\nDeep Track Capital, LP, (together with its affiliates, \u201cDeep Track\u201d or \u201cwe\u201d), one of the largest shareholders of Dynavax Technologies Corporation (NASDAQ: DVAX) (\u201cDynavax\u201d, \u201cDVAX\u201d or the \u201cCompany\u201d), with ownership of approximately 14.34% of the Company\u2019s outstanding shares, today sent a letter to the Company\u2019s Board of Directors (the \u201cBoard\u201d) related to Deep Track\u2019s nomination of four highly qualified candidates for election to the Company\u2019s Board of Directors (the \u201cBoard\u201d) at the 2025 Annual Meeting of Shareholders (the \u201cAnnual Meeting\u201d).\n<\/p>\n
This press release features multimedia. View the full release here: https:\/\/www.businesswire.com\/news\/home\/20250310980057\/en\/<\/a><\/p>\n Figure 1 *October 24, 2024, through market close on March 7, 2025. (Graphic: Business Wire)<\/p>\n<\/div>\n \nThe full text of the letter follows:\n<\/p>\n \nMarch 10, 2025\n<\/p>\n \nDear Members of the Dynavax Board,\n<\/p>\n \nAs you are aware, Deep Track Capital, LP (together with its affiliates, \u201cDeep Track\u201d or \u201cwe\u201d) is one of the largest shareholders of Dynavax Technologies Corporation (\u201cDynavax\u201d, \u201cDVAX\u201d or the \u201cCompany\u201d), with ownership of approximately 14.34% of the Company\u2019s outstanding shares. We are writing today to convey the following:\n<\/p>\n \n1)\n<\/p>\n<\/td>\n \nAn update on the reactions we have received thus far from other shareholders to our public letter announcing our nomination of four director candidates for election to the Company\u2019s Board of Directors (the \u201cBoard\u201d) at the 2025 Annual Meeting of Stockholders (the \u201cAnnual Meeting\u201d);\n<\/p>\n<\/td>\n<\/tr>\n \n2)\n<\/p>\n<\/td>\n \nOur disappointment that the Board seems uninterested in reaching a constructive resolution with us, and instead has chosen to deploy petty defensive tactics that are straight out of the most aggressive edition of the \u201cActivism Defense 101\u201d playbook;\n<\/p>\n<\/td>\n<\/tr>\n \n3)\n<\/p>\n<\/td>\n \nConcern that you have chosen to double down on a questionable unsophisticated corporate finance strategy with last week\u2019s convertible debt issuance, especially so close to the Annual Meeting; and\n<\/p>\n<\/td>\n<\/tr>\n \n4)\n<\/p>\n<\/td>\n \nClarification that our campaign is in no way about taking \u201ccontrol\u201d of the Board \u2013 as you falsely stated in your response to our nominations.\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \nPlease consider the following points as you determine next steps in your engagement with us:\n<\/p>\n Other Shareholders Have Expressed Alignment with Our Position<\/span><\/b><\/p>\n \nSince our public letter on February 19th<\/sup>, we have received messages of support from a number of significant Dynavax shareholders who believe our recommended course of action is not only reasonable, but optimal for the Company. Specifically, in our conversations investors have expressed:\n<\/p>\n \nWe trust you have noticed that Dynavax shares are reaching fresh 52-week highs. In particular, the stock is up 34% since our amended Form 13D filing on October 24, 2024, while the Nasdaq Biotechnology Index (NBI) is down 4% over the same period and the SPDR S&P Biotech ETF (XBI) is down 10%. Based on our many conversations with other investors, including sizable existing holders as well as those who have conveyed to us that they are building larger positions, their motivation for owning DVAX shares at these levels is clearly for the potential focus and clarity that Deep Track has articulated that its nominees would bring to the Company. (See Figure 1)\n<\/p>\n We Urge the Board to Stop Engaging in Petty \u201cActivist Defense 101\u201d Tactics<\/span><\/b><\/p>\n \nOur public actions followed months of attempts to engage with the Board regarding your corporate governance and business strategy. We conveyed on multiple occasions our desire to work constructively with you in the interest of all shareholders. Despite these attempts at reasonable engagement, as well as the fact that we are the second largest shareholder in Dynavax and long-term investors in the Company, the Board and its advisors have resorted to tactics typically employed against short-term activists. These maneuvers seem aimed at obstructing shareholders\u2019 rights to even participate in a fair vote. Specifically, you have:\n<\/p>\n \nThese sorts of tactics serve no purpose other than to waste shareholder capital on needless advisor fees and poison the well around reaching a potential settlement. We call on the Board to abandon this course of action and instead engage on the substance of our concerns.\n<\/p>\n Why Are You Doubling Down on Questionable Corporate Finance Strategy So Close to the Annual Meeting?<\/span><\/b><\/p>\n \nLast week, the Company announced the refinancing of the majority of its outstanding convertible debt, which resulted in an increase<\/b> to debt obligations from $225 million to $265 million. The existing notes had a conversion price of $10.47 per share, effectively rendering them an equity equivalent given that the stock is trading ~35% above the conversion price. In fact, the Company already had the ability to force conversion of the notes under certain circumstances which were likely to occur in the near term. We applaud the decision to effectively buy back stock by eliminating these notes; this is precisely what we have been advocating. However, we are baffled at the Board\u2019s choice of capital source to enact this buyback. Convertible notes are generally the most expensive cost of capital securities next to straight equity. Why would a company with $714 million of cash sitting idle on its balance sheet (earning ~4.6% in the last quarter), and a growing cash flow positive business, issue expensive convertible notes rather than use its current cash?\n<\/p>\n \nAdditionally, the terms obtained by Dynavax for the transaction appear to be far worse than should be presently available in the market. For example, BridgeBio Pharma (NASDAQ: BBIO) sold $500 million of convertible notes less than two weeks ago; compared to Dynavax, the BBIO notes had a longer term (2031 vs. 2030), a lower interest rate (1.75% vs. 2.0%), and a higher conversion premium (45% vs. 30%). Given the meaningful profitability and over-equitization at Dynavax, the Company should have been able to negotiate terms at least as favorable as other companies in the biotech space.\n<\/p>\n \nThe easiest, cleanest and most capital-efficient way to address the Company\u2019s stated \u201cliability management objectives\u201d would have been to eliminate the liability. Unlike other companies that need to continuously roll their debt, Dynavax could have simply made the debt go away. Instead, the can has been kicked for another five years, with more expensive debt added to the balance sheet when the convertible note dilution overhang could have been removed once and for all.\n<\/p>\n \nThe basic tenet of our message to management and the Board has been to utilize the least expensive sources of capital (i.e., your $714 million of cash) to invest in the highest-return assets (i.e., Heplisav, via Dynavax stock). Last week\u2019s move is the complete opposite: Dynavax issued more expensive debt to continue investing in cash, which is at best a questionable and unsophisticated corporate finance strategy. We believe that the Board is engaging in cosmetic schemes as a way to obfuscate its dereliction of thoughtful shareholder representation.\n<\/p>\n Deep Track\u2019s Campaign is About Representing the Best Interests of All Shareholders<\/span><\/b><\/p>\n \nThe Company\u2019s assertion that we are seeking control of the Board is a categorical misrepresentation of reality that appears designed to gaslight shareholders.<\/i> Deep Track is seeking to elect four director candidates to what will be a nine-member Board. Three of our nominees are completely independent of Deep Track. The addition of a representative of a large shareholder as one member of a large Board \u2013 especially a shareholder who is an expert in the life sciences sector \u2013 is warranted given the extent of our concerns and the need to restore investors\u2019 trust in the Board.\n<\/p>\n \nIn our view, these steps would be in the best interests of all shareholders. A refreshed Board could drive critical improvements to the Company\u2019s strategy and ensure it is on the best path forward for all stakeholders \u2013 including by eventually eliminating Hepatitis B \u2013 while maximizing the long-term value of the Company\u2019s assets and recycling cash back into the hands of investors who can choose the best clinical programs across the entire biotechnology sector in which to deploy that capital.\n<\/p>\n \nWe are not adversaries of the Board or the Company. Other investors clearly appreciate the greater probability of fundamental change that our efforts bring to the table. The value of our nominees, particularly our shareholder representative, is clearly exemplified by the extreme outperformance of Dynavax stock since we began our efforts in earnest.\n<\/p>\n \n***\n<\/p>\n \nWe urge you to carefully consider the above points in the context of what is best for all Dynavax shareholders.\n<\/p>\n \nRegards, About Deep Track Capital<\/b><\/p>\n \nDeep Track Capital is a Greenwich, Connecticut-based investment firm focused exclusively on the life sciences industry. We develop long term partnerships with management teams of leading innovative public and pre-IPO biotechnology companies. In addition to capital, we seek to invest our time and expertise, while leveraging our network for the benefit of our partners. We aim to lead transactions while building large syndicates, and also to invest in rounds led by other qualified investors.\n<\/p>\n CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS<\/b><\/p>\n \nThe information herein contains \u201cforward-looking statements.\u201d Specific forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, words such as \u201cmay,\u201d \u201cwill,\u201d \u201cexpects,\u201d \u201cbelieves,\u201d \u201canticipates,\u201d \u201cplans,\u201d \u201cestimates,\u201d \u201cprojects,\u201d \u201cpotential,\u201d \u201ctargets,\u201d \u201cforecasts,\u201d \u201cseeks,\u201d \u201ccould,\u201d \u201cshould\u201d or the negative of such terms or other variations on such terms or comparable terminology. Similarly, statements that describe our objectives, plans or goals are forward-looking. Forward-looking statements are subject to various risks and uncertainties and assumptions. There can be no assurance that any idea or assumption herein is, or will be proven, correct. If one or more of the risks or uncertainties materialize, or if any of the underlying assumptions of Deep Track Capital, LP (\u201cDeep Track\u201d) or any of the other participants in the proxy solicitation described herein prove to be incorrect, the actual results may vary materially from outcomes indicated by these statements. Accordingly, forward looking statements should not be regarded as a representation by Deep Track that the future plans, estimates or expectations contemplated will ever be achieved.\n<\/p>\n \nCertain statements and information included herein may have been sourced from third parties. Deep Track does not make any representations regarding the accuracy, completeness or timeliness of such third party statements or information. Except as may be expressly set forth herein, permission to cite such statements or information has neither been sought nor obtained from such third parties. Any such statements or information should not be viewed as an indication of support from such third parties for the views expressed herein.\n<\/p>\n \nDeep Track disclaims any obligation to update the information herein or to disclose the results of any revisions that may be made to any projected results or forward-looking statements herein to reflect events or circumstances after the date of such information, projected results or statements or to reflect the occurrence of anticipated or unanticipated events\n<\/p>\n CERTAIN INFORMATION CONCERNING THE PARTICIPANTS<\/b><\/p>\n \nDeep Track and the other Participants (as defined below) intend to file a preliminary proxy statement and accompanying WHITE universal proxy card with the Securities and Exchange Commission (the \u201cSEC\u201d) to be used to solicit proxies for, among other matters, the election of its slate of director nominees at the 2025 annual stockholders meeting (the \u201c2025 Annual Meeting\u201d) of Dynavax Technologies Corporation, a Delaware corporation (\u201cDVAX\u201d). Promptly after filing its definitive proxy statement with the SEC, Deep Track will furnish the definitive proxy statement and accompanying WHITE universal proxy card to some or all of the stockholders entitled to vote at the 2025 Annual Meeting.\n<\/p>\n \nThe participants in the proxy solicitation are Deep Track, Deep Track Biotechnology Master Fund, Ltd. (the \u201cRecord Stockholder\u201d), David Kroin (all of the foregoing persons, collectively, the \u201cDeep Track Parties\u201d), Brett A. Erkman, Jeffrey S. Farrow, Michael Mullette and Donald J. Santel (such individuals, collectively with the Deep Track Parties, the \u201cParticipants\u201d).\n<\/p>\n \nAs of the date hereof, the Deep Track Parties beneficially own an aggregate of 17,791,486 shares (the \u201cDeep Track Shares\u201d) of the common stock, par value $0.001 per share, of DVAX (the \u201cCommon Stock\u201d). The Deep Track Shares collectively represent approximately 14.34% of the outstanding shares of Common Stock based on 124,070,829 shares of Common Stock outstanding as of February 18, 2025 as reported in DVAX\u2019s Annual Report on Form 10-K for the year ended December 31, 2024. Each of the Deep Track Parties may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) all of the Deep Track Shares. As of the date hereof, none of the other Participants beneficially own any shares of Common Stock.\n<\/p>\n IMPORTANT INFORMATION AND WHERE TO FIND IT<\/b><\/p>\n \nDEEP TRACK STRONGLY ADVISES ALL STOCKHOLDERS OF DVAX TO READ THE PRELIMINARY PROXY STATEMENT, ANY AMENDMENTS OR SUPPLEMENTS TO SUCH PROXY STATEMENT, AND OTHER PROXY MATERIALS WHEN FILED BY DEEP TRACK WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC\u2019S WEBSITE AT WWW.SEC.GOV<\/a>. THE DEFINITIVE PROXY STATEMENT, WHEN FILED, AND OTHER RELEVANT DOCUMENTS, WILL ALSO BE AVAILABLE BY DIRECTING A REQUEST TO THE PARTICIPANTS\u2019 PROXY SOLICITOR, INNISFREE M&A INCORPORATED, 501 MADISON AVENUE, 20th <\/sup>FLOOR, NEW YORK, NY 10022 (STOCKHOLDERS CAN CALL TOLL-FREE: (877)-687-1865)\n<\/p>\n View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20250310980057\/en\/<\/a><\/span><\/p>\n Investor Media KEYWORDS:<\/b> United States North America Connecticut<\/p>\n INDUSTRY KEYWORDS:<\/b> Asset Management Professional Services Finance<\/p>\n![\"Figure](\"https:\/\/mms.businesswire.com\/media\/20250310980057\/en\/2404619\/4\/Excel1DTC.jpg\")
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David Kroin
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Founder and Chief Investment Officer, Deep Track Capital LP\n<\/p>\n<\/p>\n
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Innisfree M&A Incorporated
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Scott Winter \/ Gabrielle Wolf
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+1 212-750-5833\n<\/p>\n
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Longacre Square Partners
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deeptrack@longacresquare.com<\/a><\/p>\n
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