Dynavax to Lay Off 37% of Staff, CEO to Retire as Company Restructures
Dynavax Chief Executive Officer Eddie Gray will step down from his role on Aug. 1 as the Bay Area company undergoes restructuring to move away from immuno-oncology and prioritize its vaccine business.
The company announced the restructuring plan late Thursday. The primary focus of Dynavax will be support for Heplisav-B, its first commercial product, a treatment for hepatitis B approved by the U.S. Food and Drug Administration in 2017. At the time of its approval, Heplisav-B was the first new hepatitis B vaccine in the U.S. in more than 25 years. With the turning away from immuno-oncology, the company said it will reduce its workforce in order to focus resources on Heplisav-B. Dynavax will cull 82 positions, about 37 percent of its workforce. The positions eliminated are primarily related to research and clinical development for the immuno-oncology programs and general and administrative functions.
Gray said the company came to its decision following a comprehensive review of its “assets, strengths and opportunities.” He said leadership determined that Heplisav-B should be the company’s primary focus, particularly as it is gaining market share and is “positioned to become the new standard of care in the U.S.”
“We plan to curtail further investment in our immuno-oncology portfolio and will seek strategic alternatives for these programs. As a result, the board and management have made the difficult decision to reduce our workforce. We want to express our deepest appreciation to our employees for their invaluable contributions,” Gray said in a statement.
Gray added that the company has seen encouraging clinical data regarding its portfolio of innate immune TLR9, 7/8 agonists and antigen-enhanced immunotherapies. Still, the company will wind down the research on these oncology treatment avenues and attempt to divest them to a company that could further develop them. While the company’s near-term focus will be on Heplisav-B sales execution, Dynavax said it is assessing additional opportunities to leverage its 1018 adjuvant, as well as evaluating other opportunities for growth.
With the change in focus at Dynavax, Gray said it was the right time for him to transition out of his role of CEO. Until a new CEO is found, Dynavax will be helmed by David Novak, head of operations and Ryan Spencer, head of commercial at the company. The two men will serve as co-presidents in the newly created interim office. The board will conduct a search for the company’s next CEO and will consider both internal and external candidates.
Novack has been at Dynavax since 2013 and has led the company’s technical operations, supply chain, and quality teams through FDA approval, launch and commercialization of Heplisav-B. Spencer, who joined Dynavax in 2006, has spearheaded the commercialization of Heplisav-B, including creating and managing Heplisav-B commercial operations.
“The board is very pleased to have such experienced executives to step in to lead the new vaccine-focused company. David and Ryan have been critical contributors to the launch of Heplisav-B,” Arnold L. Oronsky, Dynavax’s chairman of the board of directors said in a statement. “Their collective expertise will be instrumental to the future success of the company.”
As of March 31, the company reported cash, cash equivalents and marketable securities totaling $183.2 million. Restructuring costs and retirement costs related to compensation and benefit expenses as well as severance costs are expected to be approximately $5.5 million, exclusive of stock compensation. The workforce reduction is expected to reduce compensation and benefits costs by approximately $16 million dollars annually.