- Dynavax Technologies plans to cut 82 positions and exit cancer research, announcing Thursday a restructuring that will also involve a search for a new CEO to replace current company head Eddie Gray, who will step down after six years leading the biotech.
- "We plan to curtail further investment in our immuno-oncology portfolio and will seek strategic alternatives for these programs," Gray said in a statement issued after markets closed Thursday. Dynavax shares opened trading Friday up 7%.
- Moving forward, Dynavax will focus its resources on growing sales of Heplisav-B, its hepatitis B vaccine, which was approved in the U.S. in late 2017.
Dynavax's planned pivot away from oncology isn't a surprise: Gray announced May 8 the company wouldn't invest in any new research until it found a partner.
That Dynavax is now disclosing plans to wind down its cancer studies suggest that search hasn't turned up a company willing to help advance its two clinical candidates.
The further along of those two, an intratumoral therapy, has been in Phase 2 testing together with Merck & Co.'s Keytruda (pembrolizumab) for melanoma and squamous cell carcinoma of the head and neck. Merck is just a collaborator, however, with Dynavax responsible for sponsoring and funding the research.
Most of the positions being eliminated are tied to Dynavax's immuno-oncology research and to general or administrative functions, the company said.
In Gray's place, the company has named two current executives — David Novack and Ryan Spencer — as co-presidents while it conducts a search for the company's next CEO.
Immuno-oncology sidelined, Dynavax's focus will rest solely on Hepsilav-B. Sales of the vaccines were limited, totaling $5.6 million in the first quarter.
Dynavax's product competes with vaccines from GlaxoSmithKline as well as Merck, and sales aren't forecast to rise quickly. RBC Capital Markets analyst Brian Abrahams predicts $32 million in product revenue this year, increasing to $52 million in 2020 and $81 million in 2021.
As a result of the restructuring, Dynavax will incur roughly $5.5 million in costs, mostly related to compensation and benefits, but expects to save $16 million annually and another $8 million per quarter once it shutters its cancer work.
The company had $183 million in cash, equivalents and securities on hand as of March 31.