DEFA14A: Dynavax Defends Board and Strategy Amidst Proxy Contest, Citing Strong Financial Performance and Shareholder Returns

Dynavax Technologies Corporation strongly disagrees with Glass Lewis's partial recommendation against its director nominees, asserting its current strategy and board are delivering significant long-term stockholder value and urging votes for all four of its highly qualified directors.

Summary

• Dynavax Technologies Corporation is a commercial-stage biopharmaceutical company focused on developing and commercializing innovative vaccines.
• The company is responding to a report by Glass, Lewis & Co. concerning the election of its director nominees at the Annual Meeting of Stockholders on June 11, 2025.
• Dynavax expresses strong disagreement with Glass Lewis's recommendation against two of its highly qualified directors, Brent MacGregor and Scott Myers.
• The company highlights that Institutional Shareholder Services (ISS) and Egan Jones both recommend supporting all of Dynavax's director nominees.
• HEPLISAV-B, Dynavax's hepatitis B vaccine, achieved $268 million in net product revenue in 2024 and held a 44% market share in the U.S. adult hepatitis B vaccine market by year-end 2024.
• First quarter 2025 financial results include HEPLISAV-B net product revenue of $65 million, a 36% increase year-over-year, and total revenue of $68.2 million, a 34% increase year-over-year.
• Dynavax has delivered a 203% total return to stockholders over the last five years (as of April 17, 2025), significantly outperforming vaccine peers (9% return) and the S&P Biotechnology Select Industry Index (-17%) over the same period.
• The company has executed over 85% of its $200 million share repurchase program, authorized in November 2024, which represents 47% of Dynavax's use of capital since 2020.
• Following the 2025 Annual Meeting, the Board will consist of nine directors, with six of eight independent directors appointed since 2020, reflecting proactive board refreshment.
• Dynavax is implementing a phased board declassification to strengthen accountability and oversight.
• The company argues that Deep Track's candidates lack the necessary public company biotechnology and vaccine operational and financial acumen and public company board experience.
• Glass Lewis noted concerns regarding Deep Track's candidate Brett Erkman, citing his lack of prior public company director or executive experience and rigid alignment with Deep Track's views.

Sentiment

Score: 8

Explanation: The document presents a strong defense of Dynavax's current strategy and board, highlighting significant financial and shareholder return outperformance compared to peers and the broader market. While acknowledging a partial disagreement from Glass Lewis, it emphasizes support from other key proxy advisors (ISS, Egan Jones) and frames the opposing party's (Deep Track) intentions negatively. The tone is confident and assertive, focusing on past successes and a clear path forward.

Positives

• HEPLISAV-B is the market-leading hepatitis B vaccine, with $268 million net product revenue in 2024 and 44% market share by year-end 2024.
• Achieved record first quarter 2025 financial results, including HEPLISAV-B net product revenue of $65 million (36% increase year-over-year) and total revenue of $68.2 million (34% increase year-over-year).
• Delivered a 203% total return to stockholders over the last five years, significantly outperforming vaccine peers (9%) and the S&P Biotechnology Select Industry Index (-17%).
• Executed over 85% of its $200 million share repurchase program, representing 47% of capital use, which differentiates Dynavax among its peers.
• Demonstrated proactive, strategic, and extensive Board refreshment, with six of eight independent directors appointed since 2020.
• Strengthened accountability and oversight through a phased board declassification.
• Received recommendations from Institutional Shareholder Services (ISS) and Egan Jones to support all of Dynavax's director nominees.

Negatives

• Glass Lewis & Co. recommended against two of Dynavax's director nominees, Brent MacGregor and Scott Myers.
• Deep Track's candidates are characterized as lacking decades of public company biotechnology and vaccine operational and financial acumen, and having little to no public company board experience.
• Concerns were raised by Glass Lewis regarding Deep Track's candidate Brett Erkman, specifically his lack of prior public company director or executive experience, untested fiduciary experience, and rigid alignment with Deep Track's views.
• Dynavax asserts that Deep Track's objective is a near-term payoff, which would come at the expense of long-term value generation for other stockholders.

Risks

• The risk that circumstances surrounding or leading up to the 2025 Annual Meeting may change.
• Risks relating to Dynavax's ability to commercialize and supply HEPLISAV-B.
• Risks that market size or actual demand for Dynavax's products may differ from expectations.
• Risks related to the timing of completion and results of current clinical studies.
• Risks related to the development and pre-clinical and clinical testing of vaccines containing CpG 1018 adjuvant.
• Risks related to the implementation of Dynavax's long-term growth objectives.

Future Outlook

Dynavax anticipates continued positive contributions from its current directors and expects to deliver ongoing value for stockholders. The company projects sustained market leadership and growth for HEPLISAV-B and is committed to executing its clear go-forward capital allocation strategy, which balances strategic investment in growth through internal and external assets with opportunistic capital return to stockholders. The company also aims to implement its long-term growth objectives.

Management Comments

• "We strongly disagree with Glass Lewis recommendation against two of our highly qualified directors."
• "Significant Board composition and strategy changes have already been made, and the directors needed to continue successfully executing our superior strategic plan that is delivering significant long-term stockholder value are already on the Board."
• "Dynavax has the right strategy and the right Board."
• "All of our nominees — Brent MacGregor, Scott Myers, Lauren Silvernail and Elaine Sun — are vastly superior to Deep Tracks slate, and replacing any of them would leave Dynavax deficient in vital expertise that is needed to guide the Company through a pivotal year."
• "It remains abundantly clear that Deep Track simply wants a near-term payoff, which would come at the expense of long-term value generation for all other stockholders."

Industry Context

Dynavax operates in the competitive biopharmaceutical sector, specifically within the innovative vaccines market. Its flagship product, HEPLISAV-B, has rapidly achieved market leadership in the U.S. adult hepatitis B vaccine segment, surpassing established large pharma competitors. The company's strong financial performance and significant capital return strategy, particularly its substantial share repurchase program, position it favorably compared to many vaccine peers and the broader biotechnology index, which have shown considerably lower or negative returns over the past five years.

Comparison to Industry Standards

• Dynavax's 203% total return to stockholders over the last five years (as of April 17, 2025) significantly outperforms vaccine peers, which returned only 9% over the same period.
• The S&P Biotechnology Select Industry Index declined 17% over the same five-year period, further highlighting Dynavax's strong outperformance.
• Dynavax's $200 million share repurchase program, representing 47% of its capital use from 2020 to present, is described as "far in excess of its peers," indicating a differentiated and robust capital return strategy.
• HEPLISAV-B's achievement of 44% market share by year-end 2024, quickly overtaking a "large pharma incumbent market leader of the U.S. adult hepatitis B vaccine market," demonstrates superior competitive performance and market penetration.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders: The document directly addresses shareholders, urging them to vote for Dynavax's nominees to ensure long-term value creation, contrasting it with Deep Track's perceived short-term payoff agenda. The significant share repurchase program directly benefits shareholders by returning capital.
• Management/Board: The document strongly defends the current management team and board, emphasizing their expertise, successful execution of strategy, and commitment to shareholder value, reinforcing their positions and legitimacy.
• Employees: While not directly mentioned, a stable and high-performing company with a clear strategy, as portrayed, generally benefits employees through job security and potential growth opportunities.
• Customers: Continued market leadership of HEPLISAV-B and focus on innovative vaccines implies ongoing commitment to providing effective products to customers.

Next Steps

• Stockholders are urged to vote FOR ALL four of Dynavax's director nominees (Brent MacGregor, Scott Myers, Lauren Silvernail, and Elaine Sun) on the GOLD proxy card.
• The 2025 Annual Meeting of Stockholders is scheduled for June 11, 2025.
• Continued execution of the go-forward capital allocation strategy, balancing strategic investment in growth and opportunistic capital return.
• Implementation of long-term growth objectives.

Key Dates

Recommendation

Keywords

Dynavax, DVAX, HEPLISAV-B, Hepatitis B vaccine, CpG 1018 adjuvant, biopharmaceutical, vaccines, SEC filing, proxy statement, corporate governance, shareholder value, share repurchase, board refreshment, Deep Track, Glass Lewis, ISS, Egan Jones, annual meeting, director nominees