The following Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve a number of risks and uncertainties. Our actual results could differ materially from those indicated by forward-looking statements as a result of various factors, including but not limited to, the period for which we estimate our cash resources are sufficient, the availability of additional funds, as well as those set forth under "Risk Factors" and those that may be identified from time to time in our reports and registration statements filed with the Securities and Exchange Commission.

The following discussion and analysis is intended to provide an investor with a narrative of our financial results and an evaluation of our financial condition and results of operations. The discussion should be read in conjunction with "Item 6-Selected Financial Data" and the Consolidated Financial Statements and the related notes thereto set forth in "Item 8-Financial Statements and Supplementary Data."

Overview

Dynavax Technologies Corporation ("we," "our," "us," "Dynavax" or the "Company"), a clinical-stage biopharmaceutical company, discovers and develops novel products to prevent and treat infectious and inflammatory diseases. Our lead product candidate is HEPLISAV™, a Phase 3 investigational adult hepatitis B vaccine.

Our pipeline of product candidates includes: HEPLISAV, our autoimmune program partnered with GlaxoSmithKline ("GSK") and our therapy for asthma partnered with AstraZeneca AB ("AstraZeneca"). We compete with pharmaceutical companies, biotechnology companies, academic institutions and research organizations, in developing therapies to prevent or treat infectious and inflammatory diseases. Our product candidates are based on our proprietary technology which uses immunostimulatory and immunoregulatory sequences.

Recent Developments

On February 25, 2013, Dynavax announced that it had received a Complete Response Letter ("CRL") from the U.S. Food and Drug Administration ("FDA" or "Agency") regarding its Biologic License Application ("BLA") for HEPLISAV. In the CRL, the FDA specified that the indication in adults 18-70 years of age cannot be approved without further evaluation of safety in this broad age group. Furthermore, the FDA requested

additional data from Dynavax's process validation program and clarifying information on the manufacturing controls and facilities related to the assurance of the quality of the commercial product. We plan to meet with the FDA in the near term to discuss the CRL and the steps necessary for potential approval of HEPLISAV.

Dynavax's Marketing Authorization Application for HEPLISAV continues to be under review in Europe.

Critical Accounting Policies and the Use of Estimates

The accompanying discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements and the related disclosures, which have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). The preparation of these financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenues and expenses for the periods presented. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, research and development activities, stock-based compensation, asset impairment, contingencies and the valuation of certain liabilities. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are more fully described in Note 2 to the Consolidated Financial Statements, we believe the following critical accounting policies reflect the more significant judgments and estimates used in the preparation of our financial statements.

Revenue Recognition

Our revenues consist of amounts earned from collaborations, grants, fees from services and licenses. We enter into license and manufacturing agreements and collaborative research and development arrangements with pharmaceutical and biotechnology partners that may involve multiple deliverables. Our arrangements may include one or more of the following elements: upfront license payments, cost reimbursement for the performance of research and development activities, milestone payments, other contingent payments, contract manufacturing service fees, royalties and license fees. Each deliverable in the arrangement is evaluated to determine whether it meets the criteria to be accounted for as a separate unit of accounting or whether it should be combined with other deliverables. We recognize revenue when there is persuasive evidence that an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured.

On January 1, 2011, we adopted on a prospective basis Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2009-13, Multiple-Deliverable Revenue Arrangements, which amends the criteria related to identifying separate units of accounting and provides guidance on whether multiple deliverables exist, how an arrangement should be separated and the consideration allocated.

Non-refundable upfront fees received for license and collaborative agreements entered into prior to January 1, 2011 and other payments under collaboration agreements where we have continuing performance obligations related to the payments are deferred and recognized over our expected performance period. Revenue is recognized on a ratable basis, unless we determine that another method is more appropriate, through the date at which our performance obligations are completed. Management makes its best estimate of the period over which we expect to fulfill our performance obligations, which may include clinical development activities. Given the uncertainties of research and development collaborations, significant judgment is required to determine the duration of the performance period. We recognize cost reimbursement revenue under collaborative agreements as the related research and development costs are incurred, as provided for under the terms of these agreements.

On January 1, 2011, we elected to prospectively adopt the milestone method as described in FASB ASU 2010-17, Milestone Method of Revenue Recognition. Under the milestone method, contingent consideration

received for the achievement of a substantive milestone is recognized in its entirety in the period in which the milestone is achieved. A milestone is defined as an event having all of the following characteristics: (i) there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved, (ii) the event can only be achieved based in whole or in part on either the entity's performance or a specific outcome resulting from the entity's performance and (iii) if achieved, the event would result in additional payments being due to the entity.

Our license and collaboration agreements with our partners provide for payments to be paid to us upon the achievement of development milestones. Given the challenges inherent in developing biologic products, there is substantial uncertainty whether any such milestones will be achieved at the time we entered into these agreements. In addition, we evaluate whether the development milestones meet the criteria to be considered substantive. The conditions include: (i) the development work is contingent on either of the following:
(a) the vendor's performance to achieve the milestone or (b) the enhancement of the value of the deliverable item or items as a result of a specific outcome resulting from the vendor's performance to achieve the milestone; (ii) it relates solely to past performance and (iii) it is reasonable relative to all the deliverable and payment terms within the arrangement. As a result of our analysis, we consider our development milestones to be substantive and, accordingly, we expect to recognize as revenue future payments received from such milestones as we achieve each milestone.

Milestone payments that are contingent upon the achievement of substantive at-risk performance criteria are recognized in full upon achievement of those milestone events in accordance with the terms of the agreement and assuming all other revenue recognition criteria have been met. All revenue recognized to date under our collaborative agreements has been nonrefundable.

Our license and collaboration agreements with certain partners also provide for contingent payments to be paid to us based solely upon the performance of our partner. For such contingent payments we expect to recognize the payments as revenue upon receipt, provided that collection is reasonably assured and the other revenue recognition criteria have been satisfied.

Revenues from manufacturing services are recognized upon meeting the criteria for substantial performance and acceptance by the customer.

Revenue from royalty payments is contingent on future sales activities by our licensees. As a result, we recognize royalty revenue when reported by our licensees and when collection is reasonably assured.

Revenue from government and private agency grants are recognized as the related research expenses are incurred and to the extent that funding is approved. Additionally, we recognize revenue based on the facilities and administrative cost rate reimbursable per the terms of the grant awards.

Research and Development Expenses and Accruals

Research and development expenses include personnel and facility-related expenses, outside contracted services including clinical trial costs, manufacturing and process development costs, research costs and other consulting services and non-cash stock-based compensation. Research and development costs are expensed as incurred. Amounts due under such arrangements may be either fixed fee or fee for service, and may include upfront payments, monthly payments and payments upon the completion of milestones or receipt of deliverables. Non-refundable advance payments under agreements are capitalized and expensed as the related goods are delivered or services are performed.

We contract with third parties to perform various clinical trial activities in the on-going development of potential products. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows to our vendors. Payments under the contracts depend on factors such as the achievement of certain events, successful enrollment of patients, completion of portions of the clinical trial or similar conditions. Our accruals for clinical trials are based on estimates of the services received

and efforts expended pursuant to contracts with clinical trial centers and clinical research organizations. We may terminate these contracts upon written notice and we are generally only liable for actual effort expended by the organizations to the date of termination, although in certain instances we may be further responsible for termination fees and penalties.

Stock-Based Compensation

Stock-based compensation expense for stock options and other stock awards is estimated at the grant date based on the award's fair value-based measurement and is recognized on a straight-line basis over the award's vesting period, assuming an annual forfeiture rate of 5% for our senior management group and 13% for all other employees. Our determination of the fair value-based measurement of stock options on the date of grant using an option-pricing model is affected by our stock price, as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. In the future, as additional empirical evidence regarding these input estimates becomes available, we may change or refine our approach of deriving these input estimates. These changes could impact our fair value-based measurement of stock options granted in the future. Changes in the fair value-based measurement of stock awards could materially impact our operating results.

We selected the Black-Scholes option pricing model as the most appropriate method for determining the estimated fair value-based measurement of our stock options. The Black-Scholes model requires the use of highly subjective and complex assumptions which determine the fair value-based measurement of stock options, including the option's expected term and the price volatility of the underlying stock. Our current estimate of volatility is based on the historical volatility of our stock price. To the extent volatility in our stock price increases in the future, our estimates of the fair value of options granted in the future could increase, thereby increasing stock-based compensation cost recognized in future periods. We derive the expected term assumption primarily based on our historical settlement experience, while giving consideration to options that have not yet completed a full life cycle. Stock-based compensation cost is recognized only for awards ultimately expected to vest. Our estimate of the forfeiture rate is based primarily on our historical experience. To the extent we revise this estimate in the future, our share-based compensation cost could be materially impacted in the quarter of revision, as well as in the following quarters. See Note 13, "Stockholder's Equity" to the Consolidated Financial Statements for further information on our equity incentive plans.

Results of Operations

Revenues

Revenues consist of amounts earned from collaborations, grants and services and license fees. Collaboration revenue includes revenue recognized under our collaboration agreements. Grant revenue includes amounts earned under government and private agency grants. Service and license fees include research and development and contract manufacturing services, license fees and royalty payments.

The following is a summary of our revenues for the years ended December 31, 2012, 2011 and 2010 (in thousands, except for percentages):

                                                                                                         Increase
                                                                              Increase                  (Decrease)
                                                                          (Decrease)  from                 from
                                      Years Ended December 31,              2011 to 2012               2010 to 2011
Revenues:                          2012         2011         2010           $             %            $            %
Collaboration revenue             $ 4,610     $ 17,190     $ 19,535     $  (12,580 )      (73 )%    $ (2,345 )      (12 )%
Grant revenue                       3,939        3,110        3,940            829         27 %         (830 )      (21 )%
Service and license revenue         1,165        1,314          475           (149 )      (11 )%         839        177 %

Total revenues                    $ 9,714     $ 21,614     $ 23,950     $  (11,900 )      (55 )%    $ (2,336 )      (10 )%

2012 versus 2011

Total revenues for the year ended December 31, 2012, decreased by $11.9 million, or 55%, as compared to the same period in 2011 primarily due to the reduction in collaboration revenue. Collaboration revenue for the year ended December 31, 2012, included $3.2 million earned from our partnership with AstraZeneca for work on asthma therapies, compared to $0.8 million earned for the year ended December 31, 2011. Additionally, total collaboration revenue for the year ended December 31, 2011, included recognition of $15 million from GSK for milestones earned in 2011. Grant revenue for the year ended December 31, 2012, increased by $0.8 million from the same period in 2011 primarily due to the increase in revenue recognized from our National Institute of Health's National Institute of Allergy and Infectious Diseases ("NIAID") contract related to adjuvant development.

2011 versus 2010

Total revenues for the year ended December 31, 2011, decreased by $2.3 million, or 10%, as compared to 2010 primarily due to the reduction in collaboration revenue. Collaboration revenue for the year ended December 31, 2011, included recognition of $15 million from GSK for milestones earned in 2011, $1.4 million in revenue from our collaboration with GSK and $0.8 million in other revenue related to our collaboration with AstraZeneca, compared to collaboration revenue for the year ended December 31, 2010, which included recognition of a $10 million upfront payment received from AstraZeneca in 2006 following an amendment to the collaboration agreement, $4.1 million of other revenue related to our collaboration with AstraZeneca, a one-time $4 million payment from Merck & Co. in satisfaction of its obligations to us following termination of our collaboration and $1.4 million in revenue from our collaboration with GSK. Grant revenue for the year ended December 31, 2011, decreased by $0.8 million from the same period in 2010 primarily due to the decrease in revenue recognized from our NIAID contract. Service and license revenue for the year ended December 31, 2011, increased by $0.8 million as compared to 2010 as a result of an increase in royalty revenue and manufacturing service revenue earned by Rhein.

Research and Development

Research and development expenses consist of compensation and related personnel costs which include benefits, recruitment, travel and supply costs; outside services; allocated facility costs and non-cash stock-based compensation. Outside services are incurred for our preclinical experiments and clinical trials, regulatory filings and manufacturing of our product candidates.

The following is a summary of our research and development expense (in thousands, except for percentages):

                                                                                                                   Increase
                                                                                        Increase                  (Decrease)
                                                                                    (Decrease)  from                 from
                                                Years Ended December 31,              2011 to 2012               2010 to 2011
Research and Development:                    2012         2011         2010           $             %            $            %
Compensation and related personnel costs   $ 21,134     $ 19,106     $ 15,221     $    2,028         11 %     $  3,885         26 %
Outside services                             19,371       24,811       31,372         (5,440 )      (22 )%      (6,561 )      (21 )%
Facility costs                                5,127        5,302        6,455           (175 )       (3 )%      (1,153 )      (18 )%
Non-cash stock-based compensation             3,514        2,103          632          1,411         67 %        1,471        233 %

Total research and development             $ 49,146     $ 51,322     $ 53,680     $   (2,176 )       (4 )%    $ (2,358 )       (4 )%

2012 versus 2011

Research and development expense for the year ended December 31, 2012, decreased by $2.2 million, or 4%, as compared to 2011. The decrease in costs was primarily due to the decline in outside services during 2012

as compared to 2011 from lower HEPLISAV clinical trial expenses, partially offset by an increase in compensation and related personnel costs, including non-cash stock-based compensation, from an increase in employee headcount and related expense incurred for option grants.

2011 versus 2010

Research and development expense for the year ended December 31, 2011, decreased by $2.4 million, or 4%, as compared to 2010. The decrease in costs was primarily due to the decline in outside services during 2011 as compared to 2010 from lower HEPLISAV clinical trial expenses, partially offset by an increase in compensation and related personnel costs, including non-cash stock-based compensation, from an increase in employee headcount. In addition, during 2011, facility costs decreased by $1.2 million as compared to 2010, as a result of lower rent expense from reduced leased space.

General and Administrative

General and administrative expenses primarily consist of compensation and related personnel costs; outside services such as accounting, consulting, business development, investor relations and insurance services; legal costs that include corporate and patent related expenses; allocated facility costs and non-cash stock-based compensation. The following is a summary of our general and administrative expenses (in thousands, except for percentages):

                                                                                        Increase                   Increase
                                                                                    (Decrease) from            (Decrease)  from
                                                Years Ended December 31,              2011 to 2012               2010 to 2011
General and Administrative:                  2012         2011         2010           $            %             $             %
Compensation and related personnel costs   $  9,468     $  7,398     $  6,436     $   2,070         28 %     $      962         15 %
Outside services                              8,730        4,548        4,207         4,182         92 %            341          8 %
Legal costs                                   2,437        1,894        3,622           543         29 %         (1,728 )      (48 )%
Facility costs                                  604          644          836           (40 )       (6 )%          (192 )      (23 )%
Non-cash stock-based compensation             6,925        3,086        1,778         3,839        124 %          1,308         74 %

Total general and administrative           $ 28,164     $ 17,570     $ 16,879     $  10,594         60 %     $      691          4 %

2012 versus 2011

General and administrative expenses for the year ended December 31, 2012, increased by $10.6 million, or 60%, compared to the same period in 2011. This increase is primarily due to higher legal and outside costs, including consulting costs for corporate development activities and market research for HEPLISAV. Compensation costs and non-cash stock-based compensation increased due to growth in the number of administrative employees to support the organization and an amended management continuity and severance agreement with one of our executive officers.

2011 versus 2010

General and administrative expenses for the year ended December 31, 2011, increased by $0.7 million, or 4%, compared to the same period in 2010. This increase is primarily due to higher compensation and related personnel costs, including non-cash stock-based compensation, from growth in the number of administrative employees to support the overall organization, partially offset by a decline in legal costs related to patent activities.

Amortization of Intangible Assets

Intangible assets consisted of the manufacturing process and customer relationships resulting from our April 2006 acquisition of Rhein and were amortized over five years from the date of acquisition through the second quarter of 2011. Amortization of intangible assets was $0.3 million and $1.0 million for the years ended December 31, 2011, and 2010, respectively.

Interest Income, Interest Expense and Other Income (Expense)

Interest income is reported net of amortization of premiums and includes accretion of discounts on marketable securities and realized gains and losses on marketable securities. Interest expense relates to the note payable issued to Symphony Dynamo Holdings LLC ("Holdings"). Other income (expense) includes gains and losses on foreign currency transactions, changes in the fair value of contingent and warrant liabilities as well as gains and losses on disposals of property and equipment.

The following is a summary of our interest income, interest expense and other income (expense) (in thousands, except for percentages):

                                                                                 Increase                    Increase
                                                                             (Decrease)  from            (Decrease)  from
                                       Years Ended December 31,                2011 to 2012                2010 to 2011
                                   2012          2011          2010            $            %              $             %
Interest income                  $    291      $    103      $     85      $     188         183 %     $       18         21 %
Interest expense                 $ (2,351 )    $ (1,957 )    $ (1,654 )    $     394          20 %     $      303         18 %
Other income (expense)           $   (293 )    $    834      $ (8,150 )    $  (1,127 )      (135 )%    $    8,984        110 %

Interest income for the year ended December 31, 2012, increased by $0.2 million, or 183%, compared to the same period in 2011 due to higher investment balances primarily as a result of our May 2012 common stock offering which resulted in net proceeds of approximately $69.6 million.

Interest expense for the year ended December 31, 2012 and 2011 is related to interest from the accretion of the discount on the note payable to Holdings that was paid in cash on December 31, 2012.

Other income (expense) for the year ended December 31, 2012 decreased by $1.1 million, or 135%, compared to the same period in 2011 due to losses on foreign currency transactions in 2012 related to fluctuations in the value of the Euro compared to the U.S. dollar and the recognition of a one-time gain of $0.8 million for the change in fair value of the long-term contingent and warrant liabilities to Holdings in 2011. Other income (expense) for the year ended December 31, 2010 primarily includes the impact of the anti-dilution provision associated with the common stock and warrants issued to Symphony Capital Partners, L.P. and Symphony Strategic Partners, LLC (collectively, "Symphony") in April 2010 and the remeasurement of the warrant liability through June 30, 2010, that resulted in non-operating expense of $11.1 million, partially offset by a gain of $2.2 million for the change in fair value of the long-term . . .