Dynavax Technologies Corporation (NASDAQ:DVAX) Q3 2023 Earnings Call Transcript

Kelly MacDonald: Hi, Jon. Thanks for the question. This is Kelly. I’ll take the first one, then hand it over to Donn for the second question. We’re really proud of the way that we’ve been able to execute some of the margin improvement. This is a result of many years of investments and efficiencies that we’ve made not only in our Duesseldorf facility, but as we continue to engage with our CMOs for adjuvant manufacture. You can see the improved trends throughout the year, as you noted. Additionally, and just as a reminder, we did reissue our guidance or reiterate our guidance that we believe for the full year. We’re going to have average gross margins in the mid 70s. And we would expect next year to continue to see strong margins, more or less consistent with what we’ve seen in this most recent quarter. Donn?

Donn Casale: Yes. And Jon, regarding market sharing, obviously, you heard the numbers regarding retail pharmacy and IDN. We’re really proud of the market share gains quarter-over-quarter. One of the areas that’s difficult and always has been difficult is kind of this long tail of a customer which is probably 40,000 locations that order very little hepatitis B vaccine. So penetrating that universe of customers has been challenging from a market share perspective. But certainly that’s why we focus our efforts back to retail, back to IDN where we believe the vast majority of growth will happen in those two segments, so we feel very confident around our growth opportunities and as we look ahead. But from a market share perspective, it’s been that long tail that’s been difficult in the past for market share.

Jonathan Miller: Great. Thanks so much. And then maybe if I can squeeze one more in there to piggyback on that earlier question about BD. Given that it’s still a priority for you, how do you view the current market environment evaluations that are out there as a potential acquirer? I think we’ve been seeing some motion in that across the industry, but it does feel like there’s opportunities from evaluation perspective. How do you view infectious disease relative to the rest of the market?

Ryan Spencer: Yes. Thanks, Jon. We agree. I think it’s hard to miss that point. But we have to really focus on staying disciplined and finding the right fit for us for our business and our plans going forward. I think the trap of a good deal is not something we’re really going to fall into. We want to really make sure it’s the right thing for our business, and this requires us to continue to be disciplined.

Jonathan Miller: Thanks so much, guys.

Operator: Thank you. One moment for our next question please. Our next question comes from the line of Roy Buchanan with JMP Securities. Your line is now open.

Roy Buchanan: Hi. Thanks for taking the questions. I’ve had a few follow ups on 1018. Just if you could give any more detail around what the FDA said. You have the actual minutes back from the meeting. Did they explicitly recognize the correlative protection for the pivotal trial? Just any other details you can give us around a potential pivotal design? Thanks.

Ryan Spencer: Hi, Roy. This is Ryan. I’ll just make a quick high level comment. Rob can add to it. I think we still continue to believe that this is a placebo-controlled efficacy study, not a correlative protection for the Z-1018 program. And the engagement with the FDA and the written response indicated support for that approach. Rob, do you have any other comments to make on top of that?

Rob Janssen: Yes. It’s an efficacy study. So there was no mention of correlates nor did we really ask about correlates. And I think the design of the study is going to be pretty typical of GSK’s old design for Shingrix in terms of size end points. We haven’t finalized any of that, but don’t be surprised if it looks a lot like that.