Good afternoon and welcome once again to TD Cowen's 45th Annual Healthcare Conference. I'm Phil Nadeau, a biotech analyst here at Cowen. It's my pleasure to moderate a fireside chat with Kelly MacDonald, the CFO of Dynavax. Kelly, maybe I'll kick it over to you to start. Could you give us a brief state-of-the-company overview? What are Dynavax's strengths, its challenges, and what will Dynavax do to create shareholder value over the next year? Yeah, great. Thanks, Phil, and thanks for having us. We really appreciate it. Dynavax is a commercial-stage biotech company focused on developing and commercializing novel vaccines, leveraging our innovative CpG 1018 vaccine adjuvant platform. We've had a tremendous execution year in 2024 focused on our three core strategic priorities. First and foremost, maximizing our commercial adult hepatitis B vaccine in the U.S., Heplisav-B. We had 27% year-over-year growth top line last year. Secondly, we continue to make really meaningful progress on our clinical- stage pipeline. Our most advanced, wholly owned clinical- stage asset is our shingles vaccine candidate, where we have important Phase 1/2 data readout expected in Q3. Thirdly, and really underpinning all of our strategic priorities, maintaining a very disciplined financial approach as we think about driving near-term and long-term value creation for all of our shareholders. We have a, we're making great progress executing under an authorized $200 million share buyback program that we announced November of last year. We also have great aspirations to leverage our fully integrated commercial infrastructure through corporate development. We're working really hard to identify the right assets to drive long-term shareholder value through that pillar. Maybe we'll start with Heplisav and its commercialization. Can you give us an update on where you are driving share at the targeted accounts? Absolutely. We exited 2024 with 44% overall market share, 27% year-over-year growth top line. The way that, you know, the way that our promotional efforts focused on Heplisav is both to drive market expansion as well as to drive market share shift. There are two key segments that we spend a lot of time focused on because these two key segments, both retail and integrated delivery networks or IDNs, we believe will create a sort of have- on track to be disproportionately large and a disproportionately positive growth opportunity for the brand. We are really focused on driving share shift in both of those segments. We exited the year with over 55% in both of those segments. Sales were down in Q4. Can you talk about the seasonal dynamics that pressure revenue through the respiratory virus season? What do you expect Q1 to be like? How bad will the seasonality be this quarter? Sure. Seasonality we continue to see across a lot of adult vaccines, frankly, but specifically for Heplisav and for hepatitis B vaccination, we do very regularly now. We have a nice historical trend to be able to predict the seasonality. We expect similar to in past years, very strong Q2 and Q3 with softer Q4 and Q1, really due to the healthcare providers focusing on respiratory vaccination during the Q4 and Q1 quarters. We did guide for 2025 an expectation for sales between $305 million and $325 million. That represents 17% year-over-year growth at the midpoint. We are looking forward to maximizing the opportunity for continued growth in 2025. Can you discuss your marketing efforts that'll drive that growth? Where are they focused? Do you have a targeted share that you'd like to achieve by the end of the year? Our marketing and both personal and non-personal promotion tactics are, like I said earlier, sort of really focused on two things. One, driving share expansion. Driving sort of market share growth. T hen also driving the size of the market. We are the primary and really only share of voice, you know, sort of out there expressing how important hepatitis B vaccination is for adults. We have had a few really meaningful tailwinds that we expect to be able to capitalize in 2025, both supporting growth in retail and IDN. In the retail setting, some of what we are looking ahead to is a recent change that we saw in Medicare and in Medicare billing. Medicare, prior to the beginning of this year, the only hepatitis B containing adult vaccine that was covered under Part D was Twinrix. Twinrix represents 30% of the retail segment. Starting January 1, Medicare has adopted Part B roster billing, which effectively removes those barriers for reimbursement for all Medicare patients. Now we have no real barriers to entry as we think about competing for the Medicare patient in the retail channel. We expect that to be a pretty important tailwind, and we expect to capitalize on that in the coming year. Likewise, for IDN, the integrated delivery networks, this is a customer base that makes a lot of decisions sort of top down. All of our marketing and promotional efforts are really focused on working and partnering with these IDNs and these big hospital systems to change behavior sort of from a top down protocol perspective. One of the really meaningful changes that we saw, that we were seeing early in 2021, is hepatitis B is now added as a HEDIS measure. We know that a lot of these retail or a lot of these IDNs and large hospitals and clinics, they organize and orient their protocols to be able to achieve these important HEDIS metrics. Having hepatitis B on a level playing field with a lot of the other high volume vaccines like pneumococcal and influenza not only brings prominence to the importance of hepatitis B vaccination for adults, but it also provides our marketing and sales team with some extra talking points and some extra horsepower to go into these customers and make sure that they're aware that we have a product that has higher compliance because it's two dose versus three dose. You referenced market growth. Where was the market prior to the ACIP guidelines change? Where is it today? Ultimately, where do you think it could be? Prior to the universal recommendation, the market was around $400 million. That was, of course, also prior to the pandemic, which disrupted all the non-respiratory vaccines. Where we saw the market exiting 2024, we estimate about $615 million. That is growth from $525 million in 2023. We project that the total Heplisav-B market opportunity is going to be greater than $900 million by 2030. The last couple of years has really sort of acted as really nice proof points on trajectory towards the total market opportunity of greater than $900 million, which we expect to be able to realize at least 60% of that opportunity by 2030. What do you think your peak share will be? Do you think 60% is how you're going to go, or could you take more share of the market? We certainly hope to take more than 60%. You know, 60% is a number that we put out for our long-term guidance and remain really confident. We We have come up with that number based on a lot of different analogs and very reasonable vaccine coverage rates, sort of consistent with other similar vaccines in the adult vaccine space. We have a lot of data points that we are looking at to come up with that long-term guide, but we certainly will do everything we can to outperform it. In May of last year, the FDA issued a Complete Response Letter for use of Heplisav-B in hemodialysis. Can you give us an update on the process of refiling and what the impact is on your revenue from that Complete Response Letter? We do expect to refile by the end of the year, and we're working closely with the agency to leverage data that we have. We have a lot of real-world evidence data in this population already. Hopefully we'll be able to navigate the complexities of, you know, from a regulatory perspective to get this indication in the label. I think this is really important. This is a very underserved population in a sense that the regimen right now is much less favorable. It's many more doses compared to what the regimen will be with Heplisav. We do think that there's a really nice opportunity for our product to make a meaningful difference for patients in the dialysis population. Is there use in dialysis today, even ahead of the label change? There is. There is use in dialysis, and we're leveraging some of that real-world data to support our discussions with the FDA. Got it. TD Cowen projects $325 million in U.S. revenue in 2025, consistent with your guidance, growing to $725 million in 2030, which assumes 61% share of the market. I guess, how could you beat our estimates? What could drive growth in revenue on top of what we're or above what we're projecting? Similarly, what do you think the risks are to our estimates? If revenue were to fall short, particularly of the long-term projection, why would that be? We would outperform those expectations and even our own expectations if the uptake is more sort of quicker than we're estimating. This is, you know, the universal recommendation. There aren't many of them to sort of have really good analogs. We are leveraging analogs that we have to be able to make predictions on what the uptake is. At the end of the day, it is still a one-and-done vaccine, meaning every new customer is a new patient. Identifying and sort of embedding practices throughout all of our customers to not only grow the market, to identify people who should be protected against Hep B, and then also to the extent that folks should be revaccinated, even if they've been vaccinated, there's a certain level of opportunity there too, as we see that happening based on claims data that's publicly available. You know, as we think about time to peak, I think certainly, you know, the uptake can happen more quickly. It may happen more deliberately and over a longer period of time. Very importantly, though, for our product, there is no LOE cliff per se, and there's no real drop-off. We are looking at the cash flow and revenue stream and the underlying valuation of the product to include a post-2030 opportunity that is very real and very durable. TD Cowen projects long-term gross margins of 80%. Is that consistent with your internal estimates? Could margins be above or below that? It is consistent with our internal projections and what we've seen last year. It's also consistent with what we've guided to specifically this year. On any given quarter, as you could see, if you look at our filings, you know, it might be a little higher, a little lower. These are some of the fun accounting gymnastics around investing in a manufacturing facility. You know, the manufacturing facilities have certain times where you need to be offline and online in capital expenditure investments. Some of the choppiness quarter to quarter, you know, over time will balance out to that 80% range. Great. Turning to the pipeline, perhaps the most prominent pipeline program is the shingles program. Can you provide a brief update on the status? Really excited about our shingles program. We have our Phase 1/2 data reading out in Q3 of this year. What we're really /looking from those data are comparable, I mean, so it's an immunogenicity trial. What we're looking for is comparable immunogenicity across a number of markers, particularly CD4 positive T cells as well as antibodies. We also are looking for very favorable and differentiated tolerability. We believe that there's, you know, the unmet need and the real opportunity in the shingles adult vaccine space is to have a vaccine that has similar efficacy towards the current vaccine, but improved tolerability. The tolerability profile absolutely can be improved. It is a multi-billion dollar global market too. We know that we're just starting to scratch the surface on the ex-U.S. market. Go ahead. I guess to set the table for the data that's coming out later this year, can you review the data that were released to ACIP in 2023? Big picture data that we released last year, and maybe just by way of a reminder, that leveraged commercially available antigens, so gE protein that was commercially available and was really an adjuvant dosing dose ranging study. What we were looking for there primarily was, one, evidence of clear vaccine response, which we did see. We saw a nice, very nice improvement in tolerability across moderate and severe, local and systemic post-injection reactions. Of course, we know we needed to see comparable immunogenicity in terms of not only vaccine response rates, but bold increase across antibodies and CD4 positive T cells. I think maybe the most controversial part of the data was that the CD4 positive T cells were increased, but maybe not quite as much as Shingrix. What's the significance of that finding? As we think forward to the Phase 1/2, how close is close enough? For sure. That finding is absolutely significant, you know, and helps us think about how we were designing our Phase 1/2. We have designed our Phase 1/2 with, you know, Dynavax produced, Dynavax manufactured, gE antigen importantly. Since we did, we were able to downselect the adjuvant dose. We are really focused on this Phase 1/2 on figuring out the right antigen dose and the right adjuvant platform. We are still looking at 1018 in alum versus 1018 without alum across a variety of antigen dosages. Importantly, we are looking to see if we can find that optimized dose and regimen, which we believe will be as comparable as possible head-to-head versus Shingrix in order to give ourselves confidence across a variety of immune markers and immunogenicity measures in order to advance to the pivotal program. Importantly, you know, our Q3 data readout that will be on the one-month data. This program is also designed such that there's a six-month data readout as well as a 12-month data readout. You know, while the one-month data certainly is the primary endpoint, and that'll be something that'll be very meaningful in terms of, you know, ungating in sort of the next steps, we do also have other data that will serve to de-risk the program, particularly from a durability perspective over time should the program be supportive of advancing. What would be the next steps for the program? Should the data be supportive? We absolutely think that this is a program that will benefit from a multinational partner. Now, this is a large global opportunity, and we'd want to make sure that we're partnering with an organization that has an ex-U.S. footprint importantly so that we can unlock all the value of this asset. Also, you know, we would expect in our current design, you know, current protocol design and regulatory pathway to have to execute a placebo-controlled Phase 3 study, which will be quite expensive. Certainly, you know, having the right partner to defer and share in some of those economics, you know, will be valuable from that perspective as well. That will be an important next step in the program as well as getting the additional data from the six-month and 12-month readouts. Can you size the shingles market opportunity? How large of a revenue opportunity is this? Right now, it's about $4 billion globally. Some of that is a catch-up cohort, but we believe that the ex-U.S. market will continue to expand even if the US market does end up contracting a bit. Maybe moving next to the plague vaccine that you're developing in collaboration with the Department of Defense. Can you give an update on that program? We signed a $30 million agreement for a plague, an adjuvanted plague vaccine with the Department of Defense towards the very end of last year. It is a $30 million contract through the first half of 2027. Now, historically, you know, we have sort of roughly said we incur these expenses over time in a somewhat linear fashion. It never works out exactly that way. It is an important program for us in partnership with the DoD. Really what we are looking for here is an optimized dosing and regimen to be able to protect troops. It is a smaller stockpile opportunity. It is not like an SNS opportunity or anything like that unless the risk profile of plague changes in a meaningful way. Certainly, it's a great way to partner with the government and to get the government to have some access to the adjuvant, which we believe will be valuable not only for a plague, but potentially for other pandemic or other vaccine opportunities as well. Do you remind us what data has been publicly released on the plague? There haven't been any data publicly released because of the nature of the obligations with the DoD. Any chance we'll see the data from the trial that was just completed? Unlikely. Unlikely. Okay. You have disclosed that there's a Phase 2 trial that's going to start later this year. What's the purpose of that study? It's really a dose and regimen optimization effort. Perfect. Maybe next, turning to the early pipeline and business development. TD Cowen projects that Dynavax will be cash flow positive during 2025 and end the year with $762 million in cash. Your balance sheet's significantly strengthened. Can you talk about use of capital? How do you prioritize capital in terms of business development versus returning money to shareholders? Sure. You highlighted a bunch of important points there, starting with our balance sheet. I think one of the new pieces of guidance that we introduced this year in connection with our year-end earnings update and sort of guide for 2025 is adjusted EBITDA, less non-cash stock-based compensation. One of the reasons for providing that metric is to share with folks sort of a nice data point that more or less roughly represents cash flow. It is not exact, of course, but it sort of closely represents cash flow. Importantly, you know, our trajectory towards profitability balances and has to continue balancing for, you know, for obvious reasons, creating near-term value with long-term value. We have an early- stage pipeline, but we have a fully integrated commercial team and infrastructure. We have the ability to leverage our infrastructure right now that we have to drive growth and Heplisav and to maximize Heplisav. As we think about capital allocation, you know, we have a lot of levers that we can pull. We spend a lot of time kind of really interrogating every single one of these levers. First, maximizing Heplisav is, you know, mission critical for our organization. We want to make sure that we're investing in high ROI investments that can drive growth both through size of market and through market share. Secondly, you know, we do have an important catalyst coming up for our s hingles program, making sure that we're advancing that program in a very disciplined way, stage-gating the costs that should be stage-gated, and also proceeding full steam ahead with the costs that should be proceeded with in order to get the answers on that program as quickly and as efficiently as possible and to understand that we're going to need certain amounts of data to be confident in and compelling as we bring that program forward, either through a BD dialogue or otherwise, because there is no correlate of protection. We very much understand that. I think thirdly, as we talk about some of the other sort of tactics and levers that you can pull, you know, Phil mentioned share buyback program. We did authorize a $200 million share buyback program back in November. Immediately after that announcement, we executed a $100 million ASR. We have been in the market, also in the open market with share buybacks in the interim. We are making really nice progress under our share buyback plan and believe that is the right use of capital right now with, you know, where the stock has been trading and relative to the other uses of capital that we have access to. As we think about, you know, the forward and how to create long-term value and how to bring on additional catalysts to leverage the strengths of our company, we absolutely are looking at business development opportunities and corporate development opportunities. These are opportunities that we believe can create outsized upside value for shareholders in the long term. We are very focused and we have a very disciplined sort of series of governance around decision-making around evaluating these kinds of assets. Maybe you could go into that point in a bit more detail. There are some shareholders who think return capital shareholders should be prioritized well above business development. Why is business development integral to creating long-term value for the Dynavax shareholders? Sure. It's, I mean, we do believe that business development for the right assets at the right economics will absolutely create, you know, disproportionate upside relative to just buying back our capital at, you know, current prices. There's absolutely a rationale for share buybacks. I think we certainly have proven that we're willing to do that. It's the right thing to do under certain set of circumstances where that's the clear use of proceeds and that has the highest IRR. To the extent that we, you know, we see other opportunities that have a higher IRR, you know, I think we'd all agree that that's the right thing to chase after. Can you talk a bit about what programs or products would appeal to Dynavax? What's the ideal stage of development, disease area, risk profile? Ideal stage of development would be late- stage or maybe even commercial. Importantly, we know that we have an early stage pipeline. We have a commercial, you know, commercial infrastructure. It is the classic biotech barbell conundrum where you have a de-risked commercial asset and cash flows coming from that commercial asset. Then, you know, a much different risk profile for the earlier stage, you know, ideas and candidates. Filling out the late- stage elements of our pipeline will be really important as we think about not only durability of growth, but also about leveraging our current strengths. We have tremendous capability and strength as a team and as a leadership team bringing forward products through late- stage regulatory, clinical, and pre-commercial efforts and then successfully commercializing them. We do think that we have unique capabilities in this area. The kinds of assets that we are looking at are ones that we believe are technically de-risked or would be technically de-risked and could have real catalyst flow and have real upside value creation that can uniquely be unlocked by Dynavax. You know, in terms of economics, we absolutely would look to not meaningfully change the current risk profile of the company. I think we've worked really, really hard to establish the financial framework and disciplined financial profile that we're operating under right now. We wouldn't do anything to change the trajectory of Heplisav. If anything, we think that, you know, adding another late- stage or commercial product to the bag would be really valuable in terms of unlocking a greater share of voice across multiple indications. Can you talk about how aggressive Dynavax is being in looking for these opportunities? I guess, how liquid is the market? How many opportunities do you see? What's the quality that's out there today? Sure. I mean, we're aggressive in the sense that we have a very robust process to evaluate candidates and opportunities. We're very well integrated into the discussions and dialogues and sort of are able to evaluate the opportunities as they come, as they surface. I would say not aggressive in the sense that we're not willing to do anything that's going to destroy value for shareholders or not be complementary to our infrastructure or leverage our, you know, what we're great at. I think it's really important that we find the right thing or combination of things that will help us accelerate value and also balance near-term value creation with long-term value creation with the right level of risk and the right level of risk profile. Where is Dynavax's preclinical research and development focused today? What are your scientists working on? We have a number of preclinical assets that we're really, really excited about, but haven't named indications yet. We're really trying to be disciplined about only naming indications when they're at sort of the IND- enabling stage or we have a real clear path to the clinic. You know, leveraging 1018 has always been a hallmark of, you know, 1018 is our core technology. We're doing everything we can to leverage 1018. There are a number of indications where we think that 1018 could provide a really meaningful differentiation too. We're looking forward to sharing more as soon as we get, as soon as we can. We can definitely, you know, continue that dialogue. On 1018, any visibility on new partnerships, new collaborations, or new purchase orders? New orders from some of your current partners? From a commercial perspective, no updates there. We have a lot of, we have a number of preclinical and clinical collaborations leveraging 1018 with other academics and biotech companies, earlier stage companies that are public. We are looking forward to, you know, continuing to support all of our partners who are investigating different experiments with 1018. You know, that is part of leveraging what is a very broad-based adjuvant opportunity. Perfect. I guess last question from us, one that we get all the time. You have a great vaccine. There are a lot of big vaccine businesses out there. Can you talk about Dynavax's desire to be an independent company versus part of a larger organization? Sure. You know, right now we're an independent company and we're going to do our absolute best to drive as much value as we can within the confines of reality. We're sure that we are an independent company. You know, to the extent that a larger company sees scale and value unlock and we agree with the level of that value unlock, we absolutely would not be in the way of a transaction like that. I think it's no question that vaccines are highly capital intensive and there is real benefit from scaling vaccines with multiple products. That's great. We're just about out of time. I would like to thank you for coming to the 45th Annual Conference. Thank you for.