Dynavax said today it will eliminate 38% of its workforce in a restructuring that will refocus the company’s operations and strategy on advancing its clinical and preclinical immuno-oncology portfolio.

An announcement by the company did not disclose its current number of employees, and a Dynavax spokeswoman at deadline had not responded to a GEN query seeking that number. Dynavax employed 234 full-time employees as of December 31, 2015—137 in its Berkeley, CA, headquarters and 97 in its office and manufacturing facility in Düsseldorf, Germany, according to its Form 10-K annual report for 2015, filed on March 8.

“Reducing our workforce is a sad and difficult decision. But it is one we believe is necessary to align our organization to reflect that of a clinical R&D-stage company with a promising immuno-oncology pipeline,” Dynavax CEO Eddie Gray said in a statement.

Dynavax estimated that the restructuring would cost the company $3 million, primarily in the first quarter of this year—a fraction of its approximately $81.4 million in cash, cash equivalents, and marketable securities the company had as of December 31, 2016—while resulting in approximately a 40% reduction in cash burn.

As part of its restructuring, the company said it has suspended manufacturing of HEPLISAV-B [Hepatitis B Vaccine, Recombinant (Adjuvanted)], while continuing to advance the hepatitis B vaccine candidate through FDA review.

On November 14, Dynavax acknowledged receiving a complete response letter (CRL) from the FDA seeking additional information on adverse events of special interest, a numerical imbalance in a small number of cardiac events in a single study (HBV-23), new analyses of the integrated safety data base across different time periods, and post-marketing commitments.

The company said it plans to respond this month to the CRL, while advancing the vaccine through an expected six-month FDA review period. During the regulatory review, Dynavax said it will retain but furlough most of the workforce supporting its manufacturing facility in Germany.

However, Dynavax added that it will continue to evaluate partnering with another company in the development of HEPLISAV-B as it refocuses on oncology.

The company's lead clinical candidate, the TLR9 agonist SD-101, is in several Phase I/II studies assessing its potential effectiveness against multiple solid tumors and hematologic malignancies. Dynavax says SD-101 has shown encouraging early clinical data in metastatic melanoma.

Dynavax is also developing a second TLR9 agonist, the inhaled therapeutic DV281, which has completed preclinical testing in models for lung cancer. The company said it intends to begin Phase I studies of DV281 in the second quarter.

Dynavax projected less than $1 million per month in HEPLISAV-B costs before any FDA decision, and less than $60 million per year in all other operating costs toward continued development of its oncology program.

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