Dynavax Technologies Corp
NASDAQ:DVAX
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Dynavax Technologies Corp
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Good day, ladies and gentlemen, and welcome to the Dynavax Technologies Second 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.
Thank you, Anne. Good afternoon, and welcome to the Dynavax second 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 revenue expectations and financial outlook, business performance expected revenue and margins, HEPLISAV-B's commercial profile, it's potentials become the standard of care, European launch timing, 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 our 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.
Thank you, Nicole. And thank you all for joining us today. I'm excited to share results from the second quarter, which reflects continued successful execution and reinforce our belief that 2021 is a transformational year for Dynavax. We continue to execute on our core priorities, driving growth HEPLISAV-B enabling our CpGs 1018 adjuvant partnerships in the fight against COVID 19, developing our pipeline and strengthening our financial profile. I will touch on each of these briefly then turn it over to the team to provide a bit more detail.
First, we generated $13.7 million in HEPLISAV-B products revenue, which is our highest quarterly revenue for HEPLISAV-B since launch. In addition to revenue growth, we continue to grow field targeted market share, achieving 30% share, and we finalized an agreement with Bavarian Nordic for the commercialization of HEPLISAV-B in Germany.
We continue to believe HEPLISAV-B has the potential to be the standard of care adult hepatitis vaccine in the United States. And we are very excited to welcome an additional 35 members to our sales team that will help us make this goal a reality. This investment in the growth of HEPLISAV-B highlights our confidence in the product and the value of the commercial opportunity.
Secondly, our vaccine adjuvant CpG 1018 provides a variety of opportunities for Dynavax. Now we are a vaccine developer or as a supplier of adjuvants through commercial supply agreements. We continue to make tremendous progress with the execution of multiple supply agreements to provide CpG 1018 to partners developing COVID-19 vaccines.
Additionally, we continue to progress our internal efforts to leverage the proven capabilities of CpG 1018 to develop innovative new vaccines. We are currently enrolling patients in a Phase 1 trial for our next product candidate, which is a Tdap vaccine adjuvanted with CpG 1018, focused on improving the response to the protests's component of the combination vaccine. Lastly, and importantly, we are pleased to report that we've generated positive GAAP net income for the second quarter in a row.
Our financial performance during the first half of 2021 reflects the benefit of continued growth of HEPLISAV-B revenue and the disciplined approach and strategy we implemented to respond to the COVID-19 pandemic. As I've said before, we believe this is a transformational time in Dynavax's history, and we will set the foundation for continued growth into the future. We are focused on identifying the best ways to deliver value to our shareholders by leveraging our development and commercialization strength in vaccines. I am proud of the progress we've made so far.
To take you through the update on HEPLISAV-B, I will now turn the call over to Donn Casale, Senior Vice President of Commercial.
Thank you, Ryan. HEPLISAV-B continues to make significant progress on its path to becoming the standard of care for Hepatitis B prevention in the United States with a potential market of over $600 million with additional opportunities for expansion beyond that. HEPLISAV-B is the only dose-dose, one month Hepatitis B vaccine that delivers higher rates of protection across all patient types in a shorter period of time.
Hepatitis B vaccine series completion is essential to achieve protection. Unfortunately, 3-dose Hepatitis B vaccine regimens have proven to be challenging with low completion rates. Fortunately, based on real-world data, twice as many adults complete the HEPLISAV-B series than those starting on Engerix-B.
As Ryan mentioned, second quarter net product revenue for HEPLISAV-B was $13.7 million, the highest quarterly revenue since our commercial launch. This revenue milestone was achieved despite the Hepatitis B market remaining far below historical norms due to the ongoing pandemic.
With vaccine utilization during the quarter at approximately 61% of pre-pandemic levels, consistent with prior quarter utilization of 59%, the market share in field targeted accounts increased to 30% in the quarter, an increase of 9.5% from the second quarter of last year. We are very excited by this outcome and remain confident in our ability to continue to drive market share quarter-over-quarter in field targeted accounts.
In the retail segment, there were several large purchases from national customers plus significant increases in the number of new stores ordering HEPLISAV-B. The retail segment has started to shift its focus from COVID-19 vaccination back to routine adult vaccines such as Hepatitis B. We believe this shift has provided a great opportunity to accelerate adoption of HEPLISAV-B in the second half of this year.
Additional progress in the quarter included increases in DOD purchases as large as session bases prepared for the surge of new recruits over the summer months. We continue to make progress with the remaining non-converted session bases and remain on track to convert at least one additional base by year-end.
Looking ahead, with a high hope that we can quickly overcome the concerning resurgence of COVID-19 cases due to the Delta variant, we expect the Hepatitis B market to continue its steady recovery back to pre-pandemic levels. This ongoing recovery, coupled with increased awareness around the importance of vaccines, provides a terrific opportunity to capitalize on the strong clinical profile of HEPLISAV-B.
Additionally, we anticipate the CDC Advisory Committee on Immunization Practices, or ACIP, will vote on a universal Hepatitis B recommendation for all previously unvaccinated adults in October. We believe a positive decision will be an important driver of long-term value for HEPLISAV-B.
Based on the increased awareness around the importance of vaccine, continued recovery of the Hepatitis B market and market expansion opportunities, including a potential ACIP universal Hepatitis B recommendation, we made the decision to expand our commercial footprint. In July, we hired additional 35 sales professionals, which increased our sales team to approximately 100 field-based professionals and expect deployment of these resources to drive increased awareness of the clinical benefits of HEPLISAV-B and market share.
An additional highlight for HEPLISAV-B was finalizing a commercialization agreement with Bavarian Nordic for the marketing and distribution of HEPLISAV-B in Germany. We look forward to Bavarian Nordic's launch of HEPLISAV-B in Germany in the first half of 2022 and updating you on progress in Europe.
As we continue to see a steady return in vaccine utilization, increasing market share and field targeted accounts, progress in national accounts, potential for significant market expansion and a planned launch in Europe, we are very excited about both the near and long-term prospects for HEPLISAV-B.
I will now return the call back over to Ryan to walk through the progress we made in our CpG 1018 adjuvant business. Thanks, Don. As you can see from Don's update, HEPLISAV-B provides an important foundation for our company. And before I turn it over to Kelly to review our financial results, let me provide an update on our progress in leveraging the value of our adjuvant.
As a reminder, CpG 1018 is the adjuvant use in HEPLISAV-B, where it has demonstrated the ability to generate higher levels of protection with fewer doses while maintaining a comparable tolerability profile as compared to an alum adjuvanted Hepatitis B vaccine. We are focused on leveraging this profile to effectively stimulate the immune response while maintaining relatively low reactogenicity to develop new innovative vaccines.
Our most advanced efforts are aimed at COVID-19 vaccines, where we are providing CpG 1018 to multiple collaborators to support the development of COVID-19 vaccines across different vaccine platforms. Our collaborators have made tremendous progress during the year, both with the advance of their clinical programs and vaccine purchase contracts. Our collaborators have currently secured potential demand for over 800 million doses of adjuvanted vaccine from government and non-government organizations through 2022, with additional capacity for their vaccines still available.
During the pandemic, we have successfully scaled up and expanded production capabilities to increase our capacity to support the demand for CpG 1018 from our collaborators. Now, our revenue in future periods for COVID-19 is dependent on the continued successful development of our collaborators' programs. So I will briefly review the current status of each program and the unique aspects of their clinical trials.
First, Clover Biopharmaceuticals announced full enrollment of their Phase 3 placebo-controlled efficacy study. This study is evaluating efficacy of their CpG adjuvanted protein subunit vaccine in over 29,000 patients across four continents. It is important to note that this efficacy trial is being conducted in the presence of multiple variance of concern and will provide a current real-world view of protection against the labs confirmed COVID-19 of any severity, along with including protection against severe disease.
Release of vaccine efficacy data is expected this quarter and will include sequencing data to identify the various responsible for infection. If positive, these data could be used as the basis for submission of applications for emergency use to regulatory authorities in China, Europe and WHO thereafter. Clover has executed a supply agreement with Gavi, the vaccine Alliance to supply 64 million doses of vaccine in 2021 with an option for an additional 350 million doses in 2022 through the COVAX Facility.
Another collaborator, Valneva is evaluating inactivated whole virus vaccine, adjuvanted with CpG 1018 and a head-to-head immunogenicity study against the AstraZeneca vaccine in over 4,000 patients in the U.K. The primary endpoint in the study is superiority compared to the EB vaccine.
Data from this trial is intended to support an application for emergency use in the fall of this year. Additionally, Valneva's participating in a booster study in the U.K., which will provide important data on the ability to mix and match vaccine platforms. Valneva development program is being supported by their supply agreement with the U.K. government for up to 100 million doses of vaccines.
Moving to our next collaborator. Biological E. is currently enrolling its Phase 2/3 trial in India for their receptor buying domain vaccine adjuvant with CpG 1018. This trial is an immunogenicity study in approximately 1,300 patients. Five years entered into a contract with the Indian government to supply 300 million doses of vaccine. Under this arrangement, the Indian government has provided funding for the production of vaccine in advance of clinical data, so that inventory is available upon emergency use authorization.
And finally, I am happy to report that Medigene Vaccine Biologics Corporation has recently received emergency use authorization in Taiwan for their protein subunit vaccine adjuvanted with CpG 1018. This EUA was granted based on the safety and immunogenicity results in a Phase 2 trial in approximately 3,800 patients. In this study, the vaccine demonstrated a very high server conversion rate of 99.8%. Additionally, the Taiwan FDA supported the EUA by conducting a favorable comparison to clinical results for the AZ vaccine from a panel of 200 patients that were not included in the Medigene trial.
Although Medigene is one of our smaller collaborators, this EUA marks an important success in our efforts to support the development of multiple COVID-19 vaccines. Through a combination of advanced funding under our collaborators, government contracts and our funding agreement with the coalition for epidemic preparedness or CEPI, we have been able to support our maximum production capacity in 2021. The delivery schedules in our supply contracts with our collaborators equate to approximately $300 million to $400 million in opportunity for revenue associated with CpG 1018 shipments in 2021. This revenue opportunity is contingent on many variables, including continued success at each of our partners programs and timing of delivery, which ultimately drives the amount and timing of revenue recognition under these contracts.
We are extremely proud to be part of the global response to the pandemic and are looking forward to the upcoming clinical trial results across our diversified partnership portfolio. Beyond COVID-19, we continue to progress our CpG 1018 adjuvant in Tdap vaccine, which is being developed in collaboration with Serum Institute of India. We expect to have safety and immunogenicity data in adults and adolescents from our ongoing Phase 1 study in the early part of next year.
Additionally, we are playing Baboon and human challenge studies to assess the impact of vaccination on disease symptoms and nasal colonization of the pertussis bacteria. We believe the data package may serve as a proof-of-concept for a vaccine that will provide longer-lasting immunity and will reduce the ability for vaccinated people to continue to spread the disease. This is an exciting opportunity for us to leverage our CpG 1018 adjuvant to bring an improved vaccine to the market.
I'll now turn the call over to Kelly to discuss our strong financial results in more detail.
Thank you, Ryan. Our financial results are included in the press release we just issued this afternoon. As Ryan mentioned, second quarter was one of our strongest quarters to-date, and that's especially true as it relates to our financials. We recorded total revenues of $52.8 million, which includes net product revenue of $13.7 million from HEPLISAV B as well as $39 million from CpG 1018 adjuvant sale to our COVID-19 vaccine collaboration partners.
We also recorded GAAP net income of $4.5 million, marking our second profitable quarter in a row, and we exited the quarter with approximately $346 million of cash, cash equivalents and marketable securities on hand and have taken steps to strengthen our capital structure with a successful debt restructuring in May.
Starting with HEPLISAV B financial performance. We recorded our highest quarterly net sales of $13.7 million, representing significant growth from net sales of $2.4 million recorded in the second quarter of last year. The year-over-year growth is primarily driven by increased demand and increased utilization. As Donn mentioned, we're very excited to see continued growth in field targeted market share to 30% and believe this is one of our most important lead indicators as utilization continues to progress towards the pre-pandemic levels.
Moving on to CpG 1018 adjuvant revenues. We recorded $39 million in product revenue associated with our sales to our COVID-19 collaboration partners in the second quarter. As previously mentioned, we continue to make significant progress with each of our CpG 1018 partnerships. And to-date, we have executed four commercial supply agreements, including most recently, Clover Biopharmaceuticals in June and Biological E. in July.
As Ryan highlighted, scheduled shipments under these commercial supply agreements represent approximately $300 million to $400 million in aggregate CpG 1018 product revenue opportunity in 2021, with about half of those shipments currently scheduled in the fourth quarter. These shipments and corresponding revenue remain contingent on each of our partners' continued success and timing of product delivery. Both of these factors ultimately drive the amount and timing of revenue recognized under these contracts.
Further, as we begin selling to our partners supporting low and middle income countries, we will expect the corresponding gross margins to settle in the 50% range over time. As a reminder, gross margins associated with CpG 1018 sale are dependent on a number of factors, including customer mix.
Turning to our balance sheet. As of June 30, 2021, we carried approximately $346 million of cash, cash equivalents and marketable securities on hand. Additionally, as of June 30, 2021, we had current deferred revenue of approximately $130 million, which primarily consisted of contractually binding amounts from our CpG 1018 collaboration partners recorded prior to the shipment of material. As of June 30, 2021, we also had long-term deferred revenue of approximately $107 million associated with the cash that we've received from CEPI. As a reminder, the CEPI fully forgivable loan enables the manufacturer of CpG 1018 for CEPI grantees, including Clover and Bio E.
Moving on to our debt. In an effort to strengthen our capital structure and lower our interest expense over the next few years, we restructured our debt this past May by issuing $225.5 million and 2.5% convertible notes due in 2026. With these proceeds, we retired our 9.5% term loan in its entirety, along with all associated covenants. We are aware of the potential dilutive effect to the convertible instrument and use a portion of the proceeds from the issuance to invest in cap call, increasing the effective conversion price.
We believe that based on our current cash projections, we will have the option to, and it is our intent to settle the par value of these notes in cash. Our new debt structure lowers our interest expense by approximately $12 million on an annualized basis over the next few years, it allows us to match our debt maturities with the growth of our business over time and better enables investment behind our core business while still maintaining strategic and operational flexibility.
In summary, we continue to make significant progress with both HEPLISAV-B and our CpG 1018 adjuvant partnerships, and we're 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 readout from our CpG 1018 collaborators.
Our success in the second 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 our team members for their commitment to Dynavax.
Operator, we would now like to open the Q&A portion of today's call.
[Operator Instructions] We have our first question from the line of Phil Nadeau from Cowen and Company.
Congrats on the progress. First question is on the $300 million to $400 million revenue opportunity that you cited for this year. Appreciating that a lot of that is back-end noted. What is your disclosure strategy for indicating to investors when you have visibility on those revenues? Do you think there'll be discrete points over the next quarter where you can say certain trucks of that revenue are now guaranteed for this year? Or is it so back amotivation the year, we won't really know what you can recognize until the year is over?
Thanks, Phil. The crux of the question really is focus on the progress of our collaborators. Obviously, as a supplier of a component of the vaccine, clinical success, their ability to continue to manufacture and deliver on their commitments as well as eventual regulatory approval is all very critical to having the right level of insights to be able to project that revenue more specifically. And so our plans on communication are based on increasing certainty across those variables.
So we really need to see the data and move forward on the path to EUA before we can be more specific. Got it. That makes a lot of sense. Second question is on the expansion of the sales force with the 35 members being added. What are the priorities of those members? Are you going to increase the number of targeted accounts? Or hope to drive even greater increases in share at the current targeted accounts? How do you expect to deploy the almost 50% increase in the size of the sales force? Donn, do you want to handle that one?
Yes, sure, Phil. Thanks for the question. Basically, as we think about the footprint, basically, it's essentially, currently, the sales force engaging at the top of the institution, opening up the channel. So it's predominantly the additional 35 sales professionals are going to be targeting the clinics, the associated clinics for pull-through. And so we believe there's opportunity there, especially as we continue to drive market share. The timing is right to deploy additional resources on pull-through at the clinic level, now that the channel is open in many of these large institutions.
Got it. That makes a lot of sense. And then last question also on HEPLISAV. It sounds like you're seeing a gradual recovery in the adult vaccine market with utilization up like 200 basis points Q2 versus Q1. I'm curious to get your thoughts on the future trends there. Now that COVID vaccinations seems to have slowed down, do you expect a more rapid return to normal in the adult vaccination market in the second half of the year? Or is it just too hard to say because the Delta variant makes dynamics tricky?
It is difficult to say, Phil, I mean, especially over the last several weeks with the Delta variant that's come on so quickly and so rapidly. I can speak from a customer perspective and our ability to engage customers has not changed over the several weeks. So we remain confident in the steady recovery of the marketplace. But I think like everyone else, we'll continue to monitor what's happening daily essentially as it relates to what's happening on the Delta variant. But again, our ability to engage customers continues to be very strong.
Our next question comes from the line of Matt Phipps from William Blair.
And let me offer my congrats as well on some nice continued execution there. Donn, maybe following up on Phil's last question. Can you give any kind of a breakdown for the utilization in the HBV market as far as -- I assume things like travel vaccines would be done more than, obviously, like dialysis, but where does like employee help fall into kind of the utilization? Can you give us any kind of more granular detail across some of these different channels?
Yes. So the IDN segment is consistent with the overall, they're very similar in the sense of where the utilization is overall from a market standpoint. Public health is a little bit worse than what we reported overall in the marketplace. But then conversely, DOD, there's really no impact whatsoever on utilization as the new recruit bases is about the same as it was back in 2019. And then in dialysis, we see a minor decline in utilization. But again, relative to the hospital and IDN segment, much, much less. So it does vary by segment. With really public health being, probably the segment that is most impacted by the pandemic right now.
Great. A similar, in past years, maybe last year was an entity, but DODs strong purchases were usually in Q2 and Q3. Do you expect that to be the case here? Or was the DOD purchase large enough this quarter that it might cover their full summer kind of recruiting?
Like in years past, we do anticipate continued purchasing throughout the quarter in Q3 looking ahead. Certainly, we saw purchases throughout the second quarter in preparation for the summer surge. And as we've mentioned in previous calls, Q2 and Q3 tend to be the quarters that you see the most utilization based upon true counts that occur throughout the four quarter period. So we expect the same thing again this year, and we'll see continued purchases throughout Q3 looking ahead.
Great. And then one last question. It looks like still a little bit of a dialysis activity in the quarter based on the slides, really small. But can you comment on if that was -- I think the first bolus purchase was all one provider and was -- they kind of said it was more for staff. But any comments on what looks like a little bit of additional dialysis segment purchase in the quarter?
So what you see there on the slide, we do see from time to time. It's just based on class of trade. So there is some purchasing happening throughout the country with various smaller outlets, dialysis clinics throughout the marketplace. And that's really what those doses represent that you see there on the slide is just some purchasing happening by very small clinics spatter throughout the market.
[Operator Instructions] We have our next question from the line of Josh Schimmer from Evicore.
Congrats on a strong quarter. I just want to follow-up on the topic of HEPLISAV's outlook. In the prepared remarks, you sounded exceptionally confident in the outlook for the franchise and ability to deliver results even in the coming quarters as the market recovers, but in answer to some of the Q&A and it sounds like maybe you wavered a little bit on that confidence, depending on what might happen with the pandemic. So maybe getting first kind of reconcile what felt like slightly different tones in that commentary? And then second, if you could give us any color on the gross margins for in the quarter for HEPLISAV versus the CpG 1018 adjuvant sales? That would be very helpful.
Josh, why don't I take the tone question, and then I'll let Kelly talk about margins. What you're hearing is that we're very excited about continued revenue growth. Our ability to continue to generate increased market share and our ability to cater customers, including advancing our capabilities by hiring additional headcount. I think the other part of the commentary is that those are the things we can control. What we can't control is market utilization, especially in the presence of an emerging dynamic environment for COVID-19. So I think that's where we're trying to find that balance. Although we do believe we will continue to see progress forward on utilization, things like a resurgence of event over a very discrete period of time, like we saw with Delta, can always come up while we're dealing with the pandemic. So it's just really balancing those factors. But we're very confident about our ability to continue to drive revenue. Kelly, you want to handle the margin question?
Sure. Consistent with Q1, gross margins for the quarter came in around 67% for HEPLISAV. Great. And then you also sounded quite confident in the outlook for the ACIP working group to discuss universal recommendations. Has anything changed to further increase your confidence in the outcome of that meeting?
The October time frame was sort of stated early on by the Hepatitis B work group as far as when they were going to be on the agenda for the vote. I think the one piece of information we should share is that we had expected the meeting to happen in June, which was part of a two-step process, prior to the vote, they like to present the evidence to grade recommendation -- evidence for recommendation review, and that didn't happen in June.
That meeting has been rescheduled. There is now an ACIP meeting, although the agenda is not public. The Federal register showed that the ACIP meeting will happen on September 29 and 30th. So this does provide some added confidence that they are on track for an October vote, although other than the dialogue that happened in February, which is very positive. We don't have any other specific insight into the outcome of that vote.
Our next question comes from the line of Ed White from H.C. Wainwright.
Congratulations on a great quarter. Just a question on the ACIP meeting and what it means. So if we do have a positive vote, are we looking for an immediate impact in the early part of 2021 or 2022? Or how are you thinking about how this plays out on a demand basis going forward?
Don?
Yes, thanks for the question. The way we think about it, certainly, something like this, it's going to take a little bit of time as it relates to getting accepted into the marketplace, part of our investment of additional 35 independents to help build out the foundation to continue to increase awareness around the HEPLISAV and the disease around Hepatitis B. When we think about it from just kind of a bigger picture, just some of our preliminary estimates around the market itself and the impact it will happen from ACIP, we believe that the market will expand anywhere from 50% to 100% over the next 5 to 10 years. And that's kind of a preliminary estimate, more work needs to be done on that. But as I mentioned before, it's going to take time for the recommendation to take effect as it has with other recommendations for other vaccines, it does take time for these types of things to impact the market.
And maybe just a question on R&D and SG&A. I know you don't typically don't give guidance, but you did add these 35 new members to the sales team. I'm just wondering how we should be thinking about R&D expense and perhaps more importantly, SG&A going forward for the rest of the year?
Kelly?
Firstly, thanks for the question, Ed. So if you look at our quarter-to-quarterized trend, historically speaking from an R&D perspective, you can see it's all in the general same ballpark with fluctuations associated closely with just timing of expenses in connection with certain of our Phase 1 investments. However, in the last two quarters, $7.8 million in Q1 and $7.2 million in Q2. We believe that this roughly represents kind of the ballpark of trend that will predict for the rest of the year. From a SG&A perspective, we anticipate that the 35 headcount would cost us on an annualized basis between $7 million to $9 million a year.
Our next question comes from the line of Matt Phipps from William Blair.
I go back to one more. To your statement around the recent earnings call that they've been having discussions directly with governments on stockpiling, their pandemic adjuvants, I don't know if they did it for some of these vaccines or any future pandemics. Just wondering if you guys have had these discussions? Obviously, you have the collaboration with CEPI, but if you've gone as far as talking with any specific governments?
Not as of yet, Matt. I think one of the things that's different about -- just to be clear, about GSK's pandemic adjuvant is that, that adjuvant has been approved for pandemic flu vaccines historically. And so it has a pandemic vaccine approval that they would likely be leveraging as it relates to potential supply. Something they've done before in the past, I guess, is my point. It's not a new line of business for that adjuvant. Our ability to have similar levels of conversations will likely evolve as we receive approvals for GSK's adjuvanted pandemic vaccines. And then obviously, that has to correspond to every government's desire and plans for how they plan preparedness in the future. So on the list, but we need to get through the pandemic approvals first.
We have no further questions at this time. I would now like to turn the call over to Ryan Spencer, CEO, for closing remarks.
Thank you, operator. As we look ahead to the second half of '21, we continue to execute on our goal to build Dynavax' to a leading vaccine company. 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 a 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 is currently a key priority, we also continue to drive our business forward through the growth of sales of HEPLISAV-B, which we believe is a source of continued long-term value creation as we grow revenue along the path to being the market-leading adult Hepatitis B vaccine. Our belief in the long-term opportunity with HEPLISAV-B continues to be reinforced with the market traction we are seeing and resulting in record product revenue this quarter. With the combined strength of opportunities from HEPLISAV-B and CpG 1018, we believe 2021 will be a transformational year for Dynavax.
Thank you for joining us on the call today. Operator, you may end the call.
Ladies and gentlemen, thank you for joining us today. This concludes today's conference call. You may now disconnect.