Dynavax Technologies (DVAX) Q1 2021 Earnings Call Transcript

Dynavax Technologies (DVAX -2.89%)
Q1 2021 Earnings Call
May 06, 2021, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the Dynavax Technologies first-quarter 2021 conference call. As a reminder, this conference call is being recorded. At the end of the company's prepared remarks, we will open the call for questions and provide specific instructions at that point. I would now like to turn the call over to Nicole Arndt, senior manager, investor relations.

You may begin.

Nicole Arndt -- Senior Manager, Investor Relations

Thank you, operator. Good afternoon. Welcome to the Dynavax first-quarter 2021 financial results and corporate update conference call. Joining me on the call today are Ryan Spencer, chief executive officer; Kelly MacDonald, chief financial officer; Robert Janssen, chief medical officer; and Donn Casale, senior vice president, commercial.

Before I begin, I advise you that we will be making forward-looking statements today, including statements regarding HEPLISAV-B's commercial profile, its potential to become the standard of care and for universal recommendation. Revenue expectations and financial outlook from our products are HEPLISAV-B European launch efforts, post-marketing studies and other vaccine development with our collaborators. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially. These risks are summarized in today's press release and are detailed in the Risk Factors section of our current 10-Q and 10-K periodic reports filed with the SEC, which we encourage you to review.

I will now turn the call over to Ryan Spencer, CEO of Dynavax.

Ryan Spencer -- Chief Executive Officer

Thank you, Nicole, and thank you all for joining us today. I'm very happy to welcome Kelly to the team as well. I'm excited to share our first-quarter results during which we generated our highest quarterly product revenue in the company's history at $83.3 million and to discuss our outlook for 2021, which we believe has the potential to be a transformational year for Dynavax. The ongoing pandemic has focused worldwide attention on the need for continued development of new or improved vaccines to help prevent the spread of infectious diseases.

Vaccine adjuvants have the potential to boost the immune response to increase protection and provide longer-lasting immunity, which make adjuvants an important contributor to the success of vaccines. Dynavax is a vaccine company with two unique and valuable assets. First, our marketed best-in-class II dose adult hepatitis B vaccine, HEPLISAV-B, with a profile that gives us the potential to become the standard of care in the U.S. The U.S.

represents a large current existing market with the potential for growth from improvement in regimen compliance and overall coverage rates for recommended populations. Importantly, the CDC Advisory Committee on Immunization Practices is evaluating significantly increasing the number of adults that are recommended for hep B vaccination by establishing a universal recommendation for all previously unvaccinated adults to support the CDC goal of eventually eliminating hepatitis B as a public health threat. Our second asset is CpG 1018. It's the advanced adjuvant, which contributes to the impressive profile of HEPLISAV-B.

We are utilizing CpG 1018 adjuvant to help develop new and improved vaccines for various diseases through internal development and through collaborations with multiple vaccine developers globally. Our COVID-19 vaccine collaborations have already begun to generate significant revenue for the company and have the potential to provide a meaningful long-term revenue stream. Let's walk through each of these important assets. To take you through our update on HEPLISAV-B, I will turn the call over to Donn Casale.

Donn?

Donn Casale -- Senior Vice President, Commercial

Thank you, Ryan. I'm pleased to provide an update on our continued progress within the U.S. market. HEPLISAV-B, our first commercialized product is an adult hepatitis B vaccine, which is adjuvanted with CpG 1018.

HEPLISAV-B was engineered to deliver higher rates of protection in a shorter period of time. Despite the availability of traditional three-dose hepatitis B vaccines over three decades, hepatitis B rates continue to be on the rise in the United States. Given its similar safety profile and significantly higher rates of protection over Engerix-B with only two doses in one month, HEPLISAV-B is an important advancement in hepatitis B prevention. Since March of last year, the healthcare industry has faced significant disruption from the COVID-19 pandemic.

Despite the challenging market conditions, HEPLISAV-B was able to continue to grow market share over the last 12 months and is positioned for continued growth as the country emerges from the pandemic. First-quarter net product revenue for HEPLISAV-B was $8.3 million, compared to $10.5 million in the first quarter of last year. The hepatitis B market was down 41% in the quarter from the same period last year, which expectedly had an impact on revenue performance. Importantly, while utilization was down, field targeted market share increased to 27% in the quarter, an all-time high and an increase of 7% from the first quarter of last year.

We are encouraged by the progress of market share considering the disruption in the healthcare industry over the past year. Based on recent market trends and customer feedback, we expect a continued recovery in utilization throughout the remainder of the year as COVID-19 vaccinations are completed. With the rate at which COVID-19 vaccination programs are beginning, are being administered across the United States [Audio gap] back to other healthcare services, such as immunizations, which we believe will help drive a positive trend in hepatitis B vac team utilization. Additionally, we believe there will be an increased level of awareness around the importance of vaccine due to the COVID-19 pandemic that will help support broad consumer demand for vaccines, all of which leads to a terrific opportunity to capitalize on the strong clinical profile of HEPLISAV-B as part of an effective vaccination strategy.

A few other highlights during the quarter for HEPLISAV-B. As we shared on the last earnings call, we received marketing authorization from the European Commission. We are focused on launching HEPLISAV-B in Europe by the end of the year, starting in Germany first, followed by additional markets as we identify commercial strategies for individual countries to capture the benefit of HEPLISAV-B. For the initial launch in Germany, we are evaluating commercial partnering approaches and look forward to keeping you updated on our progress.

Also, in April, two HEPLISAV-B abstracts were presented at the 2021 Annual Conference on Vaccinology Research. In our ongoing clinical trial, evaluating HEPLISAV-B in patients undergoing hemodialysis using a new four-dose regimen, the final immunogenicity analysis demonstrated zero protection rate of 89.3%. Interim safety data showed that HEPLISAV-B was well tolerated with no safety concerns. In our post-marketing observational surveillance study in over 69,000 patients, HEPLISAV-B showed no evidence of increased risk of acute myocardial infarction compared to Engerix-B.

The positive results of both studies further support our confidence that HEPLISAV-B will become the standard of care in the United States. And finally, furthering on our positive outlook for HEPLISAV-B, the CDC Advisory Committee on Immunization Practices, or ACIP, reviewed a universal hepatitis B recommendation for all previously unvaccinated adults during their February meeting. This recommendation would help simplify the identification of patients who need a hepatitis B vaccine compared to the current risk-based recommendation and significantly expand the number of adults in the United States who should be vaccinated against hepatitis B. 2021 is an important year for HEPLISAV-B.

As we continue to see a return in vaccine utilization, increasing market share and potential for significant market expansion, we are very excited about both the near and long-term prospects for the brand. I will now turn the call back over to Ryan.

Ryan Spencer -- Chief Executive Officer

Thanks, Donn. As you see from Donn's update, HEPLISAV-B provides an important foundation for our company. Our second asset, CpG 1018 is our advanced adjuvant that is being used in a variety of other vaccine targets. Underscoring CpG 1018's versatility, our collaborations and development efforts span multiple technology platforms across varied indications, including COVID-19, tetanus, diphtheria, and acellular pertussis or Tdap, universal influenza.

These CpG 1018 collaborations provide a pipeline of opportunities for Dynavax, either as a vaccine developer or as a supplier of adjuvant through commercial supply agreements. As a supplier of our adjuvant, we have made dramatic progress with our efforts to enable development of COVID-19 vaccines. Despite the success of the initial vaccination campaign in the U.S., the ongoing global need for COVID-19 vaccines is massive. Even with the emergency or conditional authorizations of multiple vaccines, some of the world's most dense population centers lack sufficient quantities of vaccine.

With the uncertainty regarding duration of protection and the emergence of new mutations, it is likely that additional vaccine supply will be needed and that booster vaccinations will be necessary, providing continued demand for multiple vaccines. CpG 1018 has demonstrated the ability to increase neutralizing antibodies and stimulate T cells with an especially favorable tolerability profile. Our collaboration strategy has resulted in multiple opportunities for conditional or emergency use authorization in 2021 for CpG 1018 adjuvanted COVID-19 vaccines. Our partnerships are moving forward to the next stage of development in preparation for commercial supply.

And specifically in preparation for commercial supply in 2021, our agreement with the Coalition for Epidemic Preparedness Initiative, or CEPI, has recently been expanded. Under the terms of the expanded agreement, CEPI will increase funding by $77 million to a total of $176 million, which will increase the available volume of CpG 1018 2021 for SEPI-funded COVID-19 vaccine development programs. This agreement represents a key strategic investment by SEPI to increase overall availability of COVID-19 vaccine doses in 2021. It is anticipated that CEPI grantees benefiting from our agreement will have the potential to create hundreds of millions of vaccine doses in 2021, which will be available for procurement and allocation through COVAX.

COVAX is a global initiative to ensure rapid and equitable access to COVID-19 vaccines for all countries regardless of income level. Our COVID collaboration partners continue to make good progress in their clinical development programs. In April, Valneva reported positive initial results for Part A of the Phase 1/2 clinical trial of their COVID-19 vaccine candidate and subsequently initiated a pivotal Phase 3 trial. Valneva has stated that subject to successful Phase 3 data, they aim to make regulatory submission for initial approval in the fall of 2021.

In March, Clover Biopharmaceuticals initiated a global Phase 2/3 efficacy trial. This trial is expected to have an interim analysis for vaccine efficacy in the mid-2021 time frame. This efficacy study is being funded by CEPI and as a CEPI grantee, Clover will have access to adjuvant produced under the CEPI funding arrangement. In April, biologically, another CEPI grantee, announced that the results of their Phase 1/2 trial were positive and that they have received authorization from the Indian regulatory authorities to begin Phase 3 studies.

Finally, Medigen, who's based in Taiwan, has completed enrollment of over 4,000 participants in the Phase 2 clinical trial evaluating its vaccine. Data from this trial is expected in July of this year. Based on the availability of COVID-19 vaccines compared to the world population, we expect the period of initial vaccination will continue into 2022, driving the need for additional vaccine options as soon as possible. And with emerging variants and the potential need for booster doses, the demand for COVID vaccines is expected to continue beyond 2022.

We have developed capacity for CpG 1018 manufacturing to support over 1 billion doses of vaccine annually in 2022 and beyond with additional capacity expansion available depending on the global demand, making CpG 1018 a potentially valuable additional revenue-generating asset and an important part of the global response to the pandemic. We continue to make tremendous progress on a number of fronts that we believe will generate substantial growth in 2021 and beyond. I'll now turn the call over to Kelly to discuss our financial results in more detail. Thank you, Ryan.

Our financial results are included in the press release we issued this afternoon and details in the 10-Q filed with the SEC today. So I will just touch on a few highlights. Total revenues for the first quarter of 2021 were $83.3 million, a significant increase from $10.5 million in the first quarter of 2020. As a reminder, the first quarter of 2020 only included product revenue from HEPLISAV-B compared to the first quarter of this year, which includes net product revenue of $8.3 million from HEPLISAV-B and $74.6 million from CpG 1018 adjuvant sales.

As Donn mentioned, we have seen overall hepatitis B vaccine utilization decline by about 41% in the first quarter of 2021 compared to the first quarter of last year. We expect utilization of adult vaccines to continue to be impacted throughout the first half of 2021. However, we do expect a recovery in utilization throughout the remainder of the year as initial COVID-19 vaccinations are completed. Under our commercial supply agreement with Valneva, we supplied CpG 1018 for Valneva's COVID-19 vaccine candidate being developed under an agreement between Valneva and the U.K.

government. We are scheduled to supply Valneva with CpG 1018 adjuvant for up to 100 million vaccine doses in 2021. This agreement represents a revenue opportunity of up to $230 million in 2021, with about 40% of the 2021 supply being delivered in the first half of this year and the remaining 60% in the fourth quarter, assuming continued success in the development program. Additionally, as of March 31, 2021, we have approximately $52 million in current deferred revenue, primarily related to our CpG 1018 adjuvant supply agreement with Valneva, as well as approximately $64 million in long-term deferred revenue associated with our agreement with CEPI.

Cost of product sales in the first quarter of 2021 increased to $24.6 million, compared to $2.4 million during the first quarter of 2020. This increase is in connection with increased CpG 1018 adjuvant product sales. We do anticipate cost of product sales to increase substantially in 2021 in connection with continued supply of CpG 1018 to our global partners. Research and development expenses for the first quarter of 2021 increased $7.8 million, compared to $4.7 million for the first quarter of 2020.

The increase is primarily due to development activities related to yield and process improvements at our Dusseldorf facility as we prepare for global expansion of HEPLISAV-B and a potential universal recommendation for adult hepatitis B vaccination. Income from operations for the first quarter of 2021 was $28.5 million, compared to a loss from operations of $19.3 million in the first quarter of 2020. We are very pleased with a profitable first quarter of 2021 with net income of $900,000, compared to a net loss of $12.6 million in the first quarter of 2020. During the first quarter of 2021, we recorded a charge -- a change in fair value of our warrant liability of approximately $25.6 million.

This was a noncash adjustment, but did impact our net income for the quarter. Basic and diluted net income per share was $0.01 for the first quarter of 2021, compared to a basic net loss of $0.15 per share and a diluted net loss per share of $0.25 in the first quarter of 2020. Cash, cash equivalents and marketable securities totaled $232.7 million as of March 31, 2021. Our strong execution for the quarter has bolstered our cash position, further enabling investments to drive long-term growth of HEPLISAV-B and CpG 1018.

We continue to make significant progress with both HEPLISAV-B and our CpG 1018 adjuvant partnerships, and we are looking forward to multiple important milestones and anticipated catalysts in 2021, including a potential ACIP decision on universal recommendation for adult hepatitis B vaccination, as well as multiple COVID-19 vaccine data readouts from our CpG 1018 collaborators. Our success in the first quarter further validates the corporate strategy for our two valuable assets, and we look forward to updating you on our progress throughout the rest of the year. We thank all of our investors and team members for their commitment to Dynavax. Operator, we would now like to open the Q&A portion of today's call.

Questions & Answers:

Operator

[Operator instructions] Your first question comes from the line of Matt Phipps from William Blair. Your line is now open.

Matt Phipps -- William Blair -- Analyst

Hi. Good afternoon. Congrats on a nice quarter here, and thanks for taking my questions. First of all, I guess for Donn, you said 41% impact for the quarter on HBV vaccines broadly.

Have you seen that moderating at all in the end of the quarter, say, March or early into April? Any read on if it's recovering this quickly? Or if you think it will be 41% kind of through the first half and then more of an improvement in the second half?

Donn Casale -- Senior Vice President, Commercial

Hey, Matt, yeah. So as it relates to the first quarter, actually, we saw utilization down about 50% in January. And in February and March, we saw an uptick in utilization to have an overall 41%. The initial read on April is it continues to be hovering around that 40% mark, improving slightly.

So our viewpoint on the second quarter is that we see a moderate increase in utilization in the second quarter and then accelerating into the second half of the year as relates to utilization.

Matt Phipps -- William Blair -- Analyst

OK. Thanks. And then, I guess, for Kelly, the gross margin that we could kind of back into for CpG 1018 in Q1, is that something we should assume will stay constant throughout the year and into next year? Or do you think that can improve as scale up continues?Kelly MacDonaldSure. Thanks for the question, Matt.

I think CpG 1018 profit for the quarter, as you alluded to, was around 71%, and it consisted predominantly of our value of supply to our Valneva partnership. As we continue to supply partners, we can expect revenues and corresponding profit to vary based on the mix of high income versus low-income pricing. Of course, with low-income pricing coming with higher volume. And then also, we, of course, can't be certain of ongoing profitability, which will be highly dependent on continued clinical success, but we're very pleased with the performance in the quarter.

OK. Thanks. And then I guess two COVID vaccine-related questions, if I may. First, so the Phase 3 for Valneva is obviously interesting because of the superiority trial on an immune response.

And I guess, what are your thoughts on that endpoint? Is that something that could allow them to get approval beyond the U.K., do you think? Or if they've discussed that with the regulatory bodies that you know of?

Ryan Spencer -- Chief Executive Officer

All right. Hey, Matt. I'll take this. And Rob, you can add any color as you see fit.

Valneva in their agreement with MHRA on the immunogencity study was one of the first with a developed country regulating body. So I think they're kind of ahead of a game on that one. We're going to have to see how other regulators respond as that trial moves forward, as well as other programs.

Matt Phipps -- William Blair -- Analyst

OK. And then I guess last question, just you mentioned that Clover will have access to adjuvant produced under the CEPI agreement. How would you -- how would revenue work for you guys from that? Does that mean it's already almost like prepurchase adjuvant? Or is that still when they give to the COVAX program, CEPI program that there would be revenue for you all -- when you send in that for their formulation stuff, would you recognize some revenue from them?

Ryan Spencer -- Chief Executive Officer

Sure. And just to be clear, it's for all CEPI grantees, which includes Bio E. as well.

Matt Phipps -- William Blair -- Analyst

Yeah. Sure.

Ryan Spencer -- Chief Executive Officer

But the concept is the same, it's CEPI's prefunding the production of adjuvants. So it's not necessarily the same as the full cost under the supply agreements with our collaborators. But it's allowing us to manufacture, enable capacity in 2021, now ahead of our collaborators having prepurchase that material. So it really makes it available for them.

Upon purchasing the material from us, we will then turn around and reimburse CEPI to the extent we sell all the adjuvant to CEPI grantees. And so as revenue is going to be, as you can -- I think you're kind of highlighting, can be a little tricky here as far as when the period is recorded, will be based on a number of factors around the collaboration and when we receive the cash from our partners. So to the extent you kind of nailed it, there's some level of prepurchase for the $176 million with an additional component of revenue coming as we sell it forward to our collaborators. But there will be no revenue recognized until we actually deliver the product to our collaborators.

Matt Phipps -- William Blair -- Analyst

Yes. OK. Great. Thanks, Ryan.

Congrats.

Ryan Spencer -- Chief Executive Officer

Thank you, Matt.

Operator

Your next question comes from the line of Phil Nadeau from Cowen and Co. Your line is now open.

Ernie Rodriguez -- Cowen and Company -- Analyst

Hi, team. This is Ernie Rodriguez for Phil. Thank you for taking my call. Just a follow-up quickly on the CEPI funding.

You mentioned it sounds like the terms are the same as with the original agreement. Am I correct in saying that? And second, is the -- how would be the funding distributed for the first original agreement? You had mentioned that there was going to be a first payment in the first half of the year and then the second one in Q3. Should we expect the same kind of distribution?

Ryan Spencer -- Chief Executive Officer

Yeah. Let me -- I'll put a little bit of back. It's the same structure, as you noted. This is for manufacturing of material through Q3 to be delivered in Q4 post release.

So it's not -- that's why we called it an expansion on extension. This isn't a time base. We've identified additional capacity, and CEPI had -- was willing to support the additional manufacturing. So we basically expanded the existing agreement through an amendment.

And so the timing is actually similar to what we saw before as far as payments.

Ernie Rodriguez -- Cowen and Company -- Analyst

I see. Thanks. And in terms of the post marketing study, I was curious if you -- besides the effect that you have, for example, in the influencing the preferential recommendation maybe, but have you also have feedback from physicians in terms of like concerns for cardiovascular safety of the drug that are now being addressed by these positive results?

Ryan Spencer -- Chief Executive Officer

I want to turn it over to Donn to give you a quick review on how the AMI post-marketing study impacted our commercial engagement throughout the launch. And to the extent it will be meaningful going forward. Donn?

Donn Casale -- Senior Vice President, Commercial

Yeah. No. I mean, so obviously, the results that I shared, we're very excited about the results, certainly. But from a day-to-day engagement with customers, that topic has not been a topic that's been any type of barrier as it relates to conversion with HEPLISAV.

And initially, when we first launched, certainly, the questions were out there. But over the last six to 12 months, that really hasn't been a topic or a part of the discussion or dialogue with customers as it relates to HEPLISAV-B and whether or not they're going to convert to HEPLISAV.

Ernie Rodriguez -- Cowen and Company -- Analyst

Got it. Thank you. That's helpful. Thank you for taking my call -- my questions.

Ryan Spencer -- Chief Executive Officer

Thanks, Ernie.

Operator

Your next question comes from the line of Josh Schimmer from Evercore. Your line is now open.

Josh Schimmer -- Evercore ISI -- Analyst

Hey, thanks for taking the questions. First on universal recommendation for Hep B vaccines, how do you handicap the probability that that will be recommended? What insight do you have into that in that process as we think about the probability of that? What impact would you expect that to have on the market for hepatitis B vaccines and for HEPLISAV? And then on 1018 adjuvant. How should we be thinking about quarter-to-quarter, year-to-year revenue potential because I feel like the error bars are extremely wide, and we're supposed to have some kind of assumption in our model. Maybe you can help us think about what the appropriate assumptions are at this point in time? And then what the rationale might be for them?

Ryan Spencer -- Chief Executive Officer

Sure. Thanks, Josh. Why don't I start with the concept of the probability of universal and Donn, you can provide some color on the market impact, and then I'll pick it back up on 1018. For universal probability, I mean what -- the insight is actually not even inside insight.

It's pretty public. Having the work group present a time line for -- to show their anticipated engagement with the full ACIP is pretty positive. And for them to show October on the schedule, makes us feel very confident that they're going to hit that time line. I think as it relates to the probability, one of the things I would point you to, and I would encourage you all to listen to the actual meeting.

It's available online. The dialogue that happened at the meeting is incredibly positive. For those people who did speak up during the meeting, wasn't a formal vote, I think seven out of 13 members actually made comments that were all positive and supportive of the recommendation. And others just didn't necessarily comment, but there was nothing negative.

The main dialogue was around whether or not there's a cut-off on the upper end of the age range. So ultimately, we feel like the conversation was incredibly positive, and this is a high likelihood of success, and that's also supported by the fact that this aligns with a CDC goal around eliminating biohepatitis is a public health threat. So we feel very positive about the trajectory and the likelihood of success for this recommendation. Donn, why don't you take the impact?

Donn Casale -- Senior Vice President, Commercial

Yeah. So Josh, I mean, one of the things I think is most important to note regarding the recommendation is, as you know, right now, it's a risk-based recommendation. So what the universal recommendation will do is certainly make the ease of the recommendation at the provider level much easier. And so certainly, that's going to have an impact as it relates to coverage rates.

From a size and an opportunity, and depending on the recommendation, as Ryan mentioned, whether it's up to age 59 or beyond 60, it could be upwards of the addressable market, three x of what it is today. But to put that into context, one of the things that consider certainly is current coverage rates for hep B vaccine is approximately 25% for those '19 years of age and older. And one of the things that it's probably good to look at is whether it be influenza or pneumococcal, kind of the ceiling, if you will, of coverage rates. And you see that upwards of 60% to 65% coverage rate.

So you can start to kind of amass what the potential opportunity can be from those types of numbers. So we see it as a significant opportunity. Certainly, it depends on what that recommendation will look like. But certainly, it's certainly going to expand the opportunity for us.

Ryan Spencer -- Chief Executive Officer

Thanks, Donn. Josh, [Inaudible], assuming you'll have a follow-up on those points? OK.

Josh Schimmer -- Evercore ISI -- Analyst

Any obvious -- if I could just -- any obvious reason why the ACIP may not follow the recommendations of the working group?

Ryan Spencer -- Chief Executive Officer

I mean I don't think we have any insight into why that would be the case based on the dialogue that we heard in February. I think -- if I had to pick a risk factor, it would be continued distraction from the COVID pandemic for people involved in immunizations. But honestly, I think that risk is continuing to decline as the vaccination programs in the U.S. continue to be successful.

On 1018, I appreciate the question. I just need to start by saying we're very excited about the long-term opportunity. And -- but we also have to recognize there's a ton of complexity in how this rolls out, especially given the number of partnerships we have. But there's a lot of demand in the globe.

So let's just walk through what we kind of shared today. We have the Valneva contract, which the economics and timing of that, I think we've been fairly clear on with the total opportunity, about the $230 million this year with 60% of the doses being delivered in Q4 and 40% in the first half of the year. And then beyond that, I think the best thing I can do for now, given that we're still in the process of negotiating commercial supply agreements with our collaborators, and they are still in the process of negotiating either bilateral deals or deals with COVAX, it doesn't allow me to provide any specific color on those economic relationships. But as far as order of magnitude, the quantity of CpG that we manufacture under the CEPI relationship is hundreds of millions of doses.

And the CEPI relationship is supporting the manufacture of CpG at or around cost, and that being $176 million gives you a baseline which you can provide a margin assumption on top of to highlight the opportunity that this arrangement provides for near term revenue, assuming continued success of the CEPI grantees. And then as we move forward with the clinical development and as well as the commercial supply agreements and our collaborators' arrangements with either government or COVAX, we can be in a position to provide more clarity on the long term.

Operator

We have no further questions at this time. I would now like to turn the call over to Ryan Spencer, CEO, for closing remarks. You may begin.

Ryan Spencer -- Chief Executive Officer

Thank you, operator. Well, we believe the evolving COVID-19 pandemic requires additional vaccines to support the global demand. Our CpG 1018 adjuvant through our global collaborations is well-positioned to be part of this solution. CpG 1018 has already driven the largest quarterly revenue in the company's history, and we believe it has further potential to drive significant growth and value for Dynavax and its shareholders.

Now while supporting the fight against COVID-19 is currently a key priority, we are also continuing to drive our business forward through the growth of sales of HEPLISAV-B, which we believe is a source of continued value creation as we grow revenue along our path to being the market-leading adult vaccine, hepatitis B vaccine and to take advantage of the potential market expansion with an enhanced national recommendation. With the combined strength of opportunities from HEPLISAV-B and CpG 1018, we believe 2021 will be a transformational year for Dynavax. Thank you again for spending your time with us today, and we look forward to speaking again soon. Operator, you may close the call.

Operator

[Operator signoff]

Duration: 38 minutes

Call participants:

Nicole Arndt -- Senior Manager, Investor Relations

Ryan Spencer -- Chief Executive Officer

Donn Casale -- Senior Vice President, Commercial

Matt Phipps -- William Blair -- Analyst

Ernie Rodriguez -- Cowen and Company -- Analyst

Josh Schimmer -- Evercore ISI -- Analyst

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