Dynavax's Crossroads: Can a Boardroom Shake-Up Revive Shareholder Value?

The proxy battle between Deep Track Capital and Dynavax Technologies (DVAX) has crystallized into a high-stakes referendum on corporate governance in the biotech sector. With the 2025 Annual Meeting just days away, the question isn't merely about boardroom seats—it's whether shareholders will tolerate a strategy that has left the company's flagship product, Heplisav-B, stagnating while its stock languishes.

At the heart of the conflict is a stark performance gap. Dynavax's hepatitis B vaccine, Heplisav, has failed to meet sales targets and is losing market share, even as its peers thrive. Meanwhile, the stock's underperformance relative to the Nasdaq Biotechnology Index (NBI) underscores a deeper issue: a leadership team seemingly out of touch with the urgency of its own growth targets.

The Heplisav Stagnation

Heplisav-B, approved in 2013, remains Dynavax's sole commercially viable product. Its sales missed the 2024 target of $275 million by $7 million, dropping to $268 million, while U.S. market share slid to 43% in Q1 2025 from a peak of 47% in late 2024. . Management's response—that this trajectory was “exactly how we had planned”—has fueled skepticism.

The numbers tell a harsher story. At current growth rates, hitting the 2030 target of 60% market share is mathematically impossible. Compounding this is the $450 million cash pile sitting idle, a stark contrast to the board's rhetoric about pursuing “inorganic growth.” Critics argue that capital is being wasted on vague ambitions rather than maximizing Heplisav's potential through marketing, partnerships, or pricing strategies.

Stock Performance: A Mirror of Mismanagement

Dynavax's stock has underperformed the NBI for years, a trend that deepened in 2024.

- 1-year: DVAX: -17% vs. NBI: -6%
- 2-year: DVAX: -12% vs. NBI: +2%
- 3-year: DVAX: -15% vs. NBI: +17%

This underperformance isn't merely about sector headwinds. Competitors like Pfizer and Merck have leveraged their biotech assets to drive growth, while Dynavax's leadership has been accused of complacency. The board's focus on “diversification” through acquisitions—without a clear plan—has left shareholders questioning priorities.

The Governance Gimmick: A Board Immune to Change

The classified board structure, which won't allow full turnover until 2028, has drawn criticism from Deep Track. Only one independent director is up for election in 2026, making the 2025 vote a rare opportunity for change.

Proxy advisory firms are split: Glass Lewis endorsed Deep Track, citing “valid concerns” about strategy and capital allocation, while ISS and Egan-Jones backed the current board. This divergence reflects a broader debate: Is the board's resistance to change a sign of confidence in its plan, or a red flag of entrenchment?

The Case for Change—and the Risks of Inaction

Deep Track's argument hinges on two pillars: 1) Heplisav's underperformance is solvable with sharper execution, and 2) the board's insularity has bred inertia. The firm points to missed opportunities, such as delayed partnerships in international markets and a failure to leverage Heplisav's efficacy data in pricing negotiations.

Opponents, including ISS, argue that destabilizing the board risks derailing existing efforts. Yet with Heplisav's growth plateauing and no pipeline breakthroughs in sight, the status quo is already failing. The classified board structure only amplifies the urgency—this may be the last chance to act before the company's trajectory hardens.

Investment Implications: Vote with Your Wallet

For shareholders, the choice is binary: back a leadership that has underdelivered on its own metrics, or trust a slate of outsiders to reorient the company. The data is damning: Dynavax's stock has lost value even as biotech peers rebounded.

Recommendation: Vote for Deep Track's nominees. The board's lack of accountability and the company's reliance on a single underperforming product create a high-risk scenario. A fresh perspective could unlock value through strategic partnerships, cost discipline, or even a sale of the company.

Furthermore, historical data reveals compelling opportunities around shareholder meetings. From 2015 to 2024, buying Dynavax stock five days before its annual meetings and holding for 30 days generated a 236% return, with a Sharpe ratio of 2.04—indicating strong risk-adjusted performance. This underscores the potential value of the upcoming 2025 meeting as a pivotal moment for shareholders.

The proxy battle isn't just about governance—it's about whether Dynavax can evolve beyond its past missteps. Shareholders who prioritize long-term value over short-term stability should heed the warning signs. The clock is ticking, and the market isn't waiting.