Dynavax Technologies Corporation

Good day, ladies and gentlemen, and welcome to the DynaVax Technologies fourth quarter and full year 2024 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.

Thank you for participating in today's call. Joining me from Dynavax are Ryan Spencer, Chief Executive Officer, Don Cassell, Chief Commercial Officer, Rob Jansen, Chief Medical Officer, and Kelly McDonald, our Chief Financial Officer. Earlier today, Dynavax released financial results for the fourth quarter and full year ended December 31, 2024. Copies of the press release and a supplementary slide presentation are available on Dynavax's websites. 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, and potential future uses of or demand for our CPG-1018 adjuvant. These statements involve risks and uncertainties, and our actual results may differ materially. These risks are summarized in today's press release and detailed in the risk factors section on our SEC filings, including today's annual report on Form 10-K. Our forward-looking statements speak as of today, and we undertake no obligation to update such statements. Our earnings press release and 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. And with that, I will now turn the call over to Ryan.

Thanks, Paul, and thank you all for joining us this afternoon. In 2024, we delivered across our strategic priorities, including achieving record fourth quarter and annual HEPA-SAP-B product revisions, advancing our pipeline programs, achieving profitability, and returning capital to shareholders through our share repurchase plan. This performance sets up for even greater success in 2025, which we expect to be a banner year for Dynabats. For HEPA-SAP-B, we expect to drive continued top line growth, with net product sales between $305 to $325 million, fueled by the expanding adult hepatitis B vaccine market in the U.S., along with expected market share gains by hepatitis B. We also expect 2025 to be a transformational year for our development pipeline, with multiple programs advancing to important milestones and new programs emerging throughout the year. Our shingles program is our most advanced clinical program, and we see a significant opportunity for a differentiated and best-in-class shingles vaccine in both the U.S. and ex-U.S. markets. which is currently a multi-billion dollar annual market dominated by a single product. We know the profile required for a competitive vaccine to be successful and disruptive in this market will require similar efficacy to the standard of care and significantly improve tolerability compared to the existing product. We are executing on a development plan to establish this product profile for our Z1018 program. As a reminder, we've already completed a dose-ranging phase 1 study where we saw comparable vaccine response rates to Shingrix while demonstrating a high CD4 T cell response and meaningfully lower rates of moderate to severe local and systemic post-injection reactions. For our ongoing Phase 1-2 study, we expect to report our top-line readout in the third quarter, which will be based on one-month data following the last vaccine dose in the study. We expect this study to establish proof of concept for this program and to select the dose and regimen taken to our Phase 2 extension study in patients over 70 years old, along with further studies. We expect these data will support our dialogue with regulators and potential strategic partners ahead of a global Phase 3 launch. We also expect to begin our next clinical trial for our plague vaccine program, which is partnered with the U.S. Department of Defense. Rob will speak more about our clinical pipeline in a few minutes. We are proud of the company we are building around our core assets of HEPLISA-B and CPG-1018, which have together helped protect millions of people around the world while establishing DynaVax as a leading vaccine company. Driven by continued top-line revenue growth and operational discipline, Our strong financial position has enabled us to also return capital to shareholders as part of our balanced capital allocation strategy. We will also continue to pursue external opportunities to generate sustainable long-term value for our shareholders. This will be an exciting and important year ahead for DynaVax, and I look forward to providing you with updates on our progress along the way. I'd like to turn the call over to Don. Thank you, Ryan. At Dynavex, we are proud to be the leader in the U.S. Hepatitis B adult vaccine market. Since its launch in 2018, Hepatitis B has disrupted the market due to what we believe is a differentiated and best-in-class profile. Through our strong commercial execution, we have increased Hepatitis B's total market share to 44% by the end of 2024, securing its position as the market leader. This rapid advancement in a few short years demonstrates our ability to compete effectively against established legacy products. The HIP universal recommendation has transformed the adult hepatitis B vaccine market, creating one of the largest addressable patient populations for vaccines in the U.S. The market continues to adopt these expanded guidelines, with overall hepatitis B vaccine dose growth increasing by nearly 10% year over year in 2024. HEPALSET-B's strong performance in this expanding market has resulted in record net revenues of $71 million for the fourth quarter and $268 million for the full year of 2024. These results reflect significant growth compared to prior years. The growth of HEPALSET-B is supported by two key segments, retail pharmacy and integrated delivery networks, or IDNs. We continue to prioritize our sales and marketing efforts in these critical areas. Although market share was essentially flat year-over-year in these segments, together they drove an impressive 25% annual growth in Hepatitis B doses. We are encouraged by the ongoing adoption of Hepatitis B and look forward to continuing our momentum in 2025 and beyond. As we look to the future, we are excited by market developments that are improving access to and increasing the focus on Hepatitis B vaccination in the U.S. These developments are reflected in our 2025 guidance and further strengthen our outlook on the long-term market opportunity and market share for HEPA-SAPB. First, starting in January of this year, Medicare patients gained access to hepatitis B vaccines at retail pharmacies through roster billing under Medicare Part B, which mirrors the approach for influenza and pneumococcal vaccines. Until now, Twinrix was the only hepatitis B containing vaccine reimbursed for Medicare patients in the retail setting, giving it majority market share among that population. Now, with equal access and leveraging our commercial strength of retail, we are excited about how this new Medicare policy could support hepatitis B's retail growth and market share in 2025. Second, beginning in 2025, adult hepatitis B vaccination will be included in the Healthcare Effectiveness Data and Information Set, or HEDIS measure. HEDIS is the largest and most widely used set of quality performance indicators in U.S. healthcare, and IDNs typically align their operations to perform well on these measures. The inclusion of hepatitis D vaccination as a HEDIS measure signals its growing priority, placing it alongside other high-volume adult vaccines. We believe this change is likely to enhance focus and utilization in IDNs and large clinics, while also increasing market share, as the measure focuses on series completion, which we believe aligns well with HEPA-SAP-B's two-dose regimen. These positive market dynamics, combined with our strong commercial execution and performance in retail and IDN segments, give us confidence in long-term revenue opportunity for HEPA-SAP-B. We are encouraged by the growth of the HEPA-SAP-B market opportunity. which expanded by approximately $90 million to $650 million in 2024. This progress tracks with our long-term outlook for HEPLIS IB market opportunity in the U.S., which we expect to peak to over $900 million by 2030, with HEPLIS IB capturing at least 60% market share. This long-term guidance reflects our expectation of double-digit annual growth in product net sales through 2030. We expect the Hepatitis B market opportunity to remain durable beyond 2030, driven by ongoing vaccination of the eligible adult population, observed revaccination practices by healthcare providers, and continued market share gains. In summary, we remain confident in the outlet for Hepatitis B. We expect Hepatitis B to further solidify its position as a clear market leader in the expanding Hepatitis B vaccine market. We are incredibly proud of our commercial team's success and excited about the momentum we're building today and into the future. I will now turn the call over to Rob to take you through our clinical pipeline.