Company: DVAX
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001029142-25-000071
Chunk: 227

Company: DYNAVAX TECHNOLOGIES CORP
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 1
Chunk 227
---
 funded by CEPI, at pre-negotiated prices pursuant to the CEPI Agreement, for use in Clover’s commercialization of vaccines containing SCB-2019 and CpG 1018 adjuvant (“Clover Product”). During 2022 and 2023, we signed four amendments to the Clover Supply Agreement. The terms and conditions of the Clover Supply Agreement were operative through December 2022, and as of December 31, 2022, we had satisfied all delivery obligations thereunder.For CpG 1018 Materials reserved for Clover under the CEPI Agreement and purchased by Clover under the Clover Supply Agreement, Clover is obligated to pay us the purchase price upon the earliest of (i) the true-up exercise (as defined therein), (ii) within a specified period after Clover delivers Clover Product to a customer, (iii) Clover’s receipt of payment for Clover Product from a customer (as defined therein), or (iv) upon the CpG 1018 adjuvant no longer being sellable as part of a Clover Product. When we transfer control of CpG 1018 Materials that are reserved under the CEPI Agreement, we recognize product revenue and a corresponding contract asset, as our right to consideration is contingent on something other than the passage of time, as outlined above. During the three months ended March 31, 2025, we recorded an allowance for doubtful accounts of approximately $11.0 million relating to the contract asset recognized for Clover. This determination was based on our evaluation of credit risk associated with Clover, driven by the formal termination by the Global Alliance for Vaccines and Immunization (“GAVI”) of its advanced purchase agreement option with Clover on April 24, 2025, Clover’s recent write-down of the carrying value of its CpG 1018 Materials, and Clover's liquidity position, as reflected by cash and cash equivalents reported in Clover’s audited consolidated statement of financial position as of December 31, 2024.The $11.0 million allowance for doubtful accounts represents the portion of Clover's contract asset that is incremental to the amounts which were directly funded using the Advance Payments from CEPI of approximately $60.3 million to manufacture the corresponding CpG 1018 Materials.Accordingly, the contract asset balance associated with Clover was $60.3 million as of March 31, 2025, compared to $71.3 million as of December 31, 2024. The contract asset was included in other assets (non-current) and represents amounts