Dynavax axes staff in pivot toward I/O
- New year, new Dynavax. The clinical-stage biopharma is focusing its efforts on immuno-oncology going forward and provisioning just enough resources to push its hepatitis drug to market.
- The company is restructuring as part of that pivot, and announced it would cut 38% of its global workforce, affecting mostly sales, marketing, manufacturing, and general and administrative positions. An email statement from Dynavax said it had 258 employees as of Sept. 30.
- The move is not without its merits. The company's lead candidate, Heplisav-B, has been held up by a Complete Response Letter from the Food and Drug Administration. Meanwhile, Dynavax has two pipeline immuno-oncology drugs: SD-101, which is in Phase 1/2 testing, and DV281, which is slated to go into a Phase 1 trial during the second quarter. Both drugs spur the activity of TLR9, a protein that alerts the immune system to harmful bacteria and viruses.
Dynavax expects the restructuring to cost $3 million, the oncology program to have less than $60 million in yearly operational costs, and Heplisav-B to cost less than $1 million per month prior to a potential approval. Ultimately, though, the transition should slash cash burn by 40%, Dynavax said in a Jan. 5 statement.
"We value all of our colleagues, so reducing our workforce is a sad and difficult decision," Dynavax CEO Eddie Gray said in the statement. "But it is one we believe is necessary to align our organization to reflect that of a clinical R&D-stage company with a promising immuno-oncology pipeline, which has become a strategically important area of our business and one we believe can potentially benefit thousands of people with cancer."
According to the company's most recent quarterly financial filing, "an overall increase in employee headcount in preparation for the anticipated approval of Helplisav-B," led to a $2.3 million increase in cash and stock compensation and related personnel costs. General and administrative rose for the same reasons, climbing 113% to $6.2 million from the same period in 2015.
Despite months of back-and-forth with the FDA, Dynavax believes Heplisav-B will still make it to market. Gray said in a Jan. 5 investor call that should the hepatitis B drug gain approval, it would provide a revenue base to work from for his company's other endeavors.
Still, the FDA's call for more information on the drug has put a damper on its prospects and triggered a suspension of long-term manufacturing and commercialization efforts for Heplisav-B as well as a review of the company.
"That review concluded that patients and investors will both benefit from a shift in focus towards advancing our oncology platform," Gray said in the call.
"We recognize that this pivot will be scrutinized and that we will need to clearly demonstrate the value in our programs and our ability to execute against a shifting set of priorities," he added.
- Dynavax Statement
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