Dynavax to restructure to focus on vaccine business
Dynavax Technologies Corporation announced a strategic restructuring to prioritize its vaccine business by focusing on the company's first commercial product HEPLISAV-B. As part of the restructuring, the company will explore strategic alternatives for its immuno-oncology portfolio and will reduce the company's workforce and operations to focus resources on HEPLISAV-B commercialization. While the company's near-term focus will be on HEPLISAV-B sales execution, the company is assessing additional opportunities to leverage its 1018 adjuvant, as well as evaluating other opportunities for growth. In addition, CEO Eddie Gray announced that he will retire from his positions as chief executive and director as of August 1, 2019. The board will conduct a search for the company's next CEO and will consider both internal and external candidates. In connection with the decision to focus on the vaccine business the company is eliminating approximately 82 current positions, representing approximately 37% of its current U.S. workforce. The company is providing severance, continuation of employee benefits and outplacement assistance to the employees affected by the restructuring. The positions eliminated are primarily related to research and clinical development for the immuno-oncology programs and general and administrative functions. Restructuring costs and retirement costs related to compensation and benefit expenses as well as severance costs, are expected to be approximately $5.5M, exclusive of stock compensation. The company may incur additional restructuring expenses including retirement of fixed assets and facility-related costs. The workforce reduction is expected to reduce compensation and benefits cost by approximately $16M dollars annually. After all existing oncology trials and commitments are complete, the company estimates its operating expenditures related to external oncology costs will be reduced by approximately $8M per quarter as compared to the first quarter ended March 31, 2019. The company will be responsible for certain wind-down costs and committed contractual costs for the immuno-oncology programs, including the I-SPY trial that will run through the second quarter of next year.