Dynavax Technologies Corporation

Good day, ladies and gentlemen, and welcome to the Dynavax Technologies fourth quarter and full year 2021 financial results call. As a reminder, this conference call is being recorded. At the end of the company's prepared remarks, we will open the call up for questions and provide specific instructions at that point. I would now like to turn the call over to Nicole Arndt, Senior Manager, Investor Relations. You may begin.

Thank you. Good afternoon and welcome to the DynaVax fourth quarter and full year 2021 financial results and corporate update conference call. In addition to our press release issued today, a supplementary slide presentation that accompanies today's call is available in the events section of our website. Before we begin, I advise you that we will be making forward-looking statements today, including but not limited to statements regarding potential market sizes, impact of ACIP recommendations, financial guidance and trends, and potential future uses of CPG-1018 adjuvant. These statements involve risks and uncertainties that could cause actual results to differ materially. These risks are summarized in today's press release and are detailed in the risk factor section of our 10-K file today with the SEC. We encourage you to review. Our forward-looking statements speak as of today and undertake no obligation to update such statements at a later date. During today's call, Brian Spencer, our CEO, will provide an overview of our 2021 corporate performance and strategic priorities. John Casalvo, Senior Vice President of Commercials, will review the commercial performance of HEPOS-SB. Rob Jansen, our Chief Medical Officer, will provide an overview of our current performance Clinical Pipeline, and Kelly McDonald, our CFO, will review our 2021 results and provide financial guidance for 2022. I'll now turn the call over to Ryan Spencer.

Thank you, Nicole, and thank you all for joining us today. 2021 was a truly transformative year for DynaVax. We successfully executed on our core priorities, which are driving HEPA-CEP growth, advancing our CPG1018 adjuvant supply business for COVID-19 vaccines, and building a clinical pipeline leveraging our proven adjuvant technology. Strong execution of these core priorities enabled record total revenue of $439 million, our first full year of profitability, and $546 million in cash and investment to end 2021. Importantly, we expect to continue to grow revenue in 2022 for both HEPLIS FB and CPG-1018 adjuvant supply and anticipate another year of profitability. We believe the strength of our current financial position, plus the significant revenue growth expected in 2022, provides a solid foundation for our future success as we continue to advance opportunities to leverage commercial capabilities and our proven adjuvant to deliver value for patients and our shareholders. We are extremely pleased with Heflis FD's performance in 2021, achieving $62 million in net product sales, which represents 70 sales growth compared to the previous year. Looking forward, we expect continued revenue growth from increased market share and growth in the U.S. adult hepatitis B vaccine market as healthcare services return to normal operation and as a result of the recent action by the CDC to expand the recommendation for hepatitis B vaccination to all adults age 19 to 59 years old. We believe the adult hepatitis B vaccine market has the potential to grow to $800 million by 2027, and that HEPLIS-FB has the profile to garner a majority market share. Moving to our next core priority. In support of the global effort to address the ongoing pandemic, DynaVac established multiple CPG-1018 adjuvant supply partnerships to support the development of technologically diverse COVID-19 vaccines. These partnerships have led to a portfolio of global commercial supply agreements to which DynaVax generated CPG-1018 adjunct revenue in 2021, totaling $375 million. Our COVID-19 supply partners have generated significant data demonstrating the efficacy, immunogenicity, and safety of their COVID-19 vaccines, which has led to two emergency use authorizations and multiple additional regulatory applications with responses anticipated in the first half of 2022. our COVID-19 supply partners continue to expand their clinical data to support broad utilization of their vaccine. This includes additional clinical trials to support homologous and heterologous boosters and elderly and pediatric indications. Based on the impressive phase three data sets across our COVID-19 partnership portfolio, we believe the combination of high efficacy and immunogenicity with favorable safety and tolerability could be very competitive profiles as the COVID-19 vaccine landscape evolves to an endemic market. These data reinforce our belief that CPG1018 is a unique and valuable adjuvant for the development of improved and novel vaccines. Beyond COVID-19, we are leveraging CPG1018's profile in our clinical pipeline to develop new and improved vaccines. We've identified and advanced two programs and shingles that, if successful, could provide significant U.S. and global revenue opportunities. Our near-term goal this year is to generate initial clinical data that we anticipate will support meaningful differentiation to establish our high-value pipeline designed to produce best-in-class products targeting large markets. Additionally, we are conducting preclinical efforts to develop candidates utilizing CPG-1018 to improve the immune response to existing vaccine antigens, as well as truly novel products targeting diseases with no current vaccine options. In 2022, we anticipate another profitable year driven by increasing revenue from our CPG-19 adjuvant supply business, COVID-19 vaccines, and from increasing Hepatitis B sales. With $546 million in cash and equivalents at year end, we are well capitalized to invest diverse portfolio of assets. We believe the combination of a strong financial profile, revenue-generating assets, and an emerging pipeline of product candidates based on our proven adjuvant technology provides a solid foundation for DynaVax's future. We are immensely proud of our results this past year. Our achievements in 2021 and the opportunities we believe lie ahead are made possible by the hard work and dedication of our talented team. I will now turn the call over to Don Casal to provide more details on Hepatitis B performance. Thank you, Ryan. 2021 was an exceptional year for Hepatitis B. I'm excited to share that. Despite the ongoing impact of the pandemic, Hepatitis B achieved record performance and all-time highs in revenue and market share growth. Hepatitis B is the first and only FDA-approved adult hepatitis B vaccine that allows series completion with only two doses in one month. Series completion is essential for protection. Unfortunately, most adults never complete a three-dose hepatitis B vaccine series. Efficient series completion is more critical now than ever in the era of universal adult hepatitis B vaccination. Two-dose hepatitis B can make series completion easier and protect more patients faster. In 2021, hepatitis B achieved $62 million in net product revenue, the highest annual revenue since launch. This annual revenue outcome represents a 72% increase compared to 2020 and was achieved despite the hepatitis B market remaining below historical norms due to the pandemic. During the fourth quarter of 2021, total hepatitis B market utilization was at 66% of pre-pandemic levels. Additionally, the hepatitis B market decreased by approximately 25% from third quarter due to seasonal purchasing patterns of key segments and COVID-19 booster administration campaign. This market decline was consistent with the expectations we shared during our last earnings call. By these headwinds, HEPLIS FB's total market share in the fourth quarter increased to 26%, up from 18% during the same period last year. We continue to believe that investing in HEPLIS FB to increase market share will be a meaningful driver of revenue over time as the pandemic begins to subside. In addition to continued growth in total market share, HEPLIS FB field-targeted market share increased to 34% in the fourth quarter, up from 26% during the same period last year. Furthering our positive outlook for HEPLIS FB, the CDC Advisory Committee on Immunization Practices, or ACIP, voted unanimously at their November meeting to recommend that all adults 19 to 59 years of age should receive hepatitis B vaccination. This recommendation simplifies the identification of patients who need a hepatitis B vaccine compared to the prior risk-based recommendation and significantly expands the number of adults in the U.S. who should be vaccinated against hepatitis B. With the ACIP universal recommendation, hepatitis B vaccines have the potential to become one of the most widely used adult vaccines across healthcare systems. We believe that the ACIP recommendation will be a significant catalyst for growth and we estimate that market opportunity could grow to over $800 million by 2027, with HEPLIS-M being well-positioned to secure majority of the market share over time. We remain confident in our ability to generate momentum and look forward to continuing to drive long-term growth for the brand. With a proven clinical profile and strong commercial execution, we expect further market share gains and revenue growth in 2022. Taking you through our clinical pipeline, I will now turn the call over to Rob Janssen, our Chief Medical Officer.