Dynavax Technologies Corporation Anticipates Earlier BLA Submission for HEPLISAV(TM)

BERKELEY, CA--(Marketwire - March 16, 2010) - Dynavax Technologies Corporation (NASDAQ: DVAX) today said that its large-scale Phase 3 study of HEPLISAV™ is fully enrolled, with immunization of subjects proceeding in accordance with the pre-specified safety monitoring plan. Dynavax indicated that it expects immunization of all 2,000 subjects with HEPLISAV in the lot-to-lot consistency study will be completed in the near future, an achievement that creates the opportunity to submit a BLA in the third quarter of 2011, approximately six months earlier than previously projected.

According to Dino Dina, M.D., President and CEO, “The accelerated enrollment and immunization of subjects for the safety and consistency study of HEPLISAV is an important accomplishment that we expect will facilitate the successful conclusion of several ongoing financing discussions. Clearly, this is our highest priority to ensure the success of the program.”

Dynavax separately reported $36.7 million in unrestricted cash and cash equivalents at December 31, 2009. This compares to $46.4 million at September 30, 2009, of which $21.7 million were investments held by Symphony Dynamo, Inc. (SDI). The $9.7 million burn for the fourth quarter primarily reflected intensified activities relating to the initiation of the two Phase 3 multi-center trials for HEPLISAV in the U.S., Canada and Germany. The year-end 2009 results do not include a $4.0 million payment due from Merck as announced this week. The results do not reflect a separate $1.8 million payment from AstraZeneca representing a reimbursement adjustment for 2009 and prior periods.

Today Dynavax filed its annual report on Form 10-K for the fiscal year ended December 31, 2009 with the Securities and Exchange Commission (SEC). As a result of the Company’s current financial position, Dynavax’s independent registered public accounting firm has included a statement regarding the Company’s ability to continue as a going concern in its unqualified opinion contained in the Form 10-K. This announcement is being made in compliance with NASDAQ Marketplace Rule 4350(b)(1)(B), which requires separate disclosure of a recent audit opinion that contains “going concern” explanatory language. Management’s plan to address the Company’s liquidity requirements and a more detailed discussion of the financial results is provided in the Form 10-K.

The tables included as part of this press release provide a reconciliation of GAAP revenues and operating expenses to pro forma revenues and operating expenses.

About HEPLISAV

HEPLISAV is an investigational adult hepatitis B vaccine. The vaccine candidate is being evaluated in two Phase 3 studies that are directed toward fulfilling licensure requirements in U.S., Canada and Europe. In a completed pivotal Phase 3 trial, HEPLISAV demonstrated increased, rapid protection with fewer doses than current licensed vaccines. Dynavax has worldwide commercial rights to HEPLISAV and is developing the vaccine for large, high-value populations that are less responsive to current licensed vaccines, including individuals with chronic kidney disease. HEPLISAV combines hepatitis B surface antigen with a proprietary Toll-like Receptor 9 agonist known as ISS to enhance the immune response.

About Hepatitis B Vaccines

Currently available hepatitis B vaccines require three doses over six months to achieve full immunogenicity in healthy patient populations. Because compliance with this vaccine regimen is low, new vaccines are needed to provide increased protection in a shorter timeframe. Furthermore, currently available vaccines do not fully address the needs of several patient populations, including those with chronic kidney disease, HIV or chronic liver disease. In particular, patients with comprised immune systems require both rapid and enhanced protection, either because they are less responsive to conventional vaccine regimens or because they are at high risk of infection.

About Dynavax

Dynavax Technologies Corporation, a clinical-stage biopharmaceutical company, discovers and develops novel products to prevent and treat infectious diseases. The Company’s lead product candidate is HEPLISAV, an investigational adult hepatitis B vaccine designed to enhance protection more rapidly and with fewer doses than current licensed vaccines. For more information visit www.dynavax.com.

Forward Looking Statements

This press release contains “forward-looking statements,” that are subject to a number of risks and uncertainties, including statements relating to clinical trial status, BLA submission and financing. Actual results may differ materially from those set forth in this press release due to the risks and uncertainties inherent in our business, including whether successful clinical and regulatory development and approval of HEPLISAV can occur in a timely manner or without significant additional studies or difficulties or delays in development or clinical trial enrollment, whether the studies can support registration for commercialization of HEPLISAV; the results of clinical trials and the impact of those results on the initiation and completion of subsequent trials and issues arising in the regulatory process; the Company’s ability to obtain additional financing to support the development and commercialization of HEPLISAV and its other operations, possible claims against the Company based on the patent rights of others; and other risks detailed in the “Risk Factors” section of our current periodic reports with the SEC. We undertake no obligation to revise or update information herein to reflect events or circumstances in the future, even if new information becomes available. Information on Dynavax’s website at www.dynavax.com is not incorporated by reference in the Company’s current periodic reports with the SEC.

- tables to follow -

 DYNAVAX TECHNOLOGIES CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, -------------------- -------------------- 2009 2008 2009 2008 --------- --------- --------- --------- Revenues: Collaboration revenue $ 1,455 $ 10,231 $ 35,534 $ 31,666 Grant revenue 556 972 3,477 2,999 Service and license revenue 178 742 1,307 2,429 --------- --------- --------- --------- Total revenues 2,189 11,945 40,318 37,094 Operating expenses: Research and development(1) 9,506 6,249 38,708 44,771 General and administrative(2) 4,052 3,559 15,745 15,463 Amortization of intangible assets 245 245 980 980 --------- --------- --------- --------- Total operating expenses(3) 13,803 10,053 55,433 61,214 --------- --------- --------- --------- Loss from operations (11,614) 1,892 (15,115) (24,120) Interest income 4 170 178 1,631 Loan forgiveness -- -- -- 5,000 Interest expense (4) (16) (124) (9,157) Other income (expense) (26) 114 (66) 110 --------- --------- --------- --------- Net income (loss) (11,640) 2,160 (15,127) (26,536) Consideration paid in excess of carrying value of the noncontrolling interest in SDI (19,671) -- (19,671) -- Add: Losses attributed to noncontrolling interest in SDI 1,041 939 4,233 5,707 --------- --------- --------- --------- Net income (loss) attributable to Dynavax $ (30,270) $ 3,099 $ (30,565) $ (20,829) ========= ========= ========= ========= Basic net income (loss) per share attributable to Dynavax common stockholders $ (0.73) $ 0.08 $ (0.76) $ (0.52) ========= ========= ========= ========= Shares used to compute basic net income (loss) per share attributable to Dynavax common stockholders 41,420 39,854 40,350 39,819 ========= ========= ========= ========= Diluted net income (loss) per share attributable to Dynavax common stockholders $ (0.73) $ 0.08 $ (0.76) $ (0.52) ========= ========= ========= ========= Shares used to compute diluted net income (loss) per share attributable to Dynavax common stockholders 41,420 39,854 40,350 39,819 ========= ========= ========= ========= 

(1) Research and development expenses included non-cash stock-based compensation charges of $0.3 million and $1.1 million for the fourth quarter and year ended December 31, 2009, respectively. Research and development expenses included non-cash stock-based compensation charges of $0.4 million and $1.4 million for the fourth quarter and year ended December 31, 2008, respectively.

(2) General and administrative expenses included non-cash stock-based compensation charges of $0.6 million and $1.9 million for the fourth quarter and year ended December 31, 2009, respectively. General and administrative expenses included non-cash stock-based compensation charges of $0.4 million and $1.8 million for the fourth quarter and year ended December 31, 2008, respectively.

(3) Total operating expenses excluding non-cash stock-based compensation charges were $12.9 million and $52.4 million for the fourth quarter and year ended December 31, 2009, respectively. Total operating expenses excluding non-cash stock-based compensation charges were $9.3 million and $58.0 million for the fourth quarter and year ended December 31, 2008, respectively.

 DYNAVAX TECHNOLOGIES CORPORATION RECONCILIATION OF GAAP REVENUES TO PRO FORMA REVENUES (In thousands) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, -------------------- -------------------- 2009 2008 2009 2008 --------- --------- --------- --------- GAAP revenues $ 2,189 $ 11,945 $ 40,318 $ 37,094 ADD: Collaboration funding incurred under SDI programs 813 744 3,364 5,349 LESS: Non-cash deferred revenue from Merck collaboration -- 3,086 28,485 4,965 --------- --------- --------- --------- Pro forma revenues(1) $ 3,002 $ 9,603 $ 15,197 $ 37,478 ========= ========= ========= ========= 

(1) These pro forma amounts are intended to illustrate the Company’s revenues including collaboration funding provided for the SDI programs and excluding certain non-cash items. The collaboration funding is reflected in the amount attributed to the noncontrolling interest in SDI in the Company’s consolidated statement of operations, but would have been reported as revenue if SDI’s results of operations were not consolidated with those of the Company. Management of the Company believes the pro forma results are a more useful measure of the Company’s revenues because it provides investors the ability to evaluate the Company’s operations in the manner that management uses to assess the continued progress of operating programs. These pro forma results are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from pro forma measures used by other companies.

 DYNAVAX TECHNOLOGIES CORPORATION RECONCILIATION OF GAAP OPERATING EXPENSES TO PRO FORMA OPERATING EXPENSES (In thousands) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, -------------------- -------------------- 2009 2008 2009 2008 --------- --------- --------- --------- GAAP operating expenses $ 13,803 $ 10,053 $ 55,433 $ 61,214 LESS: Stock-based compensation expense 933 717 3,035 3,205 Amortization of intangible assets 245 245 980 980 --------- --------- --------- --------- Pro forma operating expenses(2) $ 12,625 $ 9,091 $ 51,418 $ 57,029 ========= ========= ========= ========= 

(2) These pro forma amounts are intended to illustrate the Company’s operating expenses excluding certain non-cash charges in accordance with the financial statements that management uses to evaluate the Company’s operations. These pro forma results are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from pro forma measures used by other companies.

 DYNAVAX TECHNOLOGIES CORPORATION SELECTED BALANCE SHEET DATA (In thousands) (Unaudited) December 31, December 31, 2009 2008 ------------ ------------ Assets Cash and cash equivalents and marketable securities(1) $ 36,720 $ 68,476 Property and equipment, net 7,997 9,510 Goodwill 2,312 2,312 Other intangible assets, net 1,279 2,259 Other assets 2,162 8,066 ------------ ------------ Total assets $ 50,470 $ 90,623 ============ ============ Liabilities and stockholders’ equity Accounts payable $ 1,686 $ 905 Accrued liabilities 7,507 6,816 Warrant liability to Holdings 2,567 -- Current portion of deferred revenue 2,718 33,133 Noncurrent portion of deferred revenue 17,083 18,512 Liability from program option exercised under the SDI collaboration -- 15,000 Long-term note payable to Holdings 9,342 -- Long-term contingent liability to Holdings 3,040 -- Other long-term liabilities 151 101 Stockholders’ equity 6,376 16,156 ------------ ------------ Total liabilities and stockholders’ equity $ 50,470 $ 90,623 ============ ============ 

(1) These amounts also included investments held by SDI of zero and $25.1 million as of December 31, 2009 and 2008, respectively.