Q1 2024 Dynavax Technologies Corp Earnings Call

May 8, 2024

Okay.

Operator: Good day, ladies and gentlemen, and welcome to Dynavax Technologies' first quarter 2024 financial results conference call. As a reminder, this call is being recorded.

Good day, ladies and gentlemen, and welcome to the Stein of X Technologies' first quarter 'twenty 'twenty four financial results conference call.

Operator: Mind you. This call is being recorded at the end of the company's prepared remarks, we'll open the call for questions and provide specific participation instructions at that time.

Operator: I would now like to turn the call over to Paul Cox, Vice President Investor Relations and corporate Communications. Please begin sir.

Operator: At the end of the company's prepared remarks, we'll open the call for questions and provide specific participation instructions at that time. I would now like to turn the call over to Paul Cox, Vice President, Investor Relations, and Corporate Communications. Please begin.

Paul Cox: Thank you for participating in today's call joining me from <unk> are Ryan Spencer Chief Executive Officer, Don <unk>, Chief Commercial Officer, Rob Janssen, Chief Medical Officer, and our interim head of Finance Rita O'connor.

Paul Cox: Thank you for participating in today's call. Joining me from Dynavax are Ryan Spencer, Chief Executive Officer, Donn Casale, Chief Commercial Officer, Rob Janssen, Chief Medical Officer, and our Interim Head of Finance, Rita O'Connor. Earlier today, Dynavax released financial results for the first quarter ended March 31, 2024.

Paul Cox: Earlier today <unk> released financial results for the first quarter ended March 31 2024.

Paul Cox: Copies of the press release and a supplementary slide presentation are available on Dynavax's website. Before we begin, I advise you that we will be making forward-looking statements today based on our current expectations and beliefs, including but not limited to potential market sizes, market segmentation, effective marketing efforts, future expected market share, and related growth rates, and related ACIP recommendation impact on each, financial guidance and trends, including revenue, profitability, cash flow, and sufficiency of current capitalization, timing and results of FDA submissions, clinical trial starts and data readouts These statements involve risks and uncertainties, and our actual results may differ materially.

Speaker Change: Copies of the press release, a supplementary slide presentation are available on <unk> website.

Paul Cox: Before we begin I advise you that we will be making forward looking statements today based on our current expectations and beliefs, including but not limited to potential market sizes market segmentation.

Paul Cox: <unk> marketing efforts future expected market share and our related growth rates and related aci's recommendation impact on each financial guidance and trends, including revenue profitability cash flow and sufficiency of current capitalization.

Paul Cox: Timing of results of FDA submissions clinical trial starts and data readouts and potential future uses or demand for our CPG <unk> adjuvant.

Paul Cox: These statements involve risks and uncertainties and our actual results may differ materially.

Paul Cox: These risks are summarized in today's press release and detailed in the risk factor section of our SEC filings, including today's quarterly report on Form 10. Our forward-looking statements speak as of today, and we undertake no obligation to update such statements. And with that, I will now turn the call over to Ryan. Thanks, Paul. Good afternoon, everyone.

Paul Cox: Risks are summarized in today's press release and detailed in the risk factors section of our SEC filings, including today's quarterly report on Form 10-Q.

Ryan: Our forward looking statements speak as of today, and we undertake no obligation to update such statements.

Paul Cox: With that I'll now turn the call over to Ryan.

Ryan: Thanks, Paul.

Ryan Spencer: Thank you for taking the time to join us to review our Q1 2024 results. The first quarter of 2024 saw continued year-over-year growth in quarterly HEPLISAV-B net product revenue, despite a slight decrease in the U.S. hepatitis B vaccine market during the first quarter due to an extended cough, cold, and flu season, which reduced the number of vaccination opportunities. Dynavax, which was observed across other non-respiratory vaccine markets beyond hepatitis B.

Ryan: Good afternoon, everyone. Thank you for taking the time to join US to review our Q1 2024 results.

Ryan Spencer: The first quarter of 2024 saw continued year over year growth in quarterly hurtful 70, net product revenue. Despite a slight decrease in the U S. Hepatitis b vaccine market during the first quarter.

Ryan Spencer: Due to an extended cough cold and flu season, which reduced the number of vaccination opportunities.

Ryan Spencer: <unk> was observed across other non respiratory vaccine markets beyond hepatitis D.

Ryan Spencer: Even with the slow start to the year, we remain very encouraged about the adult hepatitis B vaccine market opportunity, both in 2024 and over the longer term. We're seeing a pickup in the market in recent weeks as providers have begun to shift to non-restorative vaccine campaigns, and as our retail pharmacy partners and top IDN systems launch new hepatitis B-focused initiatives. Heplisav-B became the market share-leading hepatitis B vaccine for adults in the U.S. last year, and we plan to build on that position in 2024.

Ryan Spencer: Even with the slow start to the year, we remain very encouraged about the adult hepatitis b vaccine market opportunity both in 2024 and over the longer term.

Ryan Spencer: We are seeing a pickup in the market in recent weeks as providers have begun to shift to non respiratory vaccine campaigns.

Ryan Spencer: And as our retail pharmacy partners and top IBM systems launched new hepatitis B focused initiatives.

Ryan Spencer: <unk> became the market share leading hepatitis b vaccine for adults in the U S last year, and we plan to build on that position in 2024.

Ryan Spencer: We continue to expect record Heplisav-B sales in 2024, with net product revenue expected in the range of $265 to $280 million for the year. Longer term, the U.S. adult hepatitis B vaccine opportunity remains significant with over 130 million patients eligible. One of the largest addressable patient populations in the U.S. with a vast majority remaining unvaccinated.

Ryan Spencer: We continue to expect record <unk> sales in 2024 with net product revenue expected in the range of $265 million to $280 million for the year.

Ryan Spencer: Longer term the U S adult hepatitis B vaccine opportunity remains significant with over 130 million patients eligible one of the largest addressable patient populations in the U S with the vast majority remaining and vaccinated we.

Ryan Spencer: We believe this translates to a market opportunity for HEPLISAV-B of over $800 million by 2027, with HEPLISAV-B poised to achieve a majority market share. We're also excited for several upcoming milestones from our novel vaccine pipeline, including the initiations of our Phase 1-2 trial for our single vaccine candidate, long-term follow-up data for our Phase 1 Tdap trial, and data readouts from As a reminder, we look forward to our PDUFA action date on May 13th for HEPLISAV-B's Supplemental BLA for vaccination of adults on hemodialysis, which is currently under review by the U.S. FDA.

Ryan Spencer: We believe this translates to a market opportunity for <unk> of over $800 million by 2027 with <unk> that would be poised to achieve a majority market share.

Ryan Spencer: We're also excited for several upcoming milestones for our from our novel vaccine pipeline, including the initiation of our phase one two trial first shingles vaccine candidate long term follow up data for our phase <unk> trial and data Readouts from our <unk> program.

Ryan Spencer: As a reminder, we look forward to our <unk> action date on May 13th for the for <unk> supplemental BLA for vaccination of adults on hemodialysis, which is currently under review by the U S. FDA.

Ryan Spencer: In addition to this continued execution and bolstered by our strong financial position, we continue to assess opportunities to grow beyond our internal organic pipeline within the infectious disease space, which we believe would enable us to further diversify our product portfolio and create future commercial opportunities. As we've discussed previously, we remain committed to disciplined capital allocation focused on generating significant value and driving growth.

Ryan Spencer: In addition to this continued execution and bolstered by our strong financial position, we continue to assess opportunities to grow beyond our internal organic pipeline within the infectious disease space, which we believe will enable us to further diversify our product portfolio and create future commercial opportunities.

Ryan Spencer: As we've discussed previously we remain committed to disciplined capital allocation focused on generating significant value and driving growth. We look forward to providing updates on these efforts in the future.

Ryan Spencer: We look forward to providing updates on these efforts in the future. I'll now turn the call over to Don and Rob, who will provide more details on the FOSATH-B results and our pipeline progress, respectively, before Rita O'Connor reviews our financial results for the first quarter. As previously announced, our CFO, Kelly MacDonald, is currently on maternity leave as Rita has stepped in as interim head of finance, supporting me in my temporary appointment as principal financial officer until Kelly's expected return in August. Don, can you take it away?

Speaker Change: I'll now turn the call over to Don and Rob who will provide more details on <unk> results and our pipeline progress respectively before Rita O'connor.

Rita O'Connor: Reviews, our financial results for the first quarter as.

Don: As previously announced our CFO Kelly Macdonald is currently on maternity leave as Reed has stepped in as interim head of finance supporting me in my temporary appointment as principal financial officer until Kelly as expected return in August.

Ryan Spencer: Don can you take it away.

Donn Casale: Thank you, Ryan. In the first quarter of 2024, HEPLISAV-B achieved strong net product sales despite headwinds that affected the non-respiratory vaccine markets, including hepatitis C. On our last call, we said that growth in the U.S. hepatitis B vaccine market was expected to be flat during the first quarter due to an extended cough, cold, and flu season. As expected, these dynamics played out, ultimately reducing the opportunities for adult vaccination in Q1, leading to a slight decrease in the hepatitis B vaccine market compared to the fourth quarter of last year and flat year-over-year growth compared to the first quarter of 2023.

Don: Thank you Ryan.

Ryan Spencer: In the first quarter of 2024 help us that would be achieved strong net product sales despite headwinds that affected the non respiratory vaccine market, including hepatitis C.

Donn Casale: On our last call, we said that growth in the U S. Hepatitis B vaccine market was expected to be flat during the first quarter due to an extended cough cold and flu season.

Donn Casale: As expected these dynamics played out ultimately reducing the opportunity for adult vaccination in Q1, leading to a slight decrease in the hepatitis b vaccine market compared to the fourth quarter of last year, and a flat year over year growth compared to the first quarter of 2023.

Donn Casale: This dynamic has been observed across other non-respiratory vaccine markets as well. FSFV continued to increase its total U.S. market share year-over-year, achieving an estimated 41% market share in the first quarter, compared to 37% during the same period last year. Net product revenue in the quarter grew 10% year over year compared to the first quarter of 2023.

Donn Casale: This dynamic has been observed across other non respiratory vaccine market as well.

Donn Casale: <unk> continued to increase its total U S market share year over year, achieving an estimated 41% market share in the first quarter compared to 37% during the same period last year.

Donn Casale: Net product revenue in the quarter grew 10% year over year compared to the first quarter of 2023.

Donn Casale: This sales growth continues to be driven by Headless FAB's strong performance in two critical segments: retail pharmacy and integrated delivery networks, or IDN. We estimate these segments will drive significant growth and represent over 60% of the total adult hepatitis B market in the U.S. by 2027. In both segments, Heplisav-E's first quarter estimated market share increased to approximately 55% compared to approximately 49% during the same period last year. Despite the softness in the market in the first quarter, we continue to see indicators of U.S. market expansion from the ACIP Universal Recommendation for Adult Hepatitis B Vaccination, reaffirming our confidence in a sizable market opportunity and long-term revenue growth potential for Heplisav-B.

Donn Casale: This sales growth continues to be driven by <unk> strong performance in two critical segments retail pharmacy, and integrated delivery networks or IBM.

Donn Casale: We estimate these segments will drive significant growth and represent over 60% of the total adult hepatitis b market in the U S by 2027.

Donn Casale: And both segments <unk> first quarter estimated market share increased to approximately 55% compared to approximately 49% during the same period last year.

Donn Casale: Despite the softness in the market in the first quarter, we continued to see indicators of U S market expansion from the <unk> Universal recommendation for adult hepatitis B vaccination, reaffirming our confidence and a sizable market opportunity and long term revenue growth potential for <unk> therapy.

Donn Casale: Large health systems and providers are gaining awareness and agreeing that they need to act on the ACIP Universal Recommendation. Many large systems have committed to launching new hepatitis B-focused initiatives over the next several quarters to effectively implement the recommendation. Over half of our targeted IDM universe has increased hepatitis B dose volume year over year. While system-level changes take time to enact, we are encouraged by the progress we see as our systems work to implement operational changes to support routine adoption of the ACIP Universal Recommendation.

Donn Casale: Large health systems and providers are gaining awareness and agree they need to act on the <unk> recommendation.

Donn Casale: Many large systems have committed to launching new hepatitis b focused initiatives over the next several quarters to effectively implement the recommendation.

Donn Casale: Over half of our targeted IBM universe has increased hepatitis b dose volume year over year.

Donn Casale: While system level changes take time to enact we are encouraged by the progress we see as our systems work to implement operational changes to support routine adoption of the <unk> universe recommendation.

Donn Casale: In the retail pharmacy segment, we have made meaningful progress with several large national chains, placing Heplisav-B in a preferred position among adult hepatitis B vaccines. Despite the slow start in Q1, retail customers are mobilizing around the opportunity for hepatitis B vaccination. Several customers have indicated a clear shift away from respiratory vaccines to a focus on non-respiratory vaccines such as hepatitis B. Given these positive trends and customers' commitment to prioritize hepatitis B vaccination for the rest of the year, we are forecasting the retail segment to meet our annual expectations for 2024 and make a considerable impact on hep CEPI's success this year. As Ryan noted, we are reaffirming our full year 2024 net product revenue guidance for HEPLIS-FB to be in the range of $265 to $280 million.

Donn Casale: In the retail pharmacy segment, we have made meaningful progress with several large national chains, placing help us that would be in a preferred position among adult hepatitis b vaccine <unk>.

Donn Casale: Despite the slow start in Q1 retail customers are mobilizing around the opportunity of hepatitis B vaccination.

Donn Casale: Several customers have indicated a clear shift away from respiratory vaccine to a focus on non respiratory vaccine such as hepatitis b.

Donn Casale: Given these positive trends and customers' commitment to prioritize hepatitis b vaccination for the rest of the year. We are forecasting the retail segment to meet our annual expectations for 2024 and make a considerable impact to <unk> success. This year.

Donn Casale: As Ryan noted we are reaffirming our full year 2024, net product revenue guidance for <unk> to be in the range of $265 million to $280 million.

Donn Casale: As mentioned, we've already seen signs of the market strengthening early on in Q2 as the focus of healthcare providers and retail pharmacies shifts back to prioritizing non-respiratory vaccines. We are extremely confident in the long-term expansion of the U.S. hepatitis B vaccine market and forecast annual market growth of approximately 10 to 15% over the next several years, with hepatitis B gaining meaningful increases in total market share over We continue to expect the hepatitis B vaccine market opportunity for hepatitis B to grow to over $800 million in the U.S. by 2027 from approximately $525 million in 2023.

Donn Casale: As mentioned, we have already seen signs of the market strengthening early on in Q2 as the focus of health care providers and retail pharmacy shifts back to prioritizing not respiratory vaccines.

Donn Casale: We are extremely confident in the long term expansion of the U S. Hepatitis b vaccine market and forecast annual market growth of approximately 10% to 15% over the next several years will help us be gaining meaningful increases a total market share over that time.

Donn Casale: We continue to expect the hepatitis b vaccine market opportunity for <unk> to grow to over $800 million in the U S by 2027% from approximately $525 million in 2023.

Donn Casale: In summary, we are reaffirming our confidence that HEPLISAV-B will strengthen its position as a clear market share leader in the expanding hepatitis B vaccine market, and we expect 2024 will be another year of record sales and continued growth. We are very proud of our commercial team's execution in establishing Headless FBE as the market share leader in the US, and we look forward to continuing this momentum in the remainder of 2024. I will now turn the call over to Rob to take you through our clinical pipeline. Thank you, Don.

Donn Casale: In summary, we are reaffirming our confidence that <unk> will strengthen its position as the clear market share leader in the expanding hepatitis B vaccine market and we expect 2024 will be another year of record sales and continued growth.

Rob: We're very proud of our commercial team's execution in establishing <unk> as the market share leader in the U S and we look forward to continuing this momentum in the remainder of 2024.

Donn Casale: I will now turn the call over to Rob to take you through our clinical pipeline.

Robert Janssen: We continue to make progress advancing our innovative vaccine pipeline, which is focused on leveraging our CPG1018 adjuvant with proven antidotes, starting with our shingles vaccine program, Z10E. As a reminder, we believe there is an opportunity to develop an improved shingles vaccine given the challenging tolerability profile of the current market-leading product. One of the unique advantages, we believe, of our CPG1018 adjuvant is its safety and tolerability profile combined with its ability to induce strong CB4 positive T-cell responses, which we believe are critical to preventing the reactivation of the zoster virus. We previously conducted a phase one trial of Z1018 in 150 subjects at clinical sites in Australia.

Rob: Thank you Dan we continue to make progress advancing our innovative vaccine pipeline, which is focused on leveraging our CPG 10, 18 adjuvant with proven antigens.

Robert Janssen: Starting with their shingles vaccine program in <unk> and as a reminder, we believe there is an opportunity to develop and improve shingles vaccine given the challenging tolerability profile of the current market leading product.

Robert Janssen: One of the unique advantages, we believe of our CPG <unk> adjuvant is it safety and Tolerability profile combined with its ability to induce strong CD positive T cell responses, which we believe are critical to preventing the reactivation of the zoster virus.

Robert Janssen: We previously conducted at Phase one trial of <unk> thousand 18, and 150 subjects at clinical sites in Australia.

Robert Janssen: We believe the results from this trial support the continued development of Z1018 as they demonstrate the opportunity to develop a shingles vaccine with an improved tolerability profile and comparable efficacy. Late last year, we received type B meeting feedback from FDA on the Z1018 program, which we believe is supportive of our proposed clinical development plan that includes a pivotal placebo-controlled efficacy study. During the second quarter of 2024, we plan to initiate a randomized active control phase 1-2 trial to evaluate the safety, tolerability, and immunogenicity of Z1018 compared to the licensed recombinant vaccine. We plan to enroll approximately 440 healthy adults aged 50 to 69 years at trial sites in Australia.

Robert Janssen: We believe the results from this trial support the continued development of <unk> as they demonstrate the opportunity to develop the shingles vaccine with an improved tolerability profile and comparable efficacy.

Robert Janssen: Late last year.

Robert Janssen: Received type B meeting feedback from FDA on the Z 2018 program, which we believe is supportive of our proposed clinical development plan that includes a pivotal placebo controlled efficacy study.

Robert Janssen: During the second quarter of 2024, we plan to initiate a randomized active controlled phase one two trial to evaluate the safety tolerability and immunogenicity of <unk> compared to the licensed recombinant vaccine.

Robert Janssen: We plan to enroll approximately 440 healthy adults aged $50 to 69 years at trial sites in Australia.

Robert Janssen: We will be evaluating escalating doses of our GE protein, a selected dose of CPG 1018 with or without alum, and different vaccination schedules. We anticipate top-line immunogenicity and safety data in the second half of 2025, which will include a comparison of CV4-positive T cells one month after the last vaccine dose. In March, we received FDA clearance of our IND application for this trial. Turning next to the Tdap1018 program, this is an investigational vaccine candidate that's intended for active booster immunization against tetanus, diphtheria, and pertussis or Tdap1018.

Robert Janssen: We will be evaluating escalating doses of <unk> protein.

Robert Janssen: Our selected dose of CPG, 2018, with or without Allen and different vaccinations schedules.

Robert Janssen: We anticipate topline immunogenicity and safety data in the second half of 2025, which will include a comparison of <unk> positive T cells. One month after the last vaccine dose.

Robert Janssen: In March we received FDA clearance of our <unk> application for this trial.

Robert Janssen: Turning next to the <unk> program. This is an investigational vaccine candidate that's intended for active booster immunization against tetanus, diphtheria and pertussis or Tia.

Robert Janssen: Current Tdap vaccines have limitations, including waning effectiveness, and we believe there is an opportunity to improve the duration of protection using our CPG-1018 adjuvant to generate a Th1-biased immune response. In 2022, Dynavax reported top-line results from a Phase I clinical trial evaluating the immunogenicity and safety of a booster dose of Tdap1018 compared to an active control. The results demonstrated that Tdap1018 was generally well-tolerated and induced similar or higher antipertussis antibodies and booster response rates than the active control.

Robert Janssen: Current T that vaccines have limitations, including waning effectiveness and we believe theres an opportunity to improve the duration of protection using our CPG 10, 18, adjuvant degenerate at th <unk> biased immune response.

Robert Janssen: In 2022, <unk> reported topline results from a phase one clinical trial evaluating the immunogenicity and safety of a booster dose of <unk> compared to an active control the results.

Robert Janssen: <unk> demonstrated that <unk> was generally well tolerated and induce similar or higher Andy pertussis antibodies and booster response rates than the active control.

Robert Janssen: Prior to advancing Tdap1018 into a previously announced Phase 2 human challenge trial, Dynavax plans to evaluate the persistence of pertussis immunogenicity of Tdap1018 through a long-term follow-up study of participants who completed our Phase 1 trial. The extension study is expected to follow participants for up to approximately three years following vaccination. Top-line results are expected in the fourth quarter of 2024. These data will provide us with a view of how the Tdap1018 immunogenicity response over time compares to the active control and will help establish our views on the potential benefits that can be achieved with our vaccine candidate.

Robert Janssen: Prior to advancing teed up 2018 into our previously announced phase <unk> Human Challenge trial <unk> plans to evaluate the persistence of pertussis Immunogenicity of teed up 2018 through a long term follow up study of participants who completed our phase one trial.

Robert Janssen: The extension study is expected to follow participants for up to approximately three years following vaccination.

Robert Janssen: Topline results are expected in the fourth quarter of 2024.

Robert Janssen: These data will provide us with a view of how the th <unk> Immunogenicity response over time compares to the active control and will help establish our views on the potential benefits that can be achieved with our vaccine candidate.

Robert Janssen: Moving onto the plagued vaccine program, which is in collaboration with and funded by the U S Department of defense.

Robert Janssen: In March we executed a contract modification with Dod to add approximately $4 million to support CMC work for the plagued vaccine candidate with the agreement now totaling $38 million through 2025.

Robert Janssen: We anticipate top-line data from both the randomized active control phase two clinical trial, as well as the non-human primate challenge study of the plague vaccine candidate, in the fourth quarter of 2024. These data will inform next steps for the company. We're pleased with this progress across our pipeline, and we look forward to executing on these upcoming milestones in the coming months. We also continue to identify new opportunities to leverage our CPG 1018 adjuvant through multiple innovative programs with biotech and academic collaboration. I'll now turn the call over to Rita to review our financial results.

Robert Janssen: We anticipate top line data from both the randomized active controlled phase III clinical trial as well as the nonhuman Primate challenge study of the play.

Rita: Vaccine candidate in the fourth quarter of 2024.

Rita: These data will inform next steps for the program.

Rita: We're pleased with this progress across our pipeline and we look forward to executing on these upcoming milestones in the coming months.

Rita: We also continue to identify new opportunities to leverage our CPG till 18 adjuvant through multiple innovative programs with biotech and academic collaborators.

Rita: I'll now turn the call over to <unk> to review our financial results.

Rita O'Connor: I'll review the key financial results for the first quarter of 2024, as well as our financial guidance for the full year of 2024. Please note that all financial comparisons are versus the prior year period, unless otherwise noted. Please refer to our press release and Form 10-Q for more detailed financial information. Starting with Teflis FB, net product revenue grew 10% year over year to $48 million in the first quarter of 2024. Cost of product sales for HEPLISAV-B in the first quarter of 2024 decreased to $11 million compared to $15 million for the prior year period. The decrease is primarily due to lower per unit manufacturing costs as a result of previous process improvements partially offset by a $1 million inventory write-off charge recorded during the first quarter of 2024.

Rita: Thank you Ron.

Rita: The key financial results for the first quarter of 2024 as well as our financial guidance for the full year of 2024.

Rita O'Connor: Please note that all financial comparisons are versus the prior year period, unless otherwise noted.

Rita O'Connor: Please refer to our press release and Form 10-Q for more detailed financial information.

Rita O'Connor: Starting with Tesla <unk> net product revenue grew 10% year over year to $48 million in the first quarter of 2024.

Rita O'Connor: Cost of product sales for <unk> in the first quarter of 2024 decreased to $11 million compared to $15 million for the prior year period.

Rita O'Connor: The decrease was primarily due to lower per unit manufacturing cost as a result of previous process improvements, partially offset by a $1 million inventory write off charge recorded during the first quarter of 2024.

Rita O'Connor: We continue to be pleased with the HEPLISAV-B margin profile trend, with growth margins of about 77% in Q1 of 2024, a significant improvement over the 66% in the first quarter of 2023. We continue to expect growth margins of approximately 80% for the full year of 2024, which is consistent with our long-term expectations of margin profile for Heplisav-B. Other revenue was about three million dollars for both the first quarter of 2024 and 2023, representing revenue related to the plague vaccine program in collaboration with and funded by the U.S. Department of Defense.

Rita O'Connor: We continue to be pleased with the help of <unk> margin profile trend with gross margin is about 77% in Q1 of 2020 for a significant improvement over the 66% in the first quarter of 2023.

Rita O'Connor: We continue to expect gross margins of approximately 80% for the full year of 2024, which is consistent with our long term expectations of margin profile for <unk>.

Rita O'Connor: Other revenue was about $3 million for both the first quarter of 2024 and 2023.

Rita O'Connor: Representing revenue related to the play vaccine program in collaboration with and funded by the U S Department of defense.

Rita O'Connor: Turning to our expenses, research and development expenses were $14 million for both the first quarters of 2024 and 2023. Expenses in 2023 included the completion of clinical trials for our pipeline programs, whereas the first quarter of 2024 reflected activities for planned clinical trials, as well as increases related to investments in our CPG-1018 preclinical and clinical collaboration. Selling general and administrative expenses for the first quarter of 2024 were $44 million, compared to approximately $37 million for the prior year period.

Rita O'Connor: Turning to our expenses research and development expenses were $14 million for both the first quarters of 2024 and 2023.

Rita O'Connor: Expenses in 2023 included the completion of clinical trials for our pipeline programs.

Rita O'Connor: As the first quarter of 2024 reflected activities for planet clinical trials as well as increases related to investments in our CPG 10, 18, preclinical and clinical collaborations.

Rita O'Connor: Selling general and administrative expenses for the first quarter of 2024 or $44 million.

Rita O'Connor: Compared to approximately $37 million for the prior year period.

Rita O'Connor: The increase was primarily driven by increased headcount and other investments supporting our strategic growth, including an overall increase in targeted commercial and marketing efforts designed to increase Teplicev-B market share and maximize the opportunity presented by the ACIP's Universal Recommendation. Sublease expense was $1.6 million in the first quarter of 2024 compared to sublease income of $1.6 million in the prior year period.

Rita O'Connor: Recommendation.

Rita O'Connor: Sublease expense was $1 $6 million in the first quarter of 2024 compared to sublease income of $1 6 million in the prior year period.

Rita O'Connor: This change reflected the termination of our original lease with a non-cash charge of $3.5 million, partially offset by income of $1.9 million during the period. Including this one-time non-cash charge, we expect to record approximately $5 million of net sublease income for the full year of 2024. These results generated a net loss of $9 million in the first quarter of 2024, compared to $24 million during the prior period. Moving to the balance sheet, we ended the first quarter of 2024 with cash, cash equivalents, and marketable securities of $724 million, which we believe is sufficient to progress our current pipeline assets and support our organic business without the need to raise additional capital.

Rita O'Connor: This change reflected the termination of our original lease with a noncash charge of $3 5 million, partially offset by income of $1 $9 million during the period.

Rita O'Connor: Including this onetime noncash charge, we expect to record approximately $5 million of net sublease income for the full year of 2024.

Rita O'Connor: These results generated a net loss of $9 million in the first quarter of 2024 compared to $24 million during the prior year period.

Rita O'Connor: Moving to the balance sheet. We ended the first quarter of 2024 with cash cash equivalents and marketable securities of $724 million, which we believe is sufficient to progress our current pie.

Rita O'Connor: Pipeline assets and support our organic base business without the need to raise additional capital.

Rita O'Connor: And now to summarize our financial guidance. We are reaffirming our prior full year 2024 financial guidance as follows. Peplis FD net product revenue is expected to be between approximately $265 and $280 million, including approximately $3 million in ex-U.S. sales through our commercialization partnership in Germany.

Rita O'Connor: Now to summarize our financial guidance, we are reaffirming our prior full year 2024 financial guidance as follows.

Rita O'Connor: We expect HEPLISAV-B gross margin of approximately 80% for the full year of 2024. We expect R&D expenses to be between approximately $60 and $75 million, and we expect SG&A expenses to be between approximately $160 and $180 million.

Rita O'Connor: <unk> net product revenue expected to be between approximately 265 and $280 million, including approximately $3 million in ex U S sales through our commercialization partnership in Germany.

Rita O'Connor: We expect <unk> gross margin of approximately 80% for the full year of 2024.

Rita O'Connor: We expect R&D expenses to be between approximately 60 and $75 million.

Rita O'Connor: We expect SG&A expenses to be between approximately 160 and $180 million.

Rita O'Connor: And we also expect cash, cash equivalents, and marketable securities to be higher at the end of 24 as compared to December 31st of 23, reflecting our continued discipline towards allocating capital to drive top-line revenue growth while thoughtfully advancing our research programs. I would now like to turn the call back over to Ryan before we start the Q&A section. Thanks, Rita.

Rita O'Connor: And we also expect cash cash equivalents and marketable securities to be higher at the end of the 24 as compared to December 31 23.

Rita O'Connor: Reflecting our continued discipline towards allocating capital to drive topline revenue growth, while thoughtfully advancing our research programs I would now like to turn the call back over to Ryan before we start the Q&A section.

Ryan Spencer: In closing, we believe that with our strong financial position and proven ability to execute, we are well positioned to drive sustainable growth in our core Heplisav-B business by capturing a majority U.S. market share and leading the expansion of the adult hepatitis B vaccine market. We look forward to progressing our R&D portfolio of vaccine candidates while continuing to be extremely thoughtful in how we allocate our capital to accelerate growth and build beyond our current base business.

Ryan Spencer: Thanks, Rita in closing, we believe that our strong financial position and proven ability to execute we are well positioned to drive sustainable growth in our core <unk> business by capturing majority of U S market share and leading the expansion of the adult hepatitis B vaccine market, we look forward to progressing our R&D portfolio of vaccine candidate.

Ryan Spencer: While continuing to be extremely thoughtful in how we allocate our capital to accelerate growth and build beyond our current base business. We're excited about about our progress to date and we look forward to continuing to deliver on our goals for this year and beyond. Thank you everyone for your attention today, operator, we would now like to open the Q&A portion.

Ryan Spencer: We are excited about our progress to date, and we look forward to continuing to deliver on our goals for this year and beyond. Thank you, everyone, for your attention today. Operator, we would now like to open the Q&A portion of the call. Thank you. To ask a question, you'll need to press star 1-1 on your telephone.

Speaker Change: Of the call.

Ryan Spencer: To ask a question you will need to press star one on your telephone.

Speaker Change: A question. Please press star one again, please wait for your name to be announced please standby, while we compile the Q&A roster.

Operator: To withdraw your question, please press star 1-1 again. Please wait for your name to be announced. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question will come from the line of Matthew Phipps with William Blair. Your line is now open. Good afternoon.

Matthew Christopher Phipps: One moment for your first question. Please.

Operator: Our first question will come from the line of Matthew Phipps with William Blair. Your line is now open.

Matthew Christopher Phipps: Thanks for taking my question. Um, you know, first, I guess the retail market share looks like it did dip a little bit from Q4 to Q1, 58%. Hey, hey, Matt, Don, nothing really changed.

Matthew Christopher Phipps: Good afternoon, Thanks for taking my questions.

Matthew Christopher Phipps: First I guess, the retail market share it looks like it did dip a little bit from Q4 to Q1, 58% to 55% I realize one these are somewhat assumptions, but just wondering if theres anything lumpy in there or does anything else changed with any contracts that caused that to happen.

Donn Casale: I mean, if your market share is low, there'll be slight variations in market share. I mean, it's related to the purchasing patterns of some of our larger customers. But for us, you know, we continue to expect to take market share both in retail and as well in IDN. So it's really more around the purchasing patterns of some of the larger customers. Rob, a question on the shingles program. One, could you just maybe tell us how many total arms are in the trial?

Matthew Christopher Phipps: Hey, Hey, Matt Don.

Donn Casale: Really change.

Donn Casale: Market share there will be slight variations in market share I mean, it is related to purchasing patterns of some of our larger customers.

Rob: But for US we continue to expect to take market share both in retail and as well an IBM separately more so around the purchasing patterns of some of the larger customers.

Donn Casale: Okay.

Donn Casale: Rob a question on.

Donn Casale: The singles program.

Robert Janssen: Just kind of wondering how many patients will be in each trial to get a sense of how many total arms are in the trial, and how much power you might have for the immunogenicity endpoint. And then also, did you confirm that a potential pivotal trial would be placebo-controlled, or that's just kind of still the hope and you need to still have those. So, Matt, we will be enrolling 10 arms to receive CTN-18 and then a Shingrix arm.

Rob: One could you just maybe tell us how many total arms in the trial just kind of wondering how many payers will be any trial to get a sense of.

Robert Janssen: Powering you might have for the Immunogenicity endpoint and then also did you.

Robert Janssen: I couldn't tell if you confirm that a potential pivotal trial would be placebo controlled or that's just kind of still the hope and you'd need to still have those conversations.

Robert Janssen: So Matt we will be enrolling.

Robert Janssen: <unk> arms to receive <unk>, and then Ashish <unk> arm, so there'll be 11 arms with 40 subjects in each arm.

Robert Janssen: So there will be 11 arms with 40 subjects in each arm, which is a reasonably large number for a phase one study, but it's really so we can get a good sense of what CD4 responses are. Now, with respect to placebo-controlled studies, we have communicated with the FDA and heard from them that a placebo-controlled efficacy study would be acceptable for review for a life-threatening disease. Great. And then maybe one last one for Ryan.

Robert Janssen: And which is a reasonably large number for a phase one study, but it's really so we can get a good sense of what CD four responses are.

Robert Janssen: Now with respect to please see bow controlled we have communicated with the FDA and heard from them that placebo controlled efficacy study would be acceptable for review.

Robert Janssen: Four.

Robert Janssen: License.

Speaker Change: Great and then maybe one last one for Ryan.

Ryan Spencer: You know, do you almost hesitate to make any real big decisions with regard to your cash balance until you see the immunogenicity data from the shingles program in the second half of next year? Is that almost a, You know, you just kind of want to make sure you have all your options open until you get that data, or is that not? No, it's certainly one of the elements of how we think about managing our capital position.

Robert Janssen: Do you do you almost hesitate to make any real big decisions with regards to your cash balance until you see that immunogenicity data from the singles program in the second half of next year is that almost.

Ryan Spencer: You just kind of want to make sure you have all your options open until you get to that data.

Ryan Spencer: Or is that not the case.

Ryan Spencer: One, you know, we talked a lot about this, we're in a favorable position to be able to fund our development programs, as well as the opportunity to settle or convert when it comes due in 26. And so we like to be able to maintain all of our optionality as it relates to being able to advance our pipeline. So it's definitely a factor in how we manage our capital structure overall. Great, thanks.

Ryan Spencer: No. It's certainly one of the elements on how we think about managing our capital position. One we've talked a lot about this we're in a favorable position to be able to fund our development programs as.

Ryan Spencer: As well as.

Ryan Spencer: The opportunity to settle our convert.

Ryan Spencer: When it comes due in 2006, and so we like to be able to maintain.

Ryan Spencer: All of our Optionality as it relates to being able to advance our pipeline. So it's definitely a factor in how we manage our.

Ryan Spencer: Capital structure overall.

Speaker Change: Great. Thanks for taking my questions.

Speaker Change: Thank you thanks Pat.

Paul Choi: Thank you. One moment for our next question. Our next question comes from the line of Paul Choi with Goldman Sachs. Your line is now open. Hi, good afternoon team and thanks for taking my question. I also want to follow up on shingles as well.

Ryan Spencer: One moment for our next question. Our next question comes from the line of Paul Cheng with Goldman Sachs. Your line is now open.

Paul Choi: Can you maybe comment on how you thought about the trial design for your study, particularly in the context of recent data from CuroVo, which showed 100% immunogenicity? Any thoughts on patient selection and or trial design? endpoints and such that you can comment on and just where you think you can possibly show the most differentiation either on efficacy or safety. And secondly, just with regard to HEPLISAV, can you maybe just comment on just sort of retail chain behavior, you know, the share gains continue to look good, but just curious if you're seeing more activity, you know, if you could elaborate a little bit more on the activity levels in the retail channel Thank you very much. Thanks, Paul. Rob, why don't you take the first question on shingles, and Don, you can address the retail question.

Paul Choi: Hi, good afternoon team and thanks for taking my question I also wanted to follow up on shingles, as well and.

Speaker Change: Can you maybe comment on now.

Rob: How you thought about.

Speaker Change: The trial design for for your study, particularly in the context of <unk>.

Paul Choi: Recent data from <unk>.

Rob: 100% of Immunogenicity any thoughts on patient selection and or trial design.

Speaker Change: Pinpoints and such that you can comment on just where you think you can possibly show show the most differentiation either on efficacy <unk> safety and.

Speaker Change: And secondly, just with regard to help us out.

Speaker Change: Can you maybe just comment on just sort of retail chain behavior.

Speaker Change: <unk> continued to look good but just curious if youre seeing more activity.

Paul Choi: If you could elaborate a little bit more on the activity levels in the retail channel in particular, thank you very much.

Robert Janssen: Yep. Right. So the study really is designed to identify the antigen, the GE antigen. This is the first time our GE antigen, this is the first time it's been in humans, first time it's been in people. So we'll be looking at different levels of antigens. The trial is designed to look at different levels of antigen to increase CD4 counts. And we'll also be looking at different regimens. We're looking at a couple of different regimens in terms of time between doses, again, to increase CD4 counts.

Rob: Thanks, Paul.

Speaker Change: Rob why don't you take the first question on singles and Don you can address the retail question.

Robert Janssen: Right. So this study really is designed to identify the.

Robert Janssen: <unk> antigen GE antigen. This is the first time, our GE imaging. This is a first in humans first time, it's been people. So we will be looking at different levels of antigen. So the trial was designed to look at different levels of antigen to increase CD four accounts.

Robert Janssen: And.

Robert Janssen: We will also be looking at different regimens, we're looking at a couple of different regimens.

Robert Janssen: In terms of time between doses.

Robert Janssen: Again increased CD four accounts now to look at reacted genista, we're developing and we have been communicating with.

Robert Janssen: Now, to look at reactogenicity, we're developing, and we've been communicating with FDA about it, and how to go about doing it, and that is reactogenicity, and how can we, you know, how can we design future studies that would be label-enabling to put reactogenicity data in the label. And we're looking at, you know, sort of a standard global impression of severity, changes in symptoms, health-related quality of life, those types of existing instruments that already exist.

Robert Janssen: FDA about it.

Robert Janssen: And how to go about doing it and that is reactive <unk> and how can we.

Robert Janssen: How can we design future studies that would be label, enabling to put reacted genius C data in the label and we're looking at sort.

Robert Janssen: Sort of standard global impression of severity changes in symptoms health related quality.

Robert Janssen: But we'll also be looking to develop potentially our own instrument in this study and then to validate it for use in a phase three study. And Paul, just to put a finer point on it, when we think about the ways to measure immunogenicity, we've been very clear and transparent that we believe that CD4s are critical for this vaccine. And so when we think about the way we've talked about our data, it's been very deliberate to be focused on what we think are some of the most critical endpoints. There are a variety of ways to measure immunogenicity with percentages of response to different measures.

Robert Janssen: Quality of life those types of already.

Robert Janssen: Instruments that already exist, but we'll also be looking to develop potentially our own <unk>.

Robert Janssen: In this study and then to validate it for use in our phase III study.

Robert Janssen: Paul just to put a finer point on it when we think about the ways to measure Immunogenicity, we've been very clear and transparent that we believe that CD fours are critical for this vaccine and so when we think about the way we've talked about our data it's been very deliberate to.

Robert Janssen: Be focused on what we think is the most critical some of the most critical endpoints.

Robert Janssen: Theres a variety of ways to measure immune GSE with percentages of response to different different measures, but for our trials. We've been very clear about the importance of <unk> for us and Thats, what we will continue to focus on as we progress.

Robert Janssen: But for our trials, we've been very clear about the importance of CD4s, and that's what we will continue to focus on as we progress. Got it. And on the retail front? Hey, Paul, it's Donn.

Speaker Change: Got it.

Robert Janssen: On the retail side.

Donn Casale: To put a bit more color on retail behavior, there's been a dramatic shift, if you will, in the retail segment as it relates to non-respiratory vaccines and focus on those vaccines coming off the respiratory season. You're seeing certainly a lot of focus by those retailers as it relates to various tactics to increase awareness and continue to run initiatives. Both not only awareness for the pharmacists themselves but also advertising to consumers.

Donn Casale: Hey, Bob it's Don.

Donn Casale: A bit more color on the retail behavior.

Donn Casale: A dramatic shift if you will in the retail segment as it relates to.

Donn Casale: Non respiratory vaccines and focus on those vaccines coming off the respiratory season.

Donn Casale: We're seeing certainly a lot of focus by those retailers as it relates to various tactics to increase awareness.

Donn Casale: Two.

Donn Casale: Continue to run initiative, both not only awareness for the farmer.

Donn Casale: Pharmacist themselves, but also.

Donn Casale: Advertising to.

Donn Casale: To consumers.

Donn Casale: They're all rallying around the fact that May is Hepatitis B awareness month, but there's a lot of focus again on setting up the infrastructure, if you will, to take advantage of that opportunity as well. So again, a drastic shift, if you will, in focus by the retail chains as it relates to Hepatitis B vaccination. Great. Thanks for the caller. I'll jump back in queue.

Donn Casale: And then it all rolling around the fact, it made hepatitis b awareness month, but theres a lot of focus again on setting up the infrastructure if you will.

Donn Casale: To take advantage of that opportunity as well so again.

Donn Casale: Drastic shift if you will focus by the retail chain as it relates to hepatitis B vaccination.

Speaker Change: Great. Thanks for the color I'll jump back in queue.

Paul: Thanks, Paul.

Speaker Change: Moment for our next question.

Paul Choi: Thank you. One moment for our next question. Our next question comes from the line of John Miller with Evercore ISI. Your line is now open. Oh, hi, this is Jinxuan Ong from John. Thanks for taking our question. I guess the first one on Helplessness, how is the seasonality profile developed?

Donn Casale: Our next question comes from the line of Jon Miller with Evercore ISI. Your line is now open.

Jinxuan Ong: Oh, Hi, this is Jason on for John Thanks for taking my question I guess first one helplessness how.

Jinxuan Ong: How do you see the seasonality profile developing as the market gets more penetrated do you expect to see but when do you expect to see the biggest growth for the remainder of the year and I've got a second TDAP.

Jinxuan Ong: As the market gets more penetrated, when do you expect to see the biggest growth for the remainder of the year? And second, on TDAP, I guess why is the TDAP Phase 2 trial being delayed, and how will the Phase 2 design change based on learnings from the extension of Phase 2? Okay, let me comment on seasonality first, and Donn, if you have anything to add, please feel free. It's pretty clear that Q2 and Q3 will, we expect, continue to be the largest quarters in the adult hepatitis B vaccine market for a variety of reasons, and I don't, I think the market growth doesn't really change the belief that we still believe Q2 and Q3 will be the largest quarters of the year and the years in the future, recognizing that we do expect that there will always be seasonality due to the Done.

Jinxuan Ong: While delaying that to that phase II trial and highway over the phase II design change based on learnings from the extension of the phase one thanks.

Jinxuan Ong: Okay.

Jinxuan Ong: Let me comment on seasonality first and then Dan you have anything to add please feel free.

Jinxuan Ong: It's pretty clear that Q2, and Q3 will we expect will continue to be the largest quarters and the adult hepatitis b vaccine market.

Jinxuan Ong: For a variety of reasons and I don't think the market growth doesn't really change the belief that we still believe Q2, and Q3 will be the largest quarters of the year and the years in the future recognizing that we do expect it will always be seasonality due to the fact that significant.

Jinxuan Ong: Respiratory vaccine, it's given in the Q4 Q1 time period. So we expect that seasonality to continue even as we see market growth.

Ryan Spencer: Good. That's good. And then I did the other question just at a high level on TDAP.

Jinxuan Ong: Doug.

Speaker Change: That's good and then I think the other question just at a high level.

Speaker Change: On <unk> I'll take that too and Rob. Please add any color that you feel is important but.

Robert Janssen: I'll take that too. And Rob, please add any color you feel is important, but the decision here to delay the phase two challenge study was in response to the regulatory feedback that we received related to the PRN positive versus PRN negative strain of pertussis, recognizing that the FDA is interested in the PRN negative strain that we would conduct in the future. We didn't need to conduct a positive pilot study now, and we decided to make the decision to focus on the PRN negative strain in the future when available, which also happened to allow us to see the results of this phase one extension study.

Speaker Change: The decision here to delay the phase two challenge study was as a response to the regulatory feedback that we received.

Robert Janssen: Related to the PR positive versus negative strained for pertussis.

Robert Janssen: Recognizing that the FDA is interested in the Purion negative strain that we would conduct in the future.

Robert Janssen: We didn't need to conduct a positive pilot studies now and we decided to make the decision to focus on the PRN negative strain in the future when available which also happened to allow us to see the results of this phase one extension study.

Robert Janssen: So it doesn't have an impact on the overall timeline, but it does allow us to have, you know, insight into the durability of our product prior to advancing into any other clinical studies. All in all, I think it's actually a very favorable opportunity to be able to increase our understanding of the product before investing further in additional clinical trials. Thank you. One moment for our next question, please. Our next question comes from the line of Ed White with HC Wainwright. Your line is now open. Good evening.

Rob: So it doesn't have an impact on the overall timeline.

Edward Patrick White: But it does allow us to have.

Robert Janssen: <unk>.

Edward Patrick White: Insight into the durability of our product.

Edward Patrick White: Prior to advancing into any other clinical studies.

Edward Patrick White: Alright. Thanks.

Edward Patrick White: All in all I think a pretty X actually very favorable.

Edward Patrick White: Favorable opportunity to be able to increase our understanding the product before investing further in additional clinical trials.

Edward Patrick White: Alright, thank you.

Edward Patrick White: Thank you one moment for our next question. Please.

Robert Janssen: Our next question comes from the line of Ed White with H C. Wainwright. Your line is now open.

Edward Patrick White: Thanks for taking my questions. Just to stick stick with the TDEF. So, how is the timing of phase 2 going to be affected? When do you expect to start that study? As for the phase two we started, it really is still kind of up in the air. We do need to have the PRN negative strain available, and that's being developed. So it depends on the availability of that strain.

Edward Patrick White: Good evening, Thanks for taking my questions.

Edward Patrick White: Just to stay with the TDAP.

Edward Patrick White: So.

Edward Patrick White: How is the timing of the phase II going to be affected when do you expect to start that study.

Edward Patrick White: As the phase II, where we started.

Edward Patrick White: It really is still kind of up in the air we do need to have the PRN negative strain available and that's being developed so it depends on availability that straight I think the key point, though is that study is one component of the overall development plan.

Robert Janssen: I think the key point, though, is that study is one component of the overall development plan. The longer lead times in this development plan will be the immunogenicity data, which in our view is going to be critical to have that data develop over time to show durability. That can be part of our submission.

Robert Janssen: Longer lead times in this development plan will be.

Robert Janssen: The immunogenicity data, which in our view, it's going to be critical to have that data develop over time to show durability that can be part of our submission so the TDAP.

Ryan Spencer: I think this is the way to think about it. It's a very valuable study because it will show whether the antigens are efficacious, which we have high confidence that they will be, and that with the presence of our adjuvants, we expect them to improve over existing vaccines. So ultimately, what will gate that timing will be the availability of the PRN negative strain. Okay, thanks, Ryan. And as you have the BLA, excuse me, the PDUFA on May 13th for hemodialysis patients, I'm just wondering if you can quantify, you know, what that means.

Robert Janssen: Challenges is not on the critical path I think is the way to think about it. It's a very valuable study because it will show the antigens are efficacious, which we have a high confidence that they will be.

Ryan Spencer: With the presence of our adjuvant, we would expect to improve over existing vaccines. So.

Ryan Spencer: Ultimately what will gate that timing will be the availability of the PRN negative strain.

Speaker Change: Okay. Thanks, Brian.

Speaker Change: And as you have the BLA.

Speaker Change: Excuse me the <unk>.

Speaker Change: On may 13th for Hemo dialysis patients.

Speaker Change: Just wondering if you can quantify.

Ryan Spencer: What that means to them, what the impact could potentially be.

Ryan Spencer: The impact could potentially be, you know, not only this year but going forward. Yeah, I mean, I think we've talked about this a little bit in the past, that the, the, Yeah, you already noted that May 13th is the PDUFA date. It's too early to comment on the impact of any revenue expectations, but we will know, like we said in the past, obviously, it does take time to engage customers, and really, having the PDUFA gives us that license to hunt and actually engage them commercially.

Ryan Spencer: Not only this year, but going forward.

Ryan Spencer: Yes.

Ryan Spencer: We talked about this a little bit in the past.

Ryan Spencer: Then the.

Ryan Spencer: Yes, you already noted it may 13th <unk> date.

Ryan Spencer: It's to really too early to comment on the impact of any revenue expectations, but we will know like we said in the past obviously it does take time to engage customers.

Ryan Spencer: Having the <unk>.

Ryan Spencer: It gives us a license to hunt and actually engage them.

Ryan Spencer: So we expect it's going to take time, like with any other customer, to be able to engage them in an effective manner. So we've made no comment on the revenue expectations from this particular regulatory event, but we will continue to provide updates as we progress.

Ryan Spencer: Commercially so we would expect it is going to take time like with any other customer.

Ryan Spencer: To be able to engage them in an effective manner. So.

Ryan Spencer: We made no comment on the revenue expectations.

Ryan Spencer: From this particular regulatory events, but we will continue to provide updates as we progress.

Edward Patrick White: Thanks, Ryan, for taking my question. Thank you. One moment for our next question. Our next question comes from the line of Phil Nadeau with TD Cowan. Your line is now open. Good afternoon. Thanks for taking our questions. One follow-up question on seasonality.

Ryan Spencer: Okay. Thanks, Brian for taking my questions.

Philip M. Nadeau: Thank you one moment for our next question.

Philip M. Nadeau: Our next question comes from the line of Phil <unk> with PD Cowen. Your line is now open.

Philip M. Nadeau: Appreciating, it's probably a hard question since we're all dealing with imperfect information, but do you have a sense as to whether this year the seasonality was particularly bad, given that it was early in the availability of RSV vaccines and people are still getting shots for COVID? Is there any reason to think that the seasonality and the decline in HPV are linked? Marketing Q4 and Q1 won't be as bad in future years, or is that just hard to know? Hey Phil, it's Donn.

Philip M. Nadeau: Good afternoon, Thanks for taking our questions one follow up question on seasonality appreciating.

Philip M. Nadeau: It's probably a hard question since we're all dealing with imperfect information, but do you sense.

Donn Casale: This year, the seasonality was particularly bad.

Philip M. Nadeau: Given that it was early in the availability of RSV vaccines and people are still getting shots for Covid is there any reason to think that the seasonality and the decline in HBV.

Donn Casale: In Q4, and Q1 won't be as bad in future years tore as interest.

Phil: Hard to know at this point.

Donn Casale: I think it's a little hard to know, a little early to kind of call it, but, you know, certainly, and the feedback we've been receiving from our retail customers, in particular, is that learning about new vaccines, RSV, COVID, a lot was thrown at the retailers all at once. Now that they've gone through it once, going into this year, they'll be better prepared to understand, you know, what's going to be in store for that, you know, respiratory season. So, you know, we sort of see that as an opportunity moving forward, but probably too early to tell how it looks every year thereafter.

Phil: Don I think that a little hard to know a little early to kind of call. It but certainly the feedback we've been receiving from our retail customers. In particular is learning new vaccines RSV Covid a lot was thrown at the retailers all at once now that they've gone through a launch.

Donn Casale: Going into this year there'll be better prepared to understand whats going to be in store for that respiratory season.

Donn Casale: But certainly, we expect this year to be a little bit different because our customers are a little bit more prepared for anticipating the onslaught of all these different vaccines in the space. Got it. And then on the hemodialysis, sorry, just one more quick add-on to that is also remember the winter season and how cough, cold, and flu, COVID, other things, those are variables as well as how they impact wellness visits or opportunities for vaccination. So that's going to always be variable across the season.

Donn Casale: We started to see that as an opportunity moving forward, but probably too early to tell outlooks every year thereafter, but certainly we expect this year to be a little bit different because our customers a little bit more prepared for anticipating the onslaught of all these different vaccines in the space.

Donn Casale: Got it and then on the.

Donn Casale: Mobile facilities.

Donn Casale: Just want multiple just add onto that is also remember the winter season, and how cough cold and flu COVID-19 other things those are variables as well as how the how they impact wellness visits or opportunities for vaccination. So that's going to always be variable across the season. So we just have to keep that in mind.

Ryan Spencer: So we just have to keep that in mind that it's not only market dynamics; there's also disease dynamics at play that will be variable. Do the RSV vaccines have a requirement that patients not be vaccinated for something else like HPV for weeks before or weeks after receiving the RSV vaccine? The RSV, did you say the RSV vaccines? Is that what you said?

Donn Casale: Not only market dynamics Theres also disease dynamics at play that will be variable.

Philip M. Nadeau: Yeah, specifically for RSV. Is there a required window of no other vaccinations around that? No, not in particular.

Ryan Spencer: The RSV vaccines have a requirement that patients not be vaccinated for something else like HBV for weeks before or weeks after receiving RSV vaccine.

Philip M. Nadeau: The RSC was that did you say the RSV vaccines for specifically for RSV is there is there are required to be a window of no other vaccinations around around that vaccine.

Philip M. Nadeau: No not in particular.

Philip M. Nadeau: Okay.

Unknown Executive: Okay. The issue, just be aware, Phil, is that concomitant data usually doesn't specifically say how it very, very, it's very rare for there to be specific information around how to treat other vaccines within one vaccine label. So, it's more around the operational hurdles, quite frankly, about just operationalizing a new vaccine and vaccine launches versus common administration as being the barrier for our retailers in particular. Got it.

Speaker Change: Just beware field operations.

Unknown Executive: That data is usually doesn't specific.

Unknown Executive: How it very very it's very rare for them to be specific information around how to treat other vaccines within one vaccines label. So.

Unknown Executive: It feels more around the operational hurdles quite frankly about just operationalize, a new vaccine and vaccine launches versus concomitant administration as being a barrier.

Unknown Executive: For our retailers in particular.

Philip M. Nadeau: In terms of hemodialysis, I think in the past, you've suggested that there is some use of HEPLISAV already in the market. My question is, if that's true, and if you have any estimates of penetration in the hemodialysis market. Yeah, no, there's definitely utilization in the marketplace. So yeah, and you're right.

Unknown Executive: Got it.

Unknown Executive: Terms of hemodialysis I think in the past you have suggested that there is some use of <unk>.

Philip M. Nadeau: That's helpful sort of already in the market.

Philip M. Nadeau: I'm wondering if that's true and if you have any estimates of penetration the hemodialysis market currently.

Philip M. Nadeau: Yes, theres definitely utilization.

Philip M. Nadeau: And in the marketplace.

Philip M. Nadeau: So yes, you're right. We have commented on that before we have not commented on specific.

Ryan Spencer: We have commented on that before. We have not commented on specific penetration or share other than our comments on retail and IDN. And like we have said before, until we have our FDUFO, our SPLA, approved, we're gonna refrain from getting into too many details on this segment. Great. Thanks for taking our calls. Thanks, y'all.

Operator: Thank you. Thank you. One moment for our next question. Our next question will come from the line of Roy Buchanan with Citizens JMP. Your line is now open. Hey, thanks for taking the question. Just click follow up on PDF.

Douglas Royal Buchanan: Penetration of share other than our comments on retail on IBM.

Douglas Royal Buchanan: Like we have said before until we have our.

Douglas Royal Buchanan: R R.

Douglas Royal Buchanan: <unk> Alright, BLA approved we were going to refrain from getting into too many details on the segment.

Douglas Royal Buchanan: Great. Thanks for taking my questions.

Douglas Royal Buchanan: Thanks, Phil. Thank you. Thank you Phil.

Douglas Royal Buchanan: One moment for our next question.

Douglas Royal Buchanan: I guess how many patients are you expecting in the extension trial, and it says in the press release versus active control. So you're going to be looking at both. The Tdap1018 and the Boostrix arms. It seems like a lot of patients have probably been off the trial for a while, maybe gone on to other things. Are you going to look at both the adults and the adolescents? We'll just be looking at the young adults, Roy; we won't be looking at the adolescents, who are too few, and the number of subjects we were looking to try to enroll was up to 50.

Douglas Royal Buchanan: Our next question will come from the line of Labor Kennon with citizens JMP. Your line is now open.

Robert Janssen: And we'll be comparing TDAP 1018 to... Thanks. Yeah, and Roy, just a couple elements there.

Speaker Change: Hey, Thanks for taking the question.

Robert Janssen: A quick follow up on teed up I guess, how many.

Robert Janssen: Patients are you expecting in the extension trial.

Robert Janssen: It says in the press release versus active control, so youre going to be looking at both.

Robert Janssen: Keyed up to 18 in the Booth tricks arms.

Robert Janssen: It seems like a lot of patients have probably been off the trial for a while maybe gone on to.

Speaker Change: The other things.

Speaker Change: But are you going to look at both the adults and adolescence right.

Robert Janssen: We'll just be looking at.

Speaker Change: Yes, we will just be looking at the young adults ROI.

Robert Janssen: We won't be looking to add license over to Hugh.

Robert Janssen: And.

Robert Janssen: The number of subjects were looking to try to enroll was was up to 50.

Robert Janssen: Okay.

Robert Janssen: Varying teed up to an 18 to boosters.

Robert Janssen: As you noted, the trial was conducted a while ago, so we'll have two to three years of follow-up on these patients, and the ultimate number is going to be depending on how many we can get to return, given some of the challenging factors you noted. But we expect that we'll be able to have some interesting data from the follow-up. OK, very good.

Roy: Got it. Thanks, Yeah, just a couple a couple of elements. There you already noted the trial was conducted in a while with US. So we'll have two to three years of follow up on these patients and the ultimate number is going to be depending on how many we can get to return.

Robert Janssen: Given some of the challenging factors you noted, but we expect that we will be able to have.

Robert Janssen: Some interesting data from the follow up.

Douglas Royal Buchanan: Thank you. Thank you. We have no further questions at this time. I would now like to turn the call over to Mr. Ryan Spencer, Chief Executive Officer, for closing remarks.

Robert Janssen: Okay very good.

Robert Janssen: Yes.

Ryan Spencer: Thank you.

Douglas Royal Buchanan: We have no further questions at this time I would now like to turn the call over to Mr. Ryan Spencer Chief Executive Officer for closing remarks.

Ryan Spencer: Thank you, operator, and thank you all for joining us today. We appreciate your interest in Dynavax. We are excited about our recent accomplishments and the strength of our position. We look forward to updating you on our progress focused on protecting the world against infectious diseases. Operator, you may end the call.

Ryan Spencer: Thank you operator, and thank you all for joining US today. We appreciate your interest in <unk>. We are excited about our recent accomplishments and the strength of our position. We look forward to updating you on our progress focused on protecting the world against infectious diseases. Operator, you may end the call.

Operator: Ladies and gentlemen, thank you for joining us today. This concludes today's conference call. You may now disconnect. Everyone have a wonderful day.

Speaker Change: Ladies and gentlemen, thank you for joining US today. This concludes today's conference call. You may now disconnect everyone have a wonderful day.

Operator: Yeah.

Operator: [music].

Operator: Okay.

Operator: [music].

Operator: Yes.

Operator: Sure.

Operator: [music].

Operator: Yes.

Operator: Yeah.

Operator: [music].

Operator: Sure.

Operator: [music].

Operator: Yeah.

Operator: [music].

Operator: Yes.

Operator: [music].

Operator: Okay.

Operator: Yes.

Operator: Okay.

Operator: [music].

Operator: Yes.

Operator: [music].

Operator: Okay.

Operator: [music].

Operator: Okay.

Operator: Sure.

Operator: [music].

Operator: Yes.

Operator: Thanks.

Operator: [music].

Operator: Okay.

Operator: [music].

Operator: Sure.

Operator: [music].

Operator: Okay.

Operator: [music].

Operator: Okay.

Operator: [music].

Operator: Yes.

Operator: Right.

Operator: [music].

Operator: Okay.

Operator: Sure.

Operator: [music].

Operator: Alright.

Operator: [music].

Operator: Okay.

Operator: Sure.

Operator: Yes.

Operator: [music].

Operator: Yes.

Operator: Okay.

Operator: Sure.

Operator: Okay.

Operator: Sure.

Operator: Great.

Operator: [music].

Operator: Yes.

Operator: Thank you.

Operator: Okay.

Operator: [music].

Operator: Yes.

Operator: Okay.

Operator: [music].

Operator: Sure.

Operator: Okay.

Operator: [music].

Operator: Okay.

Operator: Sure.

Operator: Yes.

Operator: Okay.

Operator: [music].

Operator: Yes.

Operator: Okay.

Operator: [music].

Operator: Okay.

Operator: [music].

Operator: Okay.

Operator: Yes.

Operator: Okay.

Operator: [music].

Operator: Okay.

Operator: Sure.

Operator: Okay.

Operator: Thank you.

Operator: Yes.

Operator: Okay.

Operator: Yes.

Operator: Okay.

Operator: Thank you.

Operator: Okay.

Operator: Yes.

Operator: Okay.

Operator: Yes.

Operator: Okay.

Operator: Yes.

Operator: Sure.

Operator: Yes.

Operator: Okay.

Operator: Thanks.

Operator: Okay.

Operator: ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Good day, ladies and gentlemen, and welcome to the Dynavax Technologies' first quarter 2024 Financial Results Conference call. As a reminder, this call is being recorded. At the end of the company's prepared remarks, we'll open the call for questions and provide specific participation instructions at that time. I would now like to turn the call over to Paul Cox, Vice President, Investor Relations and Corporate Communications. Please begin.

Speaker Change: Good day, ladies and gentlemen, and welcome to the <unk> technologies first quarter 2024 financial results Conference call. As a reminder, this call is being recorded at the end of the company's prepared remarks, we will open the call for questions and provide specific participation instructions at that time.

Operator: I would now like to turn the call over to Paul Cox, Vice President Investor Relations and corporate Communications. Please begin sir.

Paul Cox: Earlier today <unk> released financial results for the first quarter ended March 31 2024.

Paul Cox: Before we begin, I advise you that we will be making forward-looking statements today based on our current expectations and beliefs, including but not limited to potential market sizes, market segmentation, effective marketing efforts, future expected market share and related growth rates, and related ACIP recommendation impact on each. Financial guidance and trends, including revenue, profitability, cash flow, and sufficiency, timing and results of FDA submissions, clinical trial starts and data readouts, and potential future uses of or demand for our CPG 1018 adjuvants. These statements involve risks and uncertainties, and our actual results may differ materially.

Paul Cox: Copies of the press release and a supplementary slide presentation are available on <unk> website.

Paul Cox: Before we begin I advise you that we will be making forward looking statements today based on our current expectations and beliefs.

Paul Cox: But not limited to potential market sizes market segmentation.

Paul Cox: Effective marketing efforts future expected market share and our related growth rates and related AC IP recommendation impact on each financial guidance and trends, including revenue profitability cash flow and sufficiency of current capitalization.

Paul Cox: Timing of results of FDA submissions clinical trial starts and data readouts and potential future juices or demand for our CPG <unk> adjuvant.

Paul Cox: These statements involve risks and uncertainties and our actual results may differ materially.

Paul Cox: These risks are summarized in today's press release and detailed in the risk factor section of our SEC filings, including today's quarterly report on Form 10-Q. Our forward-looking statements speak as of today, and we undertake no obligation to update such statements. And with that, I will now turn the call over to Ryan. Thanks, Paul. Good afternoon, everyone.

Paul Cox: These risks are summarized in today's press release and detailed in the risk factors section of our SEC filings, including today's quarterly report on Form 10-Q.

Ryan Spencer: Our forward looking statements speak as of today, and we undertake no obligation to update such statements.

Paul Cox: And with that I will now turn the call over to Ryan.

Ryan Spencer: Thanks, Paul.

Ryan Spencer: Thank you for taking the time to join us to review our Q1 2024 results. The first quarter of 2024 saw continued year-over-year growth in quarterly HEPLISAV-B net product revenue, despite a slight decrease in the U.S. hepatitis B vaccine market during the first quarter due to an extended cough, cold, and flu season, which reduced the number of vaccination opportunities, a dynamic which was observed across other non-respiratory vaccine markets beyond hepatitis B.

Ryan Spencer: Good afternoon, everyone. Thank you for taking the time to join US to review our Q1 2024 results.

Ryan Spencer: The first quarter of 2024 saw continued year over year growth in quarterly <unk> net product revenue. Despite a slight decrease in the U S. Hepatitis b vaccine market during the first quarter.

Ryan Spencer: Due to an extended cough cold and flu season, which reduced the number of vaccination opportunities.

Ryan Spencer: NAMIC, which was observed across other non respiratory vaccine markets beyond hepatitis B.

Ryan Spencer: Even with the slow start to the year, we remain very encouraged about the adult hepatitis B vaccine market opportunity, both in 2024 and over the longer term. We are seeing a pickup in the market in recent weeks as providers have begun to shift to non-restorative vaccine campaigns and as our retail pharmacy partners and top IDN systems launch new hepatitis B-focused initiatives. Heplisav-B became the market share-leading hepatitis B vaccine for adults in the US last year, and we plan to build on that position in 2024.

Ryan Spencer: Even with the slow start to the year, we remain very encouraged about the adult hepatitis b vaccine market opportunity both in 2024 and over the longer term.

Ryan Spencer: We are seeing a pickup in the market in recent weeks as providers have begun to shift to non respiratory vaccine campaigns.

Ryan Spencer: And as our retail pharmacy partners and top IBM systems launched new hepatitis B focused initiatives.

Ryan Spencer: <unk> became the market share leading hepatitis b vaccine for adults in the U S last year, and we plan to build on that position in 2024.

Ryan Spencer: We continue to expect record Heplisav-B sales in 2024, with net product revenue expected in the range of $265 to $280 million for the year. Longer term, the U.S. adult hepatitis B vaccine opportunity remains significant, with over 130 million patients eligible. One of the largest addressable patient populations in the U.S. with a vast majority remaining unvaccinated.

Ryan Spencer: We continue to expect record <unk> sales in 2024 with net product revenue expected in the range of $265 million to $280 million for the year.

Ryan Spencer: We believe this translates to a market opportunity for HEPLISAV-B of over $800 million by 2027, with HEPLISAV-B poised to achieve a majority market share. We're also excited for several upcoming milestones from our novel vaccine pipeline, including the initiations of our Phase 1-2 trial for our single vaccine candidate, long-term follow-up data for our Phase 1 Tdap trial, and data readouts from As a reminder, we look forward to our PDUFA action date on May 13th for HEPLISAV-B's supplemental BLA for vaccination of adults on hemodialysis, which is currently under review by the U.S. FDA.

Ryan Spencer: We believe this translates to a market opportunity for <unk> of over $800 million by 2027 with helpless abbvie poised to achieve a majority market share.

Ryan Spencer: We're also excited for several upcoming milestones for our from our novel vaccine pipeline, including the initiation of our phase one two trial for our shingles vaccine candidate long term follow up data for our phase <unk> trial and data Readouts from our <unk> program.

Ryan Spencer: As a reminder, we look forward to our <unk> action date on May 13th.

Ryan Spencer: <unk> <unk> supplemental BLA for vaccination of adults on hemodialysis, which is currently under review by the U S. FDA.

Ryan Spencer: In addition to this continued execution and bolstered by our strong financial position, we continue to assess opportunities to grow beyond our internal organic pipe within the infectious disease space, which we believe would enable us to further diversify our product portfolio and create future commercial opportunities. As we've discussed previously, we remain committed to disciplined capital allocation focused on generating significant value and driving growth.

Ryan Spencer: In addition to this continued execution and bolstered by our strong financial position, we continue to assess opportunities to grow beyond our internal organic pipeline within the infectious disease space, which we believe will enable us to further diversify our product portfolio and create future commercial opportunities.

Ryan Spencer: As we've discussed previously we remain committed to disciplined capital allocation focused on generating significant value and driving growth.

Ryan Spencer: Look forward to providing updates on these efforts in the future.

Ryan Spencer: We look forward to writing updates on these efforts in the future. I'll now turn the call over to Donn and Rob, who will provide more details on the EPLICSat-B results and our pipeline progress, respectively, before Rita O'Connor reviews our financial results for the first quarter. As previously announced, our CFO, Kelly MacDonald, is currently on maternity leave, as Rita has stepped in as interim head of finance, supporting me in my temporary appointment as principal financial officer until Kelly's expected return in August.

Speaker Change: I'll now turn the call over to Don and Rob who will provide more details on <unk> results and our pipeline progress respectively before Rita O'connor Reeves.

Rita O'Connor: He reviews, our financial results for the first quarter.

Ryan Spencer: As previously announced our CFO Kelly Macdonald is currently on maternity leave as Reed has stepped in as interim head of finance supporting me in my temporary appointment as principal financial officer until Kelly as expected return in August.

Donn Casale: Don can you take it away.

Donn Casale: Thank you Ryan.

Donn Casale: Don, can you take it away? Thank you, Ryan. In the first quarter of 2024, Heplisav-B achieved strong net product sales despite headwinds that affected the non-respiratory vaccine markets, including hepatitis C. On our last call, we said that growth in the U.S. hepatitis B vaccine market was expected to be flat during the first quarter due to an extended cough, cold, and flu season. As expected, these dynamics played out, ultimately reducing the opportunity for adult vaccination in Q1, leading to a slight decrease in the hepatitis B vaccine market compared to the fourth quarter of last year and flat year-over-year growth compared to the first quarter of 2023.

Rita O'Connor: In the first quarter of 2024, <unk> achieved strong net product sales despite headwinds that affected the non respiratory vaccine market, including hepatitis C.

Donn Casale: On our last call, we said that growth in the U S. Hepatitis B vaccine market was expected to be flat during the first quarter due to an extended cough cold and flu season.

Donn Casale: This dynamic has been observed across other non-respiratory vaccine markets as well. FOSFV continued to increase its total U.S. market share year-over-year, achieving an estimated 41% market share in the first quarter, compared to 37% during the same period last year. Net product revenue in the quarter grew 10% year over year compared to the first quarter of 2023.

Donn Casale: Dynamic has been observed across other non respiratory vaccine market as well.

Donn Casale: <unk> continued to increase its total U S market share year over year, achieving an estimated 41% market share in the first quarter compared to 37% during the same period last year.

Donn Casale: Net product revenue in the quarter grew 10% year over year compared to the first quarter of 2023.

Donn Casale: This sales growth continues to be driven by Headless FAB-E's strong performance in two critical segments: retail pharmacy and integrated delivery networks for IBM. We estimate these segments will drive significant growth and represent over 60% of the total adult hepatitis B market in the U.S. by 2027. In both segments, Heplis FD's first quarter estimated market share increased to approximately 55% compared to approximately 49% during the same period last year.

Donn Casale: This sales growth continues to be driven by <unk> strong performance in two critical segments retail pharmacy, and integrated delivery networks or IBM.

Donn Casale: We estimate these segments will drive significant growth and represent over 60% of the total adult hepatitis b market in the U S by 2027.

Donn Casale: And both segments Headless Abbvie first quarter estimated market share increased to approximately 55% compared to approximately 49% during the same period last year.

Donn Casale: Despite the softness in the market in the first quarter, we continue to see indicators of U.S. market expansion from the ACIP Universal Recommendation for Adult Hepatitis B Vaccination, reaffirming our confidence in a sizable market opportunity and long-term revenue growth potential for Heplisav-B. Large health systems and providers are gaining awareness and agreeing they need to act on the ACIP Universal Recom Many large systems have committed to launching new hepatitis B-focused initiatives over the next several quarters to effectively implement the recommendation.

Donn Casale: Large health systems and providers are gaining awareness and agree they need to act on the <unk> recommendation.

Donn Casale: Many large systems have committed to launching new hepatitis b focused initiatives over the next several quarters to effectively implement the recommendation.

Donn Casale: Over half of our targeted IDM universe has increased hepatitis B dose volume year over year. While system-level changes take time to enact, we are encouraged by the progress we see as our systems work to implement operational changes to support routine adoption of the ACIP Universal Recommendation.

Donn Casale: Over half of our targeted IBM universe has increased hepatitis b dose volume year over year.

Donn Casale: In the retail pharmacy segment, we have made meaningful progress with several large national chains, placing HEPLISAV-B in a preferred position among adult hepatitis B vaccines. Despite the slow start in Q1, retail customers are mobilizing around the opportunity for hepatitis B vaccination. Several customers have indicated a clear shift away from respiratory vaccines to a focus on non-respiratory vaccines such as hepatitis B. Given these positive trends and customers' commitment to prioritize hepatitis B vaccination for the rest of the year, we are forecasting the retail segment to meet our annual expectations for 2024 and make a considerable impact on hepatitis B success this year. As Ryan noted, we are reaffirming our full year 2024 net product revenue guidance for HEPLIS-MD to be in the range of $265 to $280 million.

Donn Casale: In the retail pharmacy segment, we have made meaningful progress with several large national chain, placing helpless abbvie in a preferred position among adult hepatitis B vaccines.

Donn Casale: Despite the slow start in Q1 retail customers are mobilizing around the opportunity of hepatitis B vaccination.

Donn Casale: Several customers have indicated a clear shift away from respiratory vaccine to a focus on non respiratory vaccine such as hepatitis b.

Donn Casale: As Brian noted we are reaffirming our full year 2024, net product revenue guidance for <unk> to be in the range of $265 million to $280 million.

Robert Janssen: As mentioned, we've already seen signs of the market strengthening early on in Q2 as the focus of healthcare providers and retail pharmacies shifts back to prioritizing non-respiratory vaccines. We are extremely confident in the long-term expansion of the U.S. hepatitis B vaccine market and forecast annual market growth of approximately 10 to 15 percent over the next several years, with hepatitis B gaining meaningful increases in total market share We continue to expect the hepatitis B vaccine market opportunity for Heplisiv-B to grow to over $800 million in the U.S. by 2027 from approximately $525 million in 2023.

Donn Casale: As mentioned, we have already seen signs of the market strengthening early on in Q2, as our focus on health care providers and retail pharmacy shift back to prioritizing not respiratory vaccines.

Robert Janssen: We are extremely confident in the long term expansion of the U S. Hepatitis b vaccine market and forecast annual market growth of approximately 10% to 15% over the next several years will help us be gaining meaningful increases a total market share over that time.

Robert Janssen: We continue to expect the hepatitis b vaccine market opportunity for <unk> to grow to over $800 million in the U S. By 2027 from approximately $525 million in 2023.

Robert Janssen: In summary, we are reaffirming our confidence that HEPLISAV-B will strengthen its position as a clear market share leader in the expanding hepatitis B vaccine market, and we expect 2024 will be another year of record sales and continued growth. We are very proud of our commercial team's execution in establishing Headless F.E.

Robert Janssen: In summary, we are reaffirming our confidence that <unk> will strengthen its position as the clear market share leader in the expanding hepatitis B vaccine market and we expect 2024 will be another year of record sales and continued growth.

Robert Janssen: as the market share leader in the U.S., and we look forward to continuing this momentum in the remainder of 2024. I will now turn the call over to Rob to take you through our clinical pipeline. Thank you, Don.

Robert Janssen: We are very proud of our commercial team's execution in establishing <unk> as the market share leader in the U S and we look forward to continuing this momentum in the remainder of 2024.

Robert Janssen: I will now turn the call over to Rob to take you through our clinical pipeline.

Robert Janssen: We continue to make progress advancing our innovative vaccine pipeline, which is focused on leveraging our CPG1018 adjuvant with proven antidotes, starting with our shingles vaccine program, Z10E. As a reminder, we believe there is an opportunity to develop an improved shingles vaccine, given the challenging tolerability profile of the current market-leading product. One of the unique advantages, we believe, of our CPG1018 adjuvant is its safety and tolerability profile combined with its ability to induce strong CB4 positive T-cell responses, which we believe are critical to preventing the reactivation of this osteovirus. We previously conducted a phase one trial of Z1018 in 150 subjects at clinical sites in Australia.

Rob: Thank you Dan we continue to make progress advancing our innovative vaccine pipeline, which is focused on leveraging our CPG 10, 18 adjuvant with proven antigens.

Robert Janssen: Starting with their shingles vaccine program <unk> and as a reminder, we believe there is an opportunity to develop and improve shingles vaccine given the challenging tolerability profile of the current market leading product.

Robert Janssen: We previously conducted a phase one trial of <unk> thousand 18, and 150 subjects at clinical sites in Australia.

Robert Janssen: Late last year, we received type B meeting feedback from FDA on the <unk> program, which we believe is supportive of our proposed clinical development plan that includes a pivotal placebo controlled efficacy study.

Robert Janssen: We plan to enroll approximately 440 healthy adults, aged 50 to 69 years at trial sites in Australia.

Robert Janssen: We will be evaluating escalating doses of our GE protein, a selected dose of CPG1018 with or without alum, and different vaccination schedules. We anticipate top-line immunogenicity and safety data in the second half of 2025, which will include a comparison of CV4-positive T cells one month after the last vaccine dose. In March, we received FDA clearance of our IND application for this trial. Turning next to the Tdap1018 program, this is an investigational vaccine candidate that's intended for active booster immunization against tetanus, diphtheria, and pertussis or because current Tdap vaccines have limitations, including waning effect.

Robert Janssen: We will be evaluating escalating doses of our GE protein.

Robert Janssen: Our selected dose of CPG, 2018, with or without alum and different vaccinations schedules.

Robert Janssen: We anticipate topline immunogenicity and safety data in the second half of 2025, which will include a comparison of CV for positive T cells. One month after the last vaccine dose.

Robert Janssen: In March we received FDA clearance of our IND application for this trial.

Robert Janssen: Turning next to the <unk> program. This is an investigational vaccine candidate that's intended for active booster immunization against tetanus, diphtheria, and pertussis where TFS.

Robert Janssen: Current T that vaccines have limitations, including waning effectiveness and we believe theres an opportunity to improve the duration of protection using our CPG 10, 18 adjuvant to generate at th <unk> biased immune response.

Robert Janssen: And we believe there's an opportunity to improve the duration of protection using our CPG-1018 adjuvant to generate a Th1-biased immune response. In 2022, Dynavax reported top-line results from a Phase I clinical trial evaluating the immunogenicity and safety of a booster dose of Tdap1018 compared to an active control. The results demonstrated that Tdap1018 was generally well-tolerated and induced similar or higher antipertussis antibodies and booster response rates than the active control.

Robert Janssen: <unk> demonstrated that <unk> was generally well tolerated and induce similar or higher Andy pertussis antibodies and booster response rates than the active control.

Robert Janssen: Prior to advancing teed up 2018 into our previously announced phase II Human Challenge trial <unk> plans to evaluate the persistence of pertussis immunogenicity of <unk> through a long term follow up study of participants who completed our phase one trial.

Robert Janssen: The extension study is expected to follow participants for up to approximately three years following vaccination.

Robert Janssen: Topline results are expected in the fourth quarter of 2024.

Robert Janssen: Moving on to the Plague Vaccine Program, which is in collaboration with and funded by the U.S. Department of Defense. In March, we executed a contract modification with DoD to add approximately $4 million to support CMC work for the plague vaccine candidate, with the agreement now totaling $38 million through 2025. We anticipate top-line data from both the randomized active control phase two clinical trial, as well as the non-human primate challenge study of the plague vaccine candidate, in the fourth quarter of 2024. These data will inform next steps for the

Robert Janssen: Moving onto the plagued vaccine program, which is in collaboration with and funded by the U S Department of defense.

Robert Janssen: We anticipate top line data from both the randomized active control phase II clinical trial as well as the nonhuman Primate Challenge study of the plague vaccine candidate in the fourth quarter of 2024.

Robert Janssen: These data will inform next steps for the program.

Robert Janssen: We're pleased with this progress across our pipeline, and we look forward to executing on these upcoming milestones in the coming months. We also continue to identify new opportunities to leverage our CPG 1018 adjuvant through multiple innovative programs with biotech and academic collaborators. I'll now turn the call over to Rita to review our financial results.

Robert Janssen: We're pleased with this progress across our pipeline and we look forward to executing on these upcoming milestones in the coming months.

Rita O'Connor: We also continue to identify new opportunities to leverage our CPG till 18 adjuvant through multiple innovative programs with biotech and academic collaborators.

Robert Janssen: Ill now turn the call over to Rita to review our financial results.

Rita O'Connor: I'll review the key financial results for the first quarter of 2024, as well as our financial guidance for the full year of 2024. Please note that all financial comparisons are versus the prior year period, unless otherwise noted. Please refer to our press release and Form 10-Q for more detailed financial information. Starting with Teflis FB, net product revenue grew 10% year over year to $48 million in the first quarter of 2024. Cost of product sales for Heplisav-B in the first quarter of 2024 decreased to $11 million, compared to $15 million for the prior year period.

Rita O'Connor: Thank you Ron I'll review the key financial results for the first quarter of 2024 as well as our financial guidance for the full year of 2024. Please note that all financial comparisons are versus the prior year period, unless otherwise noted please refer to our press release and Form 10-Q for more.

Rita O'Connor: Failed financial information.

Rita O'Connor: Starting with Tesla <unk> net product revenue grew 10% year over year to $48 million in the first quarter of 2024.

Rita O'Connor: The decrease is primarily due to lower per unit manufacturing costs as a result of previous process improvements partially offset by a $1 million inventory write-off charge recorded during the first quarter of 2024. We continue to be pleased with the HEPLISAV-B margin profile trend, with growth margin of about 77% in Q1 of 2024, a significant improvement over the 66% in the first quarter of 2023. We continue to expect growth margins of approximately 80 percent for the full year of 2024, which is consistent with our long-term expectations of the margin profile for Heplisav-B.

Rita O'Connor: Cost of product sales for <unk> in the first quarter of 2024 decreased to $11 million compared to $15 million for the prior year period.

Rita O'Connor: We continue to be pleased with the help of SAP D margin profile trend with gross margin of about 77% in Q1 of 2020 for a significant improvement over the 66% in the first quarter of 2023.

Rita O'Connor: We continue to expect gross margins of approximately 80% for the full year of 2024, which is consistent with our long term expectations of margin profile for <unk>.

Rita O'Connor: Other revenue is about three million dollars for both the first quarter of 2024 and 2023, representing revenue related to the plague vaccine program in collaboration with and funded by the U.S. Department of Defense. Turning to our expenses, research and development expenses were $14 million for both the first quarters of 2024 and 2023. Expenses in 2023 included the completion of clinical trials for our pipeline programs, whereas the first quarter of 2024 reflected activities for planned clinical trials, as well as increases related to investments in our CPG-1018 preclinical and clinical collaboration.

Rita O'Connor: Other revenue was about $3 million for both the first quarter of 2024, and 2023, representing revenue related to the play vaccine program in collaboration with and funded by the U S Department of defense.

Rita O'Connor: Turning to our expenses research and development expenses were $14 million for both the first quarters of 2024 and 2023 expenses in 2023 included the completion of clinical trials for our pipeline programs.

Rita O'Connor: As the first quarter of 2024 reflected activities for planned clinical trials as well as increases related to investments in our CPG 10, 18, preclinical and clinical collaborations.

Rita O'Connor: Selling general and administrative expenses for the first quarter of 2024 were $44 million compared to approximately $37 million for the prior year period. The increase was primarily driven by increased headcount and other investments supporting our strategic growth, including an overall increase in targeted commercial and marketing efforts designed to increase Heplisav-B market share and maximize the opportunity presented by the ACIP's Universal Recommendation. Sublease expense was $1.6 million in the first quarter of 2024 compared to sublease income of $1.6 million in the prior year period.

Rita O'Connor: Selling general and administrative expenses for the first quarter of 2024 or $44 million.

Rita O'Connor: Compared to approximately $37 million for the prior year period.

Rita O'Connor: <unk> by the ACI piece Universal recommendation.

Rita O'Connor: Sublease expense was $1 $6 million in the first quarter of 2024 compared to sublease income of $1 6 million in the prior year period.

Rita O'Connor: This change reflected the termination of our original lease with a noncash charge of $3 5 million, partially offset by income of $1 $9 million during the period.

Rita O'Connor: Including this onetime noncash charge, we expect to record approximately $5 million of net sublease income for the full year of 2024.

Rita O'Connor: These results generated a net loss of $9 million in the first quarter of 2024 compared to $24 million during the prior year period.

Rita O'Connor: Moving to the balance sheet, we ended the first quarter of 2024 with cash, cash equivalents, and marketable securities of $724 million, which we believe is sufficient to progress our current pipeline assets and support our organic business without the need to raise additional capital. And now to summarize our financial guidance. We are reaffirming our prior full year 2024 financial guidance as follows. Peplis FV net product revenue is expected to be between approximately $265 and $280 million, including approximately $3 million in ex-U.S. sales through our commercialization partnership in Germany.

Rita O'Connor: Moving to the balance sheet. We ended the first quarter of 2024 with cash cash equivalents and marketable securities of $724 million.

Rita O'Connor: Which we believe is sufficient to progress our current.

Rita O'Connor: Pipeline assets and support our organic base business without the need to raise additional capital.

Rita O'Connor: We expect HEPLISAV-B to have a growth margin of approximately 80% for the full year of 2024. We expect R&D expenses to be between approximately $60 and $75 million, and we expect SG&A expenses to be between approximately $160 and $180 million.

Rita O'Connor: Now to summarize our financial guidance, we are reaffirming our prior full year 2024 financial guidance as follows.

Rita O'Connor: We expect <unk> gross margin of approximately 80% for the full year of 2024.

Rita O'Connor: We expect R&D expenses to be between approximately 60 and $75 million.

Rita O'Connor: We expect SG&A expenses to be between approximately 160 and $180 million.

Rita O'Connor: And we also expect cash cash equivalents and marketable securities to be higher at the end of the 24 as compared to December 31 23.

Ryan Spencer: In closing, we believe that with our strong financial position and proven ability to execute, we are well positioned to drive sustainable growth in our core HEPLISAV-B business by capturing a majority U.S. market share and leading the expansion of the adult hepatitis B vaccine market. We look forward to progressing our R&D portfolio of vaccine candidates while continuing to be extremely thoughtful in how we allocate our capital to accelerate growth and build beyond our current base business. We are excited about our progress to date, and we look forward to continuing to deliver on our goals for this year and beyond. Thank you, everyone, for your attention today.

Ryan Spencer: Thanks, Rita in closing, we believe that our strong financial position and proven ability to execute we are well positioned to drive sustainable growth in our core <unk> business by capturing majority U S market share and leading the expansion of the adult hepatitis B vaccine market, we look forward to progressing our R&D portfolio of vaccine candidate.

Operator: Operator, we would now like to open the Q&A portion of the call. Thank you. To ask a question, you'll need to press star 11 on your telephone.

Matthew Christopher Phipps: To withdraw your question, please press star 11 again. Please wait for your name to be announced. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question will come from the line of Matthew Phipps with William Blair. Your line is now open.

Speaker Change: Of the call. Thank you to ask a question you will need to press star one on your telephone.

Matthew Christopher Phipps: A question. Please press star one again, please wait for your name to be announced please standby, while we compile the Q&A roster.

Matthew Christopher Phipps: One moment for your first question. Please.

Matthew Christopher Phipps: Our first question will come from the line of Matthew Phipps with William Blair. Your line is now open.

Donn Casale: Afternoon, thanks for taking my question. Um, you know, first, I guess the retail market share looks like it did dip a little bit from Q4 to Q1, 58. I'm sorry, I realize these are somewhat assumptions, but just wondering if there's anything lumpy in there, or did anything else change with any contracts that caused that? Hey, hey, Max, Don.

Matthew Christopher Phipps: Good afternoon, Thanks for taking my questions.

Max: First I guess, the retail market share it looks like it did dip a little bit from Q4 to Q1 dollars, 58% to 55% of that realized one these are somewhat assumptions, but just wondering if theres anything lumpy in there or did anything else changed with any contracts that caused that to happen.

Donn Casale: Nothing really changed. I mean, market share. There will be slight variations in market share. I mean, it's related to the purchasing patterns of some of our larger customers. But for us, we continue to expect to take market share both in retail and as well in IDN. So it's really more around these purchasing patterns of some of the larger customers. Rob, a question on the shingles program. One, could you just maybe tell us how many total arms are in the trial?

Speaker Change: Hey, Hey, Matt Don.

Donn Casale: <unk> really change.

Donn Casale: Market share will be slight variations in market share I mean, it's related to purchasing patterns of some of our larger customers.

Donn Casale: But for US we continue to expect to take market share both in retail and as well an IBM separately more so around the purchasing patterns of some of the larger customers.

Donn Casale: Okay.

Donn Casale: Rob a question on.

Donn Casale: The singles program.

Rob: Can you just maybe tell us how many total arms in the trial just kind of wondering how many patients will be in a trial to get a sense of.

Robert Janssen: Just kind of wondering how many patients will be in each trial to get a sense of how much power you might have for the immunogenicity endpoint. And also, did you, I can't even tell if you confirmed that a potential pivotal trial would be placebo-controlled, or that's just kind of still the hope and you need to still have those? So, Matt, we will be enrolling 10 arms to receive Z1018 and then a Shingrix arm, so there will be 11 arms with 40 subjects in each arm, which is a reasonably large number for a phase one study, but it's really so we can get a good sense of what CD4 responses are. Now, with respect to placebo-controlled studies, we have communicated with the FDA and heard from them that a placebo-controlled efficacy study would be acceptable for review in a life-threatening disease.

Matt: Powering you might have for the Immunogenicity endpoint and then also did you.

Robert Janssen: I couldn't tell if you confirm that a potential pivotal trial would be placebo controlled or that's just kind of still the hope and you'd need to still have those conversations.

Robert Janssen: So Matt we will be enrolling 10.

Matt: <unk> arms to receive <unk>, and then Ashish Brooks arm, so there'll be 11 arms with 40 subjects in each arm.

Matt: And which is a reasonably large number for us.

Robert Janssen: But phase one study, but it's really so we can get a good sense of what CD four responses are.

Robert Janssen: Now with respect to please see bow controlled we have communicated with the FDA and heard from them that that placebo controlled efficacy study would be acceptable for review.

Robert Janssen: Four.

Robert Janssen: License.

Robert Janssen: And then maybe one last one for Ryan, you know, do you almost hesitate to make any real big decisions with regard to your cash balance until you see the immunogenicity data from the shingles program in the second half of next year? Is that almost a, You know, you just kind of want to make sure you have all your options open until you get to that data, or is that, No, it's certainly one of the elements in how we think about managing our capital position.

Speaker Change: Great and then maybe one last one for Ryan.

Robert Janssen: Do you do you almost hesitate to make any real big decisions with regards to your cash balance until you see that immunogenicity data from the stimulus program in the second half of next year.

Robert Janssen: Almost.

Ryan Spencer: You just kind of want to make sure you have all your options open until you get to that data.

Robert Janssen: Or is that not the case.

Robert Janssen: One, you know, we've talked a lot about this, we're in a favorable position to be able to fund our development programs, as well as the opportunity to settle or convert when it comes due in 26. And so we like to be able to maintain all of our optionality as it relates to being able to advance our pipeline. So it's definitely a factor in how we manage our capital structure overall.

Robert Janssen: As well as.

Robert Janssen: The opportunity to settle our convert.

Robert Janssen: When it comes due in 2006, and so we like to be able to maintain.

Robert Janssen: All of our Optionality as it relates to being able to advance our pipeline. So it's definitely a factor in how we manage our capital structure overall.

Ryan Spencer: Great, thanks. Thank you. Thanks for that.

Speaker Change: Great. Thanks for taking my questions.

Speaker Change: Thank you thanks Pat.

Operator: One moment for our next question. Our next question comes from the line of Paul Choi with Goldman Sachs. Your line is now open. Hi, good afternoon team and thanks for taking my question. I also want to have a follow-up on shingles as well.

Ryan Spencer: One moment for our next question. Our next question comes from the line of Paul Cheng with Goldman Sachs. Your line is now open.

Paul Choi: Hi, good afternoon team and thanks for taking my question I also wanted to follow up on shingles, as well and.

Paul Choi: And can you maybe comment on, you know, how you thought about the trial design for your study, particularly in the context of recent data from Curvo, you know, which showed 100% immunogenicity? Any thoughts on patient selection and or trial design? Endpoints and such that you can comment on and just where you think you can possibly show the most differentiation either on efficacy or safety?

Paul Choi: Can you maybe comment on.

Paul Choi: How you thought about.

Paul Choi: The trial design for your study, particularly in the context.

Paul Choi: Recent data from <unk>.

Paul Choi: 100% of Immunogenicity any thoughts on patient selection and or trial design.

Paul Choi: And such that you can comment on just where you think you can possibly share.

Paul Choi: So the most differentiation either efficacy or safety.

Paul Choi: And secondly, just with regard to Heplisav, can you maybe just comment on just sort of retail chain behavior, you know, the share gains continue to look good, but just curious if you're seeing more activity, and you know, if you could elaborate a little bit more on the activity levels in the retail channel in particular. Thank you very much. Thanks, Paul. Rob, why don't you take the first question on shingles?

Paul Choi: And secondly, just with regard to help us out.

Paul Choi: Can you maybe just comment on just sort of retail chain behavior share gains continue to look good but just curious if youre seeing more activity.

Paul Choi: If you could elaborate a little bit more on the activity levels in the retail channel in particular, thank you very much.

Robert Janssen: And Don, you can address the retail question. Yep. Right. So the study really is designed to identify the antigen, the GE antigen. This is the first time our GE antigen, this is the first time it's been in humans, the first time it's been in people.

Speaker Change: Thanks, Paul Rob why don't you take the first question on singles and Don you can address the retail question Yep.

Rob: So this study really is designed to identify the.

Don: Antigen GE antigen. This is the first time, our GE antigen. This is a first in humans first time, it's been people. So we'll be looking at different levels of antigen. So the trial is designed to look at different levels of antigen to.

Robert Janssen: So we'll be looking at different levels of antigens. The trial is designed to look at different levels of antigen to increase CD4 counts. And we'll also be looking at different regimens. We're looking at a couple of different regimens in terms of time between doses, again, to increase CD4 counts. Now, to look at reactogenicity, we're developing, and we've been communicating with FDA about it, and how to go about doing it, and that is reactogenicity, and how can we, you know, how can we design future studies that would be label-enabling to put reactogenicity data in the label.

Robert Janssen: Increased CD four accounts.

Robert Janssen: And we'll also be looking at different regimens, we're looking at a couple of different regimens.

Robert Janssen: In terms of time between doses.

Robert Janssen: Again increased CD four accounts now to look at Reactogenic, Steve we are developing and we have been communicating with.

Robert Janssen: The FDA about it.

Robert Janssen: And how to go about doing that and that is <unk> and how can we.

Robert Janssen: How can we design future studies that would be label, enabling to put reacted genius C data in the label and we're looking at.

Robert Janssen: And we're looking at, you know, sort of standard global impressions of severity, changes in symptoms, health-related quality of life, those types of instruments that already exist. But we'll also be looking to develop, potentially, our own instrument in this study and then to validate it for use in a phase three study. And Paul, just to put a finer point on it, when we think about the ways to measure immunogenicity, we've been very clear and transparent that we believe that CD4s are critical for this vaccine.

Robert Janssen: Sort of standard global impression of severity changes in symptoms health related quality of life those types of already.

Robert Janssen: Instruments that already exist, but we'll also be looking to develop potentially our own instrument. In this study and then to validate it for use in our phase III study.

Robert Janssen: Paul just to put it.

Robert Janssen: Final point on it when we think about the ways to measure Immunogenicity, we've been very clear and transparent that we believe that CD fours are critical for this vaccine and so when we think about the way we've talked about our data of its been very deliberate to be focused on what we think is the most critical of some of the most critical end points.

Robert Janssen: And so when we think about the way we've talked about our data, it's been very deliberate to be focused on what we think are some of the most critical endpoints. There are a variety of ways to measure immunogenicity with percentages of response to different measures.

Robert Janssen: There is a variety of ways to measure immune GSE with percentages of response to different different measures, but for our trials. We've been very clear about the importance of <unk> for us and Thats, what we will continue to focus on as we progress.

Speaker Change: Got it.

Robert Janssen: On the retail side.

Donn Casale: To put a bit more color on retail behavior, there's been a dramatic shift, if you will, in the retail segment as it relates to non-respiratory vaccines and focus on those vaccines coming off the respiratory season. You're seeing certainly a lot of focus by those retailers as it relates to various tactics to increase awareness, to continue to run initiatives, both not only for the pharmacists themselves but also advertising to consumers. They're all rallying around the fact that May is Hepatitis B Awareness Month.

Donn Casale: Hey, Bob it's put a bit more color on the retail behavior. There has been a dramatic shift if you will in the retail segment as it relates to.

Donn Casale: Non respiratory vaccines and focus on those vaccines coming off the respiratory season.

Donn Casale: We're seeing certainly a lot of focus by those retailers as it relates to various tactics to increase awareness.

Donn Casale: Two.

Donn Casale: Continuing to run initiative, both not only awareness for the farmer.

Donn Casale: Pharmacist themselves, but also.

Donn Casale: Advertising out to consumers.

Donn Casale: Theyre all rolling around the fact that it made hepatitis b awareness month, there's a lot of focus again on setting up the infrastructure if you will.

Donn Casale: There's a lot of focus again on setting up the infrastructure, if you will, to take advantage of that opportunity as well. So again, a drastic shift, if you will, in focus by the retail chains as it relates to Hepatitis B vaccination. Great. Thanks for the caller. I'll jump back in queue.

Donn Casale: To take advantage of that opportunity as well so again a.

Speaker Change: Drastic shift if you will focus by the retail chain as it relates to hepatitis B vaccination.

Speaker Change: Great. Thanks for the color I'll jump back in queue.

Paul: Thanks, Paul.

Speaker Change: Moment for our next question.

Paul Choi: Thank you. One moment for our next question. Our next question comes from the line of Jon Miller with Evercore ISI. Your line is now open. Oh, hi. This is Jinxuan Ong from John.

Donn Casale: Our next question comes from the line of Jon Miller with Evercore ISI. Your line is now open.

Jinxuan Ong: Thanks for taking our question. I guess the first one, helpfully said, is how is the seasonality profile developing? As the market gets more penetrated, when do you expect to see the biggest growth for the remaining of the year?

Jinxuan Ong: Oh, Hi, this is Joe on for John Thanks for taking my question I guess first one <unk>.

Jinxuan Ong: How does the seasonality profile developing.

Jinxuan Ong: The market gets more penetrated do you expect to see but when do you expect to see the biggest growth for the remainder of the year and I guess second TDAP I guess why delaying that to that phase II trial and highway over the phase II design change based on learnings from the extension of the phase one thanks.

Jinxuan Ong: And second on TDAP, I guess why delay the TDAP Phase 2 trial and how will the Phase 2 design change based on learnings from the extension of Phase 2? Okay. Let me comment on seasonality first, and Donn, if you have anything to add, please feel free.

Jinxuan Ong: Okay, let.

Jinxuan Ong: Let me comment on seasonality first and then Dan you have anything to add please feel free.

Ryan Spencer: It's pretty clear that Q2 and Q3 will, we expect, continue to be the largest quarters in the adult hepatitis B vaccine market for a variety of reasons. And I don't think the market growth doesn't really change the belief that we still believe Q2 and Q3 will be the largest quarters of the year and the years in the future, recognizing that we do expect there will always be seasonality due to the fact that a significant respiratory vaccine is given in the Q4, Q1 time period. So we expect that seasonality to continue even as we see market growth. Done.

Jinxuan Ong: It's pretty clear that Q2, and Q3 will we expect will continue to be the largest quarters and the adult hepatitis b vaccine market.

Ryan Spencer: For a variety of reasons.

Ryan Spencer: The market growth doesn't really change the belief that we still believe Q2, and Q3 will be the largest quarters of the year and the years in the future recognizing that we do expect it will always be seasonality due to the fact that significant.

Ryan Spencer: Respiratory vaccine, it's given in the Q4 Q1 time period. So we expect that seasonality to continue even as we see market growth.

Ryan Spencer: Good. That's good. And then I think the other question just at a high level on Tdap, I'll take that too. And Rob, please add any color you feel is important, but the decision here to delay the phase two challenge study was in response to the regulatory feedback that we received related to the PRN positive versus PRN negative strain for pertussis. Recognizing that the FDA is interested in the PRN negative strain that we would conduct in the future, we didn't need to conduct a positive pilot study now, and we decided to make the decision to focus on the PRN negative strain in the future when it is available, which also happened to allow us to see the results of this phase one extension study.

Speaker Change: Okay. That's good and then I think the other question just at a high level.

Speaker Change: On TDAP I'll take that too and Rob. Please add any color that you feel is important but the.

Ryan Spencer: The decision here to delay the phase two challenge study was as a response to the regulatory feedback that we received.

Ryan Spencer: Ladies and PR positive versus negative strained for pertussis.

Ryan Spencer: Recognizing that the FDA is interested in the purion negative strain that we conduct in the future.

Ryan Spencer: We didn't need to conduct a positive pilot study now and we decided to make the decision to.

Ryan Spencer: Focus on the Prs negative strain in the future when available was also having to allow us to see the results of this phase one extension study. So it doesn't have an impact on the overall timeline.

Ryan Spencer: So it doesn't have an impact on the overall timeline, but it does allow us to have, you know, insight into the durability of our product prior to advancing into any other clinical studies. All in all, I think it's actually a very favorable opportunity to be able to increase our understanding of the product before investing further in additional clinical trials. Thank you. One moment for our next question, please. Our next question comes from the line of Ed White with HC Wainwright. Your line is now open.

Edward Patrick White: But it does allow us to have.

Edward Patrick White: The insight into the durability of our products.

Edward Patrick White: Two advancing into any other clinical studies.

Edward Patrick White: Alright, Thanks, both all in all I think a pretty X actually very favorable.

Edward Patrick White: Favorable opportunity to be able to increase our understanding of the product before investing further in additional clinical trials.

Edward Patrick White: Alright, thank you.

Edward Patrick White: Thank you one moment for our next question. Please.

Ryan Spencer: Our next question comes from the line of Ed White with H C. Wainwright. Your line is now open.

Edward Patrick White: Good evening. Thanks for taking my questions. Just to stick stick with the TDEF.

Ryan Spencer: Okay.

Edward Patrick White: Good evening, Thanks for taking my questions.

Edward Patrick White: Just to stay with the TDAP.

Edward Patrick White: So.

Edward Patrick White: So, how is the timing of Phase 2 going to be affected? When do you expect to start that study? As for the phase two we started, it really is still kind of up in the air. We do need to have the PRN negative strain available, and that's being developed. So it depends on the availability of that strain.

Edward Patrick White: How is the timing of the phase two going to be affected when do you expect to.

Edward Patrick White: That study.

Edward Patrick White: As the phase II, where we started.

Edward Patrick White: So it really is still kind of up in the air we do need to have the PRN negative strain available and thats being developed so it depends on availability that straight I think the key point, though is that study is one component of the overall development plan.

Robert Janssen: Longer lead times in this development plan will be.

Robert Janssen: The immunogenicity data, which in our view, it's going to be critical to have that data develop over time to show durability that can be part of our submission. So the TDAP chat.

Robert Janssen: <unk> is not on the critical path I think is the way to think about it. It's a very valuable study because it will show the antigens are efficacious, which we have a high confidence that they will be and that with the presence of our ads events, we would expect to improve over existing vaccines. So.

Ryan Spencer: Ultimately what will gate that timing will be the availability of the PRN negative strain.

Speaker Change: Okay. Thanks, Brian.

Ryan Spencer: And as you have the BLA.

Speaker Change: Excuse me the Paducah.

Ryan Spencer: May 13th for humans.

Ryan Spencer: <unk> patients I'm, just wondering if you can quantify what that means to them what the impact could potentially be.

Ryan Spencer: The impact could potentially be, you know, not only this year but going forward. Yeah, I mean, I think we've talked about this a little bit in the past, that the, the, the, you already noted that May 13th is the PDUFA date. It's too really currently early to comment on the impact of any revenue expectations. But we will know, like we said in the past, obviously, it does take time to engage customers. And really having the PDUFA, it gives us that license to hunt and actually engage in the sport of hunting commercially.

Ryan Spencer: Not only this year, but going forward.

Ryan Spencer: Yes.

Ryan Spencer: We've talked about this a little bit in the past.

Ryan Spencer: Then.

Ryan Spencer: <unk>.

Ryan Spencer: Yes, you already noted in May.

Ryan Spencer: Our teams and the <unk> date.

Ryan Spencer: It's to really too early to comment on the impact of any revenue expectations, but we will know as we said in the past obviously it does take time to engage customers and really having the <unk>.

Ryan Spencer: It's the.

Ryan Spencer: It gives us that license to hunt and actually engage them.

Ryan Spencer: Commercially so we would expect it is going to take time like with any other customer.

Ryan Spencer: To be able to engage them in in an effective manner. So.

Ryan Spencer: So we expect that it's going to take time, like with any other customer, to be able to engage them in an effective manner. We've made no comment on the revenue expectations from this particular regulatory event, but we will continue to provide updates as we progress. Okay. Thanks, Ryan, for taking my question. Thank you. Please take a moment for our next question. Our next question comes from the line of Phil Nadeau with TD Cowan. Your line is now open. Good afternoon, thanks for taking our questions. One follow-up question on seasonality.

Ryan Spencer: We made no comment on the revenue expectations.

Philip M. Nadeau: From this particular regulatory events, but we will continue to provide updates as we progress.

Philip M. Nadeau: Okay. Thanks, Brian for taking my questions.

Philip M. Nadeau: Thank you one moment for our next question.

Philip M. Nadeau: Our next question comes from the line of Phil <unk> with TD Cowen. Your line is now open.

Philip M. Nadeau: Good afternoon, and thanks for taking our questions one follow up question on seasonality.

Philip M. Nadeau: Appreciating, it's probably a hard question since we're all dealing with imperfect information, but do you have a sense as to whether this year the seasonality was particularly bad, given that it was early in the availability of RSV vaccines and people are still getting shots for COVID? Is there any reason to think that the seasonality and the decline in HPV are linked? Will marketing Q4 and Q1 won't be as bad in future years? Or is that just hard to know?

Ryan Spencer: <unk>.

Philip M. Nadeau: It's probably a hard question since we're all dealing with imperfect information, but do you sense. This year the seasonality was particularly bad given that it was early in the availability of RSV vaccines and people are still getting shots for Covid is there any reason to think that the seasonality and the decline in HBV.

Philip M. Nadeau: In Q4, and Q1 won't be as bad in future years or is that just.

Speaker Change: Hard to know at this point.

Donn Casale: Hey Phil, it's Donn. I think it's a little hard to know, a little early to kind of call it, but, you know, certainly, and the feedback we've been receiving from our retail customers, in particular, is that learning new vaccines, RSV, COVID, a lot was thrown at the retailers all at once. Now that they've gone through it once, going into this year, they'll be better prepared to understand, you know, what's going to be in store for that respiratory season. So, you know, we sort of see that as an opportunity moving forward, but probably too early to tell how it looks every year thereafter.

Speaker Change: Hey, Bill I think that a little hard to know a little early to kind of call. It but certainly the feedback we've been receiving from our retail customers. In particular is learning new vaccines RSV Covid a lot was thrown at the retailers all at once now that they've gone through it was.

Donn Casale: Going into this year, there will be better prepared to understand whats going to be in store for that respiratory season. So we start to see that as an opportunity moving forward, but probably too early to tell outlooks every year thereafter, but certainly we expect this year to be a little bit different because our customers are a little bit more prepared for anticipating beyond.

Donn Casale: But certainly, we expect this year to be a little bit different because our customers are a little bit more prepared for anticipating the onslaught of all these different vaccines in the space. Okay, and then on the hemodialysis, sorry, just one more point to add to that is to also remember the winter season and how cough, cold, and flu, COVID, other things, those are variables as well as how they impact wellness visits or opportunities for vaccination. So that's going to always be variable across the season.

Donn Casale: Florida, all these different vaccines in the space.

Speaker Change: Got it and then on the.

Donn Casale: Modelo facilities.

Donn Casale: It was multiple just add onto that is also remember the winter season, and how cough cold and flu COVID-19 other things those are variables as well as how the how they impact wellness visits or opportunities for vaccination. So that's going to always be variable across the season. So we just have to keep that in mind.

Ryan Spencer: Only market dynamics Theres also disease dynamics at play that will be variable.

Ryan Spencer: Do the RSV vaccines have a requirement that patients not be vaccinated for something else like HBV for weeks before or weeks after receiving an RSV vaccine.

Ryan Spencer: The RSV was that did you say the RSV vaccine that was yes for specifically for RSV is there is there are required to be a window of no other vaccinations around around that vaccine.

Philip M. Nadeau: Yeah, specifically for RSV. Is there a required window of no other vaccinations around that? No, not in particular. Okay, just be aware, Phil, that data is usually not specific, how very, very, it's very rare for there to be specific information around how to treat other vaccines with a single vaccine label. So it's more around the operational hurdles, quite frankly, about just operationalizing a new vaccine and vaccine launches versus common administration as being the barrier for our retailers in particular.

Philip M. Nadeau: No not in particular.

Philip M. Nadeau: Okay.

Philip M. Nadeau: Just be aware field exploration.

Philip M. Nadeau: That data is usually doesn't specific.

Philip M. Nadeau: How it very very it's very rare for there to be specific information around how to treat other vaccines with everyone vaccines label. So.

Philip M. Nadeau: Okay. So far around the operational hurdles quite frankly about just operationalize, a new vaccine and vaccine launches.

Philip M. Nadeau: Versus carbon administration as being a barrier.

Philip M. Nadeau: For our retailers in particular.

Philip M. Nadeau: Got it. In terms of hemodialysis, I think in the past, you've suggested that there is some use of HEPLISAV already in the market. Would you mind if that's true and if you have any estimates of penetration in the hemodialysis market?

Speaker Change: Got it.

Philip M. Nadeau: Terms of hemodialysis I think in the past you've suggested that there is some use of <unk>.

Philip M. Nadeau: That's helpful sort of already in the market.

Philip M. Nadeau: I'm wondering if that's true if you have any estimates of penetration of the hemodialysis market currently.

Ryan Spencer: Yeah, no, there's definitely utilization in the marketplace. So yeah, and you're right. We have commented on that before. However, we have not commented on specific penetration or share other than our comments on retail and IDN.

Philip M. Nadeau: Yes, theres definitely utilization.

Ryan Spencer: And in the marketplace.

Ryan Spencer: So yes, youre right. We have commented on that before we have not commented on specific.

Ryan Spencer: Penetration of share other than our comments on retail on IBM.

Ryan Spencer: And like we have said before, until we have our FDUFA, our SPLA, approved, we're gonna refrain from getting into too many details on this segment. Great. Thanks for taking our questions. Thanks y'all.

Ryan Spencer: Like we have said before until we have our.

Speaker Change: R R.

Ryan Spencer: <unk> <unk> approved we were going to refrain from getting into too many details on the segment.

Speaker Change: Great. Thanks for taking our questions.

Speaker Change: Thanks, Bill. Thank you. Thank you bill.

Douglas Royal Buchanan: Thank you. Thank you. One moment for our next question. Our next question will come from the line of Roy Buchanan with Citizens JMP. Your line is now open.

Speaker Change: One moment for our next question.

Douglas Royal Buchanan: Our next question will come from the line of Roy Buchanan with citizens JMP. Your line is now open.

Douglas Royal Buchanan: Hey, thanks for taking the question. Just a quick follow-up on PDF. I guess how many patients are you expecting in the extension trial, and it says in the press release versus active control. So you're going to be looking at both. The Tdap1018 and the Boostrix arms.

Douglas Royal Buchanan: Hey, thanks for taking the questions.

Douglas Royal Buchanan: Hi, quick follow up on teed up I guess, how many.

Douglas Royal Buchanan: Patients are you expecting in the extension trial.

Douglas Royal Buchanan: Says in the press release versus active control, so youre going to be looking at both.

Douglas Royal Buchanan: Keyed up to 18 in the booth strict arms.

Robert Janssen: It seems like a lot of patients have probably been off the trial for a while, maybe gone on to other things. And you're going to look at both the adults and the adolescents. We'll just be looking at the young adults, Roy; we won't be looking at the adolescents, who are too few. And, you know, the number of subjects we are looking to try to enroll was up to 50.

Douglas Royal Buchanan: It seems like a lot of patients that probably have been off the trial for a while maybe gone on to other things.

Robert Janssen: What are you going to look at both the adults and adolescents.

Speaker Change: We'll just be looking at.

Roy: We'll just be looking at the young adults ROI.

Robert Janssen: We won't be looking to add lesson through <unk>.

Robert Janssen: And.

Robert Janssen: The number of subjects, we are looking to try to win more was was up to 50.

Robert Janssen: And we'll be comparing TDAP 1018 to... Thanks. Yeah, and Roy, just a couple elements there.

Robert Janssen: Okay.

Robert Janssen: Pairing teed up to an 18 to boosters.

Roy: Got it thanks Ross.

Roy: Just a couple a couple of elements. There you already noted the trial was conducted a while ago. So we will have two to three years of follow up on these patients and the ultimate number is going to be depending on how many we can get to return give.

Robert Janssen: As you noted, the trial was conducted a while ago. So we'll have two to three years of follow-up on these patients. And the ultimate number is going to be depending on how many we can get to return, given some of the challenging factors you noted. But we expect that we'll be able to have some interesting data from the follow-up. OK, very good. Thank you. Thank you. We have no further questions at this time.

Robert Janssen: Given some of the challenging factors you noted, but we expect that we'll be able to have some interesting data from the follow up.

Speaker Change: Okay very good thank you.

Speaker Change: Thank you.

Ryan Spencer: I would now like to turn the call over to Mr. Ryan Spencer, Chief Executive Officer, for closing remarks. Thank you, Operator, and thank you all for joining us today. We appreciate your interest in Dynavax. We are excited about our recent accomplishments and the strength of our position. We look forward to updating you on our progress focused on protecting the world against infectious diseases.

Robert Janssen: We have no further questions at this time I would now like to turn the call over to Mr. Ryan Spencer Chief Executive Officer for closing remarks.

Operator: Operator, you may end the call. Ladies and gentlemen, thank you for joining us today. This concludes today's conference call. You may now disconnect. Everyone have a wonderful day.

Operator: Ladies and gentlemen, thank you for joining US today. This concludes today's conference call. You may now disconnect everyone have a wonderful day.

Q1 2024 Dynavax Technologies Corp Earnings Call

Request a DemoDemo

DVAX

Dynavax Technologies

Earnings