DYNAVAX TECHNOLOGIES CORP Q4 FY2023 earnings call

• HEPLISAV-B achieved record revenue growth in 2023 (69% YOY) and became the market share leader in retail pharmacies and integrated delivery networks.
• Forecasted HEPLISAV-B net product revenue for 2024 is in the range of $265 million to $280 million.
• Pipeline milestones include PDUFA action date for HEPLISAV-B SBLA for hemodialysis in May, clearing shingles IND, advancing Tdap program, and expecting Phase 2 and non-human primate challenge study data for plague program by end of 2024.
• Strong cash position of $742 million provides optionality for strategic investments.

For HEPLISAV-B, net product revenue grew 69% year-on-year to $239 million in 2023, representing a significant revenue contribution. Other revenue was $19 million in 2023 compared to $9 million in the prior year, related to the plague vaccine program collaboration with the U.S. Department of Defense.

• HEPLISAV-B net product revenue expected to be $265 million to $280 million in 2024.
• HEPLISAV-B gross margin expected to be approximately 80% in 2024.
• R&D expenses预计在$60 million到$75 million之间；SG&A expenses预计在$160 million到$180 million之间；2024年全年预计现金流为正.

• Forward-looking statements involve risks and uncertainties, including potential market sizes, market segmentation, effective marketing efforts, future expected market share, and related growth rates, as well as risks detailed in SEC filings regarding regulatory timelines, clinical trial outcomes, etc.

Q: Last year, initial guidance for HEPLISAV-B was lower, but sales exceeded expectations. What were the factors driving greater than expected sales?

A: 2023 was the first full year post-pandemic demand reconciliation and ACIP universal recommendation. Market growth outpaced initial projections and there was successful market share growth.

Q: Does the 2024 guidance include contribution from the dialysis segment?

A: Guidance is not provided segment by segment and takes into account various market dynamics.

Q: Comment on share growth in Q1 and regulatory requirements for the plague program.

A: Continues to expect share growth in Q1; for the plague program, non-human primate studies are part of the regulatory path, but specific regulatory pathway (EUA vs full approval) is unclear until data is available.

Q: How does DoD collaboration revenue and other revenue tie into gross margin?

A: Other revenue (plague contract reimbursement) has minimal cost of goods, so overall gross margin is expected to be in the mid-80s and higher.

Q: Thoughts on capital allocation strategy?

A: Strong financial profile allows investment in driving HEPLISAV-B growth, advancing organic clinical stage assets, evaluating strategic opportunities to diversify portfolio, and considering returning capital to shareholders if appropriate.

Q: Effect of longer respiratory vaccine season on 2024 estimates and gross margin improvement for HEPLISAV-B?

A: Q1 impact is considered, but Q2 and Q3 expected to be strong; gross margin improvement driven by economies of scale and investments in antigen manufacturing facility.

Q: Timing for shingles vaccine and adjuvant sales?

A: Shingles vaccine timing is uncertain with full clinical development; no adjuvant sales expected in 2024, and future adjuvant sales depend on market dynamics and collaborator initiatives.

Q: Timing of plague trial results and cell-mediated immunity assessment?

A: Top line data from plague Phase 2 and NHP studies expected by end of 2024; primary endpoint is antibodies, and cell-mediated immunity is not assessed in the current Phase 2 study.