DEFA14A: Dynavax Secures Key ISS Endorsement Ahead of Annual Meeting, Reaffirming Current Strategy and Board

Leading independent proxy advisory firm ISS has recommended Dynavax stockholders vote FOR all four of the company's director nominees, signaling support for the current strategy and leadership against an activist campaign.

Summary

• Leading independent proxy advisory firm, Institutional Shareholder Services (ISS), has recommended that Dynavax stockholders vote FOR all four of the Company's director nominees: Brent MacGregor, Scott Myers, Lauren Silvernail, and Elaine Sun.
• The recommendation comes ahead of Dynavax's Annual Meeting of Stockholders scheduled for June 11, 2025.
• ISS noted that Deep Track, the activist investor, failed to present a compelling case for change, recognizing Dynavax's current strategy as the best path for long-term stockholder value creation.
• Dynavax's CpG 1018 adjuvant has generated over $950 million in revenue through COVID-19 business development.
• HEPLISAV-B holds a leadership position in the adult U.S. hepatitis B vaccine market.
• The company has four vaccine programs in development utilizing CpG 1018 and over 15 collaborations in preclinical and clinical development with partners.
• Dynavax has delivered a 203% total return to stockholders over the last five years as of April 17, 2025.

Sentiment

Score: 9

Explanation: The document conveys a highly positive sentiment for Dynavax's current management and strategy, primarily due to the strong endorsement from ISS, which significantly de-risks the ongoing proxy contest. The reported 203% five-year total shareholder return further reinforces this positive outlook.

Positives

• ISS's recommendation to vote FOR all four of Dynavax's director nominees provides significant validation for the current management and strategy.
• ISS explicitly stated that Deep Track failed to present a compelling case for change, reinforcing confidence in Dynavax's strategic direction.
• The company's current strategy is recognized by ISS as logical, well-understood by shareholders, and overseen by a proven leadership team that has driven long-term outperformance.
• Dynavax has successfully commercialized HEPLISAV-B and achieved long-term success, which ISS notes 'evades most biopharmaceutical companies'.
• The CpG 1018 adjuvant has generated substantial revenue, exceeding $950 million from COVID-19 business development.
• The Board has demonstrated ongoing refreshment efforts, with six of the nine directors appointed since 2020, indicating proactive governance.
• Dynavax has delivered a strong 203% total return to stockholders over the past five years, demonstrating significant value creation.

Negatives

• Dynavax criticizes Deep Track's presentation of Total Shareholder Return (TSR) as 'blatantly distorted' and diminishing their credibility.
• Deep Track's supplemental materials are described as 'cherry picked and highly misleading', revealing a 'fundamental misunderstanding of our business'.
• Dynavax alleges that Deep Track's campaign aims to 'strip-mine Dynavax' and 'destroy long-term value for all stockholders'.

Risks

• Risks and uncertainties inherent in Dynavax's business, including those detailed in the Risk Factors section of their Quarterly Report on Form 10-Q for the three months ended March 31, 2025.
• 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 expects its CpG 1018 adjuvant to continue providing value, with four vaccine programs in development potentially addressing millions of patients. The company is committed to returning excess capital as part of its balanced strategic plan and anticipates continued long-term growth and value creation.

Management Comments

• "The recommendation from ISS to support all of Dynavaxs highly qualified director nominees reaffirms that there is no case for change."
• "The Company has the right strategy and Board in place to continue driving long-term stockholder value."
• "Replacing any of our directors with Deep Tracks inferior director nominees would leave Dynavax deficient in vital expertise and be detrimental to Dynavaxs value-creating strategy."
• "Our CpG 1018 adjuvant has, and we expect will continue to, provide value as evidenced by the over $950 million in revenue generated through COVID-19 business development leveraging our adjuvant."
• "With 203% total return delivered to stockholders over the last five years, it is clear our strategy is working and generating superior value."
• "Deep Tracks campaign to ultimately gain control of Dynavax and execute a one-dimensional plan to strip-mine Dynavax will destroy long-term value for all stockholders."
• "Deep Track is deeply wrong and now is the time for stockholders to let them know."
• "Dynavax strongly urges stockholders vote FOR ALL four of Dynavaxs director nominees standing for election... on the GOLD proxy card today."

Industry Context

This announcement highlights a significant development in a proxy contest within the biopharmaceutical sector, where Dynavax, a commercial-stage vaccine company, is defending its current strategy and board against an activist investor, Deep Track. The endorsement from ISS, a leading proxy advisory firm, is crucial in influencing institutional investor votes and signals confidence in Dynavax's established vaccine commercialization capabilities and pipeline, particularly with its HEPLISAV-B vaccine and CpG 1018 adjuvant, which has seen substantial revenue from COVID-19 vaccine partnerships.

Comparison to Industry Standards

• ISS noted that Dynavax has 'enjoyed the type of long-term success that evades most biopharmaceutical companies', indicating superior performance relative to the broader industry.
• The 203% total return to stockholders over five years is presented as evidence of 'superior value' generated by Dynavax's strategy, implicitly comparing favorably to industry benchmarks.

Corporate Governance

Stakeholder Impact

• **Shareholders**: Encouraged to vote for current nominees, with the potential for continued long-term value creation under the existing strategy. The outcome of the proxy contest will directly impact board composition and strategic direction.
• **Management/Board**: The ISS recommendation provides strong support for the current leadership team and their strategic vision, potentially solidifying their positions.
• **Employees**: Implied stability and continuity of operations and strategic direction if the current board is re-elected.
• **Partners/Customers**: Continued development and commercialization of vaccines, including HEPLISAV-B and CpG 1018-based collaborations, is expected to proceed under the current strategy.

Next Steps

• Stockholders are urged to vote FOR all four of Dynavax's director nominees on the GOLD proxy card.
• The 2025 Annual Meeting of Stockholders is scheduled for June 11, 2025, where the director elections and other matters will be voted upon.

Key Dates

Recommendation

Keywords

Dynavax Technologies Corporation, DVAX, Proxy Statement, ISS Recommendation, Annual Meeting, Director Nominees, Proxy Contest, Biopharmaceutical, Vaccines, HEPLISAV-B, CpG 1018 adjuvant, Shareholder Value, Corporate Governance, Risk Management, Strategic Business Analysis