Dynavax’s battle with activist investor Deep Track Capital over the biopharma’s direction has heated up again as the company’s annual meeting draws closer.
Back in February, Deep Track—which now owns around 14.5% of Dynavax’s shares—stepped up its demands to refocus the biopharma’s efforts on its sole approved asset, the hepatitis B vaccine Heplisav, rather than what the investment firm called a “misguided empire-building exercise” of pursuing external asset acquisitions.
Heplisav was approved in 2017 and is projected to generate more than $1 billion through 2030, according to Deep Track.
Dynavax has two other candidates in development: a wholly owned vaccine for shingles and a Department of Defense-partnered vaccine for plague. Another early-stage asset, a combination vaccine for tetanus, diphtheria and acellular pertussis, was dropped in November 2024 after phase 1 data failed to impress.
The company's annual meeting June 11 will see four of Dynavax’s board members standing for election—and Deep Track is looking to replace all of them with its own candidates.
In an investor presentation (PDF) last week, Deep Track repeated its view that vaccine development is “extraordinarily risky.” Dynavax should focus on its “crown jewel” of Heplisav, rather than consider “acquiring another vaccine asset.”
“If a good acquisition target could be found, the board would have seen it by now,” Deep Track claimed in the presentation. “Shareholders worry the board will overpay out of desperation.”
“While [Dynavax’s] leadership will remain adamant that they are fully focused on Heplisav, the reality is that the board’s directive to evaluate acquisition candidates risks diverting management’s attention from Dynavax’s best opportunity to create shareholder value: growing Heplisav’s market share,” the investment firm added.
This year has seen a protracted debate between Dynavax and Deep Track over the makeup of the company’s board, with no agreement being reached.
At an annual meeting June 11, Dynavax will have four board members standing for reelection—and Deep Track is looking to replace all of them with its own candidates.
“This did not have to become a proxy contest,” the firm said in in its presentation. “Deep Track offered multiple, varied settlement solutions to improve governance while accommodating flimsy concerns from the board—none were enough for Dynavax.”
Dynavax hit back with its own letter to its stockholders Friday evening, pleading for readers to back its board members, which it argued had helped ensure the company is in “the strongest position it has ever been in.”
The biopharma pointed to first-quarter revenue of $68.2 million, which was a 34% increase compared to $50.8 million for the year-ago period.
“Deep Track's proposed changes to the board would install unqualified nominees who want to effectuate an outsized capital return and shutter efforts to accelerate growth with internal and external opportunities,” the company claimed in its May 9 letter. “This plan would destroy the future value of our business and jeopardize the long-term potential of your investment.”