Company: DVAX
Filing Date: 2025-03-10
Form Type: DFAN14A
Source: 0001193125-25-050430
Chunk: 5

Company: DYNAVAX TECHNOLOGIES CORP
Filing Date: 2025-03-10
Form: DFAN14A
Chunk 5
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 to straight equity. Why would a company with $714 million of cash sitting idle on its balance sheet (earning ~4.6% in the last quarter), and a growing cash flow positive business, issue expensive convertible notes rather than use its current cash? Additionally, the terms obtained by Dynavax for the transaction appear to be far worse than should be presently available in the market. For example, BridgeBio Pharma (NASDAQ: BBIO) sold $500 million of convertible notes less than two weeks ago; compared to Dynavax, the BBIO notes had a longer term (2031 vs. 2030), a lower interest rate (1.75% vs. 2.0%), and a higher conversion premium (45% vs. 30%). Given the meaningful profitability and over-equitization at Dynavax, the Company should have been able to negotiate terms at least as favorable as other companies in the biotech space. The easiest, cleanest and most capital-efficient way to address the Company’s stated “liability management objectives” would have been to eliminate the liability. Unlike other companies that need to continuously roll their debt, Dynavax could have simply made the debt go away. Instead, the can has been kicked for another five years, with more expensive debt added to the balance sheet when the convertible note dilution overhang could have been removed once and for all.

The basic tenet of our message to management and the Board has been to utilize the least expensive sources
of capital (i.e., your $714 million of cash) to invest in the highest-return assets (i.e., Heplisav, via Dynavax stock). Last week’s move is the complete opposite: Dynavax issued more expensive debt to continue investing in cash, which is
at best a questionable and unsophisticated corporate finance strategy. We believe that the Board is engaging in cosmetic schemes as a way to obfuscate its dereliction of thoughtful shareholder representation.

Deep Track’s Campaign is About Representing the Best Interests of All Shareholders

The Company’s assertion that we are seeking control of the Board is a categorical misrepresentation of reality that appears designed to gaslight shareholders. Deep Track is seeking to elect four director candidates to what will be a nine-member Board. Three of our nominees are completely independent of Deep Track. The addition of a representative of a large shareholder as one member of a
large Board – especially a shareholder who is an expert in the life sciences sector – is warranted given the extent of our concerns and the need to restore