Finance
Investor Deep Track launches proxy fight at Dynavax, nominates 4 directors
Published by Global Banking & Finance Review®
Posted on February 19, 2025
3 min readLast updated: January 26, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on February 19, 2025
3 min readLast updated: January 26, 2026
Deep Track Capital starts a proxy fight at Dynavax, nominating four directors to focus on the Heplisav vaccine, boosting the stock price by 1.24%.
By Svea Herbst-Bayliss
NEW YORK(Reuters) - Life sciences investment firm Deep Track Capital is launching a board fight at Dynavax Technologies, pressing for new directors to prioritize the development of the company's hepatitis B vaccine instead of pursuing new acquisitions.
Deep Track nominated four candidates to Dynavax's board to add industry and financial expertise plus a shareholder's perspective to the 11-member board, the investment firm told fellow shareholders in a letter.
Investors reacted positively to the news and pushed the stock price up 1.24% on Wednesday to close at $13.09. Since the start of the year the stock price has inched up 1.47% and it climbed 6.6% over the last 52 weeks.
As Dynavax's second-largest investor with a 13.5% stake, Deep Track describes itself as a loyal shareholder which believes in the company's potential and tried to address its concerns privately before opting for a potentially noisy proxy fight.
Deep Track founder David Kroin criticized Dynavax for failing to concentrate on building up its vaccine Heplisav and chasing after "a misguided 'empire-building' exercise."
"We remain deeply concerned that Dynavax will not only squander its substantial and growing cash balance on an ill-advised acquisition but also jeopardize future profitability and rob shareholders of the immense opportunities to be realized by focusing on Heplisav," the letter said.
"To help catalyze critical improvements at Dynavax, we are seeking to elect four highly qualified director candidates at the Annual Meeting," the letter said, noting one of the nominees is Deep Track Managing Director Brett Erkman.
Dynavax said Deep Track is holding onto a "value destructive plan" and is "abandoning portfolio diversification, returning any cash needed to sustain and grow the business by implementing an outsized share repurchase program and selling Dynavax as a single-asset company."
Ever more companies are preparing for expensive and noisy board room fights this year. Established corporate activists and first-time agitators like Deep Track are demanding more ways to push up the stock price, including operational fixes and even putting the company up for sale.
Deep Track, which invests $4 billion in assets, wants Dynavax to focus exclusively on growing Heplisav, a vaccine designed to prevent the hepatitis B infection that can lead to chronic liver disease and death, into an asset that a large pharma company would want to own.
The investment firm estimates Heplisav will generate over $1 billion in cash through 2030, and that coupled with the $714 million in cash the company had on hand at the end of last year, "this translates into nearly $2 billion of cash that can be returned to shareholders by the end of 2030."
Deep Track has also pushed Dynavax's board and management team to buy back more shares.
Dynavax late last year announced a $200 million share repurchase program. Deep Track has proposed doubling the share repurchase to $400 million.
This month the company said it added two new directors to replace a long-serving director who will retire and another who will step down to serve as CEO at another company.
After the annual meeting, which has not been scheduled, the board will have nine directors, the company said.
The company also said it will ask shareholders to approve new bylaws so that all directors stand for election every year, a governance issue that shareholders generally favor. This year only four directors will be voted on, another sore point for investment firm Deep Track.
(Reporting by Svea Herbst-Bayliss; Editing by Sonali Paul and Lincoln Feast.)
Deep Track Capital is Dynavax's second-largest investor with a 13.5% stake.
Deep Track is concerned that Dynavax is not focusing on its vaccine Heplisav and is pursuing misguided acquisitions that could jeopardize profitability.
Deep Track has nominated four candidates for Dynavax's board to enhance industry expertise and shareholder representation.
Deep Track has urged Dynavax to increase its share repurchase program from $200 million to $400 million.
Investors reacted positively, pushing Dynavax's stock price up 1.24% to close at $13.09 following the announcement.
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