(Address, including Zip Code, and telephone number, including area code, of the registrant’s principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registration was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of ~~November 1, 2017,~~May 3, 2021, the registrant had outstanding ~~60,596,251~~114,588,212 shares of common stock.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to a number of risks and uncertainties. All statements that are not historical facts are forward-looking statements, including statements about the direct and indirect impact of the ongoing COVID-19 global pandemic on our ~~ability to successfully develop, timely achieve regulatory approval for~~business and ~~commercialize HEPLISAV-B™~~operations, including sales of HEPLISAV-B®, our ability to successfully ~~develop~~commercialize HEPLISAV-B, our anticipated market opportunity and ~~obtain regulatory approval~~level of sales of HEPLISAV-B, our ~~early stage product candidates, SD-101 and DV281, and our other early stage compounds,~~ability to manufacture sufficient supply of HEPLISAV-B to meet future demand, our business, collaboration and regulatory strategy, our ~~intellectual property position, our product development efforts, our~~ ability to successfully ~~commercialize~~support the development and commercialization of other vaccines containing our ~~product candidates,~~CpG 1018™ adjuvant, including ~~HEPLISAV-B,~~any potential vaccine for COVID-19, our ability to manufacture ~~commercial~~sufficient supply of CpG 1018 to meet potential future demand in connection with new vaccines, including any potential COVID-19 vaccine, and to meet regulatory requirements, ~~the timing of the introduction of our products,~~ uncertainty regarding our capital needs and future operating results and profitability, anticipated sources of funds, liquidity and cash needs, as well as our plans, objectives, strategies, expectations and intentions. These statements appear throughout this Quarterly Report on Form 10-Q and can be identified by the use of forward-looking language such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “future,” or “intend,” or the negative of these terms or other variations or comparable terminology.

Actual results may vary materially from those in our forward-looking statements as a result of various factors that are identified in “Item 1A—Risk Factors” and “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this document. No assurance can be given that the risk factors described in this Quarterly Report on Form 10-Q are all of the factors that could cause actual results to vary materially from the forward-looking statements. All forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Readers should not place undue reliance on these forward-looking statements and are cautioned that any such forward-looking statements are not guarantees of future performance. We assume no obligation to update any forward-looking statements.

This Quarterly Report on Form 10-Q includes trademarks and registered trademarks of Dynavax Technologies Corporation. Products or service names of other companies mentioned in this Quarterly Report on Form 10-Q may be trademarks or registered trademarks of their respective owners. References herein to “we,” “our,” “us,” “Dynavax” or the “Company” refer to Dynavax Technologies Corporation and its ~~subsidiary.~~subsidiaries.

Below is a summary of material factors that make an investment in our securities speculative or risky. Importantly, this summary does not address all of the risks and uncertainties that we face. Additional discussion of the risks and uncertainties summarized in this risk factor summary, as well as other risks and uncertainties that we face, can be found in the more detailed discussion that follows this summary, and the below summary is qualified in its entirety by that more complete discussion of such risks and uncertainties. You should consider carefully the risks and uncertainties described herein as part of your evaluation of an investment in our securities:

	September 30,			December 31,			March 31,			December 31,
	2017			2016			2021			2020
	(unaudited)			(Note 1)			(unaudited)			(Note 1)
Assets
Current assets:
Cash and cash equivalents	$	20,096		$	24,289		$	79,055		$	32,073
Marketable securities available-for-sale		171,584			57,126			153,619			132,963
Accounts and other receivables		783			1,342
Accounts and other receivables, net								83,994			22,661
Inventories, net								68,846			63,689
Prepaid manufacturing								32,642			29,423
Prepaid expenses and other current assets		4,633			6,842			9,377			9,206
Total current assets		197,096			89,599			427,533			290,015
Property and equipment, net		16,622			17,174			30,696			30,567
Operating lease right-of-use assets								25,799			26,583
Goodwill		2,213			1,971			2,197			2,297
Restricted cash	626			602				226			237
Other assets		1,270		334				3,668			3,573
Total assets	$	217,827		$	109,680		$	490,119		$	353,272
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	2,243		$	3,796		$	3,154		$	3,312
Accrued research and development		3,079			5,048			2,890			2,805
Accrued liabilities		7,567			11,192			16,083			19,099
Warrant liability								31,737			10,736
Deferred revenue								52,202			38,212
Other current liabilities								3,356			3,247
Total current liabilities		12,889			20,036			109,422			77,411
Long-term debt, net of debt discount of $1,016 and $1,094 at March 31, 2021 and December 31, 2020, respectively								179,889			179,811
Long-term deferred revenue								64,350			-
Long-term portion of lease liabilities								33,795			34,789
Other long-term liabilities	504			443				2,901			2,568
Total liabilities		13,393			20,479			390,357			294,579
Commitments and contingencies (Note 4)
Commitments and contingencies (Note 5)
Stockholders’ equity:
Preferred stock: $0.001 par value; 5,000 shares authorized at September 30, 2017 and December 31, 2016; no shares issued and outstanding at September 30, 2017 and December 31, 2016		-			-
Common stock: $0.001 par value; 139,000 and 69,500 shares authorized at September 30, 2017 and December 31, 2016, respectively; 60,587 and 38,599 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively	61			39
Preferred stock: $0.001 par value
Authorized: 5,000 shares; Issued and outstanding:								-			-
Series B Convertible Preferred stock ̶ 4 shares at March 31, 2021 and December 31, 2020								-			-
Common stock: $0.001 par value; 278,000 shares authorized at March 31, 2021 and December 31, 2020; 114,563 shares and 110,190 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively								114			110
Additional paid-in capital		1,085,433			904,957			1,393,947			1,352,374
Accumulated other comprehensive loss		(1,156	)		(3,624	)
Accumulated other comprehensive (loss) gain								(1,126	)		273
Accumulated deficit		(879,904	)		(812,171	)		(1,293,173	)		(1,294,064	)
Total stockholders’ equity		204,434			89,201			99,762			58,693
Total liabilities and stockholders’ equity	$	217,827		$	109,680		$	490,119		$	353,272

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Revenues:

Collaboration revenue
$
-

$
-

$
-

$
2,578

Grant revenue

53

162

306

289

Service and license revenue

-

-

-

884

Total revenues

53

162

306

3,751

Operating expenses:

Research and development

16,417

23,234

47,576

66,051

General and administrative

6,027

11,766

18,111

29,086

Restructuring

-

-

2,783

-

Total operating expenses

22,444

35,000

68,470

95,137

Loss from operations

(22,391
)

(34,838
)

(68,164
)

(91,386
)
Other income (expense):

Interest income

429

170

809

615

Other (expense) income, net

(166
)

(26
)

(378
)

68

Net loss
$
(22,128
)

$
(34,694
)

$
(67,733
)

$
(90,703
)
Basic and diluted net loss per share
$
(0.38
)

$
(0.90
)

$
(1.36
)

$
(2.36
)
Weighted average shares used to compute basic and diluted net loss
per share

57,650

38,512

49,785

38,493

	Three Months Ended March 31
	2021			2020
Revenues:
Product revenue, net	$	82,885		$	10,514
Other revenue		450			405
Total revenues		83,335			10,919
Operating expenses:
Cost of sales - product		24,625			2,354
Cost of sales - amortization of intangible assets		-			2,298
Research and development		7,758			4,653
Selling, general and administrative		22,423			20,926
Total operating expenses		54,806			30,231
Income (loss) from operations		28,529			(19,312	)
Other income (expense):
Interest income		47			590
Interest expense		(4,712	)		(4,731	)
Sublease income		2,022			1,926
Change in fair value of warrant liability (Note 10)		(25,552	)		8,610
Other		557			322
Net income (loss)		891			(12,595	)
Net income (loss) per share attributable to common stockholders
Basic	$	0.01		$	(0.15	)
Diluted	$	0.01		$	(0.25	)
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders:
Basic		112,035			85,477
Diluted		113,469			85,648

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Net loss
$
(22,128
)

$
(34,694
)

$
(67,733
)

$
(90,703
)
Other comprehensive income:

Unrealized gain (loss) on marketable securities
available-for-sale

14

(61
)

(31
)

7

Cumulative foreign currency translation adjustments

759

208

2,499

511

Total other comprehensive income

773

147

2,468

518

Total comprehensive loss
$
(21,355
)

$
(34,547
)

$
(65,265
)

$
(90,185
)

	Three Months Ended March 31,
	2021			2020
Net income (loss)	$	891		$	(12,595	)
Other comprehensive income (loss), net of tax:
Change in unrealized gain on marketable securities available- for-sale		(9	)		291
Foreign currency translation adjustments		(1,390	)		(479	)
Total other comprehensive loss		(1,399	)		(188	)
Total comprehensive loss	$	(508	)	$	(12,783	)

	Common Stock				Preferred Stock				Additional Paid-In			Accumulated Other Comprehensive			Accumulated			Total Stockholders'
Three Months Ended March 31, 2021	Shares		Par Amount		Shares		Par Amount		Capital			(Loss) Income			Deficit			Equity
Balances at December 31, 2020		110,190	$	110		4	$	-	$	1,352,374		$	273		$	(1,294,064	)	$	58,693
Exercise of warrants		750		1		-		-		7,927			-			-			7,928
Issuance of common stock upon exercise of stock options and restricted stock awards, net		640		-		-		-		387			-			-			387
Issuance of common stock under Employee Stock Purchase Plan		104		-		-		-		383			-			-			383
Issuance of common stock, net of issuance costs, in conjunction with an At Market Sales Agreement (see Note 10)		2,879		3		-		-		28,153			-			-			28,156
Stock compensation expense		-		-		-		-		4,723			-			-			4,723
Total other comprehensive loss		-		-		-		-		-			(1,399	)		-			(1,399	)
Net income		-		-		-		-		-			-			891			891
Balances at March 31, 2021		114,563	$	114		4	$	-	$	1,393,947		$	(1,126	)	$	(1,293,173	)	$	99,762

	Common Stock				Preferred Stock				Additional Paid-In			Accumulated Other Comprehensive			Accumulated			Total Stockholders'
Three Months March 31, 2020	Shares		Par Amount		Shares		Par Amount		Capital			(Loss) Income			Deficit			Equity
Balances at December 31, 2019		83,871	$	84		5	$	-	$	1,229,417		$	(2,387	)	$	(1,218,824	)	$	8,290
Issuance (withholding) of common stock upon exercise of stock options and restricted stock awards, net		728		1		-		-		(2	)		-			-			(1	)
Issuance of common stock under Employee Stock Purchase Plan		91		-		-		-		311			-			-			311
Issuance of common stock, net of issuance costs, in conjunction with an At Market Sales Agreement (see Note 10)		2,909		3		-		-		14,226			-			-			14,229
Stock compensation expense		-		-		-		-		1,778			-			-			1,778
Total other comprehensive loss		-		-		-		-		-			(188	)		-			(188	)
Net loss		-		-		-		-		-			-			(12,595	)		(12,595	)
Balances at March 31, 2020		87,599	$	88		5	$	-	$	1,245,730		$	(2,575	)	$	(1,231,419	)	$	11,824

Nine Months Ended September 30,

2017

2016

Operating activities

Net loss
$
(67,733
)

$
(90,703
)
Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

2,456

1,574

Gain on disposal of property and equipment

(32
)

-

Accretion of discounts and amortization of premiums on marketable securities

(104
)

155

Reversal of deferred rent upon lease amendment

(209
)

-

Cash-settled portion of stock-based compensation expense

-

602

Stock compensation expense

10,844

10,030

Changes in operating assets and liabilities:

Accounts and other receivables

559

(896
)
Prepaid expenses and other current assets

(1,841
)

804

Other assets

(936
)

(99
)
Accounts payable

(1,499
)

704

Accrued liabilities and other long term liabilities

(1,274
)

(286
)
Deferred revenues

-

(2,654
)
Net cash used in operating activities

(59,769
)

(80,769
)
Investing activities

Purchases of marketable securities

(192,684
)

(122,027
)
Proceeds from maturities of marketable securities

78,298

186,670

Purchases of property and equipment, net

(374
)

(6,516
)
Net cash (used in) provided by investing activities

(114,760
)

58,127

Financing activities

Proceeds from issuance of common stock, net

169,187

-

Proceeds from exercise of stock options and restricted stock awards, net

285

131

Proceeds from Employee Stock Purchase Plan

292

616

Net cash provided by financing activities

169,764

747

Effect of exchange rate changes on cash and cash equivalents

572

104

Net decrease in cash and cash equivalents

(4,193
)

(21,791
)
Cash and cash equivalents at beginning of period

24,289

44,812

Cash and cash equivalents at end of period
$
20,096

$
23,021

Supplemental disclosure of cash flow information

Accrual for litigation settlement and insurance recovery (Note 4)
$
-

$
4,050

Release of accrual for litigation settlement and insurance recovery (Note 4)
$
4,050

$
-

Non-cash investing and financing activities:

Disposal of fully depreciated property and equipment
$
-

$
1,160

Net change in unrealized (loss) gain on marketable securities
$
(31
)

$
7

Common stock issuance costs - cash not paid as of period end
$
110

$
-

	Three Months Ended March 31,
	2021			2020
Operating activities
Net income (loss)	$	891		$	(12,595	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		1,106			1,014
Amortization of right-of-use assets		653			634
Gain on disposal of property and equipment and from lease termination		-			(76	)
Amortization of premium (accretion of discounts) on marketable securities		221			(87	)
Change in fair value of warrant liability		25,552			(8,610	)
Stock compensation expense		4,723			1,778
Cost of sales - amortization of intangible assets		-			2,298
Non-cash interest expense		414			1,338
Tenant improvements provided by the landlord		-			908
Changes in operating assets and liabilities:
Accounts and other receivables, net		(61,333	)		751
Inventories, net		(5,157	)		(6,767	)
Prepaid manufacturing		(3,219	)		-
Prepaid expenses and other current assets		(171	)		(1,000	)
Other assets		(95	)		43
Accounts payable		(295	)		(2,095	)
Lease liabilities		(751	)		(672	)
Deferred revenue		78,340			-
Accrued liabilities and other liabilities		(2,847	)		(3,728	)
Net cash provided by (used in) operating activities		38,032			(26,866	)
Investing activities
Acquisition of technology licenses		-			(7,000	)
Purchases of marketable securities		(72,016	)		(17,985	)
Proceeds from maturities and redemptions of marketable securities		51,130			37,900
Purchases of property and equipment, net		(1,747	)		(2,352	)
Net cash (used in) provided by investing activities		(22,633	)		10,563
Financing activities
Proceeds from issuance of common stock, net		28,156			14,229
Proceeds from exercise of warrants		3,377			-
Proceeds (tax withholding) from exercise of stock options and restricted stock awards, net		387			(1	)
Proceeds from Employee Stock Purchase Plan		383			311
Net cash provided by financing activities		32,303			14,539
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(731	)		(225	)
Net increase (decrease) in cash, cash equivalents and restricted cash		46,971			(1,989	)
Cash, cash equivalents and restricted cash at beginning of period		32,310			40,100
Cash, cash equivalents and restricted cash at end of period	$	79,281		$	38,111
Supplemental disclosure of cash flow information
Cash paid during the period for interest	$	4,296		$	3,412
Non-cash investing and financing activities:
Purchases of property and equipment, not yet paid	$	411		$	408

Dynavax Technologies Corporation (“we,” “our,” “us,” “Dynavax” or the “Company”), is a ~~clinical-stage immunotherapy~~commercial stage biopharmaceutical company focused on ~~leveraging~~developing and commercializing novel vaccines. Our first marketed product, HEPLISAV-B® (Hepatitis B Vaccine (Recombinant), Adjuvanted) is approved in the ~~power~~United States and European Union for prevention of the body’s innate and adaptive immune response through toll-like receptor (“TLR”) stimulation. Our current product candidates are being investigated for use in multiple cancer indications, as a vaccine for the preventioninfection caused by all known subtypes of hepatitis B virus in adults age 18 years and older. We also manufacture and sell CpG 1018, the adjuvant used in HEPLISAV-B. We are working to develop CpG 1018 as a ~~disease modifying therapy~~premier vaccine adjuvant through research collaborations and partnerships. Current collaborations are focused on adjuvanted vaccines for ~~asthma. We were incorporated in California in August 1996 under the name Double Helix Corporation,~~COVID-19, pertussis and ~~we changed our name to Dynavax Technologies Corporation in September 1996. We reincorporated in Delaware in 2000.~~universal influenza.

Our accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X. In our opinion, these unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which we consider necessary to present fairly our financial position and the results of our operations and cash flows. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted. Interim-period results are not necessarily indicative of results of operations or cash flows to be expected for a full-year period or any other interim-period. The condensed consolidated balance sheet at December 31, ~~2016~~2020 has been derived from audited financial statements at that date, but excludes disclosures required by GAAP for complete financial statements.

The unaudited condensed consolidated financial statements and these notes should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2020, as filed with the Securities and Exchange Commission (the “SEC”).

The unaudited condensed consolidated financial statements include the accounts of Dynavax and our wholly-owned ~~subsidiary,~~subsidiaries, Dynavax ~~GmbH.~~GmbH located in Düsseldorf, Germany and Dynavax India LLP in India. All significant intercompany accounts and transactions among these entities have been eliminated from the condensed consolidated financial statements. We operate in ~~one~~1 business segment: ~~the~~ discovery, development and ~~development~~commercialization of ~~biopharmaceutical products.~~novel vaccines.

As of ~~September 30, 2017,~~March 31, 2021, we had cash, cash equivalents and marketable securities of ~~$191.7~~ $232.7 million. ~~During~~As of March 31, 2021, the ~~nine months ended September 30, 2017,~~principal amount of our term loan was $180.9 million, including paid-in-kind interest. The term loan has a maturity date of December 31, 2023, unless earlier prepaid.

Prior to January 1, 2021, we ~~received approximately $169 million~~incurred net losses in ~~net proceeds from our underwritten public offering in August 2017 and an~~ ~~At Market Issuance Sales Agreement (the “2015 ATM Agreement”) and we used $59.8 million of cash in operating activities.~~

~~We have incurred significant operating losses and negative cash flows from operations~~each year since our inception. For the three months ended March 31, 2021, we recorded net income of $0.9 million. We ~~expect spending to increase in connection with the development and manufacturing~~incurred net loss of $12.6 million for three months ended March 31, 2020. We cannot be certain that sales of our ~~product candidates, particularly SD-101~~products, and ~~DV281,~~the revenue from our ~~lead investigational cancer immunotherapeutic product candidates, and~~other activities are sustainable. Further, we expect to ~~support~~continue to incur substantial expenses as we continue to invest in commercialization of HEPLISAV-B, ~~if it is approved by the U.S. Food~~development of our CpG 1018 adjuvant and ~~Drug Administration (“FDA”), as well as human~~ clinical trials ~~for our~~and other development. If we cannot generate a sufficient amount of revenue from product ~~candidates and additional applications and advancement of our technology. In order to continue these activities,~~sales, we will need ~~additional funding. This may occur~~to finance our operations through strategic alliance and licensing arrangements and/or future public or private debt and equity financings. ~~Sufficient funding~~Raising additional funds through the issuance of equity or debt securities could result in dilution to our existing stockholders, increased fixed payment obligations, or both. In addition, these securities may ~~not~~have rights senior to those of our common stock and could include covenants that would restrict our operations.

We currently anticipate that our cash, cash equivalents and short-term marketable securities as of March 31, 2021, and anticipated revenues from HEPLISAV-B and CpG 1018 will be ~~available, or if available, may be on terms that significantly dilute or otherwise adversely affect~~sufficient to fund our operations for at least the ~~rights~~next 12 months from the date of existing stockholders. If adequate funds are not available in the future, we may need to delay, reduce the scope of or put on hold one or more development programs while we seek strategic alternatives, which could have an adverse impact on our ability to achieve our intended business objectives.this filing.

Our ability to raise additional capital in the equity and debt markets, should we choose to do so, is dependent on a number of factors, including, but not limited to, the market demand for our common stock, which itself is subject to a number of development and business risks and uncertainties, ~~as well as~~our creditworthiness and the uncertainty that we would be able to raise such additional capital at a price or on terms that are favorable to us. In addition, global financial crises and economic downturns, including those cause by widespread public health crises such as the COVID-19 pandemic, may cause extreme volatility and disruptions in capital and credit markets, and may impact our ability to raise additional capital when needed on acceptable terms, if at all. Adequate financing may not be available to us on acceptable terms, or at all.

The preparation of financial statements in conformity with GAAP requires management to make informed estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Management’s estimates are based on historical information available as of the date of the condensed consolidated financial statements and various other assumptions we believe are reasonable under the circumstances. However, the worldwide spread of COVID-19 has resulted in a global slowdown of economic activity which is likely to decrease demand for a broad variety of goods and services, while also disrupting sales channels and marketing activities for an unknown period of time until the disease is contained. We are unable to predict the future effect resulting from the COVID-19 pandemic. Actual results could differ materially from ~~these~~management’s estimates.

There have been no material changes in our significant accounting policies during the nine months ended September 30, 2017, as compared with those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2016.

Our revenues consist of amounts earned from collaborations, grants and fees from services and licenses. We enter into license and manufacturing agreements and collaborative research and development arrangements with pharmaceutical and biotechnology partners that may involve multiple deliverables. Our arrangements may include one or more of the following elements: upfront license payments, cost reimbursement for the performance of research and development activities, milestone payments, other contingent payments, contract manufacturing service fees, royalties and license fees. Each deliverable in the arrangement is evaluated to determine whether it meets the criteria to be accounted for as a separate unit of accounting or whether it should be combined with other deliverables. In order to account for the multiple-element arrangements, we identify the deliverables included within the arrangement and evaluate which deliverables represent separate units of accounting. Analyzing the arrangement to identify deliverables requires the use of judgment, and each deliverable may be an obligation to deliver services, a right or license to use an asset, or another performance obligation. We recognize revenue when ~~there is persuasive evidence that an arrangement exists, delivery has occurred~~the customer obtains control of promised goods or services, ~~have been rendered,~~in an amount that reflects the ~~price is fixed or determinable and collectability is reasonably assured.~~

Non-refundable upfront fees received for license and collaborative agreements and other payments under collaboration agreements where we have continuing performance obligations related to the payments are deferred and recognized over our estimated performance period. Revenue is recognized on a ratable basis, unless we determine that another method is more appropriate, through the date at which our performance obligations are completed. Management makes its best estimate of the period overconsideration which we expect to ~~fulfill~~receive in exchange for those goods or services. To determine revenue recognition for arrangements that we determine are within the scope of Accounting Standards Codification (“ASC”) 606, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations, and assess whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

We sell HEPLISAV-B to a limited number of wholesalers and specialty distributors in the U.S. (collectively, our “Customers”).

Revenues from product sales are recognized when we have satisfied our performance ~~obligations,~~obligation, which ~~may include clinical development activities. Given~~is the ~~uncertainties~~transfer of ~~research~~control of our product upon delivery to the Customer. The timing between the recognition of revenue for product sales and ~~development collaborations,~~the receipt of payment is not significant. Because our standard credit terms are short-term and we expect to receive payment in less than one year, there is no significant ~~judgment is required~~financing component on the related receivables. Taxes collected from Customers relating to ~~determine the duration~~product sales and remitted to governmental authorities are excluded from revenues.

Overall, product revenue, net, reflects our best estimates of the ~~performance period. We recognize revenues for costs that~~amount of consideration to which we are ~~reimbursed under collaborative agreements as the related research and development costs are incurred.~~

Contingent consideration received for the achievement of a substantive milestone is recognized in its entirety in the period in which the milestone is achieved. A milestone is defined as an event having all of the following characteristics: (i) there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved, (ii) the event can only be achievedentitled based ~~in whole or in part~~ on ~~either the entity’s performance or a specific outcome resulting from the entity’s performance and (iii) if achieved, the event would result in additional payments being due to the entity.~~

Our license and collaboration agreements with our partners provide for payments to be paid to us upon the achievement of milestones. Given the challenges inherent in developing biologic products, there is substantial uncertainty whether any such milestones will be achieved at the time we entered into these agreements. In addition, we evaluate whether milestones meet the criteria to be considered substantive. The conditions include: (i) work is contingent on either of the following: (a) the vendor’s performance to achieve the milestone or (b) the enhancement of the value of the deliverable item or items as a result of a specific outcome resulting from the vendor’s performance to achieve the milestone; (ii) it relates solely to past performance and (iii) it is reasonable relative to all the deliverable and payment terms within the arrangement. As a result of our analysis, we may consider our development milestones to be substantive. Milestone payments that are contingent upon the achievement of substantive at-risk performance criteria are recognized in full upon achievement of those milestone events in accordance with the terms of the ~~agreement. All revenue recognized to date under our collaborative agreements has been nonrefundable.~~

~~Our license and collaboration agreements with certain partners also provide for contingent payments based solely upon~~contract. The amount of variable consideration is included in the ~~performance of our partner. We expect to recognize the contingent payments as revenue upon receipt, provided that all other revenue recognition criteria have been satisfied.~~

~~Revenues from manufacturing services are recognized upon meeting the criteria for substantial performance and acceptance by the customer.~~

~~Revenue from royalty payments is contingent on future~~net sales ~~activities by our licensees. Royalty revenue is recognized when all revenue recognition criteria have been satisfied.~~

~~Revenue from government and private agency grants is recognized as the related research expenses are incurred and~~price only to the extent that ~~funding~~it is ~~approved.~~probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. If our estimates differ significantly from actuals, we will record adjustments that would affect product revenue, net in the period of adjustment.

~~Research and Development Expenses and Accruals~~Reserves for Variable Consideration

Research and development expenses include personnel and facility-related expenses, outside contracted services including clinical trial costs, manufacturing and process development costs, research costsRevenues from product sales are recorded at the net sales price, which includes estimates of variable consideration such as product returns, chargebacks, discounts, rebates and other ~~consulting services~~fees that are offered within contracts between us and ~~non-cash stock-based compensation. Research~~our Customers, healthcare providers, pharmacies and development costs are expensed as incurred. Amounts due under contracts with third parties may be either fixed fee or fee for service, and may include upfront payments, monthly payments and payments upon the completion of milestones or receipt of deliverables. Non-refundable advance payments under agreements are capitalized and expensed as the related goods are delivered or services are performed.

We contract with third parties to perform various clinical trial activities in the on-going development of potential products. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flowsothers relating to our ~~vendors. Payments under~~product sales. We estimate variable consideration using either the ~~contracts depend~~most likely amount method or the expected value method, depending on the type of variable consideration and what method better predicts the amount of consideration we expect to receive. We take into consideration relevant factors such as industry data, current contractual terms, available information about Customers’ inventory, resale and chargeback data and forecasted customer buying and payment patterns, in estimating each variable consideration. The variable consideration is recorded at the ~~achievement~~time product sales is recognized, resulting in a reduction in product revenue and a reduction in accounts receivable (if the Customer offsets the amount against its accounts receivable) or as an accrued liability (if we pay the amount through our accounts payable process). Variable consideration requires significant estimates, judgment and information obtained from external sources. The amount of ~~certain events, successful enrollment of patients, and completion of portions~~variable consideration is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the ~~clinical trial~~cumulative revenue recognized will not occur in a future period. If our estimates differ significantly from actuals, we will record adjustments that would affect product revenue, net in the period of adjustment. If we were to change any of these judgments or ~~similar conditions. Our accrual for clinical trials is based on~~ estimates, it could cause a material increase or decrease in the amount of ~~the services received and efforts expended pursuant to contracts with clinical trial centers and clinical research organizations. We may terminate these contracts upon written notice and~~revenue that we ~~are generally only liable for actual effort expended by the organizations to the date of termination, although~~report in certain instances we may be further responsible for termination fees and penalties. We estimate our research and development expenses and the related accrual as of each balance sheet date based on the facts and circumstances known to us at that time. a particular period. There have been no material adjustments to ~~the prior period accrued~~these estimates for ~~clinical trial activities through September 30, 2017.~~the three months ended March 31, 2021 and 2020.

Product Returns: Consistent with industry practice, we offer our Customers a limited right of return based on the product’s expiration date for product that has been purchased from us. We estimate the amount of our product sales that may be returned by our Customers and record this estimate as a reduction of revenue in the period the related product revenue is recognized. We consider several factors in the estimation of potential product returns including expiration dates of the product shipped, the limited product return rights, available information about Customers’ inventory, shelf life of the product and other relevant factors.

~~Restructuring~~Chargebacks: Our Customers subsequently resell our product to healthcare providers, pharmacies and others. In addition to distribution agreements with Customers, we enter into arrangements with qualified healthcare providers that provide for chargebacks and discounts with respect to the purchase of our product. Chargebacks represent the estimated obligations resulting from contractual commitments to sell product to qualified healthcare providers at prices lower than the list prices charged to Customers who directly purchase the product from us. Customers charge us for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers. These reserves are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and accounts receivable. Chargeback amounts are determined at the time of resale to the qualified healthcare providers by Customers, and we issue credits for such amounts generally within a few weeks of the Customer’s notification to us of the resale. Reserves for chargebacks consists of credits that we expect to issue for units that remain in the distribution channel inventories at each reporting period end that we expect will be sold to the qualified healthcare providers, and chargebacks for units that our Customers have sold to the qualified healthcare providers, but for which credits have not been issued.

Trade Discounts and Allowances: We provide our Customers with discounts which include early payment incentives that are explicitly stated in our contracts, and are recorded as a reduction of revenue in the period the related product revenue is recognized.

Distribution Fees: Distribution fees include fees paid to certain Customers for sales order management, data and distribution services. Distribution fees are recorded as a reduction of revenue in the period the related product revenue is recognized.

Rebates: Under certain contracts, customers may obtain rebates for purchasing minimum volumes of our product. We estimate these rebates based upon the expected purchases and the contractual rebate rate and record this estimate as a reduction in revenue in the period the related revenue is recognized.

We also sell our CpG 1018 adjuvant to our collaboration partners for use in their development and/or commercialization of COVID-19 vaccine. We have determined that our collaboration partners meet the definition of customers under ASC 606. Therefore, we accounted for our CpG 1018 sales under ASC 606. Revenues from product sales are recognized when we have satisfied our performance obligation, which is the transfer of control of our product to the customer.

Overall, product revenue, net, reflects our best estimates of the amount of consideration to which we are entitled based on the terms of the contract. The amount of variable consideration is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. If our estimates differ significantly from actuals, we will record adjustments that would affect product revenue, net in the period of adjustment.

We have entered into collaborative arrangements and arrangements to provide manufacturing services to other companies. Such arrangements may include promises to customers which, if capable of being distinct, are accounted for as separate performance obligations. For agreements with multiple performance obligations, we allocate estimated revenue to each performance obligation at contract inception based on the estimated transaction price of each performance obligation. Revenue allocated to each performance obligation is then recognized when we satisfy the performance obligation by transferring control of the promised good or service to the customer. Collaboration and manufacturing service revenue are recorded in other revenue in the condensed consolidated statements of operations.

Inventory is stated at the lower of cost or estimated net realizable value, on a first-in, first-out, or FIFO, basis. We primarily use actual costs to determine our cost basis for inventories. Our assessment of market value requires the use of estimates regarding the net realizable value of our inventory balances, including an assessment of excess or obsolete inventory. We determine excess or obsolete inventory based on multiple factors, including an estimate of the future demand for our products, product expiration dates and current sales levels. Our assumptions of future demand for our products are ~~comprised~~inherently uncertain and if we were to change any of ~~severance~~these judgments or estimates, it could cause a material increase or decrease in the amount of inventory reserves that we report in a particular period. For the three months ended March 31, 2021 and 2020, there were 0 inventory reserves recognized.

We consider regulatory approval of product candidates to be uncertain and product manufactured prior to the required regulatory approval may not be sold unless regulatory approval is obtained. As such, the manufacturing costs for product candidates incurred prior to regulatory approval are not capitalized as inventory but are expensed as research and development costs. We begin capitalization of these inventory related costs once regulatory approval is obtained.

HEPLISAV-B was approved by the United States Food and Drug Administration (“FDA”) on November 9, 2017, at which time we began to capitalize inventory costs associated with the vial presentation of HEPLISAV-B. In March 2018, we received regulatory approval of the pre-filled syringe (“PFS”) presentation of HEPLISAV-B. Prior to FDA approval of HEPLISAV-B, all costs related to ~~workforce reductions. We recognize restructuring charges when~~ the ~~liability is incurred. Employee termination benefits are accrued~~manufacturing of HEPLISAV-B that could potentially be available to support the commercial launch of our products, were charged to research and development expense in the period incurred as there was no alternative future use. Prior to regulatory approval of PFS, costs associated with resuming operating activities at the ~~date management has committed~~Düsseldorf manufacturing facility were also included in research and development expense. Subsequent to ~~a plan~~regulatory approval of ~~termination and employees have been notified~~PFS, costs associated with resuming manufacturing activities at the Düsseldorf facility were included in cost of ~~their termination dates and expected severance payments.~~sales – product, until commercial production resumed in mid-2018 at which time these costs were recorded as raw materials inventory.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) 606, Revenue Recognition, Revenue from Contracts with Customers, which amends the guidance in former ASC 605, Revenue Recognition, ~~which providesa single comprehensivemodelforentitiesto use in accountingforrevenuearisingfromcontractswith customersand will supersedemostcurrentrevenuerecognitionguidance.In July 2015,~~December 2019, the FASB ~~deferred the effective date for annual reporting periods beginning after December 15, 2017 (including interim periods within those periods), with early application permitted. Accordingly, the updated standard is effective for the Company in the first fiscal quarter of 2018. The FASB~~ issued ~~supplemental adoption guidance and clarification to~~ Accounting Standards Update (“ASU”) ~~2014-09~~No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). This ASU simplifies the accounting for income taxes by removing certain exceptions and improving consistent application in March 2016, April 2016 and May 2016 within ASU 2016-08 "Revenue From Contracts With Customers: Principal vs. Agent Considerations," ASU 2016-10 "Revenue From Contracts with Customers: Identifying Performance Obligations and Licensing," and ASU 2016-12 "Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients," respectively. ~~We anticipate adoption~~certain areas of ~~ASC 606 using the modified retrospective method~~ on January 1, 2018. Based on preliminary assessment, the adoption of this guidance is not expected to materially impact the Company’s revenue recognition as there are currently no collaboration agreements where we have significant performance obligations. We will reevaluate the impact of this guidance as we enter into new revenue arrangements and will continue to review variable consideration, potential disclosures, and the method of adoption in order to complete the evaluation of the impact on the consolidated financial statements. In addition, we will continue to monitor additional changes, modifications, clarifications or interpretations undertaken by the FASB, which may impact the current conclusions.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The ASU requires companies to recognize lease right-of-use assets and lease liabilities by lessees for all operating leases with lease terms greater than 12 months.Topic 740. The ASU is effective for annual periods beginning after December 15, ~~2018 and interim periods therein on a modified retrospective basis, and will be effective for us starting in the first quarter of fiscal 2019~~2020 with early adoption permitted. We ~~are currently evaluating~~adopted this ASU on January 1, 2021 and the impact this guidance will have on our consolidated financial statements and believe the adoption will modify our analyses and disclosures of lease agreements considering operating leases are a significant portion of the Company’s total lease commitments.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force). This ASU requires that the reconciliation of the beginning-of-period and end-of-period amounts shown in the statement of cash flows include cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. The ASU is effective for annual periods beginning after December 15, 2018 with early adoption permitted. The adoption of this standard isdid not ~~expected to~~ have a material impact on our consolidated financial statements.

InWe adopted ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity on January ~~2017,~~1, 2021 using the ~~FASB issued~~modified retrospective method. This ASU ~~2017-04, Intangibles – Goodwill and other (Topic 350), which~~ simplifies the ~~test~~accounting for ~~goodwill impairment by eliminating a previous requirement~~convertible instruments and requires entities to ~~calculate~~use the ~~implied fair value~~if-converted method for all convertible instruments in calculating diluted earnings-per-share. Entities also need to recombine instruments that were previously separated into two units of ~~goodwill to measure a goodwill impairment charge. We will adopt the standard effective January 1, 2020.~~account if separation is no longer required. The adoption isof this ASU did not ~~expected to~~ have a material impact on our condensed consolidated financial ~~statements.~~statements as there were no outstanding financial instruments that require recombination at January 1, 2021.

In ~~May 2017,~~June 2016, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued ASU ~~2017-09, Compensation~~No. 2016-13, Financial Instruments – ~~Stock Compensation~~Credit Losses (Topic ~~718)~~326): ~~Scope~~Measurement of ~~Modification Accounting.~~Credit Losses of Financial Instruments. The ~~ASU provides guidance about which~~standard changes to the ~~terms or conditions~~methodology for measuring credit losses on financial instruments and the timing of ~~a share-based payment award require an entity to apply modification accounting in Topic 718. The~~when such losses are recorded. For public business entities, excluding smaller reporting companies, this ASU is effective for ~~annual periods~~fiscal years beginning after December 15, ~~2017~~2019. Furthermore, the one-time determination of whether an entity is eligible to be a smaller reporting company shall be based on an entity’s most recent determination as of November 15, 2019, in accordance with ~~early adoption permitted. The adoption~~SEC regulations. Because we were a smaller reporting company based on the most recent determination as of November 15, 2019, this ASU and its subsequent updates, will be effective for fiscal years beginning after December 15, 2022. We are currently evaluating the impact this standard ~~is not expected to~~will have ~~a material impact~~ on our consolidated financial statements.

We measure fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The accounting standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

The carrying amounts of cash equivalents, accounts and other receivables, accounts payable and accrued liabilities are considered reasonable estimates of their respective fair value because of their short-term nature.

The following table represents the fair value hierarchy for our financial assets (cash equivalents and marketable securities) and liabilities measured at fair value on a recurring basis (in thousands):

	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
September 30, 2017
March 31, 2021
Assets
Money market funds	$	14,124	$	-	$	-	$	14,124	$	71,374	$	-	$	-	$	71,374
U.S. Treasuries		-		33,649		-		33,649
U.S. treasuries										-		28,465		-		28,465
U.S. government agency securities		-		95,731		-		95,731		-		47,472		-		47,472
Corporate debt securities		-		45,204		-		45,204		-		77,682		-		77,682
Total	$	14,124	$	174,584	$	-	$	188,708
Total assets									$	71,374	$	153,619	$	-	$	224,993
Liabilities
Warrant liability									$	-	$	-	$	31,737	$	31,737

	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
December 31, 2016
December 31, 2020
Assets
Money market funds	$	18,981	$	-	$	-	$	18,981	$	23,128	$	-	$	-	$	23,128
U.S. Treasuries		-		3,499		-		3,499
U.S. treasuries										-		32,579		-		32,579
U.S. government agency securities		-		30,437		-		30,437		-		40,321		-		40,321
Corporate debt securities		-		24,941		-		24,941		-		61,063		-		61,063
Total	$	18,981	$	58,877	$	-	$	77,858
Total assets									$	23,128	$	133,963	$	-	$	157,091
Liabilities
Warrant liability									$	-	$	-	$	10,736	$	10,736

Money market funds are highly liquid investments and are actively traded. The pricing information on these investment instruments is readily available and can be independently validated as of the measurement date. This approach results in the classification of these securities as Level 1 of the fair value hierarchy.

U.S. ~~Treasuries,~~treasuries, U.S. ~~Government~~government agency securities and corporate debt securities are measured at fair value using Level 2 inputs. We review trading activity and pricing for these investments as of each measurement date. When sufficient quoted pricing for identical securities is not available, we use market pricing and other observable market inputs for similar securities obtained from various ~~third party~~third-party data providers. These inputs represent quoted prices for similar assets in active markets or these inputs have been derived from observable market data. This approach results in the classification of these securities as Level 2 of the fair value hierarchy.

~~There~~Warrants were issued in connection with the underwritten public offering in August 2019 and are accounted for as a derivative liability at fair value. See Note 10. The fair value of the warrant liability is estimated using the Black-Scholes model which requires assumptions such as expected term, expected volatility and risk-free interest rate. These assumptions are subjective and require judgement to develop. Expected term is estimated using the full remaining contractual term of the warrants. We determine expected volatility based on our historical common stock price volatility. The warrant liability is classified as a Level 3 instrument as its value is based on unobservable inputs that are supported by little or no ~~transfers between Level 1 and Level 2 during~~market activity.

As of March 31, 2021, we used the ~~nine~~following key assumptions to estimate the fair value of warrant liability:

The following table provides a summary of changes in the fair value warrant liability for the three months ended ~~September 30, 2017.~~March 31, 2021 (in thousands):

The following table provides a reconciliation of cash, cash equivalents and ~~marketable securities~~restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statements of cash flows (in thousands):

Restricted cash balances relate to certificates of deposit issued as collateral to certain letters of credit issued as security to our facility leases. See Note 5.

Cash, cash equivalents and marketable securities consist of the following (in thousands):

	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
September 30, 2017
March 31, 2021
Cash and cash equivalents:
Cash										$	7,681	$	-	$	-		$	7,681
Money market funds											71,374		-		-			71,374
Total cash and cash equivalents											79,055		-		-			79,055
Marketable securities available-for-sale:
U.S. treasuries											28,448		17		-			28,465
U.S. government agency securities											47,462		17		(7	)		47,472
Corporate debt securities											77,687		8		(13	)		77,682
Total marketable securities available-for-sale											153,597		42		(20	)		153,619
Total cash, cash equivalents and marketable securities										$	232,652	$	42	$	(20	)	$	232,674
December 31, 2020
Cash and cash equivalents:
Cash	$	2,972	$	-	$	-		$	2,972	$	7,945	$	-	$	-		$	7,945
Money market funds		14,124		-		-			14,124		23,128		-		-			23,128
Corporate debt securities		3,000		-		-			3,000		1,000		-		-			1,000
Total cash and cash equivalents		20,096		-		-			20,096		32,073		-		-			32,073
Marketable securities available-for-sale:
U.S. Treasuries		33,664		-		(15	)		33,649
U.S. treasuries											32,548		31		-			32,579
U.S. government agency securities		95,748		-		(17	)		95,731		40,313		14		(6	)		40,321
Corporate debt securities		42,200		4		-			42,204		60,071		3		(11	)		60,063
Total marketable securities available-for-sale		171,612		4		(32	)		171,584		132,932		48		(17	)		132,963
Total cash, cash equivalents and marketable securities	$	191,708	$	4	$	(32	)	$	191,680	$	165,005	$	48	$	(17	)	$	165,036
December 31, 2016
Cash and cash equivalents:
Cash	$	3,557	$	-	$	-		$	3,557
Money market funds		18,981		-		-			18,981
U.S. government agency securities		1,751		-		-			1,751
Total cash and cash equivalents		24,289		-		-			24,289
Marketable securities available-for-sale:
U.S. Treasuries		3,499		-		-			3,499
U.S. government agency securities		28,685		3		(2	)		28,686
Corporate debt securities		24,938		5		(2	)		24,941
Total marketable securities available-for-sale		57,122		8		(4	)		57,126
Total cash, cash equivalents and marketable securities	$	81,411	$	8	$	(4	)	$	81,415

The maturities of our marketable securities available-for-sale are as follows (in thousands):

~~There were no realized gains or losses from the sale of marketable securities during the nine months ended September 30, 2017 and 2016.~~

We have classified our entire investment portfolio as available-for-sale and available for use in current operations and accordingly have classified all investments as short-term. Available-for-sale securities are carried at fair value based on inputs that are observable, either directly or indirectly, such as quoted market prices for similar securities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the securities, with unrealized gains and losses included in accumulated other comprehensive loss in stockholders’ equity. Realized gains and losses and declines in value, if any, judged to be other than temporary on available-for-sale securities are included in interest income or expense. The cost of securities sold is based on the specific identification method. Management assesses whether declines in the fair value of investment securities are other than temporary. In determining whether a decline is other than temporary, management considers the following factors:

There were 0 realized gains or losses from the ~~type~~sale of marketable securities during the three months ended March 31, 2021 and 2020. All investments ~~made.~~

with unrealized losses at March 31, 2021 have been in a loss position for less than twelve months. We do not intend to sell the investments that are in an unrealized loss position before recovery of their amortized cost basis. To date, there have been no0 declines in fair value that have been identified as other than temporary.

We lease our facilities in ~~Berkeley,~~Emeryville, California ~~(“Berkeley Lease”)~~ and Düsseldorf, ~~Germany (“Düsseldorf Lease”~~Germany.

In July 2019, we entered into a sublease for office space located at 2100 Powell Street, Emeryville, California (the “Powell Street Sublease”) ~~under operating leases that expire in December 2025~~ and ~~March 2023, respectively. In May 2017, we amended~~ the lease for our former corporate headquarters at 2929 Seventh Street, Berkeley, ~~Lease to extend~~California was terminated effective August 31, 2019. Under the ~~term~~terms of the ~~lease~~Powell Street Sublease, we are leasing 23,976 square feet at the rate of $3.90 per square foot, paid on a monthly basis. Rent is subject to ~~expire in December 2025~~scheduled annual increases and to terminate the lease of an adjacent building. The early termination of the adjacent building’s lease did not result in a termination fee as the lease rate under the amended Berkeley Lease was not above market rates. In addition, as a result of the early termination, we ~~reversed the deferred rent liability of $0.2 million against rent expense during the nine months ended September 30, 2017. The amended Berkeley Lease provides~~are responsible for ~~periods of escalating rent. The total cash payments over~~certain operating expenses and taxes throughout the life of the ~~Berkeley~~Powell Street Sublease. The Powell Street Sublease will continue until June 30, 2022. There is no option to extend the sublease term.

On September 17, 2018, we entered into a lease (“Horton Street Master Lease”) for office and laboratory space located at 5959 Horton Street, Emeryville, California (“Horton Street Premises”). Under the terms of the Horton Street Master Lease, we are leasing 75,662 square feet at the rate of $4.75 per square foot, paid on a monthly basis, starting on April 1, 2019 (“Commencement Date”). Rent is subject to scheduled annual increases, and ~~Dusseldorf~~we are also responsible for certain operating expenses and taxes throughout the life of Horton Street Master Lease. In connection with the Horton Street Master Lease, ~~are divided by~~we have received tenant improvement allowance totaling $8.1 million through March 31, 2021. The Horton Street Master Lease has an initial term of 12 years, following the ~~total number of months~~Commencement Date with an option to extend the lease for two successive five-year terms. The optional periods were not included in the lease ~~period~~term used in determining the right-of-use asset or the lease liability as we did not consider it reasonably certain that we would exercise the options. The operating lease right-of-use assets and liabilities on our March 31, 2021 condensed consolidated balance sheets primarily relate to the Horton Street Master Lease.

In connection with the organizational restructuring in May 2019, we did not occupy the Horton Street Premises and in July 2019, we entered into an agreement to sublease the Horton Street Premises to a third party (“Horton Street Sublease”). Under the terms of the Horton Street Sublease, we are subleasing the entire 75,662 rentable square feet at the rate of $5.50 per square foot, paid on a monthly basis. Rent is subject to scheduled annual increases and the ~~average rent~~subtenant (“Subtenant”) is ~~charged~~responsible for certain operating expenses and taxes throughout the life of the Horton Street Sublease. The Horton Street Sublease term is until March 31, 2031, unless earlier terminated, concurrent with the term of our Horton Street Master Lease. The Subtenant has no option to ~~expense each month during~~extend the ~~lease period.~~

~~Total net rent expense related to our operating leases~~sublease term. Sublease income for the three ~~month periods~~months ended ~~September 30, 2017~~March 31, 2021 and ~~2016, was $0.7~~2020 were $2.0 million and ~~$0.6~~$1.9 million, respectively. ~~Total net~~Sublease income is included in other income (expense) in our condensed consolidated statements of operations.

Under the terms of the Horton Street Master Lease, rent received from the Subtenant in excess of rent paid to the landlord shall be shared by paying the landlord 50% of the excess rent. The excess rent is considered a variable lease payment and the total estimated payments are being recognized as additional rent expense ~~related to our operating leases~~on a straight-line basis.

Cash paid for amounts included in the ~~nine month periods~~measurement of lease liabilities for each of the three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020 was $1.7 million and ~~$1.6 million, respectively. Deferred rent~~ was ~~$0.5 million and $0.3 million as~~included in change in lease liabilities in our condensed consolidated statement of ~~September 30, 2017 and December 31, 2016, respectively.~~cash flows.

The balance sheet classification of our operating ~~leases at September 30, 2017, are~~lease liabilities was as follows (in thousands):

At March 31, 2021, the maturities of our sublease income and operating lease liabilities were as follows (in thousands):

The weighted average remaining lease term and the weighted average discount rate used to determine the operating lease liability were as follows:

On February 20, 2018, we entered into a $175.0 million term loan agreement (“Loan Agreement”) with CRG Servicing LLC. We borrowed $100.0 million under the Loan Agreement at closing and the remaining $75.0 million in March 2019 (collectively, “Term Loans”). At our option, until September 30, 2023, a portion of the interest payments may be paid in kind, and thereby added to the principal. Through March 31, 2021, a portion of our interest was paid in kind, which increased the principal amount of the Term Loans. Included in our total contractual obligations of $188.1 million is the principal amount of $175.0 million, paid-in-kind interest of $5.9 million and the backend facility fee of $7.2 million. The Term Loans have a maturity date of December 31, 2023, unless earlier prepaid. See Note 7.

As of March 31, 2021, our material non-cancelable purchase and other commitments, for the supply of HEPLISAV-B, CpG 1018 and for clinical research, totaled $90.9 million.

During 2004, we established a letter of credit with Deutsche Bank as security for our Düsseldorf lease in the amount of €0.2 million (Euros). The letter of credit remained outstanding through March 31, 2021 and is collateralized by a certificate of deposit for €0.2 million, which has been included ~~above,~~in restricted cash in the consolidated balance sheets as of March 31, 2021.

In conjunction with our agreement with Symphony Dynamo, Inc. and Symphony Dynamo Holdings LLC (“Holdings”) in November 2009, we ~~have entered into contractual arrangements that obligate us~~agreed to make contingent cash payments to Holdings equal to 50% of the ~~contractual counterparties upon~~first $50 million from any upfront, pre-commercialization milestone or similar payments received by us from any agreement with any third party with respect to the ~~occurrence~~development and/or commercialization of ~~future events,~~cancer and hepatitis C therapies originally licensed to Symphony Dynamo, Inc., including aSD-101. In July 2020, we sold assets related to our SD-101 compound to TriSalus. We paid $2.5 million ~~payment due upon approval of HEPLISAV-B. In addition,~~to Holdings in ~~the normal course of operations, we have entered into license and other agreements and intend~~August 2020. We are obligated to ~~continue to seek additional rights relating to compounds or technologies in connection with our discovery, manufacturing and development programs. Under the terms~~pay Holdings 50% of the ~~agreements,~~contingent pre-commercialization milestone payments that we may ~~be required to pay future up-front fees, milestones and royalties on net sales~~receive under the Asset Purchase Agreement. NaN liability has been recorded under this agreement as of ~~products originating from the licensed technologies, if any, or other payments contingent upon the occurrence of future events that cannot reasonably be estimated.~~March 31, 2021.

We rely on and have entered into agreements with research institutions, contract research organizations and clinical investigators as well as clinical and commercial material manufacturers. These agreements are terminable by us upon written notice. Generally, we are liable only for actual effort expended by the organizations at any point in time during the contract through the notice period.Contingencies

From time to time, we may be involved in claims, suits, and proceedings arising from the ordinary course of our business, including actions with respect to intellectual property claims, commercial claims, and other matters. Such claims, suits, and

proceedings are inherently uncertain and their results cannot be predicted with certainty. Regardless of the outcome, such legal proceedings can have an adverse impact on us because of legal costs, diversion of management resources, and other factors. In addition, it is possible that a resolution of one or more such proceedings could result in substantial damages, fines, penalties or orders requiring a change in our business practices, which could in the future materially and adversely affect our financial position, ~~financial statements,~~ results of operations, or cash flows in a particular period.

In January 2021, we entered into an agreement (the “Agreement”) with Coalition for Epidemic Preparedness Innovations (“CEPI”) for the manufacture and reservation of a specified quantity of CpG 1018 (“CpG 1018 Materials”). The Agreement enables CEPI to direct the supply of CpG 1018 Materials to CEPI partner(s). CEPI partner(s) would purchase CpG 1018 Materials under separately negotiated agreements. The Agreement also allows us to sell CpG 1018 Materials to third-parties if not purchased by a CEPI partner within a two-year term.

In exchange for reserving CpG 1018 Materials and agreeing to sell CpG 1018 Materials to CEPI partner(s) at pre-negotiated prices, CEPI has agreed to provide advance payments in the form of an interest-free, unsecured, forgivable loan of up to $99.0 million (the “Advance Payments”). We are obligated to repay the Advance Payments, in proportion to quantity sold, if and to the extent we receive payments from sales of CpG 1018 Materials reserved under the Agreement. If the vaccine programs pursued by CEPI partner(s) are unsuccessful and no alternative use is found for CpG 1018 Materials reserved under the Agreement, the applicable Advance Payments will be forgiven at the end of the two-year term.

We have determined that the accounting of the Advance Payments is under the scope of ASC 606. The Advance Payments are to cover the costs of manufacture and to reserve CpG 1018 Materials, which is an output of our ordinary activities. As such, the Advance Payments are classified as deferred revenue in our condensed consolidated balance sheets.

In February 2021, we received the first Advance Payment of $45.8 million from CEPI which we recorded as long-term deferred revenue. In March 2021, CEPI executed their option to reserve additional quantity of CpG 1018 Materials. Upon the exercise, we recorded $18.6 million of accounts receivable and long-term deferred revenue. As of March 31, 2021, long-term deferred revenue balance related to CEPI’s Advance Payments was $64.4 million. No revenue was recognized for the three months ended March 31, 2021.

In April 2020, we entered into a ~~Stipulation~~Collaboration Agreement with Valneva Scotland Limited (“Valneva”) to provide CpG 1018 adjuvant for use in the development of ~~Settlement~~Valneva’s COVID-19 vaccine candidate. The Collaboration Agreement was amended in July 2020, to ~~settle~~provide additional quantities of CpG 1018 adjuvant. In September 2020, we entered into a Supply Agreement (“Supply Agreement”) with Valneva to manufacture and supply specified quantities of CpG 1018 adjuvant for use in the ~~case entitled~~commercialization of Valneva's COVID-19 vaccine candidate.

We concluded that the Collaboration Agreement and the Supply Agreement were entered into at or near the same time, with the same customer and were negotiated as a package with a single commercial objective, that is the provision of CpG 1018 adjuvant to Valneva. Therefore, the Collaboration Agreement and the Supply Agreement should be combined and accounted for as a single arrangement.

Pursuant to the Supply Agreement, we receive advanced payments to purchase specified quantities of CpG 1018 adjuvant which are recorded as deferred revenue until we deliver the product to Valneva. In ~~re Dynavax Technologies Securities Litigation filed in 2013. The settlement,~~the first quarter of 2021, we recognized CpG 1018 product revenue, net of $64.9 million, of which $14.2 million was approved by the U.S. District Court for the Northern District of California on February 6, 2017, provided for a payment of $4.1 million by us and results in a dismissal and release of all claims against all defendants, including us. The settlement was paid by our insurers in February 2017. The $4.1 million accrued liability and corresponding $4.1 million prepaid expense and other current asset reflected in our consolidated balance sheetreported as deferred revenue as of December 31, ~~2016~~2020. As of March 31, 2021, deferred revenue related to the Supply Agreement was $51.0 million.

On February 20, 2018, we entered into a $175.0 million Loan Agreement with CRG Servicing LLC. Net proceeds under the Loan Agreement were ~~released during~~$173.3 million. The Term Loans under the ~~first quarter~~Loan Agreement bear interest at a rate equal to 9.5% per annum. At March 31, 2021, the effective interest rate was 10.3%. At our option, until September 30, 2023, a portion of ~~2017.~~

~~In February 2017, we tentatively agreed to a settlement for derivative complaints filed in 2013, all of which will~~the interest payments may be paid byin kind, and thereby added to the principal. Through March 31, 2021, a portion of our ~~insurers. We recorded an accrual~~interest was paid in kind, which increased the principal amount of ~~$0.9~~the Term Loans to $180.9 million, ~~reflected in accrued liabilities in the consolidated balance sheet as~~excluding debt discount of $1.0 million. The Term Loans have a maturity date of December 31, ~~2016~~2023, unless earlier prepaid. The Term Loans and do not expect any significant additional charges related to this matter. In addition, we record anticipated recoveries under existing insurance contracts when recovery is assured. We recorded a current asset in the amount of $0.9 million reflected in prepaid expenses and other current assets in the consolidated balance sheet as of December 31, 2016. Amounts recorded for contingencies can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions.paid-in-kind interest will be entirely payable at maturity.

~~5. Collaborative Research~~In August 2019, we entered into a second amendment to the Loan Agreement (the “Second Amendment”). The Second Amendment amended the annual net sales threshold for sales of HEPLISAV-B, revising the twelve-month measurement periods from beginning on January 1 of each year to beginning on July 1 of each year and ~~Development Agreements~~

Pursuant to a research collaboration and license agreement with AstraZeneca AB (“AstraZeneca”), as amended, we discovered and performed initial clinical development of AZD1419, a TLR9 agonist product candidate for the treatment of asthma.

Inending on June ~~2016, all of our remaining performance obligations under our agreement with AstraZeneca were completed. As no further performance obligations remain, we~~30, 2023. The Second Amendment also revised the ~~estimated period of performance of development work to June 2016 from September 2016, and recognized remaining deferred payments as revenue as of June 30, 2016. The revision~~fee payable upon partial prepayment or at maturity of the ~~performance period led~~Term Loans from 3% to 4% of the ~~recognition of an additional $0.8 million in collaboration revenue during 2016.~~aggregate principal amounts.

In November ~~2016, AstraZeneca initiated~~2020, we entered into a third amendment to the ~~Phase 2a trial~~Loan Agreement (the “Third Amendment”). The Third Amendment modified the annual net sales threshold requirement to include sales of ~~AZD1419~~CpG 1018 and it removed the annual net sales threshold requirement for the twelve-month period beginning July 1, 2020 and ending on June 30, 2021.

In January 2021, we entered into a fourth amendment to the Loan Agreement (the “Fourth Amendment”). The Fourth Amendment amended the Loan Agreement to, among other things, allow us to enter into the Agreement with CEPI and to perform our obligations thereunder.

The obligations under the Loan Agreement are secured, subject to customary permitted liens and other agreed upon exceptions, by a perfected security interest in ~~asthma patients. Upon AstraZeneca’s initiation~~(i) all tangible and intangible assets of the Phase 2a trial, we earned a milestone payment of $7.2 million, which was offset against $7.4 million in unused development funding previously advanced by AstraZeneca. We recognized the $7.2 million milestone as revenue during the fourth quarter of 2016. The remaining balance of unused development funding, netCompany and any future subsidiary guarantors, except for certain customary excluded property, and (ii) all of the ~~$7.2~~capital stock owned by the Company and such future subsidiary guarantors (limited, in the case of the stock of certain non-U.S. subsidiaries of the Company and certain U.S. subsidiaries substantially all of whose assets consist of equity interests in non-U.S. subsidiaries, to 65% of the capital stock of such subsidiaries, subject to certain exceptions). The obligations under the Loan Agreement will be guaranteed by each of the Company’s future direct and indirect subsidiaries (other than certain non-U.S. subsidiaries of the Company and certain U.S. subsidiaries substantially all of whose assets consist of equity interests in non-U.S. subsidiaries, subject to certain exceptions). The Loan Agreement contains customary covenants and requires us to comply with a $15.0 million ~~milestone payment, was $0.2~~daily minimum combined cash and investment balance covenant and a twelve-month period revenue requirement for sales of HEPLISAV-B and CpG 1018.

We recorded $4.7 million ~~which was paid during the first quarter~~ of ~~2017. No liability~~interest expense related to ~~unused development funding remains on~~ the ~~accompanying condensed consolidated balance sheet as of September 30, 2017.~~

~~Under the terms~~Term Loans during each of the ~~agreement, as amended, we are eligible to receive up to approximately $100 million in additional milestone payments, based on~~three months ended March 31, 2021 and 2020.

All of ~~certain development and regulatory objectives. Additionally, upon commercialization of AZD1419, we are eligible to receive tiered royalties ranging from the mid to high single-digits based on product~~our HEPLISAV-B sales ~~of any products originating from the collaboration. We have the option to co-promote~~were in the ~~United States products arising from~~U.S. For the ~~collaboration, if any. AstraZeneca has~~three months ended March 31, 2021 and 2020, our three largest Customers collectively represented approximately 75% and 68% of our HEPLISAV-B product revenue, respectively.

All of our CpG 1018 sales were outside the ~~right to sublicense its rights upon~~U.S. For the three months ended March 31, 2021, one customer represented approximately 87% of our ~~prior consent.~~CpG 1018 product revenue.

The following table summarizes balances and activity in HEPLISAV-B product revenue allowance and reserve categories for the ~~revenues earned under our agreement with AstraZeneca, included as collaboration revenue in our consolidated statements of operations~~three months ended March 31, 2021 (in thousands):

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Initial payment
$
-

$
-

$
-

$
521

Subsequent payment

-

-

-

1,953

Performance of research activities

-

-

-

104

Total
$
-

$
-

$
-

$
2,578

	Balance at Beginning of Period		Provisions related to current period sales		Credit or payments made during the period			Balance at End of Period
Three months ended March 31, 2021:
Accounts receivable reserves(1)	$	2,836	$	1,962	$	(2,469	)	$	2,329
Revenue reserve accruals(2)	$	6,040	$	1,641	$	(1,533	)	$	6,148

~~As of September 30, 2017 and December 31, 2016,~~ ~~no deferred revenue from the initial payment, subsequent payment or development funding payments remained.~~

Absent early termination, the agreement will expire when all of AstraZeneca’s payment obligations expire. AstraZeneca has the right to terminate the agreement at any time upon prior written notice and either party may terminate the agreement early upon written notice if the other party commits an uncured material breach of the agreement.

We compute net income (loss) per share of common stock using the two-class method required for participating securities. We consider Series B Preferred Stocks and warrants to be participating securities because holders of such shares have dividend rights in the event of our declaration of a dividend for common shares. Undistributed earnings allocated to participating securities are subtracted from net income (loss) in determining net income attributable to common stockholders.

Basic net ~~loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss~~income (loss) per share is computed by dividing ~~the~~ net ~~loss~~income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period and giving effect to all potentially dilutive common shares using the treasury-stock method. For purposes of this calculation, outstanding options and stock awards are considered to be potentially dilutive common shares and are only included in the calculation of diluted net loss per share when their effect is dilutive. Stock options and stock awards totaling approximately 6,120,000 and 4,680,000 shares of common stock as of September 30, 2017 and 2016, respectively, were excluded from the calculation of diluted net loss per share for the three and nine months ended September 30, 2017 and 2016, because the effect of their inclusion would have been anti-dilutive. For periods in which we have a net loss and no instruments are determined to be dilutive, such as the three and nine months ended September 30, 2017 and 2016, basic and diluted net loss per share are the same.

~~As of September 30, 2017, there were 60,587,000~~ shares of our common stock outstanding.

~~In August 2017, we completed an underwritten public offering~~For the calculation of ~~5,750,000~~diluted net income (loss) per share, net income (loss) attributable to common stockholders for basic net income (loss) per share is adjusted by the effect of dilutive securities, including awards under our equity compensation plans and change in fair value of warrant liability. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the resulting net income (loss) attributable to common stockholders by the weighted-average number of fully diluted common shares outstanding.

The numerators and denominators of the basic and diluted net income (loss) per share computations for our common stock ~~and received net proceeds of approximately $80.8 million.~~

~~During 2017, we sold 15,997,202~~ ~~shares of our common stock and received net cash proceeds of $88.2 million pursuant to an At the Market Agreement that terminated in June 2017. See Note 10.~~

~~Option activity under our stock-based compensation plans during the nine months ended September 30, 2017 was~~are calculated as follows (in thousands, except per share amounts):

Shares Underlying Outstanding Options
(in thousands)

Weighted-Average Exercise
Price Per Share

Weighted-Average Remaining Contractual Term (years)

Aggregate Intrinsic Value
(in thousands)

Balance at December 31, 2016

3,975

$
21.38

Options granted

329

$
6.99

Options exercised

(50
)

$
11.82

Options cancelled:

Options forfeited (unvested)

(351
)

$
18.43

Options cancelled (vested)

(217
)

$
29.11

Balance at September 30, 2017

3,686

$
20.05

5.79

$
13,420

Vested and expected to vest at September 30, 2017

3,671

$
20.06

5.79

$
13,390

Exercisable at September 30, 2017

2,394

$
22.18

5.40

$
5,948

	Three Months Ended
	March 31,
	2021			2020
Numerator
Net income (loss)	$	891		$	(12,595	)
Less: undistributed earnings allocated to participating securities		(70	)		-
Net income (loss) attributable to common stockholders, basic	$	821		$	(12,595	)
Less: Removal of change in fair value of warrant liability		-			(8,610	)
Net income (loss) attributable to common stockholders, diluted	$	821		$	(21,205	)
Denominator
Weighted average common stock outstanding, basic		112,035			85,477
Effect of dilutive shares:
Stock-based compensation plans		1,434			-
Effect of dilutive warrants		-			171
Weighted average common stock outstanding, diluted		113,469			85,648

The following were excluded from the calculation of diluted net income (loss) per share as the effect of their inclusion would have been anti-dilutive.

As of March 31, 2021, there were 114,563,212 shares of our common stock outstanding.

In ~~June 2017, stockholders~~August 2019, we sold (i) 18,525,000 shares of our common stock, par value $0.001 per share, (ii) 4,840 shares of our Series B Convertible Preferred Stock, par value $0.001 per share (“Series B Preferred Stock”) and (iii) warrants to purchase up to an aggregate of 5,841,250 shares of our common stock in an underwritten public offering (the “Offering”). Each share of common stock was sold together with a warrant to purchase 0.25 shares of common stock, at a combined price of $3.00 per share of common stock and the accompanying warrant. Each share of Series B Preferred Stock was sold together with a warrant to purchase 250 shares of

common stock, at a combined price of $3,000 per share and the accompanying warrant. Proceeds from the Offering were approximately $65.6 million, net of issuance costs of $4.5 million.

Investment funds associated with Bain Capital Life Sciences Investors, LLC (“Bain Capital Life Sciences”) purchased approximately $35.0 million of common stock, Series B Preferred Stock and warrants in the Offering at the public offering price. Pursuant to the Offering, (i) Bain Capital Life Sciences Fund, L.P. purchased 6,826,266 shares of common stock, 3,756 shares of Series B Preferred Stock and warrants to purchase 2,645,566 shares of common stock for a total purchase price of approximately $31.7 million and (ii) BCIP Life Sciences Associates, LP purchased 698,734 shares of common stock, 384 shares of Series B Preferred Stock and warrants to purchase 270,684 shares of common stock for a total purchase price of approximately $3.2 million (together, “Bain Life Sciences Funds”). Bain Capital Life Sciences is the general partner of Bain Life Sciences Funds. The participation by these investors was on the same terms as the other investors in the Offering.

Following the Offering, Andrew A. F. Hack, M.D., Ph.D and Managing Director of Bain Capital Life Sciences (a related party), was appointed to our board of directors.

On March 11, 2020, we entered into a warrant exchange agreement with Bain Life Sciences Funds pursuant to which we agreed that we would, upon future notice from Bain Life Sciences Funds, exchange all or a portion of the common stock warrants held by Bain Life Sciences Funds for warrants to purchase a new Series C convertible preferred stock (“Series C Warrants”). Each share of Series C convertible preferred stock would be convertible into 1,000 shares of common stock, with a conversion price of $4.50 and would have substantially identical rights to our Series B Preferred Stock. As of March 31, 2021, Bain Life Sciences Funds have not exercised their rights to exchange common stock warrants with Series C Warrants.

In May 2020, we completed an underwritten public offering of 16,100,000 shares of our common stock, par value $0.001 per share, including 2,100,000 shares sold pursuant to the full exercise of an overallotment option previously granted to the underwriters. All of the shares were offered at a price to the public of $5.00 per share. The net proceeds to us from this offering were approximately $75.4 million, after deducting the underwriting discount and other estimated offering expenses payable by us. Bain Life Sciences Funds purchased 1,000,000 shares of common stock in the underwritten public offering. Bain Capital Life Sciences is the general partner of Bain Life Sciences Funds. The participation by Bain Life Sciences Funds was on the same terms as the other investors in the offering.

On August 6, 2020, we entered into an at-the-market Sales Agreement (the “2020 ATM Agreement”) with Cowen and Company, ~~approved~~LLC (“Cowen”), under which we may offer and sell from time to time, at our sole discretion, shares of our common stock having an aggregate offering price of up to $150 million through Cowen as our sales agent. We agreed to pay Cowen a ~~proposal~~commission of up to 3% of the gross sales proceeds of any common stock sold through Cowen under the 2020 ATM Agreement. For the three months ended March 31, 2021, we received net cash proceeds of $28.2 million resulting from sales of 2,878,567 shares of our common stock pursuant to the 2020 ATM Agreement. As of March 31, 2021, we had $120.5 million remaining under the 2020 ATM Agreement.

As of March 31, 2021, there were 4,140 shares of Series B Preferred Stock outstanding.

Each share of Series B Preferred Stock is convertible into 1,000 shares of common stock at any time at the holder’s option. However, the holder is prohibited from converting the Series B Preferred Stock into shares of common stock if, as a result of such conversion, the holder and its affiliates would own more than 4.99% of the total number of shares of common stock then issued and outstanding, which percentage may be changed at the holders’ election to a higher or lower percentage (not to exceed 19.99%) upon 61 days’ notice to the Company. In the event of liquidation, dissolution, or winding up, the holder of Series B Preferred Stock will receive payment on shares of Series B Preferred Stock (determined on an as-converted to common stock basis) equal to the amount that would be paid on our common stock. Shares of Series B Preferred Stock generally have no voting rights, except as required by law and except that the consent of holders of a majority of the outstanding Series B Preferred Stock is required to amend the terms of the Series B Preferred Stock. Holders of Series B Preferred Stock are not entitled to receive any dividends, unless and until specifically declared by our board of directors. The Series B Preferred Stock ranks on parity with our common stock as to distributions of assets upon liquidation, dissolution or winding up. The Series B Preferred Stock may rank senior to, on parity with or junior to any class or series of capital stock created in the future depending upon the specific terms of such future stock issuance.

The fair value of the common stock into which the Series B Preferred Stock is convertible exceeded the allocated purchase price of the Series B Preferred Stock by $3.3 million on the date of issuance, for which we recorded a deemed dividend. We recognized a deemed dividend equal to the number of shares of common stock into which the Series B Preferred Stock is convertible multiplied by the difference between the value of the common stock and the Series B Preferred Stock conversion price per share on the date of issuance, which is the date the stock first became convertible. The dividend was reflected as a one-time, non-cash, deemed dividend to the holders of Series B Preferred Stock on the date of issuance.

In the first quarter of 2021, 750,308 of our common stock warrants were exercised. As of March 31, 2021, the following common stock warrants were outstanding:

Warrants were exercisable upon issuance. The holder is prohibited from exercising these warrants if, as a result of such exercise, the holder and its affiliates, would own more than 4.99% of the total number of shares of common stock then issued and outstanding, which percentage may be changed at the holders’ election to a higher or lower percentage (not to exceed 19.99%) upon 61 days’ notice to the Company.

The warrants contain provisions that may obligate us to repurchase them for an amount that does not represent fair value in the event of a change of control. Due to this provision, the warrants do not meet the criteria to be considered indexed to our own stock. Accordingly, we recorded the warrants as a derivative liability at fair value of $7.4 million on the issuance date, which was estimated using the Black-Scholes model.

The warrants will be revalued at each reporting period using the Black-Scholes model and the change in the fair value of the warrants will recognized as other income (expense) in the condensed consolidated statements of operations. At March 31, 2021, the estimated fair value of warrant liability was $31.7 million. For the three months ended March 31, 2021, we recognized the increase in the estimated fair value of warrant liability of $25.6 million as expense in other income (expense) in our condensed consolidated statements of operations.

In January 2021, we adopted the Dynavax Technologies Corporation 2021 Inducement Award Plan (“2021 Inducement Plan”), pursuant to which we reserved 1,500,000 shares of common stock for issuance under the plan to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company.

As of March 31, 2021, the 2018 Equity Incentive Plan, as amended, (“Amended 2018 EIP”), the 2021 Inducement Plan and the Amended and Restated 2014 Employee Stock Purchase Plan are our active plans. Under the Amended 2018 EIP, the aggregate number of shares of our common stock ~~authorized~~that may be issued to employees and directors (subject to adjustment for ~~issuance under the 2011 Equity Incentive Plan, as amended, by 1,600,000 shares.~~

~~Restricted stock unit activity under our stock-based compensation plans during the nine months ended September 30, 2017 was as follows (in thousands except per share amounts):~~

~~The aggregate intrinsic value of the restricted stock units outstanding as of September 30, 2017, based on our stock price on that date, was $52.5 million.~~ ~~Fair value of restricted stock units~~certain changes in capitalization) is ~~determined at the date of grant using our closing stock price.~~

As of September 30, 2017, approximately 21,000 shares underlying stock options and approximately 63,000 restricted stock unit awards with performance-based vesting criteria were outstanding. Vesting criteria for these restricted stock units awards with performance-based awards were not probable as of September 30, 2017.

Under our stock-based compensation plans, option awards generally vest over a three or four-year period contingent upon continuous service, and expire seven to ten years from the date of grant (or earlier upon termination of continuous service). Option activity under our stock-based compensation plans during the three months ended March 31, 2021 was as follows (in thousands except per share amounts):

	Shares Underlying Outstanding Options			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Balance at December 31, 2020		8,505		$	11.57
Options granted		1,996			9.36
Options exercised		(119	)		4.16
Options cancelled:
Options forfeited (unvested)		(171	)		7.50
Options expired (vested)		(164	)		19.67
Balance at March 31, 2021		10,047		$	11.15		4.26	$	17,816
Vested and expected to vest at March 31, 2021		9,693		$	11.26		4.18	$	17,184
Exercisable at March 31, 2021		5,967		$	13.44		3.05	$	8,975

Restricted stock unit activity under our stock-based compensation plans during the three months ended March 31, 2021 was as follows (in thousands except per share amounts):

We granted performance-based restricted stock unit (“PSU”) to certain executives in February 2021. These PSUs vest upon a specified market condition. The summary of PSU activities for the three months ended March 31, 2021 is as follows:

The fair value-based measurement of each option is estimated on the date of grant using the Black-Scholes option valuation model.

The fair ~~value-based measurements and~~value of each RSU is determined at the date of grant using our closing stock price. The fair value of each PSU is estimated using the Monte Carlo simulation method on the date of grant. The weighted-average assumptions used in the calculations of these fair value measurements are as follows:

	Stock Options						Stock Options						Employee Stock Purchase Plan						Stock Options						Market-Based Performance Stock Unit (“PSUs”)
	Three Months Ended						Nine Months Ended						Nine Months Ended						Three Months Ended						Three Months Ended
	September 30,						September 30,						September 30,						March 31,						March 31, 2021
	2017			2016			2017			2016			2017			2016			2021			2020
Weighted-average fair value	$	8.11		$	8.90		$	4.73		$	9.67		$	3.05		$	7.86
Weighted-average fair value per share																			$	6.72		$	3.58		$	8.40
Risk-free interest rate		1.9	%		1.1	%		1.9	%		1.4	%		1.0	%		0.6	%		0.5	%		1.4	%	From 0.03% to 1.92%
Expected life (in years)		4.5			4.5			4.5			4.9			1.2			1.2			4.5			4.5			2.9
Volatility		0.9			0.7			0.9			0.7			1.0			0.6			1.0			0.9			0.9

The components of stock-based compensation expense were as follows (in thousands):

Compensation expense is based on awards ultimately expected to vest and reflects estimated forfeitures. ~~The components~~Stock-based compensation for the three months ended March 31, 2020 included reversal of ~~stock-based compensation expense were (in thousands):~~

~~As of September 30, 2017, the total unrecognized compensation cost~~expenses related to ~~non-vested~~cancellation of certain equity ~~awards~~grants in the first quarter of 2020.

On May 3, 2021, we entered into the first Amendment (the “Amendment”) to the Agreement with CEPI. The Amendment provides for the manufacture and reservation of an additional specified quantity of CpG 1018 adjuvant (the “Extra Reserved Material”) and helps to accelerate the Company’s efforts to further increase its available inventory of CpG 1018 adjuvant. In exchange for the Company’s reserving additional CpG 1018 adjuvant pursuant to the Amendment, in addition to the $99.0 million previously provided under the Agreement, CEPI has agreed to provide advance payments in the form of an interest-free, unsecured, forgivable loan in an amount equivalent to the anticipated manufacturing costs of all material reserved by CEPI, which, for the Extra Reserved Material covered by the Amendment, is up to an additional $77.4 million, for a total of CEPI’s funding under the Agreement of up to $176.4 million. We intend to establish an additional qualified source of supply for CpG 1018 adjuvant, including ~~all awards with time-based vesting amounted to $22.0 million,~~a portion of the Extra Reserved Material, which is expected to be recognized over the remaining weighted-average vesting period of 1.7 years. Additionally, as of September 30, 2017, the total unrecognized compensation cost related to equity awards with performance-based vesting criteria not deemed probable of vesting amounted to $0.4 million.

The 2014 Employee Stock Purchase Plan, as amended, (the “Purchase Plan”) provides for the purchase of common stock by eligible employees and became effective on May 28, 2014. The purchase price per share is the lesser of (i) 85% of the fair market value of the common stock on the commencement of the offer period (generally, the sixteenth day in February or August) or (ii) 85% of the fair market value of the common stock on the exercise date, which is the last day of a purchase period (generally, the fifteenth day in February or August). For the nine months ended September 30, 2017, employees have acquired 84,247 shares of our common stock under the Purchase Plan and 98,227 shares of our common stock remained available for ~~future purchases under the Purchase Plan.~~

In January 2017, we implemented organizational restructuring and cost reduction plans to align around our immuno-oncology business while allowing us to advance HEPLISAV-B through the FDA review and approval process. To achieve these cost reductions, we suspended manufacturing activities, commercial preparations and other long term investment related to HEPLISAV-B and reduced our global workforce by approximately 40 percent.

~~In the first quarter of 2017 we recorded charges of $2.8 million related to severance, other termination benefits and outplacement services. There were no additional charges~~release during ~~the three months ended June 30, 2017 and September 30, 2017.~~ ~~Of that amount, we paid $2.7 million during the nine month period ended September 30, 2017 and expect to pay the remaining amount in~~ the fourth quarter of ~~2017.~~2021.

The outstanding restructuring liabilities are included in accrued liabilities on the condensed consolidated balance sheets. As of September 30, 2017, the components of the liabilities were as follows (in thousands):Amendment to CRG Loan Agreement

~~In November 2017,~~On May 3, 2021, we entered into ~~an At~~a fifth amendment to the ~~Market sales agreement under which~~ ~~we can offer~~Loan Agreement with CRG (the “Fifth Amendment”). The Fifth Amendment amended the Loan Agreement to, among other things, allow us to enter into the Amendment with CEPI and ~~sell~~to perform our ~~common stock from time to time up to aggregate sales proceeds of $150 million.~~obligations thereunder.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve a number of risks and uncertainties. Our actual results could differ materially from those indicated by forward-looking statements as a result of various factors, including but not limited to, the period for which we estimate our cash resources are sufficient, the availability of additional funds, as well as those set forth under “Risk Factors” and those that may be identified from time to time in our reports and registration statements filed with the Securities and Exchange Commission.

The following discussion and analysis is intended to provide an investor with a narrative of our financial results and an evaluation of our financial condition and results of operations. This discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and related Notes included in Item 1 of this Quarterly Report on Form 10-Q and the Consolidated Financial Statements and the related Notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2020.

We are a ~~clinical-stage immunotherapy~~commercial stage biopharmaceutical company focused on ~~leveraging~~developing and commercializing novel vaccines. Our first marketed product, HEPLISAV-B® (Hepatitis B Vaccine (Recombinant), Adjuvanted) is approved in the ~~power~~United States and European Union for prevention of infection caused by all known subtypes of hepatitis B virus in adults age 18 years and older. We also manufacture and sell CpG 1018, the ~~body’s innate and adaptive immune responses through toll-like receptor (“TLR”) stimulation. Our current product candidates~~adjuvant used in HEPLISAV-B. We are ~~being investigated for use~~working to develop CpG 1018 as a premier vaccine adjuvant through research collaborations and partnerships. Current collaborations are focused on adjuvanted vaccines for COVID-19, pertussis and universal influenza.

In Phase 3 trials, HEPLISAV-B demonstrated faster and higher rates of protection with two doses in one month compared to another currently approved hepatitis B vaccine which requires three doses over six months, with a similar safety profile. HEPLISAV-B is the only two-dose hepatitis B vaccine for adults approved in the U.S.

We have worldwide commercial rights to HEPLISAV-B and we market it in the United States. There are three other vaccines approved for the prevention of hepatitis B in the U.S.: Engerix-B and Twinrix® from GlaxoSmithKline plc and Recombivax-HB® from Merck & Co. In addition, we received Marketing Authorization approval of HEPLISAV-B in ~~multiple cancer indications.~~

~~HEPLISAV-B~~ ~~is our investigational adult~~February 2021 from the European Commission following a positive recommendation in December 2020 from the European Medicines Agency (“EMA”) Committee for Medicinal Products (“CHMP”) for Human Use for prevention of infection caused by all known subtypes of hepatitis B ~~vaccine.~~virus in adults age 18 years and older. We ~~resubmitted our application~~expect to launch HEPLISAV-B in the European Union in late 2021, initially focusing on one or a few key countries where it would be commercially feasible to market HEPLISAV-B on our own or through third-parties.

All of our HEPLISAV-B sales are to certain wholesalers and specialty distributors in the U.S. whose principal customers include independent hospitals and clinics, integrated delivery networks, public health clinics and prisons, the Departments of Defense and Veterans Affairs and retail pharmacies. For the three months ended March 31, 2021, HEPLISAV-B product revenue, net was $8.3 million.

In the third quarter of 2020, we commenced selling our CpG 1018 adjuvant to certain of our collaboration partners for their use in development and/or commercialization of COVID-19 vaccines. For the three months ended March 31, 2021, CpG 1018 product revenue, net was $74.6 million.

In January 2021, we entered into an agreement with Coalition for Epidemic Preparedness Innovations (“CEPI”) for the manufacture and reservation of a specified quantity of CpG 1018. The agreement enables CEPI to direct the supply of CpG 1018 to CEPI partner(s). In exchange for reserving CpG 1018, CEPI has agreed to provide advance payments in the form of an interest-free, unsecured, forgivable loan of up to $99.0 million. If the vaccine programs pursued by CEPI partner(s) are unsuccessful and no alternative use is found for CpG 1018 reserved under the agreement, the applicable advance payments will be forgiven. No revenue was recognized for the three months ended March 31, 2021 under the CEPI agreement.

On May 3, 2021, we entered into the first Amendment (the “Amendment”) to the ~~FDA~~agreement with CEPI. The Amendment provides for the manufacture and reservation of an additional specified quantity of CpG 1018 adjuvant (the “Extra Reserved Material”) and helps to accelerate our efforts to further increase our available inventory of CpG 1018 adjuvant. In exchange for our reserving additional CpG 1018 adjuvant pursuant to the Amendment, CEPI has agreed to provide advance payments in ~~February 2017 and on July 28, 2017~~ the ~~FDA’s~~ ~~Vaccines and Related Biological Products Advisory Committee (“VRBPAC”) voted 12~~form of an interest-free, unsecured, forgivable loan in an amount equivalent to ~~1 (with 3 abstentions) that~~ the ~~safety data~~anticipated manufacturing costs of all material reserved by CEPI, which, for ~~HEPLISAV-B support licensure~~the Extra Reserved Material covered by the Amendment, is up to an additional $77.4 million, for ~~immunization against hepatitis B infection in adults 18 years~~a total of ~~age and older and provided commentary on~~CEPI’s funding under the ~~design~~agreement of ~~our proposed post-marketing safety study~~up to $176.4 million. We intend to establish an additional qualified source of supply for HEPLISAV-B. A prior VRBPAC panel voted 13 to 1 that the immunogenicity data for HEPLISAV-B support approval and thus the July 2017 VRBPAC was only asked to vote on safety. The FDA is not bound by VRBPAC’s recommendations regarding safety and efficacy, but takes its advice into consideration when reviewing marketing applications. Since the July VRBPAC meeting, we have worked with FDA on completing the detailsCpG 1018 adjuvant, including a portion of the ~~post-marketing study and other steps required~~Extra Reserved Material, which is expected to be available for an approval decision. We have reinitiated preparations for the launch of HEPLISAV-B, including resumption of operations at our manufacturing plant in Dusseldorf, Germany, and hiring of personnel and retention of consultants and vendors for commercialization related infrastructure. HEPLISAV-B has a Prescription Drug User Fee Act (“PDUFA”) date of November 9, 2017. If approved by the PDUFA date, costs related to these activities will increase inrelease during the fourth quarter of ~~2017~~2021.

The ongoing COVID-19 global pandemic has presented a substantial public health and ~~into 2018~~economic challenge around the world and is affecting our employees, patients, communities and business operations, as well as the U.S. economy and financial markets. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19 virus, the actions taken to contain it or treat its impact and the economic impact on local, regional, national and international markets. We continue to assess the potential impact of the COVID-19 pandemic on our business and operations.

To date, we ~~prepare for commercial launch~~and our distribution partners have been able to continue to supply HEPLISAV-B throughout the United States, and currently do not anticipate any interruptions in supply. Due to the ongoing COVID-19 global pandemic, most medical centers have restricted access to their facilities and focused on providing care to only the most severely affected patients beginning in March 2020. As states began phasing out restrictions in the middle of 2020, medical centers have been operating under limited capacity or with strict social distancing rules. This has resulted in significantly reduced utilization of adult vaccines since the end of the first quarter of ~~2018.~~2020, including HEPLISAV-B. This reduced utilization has significantly impacted sales of HEPLISAV-B and is likely to continue to impact us until restrictions affecting us are lifted and the U.S. returns to more normal conditions.

We are continuing to closely monitor the impact of the COVID-19 pandemic on our business and are taking proactive efforts to help protect the health and safety of our workforce, patients and healthcare professionals, and to continue our business operations and advance our goal of bringing important new vaccines to patients as rapidly as possible. We have implemented measures to help protect the health and safety of our workforce, including a mandatory work-from-home policy for employees who can perform their jobs offsite. In the conduct of our business activities, we are also taking actions to help protect the safety of patients and healthcare professionals. Our lead cancer immunotherapy candidate is SD-101, a C Class CpG TLR9 agonist that was selected for characteristics optimal for treatment of cancer, including high interferon induction. Directly injecting SD-101 into a tumor site optimizes its effect by ensuring proximity to tumor-specific antigens. In animal models, SD-101 demonstrated significant anti-tumor effectsfield-based personnel have reduced in-person customer interactions in healthcare settings and are primarily using electronic communication, such as emails, phone calls and video conferences. Many health care and contracting professionals at ~~both the injected site~~hospitals and ~~at distant sites. We~~other medical institutions with whom our field-based personnel interact are conducting a ~~research~~greater proportion of their work from their homes and ~~clinical program intended~~are facing additional demands on their time during the COVID-19 pandemic. We expect that the different quality of electronic interactions as compared with in-person interactions, as well as the reduced quantity of interactions during the COVID-19 pandemic, could reduce the effectiveness of our sales personnel, our customers’ procurement activities and those of our collaborators, which could negatively affect our product sales.

Our HEPLISAV-B post-marketing follow-up has been completed. We conducted an observational comparative study of HEPLISAV-B to Engerix-B to assess ~~potential efficacy~~occurrence of ~~SD-101~~acute myocardial infarction, or AMI. This study was initiated in ~~a range~~August 2018, concluded in November 2020 and final results were presented in April 2021. The results provided evidence that there is no increased risk of ~~tumors and in combination~~AMI associated with ~~a range of treatments, including checkpoint inhibitors and other therapies. In June 2017, we presented updated~~vaccination with HEPLISAV-B compared to Engerix-B. We expect data ~~at the American Society of Clinical Oncology Annual Meeting in patients with metastatic melanoma~~ from the ~~dose-escalation phase~~autoimmune portion of our observational study to be available by the end of 2021. Our HEPLISAV-B dialysis study was also able to continue, because the dialysis treatment has been classified under “essential travel” exemptions. Final immunogenicity results of our dialysis study were presented in April 2021 and we expect the safety follow up to be completed during the fourth quarter of 2021. However, if the COVID-19 pandemic continues to persist for an ~~ongoing Phase 1/2 study~~extended period of ~~SD-101 in combination with Keytruda® (pembrolizumab), an anti-PD-1 therapy developed by Merck, known as MSD outside the United States~~time, we could experience significant disruptions to these or other studies, which could adversely affect our business and ~~Canada. Results in patients naïve to anti-PD-1 or anti-PDL-1 treatment showed an overall response rate of 100 percent (seven of seven evaluable patients) and a complete response rate of 29 percent.~~ growth prospects.

The ~~combination~~extent of the ~~two drugs was generally well tolerated with no dose-limiting toxicities.~~

~~We are developing DV281, a novel investigational TLR9 agonist designed specifically for focused delivery to primary lung tumors and lung metastases. In October 2017 we announced initiation~~impact of ~~dosing in a Phase 1b study of inhaled DV281, in combination with anti-PD-1 therapy, in patients with non small cell lung cancer.~~

~~In addition to~~ the research programs we are conducting and product candidates we are developing, we discovered and licensed to AstraZeneca AB (“AstraZeneca”) an inhaled TLR agonist, AZD1419, which is being developed by AstraZeneca for the treatment of asthma pursuant to a collaboration and license agreement. AstraZeneca initiated a Phase 2a trial in 2016.

~~Our revenues have historically consisted of amounts earned from collaborations, grants and fees from services and licenses. Product revenue will depend~~COVID-19 pandemic on our ability to ~~receive regulatory approvals for, and successfully market, our drug candidates. We have yet to~~ generate ~~any revenues from product~~ sales and ~~have recorded an accumulated deficit~~revenues, our regulatory efforts, our corporate development objectives and the value of ~~$879.9 million as~~and market for our common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time. Because of ~~September 30, 2017. These losses have resulted principally from costs incurred in connection with research and development activities, compensation~~the above and other ~~related personnel costs~~factors, our results of operations may vary substantially from year to year and ~~general corporate expenses. Research~~from quarter to quarter and, ~~development activities include costs~~as a result, we believe that period-to-period comparisons of outside contracted services including clinical trial costs, manufacturing and process development costs, research costs and other consulting services. Salaries and other personnel-related costs include non-cash stock-based compensation associated with options and other equity awards granted to employees. General corporate expenses include outside services such as accounting, consulting, business development, commercial, investor relations, insurance services and legal costs. Ourour operating results may ~~fluctuate substantially from period to period principally~~not be meaningful and should not be relied upon as ~~a result~~being indicative of ~~the timing of preclinical activities and other activities related to clinical trials for~~ our ~~drug candidates.~~

~~Since our inception, we have relied primarily~~future performance. For additional information on the ~~proceeds from public~~various current and ~~private sales~~future potential risks posed by the COVID-19 pandemic, please read Item 1A. Risk Factors, included herein.

We have been actively pursuing opportunities to collaborate with other organizations on the development of a COVID-19 vaccine, by leveraging our toll-like receptor 9 (“TLR9”) agonist adjuvant, CpG 1018, which is the adjuvant used in our HEPLISAV-B product. In 2020, we announced multiple collaborations focused on COVID-19 and we continue to work to identify other programs where CpG 1018 can be utilized to enhance the immune response to a coronavirus vaccine. We and our contract manufacturers are developing plans to help scale-up activities to support pandemic-level of production of our equity securities, government grants and revenues from collaboration agreements to fund our operations. We expect spending to increase in connection with the development and manufacturing of our product candidates, particularly SD-101 and DV281, our lead investigational cancer immunotherapeutic product candidates, andCpG 1018 adjuvant, as necessary to support ~~commercialization of HEPLISAV-B if it is approved, as well as human clinical trials for our other product candidates~~these and ~~additional applications and advancement of our technology. In order to continue these activities,~~any future collaborations. There can be no assurance we will ~~need additional funding. This may occur through strategic alliance and licensing arrangements and/~~be successful in our efforts to help develop or future public or private debt and equity financings. If adequate funds are not available in the future, we may need to delay, reduce the scope of or put on hold one or more development programs while we seek strategic alternatives.supply an adjuvanted COVID-19 vaccine.

The accompanying discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements and the related disclosures, which have been prepared in accordance with U.S. generally accepted

accounting principles. The preparation of these financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenues and expenses for the periods presented. On an ongoing basis, we evaluate our estimates, assumptions and judgments described below that have the greatest potential impact on our condensed consolidated financial statements, including those related to revenue recognition, research and development activities, stock-based compensation, inventories and ~~stock-based compensation.~~leases. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Accounting assumptions and estimates are inherently uncertain and actual results may differ materially from these estimates under different assumptions or conditions.

We believe that there have been no significant changes in our critical accounting policies during the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2021, as compared with those disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2020.

Revenues consist of amounts earned from ~~collaborations, grants~~product sales and ~~services~~other revenues. Product revenue, net, includes sales of HEPLISAV-B and ~~license~~CpG 1018 adjuvant.

Revenue from HEPLISAV-B product sales is recorded at the net sales price, which includes estimates of product returns, chargebacks, discounts, rebates and other fees. ~~Service~~We sell our CpG 1018 adjuvant to our collaboration partners for use in their development and/or commercialization of COVID-19 vaccine. Overall, product revenue, net, reflects our best estimates of the amount of consideration to which we are entitled based on the terms of the contract.

Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net product revenue and ~~license fees include revenues related to license fees and royalty payments.~~earnings in the period such variances become known.

The following is a summary of our revenues (in thousands, except for percentages):

Increase

Increase

Three Months Ended

(Decrease) from

Nine Months Ended

(Decrease) from

September 30,

2016 to 2017

September 30,

2016 to 2017

Revenues:
2017

2016

$

%

2017

2016

$

%

Collaboration revenue
$
-

$
-

$
-

-

$
-

$
2,578

$
(2,578
)

(100
)%
Grant revenue

53

162

(109
)

(67
)%

306

289

17

6
%
Service and license revenue

-

-

-

-

-

884

(884
)

(100
)%
Total revenues
$
53

$
162

$
(109
)

(67
)%

$
306

$
3,751

$
(3,445
)

(92
)%

					Increase
	Three Months Ended				(Decrease) from
	March 31,				2020 to 2021
Revenues:	2021		2020		$			%
HEPLISAV-B	$	8,303	$	10,514	$	(2,211	)		(21	)%
CpG 1018		74,582		-		74,582			-
Total product revenue, net	$	82,885	$	10,514	$	72,371			688	%
Other revenue		450		405		45			11	%
Total revenues	$	83,335	$	10,919	$	72,416			663	%

HEPLISAV-B revenue for the three months ended March 31, 2021 decreased, compared to the same period of last year, due to lower sales volume. Adult vaccine utilization (except for COVID-19 vaccines) continued to be impacted in the ~~2017 periods~~three months ended March 31, 2021 due to the COVID-19 vaccine rollout.

In the three months ended September 30, 2020, we began selling our CpG 1018 adjuvant to our collaboration partners for their use in development and/or commercialization of COVID-19 vaccines. In the three months ended March 31, 2021, we continued to manufacture and ship CpG 1018 pursuant to our supply and collaboration agreements.

Other revenue included grant revenue and collaboration revenue related to services performed under a collaboration agreement with Serum Institute of India Pvt. Ltd.

Cost of sales - product consists primarily of raw materials, certain fill, finish and overhead costs and any inventory adjustment charges for pre-filled syringes (“PFS”) of HEPLISAV-B and inventory costs to produce CpG 1018 for our collaboration partners. Our HEPLISAV-B PFS finished goods inventory previously included components for which a portion of the manufacturing costs were expensed to research and development prior to the approval of the PFS presentation by the United States Food and Drug Administration (“FDA”) in March 2018. Substantially all the inventory that was previously expensed to research and development has been sold to customers.

The following is a summary of our cost of sales - product (in thousands, except for percentages):

HEPLISAV-B cost of sales-product increased primarily due to higher unit costs as ~~all performance obligations under~~we produce and then sell inventory that reflects the ~~AstraZeneca agreement were completed~~full cost of manufacturing. The increase was partially offset by lower sales volume.

In the three months ended September 30, 2020, we began selling our CpG 1018 adjuvant to our collaboration partners for their use in ~~2016. Service~~development and/or commercialization of COVID-19 vaccines. In the three months ended March 31, 2021, we continued to manufacture and ~~license revenue decreased in the 2017 periods as no manufacturing services were performed on behalf of third parties in 2017.~~ship CpG 1018 pursuant to our supply and collaboration agreements.

Research and development expense consists, primarily, of compensation and related personnel costs (which include benefits, recruitment, travel and supply costs), outside services, allocated facility costs and non-cash stock-based compensation. Outside services ~~relate to our~~consist of costs associated with clinical development, process development, preclinical ~~experiments~~discovery and ~~clinical trials,~~development, regulatory filings and ~~manufacturing of our product candidates. For the nine months ended September 30, 2017~~research, including fees and ~~2016, approximately 35%~~expenses incurred by contract research organizations, clinical study sites, and ~~69%, respectively, of our total research and development expense, excluding non-cash stock-based compensation, is related to our investigational adult hepatitis B vaccine, HEPLISAV-B.~~ other service providers.

The following is a summary of our research and development expense (in thousands, except for percentages):

Increase

Increase

Three Months Ended

(Decrease) from

Nine Months Ended

(Decrease) from

September 30,

2016 to 2017

September 30,

2016 to 2017

Research and Development:
2017

2016

$

%

2017

2016

$

%

Compensation and related personnel costs
$
6,587

$
9,313

$
(2,726
)

(29
)%

$
21,305

$
27,675

$
(6,370
)

(23
)%
Outside services

5,705

9,653

(3,948
)

(41
)%

14,331

26,334

(12,003
)

(46
)%
Facility costs

2,152

2,629

(477
)

(18
)%

6,233

7,552

(1,319
)

(17
)%
Non-cash stock-based
compensation

1,973

1,639

334

20
%

5,707

4,490

1,217

27
%
Total research and development
$
16,417

$
23,234

$
(6,817
)

(29
)%

$
47,576

$
66,051

$
(18,475
)

(28
)%

~~For both the three and nine months ended September 30, 2017 compared to 2016:~~

Compensation and related personnel costs ~~decreased due to implementation of organizational restructuring~~ and ~~cost reduction plans in January 2017. Outside services expense decreased~~non-cash stock-based compensation increased primarily due to ~~a reduction of~~higher headcount. The increase in compensation and related personnel costs ~~related to HEPLISAV-B clinical and manufacturing activities~~was partially offset by ~~increased costs relating~~the decrease in business travel due to ~~seeking regulatory approval for HEPLISAV-B and the ongoing development of SD-101 and earlier stage oncology programs. Non-cash~~COVID-19 travel restrictions. In addition, non-cash stock-based compensation ~~increased~~in the three months ended March 31, 2020 included reversal of expenses related to cancellation of certain equity grants.

The decrease in outside services was primarily due to ~~recognition~~the winding down of expense related to share-based awards granted to employees in 2016 and 2017. Facility costs, which includes an overhead allocation primarily comprised of occupancy and related expenses, decreased due to overall lower facility and related costs and a decrease in headcount.our immuno-oncology programs.

~~We expect~~Total research and development ~~spending~~expenses were higher in the three months ended March 31, 2021, due to ~~increase in connection with the~~ development ~~and manufacturing of~~activities at our ~~product candidates, particularly SD-101 and DV281, and to support a post-marketing study of HEPLISAV-B, if it is approved by the FDA.~~Dusseldorf facility focused on process improvements.

~~General~~Selling, general and administrative expense consists primarily of compensation and related costs for our commercial support personnel, ~~costs;~~medical education professionals and personnel in executive and other administrative functions, including legal, finance and information technology; costs for outside services such as sales and marketing, post-marketing studies of HEPLISAV-B, accounting, commercial development, consulting, business development, ~~and~~ investor relations and ~~for~~ insurance; legal costs that include corporate and patent-related expenses; allocated facility costs and non-cash stock-based compensation.

The following is a summary of our selling, general and administrative ~~expense~~expenses (in thousands, except for percentages):

					Increase										Increase										Increase
	Three Months Ended				(Decrease) from						Nine Months Ended				(Decrease) from						Three Months Ended				(Decrease) from
	September 30,				2016 to 2017						September 30,				2016 to 2017						March 31,				2020 to 2021
General and Administrative:	2017		2016		$			%			2017		2016		$			%
Selling, General and Administrative:																					2021		2020		$			%
Compensation and related personnel costs	$	1,771	$	3,446	$	(1,675	)		(49	)%	$	5,771	$	9,859	$	(4,088	)		(41	)%	$	9,204	$	8,300	$	904			11	%
Outside services		1,574		5,439		(3,865	)		(71	)%		4,336		11,164		(6,828	)		(61	)%		6,588		6,625		(37	)		(1	)%
Legal costs		718		561		157			28	%		2,063		1,735		328			19	%		486		734		(248	)		(34	)%
Facility costs		277		298		(21	)		(7	)%		804		788		16			2	%		3,001		2,825		176			6	%
Non-cash stock-based compensation		1,687		2,022		(335	)		(17	)%		5,137		5,540		(403	)		(7	)%		3,144		2,442		702			29	%
Total general and administrative	$	6,027	$	11,766	$	(5,739	)		(49	)%	$	18,111	$	29,086	$	(10,975	)		(38	)%
Total selling, general and administrative																					$	22,423	$	20,926	$	1,497			7	%

~~For both the three and nine months ended September 30, 2017 compared to 2016:~~

Compensation and related personnel costs increased due to higher headcount and an accrual of benefits for a former executive in connection with his retirement, offset by the decrease in business travel due to COVID-19 travel restrictions.

Non-cash stock-based compensation increased due to higher headcount. In addition, non-cash stock-based compensation ~~decreased due to implementation~~included reversal of ~~organizational restructuring and cost reduction plans in January 2017. Outside services decreased as the first nine months of 2016 included costs~~expenses related to ~~hiring~~cancellation of ~~consultants for administrative and commercial development services for~~certain equity grants in the ~~anticipated commercial launch of HEPLISAV-B~~.

~~We expect general and administrative spending to increase in connection with the commercialization of HEPLISAV-B, if it is approved by the FDA.~~

In January 2017, we implemented organizational restructuring and cost reduction plans to align around our immuno-oncology business while allowing us to advance HEPLISAV-B through the FDA review and approval process. To achieve these cost reductions, we suspended manufacturing activities, commercial preparations and other longer term investment related to HEPLISAV-B and reduced our global workforce by approximately 40 percent. If HEPLISAV-B is approved, we plan to use existing stockpiled inventory to support initial commercial demand.

~~During the nine~~three months ended ~~September 30, 2017 we recorded charges of $2.8 million related to severance, other termination benefits and outplacement services.~~ ~~Of that amount, we paid $2.7 million during the first nine month period ended September 30, 2017 and expect to pay the remaining balance in the fourth quarter of 2017.~~March 31, 2020.

Interest income is reported net of amortization of premiums and discounts on marketable securities and includes realized gains ~~and losses~~ on investments. ~~Other (expense)~~Interest expense includes the stated interest and accretion of discount and end of term fee related to our long-term debt agreement. Sublease income ~~net~~is recognized in connection with our sublease of office and laboratory space. Change in fair value of warrant liability reflects the changes in fair value of warrants issued in connection with equity financing in August 2019. Other includes gains and losses on foreign currency transactions and disposal of property and ~~equipment~~.equipment.

The following is a summary of our ~~interest~~other income ~~and other~~ (expense) ~~income, net~~ (in thousands, except for percentages):

							Increase										Increase												Increase
	Three Months Ended						(Decrease) from					Nine Months Ended					(Decrease) from						Three Months Ended						(Decrease) from
	September 30,						2016 to 2017					September 30,					2016 to 2017						March 31,						2020 to 2021
	2017			2016			$		%			2017			2016		$			%			2021			2020			$			%
Interest income	$	429		$	170		$	259		152	%	$	809		$	615	$	194			32	%	$	47		$	590		$	(543	)		(92	)%
Other (expense) income, net	$	(166	)	$	(26	)	$	140		538	%	$	(378	)	$	68	$	(446	)		(656	)%
Interest expense																							$	(4,712	)	$	(4,731	)	$	(19	)		0	%
Sublease income																							$	2,022		$	1,926		$	96			5	%
Change in fair value of warrant liability																							$	(25,552	)	$	8,610		$	(34,162	)		(397	)%
Other																							$	557		$	322		$	235			73	%

~~For both~~Interest income for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 decreased, as compared to ~~2016, interest income increased~~the same periods in 2020, primarily due to ~~a higher average rate of return~~lower yields on our ~~investments and a higher average investment balance.~~marketable securities portfolio. The change in the fair value of the warrant liability is primarily due to increase in our stock price. The change in other ~~(expense) income, net~~ is primarily due to foreign currency transactions ~~resulting from~~and related fluctuations in the value of the Euro compared to the U.S. dollar.

As of ~~September 30, 2017,~~March 31, 2021, we had ~~$191.7~~ $232.7 million in cash, cash equivalents and marketable securities. Since our inception, we have relied primarily on the proceeds from public and private sales of our equity securities, borrowings, government grants and revenues from product sales and collaboration agreements to fund our operations. Our funds are currently invested in ~~short-term~~ money market funds, U.S. ~~Treasuries,~~treasuries, U.S. ~~Government~~government agency securities and corporate debt securities. We currently anticipate that our cash, cash equivalents and short-term marketable securities as of March 31, 2021, and anticipated revenues from HEPLISAV-B and CpG 1018 will be sufficient to fund our operations for at least the next 12 months from the date of this filing.

Pursuant to the CEPI agreement, advanced payments received from CEPI to reserve a specified quantity of CpG 1018 totaling $64.4 million were recorded as long-term deferred revenue in our condensed consolidated balance sheets.

Pursuant to the supply agreement with Valneva Scotland Limited (“Valneva”), we received advanced payments to purchase specified quantities of CpG 1018 adjuvant which were recorded as deferred revenue. As of March 31, 2021, deferred revenue related to the supply agreement totaling $51.0 million was recorded in our condensed consolidated balance sheets

In ~~August 2017,~~February 2018, we ~~completed an underwritten public offering~~entered into a term loan agreement with CRG Servicing LLC. At March 31, 2021, the principal amount of ~~5,750,000~~the term loan was $180.9 million, excluding debt discount of $1.0 million. The loan and the related unpaid interest and fees are due in December 2023.

For the three months ended March 31, 2021, we received net cash proceeds of $28.2 million resulting from sales of 2,878,567 shares of our common stock pursuant to a 2020 At Market Sales Agreement with Cowen and ~~received net proceeds~~Company, LLC (“2020 ATM Agreement”). As of ~~approximately $80.8 million.~~March 31, 2021, we had $120.5 million remaining under the 2020 ATM Agreement.

During the ~~six~~three months ended ~~June 30, 2017,~~March 31, 2021, we ~~sold 15,997,202 shares~~generated $38.0 million of o~~ur common stock~~cash from our operations primarily due to our net income of $0.9 million, of which $32.7 million consisted of non-cash items which included change in fair value of warrant liability, stock-based compensation, depreciation and ~~received net cash proceeds~~amortization, amortization of ~~$88.2 million~~ ~~pursuant to an At~~right-of-use assets, non-cash interest expense and accretion and amortization on marketable securities. By comparison, during the Market Agreement that terminated in June 2017. In November 2017 we entered into an At the Market sales agreement under which we can offer and sell our common stock from time to time up to aggregate sales proceeds of $150 million. The November 2017 sales agreement is more fully described in Part II – Item 5 – Other Information.

~~During the nine~~three months ended ~~September 30, 2017,~~March 31, 2020, we used ~~$59.8~~$26.9 million of cash for our operations primarily due to our net loss of ~~$67.7~~$12.6 million, of which ~~$13.0~~$1.7 million consisted of non-cash ~~charges such as~~items which included change in fair value of warrant liability, amortization of intangible assets, stock-based compensation, non-cash interest expense, depreciation and amortization, ~~reversal~~amortization of ~~deferred rent upon lease amendment and accretion and amortization on marketable securities.~~ ~~We also recorded charges of $2.8 million primarily related to severance, resulting from implementation of~~ ~~organizational restructuring and cost reduction plans in January 2017~~. By comparison, during the nine months ended September 30, 2016, we used $80.8 million of cash for our operations primarily due to a net loss of $90.7 million, of which $12.4 million consisted of non-cash charges such as stock-based compensation, depreciation and amortizationright-of-use assets and accretion and amortization on marketable securities. Cash used in our operations during the first ~~nine~~three months of ~~2017 decreased~~2021 increased by ~~$21.0~~$64.9 million. For the three months ended March 31, 2021, we received an advance payment from CEPI in the amount of $45.8 million which was recorded as deferred revenue. Net cash ~~used in~~provided by operating activities is also impacted by changes in our operating assets and liabilities due to timing of cash receipts and expenditures.

During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2021, net cash used in investing activities was ~~$114.8~~$22.6 million, compared to ~~$58.1~~$10.6 million inof net cash provided by investing activities ~~for~~in the ~~nine months ended September 30, 2016. Cash used in investing activities during~~same period of last year. During the first ~~nine~~three months of ~~2017 included $114.4 million of~~2021, net purchases of marketable securities was $20.9 million, compared ~~with $64.6~~to $19.9 million of net proceeds from maturities and redemptions of marketable securities ~~during~~in the same period of last year. During the first ~~nine~~three months of ~~2016.~~2020, we paid $7.0 million of sublicense payment to Merck. Cash used in net purchases of property plant and equipment decreased by ~~$6.1~~$0.6 million during the first ~~nine~~three months of ~~2017~~2021 compared to the same period in ~~2016~~2020. The decrease was, primarily, due to the ~~purchase~~installation of ~~manufacturing equipment~~facility improvements in ~~2016 for HEPLISAV-B.~~the first three months of 2020.

During the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, net cash provided by financing activities was ~~$169.8~~$32.3 million and ~~$0.7~~$14.5 million, respectively. Cash provided by financing activities for the first three months of 2021 included net proceeds of $28.2 million from our 2020 ATM Agreement and $3.4 million from warrants exercised. Cash provided by financing activities in the first ~~nine~~three months of ~~2017~~2020 included net proceeds of ~~$169.2~~$14.2 million from the issuance of common stock under our ~~underwritten public offering~~2017 ATM Agreement.

Prior to January 1, 2021, we incurred net losses in ~~August 2017 and our 2015 ATM Agreement.~~

~~We have incurred significant operating losses and negative cash flows from operations~~each year since our inception. AsFor the three months ended March 31, 2021, we recorded net income of ~~September 30, 2017, we had cash, cash equivalents and marketable securities~~$0.9 million. We incurred net loss of ~~$191.7~~ $12.6 million ~~and we used $59.8 million of cash in operating activities during the first nine~~ for three months ~~of 2017~~.ended March 31, 2020. We ~~believe~~cannot be certain that our available cash, cash equivalents and marketable securities will be sufficient to meet our projected operating requirements for at least the next 12 months from the date of this filing. We expect spending to increase in connection with the development and manufacturingsales of our ~~product candidates, particularly SD-101~~products, and ~~DV281,~~the revenue from our ~~lead investigational cancer immunotherapeutic product candidates, human~~other activities will not fall short of our projections or be delayed. Further, we expect to continue to incur substantial expenses as we continue to invest in commercialization of HEPLISAV-B, development of our CpG 1018 adjuvant and clinical trials ~~for our~~and other development. If we cannot generate a sufficient amount of revenue from product ~~candidates and additional applications and advancement of our technology. In order to continue our development activities and if HEPLISAV-B is approved,~~sales, we will need ~~additional funding or a partnership~~ to ~~enable commercialization. This may occur~~finance our operations through strategic alliance and licensing arrangements and/or future public or private debt and equity financings. ~~Sufficient funding~~Raising additional funds through the issuance of equity or debt securities could result in dilution to our existing stockholders, increased fixed payment obligations, or both. In addition, these securities may ~~not be available, or if available, may be on terms~~have rights senior to those of our common stock and could include covenants that significantly dilute or otherwise adversely affect the rights of existing stockholders. If adequate funds are not available in the future, we may need to delay, reduce the scope of or put on hold one or more development programs while we seek strategic alternatives, which could have an adverse impact onwould restrict our ~~ability to achieve our intended business objectives.~~operations.

We lease our facilities in Berkeley, California (“Berkeley Lease”) and Düsseldorf, Germany (“Düsseldorf Lease”) under operating leases that expire in December 2025 and March 2023, respectively. In May 2017, we amended the Berkeley Lease to extend the term of the Berkeley Lease to expire in December 2025 and to terminate the lease of an adjacent building. As a result of the amendment to the Berkeley Lease, our total future minimum lease payments at September 30, 2017 are $19.7 million.

In addition, our ability to raise additional funds may be adversely impacted by deteriorating global economic conditions and the recent disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic. Adequate financing may not be available to us on acceptable terms, or at all. If adequate funds are not available when needed, we may need to significantly reduce our operations while we seek strategic alternatives, which could have an adverse impact on our ability to achieve our intended business objectives.

As of March 31, 2021, our material non-cancelable purchase and other commitments, ~~included above, we have entered into contractual arrangements that obligate us to make payments~~for the supply of HEPLISAV-B, CpG 1018 adjuvant and for clinical research, totaled $90.9 million.

There were no other material changes to the contractual ~~counterparties upon~~obligations previously disclosed in our Annual Report on Form 10-K for the occurrence of future events. In addition, in the normal course of operations, we have entered into license and other agreements and intend to continue to seek additional rights relating to compounds or technologies in connection with our discovery, manufacturing and development programs. Under the terms of the agreements, we may be required to pay future up-front fees, milestones and royalties on net sales of products originating from the licensed technologies, if any, or other payments contingent upon the occurrence of future events that cannot reasonably be estimated.

We do not have any off-balance sheet arrangements, as defined by rules enacted by the Securities and Exchange Commission, and accordingly, no such arrangements are likely to have a current or future effect on our financial position.

~~Quantitative~~During the three months ended March 31, 2021, there were no material changes to our market risk disclosures as set forth in Part II, Item 7A, “Quantitative and Qualitative ~~Disclosure~~Disclosures About Market ~~Risk~~

We are subject to interest rate risk. Our investment portfolio is maintained in accordance with our investment policy, which defines allowable investments, specifies credit quality standards and limits the credit exposure of any single issuer. The primary objective of our investment activities is to preserve principal and, secondarily, to maximize income we receive from our investments without significantly increasing risk. Some of the securities that we invest in may have market risk. This means that a change in prevailing interest rates may cause the principal amount of the investment to fluctuate. To minimize this risk, we maintain our portfolio of cash equivalents and investments in short-term money market funds, U.S. government agency securities, U.S. Treasuries and corporate debt securities. We do not invest in auction rate securities or securities collateralized by home mortgages, mortgage bank debt or home equity loans. We do not have derivative financial instrumentsRisk” in our investment portfolio. To assess our risk, we calculate that if interest rates were to rise or fall from current levels by 100 basis points or by 125 basis points, the pro forma change in fair value of our net unrealized lossAnnual Report on ~~investments would be $1.1 million or $1.4 million, respectively.~~

Due to the short duration and nature of our cash equivalents and marketable securities, as well as our intention to hold the investments to maturity, we do not expect any material loss with respect to our investment portfolio.

~~We have certain investments outside the U.S.~~Form 10-K for the operations of Dynavax GmbH with exposure to foreign exchange rate fluctuations. The cumulative translation adjustment reported in the condensed consolidated balance sheet as of September 30, 2017 was $1.2 million primarily related to translation of Dynavax GmbH assets, liabilities and operating results from Euros to U.S. dollars. As of September 30, 2017, the effect of our exposure to these exchange rate fluctuations has not been material, and we do not expect it to become material in the foreseeable future. We do not hedge our foreign currency exposures and have not used derivative financial instruments for speculation or trading purposes.year ended December 31, 2020.

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and that such information is accumulated and communicated to our management, including our ~~Chief~~Principal Executive Officer and Principal Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can only provide reasonable, not absolute, assurance of achieving the desired control objectives.

Based on their evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report, our management, with participation of our Chief Executive Officer and our Chief Financial Officer, concluded that our disclosure controls and procedures are effective and were operating at the reasonable assurance level to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.

There ~~has~~have been no ~~change~~changes in our internal controls over financial reporting as defined in Rule 13a – 15(f) under the Exchange Act during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

From time to time in the ordinary course of business, ~~Dynavax receives~~we receive claims or allegations regarding various matters, including employment, vendor and other similar situations in the conduct of our operations.

On July 3, 2013, a purported stockholder derivative complaint was filed in the Superior Court of California for the County of Alameda against certain of our current and former executive officers and directors. On August 9, 2013, a substantially similar purported stockholder derivative complaint was filed in the U.S. District Court for the Northern District of California. The derivative complaints allege breaches of fiduciary duties by the defendants and other violations of law. In general, the complaints allege that certain of our current and former executive officers and directors caused or allowed for the dissemination of materially false and misleading statements regarding our product, HEPLISAV-B. Plaintiffs We are ~~seeking unspecified monetary damages, including restitution from defendants, attorneys’ fees and costs, and other relief.~~

~~On August 21, 2013, pursuant to a stipulation between the parties, the state court stayed the state derivative case pending a decision on the Company’s motion to dismiss in the~~ ~~In re Dynavax Technologies Securities Litigation. On October 17, 2013, pursuant to a stipulation between the parties, the federal court stayed the federal derivative case pending a decision on the Company’s motion to dismiss in the~~ ~~In re Dynavax Technologies Securities Litigation. On May 8, 2015, the parties filed a stipulation to keep the state derivative case stayed until a final resolution in the~~ ~~In re Dynavax Technologies Securities Litigation. On May 15, 2015, the parties also stipulated to keep the federal derivative case stayed until a final resolution in the~~ ~~In re Dynavax Technologies Securities Litigation~~. The parties entered into a stipulation of settlement which provides that the Company will enter into certain corporate governance reforms, that the Company shall cause to be paid an attorneys’ fee of $925,000 to plaintiffs’ counsel, and for dismissal of all claims against defendants in both the state and federal derivative actions. On August 21, 2017, the state court entered an order preliminarily approving the settlement and setting a final approval hearing date of October 17, 2017. On October 17, 2017, the state court entered the final approval order and dismissed the state court action. On October 20, 2017, the parties to the federal derivative action submitted a stipulation to the federal court to dismiss with prejudice the federal derivative action in light of the settlement. On October 24, 2017, the federal court granted the stipulation and dismissed the federal derivative action with prejudice.

On November 18, 2016, two substantially similar securities class action complaints were filed in the U.S. District Court for the Northern District of California against the Company and two of its executive officers, in ~~Soontjens v. Dynavax Technologies Corporation et. al., (“Soontjens”) and~~ ~~Shumake v. Dynavax Technologies Corporation et al., (“Shumake”). The~~ ~~Soontjens~~ complaint alleges that between March 10, 2014 and November 11, 2016, the Company and certain of its executive officers violated Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder, in connection with statements related to HEPLISAV-B. The ~~Shumake~~ complaint alleges violations of the same statutes related to the same subject, but between January 7, 2016 and November 11, 2016. The plaintiffs in both actions are seeking an unspecified amount of damages and attorneys’ fees and costs. On January 17, 2017, these two actions and all related actions that subsequently may be filed in, or transferred to, the District Court were consolidated into a single case entitled ~~In re Dynavax Technologies Securities Litigation~~. On January 31, 2017, the court appointed lead plaintiff and lead counsel. Lead plaintiff filed a consolidated amended complaint on March 17, 2017. Defendants’ filed a motion to dismiss the consolidated amended complaint on May 1, 2017. On September 12, 2017, the District Court granted Defendants’ motion to dismiss, but gave lead plaintiff an opportunity to amend his complaint. On October 3, 2017, plaintiff filed a Second Amended Complaint. Defendants’ motion to dismiss is due on November 3, 2017.

~~On January 18, 2017, the Company was made~~not currently aware of ~~a derivative complaint that a purported stockholder of~~any material legal proceedings involving the ~~Company intended to file in the Superior Court of California for the County of Alameda against certain of the Company’s current executive officers and directors (the “McDonald~~ ~~Complaint”). The~~ ~~McDonald~~ ~~Complaint was apparently filed on February 16, 2017, although the Company was not provided a copy of it until March 15, 2017.~~ Additionally, on January 19, 2017, another purported stockholder of the Company filed a separate derivative complaint in the Superior Court of California for the County of Alameda against the same officers and directors who were named in the ~~McDonald~~ ~~Complaint (the “Shumake~~ ~~Complaint”). Both complaints generally~~ ~~allege that the defendants caused or allowed the Company to issue materially misleading statements and/or omit material information regarding HEPLISAV-B~~ ~~and the clinical trial related thereto and otherwise mismanaged the clinical trial related to HEPLISAV-B~~. The complaints seek unspecified monetary damages, including restitution from defendants, corporate governance changes, attorneys’ fees and costs, and other relief. Defendants were never served with the ~~Shumake~~ ~~Complaint. On June 23, 2017, the plaintiff voluntarily dismissed the~~ ~~Shumake~~ ~~Complaint without prejudice. Defendants filed a demurrer in the~~ ~~McDonald~~ ~~case seeking to dismiss the lawsuit on June 19, 2017. On July 26, 2017, pursuant to a stipulation between the parties, the state court stayed the~~ ~~McDonald~~ ~~case pending the final resolution of the 2016 securities class action,~~ ~~In re Dynavax Technologies Securities Litigation~~.Company.

The Company believes that it has meritorious defenses and intends to defend these lawsuits vigorously. However, the lawsuits are subject to inherent uncertainties, the actual costs may be significant, and we may not prevail. We believe we are entitled to coverage under our relevant insurance policies with respect to these lawsuits, but coverage could be denied or prove to be insufficient.

Various statements in this Quarterly Report on Form 10-Q are forward-looking statements, including, but not limited to, statements concerning the effect of the COVID-19 pandemic our business, our future efforts to obtain regulatory approval, ~~timing of development activities,~~achieve restructuring goals, advance our collaborations, commercialize approved products, or expectations about our anticipated expenses, revenues, liquidity and cash needs, as well as our plans and strategies. These forward-looking statements are based on current expectations and we assume no obligation to update this information. Numerous factors could cause our actual results to differ significantly from the results described in these forward-looking statements, including those in the ~~following~~ risk ~~factors.~~factors that follow. We have marked with an asterisk (*) those risks described below that reflect ~~substantive~~material changes from, or additions to, the risks described under Part 1, Item 1A “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2020 that was filed with the Securities and Exchange Commission on ~~March 13, 2017.~~February 25, 2021.

HEPLISAV-B has been launched in the United States, and approved in the European Union, and there is significant competition in the marketplace. Since this is our first marketed product, the timing of uptake and distribution efforts are unpredictable and there is a risk that we may not achieve and sustain commercial success for HEPLISAV-B.

We ~~are dependent on the success of our product candidates, especially~~have established sales, marketing and distribution capabilities and commercialized HEPLISAV-B and SD-101, which depend on regulatory approval. The FDA or foreign regulatory agencies may determine our clinical trials or other data regarding safety, efficacy, consistency of manufacture or compliance with GMP regulations are insufficient for regulatory approval. Failure to obtain regulatory approvals or the delay and additional costs that would be required to obtain regulatory approvals could require us to discontinue operations.*

None of our product candidates has been approved for sale by any regulatory agency. Any product candidate we develop is subject to extensive regulation by federal, state and local governmental authorities in the U.S.~~, including~~ Successful commercialization of HEPLISAV-B will require significant resources and time and, while Dynavax personnel are experienced with respect to marketing of healthcare products, because HEPLISAV-B is the ~~FDA,~~company’s first marketed product, the potential uptake of the product in distribution and ~~foreign regulatory agencies. Our success~~the timing for growth in sales, if any, is ~~primarily dependent on our ability to obtain regulatory approvals for our most advanced~~unpredictable and we may not be successful in commercializing HEPLISAV-B. We have never launched a product ~~candidates. Approval processes~~ in the ~~U.S.~~European Union before, and despite the recent European approval of HEPLISAV-B, there can be no certainty that we will succeed in our European launch efforts. In particular, successful commercialization of HEPLISAV-B will require that we continue to negotiate and enter into contracts with wholesalers, distributors, group purchasing organizations, and other ~~countries are uncertain, can take many years~~parties, and ~~require~~that we maintain those contractual relationships. There is a risk that we may fail to complete or maintain some or all of these important contracts on favorable terms, or that in a potentially evolving reimbursement environment our efforts may fail to overcome established competition at favorable pricing.

We converted our contracted field sales team into full-time Dynavax employees in the ~~expenditure~~second quarter of ~~substantial~~2019. Before then we had not previously employed an in-house field sales team, and thus have limited experience in overseeing and managing an employed salesforce. In addition, retention of capable sales personnel may be more difficult with focus on a single product offering and we must retain our salesforce in order for HEPLISAV-B to establish a commercial presence.

Moreover, we expect that significant resources will need to be invested in order to successfully market, sell and distribute HEPLISAV-B for use with diabetes patients, one of our targeted patient populations. Although the Centers for Disease Control and Prevention (“CDC”) and the CDC’s Advisory Committee on Immunization Practices (“ACIP”) recommend that patients with diabetes receive hepatitis B vaccinations, we are unable to predict how many of those patients may receive HEPLISAV-B.

In addition to the ~~timing of when regulatory approval~~risks with employing and maintaining our own commercial capabilities and with contracting, other factors that may inhibit our efforts to successfully commercialize HEPLISAV-B include:

~~For our most advanced product,~~required to collaborate or partner HEPLISAV-B ~~on July 28, 2017~~with a third-party pharmaceutical or biotechnology company with existing products. To the ~~FDA’s Vaccines~~extent we collaborate or partner, the financial value will be shared with another party and ~~Related Biological Products Advisory Committee (“VRBPAC”) voted 12~~we will need to ~~1 (with 3 abstentions) that the safety data for HEPLISAV-B support licensure for immunization against hepatitis B infection in adults 18 years of age~~establish and ~~older.~~ ~~A prior VRBPAC panel voted 13 to 1 that the immunogenicity data for HEPLISAV-B support approval~~maintain a successful collaboration arrangement, and thus the July 2017 VRBPAC was only asked to vote on safety. The FDA is not bound by VRBPAC’s recommendations regarding safety and efficacy, but takes its advice into consideration when reviewing marketing applications. HEPLISAV-B has a Prescription Drug User Fee Act (“PDUFA”) date of November 9, 2017. There can be no assurance that the FDA will complete its review by that date and the review period could be further extended~~. In addition, unless~~ we ~~reach an agreement on the post-marketing study our BLA~~ may not be able to enter into these arrangements on acceptable terms or in a timely manner in order to establish HEPLISAV-B in the market. To the extent that we enter into co-promotion or other arrangements, any revenues we receive will depend upon the efforts of third parties, which may not be successful and are only partially in our control. In that event, our product revenues may be lower than if we marketed and sold our products directly with the highest priority, and we may be required to reduce or eliminate much of our commercial infrastructure and personnel as a result of such collaboration or partnership.

We rely on our facility in Düsseldorf and third parties to perform the ~~product.~~ ~~Finally,~~ ~~despite~~multiple processes involved in manufacturing HEPLISAV-B surface antigens, the ~~favorable VRBPAC vote, there can be no assurance that~~combination of the oligonucleotide and the antigens, and formulation, fill and finish. The FDA ~~will not issue a Complete Response Letter (“CRL”)~~approved our pre-filled presentation of HEPLISAV-B in ~~reconsidering our submission or otherwise further delay the review period.~~

In the U.S., our BLA must be approved by the FDA and corresponding applications to foreign regulatory agencies must be approved by those agencies before we may sell the product in their respective geographic area. Obtaining approval of a BLA and corresponding foreign applications is highly uncertain2018 and we ~~may fail to obtain approval. The BLA review process is extensive, lengthy, expensive and uncertain, and~~expect such presentation will be the ~~FDA or foreign regulatory agencies may delay, limit or deny approval of our application~~sole presentation for many reasons, including: whether the data from our clinical trials, including the Phase 3 results, or the development program are satisfactory to the FDA or foreign regulatory agency; disagreement with the number, design, size, conduct or implementation of our clinical trials or proposed post-marketing study, or a conclusion that the data fails to meet statistical or clinical significance or safety requirements; acceptability of data generated at our clinical trial sites that are monitored by third party contract research organizations (“CROs”); or a decision by the FDA not to approve our BLA despite an advisory committee recommendation of approval; and deficiencies in our manufacturing processes or facilities or those of our third party contract manufacturers and suppliers, if any. For example, we received two CRLs from the FDA previously in 2013 and 2016, respectively.HEPLISAV-B going forward. We have ~~responded~~limited experience in manufacturing and supplying this presentation and rely on a contract manufacturer to ~~each CRL, but~~do so. Our contract manufacturer is the only approved provider that we have, and there can be no assurance that we or they can successfully manufacture sufficient quantities of pre-filled syringes in compliance with GMP in order to meet market demand.

We have ~~addressed~~also relied on a limited number of suppliers to produce oligonucleotides for clinical trials and a single supplier to produce our CpG 1018 adjuvant for HEPLISAV-B and our pre-filled syringe presentation. To date, we have manufactured only small quantities of oligonucleotides ourselves for development purposes. If we were unable to maintain our existing supplier for CpG 1018 adjuvant, we would have to establish an alternate qualified manufacturing capability, which would result in significant additional operating costs and delays in manufacturing HEPLISAV-B and developing and commercializing our product candidates. We or other third parties may not be able to produce product at a cost, quantity and quality that are available from our current third-party suppliers or at all.

In countries outside of the ~~outstanding FDA questions~~U.S., we may not be able to comply with ongoing and comparable foreign regulations, and our manufacturing process may be subject to delays, disruptions or quality control/quality assurance problems. Noncompliance with these regulations or other problems with our manufacturing process may limit or disrupt the commercialization of HEPLISAV-B or our other product candidates and could result in significant expense.

We have entered into collaborative relationships to develop vaccines utilizing our CpG 1018 adjuvant, including collaborations to develop a vaccine for COVID-19. These collaborations may not be successful. If the combination of patents, trade secrets and other proprietary rights that we rely on to protect our intellectual property rights in CpG 1018 adjuvant or otherwise are inadequate, we may be unable to realize any commercial benefit from the development of a vaccine containing CpG 1018 adjuvant.*

As part of our business, we are working to develop our CpG 1018 adjuvant as a premier vaccine adjuvant through research collaborations and partnerships. Current collaborations are focused on adjuvanted vaccines for COVID-19, pertussis and universal influenza. There are risks and uncertainties inherent in vaccine research and development, including the timing of completing vaccine development, the results of clinical trials, whether the vaccine will be approved for use, the extent of competition, government actions and whether a vaccine can be successfully commercialized. As a result, these collaborative efforts may not be as successful as we expect, or at all.

In addition, our collaborators have primary responsibility for the development, conduct of clinical trials, and for seeking and obtaining regulatory approval of potential vaccines, including any potential vaccine for COVID-19 containing our adjuvant. We have limited or no control over our collaborators’ decisions, including the amount and timing of resources that any of these collaborators will dedicate to such activities. If a collaborative partner fails to conduct collaborative activities successfully, the development of a vaccine could be delayed, and may not occur at all. We also rely on a single supplier to produce our CpG 1018 adjuvant. If we were unable to maintain our existing supplier for the adjuvant, we would have to establish an alternate qualified manufacturing capability, which would result in significant additional operating costs and delays in developing and commercializing any potential adjuvanted

~~In February 2014,~~United States is subject to certain post-marketing obligations and commitments to the FDA. For example, we ~~announced our~~were required to conduct an observational comparative study of HEPLISAV-B to Engerix-B to assess occurrence of acute myocardial infarction, or AMI. This study was initiated in August 2018, concluded in November 2020 and final results were presented in April 2021. We are also committed to conducting an observational surveillance study to evaluate the incidence of new onset immune-mediated diseases, herpes zoster and anaphylaxis; and we are required to establish a pregnancy registry to provide information on outcomes following pregnancy exposure to HEPLISAV-B. These studies will require significant effort and resources, and failure to timely conduct these studies or complete these studies to the satisfaction of the FDA could result in withdrawal of our ~~Marketing Authorization Application (“MAA”)~~BLA approval, which would have a material adverse effect on our business, results of operations, financial condition and prospects. The results of post-marketing studies may also result in additional warnings or precautions for ~~approval~~the HEPLISAV-B label or expose additional safety concerns that may result in product liability and withdrawal of ~~HEPLISAV-B~~the product from the market, any of which would have a material adverse effect on our business, results of operations, financial condition and prospects.

Similar post-marketing obligations and commitments exist in the European Union. For example, we are required to submit periodic safety update reports, or PSURs, to the EMA and to keep an up to date risk management plan that takes into account new information that may lead to a significant change in the risk/benefit profile of HEPISLAV-B. Non-compliance with European Union requirements regarding safety monitoring or pharmacovigilance can result in significant financial penalties.

In addition, the manufacturing processes, labelling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping for HEPLISAV-B are subject to extensive and ongoing regulatory requirements in the United States and the European Union. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with current good manufacturing practices (“cGMP”), good clinical practices (“GCP”), ICH guidelines, and good laboratory practices (“GLP”). If we are not able to meet and maintain regulatory compliance, we may lose marketing approval and be required to withdraw our product. Withdrawal of our product would have a material adverse effect on our business.

If HEPLISAV-B or any products we develop are not accepted by the market or if regulatory agencies limit our labeling indications, require labeling content that diminishes market uptake of HEPLISAV-B or any other products we develop, or limits our marketing claims, we may be unable to generate significant revenues, if any.

Even if we obtain regulatory approval for our product candidates, such as the U.S. and European approvals of HEPLISAV-B and are able to commercialize them as we have with HEPLISAV-B, our products may not gain market acceptance among physicians, patients, healthcare payors and the medical community.

The degree of market acceptance of HEPLISAV-B and any of our future approved products will depend upon a number of factors, including:

The FDA or other regulatory agencies could limit the labeling indication for which our product candidates may be marketed or could otherwise limit marketing efforts for our products. If we are unable to achieve approval or successfully market any of our product candidates, or marketing efforts are restricted by regulatory limits, our ability to generate revenues could be significantly impaired.

Many of our competitors have greater financial resources and expertise than we do. If we are unable to successfully compete with existing or potential competitors as a result of these disadvantages, we may be unable to generate sufficient or any revenues and our business will be harmed.

We compete with pharmaceutical companies, biotechnology companies, academic institutions and research organizations, in developing and marketing vaccines and adjuvants. For example, HEPLISAV-B competes in the U.S. with established hepatitis B vaccines marketed by Merck and GlaxoSmithKline plc (“GSK”) and if approved outside the U.S., with vaccines from those companies as well as several additional established pharmaceutical companies. There are also modified schedules of conventional hepatitis B vaccines for limited age ranges that are approved in the European Union and United States. In addition, HEPLISAV-B competes against Twinrix, a bivalent vaccine marketed by GSK for protection against hepatitis B and hepatitis A. A three dose HBV vaccine manufactured by VBI Vaccines Inc. (“VBI”) is approved in Israel, and recently completed Phase 3 trials in the United States, Europe and Canada.

We are also in competition with companies developing vaccines and vaccine adjuvants, generally, including, among others, GSK, Pfizer, Inc., Sanofi S.A., Merck, Seqirus, Agenus, Inc., Emergent BioSolutions, Inc., Novavax, Inc., Medicago Inc., Valneva, AstraZeneca plc, Moderna, Inc., Johnson & Johnson and VBI.

Existing and potential competitors may also compete with us for qualified commercial, scientific and management personnel, as well as for technology that would otherwise be advantageous to our business. Our success in developing marketable products and achieving a competitive position will depend, in part, ~~because~~on our ability to attract and retain qualified personnel in the near-term, particularly with respect to HEPLISAV-B commercialization. If we do not succeed in attracting new personnel and retaining and motivating existing personnel, our operations may suffer and we may be unable to obtain financing, enter into collaborative arrangements, sell our product candidates or generate revenues.

We have incurred net losses in each year since our inception and anticipate that we will continue to incur significant losses for the foreseeable future unless we can successfully commercialize HEPLISAV-B and CpG 1018, and if we are unable to achieve and sustain profitability, the market value of our common stock will likely decline.

We have generated limited revenue from the sale of products and have incurred losses in each year since we commenced operations in 1996. Our net income for the three months ended March 31, 2021 was $0.9 million and net loss for the three months ended March 31, 2020 was $12.6 million. As of March 31, 2021, we had an accumulated deficit of $1.3 billion.

With our investment in the launch and commercialization of HEPLISAV-B in the U.S., we expect to continue incurring operating losses for the foreseeable future. Our expenses have increased substantially as we established and maintain our HEPLISAV-B commercial infrastructure, including investments in internal infrastructure to support our field sales force and investments in manufacturing and supply chain commitments to maintain commercial supply of HEPLISAV-B. While new sales of CpG 1018 may generate revenue during the pandemic, there is no guarantee that such revenues will be sustainable in the long term. The timing for uptake of our products in the U.S. has further increased losses related to commercialization. Due to the numerous risks and uncertainties associated with developing and commercializing vaccine and pharmaceutical products, we are unable to predict the extent of any future losses or when, if ever, we will become profitable or that if we are able to reach profitability that it will be sustainable for any period of time.

Until we are able to generate significant revenues or achieve profitability through product sales, we will require substantial additional capital to finance our operations.

As of March 31, 2021, we had $232.7 million in cash, cash equivalents and marketable securities. Prior to January 1, 2021, we incurred net losses in each year since our inception. For the three months ended March 31, 2021, we recorded net income of $0.9 million. We incurred net loss of $12.6 million for three months ended March 31, 2020. As of March 31, 2021, we had an accumulated deficit of $1.3 billion. We cannot be certain that sales of our products, and the revenue from our other activities are sustainable. Further, we expect to continue to incur substantial expenses as we continue to invest in commercialization of HEPLISAV-B, development of our CpG 1018 adjuvant and clinical trials and other development. If we cannot generate a sufficient amount of revenue from product sales, we will need to finance our operations through strategic alliance and licensing arrangements and/or future public or private debt and equity financings. Raising additional funds through the issuance of equity or debt securities could result in dilution to our existing stockholders, increased fixed payment obligations, or both. In addition, these securities may have rights senior to those of our common stock and could include covenants that would restrict our operations.

Our ability to raise additional capital in the equity and debt markets, should we choose to do so, is dependent on a number of factors, including, but not limited to, the market demand for our common stock, which itself is subject to a number of development and business risks and uncertainties, our creditworthiness and the uncertainty that we would be able to raise such additional capital at a price or on terms that are favorable to us. In addition, our ability to raise additional funds may be adversely impacted by deteriorating global economic conditions and the recent disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic. Adequate financing may not be available to us on acceptable terms, or at all. If adequate funds are not available when needed, we may need to significantly reduce our operations while we seek strategic alternatives, which could have an adverse impact on our ability to achieve our intended business objectives.

Regulatory authorities may require more clinical trials for our product candidates than we currently expect or are conducting before granting regulatory approval, if regulatory approval is granted at all. Our clinical trials may be extended which may lead to substantial delays in the regulatory approval process for our product candidates and may impair our ability to generate revenues.

Our registration and commercial timelines depend on further discussions with regulatory agencies and requirements and requests they may make for additional data or completion of additional clinical trials. Any such requirements or requests could:

We may continue to develop, seek regulatory approval for and market HEPLISAV-B or any other product candidates we may develop outside the U.S., requiring a significant commitment of resources. Failure to successfully manage our international operations could result in significant unanticipated costs and delays in regulatory approval or commercialization of our product candidates.

We may seek to introduce HEPLISAV-B, or any other product candidates we may develop, to various additional markets outside the U.S. and Europe. Developing, seeking regulatory approval for and marketing our product candidates outside the U.S. could impose substantial costs as well as burdens on our personnel resources in addition to potential diversion of management’s attention from domestic operations. International operations are subject to risk, including:

In the event that we determine to pursue commercialization of HEPLISAV-B outside the United States and the European Union, our opportunity will depend upon our receiving regulatory approval, which can be costly and time consuming, and there is a risk that one or more regulatory bodies may require that we conduct additional clinical trials and/or take other measures which will take time and require that we incur significant additional expense. In addition, there is the risk that we may not receive approval in one or more jurisdictions.

The results of clinical trials conducted to support regulatory approval in one or more jurisdictions, and any failure or delay in obtaining regulatory approval in one or more jurisdictions, may have a negative effect on the regulatory approval process in other

jurisdictions, including our regulatory approval in the United States. If we are unable to successfully manage our international operations, we may incur significant unanticipated costs and delays in regulatory approval or commercialization of our product candidates, which would impair our ability to generate revenues.

Clinical trials for our commercial product and product candidates are expensive and time consuming, may take longer than we expect or may not be completed at all, and their outcomes are uncertain.

Clinical trials, including post-marketing studies, to generate sufficient data to meet FDA (and other regulatory agency) requirements are expensive and time consuming, may take more time to complete than expected or may not be completed, and may not have favorable outcomes if they are completed. In addition, results from smaller, earlier stage clinical studies may not be representative of larger, controlled clinical trials that would be required in order to obtain regulatory approval of a product candidate.

Each of our clinical trials requires the investment of substantial planning, expense and time ~~frame for response under~~and the ~~MAA procedure was not long enough to permit the collection~~timing of the ~~necessary~~commencement, continuation and completion of these clinical ~~data.~~trials may be subject to significant delays relating to various causes, including scheduling conflicts with participating clinicians and clinical institutions, difficulties in identifying and enrolling participants who meet trial eligibility criteria, failure of participants to complete the clinical trial, delay or failure to obtain Institutional Review Board (“IRB”) or regulatory approval to conduct a clinical trial at a prospective site, unexpected adverse events and shortages of available drug supply. Participant enrollment is a function of many factors, including the size of the relevant population, the proximity of participants to clinical sites, the eligibility criteria for the trial, the existence of competing clinical trials and the availability of alternative or new treatments.

As a biopharmaceutical company, we engage clinical research organizations (“CROs”) to conduct clinical studies, and failure by us or our CROs to conduct a clinical study in accordance with GCP standards and other applicable regulatory requirements could result in disqualification of the applicable clinical trial from consideration in support of approval of a potential product.

We are responsible for conducting our clinical trials consistent with GCP standards and for oversight of our vendors to ensure that they comply with such standards. We depend on medical institutions and CROs to conduct our clinical trials in compliance with GCP. To the extent that we or they fail to comply with GCP standards, fail to enroll participants for our clinical trials, or are delayed for a significant time in the execution of our trials, including achieving full enrollment, we may be affected by increased costs, program delays or both, which may harm our business.

Clinical trials must be conducted in accordance with FDA or other applicable foreign government guidelines and are subject to oversight by the FDA, other foreign governmental agencies and IRBs at the medical institutions where the clinical trials are conducted. In addition, clinical trials must be conducted with supplies of our product candidates produced under GMP and other requirements in foreign countries, and may require large numbers of participants.

In addition, we obtain guidance from regulatory authorities on certain aspects of our clinical development activities and seek to comply with written guidelines provided by the authorities. These discussions and written guidelines are not binding obligations on the part of the regulatory authorities and the regulatory authorities may require additional patient data or studies to be conducted. Regulatory authorities may revise or retract previous guidance during the course of a clinical trial or after completion of the trial. The authorities may also disqualify a clinical trial from consideration in support of approval of a potential product if they deem the guidelines have not been met. The FDA or foreign regulatory agencies may determine our clinical trials or other data regarding safety, efficacy or consistency of manufacture or compliance with GMP regulations are insufficient for regulatory approval.

~~Failure to receive approval or significant~~ additional delay in obtaining an FDA approval decision by the anticipated new November 9, 2017 PDUFA date for HEPLISAV-B would have a material adverse effect on our business and results of operations, including possible termination of HEPLISAV-B development and ~~focusing~~ our business on our earlier stage clinical and research immuno-oncology programs. During the pendency of an FDA decision on approval, we expect to increase expenditures relating to HEPLISAV-B in anticipation of potential approval. Even if HEPLISAV-B is approved, the labeling approved by the relevant regulatory authority may negatively impact the potential commercial opportunity for this product, including restricting how and to whom we and our potential partners, if any, may market the product or the manner in which our HEPLISAV-B product may be administered and sold, which could limit the potential for entering into a partnership and commercial opportunity for such product.

Before granting product approval, the FDA must determine that our or our third party contractors’ manufacturing facilities meet GMP requirements before we can use them in the commercial manufacture of our products. We and all of our contract manufacturers are required to comply with the applicable GMP regulations. Manufacturers of biological products must also comply with the FDA’s general biological product standards. In addition, GMP regulations require quality control and quality assurance as well as the corresponding maintenance of records and documentation sufficient to ensure the quality of the approved product. Failure to comply with the statutory and regulatory requirements subjects the manufacturer to possible legal or regulatory action, such as delay of approval, suspension of manufacturing, seizure of product or voluntary recall of a product.

The FDA may require more clinical trials for our product candidates than we currently expect or are conducting before granting regulatory approval, if regulatory approval is granted at all. Our clinical trials may be extended which may lead to substantial delays in the regulatory approval process for our product candidates, which will impair our ability to generate revenues.

Our registration and commercial timelines depend on further discussions with the FDA and corresponding foreign regulatory agencies and requirements and requests they may make for additional data or completion of additional clinical trials. Any such requirements or requests could:

Clinical trials for our product candidates are expensive and time consuming, may involve combinations with other agents, may take longer than we expect or may not be completed at all, and their outcomes are uncertain.*

Clinical trials, including post-marketing studies, to generate sufficient data to meet FDA requirements can be expensive and time consuming. With respect to HEPLISAV-B, the FDA has requested additional information regarding our proposed post-marketing study. Unless we reach an agreement on the post-marketing study, our BLA may not be approved or the study may result in a cost that restricts our ability to justify further investment in the product.

~~We are currently undertaking clinical trials of SD-101 and DV281, including combination studies with other oncology agents,~~ and expect to commence clinical trials for other product candidates in our immuno-oncology pipeline in the future. Our strategy with respect to development of SD-101 and DV281 involves combination studies with other oncology agents. While we believe that this combination agent approach increases the potential for success, these clinical trials are dependent on continuing access to the other oncology agents, and for combination studies that are pursuant to a collaboration they are contingent on agreement with our combination agent study partners regarding the use of the other agents, concurrence on a protocol and supply of clinical materials. Most of our combination agent study partners, such as Merck, are significantly larger than we are and are conducting various other combination studies with other immuno-oncology agents and collaborators. We are not certain these clinical trials will be successful, or that even if successful we would be able to reach agreement to conduct larger, more extensive clinical trials required to achieve regulatory approval for a combination product candidate regimen. In addition, results from smaller, earlier stage clinical studies may not be representative of larger, controlled clinical trials that would be required in order to obtain regulatory approval of a product candidate or a combination of product candidates.

Each of our clinical trials requires the investment of substantial planning, expense and time and the timing of the commencement, continuation and completion of these clinical trials may be subject to significant delays relating to various causes, including scheduling conflicts with participating clinicians and clinical institutions, difficulties in identifying and enrolling participants who meet trial eligibility criteria, failure of participants to complete the clinical trial, delay or failure to obtain Institutional Review Board (“IRB”) or regulatory approval to conduct a clinical trial at a prospective site, unexpected adverse events and shortages of available drug supply. Participant enrollment is a function of many factors, including the size of the relevant population, the proximity of participants to clinical sites, the eligibility criteria for the trial, the existence of competing clinical trials and the availability of alternative or new treatments.

Failure by us or our CROs to conduct a clinical study in accordance with GCP standards and other applicable regulatory requirements could result in disqualification of the clinical trial from consideration in support of approval of a potential product.

We are responsible for conducting our clinical trials consistent with GCP standards and for oversight of our vendors to ensure that they comply with such standards. We depend on medical institutions and CROs to conduct our clinical trials in compliance with GCP. To the extent that they fail to comply with GCP standards, fail to enroll participants for our clinical trials, or are delayed for a significant time in the execution of our trials, including achieving full enrollment, we may be affected by increased costs, program delays or both, which may harm our business.

The FDA or other foreign governmental agencies or we ourselves could delay, suspend or halt our clinical trials of a product candidate for numerous reasons, including with respect to our product candidates and those of our partners in combination agent studies:

In addition, we may experience significant setbacks in advanced clinical trials, even after promising results in earlier trials, such as unexpected adverse events that occur when our product candidates are combined with other therapies and drugs or given to larger patient populations, which often occur in later-stage clinical trials, or less favorable clinical outcomes. ~~In addition,~~Moreover, clinical results are frequently susceptible to varying interpretations that may delay, limit or prevent regulatory approvals. ~~Also,~~

Third-party organizations such as patient advocacy groups and parents of trial participants may demand additional clinical trials or continued access to our drug even if our interpretation of clinical results received thus far leads us to determine that additional clinical trials or continued access are unwarranted. Any disagreement with patient advocacy groups or parents of trial participants may require management’s time and attention and may result in legal proceedings being instituted against us, which could be expensive, time-consuming and distracting, and may result in delay of the program. Negative or inconclusive results or adverse medical events, including participant fatalities that may be attributable to our product candidates, during a clinical trial may necessitate that it be redesigned, repeated or terminated. Further, some of our clinical trials may be overseen by a Data Safety Monitoring Board (“DSMB”), and the DSMB may determine to delay or suspend one or more of these trials due to safety or futility findings based on events occurring during a clinical trial. Any such delay, suspension, termination or request to repeat or redesign a trial could increase our costs and prevent or significantly delay our ability to commercialize our product candidates.

HEPLISAV-B ~~SD-101~~ and most of our earlier stage programs rely on oligonucleotide TLR agonists. Serious adverse event data relating to TLR agonists may require us to reduce the scope of or discontinue our ~~operations.~~operations, or reevaluate the viability of strategic alternatives.

Most of our programs, including ~~our most advanced such as~~ HEPLISAV-B, ~~and SD-101,~~ incorporate TLR9 agonist CpG oligonucleotides. If any of our product candidates in clinical trials or similar products from competitors produce serious adverse event data, we may be required to delay, discontinue or modify ~~many of~~ our clinical trials or our clinical trial ~~strategy.~~strategy, or significantly reevaluate strategic alternatives. If a safety risk based on mechanism of action or the molecular structure were identified, it may hinder our ability to develop our product candidates or enter into potential collaboration or commercial arrangements. Rare diseases and a numerical imbalance in cardiac adverse events have been observed in patients in our clinical trials. If adverse event data are found to apply to our TLR agonist and/or inhibitor technology as a whole, we may be required to significantly reduce or discontinue our operations.

We have no commercialization experience, and the time and resources to reinstitute manufacturing and develop sales, marketing and distribution capabilities for HEPLISAV-B are significant. If we fail to achieve and sustain commercial success for HEPLISAV-B, either independently or with a partner, our business would be harmed.*43

~~If our most advanced product candidate,~~ HEPLISAV-B is approved by the FDA, we will need to establish sales, marketing and distribution capabilities, or make arrangements with third parties to perform these services. These efforts will require resources and time and we may not be able to achieve these capabilities or enter into these arrangements on acceptable terms and in a timely manner. In particular, significant resources may be necessary to successfully market, sell and distribute HEPLISAV-B to patients with diabetes, a group recommended by the Centers for Disease Control (“CDC”) and Advisory Committee on Immunization Practices (“ACIP”) to receive hepatitis B vaccination.

To the extent we rely on other pharmaceutical or biotechnology companies with established sales, marketing and distribution systems to market HEPLISAV-B, we will need to establish and maintain partnership arrangements, and we may not be able to enter into these arrangements on acceptable terms. To the extent that we enter into co-promotion or other arrangements, any revenues we receive will depend upon the efforts of third parties, which may not be successful and are only partially in our control. In that event, our product revenues would likely be lower than if we marketed and sold our products directly.

Moreover, our pricing and reimbursement strategies with respect to our initial approval plans for HEPLISAV-B may significantly impact our ability to achieve commercial success in this potential patient population. Our ability to successfully obtain any market share and obtain profitability will be significantly dependent on our ability to invest appropriate resources in the marketing and launch of our product as well as the market’s acceptance of a sufficient price for HEPLSIAV-B to achieve profitability.

In addition, although we currently believe that we have sufficient inventory of HEPLISAV-B to launch the product, since we previously reduced our manufacturing efforts with respect to HEPLISAV-B following the 2016 CRL, we will have to restart production for the manufacture HEPLISAV-B in order to continue to supply product for use following launch. There can be no assurances that our estimates regarding product necessary to launch HEPLISAV-B will be sufficient or that we can successfully manufacture sufficient quantities in compliance with GMP in order to meet market demand.

If we, or our partners, if any, are not successful in setting our marketing, pricing and reimbursement strategy, recruiting sales and marketing personnel or in building a sales and marketing infrastructure, we will have difficulty commercializing HEPLISAV-B, which would adversely affect our business and financial condition. To the extent we rely on other pharmaceutical or biotechnology companies with established sales, marketing and distribution systems to market HEPLISAV-B, we will need to establish and maintain partnership arrangements, and we may not be able to enter into these arrangements on acceptable terms or at all. To the extent that we enter into co-promotion or other arrangements, certain revenues we receive will depend upon the efforts of third parties, which may not be successful and are only partially in our control.

~~We rely on our facility in Düsseldorf, Germany~~and third parties to supply materials or perform processes necessary to manufacture our product candidates. We rely on a limited number of suppliers to produce the oligonucleotides we require for development and commercialization. Additionally, we have limited experience in manufacturing our product candidates in commercial quantities.*

~~We rely on our facility in Düsseldorf and third parties to perform the multiple processes involved in manufacturing our product candidates, including 1018 and SD-101, certain antigens, the combin~~ation of the oligonucleotide and the antigens, and the formulation, fill and finish. In connection with our restructuring in January 2017, we elected to retain, but furlough, the majority of the workforce in Düsseldorf supporting the manufacture of HEPLISAV-B and utilize the existing stockpiled inventory of HEPLISAV-B to meet expected initial demand if the product is approved. If HEPLISAV-B is approved, we will need to re-activate and qualify our facility in Düsseldorf. If expected initial demand exceeds our estimates, this may result in a shortage until we can begin manufacturing. Regulatory or other limitations on our ability to re-activate our manufacturing facility, or the termination or interruption of relationships with key suppliers may result in higher cost or delays in our product development or commercialization efforts.

We have also relied on a limited number of suppliers to produce oligonucleotides for clinical trials and a single supplier to produce our 1018 for HEPLISAV-B. To date, we have manufactured only small quantities of oligonucleotides ourselves for development purposes. If we were unable to maintain our existing suppliers for 1018 and SD-101, we would have to establish an alternate qualified manufacturing capability, which would result in significant additional operating costs and delays in developing and commercializing our product candidates, particularly HEPLISAV-B. We or other third parties may not be able to produce product at a cost, quantity and quality that are available from our current third-party suppliers or at all.

We utilize our facility in Düsseldorf to manufacture rHBsAg for HEPLISAV-B. The commercial manufacturing of biological products is a time-consuming and complex process, which must be performed in compliance with GMP regulations. There ~~can be no assurance that the FDA will find our manufacturing controls and facilities to be acceptable to support the approval of HEPLISAV-B.~~

~~In addition, we may not be able to comply with ongoing and comparable foreign regulations, and our manufacturing process may be~~ subject to delays, disruptions or quality control/quality assurance problems. Noncompliance with these regulations or other problems with our manufacturing process may limit, delay or disrupt the commercialization of HEPLISAV-B or our other product candidatesregulatory obligations and ~~could result in significant expense.~~

Ifcontinued regulatory review, and if we receive regulatory approval for our other product candidates, we will be subject to ongoing FDA and foreign regulatory obligations and continued regulatory ~~review.~~review for such products.

WeWith respect to HEPLISAV-B and our ~~third party~~other product candidates in development, we and our third-party manufacturers and suppliers are required to comply with applicable GMP regulations and other international regulatory requirements. The regulations require that our product candidates be manufactured and records maintained in a prescribed manner with respect to manufacturing, testing and quality control/quality assurance activities. Manufacturers and suppliers of key components and materials must be named in a BLA submitted to the FDA for any product candidate for which we are seeking FDA approval. Additionally, ~~third party~~third-party manufacturers and suppliers and any manufacturing facility must undergo a pre-approval inspection before we can obtain marketing authorization for any of our product candidates. Even after a manufacturer has been qualified by the FDA, the manufacturer must continue to expend time, money and effort in the area of production and quality control to ensure full compliance with GMP. Manufacturers are subject to regular, periodic inspections by the FDA following initial approval. Further, to the extent that we contract with third parties for the manufacture of our products, our ability to control third-party compliance with FDA requirements will be limited to contractual remedies and rights of inspection.

If, as a result of the FDA’s inspections, it determines that the equipment, facilities, laboratories or processes do not comply with applicable FDA regulations and conditions of product approval, the FDA may not approve the product or may suspend the manufacturing operations. If the manufacturing operations of any of the suppliers for our product candidates are suspended, we may be unable to generate sufficient quantities of commercial or clinical supplies of product to meet market demand, which would harm our business. In addition, if delivery of material from our suppliers were interrupted for any reason, we might be unable to ship our approved product for commercial supply or to supply our products in development for clinical trials. Significant and costly delays can occur if the qualification of a new supplier is required.

Failure to comply with regulatory requirements could prevent or delay marketing approval or require the expenditure of money or other resources to correct. Failure to comply with applicable requirements may also result in warning letters, fines, injunctions, civil penalties, recall or seizure of products, total or partial suspension of production, refusal of the government to renew marketing applications and criminal prosecution, any of which could be harmful to our ability to generate revenues and to our stock price.

Any regulatory approvals that we receive for our product candidates are likely to contain requirements for post-marketing follow-up studies, which may be costly. Product approvals, once granted, may be modified based on data from subsequent studies or commercial use. As a result, limitations on labeling indications or marketing claims, or withdrawal from the market may be required if problems occur after approval and commercialization.

We face uncertainty regarding coverage, pricing and reimbursement and the practices of third party payors, which may make it difficult or impossible to sell our product candidates on commercially reasonable terms.*

In both domestic and foreign markets, our ability to achieve profitability will depend in part on the negotiation of a favorable price or the availability of appropriate reimbursement from third party payors, in particular for HEPLISAV-B, where existing products are already marketed. While in the U.S., pricing for hepatitis B vaccines is currently stable and reimbursement is favorable as private and public payors recognize the value of prophylaxis in this setting given the high costs of potential morbidity and mortality, there can be no assurance that HEPLISAV-B would launch with stable pricing and favorable reimbursement.

Existing laws affecting the pricing and coverage of pharmaceuticals and other medical products by government programs and other third party payors may change before any of our product candidates are approved for marketing. In addition, third party payors are increasingly challenging the price and cost-effectiveness of medical products and services, and pricing and reimbursement decisions may not allow our products to compete effectively with existing or competitive products. Because we intend to offer products, if approved, that involve new technologies and new approaches to treating disease, the willingness of third party payors to reimburse for our products is uncertain. We will have to charge a price for our products that is sufficient to enable us to recover our considerable investment in product development and our operating costs. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to achieve profitability and could harm our future prospects and reduce our stock price.

We may develop, seek regulatory approval for and market our product candidates outside the U.S., requiring a significant commitment of resources. Failure to successfully manage our international operations could result in significant unanticipated costs and delays in regulatory approval or commercialization of our product candidates.

We may seek to introduce certain of our product candidates, including HEPLISAV-B, in various markets outside the U.S. Developing, seeking regulatory approval for and marketing our product candidates outside the U.S. could impose substantial burdens on our resources and divert management’s attention from domestic operations. International operations are subject to risk, including:

We have withdrawn our MAA for HEPLISAV-B in Europe and we may not be able to provide sufficient data or respond to other comments to our previously filed MAA sufficient to obtain regulatory approvals in Europe in a reasonable time period or at all.

Any failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in other jurisdictions. If we are unable to successfully manage our international operations, we may incur significant unanticipated costs and delays in regulatory approval or commercialization of our product candidates, which would impair our ability to generate revenues.

If any products we develop are not accepted by the market or if regulatory agencies limit our labeling indications, require labeling content that diminishes market uptake of our products or limits our marketing claims, we may be unable to generate significant revenues, if any.

Even if we obtain regulatory approval for our product candidates and are able to commercialize them, our products may not gain market acceptance among physicians, patients, healthcare payors and the medical community.

~~The degree of market acceptance of any of our approved products will depend upon a number of factors, including:~~

A key part of our business strategy for products in development is to establish collaborative relationships to ~~commercialize~~help fund development and ~~fund development~~commercialization of our product ~~candidates.~~candidates and research programs. We may not succeed in establishing and maintaining collaborative relationships, which may significantly limit our ability to continue to develop and commercialize ~~our~~those products ~~successfully,~~and programs, if at all.*

We may need to establish collaborative relationships to obtain domestic ~~and~~and/or international sales, marketing, research, development and distribution capabilities for our product candidates ~~in particular with respect to the commercialization of HEPLISAV-B, if approved.~~and our discovery research programs. Failure to obtain a collaborative relationship for those product candidates and programs or HEPLISAV-B ~~particularly~~ in markets outside the U.S. requiring extensive sales efforts, may significantly impair the potential for ~~this product~~those products and programs and we may be required to raise additional ~~capital.~~capital to continue them. The process of establishing and maintaining collaborative relationships is difficult and time-consuming, and ~~involves~~even if we establish such relationships, they may involve significant uncertainty, including:

If any collaborator fails to fulfill its responsibilities in a timely manner, or at all, our research, clinical development, manufacturing or commercialization efforts pursuant to that collaboration could be delayed or terminated, or it may be necessary for us to assume responsibility for expenses or activities that would otherwise have been the responsibility of our collaborator. Despite our efforts, we may be unable to secure collaborative arrangements. If we are unable to establish and maintain collaborative relationships on acceptable terms or to successfully transition terminated collaborative agreements, we may have to delay or discontinue further development of one or more of our product candidates, undertake development and commercialization activities at our own expense or find alternative sources of capital.

~~Many~~The term loan agreement we entered into in February 2018 imposes significant operating and financial restrictions on us that may prevent us from pursuing certain business opportunities and restrict our ability to operate our business.

In February 2018, we entered into a term loan agreement under which we have borrowed $180.9 million, which includes paid-in-kind interest. The agreement contains covenants that restrict our ability to take various actions, including, among other things, incur additional indebtedness, pay dividends or distributions or make certain investments, create or incur certain liens, transfer, sell, lease or dispose of assets, enter into transactions with affiliates, consummate a merger or sell or otherwise dispose of assets. The agreement also requires us to comply with a daily minimum liquidity covenant and an annual revenue requirement, which is (i) $75 million of product revenue for the period July 1, 2021 through June 30, 2022 and (ii) $100 million of product revenue for the period July 1, 2022 through June 30, 2023. The agreement specifies a number of events of default, some of which are subject to applicable grace or cure periods, including, among other things, non-payment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults, and non-payment of material judgments.

Our ability to comply with these covenants will likely be affected by many factors, including events beyond our control, and we may not satisfy those requirements. Our failure to comply with our obligations could result in an event of default and the acceleration of our ~~competitors have greater financial resources and expertise than we do. If we are unable to successfully compete with existing or potential competitors as~~repayment obligation at a ~~result of these disadvantages~~time when we may ~~be unable~~not have the cash to ~~generate revenues and~~comply with that obligation, which could result in a seizure of most of our ~~business will be harmed.~~

We compete with pharmaceutical companies, biotechnology companies, academic institutions and research organizations, in developing therapies to prevent or treat cancer and infectious and inflammatory diseases. For example, if it is approvedassets. The restrictions contained in the future, HEPLISAV-B will compete in the U.S. with established hepatitis B vaccines marketed by Merck and GSK and outside the U.S. with vaccines from those companies and several additional established pharmaceutical companies. The field of oncology therapeutics is extremely competitive, with numerous biotechnology and pharmaceutical companies developing therapies for all of the targets we are pursuing. Competitors may develop more effective, more affordable or more convenient products or may achieve earlier patent protection or commercialization of their products. These competitive products may render our product candidates obsolete oragreement could also limit our ability to ~~generate revenues from~~meet capital needs or otherwise restrict our ~~product candidates.~~

~~Existing~~activities and ~~potential competitors may also compete with us for qualified scientific and management personnel, as well as for technology~~adversely affect our ability to finance our operations, enter into acquisitions or to engage in other business activities that would be ~~advantageous to~~in our business. Although certain of our employees have commercialization experience, as a company we currently have limited sales, marketing and distribution capabilities. Our success in developing marketable products and achieving a competitive position will depend, in part, on our ability to attract and retain qualified personnel. If we do not succeed in attracting new personnel and retaining and motivating existing personnel, our operations may suffer and we may be unable to obtain financing, enter into collaborative arrangements, sell our product candidates or generate revenues.interest.

We rely on CROs and Clinical Sites and Investigators for our clinical trials. If these third parties do not fulfill their contractual obligations or meet expected deadlines, our planned clinical trials may be delayed and we may fail to obtain the regulatory approvals necessary to commercialize our product candidates.

We rely on CROs, ~~Clinical Sites~~clinical sites and ~~Investigators~~investigators for our clinical trials. If these third parties do not perform their obligations or meet expected deadlines our planned clinical trials may be extended, delayed, modified or terminated. While we maintain oversight over our clinical trials and conduct regular reviews of the data, we are dependent on the processes and quality control efforts of our ~~third party~~third-party contractors to ensure that clinical trials are conducted properly and that detailed, quality records are maintained to support the results of the clinical trials that they are conducting on our behalf. Any extension, delay, modification or termination of our clinical trials or failure to ensure adequate documentation and the quality of the results in the clinical trials could delay or otherwise adversely affect our ability to commercialize our product candidates and could have a material adverse effect on our business and operations.

As we evolve from a company primarily involved in research and development to a company potentially involved in commercialization, we may encounter difficulties in managing our growth and expanding our operations successfully.*

If we are successful in advancing HEPLISAV-B through approval and commercialization, we will need to expand our organization, including adding marketing and sales capabilities or contracting with third parties to provide these capabilities for us. As our operations expand, we expect that we will also need to manage additional relationships with various collaborative partners, suppliers and other third parties. Future growth will impose significant added responsibilities on our organization, in particular on management. Our future financial performance and our ability to commercialize HEPLISAV-B and to compete effectively will depend, in part, on our ability to manage any future growth effectively. To that end, we may not be able to manage our growth efforts effectively, and hire, train and integrate additional management, administrative and sales and marketing personnel, and our failure to accomplish any of these activities could prevent us from successfully growing our company.

If we fail to comply with the extensive requirements applicable to biopharmaceutical manufacturers and marketers under the healthcare fraud and abuse, anticorruption, privacy, transparency and other laws of the jurisdictions in which we conduct our business, we may be subject to significant liability.

Our activities, and the activities of our agents, including some contracted third parties, are subject to extensive government regulation and oversight both in the U.S. and in foreign jurisdictions. ~~If we obtain approval for and commercialize a vaccine or other product, our~~Our interactions with physicians and others in a position to prescribe or purchase our products ~~will be~~are subject to a legal

regime designed to prevent healthcare fraud and abuse and off-label promotion. We also are subject to laws pertaining to transparency of transfers of value to healthcare providers; privacy and data protection; compliance with industry voluntary compliance guidelines; and prohibiting the payment of bribes. Relevant U.S. laws include:

The Office of Inspector General for the Department of Health and Human Services, the Department of Justice, states’ Attorneys General and other governmental authorities actively enforce the laws and regulations discussed above. These entities also coordinate extensively with the FDA, using legal theories that connect violations of the Federal Food, Drug and Cosmetic Act (such as off-label promotion) to the eventual submission of false claims to government healthcare programs. Prosecution of such promotion cases under the ~~healthcare fraud and abuse laws~~False Claims Act provides the potential for private parties (qui tam relators, or “whistleblowers”) to initiate cases on behalf of the government and provides for significantly higher penalties upon conviction.

In the U.S., pharmaceutical and biotechnology companies have been the target of numerous government prosecutions and investigations alleging violations of law, including claims asserting impermissible off-label promotion of pharmaceutical products, payments intended to influence the referral of federal or state health care business, submission of false claims for government reimbursement, or submission of incorrect pricing information.

Violations of any of the laws described above or any other applicable governmental regulations and other similar foreign laws may subject us, our employees or our agents to significant criminal, ~~and/or~~ civil ~~sanctions,~~and administrative penalties, including fines, civil monetary penalties, exclusion from participation in government health care programs (including Medicare and Medicaid), disgorgement, imprisonment, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws and the restriction or restructuring of our operations, any of which could adversely affect our ability to operate our business and our financial results. Additionally, whether or not we have complied with the law, an investigation into alleged unlawful conduct may cause us to incur significant expense, cause reputational damage, divert management time and attention, and otherwise adversely affect our business. While we have developed and instituted a corporate compliance program, we cannot guarantee that we, our employees, our consultants, contractors, or other agents are or will be in compliance with all applicable U.S. or foreign laws.

It remains unclear how various state, federal, and international privacy and cybersecurity law will affect our business. For example, we don’t know how the CCPA will be interpreted, but as currently written, it will likely impact our business activities and exemplifies the vulnerability of our business to not only cyber threats but also the evolving regulatory environment related to personal data. As we expand our operations, the CCPA may increase our compliance costs and potential liability. Some observers have noted that the CCPA could mark the beginning of a trend toward more stringent privacy legislation in the United States. Other states are beginning to pass similar laws.

Internationally, the GDPR requires us to make more detailed disclosures to data subjects, requires disclosure of the legal basis on which we can process personal data, makes it harder for us to obtain valid consent for processing, will require the appointment of data protection officers when sensitive personal data, such as health data, is processed on a large scale, provides more robust rights for data subjects, introduces mandatory data breach notification through the EU, imposes additional obligations on us when contracting with service providers and requires us to adopt appropriate privacy governance including policies, procedures, training and data audit. If we do not comply with our obligations under the GDPR, we could be exposed to fines of up to the greater of €20 million or up to 4% of our total global annual revenue in the event of a significant breach. In addition, we may be the subject of litigation and/or adverse publicity, which could adversely affect our business, results of operations and financial condition. Also, mechanisms for legally transferring information under the GDPR remain unclear. At present, there are few if any viable alternatives to the SCCs, so future developments may necessitate further expenditures on local infrastructure, changes to internal business processes, or may otherwise affect or restrict sales and operations.

In addition, our data security and information technology systems, as well as those of our partners and contractors, are potentially vulnerable to data security breaches, whether by employees or others, that may expose sensitive data or personal information to unauthorized persons.

Enacted or future legislation, including potentially unfavorable pricing regulations or other healthcare reform initiatives, may have an adverse effect on our operations and business.

We expect there will continue to be federal and state laws and/or regulations, proposed and implemented, that could impact our operations and business. ~~The extent~~For example, the ACA, among other things, imposes a significant annual fee on companies that manufacture or import branded prescription drug products. It also contains substantial provisions intended to ~~which future legislation or regulations, if any, relating~~broaden access to health ~~care fraud~~insurance, reduce or constrain the growth of healthcare spending, and ~~abuse~~impose additional health policy reforms, any or all of which may affect our business. There have been executive, legal and political challenges to certain aspects of ACA. For example, President Trump signed several executive orders and other directives designed to delay, circumvent, or loosen certain requirements mandated by ACA. Concurrently, Congress considered legislation that would repeal or repeal and replace all or part of ACA. While Congress has not passed comprehensive repeal legislation, several bills affecting the implementation of certain taxes under the ACA have been signed into law. The Tax Cuts and Jobs Act of 2017 (“Tax Act”) included a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate”. In addition, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the ACA-mandated “Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective January l, 2021, also eliminated the health insurer tax. The Bipartisan Budget Act of 2018 (“BBA”) among other things, amended the ACA, effective January 1, 2019, to increase from 50 percent to 70 percent the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole”. On December 14, 2018, a Texas U.S. District Court Judge ruled that the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress as part of the Tax Act. Additionally, on December 18, 2019, the U.S. Court of Appeals for the 5th Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the ACA are invalid as well. The U.S. Supreme Court is currently reviewing this case, but it is unknown when a decision will be reached. On February 10, 2021, the Biden administration withdrew the federal government’s support for overturning the ACA. Although the U.S. Supreme Court has yet ruled on the constitutionality of the ACA, on January 28, 2021, President Biden issued an executive order to initiate a special enrollment period for purposes of obtaining health insurance coverage through the ACA marketplace, which began on February 15, 2021 and will remain open through August 15, 2021. The executive order also instructs certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA. It is unclear how the Supreme Court ruling, other such litigation, and the healthcare reform measures will impact the ACA and our business.

Other legislative changes have also been proposed and adopted since the ACA was enacted. For example, the Budget Control Act of 2011 resulted in aggregate reductions in Medicare payments to providers of up to two percent per fiscal year, starting in 2013 and, due to subsequent legislative amendments to the statute, including the BBA, will remain in effect through 2030 unless additional Congressional action is taken. However, COVID-19 relief support legislation suspended the 2% Medicare sequester from May 1, 2020 through December 31, 2021. In addition, the American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several types of providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. Such laws, ~~and/~~and others that may affect our business that have been recently enacted or ~~enforcement,~~may in the future be enacted, may result in additional reductions in Medicare and other healthcare funding.

Also, there has been heightened governmental scrutiny recently in the U.S. over pharmaceutical pricing practices in light of the rising cost of prescription drugs and biologics. Such scrutiny has resulted in several recent Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. At the federal level, the Trump administration used several means to propose or implement drug pricing reform, including through federal budget proposals, executive orders and policy initiatives. For example, on July 24, 2020 and September 13, 2020, the Trump administration announced several executive orders related to prescription drug pricing that attempt to implement several of the administration’s proposals. The FDA also released a final rule, effective November 30, 2020, implementing a portion of the importation executive order providing guidance for states to build and submit importation plans for drugs from Canada. Further, on November 20, 2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law. The implementation of the rule has been delayed by the Biden administration from January 1, 2022 to January 1, 2023 in response to ongoing litigation. The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which have also been delayed until January 1, 2023. On November 20, 2020, CMS issued an interim final rule implementing President Trump’s Most Favored Nation executive order, which would tie Medicare Part B payments for certain physician-administered drugs to the lowest price paid in other economically advanced countries, effective January 1, 2021. On December 28, 2020, the United States District Court in Northern California issued a nationwide preliminary injunction against implementation of the interim final rule. However, it is unclear whether the Biden administration will work to reverse these measures or pursue similar policy initiatives. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, and restrictions on certain product access. In some cases, such legislation and regulations have been designed to encourage importation from other countries and bulk purchasing.

We cannot predict the initiatives that may be ~~enacted~~adopted in the future or ~~what~~the effect any such ~~legislation or regulation would~~initiatives may have on our ~~business remains uncertain.~~

~~The loss~~business. However, in the future, there will likely continue to be additional proposals relating to the reform of ~~key personnel,~~the U.S. healthcare system, some of which could further limit coverage and reimbursement of products, including our ~~Chief Executive Officer, could delay~~product candidates. Any reduction in reimbursement from Medicare or ~~prevent achieving our objectives. In addition, our continued growth in anticipation of commercialization~~other government programs may result in ~~difficulties~~a similar reduction in managing our growth and expanding our operations successfully.*

~~We depend on our senior executive officers, as well as key scientific and~~payments from private payors. The implementation of cost containment measures or other personnel. Our research, product development and business efforts could be adversely affected by the loss of one or more key members of our scientific or management staff, including our Chief Executive Officer. We currently have no key person insurance on any of our employees.

As we advance HEPLISAV-B to commercialization, we will need to expand our regulatory, manufacturing, administrative, marketing and sales capabilities or contract with third parties to provide these capabilities for us. As our operations expand, we expect that we will need to manage additional relationships with various vendors, partners, suppliers and other third parties. Future growth will impose significant added responsibilities on members of management. Our future financial performance and our ability to commercialize HEPLISAV-B and to compete effectively will depend, in part, on our ability to manage any future growth effectively. To that end, we must be able to effectively manage our commercialization efforts, research efforts and clinical trials and hire, train and integrate additional regulatory, manufacturing, administrative, and sales and marketing personnel. Wehealthcare reforms may ~~not be able to accomplish these tasks, and our failure to accomplish any of them could~~ prevent us from ~~successfully growing~~being able to generate revenue, attain profitability or commercialize our ~~company and achieving profitability.~~products. Further, it is possible that additional governmental action is taken in response to the COVID-19 pandemic.

We face product liability exposure, which, if not covered by insurance, could result in significant financial liability.

While we have not experienced any product liability claims to date, the use of any of our product candidates in clinical trials and the sale of any approved products, including HEPLISAV-B, will subject us to potential product liability claims and may raise questions about a product’s safety and efficacy. As a result, we could experience a delay in our ability to commercialize one or more of our product candidates or reduced sales of any approved product candidates. In addition, a product liability claim may exceed the limits of our insurance policies and exhaust our internal resources. We have obtained limited clinical trial liability and umbrella insurance coverage for our clinical trials. This coverage may not be adequate or may not continue to be available in sufficient amounts, at an acceptable cost or at all. While we have obtained product liability insurance coverage for HEPLISAV-B, there is a risk that this coverage may not be adequate or may not continue to be available in sufficient amounts, at an acceptable cost or at all. We also may not be able to obtain commercially reasonable product liability insurance for any product approved for marketing in the future. A product liability claim, product recalls or other claims, as well as any claims for uninsured liabilities or in excess of insured liabilities, would divert our management’s attention from our business and could result in significant financial liability.

~~We are involved in legal actions that are expensive and time consuming, and, if resolved adversely, could harm our business, financial condition, or results of operations.~~

Securities class action lawsuits against us are pending and purported stockholder derivative complaints have been brought against us. Any negative outcome from such lawsuits could result in payments of monetary damages or fines, or adversely affect our products, and accordingly our business, financial condition, or results of operations could be materially and adversely affected.

There can be no assurance that a favorable final outcome will be obtained in these cases, and defending any lawsuit is costly and can impose a significant burden on management and employees. Any litigation to which we are a party may result in an onerous or unfavorable judgment that may not be reversed upon appeal or in payments of monetary damages or fines not covered by insurance, or we may decide to settle lawsuits on unfavorable terms, which could adversely affect our business, financial conditions, or results of operations.

We use hazardous materials and controlled substances in our business. Any claims or liabilities relating to improper handling, storage or disposal of these materials and substances could be time consuming and costly to resolve.

Our research and product development activities involve the controlled storage, use and disposal of hazardous and radioactive materials and biological waste, and controlled substances. We are subject to federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of these materials, substances, and certain waste products. We believe we are currently in compliance with all government permits that are required for the storage, use and disposal of these materials and controlled substances. However, we cannot eliminate the risk of accidental contamination or injury to persons or property from these materials, or that controlled substances will be accidentally stored or used in violation of relevant federal, state and local requirements. In the event of an accident related to hazardous materials or a violation of requirements pertaining to controlled substances, we could be held liable for damages, cleanup costs or penalized with fines, and this liability could exceed the limits of our insurance policies and exhaust our internal resources. We may have to incur significant costs to comply with future environmental laws and regulations, and laws and regulations pertaining to the storage and use of controlled substances.

~~Significant disruptions of information technology systems or breaches of data security could adversely affect our business.~~

Our business is increasingly dependent on critical, complex and interdependent information technology systems, including Internet‑based systems, to support business processes as well as internal and external communications. The size and complexity of our

~~computer systems make them potentially vulnerable to breakdown, malicious intrusion and computer viruses that may result in the impairment of key business processes.~~

In addition, our systems are potentially vulnerable to data security breaches—whether by employees or others—that may expose sensitive data to unauthorized persons. Such data security breaches could lead to the loss of trade secrets or other intellectual property, or could lead to the public exposure of personally identifiable information (including sensitive personal information) of our employees, collaborators, clinical trial patients, and others. A data security breach or privacy violation that leads to disclosure or modification of or prevents access to patient information, including personally identifiable information or protected health information, could harm our reputation, compel us to comply with federal and/or state breach notification laws, subject us to mandatory corrective action, require us to verify the correctness of database contents and otherwise subject us to liability under laws and regulations that protect personal data, resulting in increased costs or loss of revenue. If we are unable to prevent such data security breaches or privacy violations or implement satisfactory remedial measures, our operations could be disrupted, and we may suffer loss of reputation, financial loss and other regulatory penalties because of lost or misappropriated information, including sensitive patient data. In addition, these breaches and other inappropriate access can be difficult to detect, and any delay in identifying them may lead to increased harm of the type described above. Moreover, the prevalent use of mobile devices that access confidential information increases the risk of data security breaches, which could lead to the loss of confidential information, trade secrets or other intellectual property. While we have implemented security measures to protect our data security and information technology systems, such measures may not prevent such events.

~~Such disruptions and breaches of security could have a material adverse effect on our business, financial condition and results of operations.~~

~~We have incurred substantial losses since inception and do not have any commercial products that generate revenue.~~

We have experienced significant net losses in each year since our inception. Our accumulated deficit was $879.9 million as of September 30, 2017. To date, our revenue has resulted from collaboration agreements, government and private agency grants and services and license fees from our customers, including the customers of our wholly-owned subsidiary Dynavax GmbH. We anticipate that we will incur substantial additional net losses in future years as a result of our continuing investment in research and development activities and to commercialize HEPLISAV-B if it is approved by the FDA.

We do not have any products that generate revenue. There can be no assurance whether HEPLISAV-B or any of our other product candidates can be successfully developed, financed or commercialized in a timely manner based on our current plans. We will not be able to achieve approval or generate meaningful sales without significant additional resources. Our ability to generate revenue depends upon obtaining regulatory approvals for our product candidates, generating product sales and entering into and maintaining successful collaborative relationships.

If we are unable to generate significant revenues or achieve profitability, we may be required to reduce or discontinue our current and planned operations, enter into a transaction that constitutes a change in control of the company or raise additional capital on less than favorable terms.

If we are unable to generate significant revenues or achieve profitability, we will require substantial additional capital to continue development of our product candidates and if our most advanced candidate, HEPLISAV-B, is approved, to commence manufacturing, sales and marketing activities.

To continue development of our product candidates and, if it is approved, to launch HEPLISAV-B, we will need significant additional funds. Addressing this need may occur through strategic alliance and licensing arrangements and/or future public or private financings. We expect to continue to spend substantial funds in connection with:

The cash requirements of our current operations will be significantly impacted by the FDA decision regarding potential approval for HEPLISAV-B. Although we believe we have current funds for at least the next twelve months based on our current operational plans, cash, cash equivalents and marketable securities on hand, we expect that if HEPLISAV-B is approved by the FDA, we will require additional capital following approval, in particular if we fail to enter into a third party collaboration following approval.

Sufficient additional financing through future public or private financings, strategic alliance and licensing arrangements or other financing sources may not be available on acceptable terms or at all. Our ability to raise additional capital in the equity and debt markets is dependent on a number of factors, including, but not limited to, the market demand for our common stock, which itself is subject to a number of development and business risks and uncertainties, as well as the uncertainty that we would be able to raise such additional capital at a price or on terms that are favorable to us. Equity or other financings, if completed, could result in significant dilution or otherwise adversely affect the rights of existing stockholders. If adequate funds are not available in the future, we may need to delay, reduce the scope of, or put on hold the HEPLISAV-B program or other development programs while we seek strategic alternatives.

We rely on licenses to intellectual property from third parties. Impairment of these licenses or our inability to maintain them would severely harm our business.

Our current research and development efforts depend in part upon our license arrangements for intellectual property owned by third parties. Our dependence on these licenses subjects us to numerous risks, such as disputes regarding the use of the licensed intellectual property and the creation and ownership of new discoveries under such license agreements. In addition, these license arrangements require us to make timely payments to maintain our licenses and typically contain diligence or milestone-based termination provisions. Our failure to meet any obligations pursuant to these agreements could allow our licensors to terminate our agreements or undertake other remedies such as converting exclusive to non-exclusive licenses if we are unable to cure or obtain waivers for such failures or amend such agreements on terms acceptable to us. In addition, our license agreements may be terminated or may expire by their terms, and we may not be able to maintain the exclusivity of these licenses. If we cannot obtain and maintain licenses that are advantageous or necessary to the development or the commercialization of our product candidates, we may be required to expend significant time and resources to develop or license similar technology or to find other alternatives to maintaining the competitive position of our products. If such alternatives are not available to us in a timely manner or on acceptable terms, we may be unable to continue development or commercialize our product candidates. In the absence of a current license, we may be required to redesign our technology so it does not infringe a ~~third party’s~~third-party’s patents, which may not be possible or could require substantial funds and time.

If third parties successfully assert that we have infringed their patents and proprietary rights or challenge our patents and proprietary rights, we may become involved in intellectual property disputes and litigation that would be costly, time consuming and delay or prevent development or commercialization of our product candidates.

We may be exposed to future litigation by third parties based on claims that our products, product candidates or proprietary technologies infringe their intellectual property rights, or we may be required to enter into litigation to enforce patents issued or licensed to us or to determine the ownership, scope or validity of our or another party’s proprietary rights, including a challenge as to the validity of our issued and pending claims. From time to time we are involved in various ~~interference and other~~ administrative proceedings related to our intellectual property which ~~has caused~~causes us to incur certain legal expenses. If we become involved in any litigation and/or other significant ~~interference~~ proceedings related to our intellectual property or the intellectual property of others, we will incur substantial additional expenses and it will divert the efforts of our technical and management personnel.

Two of our potential competitors, Merck and GSK, are exclusive licensees of broad patents covering methods of production of rHBsAg, a component of HEPLISAV-B. In addition, the Institut Pasteur also owns or has exclusive licenses to patents relating to aspects of production of rHBsAg in the U.S. While some of these patents have expired or will soon expire outside the U.S., they remain in force in the U.S. To the extent we are able to commercialize HEPLISAV-B in the U.S. while these patents remain in force, Merck, GSK or their respective licensors or the Institut Pasteur may bring claims against us.

If we or our collaborators are unsuccessful in defending or prosecuting our issued and pending claims or in defending potential claims against our products, for example, as may arise in connection with the commercialization of HEPLISAV-B or any similar or other product candidate, we or our collaborator could be required to pay substantial damages or be unable to commercialize our product candidates or use our proprietary technologies without a license from such ~~third party.~~third-party. A license may require the payment of substantial fees or royalties, require a grant of a cross-license to our technology or may not be available on acceptable terms, if at all. Any of these outcomes could require us to change our business strategy and could materially impact our business and operations.

One of our potential competitors, Pfizer, has issued patent claims, as well as patent claims pending with the PTO and foreign patent offices, that may be asserted against our TLR agonist products and our TLR inhibitor products. We may need to obtain a license to one or more of these patent claims held by Pfizer by paying fees or royalties or offering rights to our own proprietary technologies to commercialize one or more of our formulations other than with respect to HEPLISAV-B, for which we have a license. A license for other uses may not be available to us on acceptable terms, if at all, which could preclude or limit our ability to commercialize our products.

If the combination of patents, trade secrets and contractual provisions that we rely on to protect our intellectual property is inadequate, the value of our products or product candidates will ~~decrease.~~decrease, and we may be unable to realize any commercial benefit from the development of a vaccine containing our CpG 1018 adjuvant.

We will be able to protect our proprietary rights from unauthorized use only to the extent that these rights are covered by valid and enforceable patents for a commercially sufficient term or are otherwise effectively maintained as trade secrets. We try to protect our proprietary rights by filing and prosecuting U.S. and foreign patent applications. However, in certain cases such protection may be limited, depending in part on existing patents held by third parties, or other disclosures which impact patentability, which may only allow us to obtain relatively narrow patent protection. In the U.S., legal standards relating to the validity and scope of patent claims in the biopharmaceutical field can be highly uncertain, are still evolving and involve complex legal and factual questions for which important legal principles remain unresolved.

For example, our CpG 1018 adjuvant has no composition of matter patent protection in the United States or elsewhere. We must therefore rely primarily on the protection afforded by method of use patents relating to the use of CpG 1018 in vaccines, and trade secret protection and confidentiality and other agreements to protect our interests in proprietary know-how related to CpG 1018. We have filed patent applications claiming compositions and methods of use of CpG 1018 for COVID-19 and other vaccines, but we cannot provide any assurances that we will receive an issued patent for any of these patent applications or that, if issued, any of these patents will provide adequate protection for any intended use of CpG 1018 in vaccines. If we are unable to adequately obtain patent protection or enforce our other proprietary rights relating to CpG 1018, we may be unable to realize any commercial benefit from the development of a vaccine containing CpG 1018, and we may not have the ability to prevent others from developing or commercializing a vaccine containing CpG 1018.

The biopharmaceutical patent environment outside the U.S. is ~~even more~~also uncertain. We may be particularly affected by this uncertainty since several of our product candidates or our collaborators’ vaccine candidates may initially address market opportunities outside the U.S., where we may only be able to obtain limited patent ~~protection.~~protection, if any. For example, while many countries such as the United States permit method of use patents relating to the use of drug products, in some countries the law relating to patentability of such use claims is evolving and may be unfavorably interpreted to prevent us from successfully prosecuting some or all of our pending patent applications relating to the use of CpG 1018. There are some countries that currently do not allow such method of use patents, or that significantly limit the types of uses that are patentable.

The risks and uncertainties that we face with respect to our patents and other proprietary rights include the following:

We also rely on trade secret protection and confidentiality agreements to protect our interests in proprietary know-how that is not patentable and for processes for which patents are difficult to enforce. We cannot be certain that we will be able to protect our trade secrets adequately. Any disclosure of confidential data in the public domain or to third parties could allow our competitors to learn our trade secrets. If we are unable to adequately obtain or enforce proprietary rights, we may be unable to commercialize our products, enter into collaborations, generate revenues or maintain any advantage we may have with respect to existing or potential competitors.

Our stock price is subject to volatility, and your investment may suffer a decline in value.

The market prices for securities of biopharmaceutical companies have in the past been, and are likely to continue in the future, to be, very volatile. The market price of our common stock is subject to substantial volatility depending upon many factors, many of which are beyond our control, including:

The stock markets in general, and the markets for biotechnology and pharmaceutical stocks in particular, have historically experienced significant volatility that has often been unrelated or disproportionate to the operating performance of particular companies, including recently in connection with the ongoing COVID-19 pandemic, which has resulted in decreased market prices, notwithstanding the lack of a fundamental change in the underlying business models or prospects of those companies. These broad market fluctuations have adversely affected and may in the future adversely affect the market price of our common stock. In this regard, worsening economic conditions and other adverse effects or developments ~~or disputes concerning~~relating to the ~~proprietary rights~~ongoing COVID-19 pandemic may negatively affect the market price of our ~~products or product candidates;~~

One or more of these factors could cause a substantial decline in the price of our common stock. In addition, securities class action and shareholder derivative litigation has often been brought against a company following a decline in the market price of its securities. We ~~are currently~~have in the ~~target of such litigation, resulting from the decline in our common stock following the disclosure in November 2016 of the FDA’s 2016 CRL related to HEPLISAV-B. We~~past been, and we may in the future be, the target of ~~additional~~ such litigation. Securities and shareholder derivative litigation could result in substantial costs, and divert management’s attention and resources, which could harm our business, operating results and financial condition.

The anti-takeover provisions of our certificate of incorporation, our bylaws, Delaware law and our share purchase rights plan may prevent or frustrate a change in control, even if an acquisition would be beneficial to our stockholders, which could affect our stock price adversely and prevent attempts by our stockholders to replace or remove our current management.

Provisions of our certificate of incorporation and bylaws may delay or prevent a change in control, discourage bids at a premium over the market price of our common stock and adversely affect the market price of our common stock and the voting or other rights of the holders of our common stock. These provisions include:

Our share purchase rights plan may have certain anti-takeover effects. Specifically, the rights issued pursuant to the plan will cause substantial dilution to a person or group that attempts to acquire the Company on terms not approved by our Board of Directors. Although the rights should not interfere with any merger or other business combination approved by the Board of Directors since the rights issued may be amended to permit such acquisition or redeemed by the Company at $0.001 per right prior to the earliest of (i) the time that a person or group has acquired beneficial ownership of 20% or more of our common stock or (ii) the final expiration date of the rights, the effect of the rights plan may deter a potential acquisition of the Company. In addition, we remain subject to the provisions of the Delaware corporation law that, in general, prohibit any business combination with a beneficial owner of 15% or more of our common stock for three years unless the holder’s acquisition of our stock was approved in advance by our Board of Directors.

~~We will continue to incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could affect our operating results.~~

As a public company, we will continue to incur legal, accounting and other expenses associated with reporting requirements and corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as well as new rules implemented by the Securities and Exchange Commission and the NASDAQ Stock Market LLC. We may need to continue to implement additional financial and accounting systems, procedures and controls to accommodate changes in our business and organization and to comply with new reporting requirements. There can be no assurance that we will be able to maintain a favorable assessment as to the adequacy of our internal control over financial reporting. If we are unable to reach an unqualified assessment, or our independent registered public accounting firm is unable to issue an unqualified attestation as to the effectiveness of our internal control over financial reporting as of the end of our fiscal year, investors could lose confidence in the reliability of our financial reporting which could harm our business and could impact the price of our common stock.

Future sales of our common stock or the perception that such sales may occur in the public market could cause our stock price to fall.*

Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. ~~As of September 30, 2017~~ we had 60,587,000 shares of common stock outstanding, all of which shares were eligible for sale in the public market, subject in some cases to the volume limitations and manner of sale requirements under Rule 144 of the Securities Act of 1933, as amended.

Under our universal shelf registration statement, ~~filed by us in August 2017,~~ we may sell any combination of common stock, preferred stock, debt securities and warrants in one or more offerings, including pursuant to our ~~2017 At the Market Agreement~~sales agreement with Cowen, under which we can offer and sell our common stock from time to time up to aggregate sales proceeds of ~~$150,000,000.~~ $150 million.

The sale or issuance of our securities, including those issuable upon exercise of the outstanding warrants or conversion of the preferred stock, as well as the existence of outstanding options and shares of common stock reserved for issuance under our option and equity incentive plans also may adversely affect the terms upon which we are able to obtain additional capital through the sale of equity ~~securities~~.securities.

The loss of key personnel could delay or prevent achieving our objectives. In addition, our continued growth to support commercialization may result in difficulties in managing our growth and expanding our operations successfully.

We depend on our senior executive officers, as well as other key scientific personnel. Our commercial and business efforts could be adversely affected by the loss of one or more key members of our commercial or management staff, including our senior executive officers. We currently have no key person insurance on any of our employees.

As our operations expand, we expect that we will need to manage additional relationships with various vendors, partners, suppliers and other third parties. Future growth will impose significant added responsibilities on members of management. Our future financial performance and our ability to successfully commercialize HEPLISAV-B and to compete effectively will depend, in part, on our ability to manage any future growth effectively. To that end, we must be able to effectively manage our commercialization efforts, research efforts and clinical trials and hire, train and integrate additional regulatory, manufacturing, administrative, and sales and marketing personnel. We may not be able to accomplish these tasks, and our failure to accomplish any of them could prevent us from successfully growing our company and achieving profitability.

Our business operations are vulnerable to interruptions by natural disasters, health epidemics and other catastrophic events beyond our control, the occurrence of which could materially harm our manufacturing, distribution, sales, business operations and financial results.

Our business operations are subject to interruption by natural disasters and other catastrophic events beyond our control, including, but not limited to, earthquakes, hurricanes, fires, droughts, tornadoes, electrical blackouts, public health crises and pandemics, war, terrorism, and geo-political unrest and uncertainties. We have not undertaken a systematic analysis of the potential consequences to our business that might result from any such natural disaster or other catastrophic event and have limited recovery plans in place. If any of these events occur, our manufacturing and supply chain, distribution, sales and marketing efforts and other business operations could be subject to business shutdowns or disruptions and financial results could be adversely affected. We cannot presently predict the scope and severity of any potential business shutdowns or disruptions resulting from these events, but if we or any of the third parties with whom we engage, including the suppliers, contract manufacturers, distributors and other third parties with whom we conduct business, were to experience shutdowns or other business disruptions, our ability to conduct our business in the manner and on the timelines presently planned could be materially and adversely affected in a number of ways, some of which are not predicable.

Our business could be adversely affected by health epidemics in regions where we have manufacturing facilities, sales activities or other business operations. For example, outbreaks of epidemic or pandemic diseases, such as the ongoing COVID-19 pandemic, or the fear of such events, could cause restrictions on supply chains, access to workplaces and affect employee health and availability.

Although we maintain inventories of HEPLISAV-B and its components, our ability and those of our contractors and distributors to produce and distribute HEPLISAV-B could be adversely affected. A pandemic or similar health challenge could severely impact the U.S. healthcare system, which may have an adverse effect on usage and sales of HEPLISAV-B. In addition, any such event could result in widespread global health crisis that could adversely affect global economies and financial markets resulting in an economic downturn that could affect the demand for HEPLISAV-B and future revenue and operating results and our ability to raise additional capital when needed on acceptable terms, if at all.

Additionally, our corporate headquarters in Emeryville, California, is located in a seismically active region that also is subject to possible electrical shutdowns and wildfires. Because we do not carry earthquake insurance for earthquake-related losses and

significant recovery time could be required to resume operations, our financial condition and operating results could be materially adversely affected in the event of a major earthquake or catastrophic event. We carry only limited business interruption insurance that would compensate us for actual losses from interruption of our business that may occur, and any losses or damages incurred by us in excess of insured amounts could adversely affect our business and operations.

Significant disruptions of information technology systems or breaches of data security could adversely affect our business.

Our business is increasingly dependent on critical, complex and interdependent information technology systems, including internet-based systems, to support business processes as well as internal and external communications. In addition, the COVID-19 pandemic has intensified our dependence on information technology systems as many of our critical business activities are currently being conducted remotely. The size and complexity of our computer systems make them potentially vulnerable to breakdown, malicious intrusion and computer viruses that may result in the impairment of key business processes.

In addition, our systems are potentially vulnerable to data security breaches—whether by employees or others—that may expose sensitive data to unauthorized persons. Such data security breaches could lead to the loss of trade secrets or other intellectual property, or could lead to the public exposure of personally identifiable information (including sensitive personal information) of our employees, collaborators, clinical trial patients, and others. A data security breach or privacy violation that leads to disclosure or modification of or prevents access to patient information, including personally identifiable information or protected health information, could harm our reputation, compel us to comply with federal, state and/or international data breach notification laws, subject us to mandatory corrective action, require us to verify the correctness of database contents and otherwise subject us to liability under laws and regulations that protect personal data, including but not limited to HIPAA, similar state data protection regulations, and the GDPR, resulting in significant penalties; increased costs; loss of revenue; expenses of computer or forensic investigations; material fines and penalties; compensatory, special, punitive or statutory damages; litigation; consent orders regarding our privacy and security practices; requirements that we provide notices, credit monitoring services and/or credit restoration services or other relevant services to impacted individuals; adverse actions against our licenses to do business; or injunctive relief. News reports have also highlighted COVID research-specific hacking and phishing attempts. Because we and our collaborators are working on vaccines, including potential COVID vaccines, we may be at higher-than-average risk for such attempts.

Compliance with these and any other applicable privacy and data security laws and regulations is a rigorous and time-intensive process, and we may be required to put in place additional mechanisms ensuring compliance with the new data protection rules. If we fail to comply with any such laws or regulations, we may face significant fines and penalties that could adversely affect our business, financial condition and results of operations. Furthermore, the laws are not consistent, and compliance in the event of a widespread data breach is costly.

U.S. and international authorities have been warning businesses of increased cybersecurity threats from actors seeking to exploit the COVID-19 pandemic. In 2020 we experienced a cybersecurity incident known as a phishing e-mail scam, and although we do not consider its impact on us to be material, if we are unable to prevent this or other such data security breaches or privacy violations or implement satisfactory remedial measures, our operations could be disrupted, and we may suffer loss of reputation, financial loss and other regulatory penalties because of lost or misappropriated information, including sensitive patient data. Moreover, failure to maintain effective internal accounting controls related to data security breaches and cybersecurity in general could impact our ability to produce timely and accurate financial statements and could subject us to regulatory scrutiny. In addition, these breaches and other inappropriate access can be difficult to detect, and any delay in identifying them may lead to increased harm of the type described above. Moreover, the prevalent use of mobile devices that access confidential information increases the risk of data security breaches, which could lead to the loss of confidential information, trade secrets or other intellectual property. While we have implemented security measures that are intended to protect our data security and information technology systems, such measures may not prevent such events.

Such disruptions and breaches of security could have a material adverse effect on our business, financial condition and results of operations.

On November 3, 2017, we entered into an At the Market issuance (“ATM”) Sales Agreement (the “Agreement”) with Cowen and Company, LLC (“Cowen”) under which we may offer and sell from time to time at our sole discretion shares of our common stock having an aggregate offering price of up to $150,000,000 through Cowen as our sales agent.None.

Cowen may sell the common stock by any method permitted by law deemed to be an “at the market” offering as defined in Rule 415 of the Securities Act of 1933, as amended (the “Act”), including without limitation sales made by means of ordinary brokers’ transactions on The NASDAQ Capital Market or otherwise at market prices prevailing at the time of sale, in block transactions, or as otherwise directed by us. Cowen will use commercially reasonable efforts to sell the common stock from time to time, based upon instructions from us (including any price, time or size limits or other customary parameters or conditions we may impose). We will pay Cowen a commission of up to 3.0% of the gross sales proceeds of any common stock sold through Cowen under the Agreement. We have also provided Cowen with customary indemnification rights under the Agreement.

We are not obligated to make any sales of common stock under the Agreement. The offering of shares of our common stock pursuant to the Agreement will terminate upon the earlier of (i) the sale of all common stock subject to the Agreement, or (ii) termination of the Agreement in accordance with its terms.

The foregoing description of the Agreement is not complete and is qualified in its entirety by reference to the full text of the Agreement, a copy of which is filed herewith as Exhibit 10.1 to this report and is incorporated herein by reference. ~~A copy of the opinion of Cooley LLP relating to the legality of the issuance and sale of the securities under the Agreement is filed as Exhibit 5.1 to this report.~~

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of ~~Berkeley,~~Emeryville, State of California.

Delaware		33-0728374
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

Title of each class:	Trading symbol(s):	Name of each exchange on which registered:
Common Stock, $0.001 par value	DVAX	The Nasdaq Stock Market LLC

		Page No.
PART I FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	46
	Condensed Consolidated Balance Sheets as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~2020	46
	Condensed Consolidated Statements of Operations for the Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020	57
	Condensed Consolidated Statements of Comprehensive Loss for the Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020	57
	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2021 and 2020	8
	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020	69
	Notes to Condensed Consolidated Financial Statements	710
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1826
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2333
Item 4.	Controls and Procedures	2333
PART II OTHER INFORMATION
Item 1.	Legal Proceedings	2434
Item 1A.	Risk Factors	2534
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3954
Item 5.	Other Information	3954
Item 6.	Exhibits	4055
SIGNATURES		4257

Number of shares		5,090,942
Expected term	0.9 year
Expected volatility		1.2
Risk-free interest rate		0.1	%
Dividend yield		0	%

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Revenues:
Collaboration revenue	$	-		$	-		$	-		$	2,578
Grant revenue		53			162			306			289
Service and license revenue		-			-			-			884
Total revenues		53			162			306			3,751
Operating expenses:
Research and development		16,417			23,234			47,576			66,051
General and administrative		6,027			11,766			18,111			29,086
Restructuring		-			-			2,783			-
Total operating expenses		22,444			35,000			68,470			95,137
Loss from operations		(22,391	)		(34,838	)		(68,164	)		(91,386	)
Other income (expense):
Interest income		429			170			809			615
Other (expense) income, net		(166	)		(26	)		(378	)		68
Net loss	$	(22,128	)	$	(34,694	)	$	(67,733	)	$	(90,703	)
Basic and diluted net loss per share	$	(0.38	)	$	(0.90	)	$	(1.36	)	$	(2.36	)
Weighted average shares used to compute basic and diluted net loss per share		57,650			38,512			49,785			38,493

Balance at December 31, 2020	$	10,736
Increase in fair value of warrants exercised		3,172
Warrants exercised		(4,551	)
Increase in the estimated fair value of warrant liability upon revaluation		22,380
Balance at March 31, 2021	$	31,737

	March 31, 2021		December 31, 2020		March 31, 2020		December 31, 2019
Cash and cash equivalents	$	79,055	$	32,073	$	37,899	$	39,884
Restricted cash		226		237		212		216
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$	79,281	$	32,310	$	38,111	$	40,100

	March 31, 2021		December 31, 2020
Raw materials	$	25,137	$	25,121
Work-in-process		20,525		30,293
Finished goods		23,184		8,275
Total	$	68,846	$	63,689

	March 31, 2021		December 31, 2020
Operating lease liabilities:
Current portion of lease liabilities (included in other current liabilities)	$	3,356	$	3,247
Long-term portion of lease liabilities		33,795		34,789
Total operating lease liabilities	$	37,151	$	38,036

Years ending December 31,
2017 (remaining)	$	544
2018		2,349
2019		2,552
2020		2,614
2021		2,542
Thereafter		9,130
Total	$	19,731

Years ending December 31,	Sublease Income		Operating Lease Liabilities
2021 (remaining)	$	3,915	$	5,215
2022		5,357		6,240
2023		5,518		5,377
2024		5,684		5,521
2025		5,854		5,670
Thereafter		33,742		30,704
Total	$	60,070		58,727
Less:
Present value adjustment				(21,576	)
Total			$	37,151

	March 31, 2021			December 31, 2020
Weighted average remaining lease term	9.0 years			9.1 years
Weighted average discount rate		10.1	%		10.1	%

	Shares Underlying Outstanding Options (in thousands)			Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Balance at December 31, 2016		3,975		$	21.38
Options granted		329		$	6.99
Options exercised		(50	)	$	11.82
Options cancelled:
Options forfeited (unvested)		(351	)	$	18.43
Options cancelled (vested)		(217	)	$	29.11
Balance at September 30, 2017		3,686		$	20.05		5.79	$	13,420
Vested and expected to vest at September 30, 2017		3,671		$	20.06		5.79	$	13,390
Exercisable at September 30, 2017		2,394		$	22.18		5.40	$	5,948

	Number of Shares (In thousands)			Weighted-Average Grant-Date Fair Value
Non-vested as of December 31, 2016		699		$	12.12
Granted		2,136			4.83
Vested		(171	)		18.62
Forfeited or expired		(221	)		8.44
Non-vested as of September 30, 2017		2,443		$	5.62

	Number of Shares (in thousands)			Weighted-Average Grant-Date Fair Value Per Share
Non-vested as of December 31, 2020		1,794		$	7.23
Granted		1,796			9.43
Vested		(533	)		8.88
Forfeited		(120	)		8.50
Non-vested as of March 31, 2021		2,937		$	8.22

	Employee Severance and Other Benefits
Restructuring charges	$	2,783
Cash payments		(2,738	)
Balance at September 30, 2017	$	45

		Incorporated by Reference
Exhibit Number	Document	Exhibit Number	Filing	Filing Date	File No.	Filed Herewith
3.1	Sixth Amended and Restated Certificate of Incorporation	3.1	S-1/A	February 5, 2004	333-109965
3.2	Certificate of Amendment of Amended and Restated Certificate of Incorporation	3.1	8-K	January 4, 2010	001-34207
3.3	Certificate of Amendment of Amended and Restated Certificate of Incorporation	3.1	8-K	January 5, 2011	001-34207
3.4	Certificate of Amendment of Amended and Restated Certificate of Incorporation	3.6	8-K	May 30, 2013	001-34207
3.5	Certificate of Amendment of the Sixth Amended and Restated Certificate of Incorporation	3.1	8-K	November 10, 2014	001-34207
3.6	Certificate of Amendment of the Sixth Amended and Restated Certificate of Incorporation	3.1	8-K	June 2, 2017	001-34207
3.7	Certificate of Amendment of the Sixth Amended and Restated Certificate of Incorporation	3.1	8-K	July 31, 2017	001-34207
3.8	Amended and Restated Bylaws	3.2	S-1/A	February 5, 2004	333-109965
3.9	Form of Certificate of Designation of Series A Junior Participating Preferred Stock	3.3	8-K	November 6, 2008	000-50577
4.1	Reference is made to Exhibits 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8 and 3.9 above
4.2	Form of Specimen Common Stock Certificate	4.2	S-1/A	January 16, 2004	333-109965
4.3	Rights Agreement, dated as of November 5, 2008, by and between the Company and Mellon Investor Services LLC	4.4	8-K	November 6, 2008	000-50577
4.4	Form of Right Certificate	4.5	8-K	November 6, 2008	000-50577
4.5	Form of Restricted Stock Unit Award Agreement under the 2004 Stock Incentive Plan	4.6	10-K	March 6, 2009	001-34207
5.1	Opinion of Cooley LLP					X
10.1	Sales Agreement, dated November 3, 2017, by and between the Company and Cowen and Company, LLC					X
10.2	License Agreement, dated June 26, 2007, between Coley Pharmaceuticals Group, Inc. and the Company					X

+		~~Incorporated by Reference~~
Exhibit Number	~~Document~~	~~Exhibit Number~~	~~Filing~~	~~Filing Date~~	~~File No.~~	~~Filed Herewith~~
~~31.1~~	~~Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~					X
~~31.2~~	~~Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~					X
32.1*	~~Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~					X
32.2*	~~Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~					XIndicates management contract, compensatory plan or arrangement.

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EX—101.SCH	Inline XBRL Taxonomy Extension Schema Document
EX—101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
EX—101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase
EX—101.LAB	Inline XBRL Taxonomy Extension Labels Linkbase Document
EX—101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
EX—104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

	DYNAVAX TECHNOLOGIES CORPORATION

Date: ~~November 3, 2017~~May 6, 2021	By:	/s/ ~~EDDIE GRAY~~RYAN SPENCER
		~~Eddie Gray~~Ryan Spencer
		Chief Executive Officer
		(Principal Executive Officer)

Date: ~~November 3, 2017~~May 6, 2021	By:	/s/ ~~MICHAEL OSTRACH~~KELLY MACDONALD
		~~Michael Ostrach~~Kelly MacDonald
		Chief Financial Officer
		(Principal Financial Officer)

Date: ~~November 3, 2017~~May 6, 2021	By:	/s/ ~~DAVID JOHNSON~~JUSTIN BURGESS
		~~David Johnson~~Justin Burgess
		~~Vice President, Chief Accounting Officer~~Controller
		(Principal Accounting Officer)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company