Dynavax Technologies’ Q1 Results: Strong Core Growth Amid Headwinds

Dynavax Technologies (DVAX) reported first-quarter 2025 revenue of $68.2 million, slightly below the $69.6 million consensus estimate, but the broader story behind the numbers reveals a company advancing its core hepatitis B franchise and pipeline while navigating near-term financial headwinds.

Dynavax’s Q1 Revenue Slightly Misses Estimates, But Core Metrics Shine

While the top-line figure fell short of expectations, the miss stemmed largely from non-operational factors. HEPLISAV-B®, the company’s flagship hepatitis B vaccine, delivered record net product revenue of $65 million, a 36% year-over-year increase, driven by a U.S. market share rise to 43% (from 41% in Q1 2024). Total revenue rose 34% compared to the same period last year, underscoring the vaccine’s momentum.

The company’s GAAP net loss widened to $96.1 million, but this included a $82.1 million non-cash loss from debt refinancing and an $11 million bad debt expense tied to partner Clover Biopharmaceuticals. Excluding these items, adjusted EBITDA improved to negative $4.4 million, a significant improvement from negative $6.8 million in Q1 2024.

HEPLISAV-B Dominates with Market Share Gains

HEPLISAV-B’s performance remains the cornerstone of Dynavax’s value. The vaccine’s 43% market share in the U.S. reflects its efficacy and preference over competitors. Management emphasized its goal to capture at least 60% market share by 2030, as the adult hepatitis B market is projected to grow to over $900 million annually by that time. A planned observational study targeting hemodialysis patients could expand its label and further fuel adoption.

Pipeline Progress: Shingles, Plague, and More on the Horizon

Dynavax’s pipeline is advancing across multiple high-potential areas:
- Shingles (Z-1018): Part 1 data from its Phase 1/2 trial comparing Z-1018 to Shingrix are expected in Q3 2025, with Part 2 targeting older adults.
- Plague (rFV1): A $30 million DoD agreement funds a Phase 2 trial starting in Q3 2025.
- Lyme Disease: IND-enabling studies are underway, with clinical development planned for 2027.
- Pandemic Influenza: A Phase 1/2 trial for an H5N1 vaccine begins in Q2 2025, leveraging CpG 1018’s dose-sparing capabilities.

These programs highlight the versatility of Dynavax’s CpG 1018 adjuvant technology, which could position the company as a leader in pandemic preparedness and specialty vaccines.

Financials: GAAP Loss Explained, Cash Position Solid

Despite the GAAP loss, Dynavax’s $661.3 million cash balance (down slightly from year-end 2024) remains robust. Over 85% of its $200 million share buyback program has been completed, signaling confidence in its valuation. Full-year 2025 guidance remains intact: $305–325 million in HEPLISAV-B revenue and $75 million in adjusted EBITDA.

Risks and Challenges Ahead

• Clover-Related Risks: The $11 million bad debt reflects broader partner instability and potential shifts in global vaccine demand.
• Regulatory Hurdles: Late-stage trials for pipeline candidates require rigorous data, including placebo-controlled comparisons for Lyme and shingles vaccines.
• Share Repurchase Impact: While buybacks signal confidence, they may limit flexibility if capital needs arise.

Conclusion: Strong Fundamentals Support Long-Term Growth

Despite the Q1 revenue miss and GAAP loss, Dynavax’s core metrics and pipeline milestones position it for sustained growth. HEPLISAV-B’s dominance in a $900 million+ market by 2030, combined with advancing programs in shingles, plague, and Lyme disease, creates a compelling multi-year narrative.

The company’s cash reserves and disciplined capital allocation—evidenced by the nearly completed buyback—mitigate near-term risks. Investors should focus on upcoming catalysts, including Q3 shingles data and 2027 Lyme vaccine trials, which could unlock significant value.

While the stock may face short-term volatility, Dynavax’s execution in its core business and diversified pipeline suggest it remains a strategic play in the growing vaccine market. The path to long-term success is clear, but execution against 2025 milestones will be key.