Company: DVAX
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001029142-25-000071
Chunk: 160

Company: DYNAVAX TECHNOLOGIES CORP
Filing Date: 2025-05-06
Form: 10-Q
Item: Part II, Item 1A
Chunk 160
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 could increase our costs, reduce the competitiveness of our products and otherwise have a material adverse effect on our financial results, business and business prospects.*

The U.S. and other countries have imposed and may continue to impose new trade restrictions and export regulations, have levied tariffs and taxes on certain goods, and could continue to significantly increase tariffs on a broad array of goods, including pharmaceutical and biological products. 

In April 2025, the U.S. government imposed a 10% baseline global tariff and a 125% tariff on goods imported into the U.S. from China, subject to various exemptions, including pharmaceuticals, in addition to a prior 20% tariff imposed on imports from China, while suspending the imposition of higher “reciprocal” tariffs on numerous other territories until July 2025. 

The U.S. government has also specifically stated that the pharmaceutical industry will be exempt from tariffs. We conduct business globally and our operations, including third-party suppliers, span numerous countries outside the U.S. subject to industry-specific tariffs, and the U.S. government has initiated a related investigation into the national security effects of imported pharmaceuticals and their ingredients. As such, we currently expect that the current pharmaceutical exemption will be short-lived and that such industry-specific pharmaceutical tariffs will be ultimately imposed by the U.S. government. 

We rely on our facility in Düsseldorf, Germany and third parties to perform the multiple processes involved in manufacturing hepatitis B surface antigen for use in HEPLISAV-B, the manufacture and combination of the oligonucleotide with the antigens, and formulation, fill and finish. While we cannot at this time predict the ultimate impact of the proposed tariffs, or if they would apply to transactions between a parent company and its foreign subsidiary, we anticipate that that our margins could be adversely affected beginning as early as fiscal 2026, depending on the ultimate scope and duration of tariffs imposed. However, given the volatility and uncertainty regarding the scope and duration of such tariffs and other aspects of U.S. and foreign government trade policies, the ultimate impact on our operations and financial results remains uncertain and could be significant.  

Such tariffs may result in additional costs on our business, including costs with respect to the items mentioned above upon which our business depends and may generally increase our manufacturing costs. In addition, such tariffs may increase our supply chain complexity and could also potentially disrupt our existing supply chain. Moreover, other governments have imposed and may continue to impose retaliatory tariffs, trade restrictions or trade barriers 

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