong balance sheet. We are pleased with the momentum of Heplisav-B, with quarterly net sales of approximately $90 million, up 13% year over year, and approximately $95 million in total revenues, up 18% year over year.

Additionally, Heplisav-B gross margin was 84% and in line with our expectation for Heplisav-B gross margin in the low 80% for the year. Turning to expenses, quarterly R&D expense was $19 million, up from $14 million in the third quarter last year, reflecting pipeline advancement, most notably our shingles program and our DOD-funded plague program, as Rob highlighted. Looking forward, we expect R&D expenses to steadily increase through 2026 in connection with the advancement of our mid to late-stage clinical assets, inclusive of our recent deal with Vaxart. These anticipated increases in investment are aligned with our expectation to deliver critical value inflection catalysts in the second half of 2026. Transitioning to SG&A expenses, we deploy a highly disciplined approach with approximately $40 million in quarterly expenses focused on high ROI investments that drive top-line growth and support our core business.

Accordingly, we reiterate our expectation for SG&A expenses to be consistent with prior year, excluding proxy contest-related costs incurred during the first half of this year. This prudent management of our SG&A line reflects our ongoing commitment to financial discipline as the organization matures. Moving to the bottom line, we had a GAAP net income of $27 million for the third quarter of 2025, compared to GAAP net income of $18 million in the third quarter of 2024. Additionally, non-GAAP adjusted EBITDA improved to $36 million for the third quarter, compared to $25 million in the third quarter of last year. Transitioning to the balance sheet, we ended the third quarter with cash and equivalents of $648 million, compared to $714 million at the end of 2024.

The decrease in our cash position was primarily driven by the successful execution of our previous $200 million share repurchase program, which was completed earlier this year and retired approximately 17 million shares. With continued clarity and advancement across all aspects of our business, I’m pleased to share that our board of directors authorized a new $100 million share repurchase program. Reinforcing our commitment to utilizing share repurchase tactics when we believe they are the best use of capital. We expect the program to be executed within the next 12 months, and it will bring our total capital return to shareholders to $300 million. For context, this cumulative capital return represents approximately 25% of our current market capitalization. We believe this balanced approach reflects our confidence in the company’s long-term growth and commitment to enhancing shareholder value.

Lastly, and in line with our stated strategy and commitment to deploying capital towards late-stage, highly synergistic assets, we entered into a strategic license agreement with Vaxart for its novel oral COVID-19 vaccine program. This agreement gives us the exclusive opportunity, but not the obligation, to add the oral vaccine program into our late-stage pipeline after seeing the phase 2b data readout anticipated in late 2026. As Ryan highlighted, we have structured this deal in a financially disciplined way, with $25 million upfront license payment and future license payments to be made only after results from the phase 2b data and regulatory feedback from a subsequent end-of-phase 2 meeting with the FDA.

If we elect to assume responsibility of the program after the phase 2b data package, Vaxart is eligible for an additional $50 million payment, as well as potential regulatory approval and commercial milestone payments and royalties on future net sales. Turning to our financial guidance for the full year 2025, we reiterate our expectations for Heplisav-B net product revenue to be in the range of $315-$325 million. We now expect to achieve adjusted EBITDA of at least $80 million for the year, excluding certain non-recurring expenses, Vaxart transaction-related expenses, and stock-based compensation, noting that this is an improvement compared to our prior guidance of adjusted EBITDA of at least $75 million. In closing, we are very excited about the continued strength of Heplisav-B, coupled with our advancing pipeline with key upcoming milestones in the second half of 2026.

From a capital allocation perspective, we are very pleased to authorize another share repurchase program and to deploy capital strategically towards our Vaxart license agreement for a highly novel late-stage COVID-19 adult vaccine candidate. We continue to believe in our balanced capital allocation strategy, investing in innovative growth opportunities while also returning capital to shareholders as appropriate. We believe this approach positions Dynavax to deliver long-term value and sustainable growth. Thank you, everyone, for your time. Operator, we would now like to open the Q&A portion of today’s call.

Conference Call Operator: Thank you. At this time, we will conduct the question-and-answer session. To ask a question, you will need to press Star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press Star 1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Matthew Phipps with William Blair. Your line is now open.

Matthew Phipps, Analyst, William Blair: Good afternoon. Thanks for taking my questions. I guess just, Ryan, curious why license a COVID vaccine today. Do you think success with an oral option can return the overall market to growth, particularly with more stringent recent labeling? Also, it looks like this trial was originally planned in all 10,000 patients. There was obviously some BARDA issues. I guess, what kind of powering is the trial having at 5,400 patients? Can you give us a sense of what you need to see to be confident in opting in? I mean, is this trying to see superiority or just similar efficacy, better tolerability? Just curious what it is you hope to achieve here.

Ryan Spencer, Chief Executive Officer, Dynavax Technologies: Sure, Matt. Thank you. Okay. Let’s just take those one at a time. Why now in this market? The reality is this is a very strategic opportunity for us. For a product that fits our capability very well. The market dynamics that you kind of highlighted too, I think sort of answer the other part of the question on what we need to see. I’ll get to that in a second. We do believe that an improved vaccine, both with delivery mechanisms but also with underlying efficacy, has the opportunity to help grow the market. There’s lots of room for market growth in COVID compared to other vaccines like flu that are given annually. We do believe there’s opportunities to grow that market over the long term with improved options.

As it relates to the study size, the power of the study was an important consideration. The reality is the study was originally powered with assumptions around the amount of disease that is seen annually. What we have seen through a number of sources and evidence is that the actual amount of disease is much higher than that, meaning that even though the study is now powered at 5,000 subjects or over 5,000 subjects, it is adequately powered to demonstrate an improvement over the comparator mRNA vaccine. Which is going to the final question, what would we like to see? We would like to see just that, that this is an improved option, leveraging the different MOA against the mRNA comparator. There is lots of room for improvement within COVID vaccines. We know now that current options wane very rapidly over the first six-month period.

We believe there is room for reduction of symptomatic infection as well as reduction of hospitalizations or severe disease over a longer period of time. We believe the novel mechanism of action and intestinal or mucosal delivery has a real opportunity of making a major difference that can help patients, but also transform the market.

Matthew Phipps, Analyst, William Blair: Thanks, Ryan. If I could ask one quick follow-up, by the end of next year now, you’ll have kind of full phase 2 data from the shingles program and this chance to opt into this. I guess, do you feel like you are in a position to be able to do registrational studies for both of these, for a shingles program and the oral COVID-19 pill, same time if it ends up both working out to move both forward? You guys have the capacity and everything to do that.

Ryan Spencer, Chief Executive Officer, Dynavax Technologies: Yes, we do, Matt. Obviously, they have different readouts of different natures, and there’s other elements of speed and timing as you move from phase 2 to phase 3. We will pay attention to the staging of those activities so that we can execute appropriately. We do believe that we both are capitalized and competent in that way, and we can manage the staging of the activities with required, obviously, organizational growth in order to execute those things. We believe we could or will be well-positioned to execute on all of our R&D initiatives.

Matthew Phipps, Analyst, William Blair: Okay. Thanks for taking my questions.

Ryan Spencer, Chief Executive Officer, Dynavax Technologies: Thank you.

Conference Call Operator: Thank you. Our next question comes from the line of Phil Nadeau with TD Cowen. Your line is now open.

Phil Nadeau, Analyst, TD Cowen: Good afternoon. Thanks for taking our questions. A couple from us. First, a follow-up to Matt’s question in terms of what you need to see to advance. It sounds like you’re saying you won’t opt in unless there is something superior about the oral vaccine versus the mRNA vaccine. So not inferior with oral delivery is not enough. Is that fair? Second, can you give us some sense of the cost of development for this program? Should you opt in, how much would that change your profitability profile? Last question is on Heplisav, actually, seasonality. It does seem like guidance is suggesting that there’ll be reduction in revenue in Q4 due to seasonality. Just want to get your thoughts on how dramatic the seasonality is that you’re seeing so far this year. Thanks.

Ryan Spencer, Chief Executive Officer, Dynavax Technologies: Great. Going back to what we need to see, the trial is designed to show an improvement head-to-head against an mRNA vaccine pill. I mean, that’s obviously what we’re focused on. There are also other measures beyond just symptomatic COVID-19 that would provide evidence of potential differences. We are going to have to look at the full data package, but the goal is to drive a better option forward. The secondary endpoints could be meaningful as well. The intention here is to have an improved product. That’s what our goal is. As it relates to the overall cost, Kelly, why do not you take that as far as helping provide some insight as to how we are thinking about this at this stage?

Sure. We would expect to have to run, for registrational purposes, a placebo-controlled efficacy study, as you would expect. That will come with a very reasonable and potentially pretty hefty price tag. However, as we reflect on our profitability profile with continued growth and progress in Heplisav-B and our stated intention to seek strategic partners to maximize the value of shingles, especially outside of the U.S., we look forward to continuing to manage our path to profitability despite having meaningful progress in phase 3 registrational studies to support the Vaxart candidate.

Don, would you mind handling Phil’s question on seasonality impact?

Paul Cox, Vice President, Investor Relations and Corporate Communications, Dynavax Technologies: Sure. Yeah, Phil, thanks for the question. I think regarding seasonality, I mean, you’re always going to have the holidays, right, as it relates to the fourth quarter. We have to put that into consideration. There’s always the holidays, which does slow down some demand. What we are seeing certainly, and I’ve communicated this in the past, is that vaccines and hepatitis B vaccine continue to become a priority in the retail segment. As we continue to move forward, we’re going to start to see, we believe, stronger fourth quarters as retail continues to grow and expand within adult immunizations, specifically hepatitis B. There’s always the holidays. I think from a standpoint, we will see some seasonality. You’ve probably seen some of that data already with some of the pullback.

I think, again, it’s going to be a quarter where, as Hep B grows and Heplisav-B grows in the retail segment, it will continue to smooth out.

Phil Nadeau, Analyst, TD Cowen: That’s very helpful. Thanks for taking our questions.

Ryan Spencer, Chief Executive Officer, Dynavax Technologies: Thanks, Phil.

Conference Call Operator: Thank you. Our next question comes from the line of Jonathan Miller with Evercore ISI. Your line is now open.

Jonathan Miller, Analyst, Evercore ISI: Hi, guys. Thanks for taking my questions. Congrats on the progress. I’ll start with the Vaxart deal as well. In their first-gen COVID vaccine, they did show a lot of mucosal IgA responses. I think that was part of the point of the oral vaccine for them. It did look like IgG responses were weak. We haven’t seen direct data that they’ve fixed this issue in the next-gen product, although they say that they’ve done that. What have you seen to suggest that you’re getting strong serum immunity as well as mucosal immunity? Do you expect to be seeing more durable serum immunity than mRNA in addition to durability on the mucosal side?

Ryan Spencer, Chief Executive Officer, Dynavax Technologies: Yeah. I won’t want to comment on any data that they’ve generated or haven’t generated or haven’t shared, John. I think your point or your question, we can comment on. They had their first-gen product. There’s also they’re using a second-gen construct here, which has demonstrated improved immunogenicity in their norovirus trial. We believe that’s a very meaningful improvement that will translate to COVID as well. This is a mucosally delivered vaccine that does have the unique benefit of both systemic and mucosal immunity, although it is not necessarily expected to generate the same level of systemic immunity in IgG, as you referred to, necessarily as injectable vaccines. I think the reality is you need to have the efficacy study for a product like this, which is why we think this is such a unique opportunity to opt into something of this nature.

Prior to having the efficacy studies, you do not have the right level of insight into how effective the mucosal approach will be. That cannot be measured until we have an efficacy study. There are no correlates or other measures that can help you understand that. I think ultimately, this is the trial we need, and we need to see how both of those things balance out in the efficacy result, which is why this is such an important study.

Jonathan Miller, Analyst, Evercore ISI: I guess just to follow up on an earlier question, you’re saying that you think the reduced study size is more than sufficient to show a benefit. I understand that. Can you speak to the reason the study was limited in terms of its size? There does seem to have been a BARDA issue. There was a stop work order given by the government. Given that it’s a government program, at least primarily historically, do you expect that that current shutdown and current attitude of the administration is going to cause issues for further development beyond the existing study?

Ryan Spencer, Chief Executive Officer, Dynavax Technologies: I think you’d have to go back to the Vaxart disclosures. It’d be a good thing to reference. The reduction in trial size was a blanket decision related to any trials using mRNA were stopped. As part of that, to follow up to your other question, and again, I would like to refer you to the Vaxart disclosures based on their communications with BARDA for the definitive answer here. To summarize, BARDA has been very clear that they are continuing to fund the patients that were enrolled in the study at that point of that decision to stop utilizing mRNA in clinical development. I think the reality is they continue to have that support from BARDA based on their public disclosures. We’re excited to see the results in these 5,400 people.

Like I said, while it started at 10,000, the amount of disease that’s seen, just seen overall, indicates that it would be well-powered at 5,400.

Jonathan Miller, Analyst, Evercore ISI: Understood. Thank you.

Conference Call Operator: Thank you. Our next question comes from the line of Karishma Raghuram with Goldman Sachs. Your line is now open.

Phil Nadeau, Analyst, TD Cowen: Oh, hi. It’s actually Paul Choi with Goldman Sachs. Thanks for taking the question. I want to ask on the Heplisav-B market outlook over the longer term. You guys are having nice performance in the IDN and retail channels, but your overall share has been relatively steady at 45%. You are targeting 60% share by 2030. Can you maybe tell us how confident you’re feeling on the achievability of that longer-term target and just sort of what are the, how do you bridge the difference between where you are currently and your longer-term aspirations? My second question is on the shingles side with CpG-1018. Have you started part two of the study there? Can you maybe just update us on where that stands? Thank you very much.

Ryan Spencer, Chief Executive Officer, Dynavax Technologies: Thanks, Paul. I’ll go backwards on that one. Shingles, yes, we started part two. We started enrolling and have dosed patients in that program. That happened during Q3 that we kicked off that part of the study. We look forward to providing those results in the second half of next year. As it relates to share, I’ll provide some high-level comments and see if, Don, you have other stat on. I think we have to kind of adjust the commentary that we’ve been stuck in that 45% range. We’ve been making progress every quarter. This quarter is 46%, which is up from the same quarter last year. That’s what should be expected on the path to 60%. It’s going to be a continued.

Progress between here and there, between the 46% we’re at now and making that progress quarter over quarter all the way to 2030. You should expect to see those couple percent increases year over year on the path to 60%. One of the reasons, and this is where we provided some additional insight in our slide deck on market share by segment, as well as our views on how the segments will evolve. We’re not shy about it. We believe we will continue to see growth in the retail setting, which is also the segment where we have our largest share and where we continue to expect to take additional share. Two things will drive our share increase to 60%: continuing to take additional share across all aspects of our business and volume moving to the segments of our business where we have the highest share.

Those two things together will underpin our confidence in driving 60% share by 2030. Don, any other comments?

Paul Cox, Vice President, Investor Relations and Corporate Communications, Dynavax Technologies: The only thing I’d add to that, Paul, is that the share we have been able to obtain up to this point for total market share, as well as specifically in retail, we reported 63% market share, are right in line with our expectations and kind of fit our model of how we achieve at least 60%, underpinned by what Ryan just mentioned around the shift to retail. We have a lot of momentum in retail. We continue to expect increases in market share within that segment and the vast majority of the growth coming within that segment. It becomes a math problem, and you get there through that approach.

Phil Nadeau, Analyst, TD Cowen: Okay. Thanks for taking the questions.

Paul Cox, Vice President, Investor Relations and Corporate Communications, Dynavax Technologies: Thanks, Paul.

Conference Call Operator: Thank you. We have no further questions at this time. I would now like to turn the call over to Ryan Spencer, CEO, for closing remarks. You may begin.

Ryan Spencer, Chief Executive Officer, Dynavax Technologies: Thank you, operator. Thank you all for joining us today. We appreciate your interest in Dynavax. We’re extremely proud of the progress made throughout the quarter, and we’re delivering on all of our key growth pillars: maximizing and growing Heplisav-B, progressing our internal pipeline, executing on late-stage and strategically aligned business development transactions, and opportunistically returning capital to shareholders. We look forward to updating you on our continued progress focused on protecting the world against infectious diseases. Operator, you may end the call.

Conference Call Operator: Ladies and gentlemen, thank you for joining us today. This concludes today’s conference call. You may now disconnect.

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