Dynavax is pulling out of immuno-oncology R&D, laying off 82 staff and parting company with its CEO. The actions will create a slimmed-down commercial-stage company focused on selling hepatitis B vaccine HEPLISAV-B.
California-based Dynavax tied its fate to TLR9 agonist SD-101 and other cancer assets at the start of 2017, when the company responded to back-to-back HEPLISAV-B rejections by laying off 38% of its staff and pivoting toward immuno-oncology. Now, Dynavax is effectively undoing its prior pivot and once again putting HEPLISAV-B at the heart of its plans.
Dynavax plans to “explore strategic alternatives” for SD-101 and its other immuno-oncology assets. But in the near term, work on the programs will stop, putting people involved in research and clinical development out of work. All told, Dynavax will shed 82 staff, 37% of its current U.S. workforce.
Work is underway to wind down the immuno-oncology trials. Dynavax is the sponsor of a phase 1/2 trial that is testing SD-101 in combination with Merck’s Keytruda. And the same drug is being tested in a clutch of trials sponsored by other groups, including QuantumLeap Healthcare Collaborative’s I-SPY 2 trial. Dynavax will be responsible for certain costs associated with I-SPY 2 and other trials.
The layoffs will add around $5.5 million to Dynavax’s costs, too, but the company expects to save money in the longer run. Dynavax estimates the layoffs will save it $16 million a year. The cancer exit is expected to cut costs by $8 million a quarter once Dynavax is clear of its current commitments.
Those savings will help Dynavax eke out the $183 million it had in the bank as of the end of March as it seeks to make a success of HEPLISAV-B. Responsibility for improving the fortunes of the vaccine, which racked up net sales of $6.8 million last year, will fall on a new-look leadership team.
Eddie Gray, who joined Dynavax as CEO in 2013, thinks now is the “optimal time” to leave his post. Dynavax’s board has appointed David Novack and Ryan Spencer, respectively the senior vice presidents of operations and commercial, to temporary co-president positions to lead the company while it searches for a new CEO.